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Increasing HIT through the Economic Stimulus Bill

Partner Institute: 
Johns Hopkins Bloomberg School of Public Health, Department of Health Policy and Management
Survey no: 
(13) 2009
Holzer, Jessica and Gerard Anderson
Health Policy Issues: 
New Technology, Role Private Sector, System Organisation/ Integration, Funding / Pooling, Quality Improvement, Remuneration / Payment, HR Training/Capacities
Reform formerly reported in: 
Implementing Electronic Health Records: An Update
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes yes no no


The American Recovery and Reinvestment Act of 2009 provides US$19.2 billion to support expansion of health information technology in ambulatory care settings. Such an investment in HIT is unprecedented, and has the potential to significantly change the health IT infrastructure in the US, particularly coverage of electronic medical records. Support has been strong among many stakeholders, including physicians and insurance companies, increasing the chances of the program's success.

Purpose of health policy or idea

The purpose of the Health Information Technology (health IT) expansion in the Economic Stimulus is to establish a nationwide health IT infrastructure capable of connecting providers and patients through compatible, standardized electronic health record (EHR) systems. The Stimulus Bill provides incentives for new adopters of EHR from 2011 to 2014. After 2015, providers who are non-meaningful users of EHR (a term yet to be defined) or non-users of EHR will see their reimbursements from the government decreased by 1% per year until 2018. After 2018, if less than 75% of providers are meaningful users of EHR, it is at the discretion of the Secretary of Health and Human Services to determine if further payment reductions are approriate to stimulate adoption of health IT (ARRA 2009, Blumenthal 2009, Steinbrook 2009). 

Main points

Main objectives

The HIT expansion provides US$19.2 billion the support a national expansion of EHRs and other forms of HIT in ambulatory care settings (Steinbrook 2009).  From 2011 to 2015, providers can receive incentive payments for adoption and meaningful use of EHRs and other HIT within their practices. Beyond 2015, offices that are not deemed meaningful users of EHR risk decreases in reimbursement levels from the Centers for Medicare and Medicaid Services of 1% per year until 2018 (ARRA 2009). The Stimulus Bill in which the expansion was included was broadly supported by Democrats in Congress as well as President Obama, but Repulicans were largely opposed. Interest groups such as the American Medical Association and the American Academy of Family Physicians, as well as the American Civil Liberties Union, were largely in support of the expansion.

Type of incentives

Incentive: Graded financial incentive for the first five years of use for providers who implement electronic health record (EHR) systems after 2011 and before 2015. Early adopters in 2011 could receive as much as US$18,000 in the first year, going down to US$2,000 by 2014.

Penalty: Providers who are not meaninful users of certified electronic health records by 2015 will see their reimbursement rates from the Center for Medicare and Medicaid Services (CMS) decrease by 1% a year in 2015, 2016 and 2017. If less than 75% of ambulatory providers are not meaninful users of EHRs by the end 2017, further reductions are possible at the discretion of the Secretary of Health and Human Services.

Groups affected

Providers, Government, Patients

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Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual rather consensual highly controversial
Structural or Systemic Impact marginal fundamental fundamental
Public Visibility very low very high very high
Transferability strongly system-dependent strongly system-dependent system-neutral

Successful implementation of this HIT expansion could significantly change the health care system in the US, making access to real-time patient information possible, thus reducing medical errors and duplicate testing. These cost savings, along with the potential improvements in quality from comprehensive patient records available in real time, may address some of the cost and quality concerns that currently pervade the US health care system.

Political and economic background

The American Recovery and Reinvestment Act of 2009, also know as the Stimulus Bill or H.R. 1, was the first act of the new 111th Congress (ARRA 2009). It responded to a severe downturn in the economy marked by a collapse of the financial sector and housing markets, followed by subsequent crises in other sectors, such as the American auto industry. The contents of this Bill were significantly affected by the change in administration as well, with President Barack Obama taking office. 

Change of government

The Obama Administration was instrumental in development of the Stimilus Bill, as was the newly-elected Congress, in which the Democrats are the controlling party.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes yes no no

Origins of health policy idea

Health information technology (HIT), generally in the form of electronic health records (EHRs) is expected to reduce medical errors, improve care, and make the health care system in the United States more efficient (AHRQ 2006). Unfortunately, uptake of this technology in ambulatory care settings in the US has been fairly low, with estimates ranging from 11% to 46%, depending on the size of the practice, the type of health IT used (partial EHR versus complete EHR), and the way HIT/EHR was defined in the survey instrument (RWJF 2006, Blumenthal 2009). While the estimates are not precise, the uptake of HIT, and EHRs more specifically, is generally agreed to be too low, and a source of concern if it contributes to reduced quality of care, increased costs of care, and increased disparities in care (AHRQ 2006, RWJF 2006). 

