U.S. Health Industry Cheers health financing, but some docto

(BestWire Services Via Acquire Media NewsEdge) As the U.S. health insurance industry cheers the funding for health information technology under President Barack Obama's $787.2 billion federal stimulus package, some doctors don't like the government's approach in encouraging them to adopt electronic medical records. They think the industry may eventually follow the government's lead when it comes to reimbursement practices.

The American Recovery and Reinvestment Act, enacted in February, includes $17.2 billion for health IT and $2 billion in affiliated grants and loans. It sets a goal of seeing 90% of doctors and 70% of hospitals adopt electronic medical records within the next decade (BestWire, Feb. 17, 2009).

Washington has "put enough funding in place and I think it's up to the people in the industry now to make it work," said Andy Slavitt, chief executive officer of health information and technology firm Ingenix, a unit of health insurer UnitedHealth Group (NYSE: UNH).

The new administration wants to lower health care costs by reducing unneeded medical procedures and by improving people's health, Slavitt said. Many believe health IT is key to achieving that goal, said Slavitt, whose firm sells "network-based" EMR technology to doctors and hospitals.

With an EMR, a provider can see a patient's medical history, allowing for accurate diagnoses and fewer medical errors, said Robert Zirkelbach, a spokesman for America's Health Insurance Plans. The stimulus bill makes "an important first step in that regard by giving incentives for physicians and hospitals to put their files in electronic format and to begin the process of moving towards an interoperable electronic health system," he said.

According to a report by iHealthBeat, the package allows the government to reduce Medicare and Medicaid reimbursements by 1% annually from 2015 to 2018 if providers don't implement some health IT applications by then. If fewer than 75% of providers don't adopt EMRs by 2018, the law allows the government to reduce reimbursements by an additional 1% annually, up to 5%, for providers who haven't adopted the technology, according to a report by Information Week magazine.

Starting in 2011, doctors and hospitals can qualify for the higher payments; they don't start getting penalized until 2015, Slavitt said.

Don McLeod, a spokesman for the Centers for Medicare and Medicaid Services, part of the U.S. Department of Health and Human Services, said CMS is studying provisions of the law and has not commented on implementation.

The penalties rile some doctors, who don't like the government's carrot-and-stick approach. Dr. Marcy Zwelling-Aamot, a California-based primary care doctor with a concierge practice, said the measure "punishes physicians who choose not to play," noting that almost every doctor participates in Medicare. To get funds, a provider must be part of a regional health information exchange, which costs "tons of money," she said.

Penalizing a doctor for not buying medical office equipment "is coercion," said Dr. A. Ralph Kristeller, a retired physician who served as chief of medicine at Overlook Hospital in Summit, N.J.

Private health insurers want EMRs because eventually, they'll want to penalize doctors with lower reimbursements too, Zwelling-Aamot contends. "They do everything Medicare does." Health insurers may "piggyback" onto anything that's in their interest, Kristeller added.

But Slavitt said the industry is moving toward paying physicians for getting better-quality results from patients, instead of what they are paid for today -- ordering tests and making referrals. The payment system needs to be reformed around delivering better results. That means both doctors and health plans will be better off financially, he said.

Dr. Arnold Pallay, a family physician and medical director of a four-physician group in Montville, N.J., said the government's approach makes sense. Making the switch to EMRs is a culture change for some doctors, who may be used to writing notes on a patient chart and prescriptions on a notepad for 15 years, he said, noting they're also concerned about the "nerve-wracking" workload in making the switch.

He's hopeful because the EMR system his office has had in place for eight years is not interoperable, or not interfaced directly, with the hospitals he practices in. A "standardized, interfaced-driven" EMR would improve data on patients' medications, allergies and prior surgical history, Pallay said.

Health insurers also want EMRs, as well as personal health records, to monitor a doctor's practice, such as how they prescribe drugs and arrive at diagnoses, Kristeller said. "That's valuable information for them." "Moving to a 21st century electronic health care system will improve health care quality by enabling patients and their doctors to receive information in real time to make the most informed health care decisions," Zirkelbach said.

[To listen to the entire interview with Slavitt, go to www.bestdayaudio.com] (By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com) (c) 2009 A.M. Best Company, Inc.