Wiring the Health System Origins and Provisions of a New Federal Program
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1 s p e c i a l r e p o r t Wiring the Health System Origins and Provisions of a New Federal Program PART ONE OF TWO David Blumenthal, M.D., M.P.P. Presented as the 36th annual Joseph Garland Lecture of the Boston Medical Library on October 25, Dr. Garland was editor-in-chief of the Journal from 1947 through In February 2009, the U.S. government launched an unprecedented effort to reengineer the way the country collects, stores, and uses health information. This effort was embodied in the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was part of a much larger piece of legislation, the so-called stimulus bill. The purpose of the stimulus bill, also known as the American Recovery and Reinvestment Act of 2009 (ARRA), was to stimulate the economy and prevent one of the worst economic recessions in modern history from becoming a full-fledged depression. Congress and the Obama administration took advantage of the crisis to enact programs that might spur short-term economic growth as well as promote scientific and technical advances with potential long-term benefits for the American people. In the health field, one such program involved a commitment to digitizing the U.S. health information system. The HITECH Act set aside up to $29 billion over 10 years to support the adoption and meaningful use of electronic health records (EHRs) (i.e., use intended to improve health and health care) and other types of health information technology. Such large, targeted public investments in any particular type of health technology are rare in U.S. history. Indeed, it is difficult to think of a precedent for the HITECH Act, which encourages millions of health professionals and thousands of health care institutions to adopt and use health information technology. Now that more than 2 years have passed since this historic program began, a review of its original rationale, its accomplishments, and its considerable challenges seems timely. This report discusses the original justification for the HITECH Act, its major provisions, and some of the early challenges associated with its implementation. In interpreting this report, readers should be aware that I served as national coordinator for health information technology in the Obama administration from April 2009 until April Arguments for HITECH Two basic arguments justified intervention by the federal government in 2009 to promote the adoption and meaningful use of health information technology. The first was a conviction that information technology could improve health and health care for the American people. The second was that major problems inhibit the spread of health information technology in ways that create the need for government remedies. Value of Health Information Technology As the first decade of the 21st century came to a close, a variety of considerations appeared to support the expanded use of new forms of information technology in health care. One rationale was intuitive. Information technology was revolutionizing every aspect of human affairs, but U.S. health care seemed peculiarly immune. As of 2008, only 17% of physicians and 12% of hospitals had basic or fully functional electronic health records. 1,2 This level of use contrasted with widespread adoption of EHRs in many other industrialized nations, including the United Kingdom, the Netherlands, Scandinavia, Australia, and New Zealand. 3 Surely, the U.S. health care system by far the most expensive in the world should be capitalizing on one of the most fundamental technological breakthroughs in human history. n engl j med 365;24 nejm.org december 15,
2 Theoretical arguments offered a further rationale for the use of health information technology. Experts agreed that the U.S. health care system was not realizing value for the money invested. 4-6 The health system s waste and inefficiency weighed particularly heavily on policymakers, who contemplated the effects of relentlessly increasing health care costs on the U.S. economy and federal deficits. 6 But eliminating waste and improving quality are difficult if health professionals are uninformed about the care their patients are receiving elsewhere in the health care system. Better coordination of care lies at the heart of improved performance of the health system, but coordination implies sharing information, and information sharing is difficult in a paper-based world. Electronic health information systems thus seemed a necessary foundation for realizing many other short-term and long-term health policy goals. 7 Still another rationale was empirical. Experience was demonstrating the ability of health information technology to improve the quality and efficiency of care, especially in the large health systems that were early adopters of this technology. Relying heavily on health information technology, the Veterans Health Administration transformed itself in the 1990s from a muchdisparaged health care organization to one of the best in the United States. 8 The Kaiser Permanente Health Plan was making major strides in improving the care of patients with chronic illness using its systemwide electronic health records. 9,10 Ninety percent of physicians using EHRs in 2008 reported that they were satisfied or very satisfied with them, and large majorities could point to specific quality benefits. 1 After a review of the existing evidence, the Institute of Medicine called repeatedly for increased use of health information technology in health care. 11,12 Studies were not uniformly positive. Some showed possible safety problems associated with health information technology Others raised questions in particular about whether the benefits realized by early adopters and large institutions with self-developed EHRs were generalizable to commercially developed products and later adopters and smaller institutions. 