Securing Stimulus Dollars Will Require Sacrifice and Swift Action

HealthLeaders Media Staff, April 10, 2009

Nashville (TN) General Hospital at Meharry is facing a 10% budget cut, which could mean cutting its oncology and cardiology clinics, the adult day-care program at Knowles Home Assisted Living & Adult Day Care center, and eliminating $350,000 in funding for Our Kids, a program for abused children.

The facility treats large volumes of patients who have little or no insurance, so its uncompensated care costs are offset by the millions of dollars it receives from the city annually. Recently, however, Mayor Karl Dean asked the Metro Hospital Authority and other city departments to plan for 10% budget cuts.

Hospital leaders nationwide are facing similar heart-wrenching choices in order to keep their hospitals afloat or to better position their health systems for success on the other side of this recession. The April issue of HealthLeaders magazine examines some of the difficult strategic decisions that hospital leaders are facing right now in its cover story Jump . . . or Get Pushed. For example, should organizations trade in their current CEO for one who is more of a war-time leader? Should organizations risk trying to grow services in a down economy? Should health systems give patients more decision-making power in the organization?

Another pressing issue that hospital and physician leaders have to address is what to do about the $19 billion in available funds for electronic health records in the stimulus package. Ideally organizations could wait until the end of the year for regulations to clarify what a "qualified EHR" or a "meaningful user" means. But if organizations want to get the maximum funds available in 2011 they can't wait for the end of the year before getting started. They should get moving on this project now?at least that was the consensus this year at the Healthcare Information and Management Systems Society annual conference held this past week in Chicago.

CEOs have told their CIOs not to leave one penny from this stimulus package on the table, according to a healthcare executive I spoke with at the conference this year.

That means some tough choices will definitely need to be made for many healthcare organizations. There are manpower concerns on both the vendor and provider side about having enough qualified staff to meet this deadline. So do you cut from one hospital department to beef up IT staff? What about training? Then there is the question of financing. Money has been one of the main reasons that more healthcare organizations haven't already implemented EHRs and those constraints have not disappeared. The stimulus reimbursement will come after health systems have qualified—not before. So what are providers willing to sacrifice to meet this deadline? Senior leaders will have to make some tough choices that won't please everyone. One thing healthcare executives seem to agree on, however, is that providers had better secure their position in line with a vendor sooner rather than later to have any chance of qualifying for the maximum reimbursement.

Organizations shouldn't be panicking, however. There is still time to for due diligence to make sure that the vendor they choose will be able to qualify for the "meaningful use" definition when it's finally revealed and that it has the available resources to provide training and support. But perhaps more importantly, they'll want to ensure that the vendor they choose will still be around in five years.

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