May 2007

While health care information technology can cut health care costs and improve patient care, it often is too costly for small physician practices, which must pay $50,000 per doctor or more for such systems, witnesses told a House panel, urging federal financial help to spread IT adoption.

Physicians from small group practices told the House Small Business Subcommittee on Regulation, Health Care and Trade that scrapping paper records systems in favor of health IT systems is expensive, requires extensive staff training, and a learning curve that temporarily reduces office efficiency.

Witnesses urged Congress to provide financial support for IT adoption, including small and rural practices. Support could be delivered in the form of tax credits for IT implementation and technology bonuses for practices utilizing IT that treat Medicare patients, they said.

Witnesses said the benefits of IT systems become apparent only after a few years of training and adjustment to the new systems, including having 24-hour access to patient information, being able to track patient prescription drug interactions, and the protection of patient records in cases of fire or natural disaster.

"After the initial setbacks we faced during the first two years of using an [electronic medical records] system, our staff and our patients are finally able to appreciate the full potential of health information technology in our practice," said Margaret Kelly, an obstetrician who practices with her father in San Antonio, Texas.

"In fact, our old way of doing things seems completely archaic in retrospect," she added.

"The benefits for our patients and physicians now include immediately available and legible office notes, laboratory data automatically entered into the system by the laboratory company, digital EKGs, and remote access to the entire record," added Kevin Napier, a physician practicing in a nine-member group practice in Griffin, Ga.

High Costs

Despite the advantage of using health IT, witnesses told the subcommittee of the high cost of incorporating IT into their practices, and noted that these benefits do not necessarily translate into cost savings or additional revenue. In addition, IT systems are not necessarily interoperable, hampering their use for the entire health care system, they said.

In fact, policies of private insurers and federal health care programs such as Medicare, which witnesses often said underpay them for the care they deliver, "are complicit in keeping us in a paper -based system," Kelly told the subcommittee.

"Private insurers and Medicare constantly expect us to deliver more care in each visit, for less money," she said, adding that Medicare reimbursement is projected to be reduced 40 percent over the next eight years. "As our rates continue to be cut from all angles, it can be difficult for many practices to justify such an investment in health IT," she added.

Napier said the cost in moving to an IT system at his nine-member physician office was nearly $400,000. Each doctor is helping to pay back a loan for the system by paying $1,000 a month beginning in 2005 and continuing another three years, he added.

Legislative Action

Subcommittee Chairman Charles A. Gonzales (D-Texas) said he would soon introduce legislation that would provide financial incentives and other resources to spur IT adoption. Financial help would include tax incentives, grants, and subsidized loans, Gonzales said in his opening statement.

"Right now there are inadequate incentives for health care providers to adopt" health IT, he said. "The costs are too high in light of the benefits."

The House and Senate in 2006 failed to reach a compromise on their two IT bills. The Senate measure (S. 1418) would have provided about $650 million in grants to providers for IT adoption, while the House bill (H.R. 4157) contained considerably less federal funding, opting instead for safe harbor exclusions in federal anti-fraud laws allowing large health care providers such as hospitals to provide IT to smaller ones, such as small physician practices.

House and Senate congressional aides said that action on IT legislation most likely will not occur until at least 2008, due to a lack of money and other pressing health care issues, such as reauthorization of the State Children's Health Insurance Program.

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Hospitals may have difficulty meeting requirements of an expanded quality reporting program under Medicare, unless federal activities to facilitate increased use of health information technology "proceed promptly," the Government Accountability Office said in a report to the top lawmakers on the Senate Finance Committee.

GAO said that the Department of Health and Human Services and the Centers for Medicare & Medicaid Services must help hospitals overcome limitations of existing IT systems, so providers can more fully participate in an expanded quality reporting program.

GAO said HHS should identify the specific steps that it plans to take to promote the use of health IT for the collection and submission of data for CMS's hospital quality reporting program and inform interested parties about those steps and expected timeframes, including milestones for completing them.

In a response contained in the report, CMS concurred with the recommendations, saying it will continue to participate in relevant HHS studies and workgroups on the issue. The agency said it would inform interested parties regarding progress in health IT implementation for the collection and submission of hospital quality data, including timeframes and milestones.

"In addition, as IT is implemented, CMS anticipates that a formal plan will be developed that includes training for providers in the use of health IT for reporting quality data," said the report, Hospital Quality Data: HHS Should Specify Steps and Time Frame for Using Information Technology to Collect and Submit Data (GAO-07-320).

The report was released May 4 by Finance Committee Chairman Max Baucus (D-Mont.) and committee ranking minority member Chuck Grassley (R-Iowa).

The 2003 Medicare prescription drug law created financial incentives for hospitals to submit quality data to CMS, and those that do avoid a reduction in their full Medicare annual payment update, GAO said.

CMS to Collect More Data

CMS plans to expand the number of measures and corresponding data elements hospitals must submit to qualify for the voluntary program, the report stated. Providing that information will be increasingly difficult unless hospitals can automate the process using IT, the report said.

GAO examined eight hospitals for the report, finding a complex process in place for reporting the quality data.

"Our case studies showed that existing IT systems can help hospitals gather some quality data but are far from enabling hospitals to automate the abstraction process," the report said.

"The limitations reported by officials in the case study hospitals included having a mix of paper and electronic records, which required staff to check multiple places to get needed information; the prevalence of data recorded as unstructured narrative or text, which made locating the information time-consuming because it was not in the prescribed place in the record; and the inability of some IT systems to access related data stored in another IT system in the same hospital, which required hospital staff to access each IT system separately to obtain related pieces of information."

Access to this information put a strain on the hospitals' clinical staff, but overcoming the limitations of IT systems could ease the demand on their time, GAO said.

CMS said HHS's American Health Information Community put forth an initial set of recommendations on the issue of collecting and submitting quality information via health IT systems, and further recommendations are due June 5.

In May 4 statements about the report, Baucus and Grassley said CMS must play an important role in helping hospitals use IT to report quality data.

"This study shows how information technology can facilitate the measurement and reporting of health care quality data," Grassley said. "As CMS increases the number of quality measures for hospitals to report, the need will greatly increase for IT systems that can assist hospitals in all steps of the quality data collection and reporting process."

The report is available at http://www.finance.senate.gov/press/Bpress/2007press/prb050407b.pdf.

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