Medical Device Daily Washington Editor

Capitol Hill is apparently taking aim again at healthcare information technology (HIT) if a recent memo on the topic is any indication. A May 22 memo signed by four members of the House Energy and Commerce Committee (E&C) makes clear that both parties want to get something done on the issue soon, but they may have to hurry. Given the focus on the November elections, the prospects of passing a bill after the August recess may be dim.

The May 22 memo was written to "provide a roadmap for how to best integrate the federal governments role in the promotion of HIT." The four signees, committee chairman John Dingell (D-Michigan) and ranking member Joe Barton (R-Texas), along with health subcommittee chair and ranking member, Frank Pallone (D-New Jersey and Nathan Deal (R-Georgia) respectively, also noted that their discussion draft includes "stronger privacy protection."

The congressional team wants to draft a bill that will make the Office of the National Coordinator for Healthcare Information Technology (ONCHIT) "permanent" and also "provide more resources for that office." As one might have guessed, the sponsors of this effort propose adding two "federal advisory committees for expert stakeholder to provide input and assistance."

One of these committees would be an "HIT policy committee ... to recommend a policy framework and prioritize standards." This panels recommendations would be forwarded to an HIT standards committee, charged with developing and recommending "the technical standards, implementation specifics and certification criteria."

The signers also are interested in establishing three funding programs. One would consist of "direct financial support for providers" with preferences given to small physician offices and those in rural areas. The second will underwrite private-sector loans to states and tribes while the third will bolster regional HIT plans. Regional health information organizations, or RHIOs, have not fared well in recent times, a notion reinforced by last years collapse of a RHIO in Santa Barbara, California (Medical Device Daily, Aug. 2, 2007). Calls to congressional offices and the Healthcare Information and Management Systems Society (Chicago) were not returned.

CBO says HIT benefits overblown

The Congressional Budget Office recently published an analysis of the impact HIT may have on the American medical economy, and the conclusion is that while HIT can make a difference, it wont be the difference that is often touted.

CBO Director Peter Orszag states in a related entry on the CBO blog that there is a widespread belief that HIT "has the potential to transform the practice of healthcare by reducing costs and improving quality." He also indicated that "relatively few providers as of 2006, about 12% of physicians and 11% of hospitals have adopted health IT."

Despite the hype, he said that while HIT "can be an essential component of an effort to reduce cost (and improve quality)," computerization of healthcare "by itself it typically does not produce a reduction in costs."

Orszag said that the most conspicuous examples of HITs impact on costs and quality of care "have tended to involve relatively integrated health systems" and that such results might not generalize particularly well. Part of the slow pace, of course, involves the perception on the parts of many doctors that they "might not be able to reduce their office expenses or increase their revenue sufficiently to pay for" HIT.

He took exception to the conclusions drawn in the widely cited 2005 study of the potential impact of HIT by the Rand Corporation (Santa Monica, California), which projected an annual savings of about $80 billion, but Orszag said the Rand study failed to account for the fact that reimbursement systems still occasionally penalize providers for reducing costs.

The CBO director also said the Rand study excluded data "published in peer-reviewed journals that failed to find favorable results." He said the exclusion of such data "clearly biases any estimate of the actual impact of health IT on spending."

Orszag said that the role of HIT on comparative effectiveness research may be significant thanks to the "large amounts of data on patients care and health," but he also said that federal subsidies for HIT are "less likely [than penalties for failure to implement HIT] to generate cost savings for the federal government because it involves up-front costs." He also noted that "for any given underlying financial incentive, a penalty may be more effective at triggering adoption than a subsidy if a penalty carries a negative connotation that does not apply to failing to receive a subsidy."

FDA adds to list of devices to be tracked

>The Food and Drug Modernization Act of 1997 imposed a tracking requirement on many medical devices, and FDA now has included thoracic aortic aneurysm stent grafts to the list of tracked items.

As has always been the case, manufacturers must be able to locate an unused device within three days of a request by FDA to locate it, and within 10 days for devices that have been distributed to or are implanted in a patient. The guidance reminds industry that the tracking method is not prescribed, but must be described in company standard operating procedures.

Manufacturers must also conduct tracking audits twice a year for the first three years of a devices introduction to the market, then annually thereafter. The manufacturer no longer has to track a specific device after 10 years if the agency signs off on such a request, but companies that go out of business have to forward copies of all their tracking records to FDA upon closure.