Senators debate $22.9 billion healthcare IT proposal

January 27, 2009
H.A. Abella

At a Senate Finance Committee hearing Tuesday, Republican senators questioned whether hefty expenditures for healthcare informatics in the Obama administration’s $825 billion stimulus package will actually help jumpstart the economy.

At a Senate Finance Committee hearing Tuesday, Republican senators questioned whether hefty expenditures for healthcare informatics in the Obama administration's $825 billion stimulus package will actually help jumpstart the economy.

Despite repeated pleas from the White House for speedy bipartisan approval of the American Recovery and Reinvestment Act (HR 1), Republicans asked for careful study of big-ticket items, such as more than $20 billion to finance the adoption of electronic medical records, before their approval for a vote on the Senate floor.

Senate Finance Committee ranking member Charles Grassley (R-IA) probed the stimulus power of several bill provisions in an opening statement. Improving health information technology is critical for the nation's healthcare infrastructure, Grassley said. He questioned, however, whether spending $22.9 billion on health IT infrastructure and more than $80 billion in Medicaid would actually increase the growing federal budget deficit instead of offsetting it.

"It wasn't so long ago that $16 billion was a lot of money around here. Providing assistance to states makes sense if we are concerned about states raising taxes or cutting spending. But is $87 billion the right number, and is increased Medicaid spending the right way to do it? Could we better stimulate economic recovery using all or parts of that money elsewhere?," Grassley said.

The bill would make sound investments in health IT that should reduce cost, improve quality, and help patients make better decisions about their care, according to committee chair Sen. Max Baucus (D-MT). Language of the health IT provisions of the bill includes:
• $20 billion to jumpstart efforts to computerize health records to cut costs and reduce medical errors
• $1 billion in urban hospital infrastructure updates to make them health IT-friendly
• $550 million for healthcare technology upgrades for underserved rural populations.

If the bill is approved, health IT could become the cornerstone of healthcare reform by providing a cost-efficient platform for standardizing and collecting data, a move in line with increasing demands for more accountability and pay for performance, Baucus said. Investing in health IT will help put the necessary infrastructure in place while creating thousands of well-paying high-tech jobs.

Provisions in the bill could help nearly every U.S. physician and most hospitals to go paperless within a decade, he said.

"Health IT would reduce medical errors. It would improve the quality of care that patients receive, especially for the chronically ill. It would make patients safer, providers more efficient, and our country more competitive by reducing healthcare costs," Baucus said.

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