Health Group Publishes Report for State and Federal Government

SAN FRANCISCO,Calif. -- The Health Technology Center, in a joint report with Manatt, Phelps & Phillips, LLP, proposed the creation of a Health Care Information Technology Revolving Loan Fund Program. The innovative proposal is modeled after other successful revolving loan fund programs (RLFs) that the federal government has established to provide states with money for local transportation and environmental initiatives, and is designed to address a critical health care need that is destined to remain unmet without public sector involvement and support.

The seeds for the Health Care Information Technology RLF were sown in the late 1990s, on the heels of a groundbreaking Institute of Medicine (IOM) report, "To Err is Human," estimating that 98,000 Americans were dying each year from medical errors -- a higher number of fatalities than from breast cancer, AIDS or other far more visible medical causes. The IOM report pointed dramatically to the fact that, despite the epidemic proportions of the problem, little attention and funding was being devoted to system-based solutions. In the four years since "To Err is Human," few plans have been proposed that offer the dramatic, comprehensive solutions called for by IOM.

The new Health Technology Center report "Spending Our Money Wisely: Improving America's Health Care System by Investing in Health Care Information Technology," pinpoints a system-wide lack of health care information technology (IT) investment as a key factor holding back progress, explores the obstacles to broader investment, and proposes a federal RLF program as a necessary solution.

In addition to the IOM report, other findings continue to show a critical need to establish a health care technology infrastructure to improve quality of care and control costs. A recent, rigorous literature review found that nationwide adoption of computerized order entry systems in ambulatory care would eliminate more than 2 million adverse drug events and 190,000 hospitalizations per year resulting in a savings of approximately $44 billion per year in reduced medication, radiology, laboratory and hospitalization expenditures. Additionally, the Department of Health and Human Services has stated 20% of all lab and x-ray tests are performed because the results from the exact same tests on the same patients were not available when needed. Secretary of Health and Human Services, Tommy Thompson was recently quoted as saying that, "Our health care is even further behind technologically than our grocery stores."

"The federal government is the largest payer in our health care system and is key in driving the success of a sophisticated IT infrastructure," said Janet Marchibroda, Chief Executive Office of the eHealth Initiative. "Some successful regional efforts to use electronic information for health care delivery are underway but we need the government's support to mobilize these efforts on a national level."

The proposal calls for the federal government to make an initial investment in capital, which would be allocated to each of the states. The states would then transfer the funds to independent not-for-profit organizations responsible for deciding what projects should receive loan financing or grant funding and on what terms. Once established, revolving loan fund programs have proven over time to become financially self-sufficient because they create a continual flow of money back to the fund, which includes interest. The plan also suggests grants and loans to be made available to providers serving low income and rural communities for investment in an electronic health care system.