March 6 (Bloomberg) -- The Obama administration will push hospitals and software providers to share patient data in an effort to maximize the benefits of electronic records, the U.S. coordinator for health-information technology said.
The administration is considering steps such as extending legal protections for physicians who share data and changing Medicare and Medicaid payments to encourage open access, said Farzad Mostashari, the top U.S. official on health technology.
The administration has set aside an estimated $27 billion to help doctors and hospitals buy electronic systems. The companies that build the systems have clashed over how to exchange information across their competing systems. Vendors, led by Epic Systems Corp. and Cerner Corp., need to get on board or risk losing customers, Mostashari said.
“The competition is trending toward who can be the most interoperable,” Mostashari said today in an interview at the electronic medical records industry’s New Orleans conference. “The purchaser is saying ‘My payment now, and increasingly in the future, will depend on how well I can share data and not on holding it hostage.’ And they want vendors who can help them with that.”
Mostashari also said the administration’s program to help doctors buy electronic systems would suffer under the cuts to the federal budget called sequestration that took effect beginning this week. Payments to some physicians for the purchase of records systems will be reduced by 2 percent starting April 1, and his office may be forced to put off projects such as setting standards for how medical devices or nursing homes store information, he said.
The tension among software makers has been on display at this week’s Healthcare Information and Management Systems Society conference. On March 4, Cerner, McKesson Corp. and three other vendors said they’d agreed to write standards for exchanging data across their systems, a step that would give doctors easier access to patient information.
The group didn’t include Epic, the industry leader. Epic Chief Executive Officer Judy Faulkner said yesterday that the effort seemed more about competitors ganging up to blunt her business than improving patient care.
Mostashari didn’t take sides in the debate, saying only that the business included “fierce competitors.” While he is encouraged by the industry’s search for its own solutions, those steps may not be enough.
“We are expressing our strong policy intent to use all available levers” to get competing systems to connect. “Fundamentally, the overall market is moving toward” more communication, he said.
McKesson, based in San Francisco, declined less than 1 percent to $108.32 at the close in New York. Cerner, based in Kansas City, Missouri, fell 1.5 percent to $90.91. Epic is based in Verona, Wisconsin.
The administration put the money for electronic records into its 2009 stimulus plan, arguing the technology will help doctors coordinate care and cut down on wasteful spending. While the number of physicians on computerized records has increased since then, the benefits haven’t yet met expectations, said Arthur Kellerman, a health policy analyst at the Rand Corp., a Santa Monica, California-based research group.
While Rand once predicted savings of as much as $81 billion a year from electronic records, U.S. health-care spending has continued to increase, partly because of systems that don’t share information, Kellerman wrote in January in the journal Health Affairs.
“The health IT systems that dominate the market are not designed to talk to each other,” he said. New rules promised by the Obama administration “are already triggering resistance from providers and vendors.”
The administration today issued a “request for information” seeking ideas on how to encourage more information-sharing. New regulations, if any, won’t come before 2014, Mostashari said.
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