Medical Device Daily Washington Editor

The economic stimulus packages that the House and Senate have been working on contain substantial sums for spending on healthcare information technology (HIT) – $20 billion in the original House version and an additional $3 billion in the Senate's first iteration – but where the final number falls after yesterday's pruning by the House and Senate conferees is unclear, given that the new agreement is for a projected total of $789 billion.

At yesterday afternoon's press conference, Sen. Harry Reid (D-Nevada), said that the effort required a lot of "intense" give and take, and that the new bill "creates more jobs than the original Senate bill and costs less than the original House bill." However, the compromise bill eliminates a proposal to double the one-time tax credit for first-time home buyers from $7,500 to $15,000, a provision that would have been in force for only one year, but would also have eliminated the need to repay the credit in subsequent tax years.

The Obama administration had unveiled a revamped approach to economic recovery with an announcement Tuesday by Treasury Secretary Geithner of a plan for that would come to $2.5 trillion by some estimates, but Wall Street reacted negatively, sending the Dow down 5% shortly after the announcement. According to the Wall Street Journal, Ethan Harris, chief U.S. economist at investment bank Barclay's Capital (New York) described the plan as "the shock and ugh plan."

Prospects for the plan discussed by Geithner were not abetted by the likelihood that the government would have to print substantial sums of new money, which runs the risk of fueling inflation at a time when the economy has stagnated. Past episodes of "stagflation" include the years following the oil shocks of 1973 and 1979, when unemployment topped 10%.

The HIT interoperability issue, however, seems likely to wane for now, given that most of the stimulus for HIT will not bleed into the economy until 2011. The issue was raised in a hearing held by Sen. Barbara Mikulski (D-Maryland) last month (Medical Device Daily, Jan. 16, 2009), during which Mikulski decried previous HIT spending as a "techno boondoggle" because of the absence of interoperability standards. Mikulski's comments referred to an instance when Uncle Sam had paid out more than $1 billion for HIT, but Mikulski declined to take a question on the subject after the hearing. The issue came up again earlier this month at the National Health Policy Conference when a congressional staffer raised the possibility that the standards would not be available even by 2011 (MDD, Feb. 5, 2009).

Rep. Pete Stark (D-California) penned a bill last year, the Health-E Information Technology Act of 2008, that would have mandated interoperability in HIT systems for providers who take Medicare patients, but that bill's provisions would not have gone into force until 2011. Brian Cook, a spokesman for Stark, told Medical Device Daily "most of what was in [Stark's bill] is now part of the HIT sections in the recovery package," including the Medicare and Medicaid provider incentives to begin in 2011. However, he said that both bills impose penalties for non-adoption by 2015 for Medicare providers only. Cook was unable to explain why Medicaid providers might be exempt from non-adoption penalties.

Leigh Burchell, director of government and industry relations for electronic health record vendor Allscripts (Chicago) told MDD that she was also under the impression that the Department of Health and Human Services was to publish interoperability standards by the end of 2009. "That is what I've heard from a couple of different sources," including Capitol Hill staffers, she said. "For that reason, we expect that the standards that come out will be based on current standards" that have already been developed by various stakeholders, rather than a continued from-scratch effort on the part of HHS. Burchell said that the standards already in place cover a sizable portion of an ideally exhaustive set, but because adoption is still anemic, she said, "it's almost hard to tell where the standards need to go, so they'll evolve."

Burchell said that interoperability "is not a technological challenge, it's a governance challenge." Most vendors "could deliver interoperability today, and in fact we do," she said, but she added that the stimulus bill will help "open the conversation to form a collaborative relationship" for data repositories, such as regional health information organizations.

As to whether vendors could handle a provider-driven HIT stampede, Burchell said "we've had conversations around that, particularly concerning the dates," because "if there is a market reaction that physicians want to implement in 2010, you may end up with challenges of implementation." Allscripts, she said, could undertake a massive effort to train those who would train physician staff on the use of the software, "but it would be more manageable if the adoption wave begins to increase, but allows everyone to spread their activities out over the next couple of years."

The House version of the bill would have provided as much as $65,000 per physician to adopt HIT, but critics charge this amount is far in excess of the amount needed. How this is handled in the compromise bill is unclear, but some estimates for the total per-physician cost over five years run in the neighborhood of $23,000.

The House-Senate bill provides $87 billion for Medicaid and retains the effort to push back on the alternative minimum tax, which drew fire from Sen. Tom Harkin (D-Iowa), who was quoted as stating that the provision "has nothing to do with stimulus ... has nothing to do with recovery." However, Senate majority leader Mitch McConnell (R-Kentucky) argued that Americans "are wondering how we're going to pay for all this."

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