Report proposes federal IT loan program

June 9, 2003

Calling the U.S. healthcare system "extraordinarily backward" in its use of information technology, a report released last week proposed a federal healthcare IT revolving loan fund program.The report, from the San Francisco-based not-for-profit Health

Calling the U.S. healthcare system "extraordinarily backward" in its use of information technology, a report released last week proposed a federal healthcare IT revolving loan fund program.

The report, from the San Francisco-based not-for-profit Health Technology Center, called on the federal government to provide money for each state to distribute to not-for-profit organizations to determine which healthcare IT projects would receive funds.

The proposal also calls for providers in low-income and rural communities to get grants and loans to invest in healthcare technology.

"Current proposals for federal legislation to support patient safety include some important first steps in funding information technology," said Dr. Molly Joel Coye, HealthTech president and CEO. "But these are just a drop in the bucket in comparison to what will be needed to truly connect the healthcare system - to make certain that all patients and providers can get the information they need when they need it."

The HealthTech proposal establishes a mechanism for distributing larger sums of federal aid, through leveraged state tax exempt authorities, to public-private partnerships.

"This will provide the pump-priming we need to drive both federal and private investment," Coye said.

Radiology departments in rural and/or low-income areas could benefit under the proposal.

"The public-private partnerships that we proposed would distribute a mixture of loans, from a revolving loan fund, and direct grants that would require minimal or no repayment," she said. "The grants are intended for rural and low-income areas. We know that many safety net providers could not take advantage of even favorable loan terms."

The report points the finger at a systemwide lack of healthcare IT investment as a major barrier holding back adoption. The government has used revolving loans before to fund transportation and environmental initiatives.

Coye said the next step is beyond the influence of HealthTech.

"We're not set up for advocacy," she said. "We studied the need for federal support, the best means of organizing a program for that purpose, and now we've made the proposal public."

Several organizations, including the eHealthInitiative - an organization devoted to promoting an interconnected, electronic health information infrastructure - are actively supporting the proposal, according to Coye.