Health Information Technology

April 2009

The $787 billion American Recovery and Reinvestment Act (ARRA) of 2009 (P.L. 111-5) is intended to stimulate the economy, create jobs, and provide other investments, including the infrastructure to transform the health care system and control future spending.1 The legislation includes $19 billion for health information technology (HIT), the first part of a commitment by President Obama to invest $50 billion over five years to encourage the widespread adoption of HIT in the United States. Policymakers and researchers promote HIT as a means to improve the safety, quality, and efficiency of health care.2  Some health services researchers, however, question the returns this investment is likely to yield.3

What Is HIT?

HIT is a general concept comprising a number of different types of specific applications:

  • Electronic medical records (EMRs) are an electronic version of a provider's paper medical records for the patients they treat. Electronic health records (EHRs) also contain information about a given patient, but are sometimes distinguished from EMRs in that they may include patient information from more than one provider as well as administrative information.
  • Computerized physician order entry (CPOE) is a process by which a provider electronically transmits orders to other medical personnel for pharmacy, laboratory or other diagnostic tests, and treatment.
  • Personal health records (PHRs) are an electronic tool controlled by patients themselves to track information and test results from providers, pharmacies, and insurance companies. PHRs can take the form of stand-alone internet or software applications in which the patient and/or one other entity enters information about the patient's health, or an integrated tool that can receive information directly from multiple providers.
  • Document image management systems (DIMS) or picture archive communication systems (PACS) allow electronic retrieval, routing, display and archiving of documents and/or images.
  • Clinical decision support (CDS) systems help physicians make decisions about the preferred course of diagnosis or treatment for a patient. In hospitals, doctors often use CDS in conjunction with CPOE.
  • Chronic disease management systems and disease registries collect, manage, and give information to help providers manage all of their patients with a particular disease or condition.
  • Health information exchanges (HIEs) provide the capability to move clinical and administrative information among multiple providers (and sometimes payers) to help coordinate a patient's care. HIEs are usually local or regional organizations governed by multiple stakeholders in the area's health care system.
  • Telemedicine, sometimes considered a form of HIT, uses telephonic and electronic technologies to provide consultation and patient monitoring between remote locations.4

Provisions of ARRA

ARRA adopts a multi-part approach to expanding the use of HIT. In particular, the legislation:

  • Codifies and expands the responsibilities of the Office of the National Coordinator of Health Information Technology (ONCHIT), a function created by presidential executive order in 2004;
  • Provides $17 billion in Medicare and Medicaid incentives between 2011 and 2016 to physicians and hospitals that demonstrate “meaningful use” of “certified EHRs;”
  • Provides financial penalties in reduced Medicare and Medicaid reimbursements to physicians that do not adopt EHRs starting in 2017;
  • Provides $2 billion to ONCHIT to support technical assistance for providers and to develop the HIT infrastructure, including standards for interoperable systems and regional HIEs; and
  • Enhances privacy and security requirements for HIT by expanding the applicability of HIPAA rules requiring that patients be notified if the security of their medical records is compromised, and restricting the commercial use of patient information contained in HIT systems.5

Current Use of EHRs

ARRA focuses on EHRs, which are electronic versions of patients' medical records from one or more providers.6 To date, EHR use has been limited to a small minority of physicians and hospitals. A recent study partially funded by the Robert Wood Johnson Foundation (RWJF) found that in 2008, 13 percent of physicians reported having a basic EHR system, but only 4 percent reported having extensive, fully functional electronic records. Primary care physicians as well as those practicing in the western United States, in large groups, in hospitals, or in medical centers, are more likely to be users of EHR systems.7 These findings are consistent with another recent RWJF-funded study of physician organizations in the United States.8 Prevalence of EHRs is even less in hospitals. A RWJF-funded survey of hospitals found that 7.6 percent used basic EHR systems in at least one clinical unit and that only 1.5 percent had comprehensive EHRs in all clinical units.9 These institutions were more likely to be teaching hospitals and located in urban areas.10 These studies and other research have found that the time and cost associated with the initial investment (especially for small physician practices), the lack of interoperability among different EHR systems,11 and the need for technical assistance and training for medical personnel are all barriers to EHR adoption.12
Implementation Challenges and Beyond

