"Health information technology is the first thing on the list and the only thing on the horizon to both significantly reduce cost and to improve the quality of health care for our citizens in Kentucky and across the country." -- Kentucky Lt. Governor Daniel Mongiardo, a practicing physician

Kentucky Gov. Steve Beshear and Lt. Gov. Daniel Mongiardo yesterday announced that Kentucky is moving forward with the creation of a statewide health information exchange -- an initiative that will position the commonwealth as a national leader in e-health.

The move comes as President-elect Barack Obama is pledging to spend billions in stimulus dollars on e-health, an area that Lt. Gov. Mongiardo has been a leader in for several years.

"While all states -- including Kentucky -- are looking for ‘shovel-ready' projects as part of a proposed federal stimulus, we are looking for innovative and groundbreaking ways to implement health technology; technology that will save lives and significantly reduce costs," Beshear said. "This initiative -- to create a statewide information exchange -- is an important first step in making Kentucky a national leader in the emerging e-health movement."

Lt. Gov. Mongiardo, a practicing physician, agreed, saying that "health information technology is the first thing on the list and the only thing on the horizon to both significantly reduce cost and to improve the quality of health care for our citizens in Kentucky and across the country."

Specifically, Beshear and Mongiardo said the state is using an existing federally funded Medicaid Transformation Grant to lay the cornerstone for a health information exchange. The Kentucky Health Information Exchange will create a technology infrastructure across the state that will allow doctors or other health-care providers to have more complete and instantaneous medical histories for their patients at the point of making critical health-care decisions.

A Request for Proposal (RFP) has been issued seeking vendors to help establish this information exchange system. A vendor's conference was held today in the Capitol Annex for vendors.

Currently, Mongiardo said, health decisions are made with incomplete information, resulting in unnecessary or duplicative procedures, costing money and, far too often, lives. The health exchange will provide physicians with current information on drug interactions and current health histories that will help prevent medical errors or duplicative services.

The exchange will be set up in such a way to ensure patient privacy as paper records are converted to digital, Mongiardo said. In fact, electronic record-keeping would be a more efficient way to maintain privacy than the current paper records.

"Health care is the most information-intensive industry, yet it lags behind every other sector of the national economy in its adoption of information technology," Mongiardo said. "The banking industry is 20 years ahead of health care in implementing information technology."

As a result, Americans pay more for health care than other industrialized countries, although they have comparatively shorter life spans and higher infant mortality rates. At the same time, the United States spends almost twice as much as other leading industrialized nations on health care, placing the country and employers at a severe economic disadvantage because of soaring insurance premiums and health-care costs.

Kentuckians, in fact, spend more than 16 percent of the state's gross domestic product on health care even as the state has among the country's highest rates of chronic illnesses, such as cardiovascular disease, obesity, cancer and diabetes.

"The current system is unsustainable. Without a cure, America's health-care system will soon crash," Mongiardo said. "The Kentucky Medicaid program has a soaring shortfall and Medicare's financial status is a growing concern as well."

In response, President-elect Obama has proposed an aggressive plan to invest $50 billion over five years in health information technology. It is estimated that a stimulus investment of $10 billion in