18 But, on balance, studies provided support for the wider adoption and use of health information technology. 19 Barriers to Adoption and Use of Health Information Technology Despite the attractions of health information technology, at least four barriers have slowed the dissemination of EHRs and other electronic information systems. The first barrier is economic. 1,2,20,21 The fee-for-service payment system in the United States does not financially reward the improved quality and efficiency that health information technology makes possible. When such benefits occur, they accrue to patients and payers as much as or more than to the health professionals and institutions that bear the often considerable costs of installing EHRs and other forms of information technology. Thus, left to their own devices, private U.S. health markets are unlikely to take full advantage of health information technology. Economists generally agree that when markets fail in this way, government has a legitimate role in helping to correct those market failures. 22 A second barrier to the adoption and use of health information technology is logistical and technical. EHRs in particular are complex products that are difficult to evaluate and understand. The market s diverse offerings vary enormously in capability and usability, and new products are burgeoning. Lacking resources and expertise, providers are legitimately concerned about making big investments in systems that may not meet their needs. 1 They also face technical hurdles in installing, maintaining, and upgrading EHRs over time. These concerns can reinforce the natural reluctance of health professionals to make the major changes in their daily work that new health information systems often require. Such logistical and technical barriers suggest that many providers may need assistance in adopting and using health information technology, and a successful effort to propagate EHRs in New York City indicated that government can facilitate such assistance. 23 Problems with the exchange of health information create a third obstacle to the dissemination and use of health information technology. The ability to effectively transfer electronic health information between different information systems in various institutions and practices is underdeveloped in the United States at this time. 24,25 Thus, providers are appropriately concerned that their electronic health information 2324 n engl j med 365;24 nejm.org december 15, 2011
3 special report systems may not be able to exchange health information about their patients with other caretakers. This concern creates a rationale to wait until some uncertain future time when systems for exchange are working well. However, with thousands of health information technology products and hundreds of thousands of users of health information technology, developing such exchange solutions and getting them to work seamlessly are huge challenges. Overcoming these challenges requires collaboration among vendors and users of health information technology, but these organizations are often fierce competitors in local and national markets; so collaboration is unlikely to occur naturally. This lack of collaboration creates a rationale for government to be an honest broker in facilitating technical and policy approaches to the exchange of health information. Still a fourth problem inhibiting the adoption and use of health information technology is concern about the privacy and security of digital health information. Paper-based systems are not completely private or secure, 26 but digital systems create new challenges. The media report almost daily breaches in public and private electronic information systems, both health- and non health-related. 27 Entire new industries have arisen using personal health information for purposes that were never anticipated by existing privacy statutes, and these uses are not currently regulated. An example is the growing personal health record industry, which is not currently regulated under the Health Insurance Portability and Accountability Act (HIPAA). Public fears about the loss or misuse of personal health information could undermine efforts to disseminate health information technology. Taken together, the case for more rapid adoption and use of health information technology, the considerable barriers to its spread, and the rationale for government intervention to overcome those barriers created the justification for federal legislation to promote electronic health information systems. Congress had made several bipartisan attempts to pass such legislation during the administration of President George W. Bush, but the political will for a major federal investment in health information technology did not exist at that time. The economic crisis of 2008 broke the logjam, and the HITECH Act emerged. The HITECH Ac t and Its Progr ams In part because of previous unsuccessful efforts to pass federal legislation, Congress was well prepared to respond to the opportunity created by the Obama administration s support for health information technology programs and the momentum of the stimulus bill. The HITECH Act was drafted in a matter of weeks, with persistent bipartisan support and often with the use of preexisting legislative language. The resulting legislation addressed to varying degrees almost all the major obstacles to the adoption and effective use of EHRs. Overcoming Economic Barriers to Adoption of Health Information Technology The most widely publicized provision of the HITECH Act attempts to remedy the economic barriers to the spread of health information technology. By making available up to $27 billion in extra Medicare and Medicaid payments to health professionals and institutions that become meaningful users of EHRs, the federal government is helping to correct the market failures