The Obama administration has appointed former HCFO grantee David Blumenthal, M.D., M.P.P., to lead ONCHIT, where he will oversee the implementation of the HIT provisions of ARRA.13 Among the challenges ONCHIT faces are meeting the tight timetable to develop the infrastructure and interoperability standards necessary for providers to benefit from the financial incentives, developing operational definitions for the terms “certified EHR” and “meaningful use,”14 and assuring that EHR systems provide sufficient flexibility to support a variety of functions, including CDS and data useful for comparative effectiveness research.  One model that experts have suggested that HIT policymakers adopt is that of the Apple iPhone, which has an openly-shared software platform and user interface for which outside developers can create compatible applications.15 

Another challenge is to develop EHRs in a way that maximizes their effectiveness in improving the quality and efficiency of care. To date, the research on the benefits of HIT has produced mixed results. A recently published study produced as part of an on-going HCFO grant to Stephen Parente, Ph.D., and Jeffrey McCullough, Ph.D., both of the University of Minnesota, confirmed the need for health services researchers to continue work in this area. Using national data to estimate the relationship between HIT and clinical quality, Drs. Parente and McCullough found that EMRs16 are associated with a small, but statistically significant aversion of post-operative infections. However, they found no statistically significant relationships for two other types of HIT—nurse charting and PACS—or for two other measures of patient safety—post-operative hemorrhages/hematomas and pulmonary embolisms/deep vein thrombosis, which could reflect the true value of the HITs examined or limitations of the study.17 On-going work that Drs. Parente and McCullough have undertaken as a part their HCFO grant is examining the costs and benefits of CPOE.18

Health services research will play an important role in guiding the evolution of HIT. This will include efforts to provide a more definitive understanding of the benefits and costs of HIT and which types of technology are best suited to particular functions. Organizational health services research will play an important role in identifying “best practices” to guide training and other technical assistance to providers. Hence, a final, but important initial challenge for policymakers is to provide the resources and environment for researchers to study and learn from these early HIT efforts.

The following are select grants from the HCFO portfolio that address issues related to HIT. For other HCFO grants, see

HCFO Grants:

Title:  The Costs and Benefits of Health Information Technology: Computerized Physician Order Entry
Grantee Institution:  University of Minnesota
Principal Investigator:  Jeffrey McCullough, Ph.D. 
Grant Period:  September 01, 2008 - February 28, 2010

The researchers will measure the quality and cost effects of clinical information technology (IT), specifically computerized physician order entry (CPOE) systems. They will use data from 1997 to 2006 to measure the direct value of CPOE, as well as the value it creates in conjunction with complementary technological and organizational investments. The value of CPOE will be based on its causal effect on medical errors, financial costs of medical errors, financial value of CPOE-driven error reductions, and “charge capture,” which the researchers describe as more effective billing and the ability to extract higher payments from Medicare and other payers. The objective of this study is to provide new insight into how clinical IT creates both financial and clinical value, while enhancing the empirical rigor with which that value is measured.

Title:  The Economics of Health Information Technology in Physician Organizations
Grantee Institution:   University of California at San Francisco
Principal Investigator:  Robert H. Miller, Ph.D. 
Grant Period:  February 01, 1999 - October 31, 2001

How do managed care organizations and large physician groups implement and use health information technologies (HIT)? Investigators at the University of California, San Francisco will: 1) develop a conceptual and theoretical framework for understanding HIT use; 2) obtain and analyze information on HIT, especially clinical information; and 3) analyze effects of existing HIT developments on purchaser, regulator, and legislator policies for quality reporting requirements and payment models. They will also explore the effects of HIT on contractual and ownership relationships among managed care organizations. Methods will include interviews of managers in 30 physician groups and 6 HMOs, and managers in the groups' parent firms, if applicable. Both capitated groups and groups which accept few capitated contracts will be included. They will also conduct interviews of HCFA, industry association staff/ public managers in selected states, and NCQA staff about the relative importance of existing HIT as obstacles to strengthening performance reporting requirements and introducing risk-adjustment capitation rates. The objective of the project is to help policy makers, regulators, managers and researchers understand the economic logic of HIT use in managed care organizations and physician groups, and policies that could hasten the pace of HIT change. This study will complement another HCFO grant being investigated by researchers at the University of Minnesota on health information technologies.

