Inside the Economic Stimulus Package: What's In It for Imaging & IT?

This year, one trend dominates the health imaging market and the entire economy. The lingering and deepening recession stands at the top of the list of items that keep CIOs, hospital and clinical department administrators, and radiologists awake at night.

There is at least a spark of hope in the $787 billion U.S. economic stimulus package. So what’s in it for imaging, radiology, cardiology and IT? Health Imaging & IT untangles the package, interpreting its implications for the health imaging world.

The basics

The American Recovery and Reinvestment Act includes more than $19 billion in funds for healthcare IT. Specifically, the Health Information Technology for Economic and Clinical Health Act (HITECH) is designed to spur adoption of electronic health records (EHRs). It incorporates $17.2 million in pay-for-use funding for “meaningful use” of the certified EHRs. Meaningful use is defined as a connected EHR that provides electronic exchange of health information to improve quality and promote coordinated care. The stimulus package also includes another $2.1 billion in grants and loans designed to jump-start IT adoption, which will be determined by Office of the National Coordinator of Health Information Technology (ONCHIT).

The Carrot
Projected Minimum Incentives for Physician Practices that Convert to EHRs Year 1 – $15,000 Year 2 – $12,000 Year 3 – $8,000 Year 4 – $4,000 Year 5 – $2,000 Penalties for non-adoption start in 2014

The funding could provide a much-needed boost for the sagging health IT market. Prior to the act’s passage, research giant Gartner projected healthcare IT spending would grow a mere 2.6 percent to $28.4 million in 2009, following a healthy growth rate of 6.6 percent in 2008. Indeed, most hospitals have planned for the pinch. Seventy-one percent expect smaller IT budgets in 2009, and another 26 percent will hold steady.

Budgets likely will be tweaked and spending could increase, however, with the financial incentives for healthcare providers that convert to an electronic medical record.

Early adopters gain big

HITECH offers incentives for everyone from small practices to large hospitals, with most eligible for funds to upgrade to EHRs. Early adopters in both realms qualify for the largest incentives.

Physician practices that deploy an EHR by 2011 qualify for additional per-physician Medicare payments range from $44,000 to $64,000 over the five-year incentive period. Later adopters not only miss out on incentive payments, but also may incur penalties. That’s because the package incorporates both carrots and sticks; hospitals and physicians that do not convert to EHRs by 2014 face Medicare payment penalties. Plus, other payors could follow Medicare’s lead and implement staggered payments.

The Stick

Beginning in 2015, physicians not demonstrating “meaningful use” of EMRs will be reimbursed according to a reduced Medicare fee schedule. The reductions will be: 2015: 99% of the regular fee schedule 2016: 98% of the regular fee schedule 2017 and each subsequent year: 97% of the regular fee schedule If fewer than 75% of eligible healthcare professionals are utilizing EHRs beginning in 2018, the fee schedule may be reduced to 96% and then 95% in subsequent years but not further.

Hospitals with more than 500-beds stand to receive up to $11 million each to modernize their medical records, while smaller hospitals are eligible for financial incentives up to $3 million each. Calculating the actual hospital incentive is quite complicated. The bonus begins with a $2 million base payment and factors in a formula that accounts for discharge volume and inpatient Medicare bed days.

There is a downside to the push to accelerate EHR adoption. It’s difficult for hospitals and physician practices to shift gears. Those that have not yet investigated the operational, IT and workflow implications of an electronic record are at a disadvantage. Unfortunately, physician practices and hospitals that attempt to convert to electronic systems with appropriate planning may not achieve the same level of success as sites that develop a comprehensive deployment plan.

A sound accelerated IT adoption plan

There may never be a better time to hop on the healthcare IT bandwagon. Facilities that had previously planned for a converting to an EHR, but delayed adoption, are well-situated to reap maximum gain from HITECH. They need to review and update their plans, making sure to visit with successful electronic sites with similar demographics. On the other hand, sites that are newbies to the EHR concept require accelerated remediation. These sites need to charge a committee with investigating the pros and cons of the stimulus and EHR adoption. They need to take advantage of vendor resources, trade organizations and tap into colleagues with EHR know-how. For most practices, it makes sense to transition into the electronic world with a caveat: there is no substitute for sound planning. 

