With Costs Taken Care Of, It's Time for EHR Adoption

With a stroke of his pen, President Barack Obama on Tuesday effectively eliminated physicians' biggest barrier to widespread EHR adoption.

For years physicians have cited the costs of implementation as a rationale for delaying adoption—including in our own Industry Survey—and considering the average initial investment somewhere in the $30,000 range, it has been a legitimate obstacle for most practices.

Not anymore. The American Recovery and Investment Act sets aside $19 billion to support healthcare IT, including up to $42,000 for each individual provider.

Here's how it gets doled out: Physicians who are "meaningful" EHR users can receive up to $18,000 if they are eligible in 2011 or 2012 ($15,000 or less if the first year is after that). Payment ceilings drop to $12,000 in year two, $8,000 in year three, $4,000 in year four, and $2,000 in year five. Payment limitations are 25% higher for eligible providers in areas designated as health professional shortage areas, and the incentives do not apply to hospital-based physicians.

Physicians wanted federal help with the healthcare IT costs, and here it is. Problem solved?

Not quite. It's better to think of EHR adoption as a starting point than a finish line, says David C. Kibbe, MD, MBA, senior advisor for the American Academy of Family Physicians and chair of the ASTM International E31Technical Committee on Healthcare Informatics. The real goal should be to improve quality and coordination of healthcare, not just to outfit every physician with new technology. The stimulus package's ultimate effectiveness depends on how some of the details in the provisions are executed in relation to that long-term goal.

For instance, the range of products eligible for incentive payments will make a significant difference. "One of the keys to the bill's success is to make sure that new and innovative products are allowed to participate in this marketplace and that the monies are spent toward some of those innovations, which I think will lower costs," says Kibbe.

Many of the traditional products, including those endorsed by the Certification Commission for Health Information Technology, have been experimental and difficult to integrate. If the scope is too narrow, physicians' concerns about interoperability and effectiveness, which have previously been overshadowed by cost concerns, could reinstall some hesitancy.

The details will be up in the air, however, until President Obama appoints a Secretary of Health and Human Services and other key players, such as the newly-created Office of the National Coordinator for Health Information Technology.

But time is of the essence. The bill is designed to make physicians act relatively quickly—in 2015, physicians without a meaningful EHR will receive only 99% of payments for professional services. The next year, another percentage point is shaved off, and another after that.

Physicians have been taking a wait-and-see approach long enough. The money is on the way; it's time to start shopping.