Title:  Information Technologies and the Use of Information in Managed Care
Grantee Institution:   University of Minnesota
Principal Investigator:  Jon B. Christianson, Ph.D. 
Grant Period:  January 01, 1999 - June 30, 2001

How do health maintenance organizations (HMOs) implement and use health information technology (HIT)? Investigators at the University of Minnesota investigated: 1) What has been the role of HIT in shaping the development of the managed care industry over the past two decades? 2) How is HIT currently being used to organize and coordinate work within different model types of MCOs (group, staff, IPA, network, mixed model), and at different levels within individual MCOs? 3) What factors influence the structure of IT in HMOs? And 4) What public policy issues are emerging in relation to the organization and management of HIT in MCOs? The investigators used questions from the InterStudy survey database to examine these issues, as well as telephone surveys of 50 independent information technology vendors and 50 information technology managers within managed care organizations. The objective of the project was to inform policy makers about the role of HIT in managed care organizations, so they can better develop appropriate public policy towards HIT development in the managed care industry in the future.

1 "Building the Recovery,"
2 Blumenthal, D. “Stimulating the Adoption of Health Information Technology,” New England Journal of Medicine, Vol. 360, No. 15, April 9, 2009, pp. 1477-79; Bates, B.W. and A.A. Gawande. “Improving Safety with Information Technology,” New England Journal of Medicine,  Vol. 248, No. 25, June 19, 2003, pp. 2526-34.
3 Soumerai, S.B. and S.R. Majumdar. “Bad Bet on Medical Records,” The Washington Post, March 17, 2009. Also see
4 Definitions are drawn from: California Health Care Foundation, Health IT Glossary of Terms. ; "Evidence on the Costs and Benefits of Health Information Technology," Congressional Budget Office, Washington, DC: May 2008; Parente, S.T. and J.S. McCullough. “Health Information Technology and Patient Safety: Evidence from Panel Data,”  Health Affairs, Vol. 28, No. 2, March/April 2009, pp. 357-60; Tang, P.C. and T.H. Lee, “Your Doctor's Office or the Internet? Two Paths to Personal Health Records,” New England Journal of Medicine, Vol. 360, No. 13, March 26, 2009, pp. 1276-1278.
5 Blumenthal, D. (2009) op. cit.; Mandl, K.D. and I.S. Kohane. "No Small Change for the Health Information Economy,"  New England Journal of Medicine, Vol. 360, No. 13, March 26, 2009, pp. 1278-81.
6 See footnote #1 for the distinction between EHRs and the similar term EMRs.
7 DesRoches, C.M., et al. “Electronic Health Records in Ambulatory Care – A National Survey of Physicians,”  New England Journal of Medicine, Vol. 359, No. 1, July 3, 2008, pp. 50-60.
8 Robinson, J.C., “Financial Incentives, Quality Improvement Programs, and the Adoption of Clinical Information Technology,” Medical Care, Vol. 47, No. 4, April 2009, pp. 411-17.
9 The study also found that only 17 percent of hospitals used CPOE systems for medications.
10 Jha, A.K., et al. “Use of Electronic Health Records in U.S. Hospitals,”  New England Journal of Medicine,  Vol. 360, No. 1, March 26, 2009, pp.1-11.
11 Interoperability refers to the ability of two or more electronic systems to exchange and use information.
12 DesRoches, C.M. (2008) op cit.; Robinson, J.C. (2009) op cit.; Jha, A.K. (2009) op. cit.; "2008 HIMSS/HIMSS Analytics Ambulatory Healthcare IT Survey,"  Final Report, Healthcare Information and Management Systems Society (HIMSS), Chicago: October 2008.
13 "HHS Names David Blumenthal as National Coordinator for Health Information Technology," U.S. Department of Health & Human Services, March 20, 2009. See also
14 Blumenthal, D. (April 9, 2009) op. cit.
15 Mandl, K.D. and I.S. Kohane (March 26, 2009) op.cit.
16 Drs. Parente and McCullough use the term EMR synonymously with EHR.
17 Parente, S. T. and J.S. McCullough. (March/April 2009). op. cit.  The issue of Health Affairs in which Drs. Parente and McCullough's study was published is devoted to HIT and contains other papers examining several aspects of the issue; "Is Health Information Technology Associated with Patient Safety in the United States?" Findings Brief, AcademyHealth, Vol. XII, No. 3, April 2009. See also
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