Tips to Succeed Through a Recession

Major challenges, like a recession, warrant a multi-pronged attack. So as facilities investigate investment or enrichments of EHRs, they also need to focus on other aspects of their business model and find new ways to cut costs and grow business. Many successful strategies employ a common theme—innovate to slash costs and better leverage resources. In other cases, savvy sites are documenting substantial benefits to demonstrate ROI. Here are a host of real-world examples of how Health Imaging & IT readers are getting leaner to stay profitable in the current climate. Web 2.0—or Marketing on Steroids Dennis Schiraldi, director of Dynamic Medical Imaging in Columbus, Ohio, combines conventional marketing—personal calls, “lunch and learns” and fax and email blasts—with Web 2.0 to maximize his shoestring marketing budget of $20,000 to $24,000 annually. The center posted an informational video and a local newscast about open MRI on YouTube, created a Facebook account with research articles and insurance information and invested in search engine optimization to drive traffic to its website. Google cost-per-click ads cost a mere $200/month, a fraction of the $5,000 price tag on a one month billboard, says Schiraldi. Facebook is both free and hyper-efficient as the imaging center can engage all physicians in the practice database in five minutes vs. the four to six weeks its takes to personally visit them. Plus, Facebook is convenient; the social networking site fits into physicians’ busy schedules. In addition, Web 2.0 automates tracking, bringing in about 40 patients to the center every month, according to Schiraldi. Tele-mammography Solves Staffing Shortage For two years, the Center for Breast Care at Boca Raton Community Hospital in Boca Raton, Fla., attempted to recruit an additional breast-care specialist without success. Finally, the center outfitted itself for growth from within by tapping into telemammography to boost the efficiency and work hours of one if its part-time mammographers. The project entailed investing in a high-speed internet connection for the mammographer’s home office, an additional reporting system license and minor home remodeling. It extended the utility of the experienced reader and enabled telemammography interpretation using a Hologic mammography workstation with iCAD software. The radiologist’s three-hour commute is dedicated to image review with daily volume in the 40 to 60 study range. Plus, the center reimburses by the case, which is very cost effective. Grid Computing Distributes Multi-vendor PACS Images Radiology Affiliates Imaging in Hamilton Township, N.J., connects 29 radiologists across two imaging centers and five hospitals via a technology grid. The configuration allows radiologists to read studies from multiple PACS, including NovaRad NovaPACS and GE Healthcare Centricity, from any location. “The grid maximizes efficiency and provides a competitive advantage because sub-specialist consults are available on any case,” explains CIO Pete Higgins. The practice runs radiologist shifts from 8 a.m. to 11 p.m. and provides full reads for evening studies and hospital nighthawk clients, a model that distributes efficiency to all radiologists. “Everyone starts with a fresh desk every morning,” shares Higgins. Healthcare IT Reduces Errors, Saves $$ CentraState Healthcare System in Freehold, N.J., tackled declining margins and the need to generate accurate patient-safety metrics by embracing healthcare IT. Since CentraState deployed Siemens Medical Solutions Soarian Clinicals, including Siemens Pharmacy and Siemens Med Administration Check in 2006, it has achieved a 25 percent reduction in avoidable medication errors and $500,000 in annual savings through better charge documentation. Similarly, HealthAlliance, a two-campus system in Central Massachusetts, replaced its core clinical and financial systems and adopted Siemens Soarian next-generation technology. One of the primary goals centered on proactive revenue cycle management. Since go live in December 2005, HealthAlliance achieved multiple financial milestones including: Reduction in average days of revenue in accounts receivable (A/R days); $1.1 million in payment rate improvements in the first six months of fiscal year 2008; 99 percent accuracy rate for valuation of accounts receivable. Closing the Communication Loop Late in 2008, Philips Healthcare and the University of Chicago Medical Center (UCMC) launched a closed-loop imaging research trial designed to integrate imaging and information technologies throughout the radiology suite so they “talk” to each other across a smart, automated and open platform, seeking to streamline imaging procedure steps to save minutes, during the entire imaging loop. Radiology efficiency may help UCMC reduce patient waiting time, repeat scans and the time needed for appointments. The closed-loop model is based on an orchestrated workflow that can only be achieved if all systems used in the imaging loop are integrated and provide an interface allowing information to flow seamlessly from one step to the next, minimizing inefficient and potentially distracting busy work for the radiologists and technicians, says Paul J. Chang, M.D., medical director, enterprise imaging for University of Chicago Hospitals. During the initial research phase, UCMC replaced the current paper-based CT protocol system with an automated electronic patient protocol system that uses a Philips Tablet PC to communicate protocol settings to the CT scanner, eliminating manual entry, non-essential work and paper trails. A Virtual Worklist Saves Time “Our most successful cost-cutting strategy comes from efforts to improve connectivity across the board,” states Mitch Schwarbach, administrator at Advanced Radiology in Park Ridge, Ill. In practices that read for multiple sites, radiologists can be befuddled, and hindered, by disparate imaging systems that can’t talk to each other. With Compressus’ MEDxConnect software, Advanced Radiology combined studies from all disparate imaging clients in a single worklist. Studies are automatically routed to the appropriate specialist, eliminating the need to scroll through a worklist that includes subspecialty studies like breast MRs to locate a study. “Objectively, volume has not changed since deploying the software, but radiologists are asking for more work, which demonstrates improved efficiency,” shares Schwarbach. Another Compressus user, Seattle Radiologists in Washington, shares that the software mitigates the impact of declining scan volume. The virtual worklist lets the group augment revenues by integrating images, priors and reports in a single system to streamline the provision of professional services to outside organizations.