Electronic Health Records: Should We Subsidize Activities That Would Take Place Anyway?

Electronic Health Records: Should We Subsidize Activities That Would Take Place Anyway?

The American Medical Association and the American Hospital Association along with some 50 smaller health groups have protested that the government’s proposed definition of “meaningful use” is too hard to achieve.  At issue are $14 billion to $27 billion in federal incentive payments for qualifying health care providers, i.e. those who meet all requirements for meaningful use. The groups say the proposed criteria push for too much, too soon and the program should reward providers for steps they already are taking to streamline record keeping.

Whatever one’s views about the merits of various program goals, it wouldn’t seem to be good policy to subsidize activities that are taking place anyway. The subsidies for electronic health records in the economic stimulus legislation were intended to induce new investment and new advances in health information technology, not to pay for activities already underway. My colleague Scott Wallsten proposed evaluating the broadband stimulus plan from a similar perspective by measuring the degree to which the stimulus money funded initiatives that would not have been undertaken in its absence.

I agree, however, that the proposed definition of meaningful use needs to be simplified and achievable. Indeed, the complex and evolving criteria could actually slow investment in electronic systems, as I discussed in comments I submitted on the proposal.  Uncertainties about qualifying for the payments have led to confusion about which systems will become standard and have increased investment risk. This could slow innovation and technical change in electronic health records and increase health costs.

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