Federal intervention will be needed if the United States hopes to advance nationwide healthcare IT adoption, according to Congressional Budget Office Director Peter Orszag.
At a House panel hearing Thursday, Orszag said allowing the free market to evolve into using electronic health records will be too slow.
Testifying before the House Ways and Means Subcommittee on Health, Orszag said, "If the federal government chose to intervene directly to promote the use of health IT, it could do so by subsidizing that use or by requiring it."
He cautioned, however, that paying out bonuses for healthcare IT use would likely only reward the 10 percent or so of physicians who already use healthcare IT and would be too costly to the federal government, with little progress achieved.
"A large bonus would entice more new purchasers, but it would add further to the overall net cost of the federal subsidy," he said.
Subcommittee Chairman Pete Stark (D-Calif.) said of healthcare IT, "The time has come for the American healthcare system to get serious about fully utilizing this important tool."
Stark called the adoption of healthcare IT "a win-win situation." But, he said, "the lack of progress to date shows the need for strong federal leadership and real investment in order to realize those benefits."
The panel plans to consider how to provide incentives that will lead to interoperable systems. It also wants to consider how to protect patient privacy and security, Stark said.
Orszag's statement on government intervention contrasts with the Department of Health and Human Services on healthcare IT adoption. HHS Secretary Michael Leavitt has frequently said the free market will tip the scale to adoption, rather quickly, as patients begin to demand electronic health records.
HHS hopes to jumpstart healthcare IT adoption through the use of electronic prescriptions. Physicians who use e-prescribing beginning in 2009 will be paid a 2 percent bonus under Medicare, according to a new law. The new law will penalize physicians who do not adopt e-prescribing by 2012.
Orszag said the CBO drew its conclusions from evidence about the benefits and costs of health IT and an analysis of barriers to its adoption.
"Research indicates that in certain settings, health IT appears to make it easier to reduce health spending if other steps in the broader healthcare system are also taken to alter incentives to promote savings," he said. "By itself, the adoption of more health IT is generally not sufficient to produce significant cost savings."
As Congress struggles to pass a healthcare IT bill, this week the Committee on Energy and Commerce approved the PRO(TECH)T Act of 2008. The bill will promote healthcare IT adoption, and the committee hopes to push quickly to a full House vote, committee leaders said.
Do you think federal intervention is needed for HIT adoption? What would it take for you to adopt healthcare IT? Send your thoughts to me at diana.manos@medtechpublishing.com.