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Down To Business: Health Care IT Gets Dragged Into The 21st Century

Do I like that the government is creating yet another program to teach an industry how to behave? No. But given the lack of a dominant health care industry player to dictate supply chain standards, it needs to get involved.
The federal government has set aside close to $20 billion to "encourage" hospitals, doctors' offices, and other health care providers to start digitizing their medical records and processes. If that's not enough stimulus for providers to venture into the 21st century, watch as they go the way of the corner hardware store.

The federal stimulus package earmarks about $2 billion in loans and grants for hospitals and doctors to deploy e-health records, as well as for standards-related work. It also will pay providers more than $17 billion over the next five years for their "meaningful" adoption of e-health systems. The goal: to get at least half of U.S. hospitals and doctors' offices to adopt e-health record systems by 2014, up from less than 10% today.

As my colleague Marianne Kolbasuk McGee reported last week, it's up to the secretary of health and human services to spell out what "meaningful" means. The idea is for providers to use certified e-records products and e-prescriptions, and to be able to electronically exchange clinical and care data with one another and with government health agencies. The government is brandishing a small stick as well as carrots: Providers that don't adopt certain e-health systems will find their Medicare and Medicaid reimbursements reduced by 1% a year from 2015 to 2018.

The conventional wisdom is that hospitals and practices need government assistance because they don't have the funds to go digital. Even though electronic systems can reduce medical errors, paperwork, redundant procedures, and other inefficiencies, the reasoning goes, the financial rewards of automation accrue mostly to insurance companies, health plans, and government health programs, not to the outfits that dispense medical care.

Giving the laggards more ammo is an article in the March 12 issue of The Wall Street Journal by Jerome Groopman and Pamela Hartzband of Beth Israel Deaconess Medical Center. The two doctors question the $80 billion in savings President Obama has ascribed to e-health care records, as well as their effectiveness in reducing errors.

OK, the benefits are overstated by those parties with the most to gain: the government and system suppliers. And do I like that the government is creating yet another massive program to teach an industry how to behave? No. But given the lack of a dominant health care industry player to dictate supply chain standards (like Wal-Mart is in retail), the government needs to get involved.

As for the foot-dragging by health care providers, imagine if retailers and consumer-goods makers had resisted digitization years ago: "We'd love to automate our internal and supply chain processes, but our margins are pretty thin and we wouldn't realize the benefits as much as our partners would, so we'll take a pass" ... and fade into obscurity.

Not to say that digitization will come easy to health care providers, even with the government's support. E-health records systems are expensive and require changes in physician office workflow, crimping productivity as everyone gets up to speed. But which IT adopters don't face such hurdles?

In the United States, 180,000 practices employ four or fewer doctors. But size is no longer an excuse for inaction. I recently switched from a 20-physician practice because it's still operating like it's 1990. Apparently the government, the country's largest health care payer, is fed up as well.

Rob Preston,
VP and Editor in Chief
[email protected]

To find out more about Rob Preston, please visit his page.

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