Information technology Primed for explosive growth

Two federal health information technology incentive programs will likely trigger explosive growth in 2012 in the adoption and meaningful use of electronic health-record systems by officebased physicians, but adoption rates will rise more slowly at hospitals.

According to recent data from the National Center for Health Statistics, an arm of the Centers for Disease Control and Prevention, physician adoption of “fully functional” EHRS reached 17% in 2011, up from less than 7% in 2009 when the American Recovery and Reinvestment Act passed. The federal stimulus law created two federal EHR incentive payment programs under Medicare and Medicaid and authorized about $27 billion in spending for them.

As a point of reference, a fully functional EHR comes closest to what physicians need to qualify for Stage 1 meaningful-use criteria under the Medicare EHR incentive payment program. Providers under the Medicaid EHR program also must meet meaningfuluse criteria later, but not in their first year of participation.

The year 2012 will mark the second, and final, chance for physicians and other “eligible professionals” to jump into the Medicare incentive program and get the maximum payment of $44,000 for becoming a meaningful user of their EHR systems.

Only 10,155 physicians and other EPS had signed up and received a Medicare EHR payment through November 2011, the most recent month data was available from the CMS. But that number of paid providers had jumped 75% from October. Another 11,140 EPS had been paid under the Medicaid EHR program through November, up 28% in a month.

Expect a stampede of physicians and other clinicians to join them this year.

Combined, the Medicare and Medicaid EHR incentive programs paid out more than $1.8 billion through November 2011, but the Medicare program didn’t start making payments until May, and at year’s end not all states, many of which are cash-strapped because of the stagnant economy, had Medicaid EHR programs up and running.

As 2011 closed, 41 states had Medicaid EHR incentive programs at least registering participants, with two more states expected to join them by January 2012. Of the 41 state programs in operation, 38 were advanced enough to be paying providers, so getting all 50 state programs making payments should accelerate the cash flows to participating providers.

More than $1.4 billion of those Medicare and Medicaid EHR payments made in 2011 went to hospitals. Slightly more than 1,200 hospitals received incentive payments, with the average payment coming in at about $1.1 million.

John Hoyt is executive vice president of HIMSS Analytics, the market research arm of the Healthcare Information and Management Systems Society. The HIMSS Analytics EHR adoption model tracks the climb up the electronic health-record system usage ladder for more than 5,200 hospitals. Its rungs start at Stage 0, with lit- tle to no system adoption, through Stage 7, which includes complete EHR adoption, plus information exchange capabilities.

In aggregate for hospitals, the climb has been painfully slow since 2009 through the third quarter of 2011, the most recent quarter for which HIMSS data is available. Since 2009, the median ranking for U.S. hospitals remains stuck in Stage 3, and that won’t change for 2012, Hoyt says.

But the good news for this year, he says, will be the significantly higher number of hospitals adopting systems at the upper rungs of the model, Stages 5, 6 and 7. Those are the stages benchmarked by EHR functions needed for hospitals to complete meaningful-use requirements under the Medicare incentive programs, he says.

Hoyt says 102 hospitals made it to the elite Stage 6 in 2011, joining just 150 or so already there at the start of the year.

“We are seeing a lot of growth at that high end,” Hoyt says. “Once you make it past Stage 4 and have the docs at the keyboard, it’s easy to make a move. That’s a big hill, and it’s easier from there. I see no reason for it to slow down. So, I’m confident we’ll hit another 125” at Stage 6 in 2012, Hoyt says.

—Joseph Conn