that inhibit the dissemination of health information technology. The meaningful-use framework actually navigates between two alternative approaches to addressing health information technology related market failures. The first alternative would pay directly for improved clinical outcomes of care, on the theory that providers would naturally gravitate to health information technology once they were compensated for improving quality and efficiency. The other alternative would simply pay providers for the costs of adopting EHRs and other types of health information technology. The problem with the former approach is that, although improving clinical outcomes is a critical goal and benefit of health information technology, electronic health systems can confer other societal benefits such as supporting research, public health programs, and the creation of the large local, national, and international databases on which research and public health depend. Vendors and providers might not pursue the full range of health information technology related benefits if they were paid just for improving clinical outcomes. Paying directly for adoption of health information technology creates a different problem. Providers could receive the funds and buy EHRs but never use them effectively. n engl j med 365;24 nejm.org december 15,
4 Instead, Congress took the approach of incentivizing the meaningful use of EHRs and gave the secretary of health and human services broad discretion to define this term, while stipulating that it should include at a minimum electronic prescribing, information exchange, and electronic reporting of quality metrics. Congress also specified that requirements for meaningful use should become more demanding over time. 28 This approach created an opportunity for the executive branch to deliberate carefully and consult broadly about the uses of EHRs that support improved health and health care, to incentivize those uses, and to modify them over time in response to experience with the meaningfuluse regulation and changes in health information technology. Nothing precludes the secretary of health and human services from determining that improving clinical outcomes should be an indicator of meaningful use, but he or she is also free to include other features, such as collecting and reporting data that are critical to controlling outbreaks of infectious disease, monitoring drug side effects, and investigating the effects of environmental catastrophes such as the Gulf oil spill. Addressing Other Barriers to Adoption of Health Information Technology To tackle the other barriers to adoption of health information technology, the HITECH Act includes a variety of approaches. First, it established in law the Office of the National Coordinator for Health Information Technology (ONC), tasked it with developing a national health information technology system, and provided it with $2 billion in discretionary funds to support the law s ambitious agenda. Though the ONC had considerable latitude in designing programs to support adoption and meaningful use of health information technology, Congress did direct the Department of Health and Human Services to pursue particular strategies aimed at overcoming critical barriers to the health information technology agenda. To begin with, the HITECH Act addresses in several ways the logistical and technical obstacles to adoption of health information technology. The law requires the ONC to establish a system of regional extension centers for health information technology, the purpose of which is to assist health care providers with adopting and meaningfully using EHRs. The inspiration and namesake for the regional extension center program is another venerable federal program that is also intended to assist technology diffusion: the U.S. Department of Agriculture s Cooperative Extension Service. 29 Created in 1914, this service has successfully helped farmers for nearly a century to keep up with new agricultural science and technology. Congress saw an opportunity to do the same for health professionals and hospitals in the field of health information technology. Like the agriculture precedent, Congress intended regional extension centers to set up local offices close to their clients and to provide hands-on assistance with the adoption of technology. As an additional form of assistance, the HITECH Act tackled another problem: a shortage of trained health information technology professionals who could work with providers in the clinic and at the bedside to ease their transition into the electronic world. At the time the HITECH Act passed, studies estimated that the United States needed an additional 50,000 health information technology professionals. 30 The law mandated that the ONC take steps to train more personnel who could work with providers, vendors, and regional extension centers to realize the goals of the legislation. Another element of the legislation addressed the logistical and technical needs of health professionals and institutions. Congress specified that for providers to qualify for meaningful-use payments, they had to use certified EHRs and then tasked the secretary of health and human services with creating certification criteria and a certification process. The requirement for certification offered a form of consumer protection to prospective buyers of EHRs. The department had the authority to test EHRs to be certain that they were capable of supporting meaningful use. This certification did not guarantee they would be easy to use, but it did offer some assurances to prospective purchasers of the equipment. Congress was sensitive as well to another barrier to adoption and meaningful use of health information technology: the difficulty of health information exchange. The HITECH Act requires the secretary of health and human services to adopt standards and specifications (i.e., guidance or instructions) for implementing standards so that they will share a common language and be 2326 n engl j med 365;24 nejm.org december 15, 2011
