Analysis: Stimulus Law Spends on Healthcare Today to Save for Tomorrow

John Commins, for HealthLeaders News , February 18, 2009

Page says the Obama administration's EHR incentives may be the carrot that eventually leads to a big stick: mandatory EHR for physicians seeking Medicare/Medicaid reimbursements. "If in five years you don't have EHR you could probably be seeing this kind of thing," he says.

One of the smaller expenditures in the massive healthcare stimulus package may prove to be the most contentious. The Obama administration has earmarked $1.1 billion—which is pocket change relative to the overall size of the stimulus—to compile data on evidence-based medicine.

The government wants to know which surgical procedures, drugs, medical devices and treatments work and which don't. Peter Orszag, director of the federal Office of Management and Budget, suggested recently that the government could adopt a system of financial rewards and disincentives for physicians and hospitals that use proven treatments. "More research on what works and what doesn't, tied to financial incentives to provide the higher-value care, could help to reduce costs without harming quality," Orszag said on National Public Radio. "We currently have a set of financial incentives just for more care. And we need a set of financial incentives for better care. And part of that requires knowing what better care is."

Evidence-based medicine is also aggressively supported by the health insurance industry. "The investment in comparative effectiveness will yield vital information on the safety and effectiveness of medical treatments and technologies, empowering patients and doctors to make better-informed healthcare decisions," says Karen Ignagni, president and CEO of America's Health Insurance Plans.

That enthusiasm from the government and the health insurance industry has doctors uneasy. Many doctors see evidence-based medicine as the government's and private carriers' first big step toward dictating treatment. Drug and medical device companies don't like it either. They're afraid that their more profitable products might be either exposed as ineffective or too costly.

"At some point I would imagine the government is going to try to figure out what is the best treatment," Page says. "Then the question is, are they going to tell doctors you treat this way or that way and you only reimburse them if they follow certain protocols. That is down the road, but if you read between the lines, is this where it's going?"

Obama administration officials have made it clear that the stimulus plan is the first major step in the president's plan to overhaul healthcare delivery. "This represents the beginning steps of the president's health reform vision," Jenny Backus, a spokeswoman for the Health and Human Services Department, told the Associated Press. "It's designed to get relief to people who need it most and to do everything we can to bring down the cost of healthcare, and improve access and quality."

Although it may be tempting to take every last nickel the feds are offering, Jenkins warns anyone taking stimulus money to read the fine print. "There are a lot of devils in the details about how the money is spent and how the different measures get implemented," he says. "Anyone doing business with the federal government needs to watch their Ps and Qs and exert all due diligence. If you can get passed that, my general advice is look for how this stimulus bill can work for you, and look for where there are initiatives you are pursuing where this new fund can support what you are doing."

John Commins is the human resources and community and rural hospitals editor with HealthLeaders Media. He can be reached at

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