Friday, May 15, 2009

Inside Stimulus & Recovery

E-records at heart of stimulus bill for health-care firms

By Jim Schakenbach, Special to Mass High Tech

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In February, when President Obama signed the American Recovery and Reinvestment Act (ARRA) of 2009 into law, he focused on what it meant to the nation. Further downstream, in the corporate and institutional offices through the U.S., the focus was on “what it means to me.”

In New England, where health care is big business, eyes turned to one aspect of what is often referred to simply as the “federal stimulus package.”  This massive infusion of cash into the national economy contains a significant provision for health care modernization and specifically improvements in health care information technology (HIT). The lion’s share of HIT money is earmarked for the adoption and deployment of electronic health records — commonly viewed as a long-overdue initiative that would be the first significant improvement in decades affecting how patients’ records are managed.

Considering the astonishing speed — some call it “haste” — with which this relief package was put together, it’s not surprising that there are lots of numbers flying around with regard to what’s being funded and when.

“You can’t imagine a more poorly designed bill,” stated Ray Campbell, executive director and CEO of the Massachusetts Health Data Consortium, whose members include major employers, health plans, state agencies and health care providers.

According to the consortium’s health care policy analyst, Seth Eckhouse, $19 billion is the amount most frequently associated with the HIT portion of the stimulus package. But the figure may actually be much higher: “$36 billion is the actual outlay earmarked by the federal government between now and 2019,” says Eckhouse. “The bulk of that, about $17 billion, will go toward Medicare and Medicaid reimbursements to physicians who upgrade to electronic record systems and can demonstrate what the law calls ‘meaningful use’. What that actually means is not yet clear,” Eckhouse said, adding that the government expects to recoup the rest of the approximately $36 billion through federal tax revenue and cost reductions brought about by system modernization and streamlining.

So what is the anticipated economic impact upon Massachusetts companies? It’s hard to say right now. According to Micky Tripathi, president and CEO of the Massachusetts eHealth Collaborative, much of the money is slated to reimburse physicians and other health care providers, but there will be a trickle-down effect for the companies that manufacture and provide the technology needed to manage, store and distribute digitized records. “If you can supply the hardware, software, network services and data security for electronic health records, the increased demand for these will mean increased business for you,” said Tripathi, whose organization represents physicians.

For companies such as electronic medical record and health care practice management software developer eClinicalWorks LLC of Westborough, that could mean growth at an exponential rate. “We hired 70 new employees in the first quarter of this year in anticipation of an increase in demand,” says eClinicalWorks CEO and co-founder Girish Kumar Navani.
“We’re now hiring for growth, not for need.” Navani sees the success of the stimulus package’s electronic health records initiative tied to the establishment of regional extension centers focused on helping health care providers implement and utilize electronic health records systems.   

Campbell said that, in addition to electronic health records, funding has been earmarked for other health care technology and treatment initiatives, including $4.7 billion for broadband deployment to under-served areas, $2.5 billion for distance learning and telemedicine, and $1.5 billion for comparative effectiveness research. He noted that the Agency for Health care Research & Quality, has had its budget increased by the ARRA from $75 billion to $300 billion. However, he cautions that the majority of any outlay for proposals will likely go into existing channels and benefit larger institutions with federal funding programs already in place.

Glen Comiso, director of eHealth and Life Sciences at the Massachusetts Technology Collaborative points out that telemedicine is already on the state’s agenda as an important technology that needs support and encouragement, along with computerized physician order entry systems to enable more effective prescription fulfillment and use.

“There’s a growing demand for robust health information exchange technology to network all the digitized records that will be produced, enabling physicians and health care facilities to share patients’ data without having to physically walk records across the street,” he said, alluding to how two Boston hospitals can be located adjacent to each other but unable to share files electronically.

But the funding for projects other than electronic health records is slim, and that worries entrepreneurs like physician Roy Schoenberg, president and CEO of American Well in Boston, creator of a marketplace designed to provide health care services using web communications and digital telephony. “Digitizing records alone is not going to solve our health care problems, “ said Schoenberg. “That’s only part of the solution. The real problem looming on the horizon is how we’re going to provide quality health care to a growing number of people needing it.”

Schoenberg sees considerable opportunity for companies like his looking to modernize and overhaul the service side of health care. “Access to quality health care is going to be the big issue, and anybody working toward providing improved access and quality care will stand to profit from it,” he added.

Jim Schakenbach is a freelance writer in Jefferson.