Providing incentives to expand health information technology, particularly electronic health records (EHRs), is not a new concept. Researchers and clinicians alike have been commenting for a number of years on the financial barriers to widespread implementation of EHRs (Hersh 2004, RWJF 2006), as well as other barriers, such as interoperability of systems and concerns over privacy and confidentiality (Blumenthal 2009).

Though providing incentives is not a new idea, Federal action to provide funds for these incentives represents a new direction for the US. The stimulus bill allocates $19 billion (Blumenthal 2009) for Health IT alone. This influx of money may not incentivize complete EHR/HIT coverage in ambulatory settings across the country, but it directly responds to the calls for increased funding and incentives to increase utilization of health IT in ambulatory care settings. 

Initiators of idea/main actors

  • Government: President Barack Obama was highly supportive of the inclusion of the HIT expansion in the Stimulus Bill.
  • Parliament: The Democratically-controlled Congress introduced the Stimulus Bill, including the HIT expansion, as their first act this year. The Bill was passed with little support from Republicans--all House Republicans voted against the bill or did not vote.
  • Providers: The American Medical Association (AMA) and the American Academy of Family Physicians (AAFP) are in support of the HIT provisions in the Stimulus Bill. The AMA has produced guidance for physicians on the effect of the HIT expansion (AMA 2009).
  • Patients, Consumers: American Civil Liberties Union and other privacy-oriented groups supported this version of an HIT expansion in light of the privacy protections written into the Bill.

Approach of idea

The approach of the idea is described as:
new: Federal action to provide incentives to expand HIT is a new direction for the U.S.

Stakeholder positions

Discussions of the need for health information technology expansion have been ongoing for years, and reports on the impact of expanded HIT, as well as barriers and progress in HIT have been produced in both the private and public sectors (RWJF 2006, AHRQ 2006).  The language of the HIT expansion in the Stimulus Bill was crafted by the House Ways and Means Committee (Ways and Means 2009), which is chaired by Representative Charles Rangel, a Democrat from New York State. 

The Democrats were strongly in support of the entire Stimulus Bill, including the Health IT expansion.  Republicans were strongly opposed, with only three Republicans in the Senate--Sens. Specter, Snowe and Collins, voting for the Bill.  The HIT expansion in the Bill is similar to proposals put forward previously, but the support for it in this Congress was strongly increased by the support it received from President Obama.

Additionally, the American Civil Liberties Union (ACLU), which had opposed prior HIT legislation on the grounds that it did not specifically address privacy and confidentiality concerns, was supportive of the HIT expansion language in the Stimulus Bill in light of language in the Bill specifically addressing privacy and confidentiality concerns (ACLU 2009).

Provider groups, such as the American Medical Association (AMA) and the American Academy of Family Physicians, are largely in support of the Bill as well.  The AMA expressed some reserve about the penalties associated with failure to meet HIT standards by 2018, but appreciated the extreme hardship clause that made exception for some offices that were unable, due to structural limitations, to meet the HIT expansion by 2018 (AMA 2009). 

Opposition to the Stimulus Bill was not specifically focused on the HIT expansion, though in general the opposition came from fiscal conservatives, who viewed the Bill as a partisan spending Bill with too-few tax-cuts and too much government spending.  

Actors and positions

Description of actors and their positions
Obama Administrationvery supportivevery supportive strongly opposed
Democratsvery supportivevery supportive strongly opposed
Republicansvery supportiveopposed strongly opposed
American Medical Association (AMA)very supportivesupportive strongly opposed
American Academy of Family Physicians (AAFP)very supportivesupportive strongly opposed
Patients, Consumers
American Civil Liberties Union (ACLU)very supportivesupportive strongly opposed

Influences in policy making and legislation

The HIT expansion in the Stimulus Bill is very similar to other HIT legislation that has previously been proposed in the House and Senate for a number of years.  In this case, attaching the HIT legislation to the Stimulus Bill helped to pass the HIT expansion.  Additionally, the strong support of President Obama, and the majority of Democrats in Congress, made passage of the Stimulus Bill, and by extension the HIT expansion, a possibility.  No House Republicans supported the Bill and only 3 in the Senate did (Steinbrook 2009), so the majority rule of the Democrats was essential to success in this case.

Legislative outcome


Actors and influence

Description of actors and their influence

Obama Administrationvery strongstrong none
Democratsvery strongvery strong none
Republicansvery strongneutral none
American Medical Association (AMA)very strongstrong none
American Academy of Family Physicians (AAFP)very strongstrong none
Patients, Consumers
American Civil Liberties Union (ACLU)very strongstrong none
Obama AdministrationDemocratsAmerican Medical Association (AMA), American Academy of Family Physicians (AAFP), American Civil Liberties Union (ACLU)Republicans

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

The Depatment of Health and Human Services (HHS), through the Office of the National Coordinator for Health Information Technology (ONCHIT), will oversee the expansion of HIT to amulatory care settings throughout the US.  They will be responsible for establishing standards for HIT, evaluating physician offices for compliance, disbursing incentives and providing, if necessary, a standardized HIT system if the private market is not able to provide appropriate products for providers. 

