Obama's e-health agenda receives cash infusion

The White House's unveiling on Thursday of $1.2 billion in grants for programs to expand the use of electronic health records represents the first major investment in President Obama's health information technology agenda. Administration officials this past week have publicly tied the benefits of health IT to the president's larger, more controversial health care reform effort.

The grant money is aimed at laying the foundation for so-called meaningful use of electronic health records -- a standard for quality and efficiency of care that will determine which medical professionals and technologies are eligible for forthcoming stimulus funds.

The money will "prepare the groundwork for Medicare and Medicaid incentives" that take effect in 2011 under the Recovery Act, David Blumenthal, national coordinator for health IT, said during a Thursday conference call with reporters. Doctors and hospitals that make meaningful use of e-records by 2011 or 2012 will be eligible for up to $44,000 in Medicare payments over five years.

"Expanding the use of electronic health records is fundamental to reforming our health care system," Health and Human Services Secretary Kathleen Sebelius said on Thursday. "Electronic health records can help reduce medical errors, make health care more efficient and improve the quality of medical care for all Americans."

About half the grants will go toward creating 70 regional centers that will offer hospitals and clinicians hands-on experience in meaningful use of e-health records systems. "These modern health IT centers could be considered as somewhat akin to the agricultural extension centers Congress set up early in the 20th century, which helped to support vast improvements in the efficiency, quality and productivity of the agricultural sector," Blumenthal wrote in an e-mail to the public on Thursday, marking the second in a new series of health IT-related e-mail messages from the Obama administration.

The other half of the funding will go to states to help them roll out policies and networks for exchanging information electronically within and across state lines.

Getting technologies into the hands of health care providers and ensuring those tools can talk to each other are important to cutting health care costs, said David Merritt, a vice president at the Center for Health Transformation. But the success of health IT and the president's other health care proposals are not parts of the same whole, he added. The center is a corporate institution founded by former Republican House Speaker Newt Gingrich that works on health IT policy and health care reform.

"Even if the overall health reform effort crashes and burns, you'll still see the pieces in place for health IT moving forward," Merritt said.

He called the administration's health IT actions on Thursday "a welcome step."

"They did a very good job of plunking down a lot of money for provider adoption, but an equally important part is to have a network in place," he added. "If they don't address connectivity . . . they'll simply turn paper silos into electronic silos. . . . It's good that they are moving this early on [on both parts]," only six months into the administration.

HHS expects to issue a notice of proposed rule-making on meaningful use criteria by the end of 2009 and then provide a 60-day public comment period, according to Blumenthal. "Part of the meaningful use definition is the ability to exchange information," he told reporters. Separately, HHS and the Federal Trade Commission this week announced companion rules that require medical professionals covered by health privacy laws and health IT vendors who are not covered by such laws to notify consumers if their electronic health information is breached.

The first grants for the regional support centers will be awarded on a rolling basis in fiscal 2010. Awards to states also will be issued in fiscal 2010.

HHS anticipates all centers will be running at full capacity by the end of December 2010 and will be largely self-sustaining by the end of December 2012.

All the movement on the health IT front this week did not surprise Brian Wagner, senior director at the eHealth Initiative, who said the health IT community had been expecting these programs for months. He noted that Obama was the first candidate to stump on a platform of health IT. The eHealth Initiative is a nonprofit committed to improving health care through compatible health IT systems.

HHS' timeline for both programs is aggressive, Wagner said.

The regional centers will "have to be very quickly embedded in the community and prove themselves to the community and the government," as competent, friendly and accessible, in order to stay in business, Wagner said. Self-sufficiency is "contingent on proving themselves to the people they are going to be providing services, too."