A study published in March 2009 by the New England Journal of Medicine, revealed that less than 2 percent of U.S. hospitals surveyed had a comprehensive EHR system in all clinical departments. Fewer than 8 percent have a basic EHR system (one that operates in a single clinical area) and less than 20 percent have a computerized ordering system for medications.

Stick, meet carrot

A 2009 report from PriceWaterhouse-Coopers Health Research Institute (PwC) illustrates the financial realities of HITECH in vivid relief: they estimate that a 500-bed hospital with a certified EHR could grab an average of $6.1 million in incentives; a 500-bed hospital that fails to implement a certified EHR system could have their Medicare funding docked by $3.2 million or substantially more, depending on the number of Medicare patients the hospital serves. The report estimates than an average three-person practice can expect to spend between $174,000 and $296,000 over two years to buy, deploy and maintain a certified EHR.

Individual physicians can earn $44,000 from Medicare or $66,000 from Medicaid for adopting a certified EHR, and those who do not achieve meaningful use by 2015 risk penalties. The PwC report also states, "Incentives are front-loaded for hospitals that achieve compliance in 2011 through 2013; on or after 2017, hospitals will receive no more incentives... each system will want to be poised to apply for the funding as it becomes available."

The promise of funding is offset by hefty penalties for providers who fail to use their EHRs in accordance with CMS' standards of meaningful use. Physicians and hospitals eligible for stimulus dollars must meet meaningful use objectives and measures to qualify as a meaningful EHR user.

Stage 1, effective in 2011, sets out 25 objectives and measures for eligible physicians and 23 objectives and measures for eligible hospitals, as well as a set of 35 quality standards. Results will be attested to CMS, or in the case of Medicaid, attested to individual state Medicaid programs.

"We are very concerned that the definition of meaningful use proposed by CMS will create a bar that will prevent many hospitals from receiving those funds," May said. "While the vision is probably in the right direction, the time frame and the all-or-nothing approach is a real problem. Remember, while there are financial incentive payments and stimulus funds for meaningful users, there are also penalties in 2015 for those that are not meaningful users. Yes, it's a voluntary program, but it isn't really that voluntary when there's a big stick to it."

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