Published — October 12, 2011 Updated — May 19, 2014 at 12:19 pm ET

Health information technology: Incentives may not always serve intended purpose

Health care providers are switching from print to electronic health records. Emma Schwartz/iWatch News

Survey suggests some awards are going to doctors who have been using electronic health records for years


About half of the first batch of federal dollars meant to encourage doctors and hospitals to switch to electronic records went to providers who were converts to the technology long before the stimulus program was announced, an iWatch News analysis suggests.

The analysis could raise questions about whether the government will be able to meet its goal of widespread adoption of health information technology. While these early numbers are hardly conclusive, they suggest that a large swath of payments intended to be an incentive for new adoption of electronic health records are merely rewarding health providers for minor adjustments to systems they have had in place for years.

Proponents of the program are undeterred, arguing that it is on track and has established important industry standards. Opponents question the efficiency of the payments, though, and some have even called for Congressional repeal. All of this comes at a time when the president is pushing a new stimulus bill, the “Super Committee” is attempting to rein in federal spending, and the United Kingdom is abandoning much of its own health information technology project.

The first installment

About 320 doctors and hospitals were included in the first batch to receive incentive payments through Medicare — payments that totaled $75 million. Those payments began during the two weeks following the launch of the program April 18 by the Centers for Medicare & Medicaid Services (CMS). The details of the initial batch were released by the agency at the end of May.

The payments represent the first installment on a $27 billion incentive program designed to compensate health care providers for both adopting often-expensive computerized medical recordkeeping systems and proving that they have used them to improve patient care.

To be eligible for the first round of payments, health care providers must attest to having adopted 23 out of 25 “meaningful use” benchmarks, a checklist the government developed to ensure providers are recording and keeping track of their patient’s health information in a standardized way. Among the examples: recording smoking status, maintaining a list of allergies to medications, documenting demographics and providing patients with an electronic copy of their health information. Providers must also have technology that is able to collect, analyze and report the measures, engage patients and transfer information to other providers. For many, this will mean installing a complex and expensive software update.

The incentive program, to be administered through both Medicare and Medicaid, is part of President Barack Obama’s 2009 economic stimulus, the $787 billion American Recovery and Reinvestment Act. The incentive provision is known as the Health Information Technology for Economic and Clinical Health (HITECH) Act. The idea behind it is that creation of a computerized health record for every American will cut health care costs in the long run. A CMS spokesman said the agency has distributed nearly $400 million in both Medicare and Medicaid payments, and that by the end of the summer, that figure might well exceed half a billion dollars. The government hasn’t required medical providers to adopt electronic health records — but will penalize them if they do not, by deducting 1 percent to 5 percent of their Medicare payments from 2015 to 2019.

iWatch News attempted through phone and email to interview all providers who had received the money; 62, or about a third, of the 188 distinct practices (some with multiple doctors who received money) and hospital chains on the list chose to respond. Health providers were asked for the brand of the technology they installed, when they installed it, whether they would recommend it to other providers and whether they have had any problems with it.

Of those who responded to the questions, almost half of the providers had installed the technology in the years before the stimulus program was announced — some dating as far back as the 1990s.

Early Adopters

Those who already had electronic recordkeeping systems were still able to take advantage of the HITECH Act incentives by upgrading their existing software and demonstrating to the government that the improved system was meeting those “meaningful use” standards in improving patient care.

Dr. George Miller, a surgeon who practices in Grenada, Miss., said his decision to adopt electronic health records had nothing to do with the stimulus — in fact, he has been using the technology for a decade. His company made upgrades to the software after the HITECH Act. “When we achieved ‘meaningful use,’ I figured I might as well get reimbursed,” he said.

The same was true for Dr. Jeffrey Willig, an ophthalmologist in Syosset, N.Y., who said doctors should take advantage of the government’s generosity. “If you’re going to do it anyway, then why not do it and have someone else pay for it?” he said.

Dr. Rafi Kevorkian, an internist in St. Louis, Mo., said he began using electronic health records in November 2009 and didn’t find out about the incentive program until he got going. Though electronic health record-keeping systems have saved him a lot of time and keep him on top of health maintenance, he said he thought filling out the “meaningful use” forms was “a pain” that he would be dealing with for the next four years through the different stages of the program. He also noted it was costly to have IT personnel help.

Dr. Luis Calo, who has a family practice in Harlingen, Texas, told a different sort of story. When he started his new practice in late 2009, Calo said, the HITECH money spurred him to invest in electronic recordkeeping software. He selected his system specifically to make sure it would allow “meaningful use” and used the $18,000 incentive payment toward the startup costs. Moving forward, he hopes to use the next rounds of Medicare payments toward monthly fees, upgrade costs, and, if necessary, hardware expansion.

Providers will have other chances to meet the “meaningful use” requirements and receive incentive payments. Medicare payments that have gone out this year are only part of the first phase of three for “meaningful use,” the second of which may be delayed a year (until 2014). The three stages will give providers three separate opportunities to cash in on the stimulus to help defray the hefty costs associated with going digital. Systems can cost as much as $45,000 per physician, with annual operating, licensing and maintenance costs ranging from $3,000 to $9,000, according to a 2008 report from the Congressional Budget Office. Participants have through the end of 2013 to participate in the first stage, but the maximum they can recoup will decrease each year. Until the end of 2014, an eligible professional who qualifies for the different benchmarks can receive a maximum of $44,000 from the government; hospitals can received a maximum of $2 million.

