The gift that keeps giving-the stimulus to the electronic medical record industry

The American Recovery and Reinvestment Act had a number of beneficiaries.Part of the legislation was money for physicians to use to purchase electronic health record systems.

Stimulus for whom? Physicians do receive a relatively small payment ( about 40 -60 k) for agreeing to install EHR systems (electronic Medical records system) but were there large numbers of the rank and file physicians out lobbying for that part of the stimulus bill? I think not.But legislative packages do not arise at random out of thin air,there are folks at work lobbying for things that provide them favors.Economists call this behavior rent seeking. .There was much rent seeking going on the stimulus bill .

Maybe we should look to companies that sell the products and services that the goverment was giving money to physicians to purchase. Several of them worked with former Republican presidential candidate N. Gingrich's consultancy known as "Center for Health Transformation" which among other initiatives championed the electronics health record as a means of improving health care. These including Allscripts,Microsoft,Siemens and GE Health Care.

The underlying principle of the universe,there is no free lunch,applies to the faux beneficiaries- the physicians. The golden rule applies .He who has the gold makes the rules. The gift to the docs comes with strings,lots of them linked to Medicaid and Medicare payments. The 19 billion ( or 27 billion,depending on what source you read )given to the EHR companies through the physician checkbooks is just a drop in a big bucket as physicians will now have the obligation to keep the soft and hardware running and of course update regularly with new versions of the various software packages and update their systems as Federal requirement evolve.

Docs will also be tasked with proving their new system are demonstrating "meaningful use" a goverment term of art with very specific details that physicians practices will have to learn and try to comply with.See here for a reference for an explanation of the 25 criterion for meaningful use. Failure to achieve this level of use will at the end of the day ( a five year day) result in decrease in the CMS payments for services to the physicians who are meaninglessly utilizing their EHR.

Many- if not most- examples of rent seeking simply involves transferring tax payer money to a
the entity that successfully lobbyed for the favor. That happened here , of course, but additionally physicians will obliged to keep the systems running providing a continuing income stream to the EHR industry in perpetuity and providing a means of increasing control of the physicians practices.Part of the meaningful use requirements is to maintain a data base registry of patients with a given condition so that the doc can then demonstrate to the central authority the degree to which his practice complies with this or that guideline.


As if that all were not enough to push the older docs to decide right now to retire, part of the stimulus bill ( AKA American Recovery and Reinvestment Act of 2009) contains more stringent and detailed requirement and new penalties under HIPPA, See here for that.

We are the from the government ,we are here to help .