EHR Incentive Dollars Flowing to Physicians

It's no secret that cost continues to be the greatest deterrent to physician adoption of electronic health records, or EHRs. In recent weeks, two separate organizations have released reports that examine the progress of initiatives designed to help physicians pay for the implementation and maintenance of EHR systems. What they show is that there's significant funding available for this purpose, but it's moving more slowly through some vectors than others.

According to the Certification Commission for Healthcare Information Technology, or CCHIT, money -- big money -- is on the table for America's physicians. CCHIT, an independent private-sector initiative designated as the nation's recognized certification authority for EHRs and their networks, has listed 90 programs in its CCHIT Incentive Index catalog (12-page PDF; About PDFs) that represent about $703 million in potential EHR funding. A state-by-state listing also is available from the CCHIT Web site.

Nearly $670 million is available from 40 incentive programs offered by government agencies, insurance plans, employer coalitions and public-private partnerships. Hospitals and hospital systems have tossed another $33 million into the EHR pot following the federal government's relaxation of anti-kickback laws and related regulations in 2006.

CCHIT's Sept. 25 press release cited Bridges to Excellence as an example of a program that is collaborating with some of America's largest corporations, including IBM, AT&T and General Electric. Through pay-for-performance programs connected to the Bridges program, physicians who use CCHIT-certified EHRs earn per-patient bonuses.

In addition, CCHIT found that at least 43,000 physicians are involved in state and local initiatives that offer EHR subsidies. Another 1,200 physician practices will be eligible for incentive payments through an upcoming $150 million Medicare demonstration project.

John Morrissey, CCHIT communication manager, recently told AAFP News Now that the $703 million estimate was conservative, particularly in terms of hospitals reporting EHR donations to physicians.

Under federal regulations, hospitals are allowed to subsidize as much as 85 percent of the upfront and ongoing costs of EHR software and IT support services for physicians. Morrissey said that because many hospitals reported percentages of support rather than specific dollar amounts, the true amount of cash available for support might not be accurately reflected. "I think we're very underreported," he added.

The Washington-based Center for Studying Health System Change, or HSC, also issued a new report. "Despite Regulatory Changes, Hospitals Cautious in Helping Physicians Purchase Electronic Medical. Records" focused on site visits to 12 nationally representative metropolitan communities and follow-up interviews with 24 hospitals. HSC noted that just seven of the hospitals had pursued a strategy to provide financial or other support to physicians to purchase EHRs.

In addition, although many hospitals expected to provide some type of IT support to physicians, only 11 of the 24 hospitals interviewed were considering subsidizing at least a portion of EHR costs as allowed under the modified federal regulations. Most of these hospitals planned to combine their direct financial support with hospital EHR vendor discounts obtained by purchasing EHR systems for hospital-owned physician practices.

Some hospitals also planned to offer physicians health IT perks such as training, technical support, data storage and clinical data exchange between the hospital and physician-owned EHRs.

HSC study co-author Joy Grossman said that developing an interoperable hospital health IT network takes years, and that it was no surprise that hospitals were proceeding slowly.

"From the hospitals' perspective, they do not want to irritate the physicians by rolling out systems that don't work. That's the worst thing that could happen, so they focused on getting it right," Grossman told AAFP News Now. Hospitals said they wanted to work out the health IT kinks with their own physicians before rolling systems out to a broader group, she said.

Grossman, an economist and senior health researcher for HSC, pointed out that hospital executives needed to see clear strategic benefits to their institutions before proceeding with EHR handouts. "They must think about this in terms of the resources they have available and the other strategic decisions they have to make," she said.

Hospitals in the study cited a need to improve patient care and create strategic alliances with physicians as important factors in moving forward with their EHR support plans. They noted other circumstances that could persuade them to step up their efforts, including

CCHIT's Morrissey said he was encouraged by the amount of EHR dollars currently available to physicians. He pointed out that the anti-kickback measures were relaxed just two years ago and said both reports showed "a reasonable rate of progress given what should be considered a relatively short timeline."