HCW Benefits Blog

Contributor:
Rob Krieg, JD, CEBS - Consultant
Hill, Chesson & Woody

In case you missed it, the U.S. Department of Health and Human Services (HHS) recently took an initial step toward “safer and more efficient” healthcare services by issuing final rules establishing criteria for the federal electronic health record (EHR) incentive program.  According to these rules, providers can qualify for federal incentives if they are determined to be “meaningful users” of EHR technology by following a set of standards designed to ensure quality and effectiveness practices.  These “Meaningful Use” rules represent the beginning of a process that will eventually lead to widespread EHR adoption by hospitals and physicians all over the country.  But for consumers and employers, the rules can be seen as a step toward addressing the increasing cost of healthcare through EHR adoption.

Coordinated provider adoption of EHR technology is often considered by many experts as a vehicle for reducing wasteful spending in the healthcare industry.  In the PricewaterhouseCoopers 2008 report, The Price of Excess: Identifying Waste in Healthcare Spending, eight of every 10 consumers surveyed believed inefficiency in the healthcare system is a key cost inflator, and inefficient claims processing was rated as one of the highest areas of waste, costing up to $210 billion annually.  But the Obama administration has made it a priority to address this issue through mandated adoption of EHRs via provisions in the American Recovery and Reinvestment Act (ARRA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act – and these rules are a direct result of that initiative.

The problem is that only about 20% of hospitals and 10% of health professionals currently use basic EHRs – which is why the federal government will be paying out over $27 billion over a 10-year period as part of the HITECH Act’s EHR incentive program.  But before the program could be implemented, HHS needed to specify which providers would be eligible for the incentives.

In January 2010, the Department proposed a set of criteria that would qualify a provider as a “meaningful user” of EHRs and be thereby eligible for the incentive.  However, several comments claimed that many of the requirements would be too difficult to meet, and the Department compromised by making 60% of the requirements mandatory and placing the rest on an “a la carte” menu in which the provider could select various criteria to defer until the following year.  Depending on the perspective, that compromise could affect the cost-control impact of the rules.

The mandated list includes basic criteria, such as computerized provider order entry for medication orders, maintaining active medication and medication allergy lists, and recording patient demographics.  But several items that may have a greater effect on costs, such as implementing drug formulary checks or performing medical reconciliation between care settings, were moved to the a la carte list, making it less likely to see any significant impact on costs in the first phase of the incentive program.  However, supporters are in agreement that the rules accomplish the more significant goal of putting the EHR adoption incentive program on the track to implementation.

Needless to say, the actual impact of EHR adoption on overall healthcare costs has been and continues to be widely debated (as discussed in the Eyes on Benefits dated January 28, 2009).  But if the federal incentive program can indeed pave the way for safer and more efficient healthcare practices, then it can only be of significant benefit to providers and consumers alike.

For more information on this topic, please visit the following links:

• Feds Issue Electronic Health Record Regs
• Praise, Concerns Come Pouring In for Meaningful Use Rules
•  HHS Announces Final Rule on Meaningful Use of EHRs
• Electronic Health Record: Final Rules Issued on Meaningful Use