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Firms look to digital health records

Economic stimulus money to computerize forms will offer opportunities for information technology companies.

February 17, 2009|Anita Huslin | Huslin writes for the Washington Post.

WASHINGTON — The $19 billion prescribed in Congress' economic stimulus package to bring U.S. healthcare records into the electronic age is a welcome opportunity for information technology firms seeking to build market share in a still-young industry.

Although the federal government set a goal five years ago of creating an electronic health record for everyone by 2014, the effort has lagged for several reasons. Roadblocks include concerns over lack of universal protocols for collecting data as well as rules that establish how, with whom and under what circumstances the data can be shared. Many healthcare providers -- physician practices, testing facilities, hospitals and clinics -- fear liability if private information gets into the wrong hands. Embedded in all these issues is the cost, an estimated $150 billion, which has proved to be a significant barrier to that 2014 target.

Few expect the new spending to change things immediately. "The incentives for doctors and hospitals to use these tools have months of regulatory processes to go through," said David Brailer, former head of the Office of the National Coordinator for Health Information Technology, created under the Bush administration to establish standards for the collection and use of electronic medical records. "I don't think doctors will go out tomorrow and buy electronic records because there is a little bit of money coming."

To computerize their medical records, physicians and their practices stand to get $44,000 to $64,000 in incentives, and hospitals as much as $11 million. But there are also penalties. Providers who treat Medicare and Medicaid patients and have not gone to paperless systems within five years could lose funding. With the federal government spending more than $600 billion annually on 80 million Americans through Medicare, Medicaid and other programs, that could prove a powerful incentive for providers to get on board.

At least that's what businesses such as CNSI, a Rockville, Md., company that sells Medicaid reimbursement systems in four states and is pitching more than a dozen others, would like to see happen.

Arvinder Singh, senior vice president of CNSI, said the company hopes the stimulus money will bring more customers and allow CNSI to expand pilot programs.

"This will help create more of a market for analysts and support staff, and create jobs," he said.

Others, such as WellNet Healthcare of Bethesda, Md., hope to take advantage of spending on a medical data infrastructure system linking doctors and hospitals to insurance companies.

Such technology could provide a broader arena for sales of their systems, which help companies monitor and manage their employee healthcare costs.

Brailer cautioned that spending would not really grow until standards were set for secure collection and handling of medical information. He said there was some progress, but funding limits meant there was still a way to go.

Many doctors' offices and smaller hospital systems have held back from adopting available systems, vendors said, because of the cost and because they don't know whether the one they choose ultimately would comply with federal standards.

"There are too many unknowns as to what might be required, standards-wise," said Kevin Hutchinson, president and chief executive of Prematics, a Vienna, Va., firm that is one of the largest sellers of electronic prescription systems.

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