What New Research Says about Which Federal Financial Incentives Produce Health System Change | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

What New Research Says about Which Federal Financial Incentives Produce Health System Change

August 18, 2017
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Julia Adler-Milstein, Ph.D. and Ashish Jha, M.D. analyze what federal incentives spur health system change

As Healthcare Informatics Managing Editor Rajiv Leventhal reported on August 9, “Electronic health record (EHR) adoption rates in hospitals increased by an average of 3.2 percent annually in the period before implementation of meaningful use (MU) incentives. But in the period after MU, the average annual increase was 14.2 percent, according to new research in Health Affairs.” Leventhal continued, “As study authors—Julia Adler-Milstein, Ph.D., an associate professor in the School of Information and School of Public Health (health management and policy) at the University of Michigan, and Ashish K. Jha, M.D., is the K. T. Li Professor of International Health at the Harvard T. H. Chan School of Public Health in Boston—noted, the extent to which recent large increases in hospitals’ adoption of EHR systems can be attributed to the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 is uncertain and debated.”

As Leventhal noted in his report, researchers Adler-Milstein and Jha found that, while acute-care hospitals eligible to participate in HITECH’s meaningful use program raised their annual average increases in EHR adoption rates from 3.2 percent in the pre-study period to 14.2 percent afterwards, hospitals ineligible to participate in meaningful use went from only a 0.1-percent adoption rate per year to only a 14.2-percent adoption rate. The authors did note “several important limitations to their research, including the fact that “First, ineligible hospitals are different from eligible hospitals in terms of their patient populations and the care they deliver. Therefore,” the wrote, “ineligible hospitals are not the perfect group. However, because meaningful use is a national program,” they note, “we lacked alternative comparison groups.” Additionally, they conceded that they faced some challenges around survey response; and, they wrote, “Finally, we were not able to disentangle the effect of the various  individual components of HITECH on EHR adoption. While the meaningful-use incentive program was the centerpiece of HITECH, complementary programs such as the Regional Extension Center program and the EHR certification program—alone or in combination with the meaningful-use program—could have driven an increase in EHR adoption.”

Nonetheless, the differences in EHR adoption that Drs. Adler-Milstein and Jha uncovered were significant. In terms of overall conclusions, the authors wrote, “HITECH is a unique policy intervention that offered hospitals financial incentives in the form of bonus payments to speed the rate of EHR adoption. Even though the large observed increase in EHR adoption among eligible hospitals after meaningful-use incentives were introduced is compelling evidence of HITECH’s effectiveness, it is possible that many hospitals would have adopted EHRs without the policy intervention. By using ineligible hospitals as a control group, we found that HITECH can be credited with increasing the rate of EHR adoption by 8 percentage points per year,” the wrote.

Further, the researchers wrote, “Our results raise the question of whether the annual 8-percentage-point increase attributable to HITECH is substantial and reflects good value for the $20.9 billion that was paid to hospitals through 2015 (with additional funding paid to eligible professionals) as a result of their meeting meaningful-use criteria. Given that the level of EHR adoption among eligible hospitals in 2010 was 15 percent, an increase of 8 percentage points per year suggests that in five years the incentives moved U.S. hospitals past the halfway mark. There are likely very few other policies that have driven such substantial change in such a short period,” they wrote.

Bingo. One of the things that I personally have found intellectually frustrating for the past several years has been the somewhat myopic grousing about meaningful use that left out discussion of the program’s core impact. Physicians and other clinicians, and others working in hospitals and medical groups, have had much to legitimately complain about with regard to the program. They have also had much to legitimately complain about—and still do—with regard to the limitations of EHRs, and their lack of user-friendliness. The thing is, anyone who’s been in healthcare for a long time understands that EHRs were designed at a time when something like pure storage of patient record information was the rather limited initial goal, and long before most people in healthcare, including clinicians on the ground, understood the broad direction that the healthcare system would take in the U.S.—towards accountable care, population health management, bundled payments, and value-based care and payment. The earlier versions of EHRs were closed, clunky, difficult to use, and relatively primitive—and some would say they haven’t advanced all that much since then.

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