5 special report capable of exchanging information. The first set of standards and specifications for implementing them had to be adopted by December 31, The legislation further set aside $300 million to help states promote health information exchange. This provision reflected the fact that a number of states (such as New York, Rhode Island, Delaware, Utah, and New Mexico) had taken leading roles in promoting health information exchange in their jurisdictions before enactment of the HITECH Act. The HITECH Act also requires the secretary to develop an approach to governing a nationwide health information network that will support the exchange of health information. A final major thrust of the legislation was to address the privacy and security concerns that might inhibit the dissemination of health information technology. The law increased penalties under HIPAA for health care organizations responsible for negligent breaches of protected health information from a maximum of $25,000 to a maximum of $1.5 million for each violation. It restricts the uses of health information for marketing and fund-raising purposes unless patients consent to these uses. And it tasks the ONC with developing additional approaches for protecting sensitive health information that will give consumers greater control over what, how, and with whom information can be shared. Initial Challenges of Implementing the HITECH Ac t Good legislation does not guarantee successful implementation, and the challenges to putting the HITECH Act s provisions into place were manifold when it was passed. The first and most daunting challenge was the sheer scope of the law s mandate. Never before had a country as large, complex, politically decentralized, and diverse as the United States attempted to create a nationwide interoperable electronic health information system. The only precedents were set in comparatively small nations, such as Denmark, Sweden, and New Zealand, which are roughly equivalent in size and area to a small to moderatesize state in the United States. Even many of these countries were struggling to create health information exchange. A second challenge was the time frames created in the law. The HITECH Act required the secretary of health and human services to adopt, by December 31, 2009, the standards, specifications for implementing standards, and certification criteria for EHRs that would support meaningful use. Of course, it made no sense to create these technical requirements for EHRs before defining meaningful use itself. Meaningful use was a new idea with no precedent in law, policy, or the health care literature. The ONC also had to develop a process for certifying EHRs. Thus, the department had from February to December to draft multiple major new regulations with far-reaching impact. Given the complexities of the federal regulatory process and the novelty of policies and programs involved, this was an exceedingly ambitious deadline. Equally daunting as a deadline was the statutory timing for meaningful-use payments. The HITECH Act stated that hospitals who met criteria for meaningful use could begin receiving payments from Medicare and Medicaid starting on October 1, 2010, and eligible professionals who met criteria for meaningful use could begin receiving payments on January 1, 2011 (eligibility criteria are defined by the Centers for Medicare and Medicaid Services [CMS]). 31 Medicare payments for meaningful use extend until 2016, but rapidly decline after 2012, so that most of the incentive payments are available in the first couple of years (Table 1). This placed considerable pressure on the ONC to use its $2 billion in discretionary funds quickly to assist providers who wanted to begin collecting incentive payments at the program s outset. But the necessary technical supports, including regional extension centers, training programs, and the capacity for health information exchange, were themselves new programs that had to be created from whole cloth without the benefit of an extensive period of refinement and testing. Finally, the federal government itself was not fully prepared in the spring of 2009 to address these challenges. CMS, a large agency with extensive regulatory experience, had responsibility for drafting and implementing the meaningfuluse regulation. However, most other elements of the HITECH Act were the responsibility of the ONC. In April 2009, the ONC had fewer than 35 federal employees. It had never drafted a regulation or run technical assistance or training programs. Now, it had primary responsibility for leading what amounted to a huge project for n engl j med 365;24 nejm.org december 15,
6 Table 1. Maximum Incentive Payments (in U.S. Dollars) through Both Medicare and Medicaid for the Use of Electronic Health Records, According to the First Calendar Year for Which the Eligible Professional Receives Payment.* Calendar Year Medicare Medicaid Medicare Medicaid Medicare Medicaid Medicare Medicaid Medicare Medicaid Medicare Medicaid dollars ,000 21, ,000 8,500 18,000 21, ,000 8,500 12,000 8,500 15,000 21, ,000 8,500 8,000 8,500 12,000 8,500 12,000 21, ,000 8,500 4,000 8,500 8,000 8,500 8,000 8,500 21, ,500 2,000 8,500 4,000 8,500 4,000 8,500 8,500 21, ,500 8,500 8,500 8,500 8, ,500 8,500 8,500 8, ,500 8,500 8, ,500 8, ,500 Total 44,000 63,750 44,000 63,750 39,000 63,750 24,000 63, , ,750 * Eligible professionals may not receive incentive payments under both Medicare and Medicaid for the use of electronic health records (EHRs). The limit on the amount of the annual EHR incentive payment for each payment year will be increased by 10% for eligible professionals who predominantly furnish services in an area that is designated as a Health Professional Shortage Area. Data are from the Centers for Medicare and Medicaid Services. 