Do EHR Incentive Payments Work?

By Katie Wike, contributing writer

One source says incentive payments under the HITECH Act have been unsuccessful in increasing EHR adoption.

A draft paper published by the National Bureau of Economic Research casts doubts on the effectiveness of electronic health record (EHR) incentives provided through the HITECH Act.

“In February 2009 the U.S. Congress unexpectedly passed the Health Information Technology for Economic and Clinical Health Act (HITECH). HITECH provides up to $27 billion to promote adoption and appropriate use of Electronic Medical Records (EMR) by hospitals,” explains the draft.

According to the findings, adoption rates for independent hospitals were 48 percent in 2008 and 77 percent in 2011. They estimate that without HITECH incentives, the adoption rate would have reached 67 percent by 2011 regardless. The cost of having a 77 percent rate rather than a 67 percent rate was an estimated $48 million. Most astoundingly, experts estimate the 77 percent rate would have been achieved without HITECH incentives by 2013.

According to Modern Healthcare, co-author David Dranove, a professor of health industry management at Northwestern University wonders if incentives were the right decision. “We pushed things forward two years, but we don't know how to use” the records, he said. “Why rush? Wouldn't it be better to have a better sense of how to make electronic medical records work?”

“(EHRs) are still not ready for prime time,” Dranove said. “We weren’t surprised at the reluctance of hospitals, even with this huge financial incentive, to adopt the technology.”