HIT Needs Medicare's Leadership

DECEMBER 01, 2005

Avalere Health researchers have concluded that Medicare has the clout to create a health information technology (HIT) incentive and financing program that will directly persuade physicians to adopt it. The company's analysis, reported in Health Affairs (September/October 2005), also discusses the different policy options the federal government should review to fully leverage the power of Medicare in shaping the direction of HIT.

Medicare is a significant player in the marketplace. In 2004, >700,000 physicians participated in Medicare. There are 41 million Medicare beneficiaries, expending >$290 million in health care costs. Although the health care industry agrees that HIT adoption could enhance patient safety and health care quality while reducing cost, Medicare has done little to encourage HIT adoption. Aside from recent pilots, Medicare has not paid physicians or institutional providers either through direct reimbursement or outcome-based incentive programs.

Avalere's paper, "Medicare's Next Voyage: Encouraging Physicians to Adopt Health Information Technology," suggests that the Centers for Medicare and Medicaid Services (CMS) should explain its technology objectives, open a dialogue with the physician community, shape the development of standards and technology certification criteria, and adopt concrete payment systems to promote adoption of meaningful technology that furthers the interests of Medicare beneficiaries.

Sheera Rosenfeld, lead author and an HIT expert at Avalere, noted that the CMs' recent actions—including the VistA Office electronic health records initiative, pay-for-performance pilots, and exploration of personal health records—are positive signs of progress. "However, these are all areas in which CMS needs to consider the broad range of implications," she said.