Obama pledges to pursue health IT, despite economic woes

President-elect and his pick to head HHS say electronic health records are part of a plan to cut costs as a way to ease financial burdens on companies.

President-elect Barack Obama vowed on Thursday to pursue the use of health information technology aggressively, while his pick to head the Health and Human Services Department said he viewed health IT as a key part of the new administration's stimulus package.

Obama, in remarks introducing Tom Daschle as his nominee for HHS secretary and as head of a new White House Office of Health Reform, said despite the economic crisis the nation needs to invest in a drastic overhaul of the U.S. health system.

While some people might question government investment in health care, Obama said, "How can we afford not to invest?" The nation's spiraling health care costs threaten the wellbeing of large and small businesses, he said, including the auto industry, which saw its request for a federal aid package founder in the Senate on Thursday.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, which will handle the economic stimulus bill Obama wants to pursue, told The Washington Post that he considered health IT a key part of a stimulus package. "It's very important that health IT be part of the economic recovery," Baucus said. "It represents the beginning of health care reform."

Obama did not provide details, but the plan he released during the campaign called for a $10 billion a year investment during the next five years to move the nation to broad adoption of health IT systems, including electronic health records. The investment would yield savings of $77 billion a year, if most hospitals and doctors adopted health IT and electronic health records, Obama postulated in the plan. The savings would result from shorter hospital stays, fewer duplicative and unnecessary tests, more appropriate drug regimes, and other efficiencies, according to the plan.

The plan's goals are similar to a health IT project that President Bush kicked off in 2004 to create a system that would provide electronic health records for the majority of Americans by 2014. The investment Obama promised in his campaign is much larger than the Bush administration's commitment to health IT.

Obama based his health IT plan and the savings it could generate on a 2005 report from RAND Corp., "Extrapolating Evidence of Health Information Technology Savings and Costs." The report estimated it would cost $114.6 billion to set up every hospital and doctor nationwide with an electronic health record system and $97.4 billion during a 15-year period to equip U.S. hospitals with an in-patient electronic health record system. The cost to every doctor with an e-health record during the same period would cost $17.2 billion.

Baucus released on Nov. 19 his own reform plan to cut health care costs, which he pegged at $2.1 trillion a year. Adopting health IT systems, he said, would improve the quality of care and make the overall system more efficient.

Baucus noted that technology adoption, particularly by doctors, has been slow because of high costs and lack of expertise. He wants to boost health IT adoption by offering grants, loans and incentive payments to doctors through the Centers for Medicare and Medicaid Services, similar to bonus payments they now receive for using e-prescribing systems.

Blair Childs, a spokesman for Premier Inc., which collects and analyzes hospitals' clinical and financial data, said he agrees with Obama and Baucus that health IT shows "tremendous promise for improving quality and efficiency, enhancing patient safety and eliminating costs from the health care system."

Childs added, "The presidential campaign pledge of $50 billion and Sen. Baucus' efforts to include health IT in the next stimulus package signal a real commitment to aggressively move forward on the use of technology in the health care system."

Individual states have pushed for health IT adoption, and the National Conference of State Legislatures reported on Thursday that "states are moving at an unprecedented rate to get their health care systems wired and connected."

During the past two years, 132 bills containing health information technology provisions were enacted in 44 states and the District of Columbia. "This is a health care IT revolution," said Massachusetts Sen. Richard Moore, vice president of the conference. "State governments and their federal partners are moving toward a seamless, integrated system of information sharing ranging from patient medical records to insurance claims to filling a patient's drug prescription."