Congress gives electronic health records big boost

House stimulus package includes $20 billion for medical records, while health professionals tout benefits and savings at Senate hearing.

As House Democrats released on Thursday their economic stimulus package, which includes billions of dollars to pay for the creation of electronic health records for Americans, a Democratic senator urged the government to be cautious in funding a huge electronic record system.

House Democrats proposed spending $20 billion of the $825 billion stimulus package to "update and computerize our health care system to cut red tape, prevent medical mistakes and help reduce health care costs by billions of dollars each year," said Rep. David Obey, D-Wis., chairman of the House Appropriations Committee in a prepared statement.

Shortly before the release of the stimulus bill, medical professionals told a Senate panel that facilities that have transitioned from paper files to electronic health records reduced medical errors that lead to the deaths of at least 44,000 people in hospitals every year, according to a frequently cited report by the Institute of Medicine. The electronic health record system at the Northshore University Health System in Evanston, Ill., for example, is responsible for eliminating medical errors by 80 percent, Mary Grealy, president of the Health Leadership Council, told the Senate Committee on Health, Education, Labor and Pensions. The council's members include health insurers, pharmaceutical companies and medical device manufacturers.

Sen. Barbara Mikulski, D-Md., chairwoman of the committee, called for developing a secure, nationwide, interoperable health IT system, which she envisioned as a "network of networks," that linked hospital and clinician computer systems, including those operated by national medical laboratory companies and pharmacies.

But she warned that Congress should not fund a "techno-boondoggle," in which money is wasted on a system that does not work as planned. Mikulski said Congress should proceed cautiously when funding the electronic health record system.

Any health IT plan that Congress endorses should concentrate on results rather than the technology, said Carol Diamond, director of the health program at the Markle Foundation, which promotes the use of IT in health care. "Adoption of IT should not be the goal," she told the panel. "The focus should be outcomes, such as reduced medical errors, improved clinical and improved patient care."

In a speech at George Mason University in Fairfax, Va., last week, President-elect Barack Obama said widespread adoption of health IT "will cut waste, eliminate red tape and reduce the need to repeat expensive medical tests." Obama called for a $50 billion investment in heath IT over the next five years during his campaign.

In his speech last week he added that adoption of a national health IT system will do more than "save billions of dollars and thousands of jobs -- it will save lives by reducing the deadly but preventable medical errors that pervade our health care system." Officials and health IT experts said both savings and reduction of errors from the use of technology have been successfully demonstrated.

The total cost to build an electronic medical records system could be between $75 billion and $150 billion, said health IT professionals interviewed by Nextgov. And the benefits from such a system could be realized quickly, said Richard Alvarez, president and chief executive officer of Canada Health Infoway, a nonprofit organization funded by the Canadian government to spur deployment of health IT.

He said a program to digitize diagnostic images such as X-rays and magnetic resonance imaging scans, saves $1 billion a year in Canada. Alvarez said that after five years, medical facilities there have digitized 80 percent of all diagnostic images, which not only include X-rays and MRIs, but also ultrasound scans and computed tomography scans, which create detailed pictures of structures inside the body. Based on savings the project has generated in Canada, Alvarez said the United States could realize savings of about $10 billion a year from digitizing all medical imagery.

Canada also plans to complete deployment of a nationwide health IT system, which includes electronic medical records, at a cost of about $12 billion, and he expects savings of between $5 billion and $6 billion a year. Alvarez said the United States could derive 10 times those savings from a national system because the U.S. population is 10 times that of Canada's.