Sen. Edward Kennedy (D-Mass.) became the first lawmaker to formally propose directly linking payment incentives to providers' use of information technology.
Several members of Congress have become increasingly interested in the issue in recent months, and President Bush recently appointed the first ever national health IT coordinator. The bill Kennedy introduced would offer larger payments to hospitals and doctors that put in place new information technologies such as electronic medical records and automated billing systems. Over time, Kennedy said, his bill would reduce payments to large healthcare facilities failing to take advantage of IT systems that can improve quality while controlling administrative and clinical costs.
"Arbitrary cutbacks for hard-pressed hospitals and physicians are the wrong remedy" for reducing healthcare cost growth, Kennedy said in a news release.
John Toussaint, president and chief executive officer of ThedaCare, a three-hospital system in Appleton, Wis., said he favored the idea of tying payment perks to use of IT.
"I usually don't say I would welcome more regulation, but I welcome this," he said. "This is where the industry needs to go." All of ThedaCare's clinics and 60% of its hospital operations are now electronic.
The American Hospital Association was reviewing the bill at deadline and had not taken a position, a spokeswoman said.
Kennedy's bill would also set the goal of broadly implementing electronic health records by 2011, three years earlier than a similar goal set by the president last month. Kennedy said his bill would create a healthcare system that pays for value rather than procedures and illnesses. The bill would instruct HHS to set quality standards and would require both public and private payers to reward providers that reach such standards with higher payments-as well as punish those who don't with lower payments. If it becomes law, Kennedy's bill will also authorize unspecified grants and loans to help providers install the often expensive technology.
In an election year that follows passage of the mammoth Medicare reform law, members of Congress have said it's a difficult time to advance new healthcare initiatives, even when they have bipartisan support. At deadline Kennedy spokesman Jim Manley could not provide specifics on the amounts of the incentives or penalties in the bill. He also said the bill did not yet have any co-sponsors. Still, members of both parties and chambers support efforts to encourage healthcare IT.
Kennedy will focus on passing the bill in the next Congress, Manley said.
"All hospital providers, including us, are trying to find ways to improve our delivery and recognize that technology is one tool to help us achieve that," said Matthew Williams, vice president of advocacy and government relations for Catholic Healthcare Partners in Cincinnati.
-with Tony Fong