Michigan unveils strategy to garner stimulus IT funds

The Recovery Act included more than $25 billion in grants aimed at improving the nation's technology infrastructure and expanding adoption of electronic health records. The unprecedented amount of federal funding for health IT and broadband initiatives has provided some economic hope to states like Michigan, which boasts the highest unemployment rate in the country.

Faced with 15 percent unemployment, a $2.8 billion budget deficit and the struggling automotive industry, officials in Michigan are hoping the federal government's IT investments provide a long-term windfall for the Midwestern state. With an eye toward enticing more technology firms to set up shop within the Michigan's borders, state officials have teamed up with business groups and local universities to coordinate the state's efforts on increasing adoption of both broadband and electronic health records.

In the area of electronic health records, Michigan is ahead of most states in its planning, but not quite at the same level as leaders like Virginia and Delaware. Michigan Chief Information Officer Ken Theis said he is very proud of the progress the state has made on planning and implementing e-health records since discussions began in October 2006.

"We've made great progress over the last couple of years," Theis said. "This is going to transform how health care gets done in Michigan. The role of IT is going to be critical, which is why the state needs to come in and provide the framework from a technical perspective."

After convening various health care stakeholders, including hospitals, doctors, regional providers and insurance companies, officials divided the state into nine medical trading areas, each of which covers several counties. Each region will host a health information exchange through which health care providers can access patient records from other providers in the same region. The plan is for the regions to be connected to a centralized state network that eventually would be linked to a national health information exchange.

Providers pay a monthly fee, about $100 per month, to be part of the regional exchange, but offices already using e-health records systems would not require additional software or hardware. The exchange includes a software tool that allows users to transfer clinical information to one another without requiring that they use the same type of electronic health records system.

"[The exchange] is an IT solution that is interoperable with everyone's electronic medical records system," said Denise Holmes, director of the Michigan Health Information Network at Michigan State University's College of Human Medicine, which provides guidance to the regions on privacy and security issues related to health information exchanges. "Beyond the technology solution, you have a formal organization that works out data sharing agreements, legal, security and privacy issues so people are confident when they send data that it's falling in the right hands and it's secure."

Of the nine health information exchanges in Michigan, two have moved from the planning to the implementation phase. Somewhat counterintuitively, the first exchange to go live covers the entire upper peninsula of Michigan, which is largely rural and sparely populated.

"We usually think of large urban areas as the first adopters," Holmes said. "But health information exchanges are more easily implemented in rural areas with smaller to mid-size hospitals."

A second health information exchange covering three counties in the Lansing area is set to go live in the coming weeks, while the others are still in various stages of preliminary planning. In total the state has spent about $10 million to help encourage adoption of health IT to date, but that number is expected to increase exponentially when officials learn how much funding they will receive from the federal government at the end of September.

Janet Olszewski, director of the Michigan Department of Community Health, said the state is well-positioned to establish the health information exchange infrastructure thanks to advance planning and technical assistance from centers based at Michigan State, Wayne State and the University of Michigan. Olszewski said despite the state's dire budgetary situation, she anticipates making significant progress on implementing health IT during the first two years of the federal program, although more resources would help.

"It doesn't stop us from going forward," Olszewski said, adding that the $19 billion in federal government's grants will dry up after a couple years, creating additional pressure to take action quickly. "We're going to need to look creatively at how we're going to put that together. We had to reduce our health IT grants, we haven't been able to do that again because of the budget situation for like seven years. It affects us, but doesn't take us out of the game."

"This is our one shot to do this; we don't want to waste it," said Theis. "We probably one have one shot, the challenge is, how do we do this to show benefit on day one to physicians and patients."

Theis hopes the federal IT funds can be part of the solution to Michigan's economic woes; his organization is part of New Economy Partnerships, a group of state officials dedicated to bringing technology firms to the state to do business. He cited several factors that might attract companies to Michigan, including the extremely depressed real estate market and a pool of engineering talent from the auto industry.

"Typically we have not been good at attracting those companies to Michigan," Theis said. "IT firms don't want tax incentives. They want low cost of entry and access to talent, specifically access to talented individuals. We have those."

Theis said he expects the state to receive $200 million to $300 million from the federal government for broadband expansion, money that will be focused on increasing availability in rural and underserved areas. Currently 60 percent of citizens in Michigan have access to broadband where they live. Theis would like to see that number climb, but acknowledged that adoption, not accessibility, is the major challenge.

The federal broadband money will be distributed directly to telecommunications providers, but Theis said his organization has been working closely with those companies to ensure they are not submitting duplicative proposals. His office has been encouraging companies to pursue projects that both expand coverage and create a network backbone that can be leveraged to expand further in the future.

"We're trying to reduce waste in our networks," Theis said. "Our plan is to draw that into a public sector superhighway that could save between $80 million and $100 million a year."