by Steve Patterson

Health 2.0 Meets Government Stimulus

Jul 08, 20096 mins
Data CenterEnterprise ApplicationsIT Leadership

How the government will reimburse healthcare $34 billion for its investments in information technology.

Stepping into the recent Health 2.0 conference in Boston, one is startled by the optimism of the presenters and attendees. One would be tempted to ask if they knew what year it was and if they had any recollection of the economic crash they had just barely survived.

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Health 2.0, cousin to Web 2.0, has become energized by Congress’ $34 billion commitment to invest in Healthcare Information Technology (HIT). The celebratory mood of the Health 2.0 community is the same as we have witnessed in industries on the verge of rapid growth—and simultaneously very different. Advocates and entrepreneurs make up the community, the healthcare advocates charged up by the first healthcare reform rhetoric and government programs since the Carter administration and the entrepreneurs attracted by the large opportunity a nimble young company can exploit. Both groups are almost indistinguishable in the din of their enthusiasm.

The headlines only reported $19 billion of the $800 billion American Recovery and Reinvestment Act (ARRA) that was designated for HIT, but in fine print the government is committed to spending $34 billion to reimburse doctors and hospitals for HIT investments offset by an anticipated $15 billion savings.

Only 17% of the nation’s doctors use HIT according to a recent report in the New England Journal of Medicine, significantly lagging other industries’ use of computers and the Internet to reduce cost and improve efficiencies. During the five years beginning in 2011 doctors and hospitals will be reimbursed for their investments in Electronic Health Record “EHR” systems. The efficiencies that have resulted from EHR systems built by large vertically integrated healthcare providers have convinced Congress that significant efficiencies will accrue from the broad use of EHR systems in doctor’s offices and hospitals, interconnected into a single secure electronic healthcare system of independent providers.

Google and Microsoft publicly christened and legitimized EHR two years ago when both offered EHRs free to the consumer with Google Health and Microsoft HealthVault. Recently Walmart announced it will sell EHR systems for doctors offices.

Late last month, Allscripts, Cisco, Citrix, Dell, Intel, Intuit, Microsoft, and Nuance Communications announced that they have teamed up as the “EHR Health Alliance” aimed at educating doctors on the many tools available to help set up electronic health records. Soon they will begin associating their brands with healthcare via nationwide roadshows and telephone hotlines. The EHR Health Alliance was created to overcome healthcare industry inertia, but there is much more innovation needed to knit the independent EHR systems into a single, secure electronic EHR system.

Massachusetts Health 2.0 companies lifeIMAGE and MedCommons have more specialized EHR offerings. LifeIMAGE has a definitive business case for eliminating redundant radiological exams by offering doctors and hospitals a service that lets them securely access a patient’s radiological images ordered by other medical entities. MedCommons provides secure authorized transport of diagnostic and medical records that are consistently presented to the patient’s primary and referral health service providers. The value of both companies is in making the patient’s EHR portable and useful to the patient and those providers from whom the patient seeks treatment.

Collaborative systems for clinical medical care that use EHR to improve efficient healthcare have become the accepted standard at large vertically integrated healthcare organizations like the Veteran’s Administration, Kaiser Permanente and Partners Healthcare. Shared Health of Tennessee delivers similar collaborative solutions, but different in that they connect a community of independent healthcare providers and clinicians with secure exchange of EHR data between service providers. Interestingly, Shared Health had an early vision that transformation of healthcare through the exchange of clinical, administrative, and claims data would drive improvements in the quality and cost of healthcare, long before the ARRA legislation. Shared Health’s early leadership serving almost 3 million people through an interconnected network of service providers is a case study for the therapeutic value and cost efficiency of EHR systems.

Shared Health, lifeIMAGE and MedCommons are three straight forward examples of doctor and hospital purchases that are very likely to be subsidized under the ARRA beginning in 2011. These companies and other companies less obviously eligible for government subsidization will have to wait for a conclusive determination. Money has been legislated for HIT, and Medicare has been identified as the conduit through which doctors and hospitals will be reimbursed for their investment in HIT, but exactly which investments will be reimbursed is not yet settled.

“Meaningful use” is the term that is written in the ARRA legislation to define investments eligible for reimbursement. More specifically the product or service must demonstrate use of a “qualified EHR” in a “meaningful manner.” But this definition is not settled and the process for certification of these products and services as compliant with the definition is not final.

“This definition [meaningful use] will be a major factor in how innovative the EHR systems can be” said Vince Kuratis President of Better Health Technologies. “If it is too narrow the EHR systems that become eligible for subsidizations may lack leading edge interoperability with a limited capability to serve as a platform for new and transformative applications of the EHR data. This outcome would be the equivalent of manufacturing a 2002 Chevy Suburban for today’s car market.” Kuratis is one of a growing number of proponents of a multipurpose EHR that will empower patients to be their own advocates and as an EHR that serves doctors to improve a patient’s healthcare. Further, anonymized EHRs can be elements of large data sets unidentifiable to any person, which can be analyzed to improve healthcare investments and support better epidemiological decisions. They want the definition to allow younger disruptive Health 2.0 companies that have novel applications of the EHR platforms to be eligible for generous amounts of the stimulus money.

Eugene Borukhovich, Chief Evangelist for MyHealthExperience, a social networking site delivering personalized health experience to patients, is also a passionate advocate for interoperability. “Interoperability will empower patients to utilize new diagnostic methods such as crowdsourcing to communities of patients. Also, doctors’ decision making will be improved by sophisticated decision support tools based on EHR information.”

The inertia of the healthcare industry is not to be underestimated but the government has put enough money at stake to commit the large IT and retailing leaders to overcoming it. Unless IT industry leaders are distracted by an early economic recovery, they need to succeed in winning the adoption of EHR systems to meet their revenue goals. Many in the Health 2.0 community forecast the creation of a new category of innovation built on top of an EHR platform that will enable new systematic approaches to healthcare that empower patients, identify new treatments and improve management. Advocates will play an important part in campaigning for new approaches to healthcare, openness and interoperability, and entrepreneurs, will be a major force in delivering products and services that fulfill the advocates’ vision.

Patterson is a freelance tech journalist and new business strategy consultant. He can be reached at