Half Billion Dollars a Year Proposed for Health IT

By M.L. Baker  |  Posted 06-15-2005
New legislation proposes awarding a half billion dollars a year for health IT—half in grants, half in loans.

The bill was introduced Monday by Sen. Christopher Dodd, D-Conn., and would allocate funds from 2006 to 2011. Additional legislation written jointly by Senate Majority Leader Bill Frist, M.D., R-Tenn., and Sen. Hillary Rodham Clinton, D-N.Y., to promote the development of regional health information networks is expected later this month.

The bill (Senate 1223) proposed by Dodd creates a new executive office of National Health Information Technology. The head of this office would be appointed by and report directly to the president. Though the position of National Health Information Coordinator was created by President Bush, the HHS (Health and Human Services) secretary supervises and appoints the coordinator. Current coordinator, David Brailer, was named by former Secretary Tommy Thompson in May last year, shortly after the position was established.

Six months after the creation of the proposed executive position, the IT director would make recommendations for "federal reimbursement and payment structures that would encourage the adoption of information technology (IT) to improve health care quality and safety."

The proposed executive office would be required to approve any health IT policy changes implemented by other government agencies, and it would be required to adopt standards to promote interoperability within two years of its creation. One year after the adoption of standards, the secretary of Health and Human Services could only purchase clinical systems if they complied with these standards. The federal government is the largest health care payer in the country. Together, the Veteran's Administration, Medicare and Medicaid pay over 40 percent of the nation's health care bills.

Michael Leavitt, the secretary of HHS, has long said that the federal government could move the market by adopting standards, but has called for "organic collaboration" among health care providers, payers and technologists to move the industry toward compatible standards. The bill specifies that the standards adopted by the executive office could already be extant.

Last week, Leavitt announced the creation of the American Health Information Community to ensure that health information can be shared electronically across different institutions. The AHIC's mission is so important, he said, he would chair it himself. HHS also announced four requests for proposals for projects related to forming the network.

In May, Reps. Patrick Kennedy, D-R.I., and Tim Murphy, R-Pa., introduced the 21st Century Health Information Act (H.R. 2234). This bill requires $50 million in grant funding to be spread among up to 20 different regional health information organizations. It also calls the government to establish a help center for physicians trying to set up clinical systems.

Last week, the House Appropriations Committee approved a bill for $75 million for the Office of the Health Information Coordinator, $58 million more than last year, but $3 million less than the Bush administration requested.