Maryland and Washington, D.C., are among 12 cities and states whose doctors will participate in a $150 million Medicare pilot project offering physicians incentives to adopt electronic health records.
The five-year effort will help as many as 1,200 small practices around the country switch from paper to digital recordkeeping.
Michael O. Leavitt, secretary of the Department of Health and Human Services, announced the federal initiative yesterday at a news conference at Anne Arundel Medical Center in Annapolis. An HHS spokeswoman said the agency chose the hospital because of its proximity to Washington and Baltimore.
Leavitt said the program would play a key role in modernizing the U.S. health care system. "The use of electronic health records, and of health information technology as a whole, has the ability to transform the way health care is delivered in our nation," he said.
Proponents argue that electronic health records have the potential to speed up service, reduce medical errors, save lives and save hundreds of billions of dollars.
The U.S. health care system remains almost wholly paper-based: nine out of 10 U.S. doctors and more than two-thirds of U.S. hospitals still use paper for patient records. Most of the developed world is much further ahead; medical records in some countries, such as Germany, are already fully electronic.
Critics say there are several reasons for the slow pace of change here. The U.S. health care system is large and relatively disorganized - a $2 trillion industry staffed by 700,000 doctors, mostly in small practices. In addition, the government has provided little leadership and no incentives to adopt new technology, they say.
For individual doctors or small practices, switching to digital records costs about $40,000 to $60,000. But experts say the savings from digitization mostly benefit insurance companies and patients, so small practices have no financial incentive to computerize.
HHS started the new program to address this issue. Over five years, it will pay individual doctors up to $58,000 and practices up to $290,000 to computerize recordkeeping. To ensure that doctors use the new systems, and that the new methods really do improve care, the program will provide bonuses if doctors reach performance and quality benchmarks.
Some experts criticized the scope of the program.
"It's a good start, but compared to what other developed countries are doing, it's a mere fraction. It's a pittance," said Dr. Peter Basch, a doctor at Medstar Health in Columbia. An expert on health information technology, Basch chaired a panel for the Maryland Health Care Commission that encouraged widespread adoption of electronic records in a February report.
"We as physicians benefit the least" from digitizing, said Dr. Ron Sroka, president-elect of MedChi, Maryland's medical society. "This program reaches just a small group of physicians. We hope it will be offered to everybody."
Compared with other countries, the new program is small. Canada is spending $1 billion to computerize its health system, while Britain is spending 10 times that much.
A 2006 study reported that Britain is spending almost $200 per citizen on computerization, while Canada is allocating about $30. The U.S. figure is less than a dollar.
Leavitt defended the program, calling it an experiment to see whether incentives can help speed adoption and improve care. "Our purpose here is to learn," he said.
He said he is working to persuade Congress to provide an additional $50 million to extend the initiative to 28 other jurisdictions.
Leavitt also argued that government incentives alone will not transform the system. He said consumers will play a key role and noted that Google and Microsoft recently introduced Web-based health applications to store individual health records.
Many observers predict consumers will begin using these services widely. And once that happens, Leavitt says, patients will begin choosing doctors partly on the basis of how digitized their practices are.
In response, he expects doctors will move quickly toward digital records. "We will begin to see the market take over," he said.
Others also praised the program. "It's not that much money, but it's designed to give us some answers," said Dr. Rex Chowdry, executive director of the Maryland Health Care Commission.
Chowdry, who attended the news conference and who has been an enthusiastic advocate of digitization, called the program a "credible start" and said that it was important to determine whether the approach works before setting up a larger effort.
The 12 trial regions were chosen from a group of 30 finalists. Each one submitted a proposal from local medical authorities emphasizing the capacity and willingness of the local medical community to adopt new technology.
Sroka, a family doctor who practices in Crofton, said the Maryland medical society's 7,000 members were divided about whether to pursue the funding. He said that in a poll of local representatives, half favored the idea and half were opposed or undecided.
He said members worried that digital records might endanger patients' privacy. Members also feared that the program might be a Trojan horse for a comprehensive federal pay-for-performance system.
Many doctors around the country say that such a system would take away their ability to make decisions about patient care.
"Our biggest fear is loss of control of what we do, and loss of patients' privacy," Sroka said.
In the end, he said, members decided that the program would likely improve patient safety and was worth trying.
The other cities and jurisdictions selected were Alabama; Delaware; Jacksonville, Fla; Georgia; Maine; Louisiana; Oklahoma; Pittsburgh, Pa.; South Dakota; Virginia; and Madison, Wis.
Four of the communities, including Maryland and Washington, will begin implementing the program within months. The other eight will begin next year.
David Kohn blogs on issues important to the medical
community, at baltimoresun.com/marylandmed