Information Technology: Record Savings

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President Bush is willing to spend more on healthcare IT now so electronic records and other innovations will reduce future costs. An old business aphorism holds that it's necessary to spend money to make money. President Bush has taken a slightly different approach when it comes to healthcare IT: He wants to spend money now to save money later — while also improving care.

Few providers would dispute the notion that nursing facilities will need more information technology going forward.
"IT is critical in long-term care," says Frances Scogna, administrator for HQM of Charles Town, in West Virginia. "Encouraging the use of computers and integration of the MDS (Minimum Data Set) process with residents' charts is essential," she adds.
The president recently unveiled an IT-investment plan at the Cleveland Clinic. The setting seems appropriate, as clinicians there are developing information technology standards for medical records.
Bush and other proponents say electronic records can reduce the amount of time being spent on redundant paperwork. Electronic files also give caregivers instant access to potentially lifesaving information -- such as a resident's medical history, lab test results and prescribed medications. Their adoption might also save the U.S. Treasury billions of dollars later.
$125 million request
To usher in better IT, the administration asked for $125 million to fund healthcare information technology-related projects in its fiscal year 2006 budget.
"Health information technology will transform the practice of medicine," says Health and Human Services Secretary Michael Leavitt, who joined the president in Cleveland.
Among other things, the money will help speed public-private efforts toward adopting healthcare data standards, and establish common standards for clinical data exchanges.
The White House also requested $50 million for the Agency for Healthcare Research and Quality for grants to "promote, accelerate and demonstrate" development and adoption of healthcare IT, including in small and rural communities. Centers for Medicare & Medicaid Services Administrator Mark McClellan, MD, also says a new pay-for-performance demonstration program would encourage providers to adopt information technology.
This latest funding request reflects an ongoing theme. In his 2004 State of the Union address and during the presidential campaign, Bush called for the nation to eliminate paper medical records within a decade.
"Most industries have used information technology to make their businesses more cost effective, more efficient and more productive,'' Bush said at the Cleveland Clinic. "Healthcare hasn't.''
Like many administrators, Rick Scollon can back up the observation.
"Many nurses and CNAs don't know much about computers -- and some are actually fearful of them," notes Scollon, who is the administrator for Oregon Manor in Oregon, WI.
But there is growing evidence that electronic medical records are becoming more common, particularly for providers who belong to healthcare networks.
In the past decade, many healthcare organizations have implemented IT initiatives that have reduced medical errors, addressed electronic security issues and delivered sophisticated Web site functionalities.
A survey released in mid-February by the Health Information and Management Systems Society found that 18% of responding members had a fully operational system. Moreover, nearly two-thirds of the executives surveyed expect their organization to implement an electronic medical record system within two years.
Big picture
The Cleveland trip was part of Bush's pitch for his healthcare policies. Limiting his options are a federal budget deficit the administration forecasts at a record $427 billion this year, and Bush's own pledge to hold down congressional spending.
"The president is seeking ways to score policy achievements without spending too much money" says Joe Antos, a healthcare policy analyst at the American Enterprise Institute in Washington. Bush's healthcare technology initiative "allows him to talk about a health policy agenda,'' Antos says.
Congress would support electronic healthcare records legislation as long as there's a way to pay for incentives for long-term care operators and other providers, says Andrew Bressler, an analyst for Banc of America Securities in Washington.
"It can pass because there is broad bipartisan su