Should Early Adopters Qualify?

So, if one aim of the payments is to encourage adoption of health information technology adoption, why give them to providers who already have electronic recordkeeping systems in place?

Some lawmakers believe it’s important not to penalize early adopters of the technology. Rep. Anna Eshoo, D-Calif., introduced a bill in 2007 that provided much of the basis for what eventually went into the HITECH legislation. According to her office, “The idea was to eventually get everyone using health information technology, but to use it together.”

“Promoting the adoption of health information technology will yield great improvements to patient safety, efficiency and costs from preventable medical errors,” Eshoo said.

“We’re making progress and I look forward to seeing total adoption across our country.”

Dr. Lyle Berkowitz, an internist and medical informatics expert, said he is unconcerned about whether the payments go to new or old adopters.

“In fact many of the ultimate ones who get the ‘full’ ‘meaningful use’ dollars will be getting rewarded for ‘doing the right thing’ before there were even rewards to do so … which is actually not a bad message to send,” he said.

“Even for those of us using [electronic medical records] for many years, ‘meaningful use’ is not a slam dunk — it requires a lot of work and updating of technology and workflows … but it’s easier for us than starting from zero.”

Brian Bruen, lead research scientist and lecturer at George Washington University’s Department of Health Policy, said he thought it was too early to draw conclusions about the findings in the analysis. Many providers, he said, are taking a “wait-and-see approach.”

But he said there are benefits to paying early adopters because the legislation requires providers to improve their level of capability to allow for more streamlined, integrated, cost-effective care. “We’re not paying for nothing,” he said.

Others disagreed. A spokesman for Sen. Tom Coburn, R-Okla., an obstetrician, said that “if providers have been paid for systems they already had in place, that seems to be an inexcusable waste of taxpayer dollars. It makes no sense for HHS to pay physicians for systems they already have.” Coburn criticized the HITECH Act in his July “Back in Black” deficit reduction plan and proposed ending federal subsidies for health information technology. Coburn noted that according to the nonpartisan Congressional Budget Office, “the use of health information technology was already projected to be widespread by the end of the decade — even without the adoption of the HITECH Act.”

Pete Sepp, a spokesman for the National Taxpayers Union, said he thought the stimulus program was designed more for speed than effectiveness — “get the money out the door and hope that the eligibility requirements would work out.”

“Elected officials who want to appear to be ‘doing something’ about a problem create a program that involves a good PR boost without necessarily providing an equally valuable result for the investment of tax dollars,” he said.

One fear, expressed by Brock Slabach of the National Rural Health Association, is that smaller health providers will struggle to meet the complicated and expensive demands of the HITECH Act.

“If the public policy agenda was to move providers that couldn’t afford or didn’t have the resources … I think the jury is still out,” he said. “ I think we’ll find the ones that were far along will be further along and the ones who didn’t are going to go nowhere.”

And the rules, some doctors say, are confusing. One recipient, Dr. Mark Viner — a psychiatrist who practices in Sparks, Nev. — said he opted to return the initial payment after realizing that his private practice may not have treated enough Medicare patients to qualify.

Despite the issues raised by both the iWatch News findings and various critics, the CMS spokesman made clear the agency is pleased with the program thus far. “The most important point,” he said, “is that these incentive payments represent an investment in improving health care through the widely acknowledged benefits of electronic health records.”

Improving Patient Care

Of the health care providers who have switched to electronic health records, the majority of those who spoke to iWatch News were positive about the systems. Several said the technology has tremendously helped their practice by speeding up transactions, decreasing the amount of time patients spend in the waiting room, and helping patient progress.

Andy Wilson, a spokesman for Texas Health Resources, said electronic health records have reduced the provider’s medical errors and reduced costs as well.

And Dr. Michael Mignoli, an internist in Lone Tree, Colo., raved about his system. “It provides me the opportunity to deliver high quality care,” he said. Mignoli first started using electronic recordkeeping in 1995 and said he could not “give a higher recommendation” to his current software.

But for many, the transition hasn’t been easy.

Dr. Mark Johnson, a podiatrist who practices in West Plains, Mo., and who participated in the Medicare incentive program, said getting used to the software was time-consuming.

“I’ve got a lot of colleagues who aren’t doing ‘meaningful use’ at all,” he said. “For solo doctors, it’s a burden. It puts a lot of stress on staff, assistants and the receptionist.”

This view was echoed by Dr. Alfredo Gonzalez, a Glenview, Ill.-based cardiologist. He called the government regulations “absurd in many ways” because they force him to spend “more time writing data that is irrelevant to patient care and less time taking care of patients.”

Dr. David Kibbe, a physician and senior adviser for the American Academy of Family Physicians said that even the best-managed, most-organized practices are going to face some loss of productivity. Health care providers who are starting from scratch know that beginning to adopt computerized health records already carries its own set of problems, with or without the “meaningful use” criteria.

Read more in Health

Share this article

Join the conversation

Show Comments

Notify of
Inline Feedbacks
View all comments