Achieving Electronic Connectivity in Health Care: Summary of Financial Incentives Recommendations
A Preliminary Roadmap from the Nation's Public and Private-Sector Healthcare Leaders
July 1, 2004 | Report, White Paper
Markle Connecting for Health, Working Group on Financial, Organizational, and Legal Sustainability of Health Information
Markle Connecting for Health, Working Group on Financial, Organizational, and Legal Sustainability of Health Information
From February through July 2004, within the framework of Phase II of Connecting for Health, the Working Group on Financial, Organizational and Legal Sustainability of Health Information Exchange performed an analysis of the legal and organizational issues and barriers to health information exchange as well as a high-level qualitative financial analysis of health care IT application adoption. The Working Group focused on health information exchange for the ambulatory care physician practice.
Findings:
- Financial incentives need to be realigned to promote quality care improvement via IT adoption, connectivity, and information exchange among all health care providers.
- Financial incentives of the approximate range of $3 to $6 per patient visit or $0.50 to $1.00 per member per month, based on 4,000 patient visits per year or a 2,000 patient panel, over at least a three-year period appear to be a sufficient starting point to encourage and sustain wide-spread adoption of basic EHR technologies by small, ambulatory primary care practices. Estimates represents approximately $7 - $14 billion per year for three years or 1.2% to 2.4% of total amount spent on ambulatory care in 2003 on an annual basis. Industry is experimenting with incentive models and will gradually migrate to incentives to encourage adoption as well as additional incentives that will be necessary on an on-going basis to encourage more extensive use of EHR technologies, e.g., coordinated care or advanced chronic disease management.
- The qualitative analysis supports a business case that is better for some “incremental applications” than others. These incremental applications can be implemented as steps toward the full implementation of an EHR. Applications with smaller investment or a very high net beneficial business case could be considered as candidates for initial implementation as long as they are not dead-end applications.
- Small and medium-sized practices have greater potential to benefit from information exchange, but will require greater attention and support in order to achieve sustainability.
