Stimulus Dollars in Action

Over $19 billion has been designated to promote the adoption of EMRs. This injection of money has sparked a huge increase in EHR adoption and job creation in the health IT sector.

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The ARRA Stimulus Plan in Action

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In February 2009, President Barack Obama signed into law a plan for economic recovery designed to pull the United States out of a deep recession. Encompassing $789 billion in funding for stimulus programs, the American Recovery and Reinvestment Act included $19 billion to promote the adoption of Electronic Health Record (EHR) technology in the medical community.

There have been dramatic results of this economic stimulus on the EHR community over the past year:

  • Expansion and job creation in the EHR technology sector
  • Rising EHR adoption by physicians
  • Creation of new health IT academic programs
  • Rapid innovation and new disruptive business models

In this whitepaper, we will cover the growth in each of these areas in additional detail and will look ahead to the stimulus plan impact through 2016.

The significance of the health information technology boom reaches far beyond just the high-tech and healthcare communities. Patients and public health can benefit as well as EHR technology has been demonstrated to improve the quality of care, reduce medication errors, lower malpractice claims and improve communication among clinicians.

Growth of the EHR Sector & Job Creation

Health IT has been a bright spot during the recession. Backed by the $44,000 stimulus incentives for providers and a short timeline for EHR adoption, the sector boomed in 2009. The boom is predicted to continue, market analysts predict 400% growth in the 1.2 billion market for EHR technology by 2013.

In 2009, large public EHR companies such as Allscipts saw stock price increases after the ARRA announcement.viii And smaller EHR vendors, such as eClinicalWorks announced expansions and new hiring.ix

At Practice Fusion, the growth has been dramatic. From a small cloud computing start-up in 2008, Practice Fusion saw 400% growth in 2009 and became the fastest growing EHR community in the country.

  • Increased from 1,500 to 25,000 Practice Fusion users in 2009.
  • Successfully fundraised with Band of Angels, Felicis Ventures, and Morgenthaler during one of the most difficult venture funding climates in the last 12 years.x
  • 212% increase in Practice Fusion employees during last 6 months of 2009. Creation of new jobs in San Francisco, CA.
  • Two facility moves to accommodate hiring growth.

And growth in the sector is not limited to EHR vendors. EHR sector growth has created opportunities for IT professionals, coders, billers, certification agencies, CIOs, statisticians, hardware companies, broadband providers, government employees and consultants. The healthcare sector added 300,000 jobs in 2009, at a time that non-farm jobs in America fell by 6 million.xi Leaders in the health IT sector have predicted a demand for 50,000 to 100,000 new jobs to facilitate EHR implementation over the next few years.

Physician Adoption of EHR Systems

Over the past decade, physicians have been slow to adopt electronic health record technology. A 2007/2008, New England Journal of Medicine report showed that only 4% of physicians reported having a fully-functional EHR system and 13% reported having a limited system.xvi By the next year, these numbers had increased to 6.3% and 20%. For 2009/2010, we anticipate greatly increased adoption figures.

Several factors are thought to have contributed to slow adoption:

  • High up-front costs for EHR software, $44,000 upfront per user and $8,500/year ongoing on average.
  • High levels of required IT infrastructure for installing local servers and creating custom templates.xvii
  • Lack of usability with software programs that are often several years old.xviii
  • Difficulty of changing practice workflows to accommodate new technology.

The creation of a $44,000 stimulus for EHR adoption removes some of the cost barrier with legacy EHR systems. It also creates a dynamic market for doctors to price compare and find solutions that fit their needs. In addition, Medicare and Medicaid penalties beginning in 2015 provide the proverbial stick to the incentive’s carrot.

Practice Fusion’s EHR system is free and web-based – eliminating both the cost and technology hurdles faced by medical practices. Especially for the 80% of physicians who practice in groups of 9 or less and have limited financial resources for EHR adoption.xix

Academic Programs

The economic stimulus plan also includes incentives and grants for educational programs in health informatics. Universities carrying out a demonstration or creating a curricula and universities establishing or expanding medical health informatics programs are both eligible for grants from the Office of the National Coordinator for Health Information Technology.xxii This includes schools of medicine, graduate schools, certification programs, undergraduate programs and masters degree programs.

In January 2010, HHS announced an additional $38 million for health IT workforce grants to train professionals for EHR support and adoption positions.xxiii At a time when higher education has been hard hit by recession, including a 22% endowment drop, these grants can provide vital funding.xxiv

The same adoption issues around cost and IT demands faced by medical practices are amplified at the academic level. Providing large groups of students with an EHR system with which to train has been difficult for many academic programs.

Practice Fusion has seen a significant increase in demand for EHR programs to be used with these new health informatics courses. We work with several academic programs to provide instructors and student access to our free EHR system, including:

  • The University of West Florida
  • Orange County Public Schools in central Florida
  • New York Institute of Technology
  • Lake-Sumter Community College
  • Tacoma Community College

Not only are these academic grants creating much-needed trained health IT graduates, but are also creating jobs themselves as programs expand, add staff and build new infrastructure to support this education.

Rapid Innovation & New Disruptive Business Models

Opportunities created by the stimulus plan for the health IT in 2009 have led to a wave of innovation across the sector. Efforts to improve care and reduce its costs have been re-energized in particular.

  • Tools that empower patients with data and decision support have come front and center. The rise of iPhone medical applications is just one sign of this shift.xxix
  • Telemedicine and connecting with doctors by email, web or phone is also increasing, with wireless home health projected to grow to $4.4 billion by
  • Evidence-based medicine is on the rise, aided by $1.1 billion in comparative-effectiveness research funding under ARRA.xxxi

In the ambulatory EHR sector, Practice Fusion’s free, web-based EHR has been a major disruptive force in an industry once ruled by client-server machines with $50,000+ software licenses and additional fees for implementation and training. Medical providers can sign-up to use the EHR online and start charting in five minutes with no cost or installation. They can connect to labs, send e-prescriptions and share records with colleagues and patients online, all on the day they sign up.

By applying best practices from the last 10 years of technology advancement, Practice Fusion has created a system that uniquely modernizes and responds to needs of the medical community. Our EHR is free, web-based, easy-to-use, secure, comprehensive and constantly improving.

In the rapidly evolving world of health information technology, Practice Fusion is well poised to adapt and succeed.