Electronic Health Record Companies Stimied By Law's Language

Last Updated Nov 22, 2009 6:24 PM EST

The "Stimulus" bill contains money for lots of discrete different things. Such as the including the $4 billion as reported on yesterday for broadband expansion. There is also $17 billion or so set aside to stimulate the use of Electronic Health Records (EHR) by providing money to doctors to adopt the use of this software.

EHR software has seen significant investment from various companies such as GE Healthcare, NextGen Healthcare Information Systems and others. In theory by helping provide efficient management of patient records EHR will save money overall by eliminating unnecessary tests or treatment. EHR will also reduce mistakes as they more accurately record doctor's orders and treatments.

Obviously this government money is seen as spurring large sales of the systems. Unfortunately the law includes a phrase that the systems must be of "meaningful use" in order for a doctor to receive the subsidy. The law though does not fully define what this statement means. That could lead to software being purchased that won't meet the guideline or qualify for the money.

Until this is clarified it will be hard for hospital systems and individual doctors to take a chance on investing in the software. This means that the market may see an uptick in the future but right now there is a great deal of potential demand that cannot be exercised. This has not stopped some private entities from going ahead and offering their own subsidies to their physicians as they believe the savings they will see are enough to justify the expenditure.

The North Shore-Long Island Jewish Health System of metropolitan New York has announced that they will set aside $400 million of their own money to aid physicians in implementing EHR. If things work out the physicians will also receive the money from the "Stimulus" bill as well reducing costs even further. The systems goal is to "provide real-time, situation-appropriate care plans, clinical alerts and preventive care. For example, when a physician indicates a patient's problem, the clinician is provided with a list of diagnostic tests and possible therapeutic interventions that are considered best practices to help support the decision-making process. In addition, once elements of a care guide are selected, the system suggests a long-term plan for ongoing monitoring of the patient, based on their list of medical problems, as well as standard health care preventive maintenance based on the patient's age and gender." The end result will be better treatment and healthier patients which should save money in the long run.

The lack of complete definition in the law of that one phrase is making it hard for the industry to move forward. The chance of investing in an expensive system that requires monthly fees beyond the initial purchase with the possibility of the Government not providing the proposed subsidy or perhaps even forcing a buy of a different system means that few are going to take that chance. It may take a few months for Congress and the Department of Health & Human Services to realize what needs to be done and issue the clarification. Until then this is one part of the "Stimulus" that may not go to use.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.