32 The total amount is for eligible professionals who do not switch their eligibility between Medicare and Medicaid. social change: a national campaign to modernize the U.S health information system over the course of a few short years. Thus, despite the strong rationale of the HITECH Act, the ability of the executive branch to implement the HITECH Act s key provisions remained very uncertain when President Barack Obama signed ARRA into law in February Two years later, the challenges of implementation remain substantial, and it may be some period of time before the success of the federal government in addressing the grand vision conveyed in the ARRA can be fully assessed. Disclosure forms provided by the author are available with the full text of this article at NEJM.org. From the Departments of Medicine and Health Care Policy, Harvard Medical School, Boston. 1. DesRoches CM, Campbell EG, Rao SR, et al. Electronic health records in ambulatory care a national survey of physicians. N Engl J Med 2008;359: Jha AK, DesRoches CM, Campbell EG, et al. Use of electronic health records in U.S. hospitals. N Engl J Med 2009;360: Schoen C, Osborn R, Doty MM, Squires D, Peugh J, Applebaum S. A survey of primary care physicians in eleven countries, 2009: perspectives on care, costs, and experiences. Health Aff (Millwood) 2009;28:w1171-w McGlynn EA, Asch SM, Adams J, et al. The quality of health care delivered to adults in the United States. N Engl J Med 2003; 348: Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med 2003;349: Orszag PR. The overuse, underuse, and misuse of health care. Testimony before the Committee on Finance, United States Senate, July 17, 2008 ( HealthCare_Testimony.pdf). 7. Evidence on the costs and benefits of health information technology. Washington, DC: Congressional Budget Office, (2976) ( 8. Jha AK, Perlin JB, Kizer KW, Dudley RA. Effect of the transformation of the Veterans Affairs health care system on the quality of care. N Engl J Med 2003;348: Chen C, Garrido T, Chock D, Okawa G, Liang L. The Kaiser Permanente Electronic Health Record: transforming and streamlining modalities of care. Health Aff (Millwood) 2009;28: Lee BJ, Forbes K. The role of specialists in managing the health of populations with chronic illness: the example of chronic kidney disease. BMJ 2009;339:b Kohn LT, Corrigan JM, Donaldson MS, eds. To err is human: building a safer health system. Washington, DC: National Academy Press, Institute of Medicine. Crossing the quality chasm: a new health system for the 21st century. Washington, DC: National Academy Press, Han YY, Carcillo JA, Venkataraman ST, et al. Unexpected increased mortality after implementation of a commercially sold computerized physician order entry system. Pediatrics 2005;116: [Erratum, Pediatrics 2006;117:594.] 14. Koppel R, Metlay JP, Cohen A, et al. Role of computerized physician order entry systems in facilitating medication errors. JAMA 2005;293: n engl j med 365;24 nejm.org december 15, 2011
7 special report 15. Koppel R, Kreda D. Health care information technology vendors hold harmless clause: implications for patients and clinicians. JAMA 2009;301: Sittig DF, Teich JM, Osheroff JA, Singh H. Improving clinical quality indicators through electronic health records: it takes more than just a reminder. Pediatrics 2009;124: Sittig DF, Singh H. Legal, ethical, and financial dilemmas in electronic health record adoption and use. Pediatrics 2011;127(4): e1042-e Chaudhry B, Wang J, Wu S, et al. Systematic review: impact of health information technology on quality, efficiency, and costs of medical care. Ann Intern Med 2006;144: Buntin MB, Burke MF, Hoaglin MC, Blumenthal D. The benefits of health information technology: a review of the recent literature shows predominantly positive results. Health Aff (Millwood) 2011;30: Jha AK, DesRoches CM, Shields AE, et al. Evidence of an emerging digital divide among hospitals that care for the poor. Health Aff (Millwood) 2009;28:w1160-w Rao SR, Desroches CM, Donelan K, Campbell EG, Miralles PD, Jha AK. Electronic health records in small physician practices: availability, use, and perceived benefits. J Am Med Inform Assoc 2011;18: Mansfield E, Yohe G. Microeconomics: theory and applications. 11th ed. New York: W.W. Norton, Mostashari F, Tripathi M, Kendall M. A tale of two large community electronic health record extension projects. Health Aff (Millwood) 2009;28: Adler-Milstein J, Landefeld J, Jha AK. Characteristics associated with regional health information organization viability. J Am Med Inform Assoc 2010;17: Adler-Milstein J, Bates DW, Jha AK. A survey of health information exchange organizations in the United States: implications for meaningful use. Ann Intern Med 2011;154: Benjamin R. Finding my way to electronic health records. N Engl J Med 2010;363: Department of Health and Human Services, Office for Civil Rights. Breach notification rule ( hipaa/administrative/breachnotificationrule/postedbreaches.html) th Congress. Public law, 111-5: Health Information Technology for Economic and Clinical Health Act. 2009;123 Stat. 227 ( coveredentities/hitechact.pdf). 29. Department of Agriculture, National Institute of Food and Agriculture. Agricultural extension background ( 30. Rollins G. Forces of change: the growth of data drives demand for data management. J AHIMA 2010;81: CMS EHR meaningful use overview. Baltimore: Centers for Medicare and Medicaid Services, October 2011 ( ehrincentiveprograms/30_meaningful_use.asp#bookmark2). 32. Medicare EHR incentive program, physician quality reporting system and e-prescribing comparison. Baltimore: Centers for Medicare and Medicaid Services, March 2011 ( MLNProducts/downloads/EHRIncentivePayments-ICN pdf). Copyright 2011 Massachusetts Medical Society. n engl j med 365;24 nejm.org december 15,
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