Achieving Electronic Connectivity in Health Care: Summary of Financial Incentives Recommendations | Markle | Advancing America's Future

Achieving Electronic Connectivity in Health Care: Summary of Financial Incentives Recommendations

Publication Date: July 1, 2004

Findings: 

  1. Financial incentives need to be realigned to promote quality care improvement via IT adoption, connectivity, and information exchange among all health care providers.
  2. 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.
  3. 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. 
  4. 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.

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