Implementation of the HIT expansion is likely to face some roadblocks as HHS and ONCHIT are forced to define "meaningful use," by which measure physicians' offices will be evaluated for incentive payments and penalties (Blumental 2009, Steinbrook 2009).  Further barriers may arise if a large number of providers are unable to meet the expectations of compliance in the time alotted and resist the proposed reductions in reimbursements.

Privacy and confidentiality concerns may also continue to be a problem as new issues arise with broader implementation.  Interoperability of new plans with existing EHRs may also contribute some difficulty to the process, especially in relation to the proposed government-provided system that may be provided by ONCHIT.

Republicans who were opposed to the Stimulus Bill are unlikely to attempt to directly block the HIT expansion, but full implementation will only be successful if Democrats, particularly President Obama, continue to strongly support the effort and further support the agencies responsible for implementation, oversight and evaluation.     

Monitoring and evaluation

The legislation includes a monitoring portion that is intended to measure successful implementation of HIT in ambulatory settings. This monitoring will evaluate the degree to which physician offices are in compliance with the "meaningful use" requirement set forth in the legislation.

"Meaningful use" remains, as yet, undefined by the legislation. ONCHIT is tasked with forming a committee designated to create standards against which meaningful use can be measured. These measures will be critical in establishing who receives incentive payments and who suffers penalties from the legislation.

Additionally, the legislation is time-limited, so incentives and penalties will both sunset, in 2015 and 2018, respectively.  At the end of 2018, the Secretary of HHS will be able to evaluate the success of the legislation and determine if further penalties are required to increase implementation. 

Review mechanisms

Final evaluation (internal)

Dimensions of evaluation

Structure, Outcome

Results of evaluation


Expected outcome

With continued support from Democrats, especially President Obama, and within HHS, this policy is likely to be successful. Though adjustments may be made in the next 8-9 years over which implementation is supposed to take place, there is significant support for this policy within the government, and among researchers, patient groups and physicians (Blumenthal 2009; Steinbrook 2009).

Successful expansion of HIT to ambulatory care settings across the country, especially if they are truly interoperable, is likely to have a revolutionary effect on medical care in this country. The ability to access patient records in real time is likely to reduce medical errors, reduce duplication of tests and services, increase responsiveness to patient needs, and improve communication among providers. These changes have the potential to reduce both costs and harms, and to improve quality of care for the entire population.

One potential concern, as has been voiced by the ACLU and other privacy-minded organizations, is the impact such broad sharing of medical information may have on patients. The HIT expansion has considered these effects and has taken steps to mitigate the danger of privacy breaches by requiring considerable protections in any approved system, but it may still be the case that privacy remains a concern for patients and physicians, who may resist implementation of EHRs as a result (Steinbrook 2009).    

Impact of this policy

Quality of Health Care Services marginal fundamental fundamental
Level of Equity system less equitable four system more equitable
Cost Efficiency very low high very high

The HIT expansion in the Stimulus Bill responds to a long-standing call for federal support in this arena.  Now, with financial support and the political support of the dominant political party, this legislation is likely to have a significant impact on health care in the US, changing the way physicians and patients experience medical care, improving communication, and reducing adverse events. 


Sources of Information

American Recovery and Reinvestment Act of 2009 (ARRA).  H.R.1.  111th Congress.

Agency for Healthcare Research and Quality (AHRQ).  Costs and Benefits of Health Information Technology.  Evidence report/tehcnology assessment Number 132. 2006 

Hersh, William.  Health care information technology: progress and barriers.  JAMA (292)18: 2273-2274, 2004.

Robert Wood Johnson Foundation, The George Washington University, Massachusetts General Hopsital. Health Information Technology in the United States: The Information Base for Progress.  2006.

Blumenthal, David. Stimulating the Adoption of Health Information Technology. New England Journal of Medicine (360)15: 1477-1479, 2009.

Department of Health and Human Services (HHS).  Recovery Money.

Steinbrook, Robert.  Health Care and the American Recovery and Reinvestment Act.  New England Journal of Medicine (360)11: 1057-1060, 2009.

House Ways and Means Committee. Title IV - Health Information Technology for Economic and Clinical Health Act.

American Civil Liberties Union (ACLU).  ACLU Applauds Privacy Safeguards In Stimulus Package For Health IT.   

Reform formerly reported in

Implementing Electronic Health Records: An Update
Process Stages: Implementation, Evaluation, Policy Paper, Legislation, Idea, Pilot

Author/s and/or contributors to this survey

Holzer, Jessica and Gerard Anderson

Suggested citation for this online article

Holzer, Jessica and Gerard Anderson. "Increasing HIT through the Economic Stimulus Bill". Health Policy Monitor, April 2009. Available at