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Where HITECH’s $28 billion of investment has gone

Niam Yaraghi

Yesterday, Health Affairs Blog published an article by five prominent Republicans on the Senate’s Finance Committee. Senators Thune, Alexander, Roberts, Burr, and Enzi articulated their concerns with the lackluster returns on the billions of dollars spent so far on health IT through the HITECH Act. They describe performance of Office of National Coordinator for Health IT (ONC) as weak and demanded ONC to provide, “practical and actionable steps to ensure a proper return on the American people’s investment”. They ask, “where is HITECH’s 35 billion dollar investment going?” and demand solutions on “how to achieve interoperability and how to address the cost, oversight, privacy, and sustainability of the meaningful use program.”

Unrealistic expectations for ONC

While I agree with the Senators that the health care IT system is currently not performing well, I do not believe they have realistic expectations for ONC. Congress must realize that the national health care IT system is not broken, rather it was build this way. HITECH was designed with a lack of insight into how the health care market functions and thus billions of dollars were doomed to be wasted and have no tangible return from the very first day. There is a huge gap between the intended goals of the HITECH Act and the implementation strategies it has proposed. Legislators had incorrectly assumed that medical providers would engage in information exchange if they were provided with the technical capability to do so. They failed to understand that in the current financial structure of the health care system, there is hardly anyone who wants to exchange information even if it was technically possible.  

Attributing the failure of exchanging medical information to interoperability issues is naïve. The reason for the lack of information exchange in the US health care system is not the lack of standards, it is rather the lack of long-term, market driven economic incentives. These Senators argue that ONC could have achieved higher levels of interoperability with more rigorous EHR certification programs. As Farzad Mostashari, the former head of ONC mentioned yesterday at Brookings, although certified EHR products currently can and should enable many types of data exchange, they still refuse to do so unless they receive additional fees. As I have discussed before, the poorly designed HITECH incentives are the only reason behind such data blocking behavior. ONC cannot and should not resolve this problem through standardization and certification programs. Standardization is an essential part of research and development for every industry. By demanding ONC spend taxpayer’s money on designing standards and focusing on certification, we will only be doing a big favor for EHR vendors by picking up their R&D tab.

The path forward

The best way to solve the lack of technical interoperability is through self-regulated, industry driven certification alliances. The incredibly successful experience of other industry associations in standardization and certification of their products is informative. A very good example is the Wi-Fi alliance, a world-wide network of companies that promotes interoperability in Wi-Fi products through certification of compliance with particular standards.  Telecommunication companies not only willingly comply with the Wi-Fi endorsed standards, but also financially contribute to this alliance so that it can invest in design and promotion of better standards. The only reason that such alliances exist without any support from the government, is its economic benefits to its members; without Wi-Fi alliance to design standards and certify compliance of its members, there would be no Wi-Fi business. Had any reason for the members of health IT industry existed to collaborate with each other, we would have already witnessed a similar industrywide group in the health IT sector. Health IT vendors will not take the time and do the hard work of creating such an alliance if the government volunteers to do the job for them.

The $28 billion spent through HITECH are already wasted. By creating a lucrative source of revenue focused on EHR software, the government crowded out other kinds of innovation in the health care market. Rather than spending the remaining $7 billion in HITECH funds and expecting a different outcome, we should redirect these funds toward incenting innovation. It is prudent to focus the remaining budget on the initial goals of HITECH and to promote efficiency and quality of health care by funding innovations, which have successfully proven their impact. Rather than demanding an actionable plan from ONC, Congress should call for proposals from the private sector and technology entrepreneurs who can innovate a way out of the current impasse in the national health IT system. To be successful, these innovations should not only provide a technical solution for interoperability, but also should design business strategies in which different members of the market willingly contribute to information exchange. As I have suggested previously, private business can easily bear the costs of building a sustainable ecosystem in which patient privacy is ensured and the value of medical data is extracted to lure every medical provider into contributing to the eco-system.

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