When Will EHR Spending Ramp Up?

By: Howard Anderson, HDM Breaking News

Although the federal economic stimulus package will spur an increase in spending on clinical applications in the months ahead, many hospitals and clinics are now taking their time studying their options, two researchers say.

“The steady drumbeat of inevitability is changing the debate from not ‘if’ we’ll get an electronic health record but ‘when’,” says Eric Brown, research director at Forrester Research Inc., Cambridge, Mass. “There’s a tipping point at which we’ll see big growth, but we’re not there yet.”

Because of the conservative nature of health care organizations, the growth in demand will be “a slow, steady progression” rather than a spike, Brown contends. “Health care rarely meets pundits’ expectations for growth.”

Under the American Recovery and Reinvestment Act, hospitals and physician group practices can qualify for billions of dollars in extra payments from Medicare and Medicaid if they make meaningful use of qualifying electronic health records systems. But to achieve maximum payments, they must hit certain deadlines. For example, physician groups must have a qualifying EHR system in place by 2012.

“What we’re seeing now is a lot of intense research going on” at hospitals and clinics, says Chris O’Neal, director of corporate reporting at KLAS Enterprises, an Orem, Utah-based research firm that rates provider satisfaction with software. “The spike in demand is coming.”

A KLAS survey in May of 155 health care CIOs and other executives regarding the stimulus incentives found that 43% had no plans for immediate changes but were watching the market, while 30% said the stimulus likely would speed up their I.T. investments.

Providers are doing careful research on EHR vendors, O’Neal believes, because “they cannot afford a misstep” which might cause them to miss a critical deadline for qualifying for a stimulus payment.

Among hospitals, O’Neal expects strong demand for computerized physician order entry systems, which most organizations lack, as well as clinical documentation for nurses. The stimulus program likely will require both of these components for hospitals to qualify for EHR incentive payments, he notes.

Brown says many hospitals will face a difficult challenge when persuading physicians to actually use CPOE. “Will they pay physicians a percentage of the money they get from the stimulus if they use CPOE?” Brown asks. “I’m not sure.”

O’Neal says many smaller clinics will consider using remotely-hosted EHRs accessible over the Internet. Brown says this model could prove attractive to risk-averse small practices with limited budgets that want to get a piece of the stimulus action.

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