Reading Time: 3 minutes

Federal health officials said Wednesday they have cut billions of dollars from the projected cost of a program to push doctors and hospitals to use electronic medical records, suggesting their previous estimates overstated the number of health care providers likely to adopt the technology.

The goal to create a digital health record for every American in the next five years was first set under President George W. Bush. The project picked up steam in the Obama administration, which regards it as vital to controlling soaring health care costs.

In May, budget officials estimated they would spend up to $47 billion in stimulus money to help doctors and hospitals purchase the systems. But in a press briefing on Wednesday, officials said that figure had been chopped nearly in half to between $14.1 billion and $27.3 billion.

“A program like this has never been done on this national scale,” Tony Trenkle, who directs the office of e-health standards and services for the federal Centers for Medicare and Medicaid Services, told the Huffington Post Investigative Fund in an interview.

“This is our best estimate at this point. We are going to refine these estimates based on comments and others who look at our assumptions,” he said.

Fewer than one in five American doctors and hospitals now use digital record systems. Many health policy experts say that computerizing health records could not only cut costs by reducing dangerous medical mistakes and wasteful spending but also improve the quality of care. Federal officials hope that among other things patients would be able to take custody of their medical histories and send them to doctors and hospitals as they choose.

Under the $787 billion stimulus law, signed by President Obama in February, doctors can receive as much as $44,000 in extra Medicare payments for adopting electronic health records and making “meaningful use” out of them. Hospitals are also eligible to receive millions of dollars from Medicare under the plan. But providers who fail to adopt the technology by 2015 will be penalized with lowered Medicare payments.

Since February, health officials have offered several different estimates of how much the government would be spending under the plan. They said that further revisions are possible as they evaluate how many doctors and hospitals purchase the equipment and apply for stimulus reimbursement.

The law gave federal officials until the end of the year to come up with regulations that defined what would be considered meaningful use. The 556-page proposed rule was released jointly on Wednesday by Medicare officials and David Blumenthal, the National Coordinator for Health Information Technology.

The document provides the most detailed information to date on the progress of the plan to digitize medicine — and the challenges it presents.

The report predicts that most of the nation’s 5,000 hospitals will be eligible for the stimulus payments from Medicare. But the report found that as many as half of eligible doctors will not adopt the technology in time. However, Blumenthal said in a statement that he expects the adoption rate to be much higher once his office initiates programs to help doctors qualify for the stimulus funds.

While many doctors have said they are pleased with digitized record systems, others have complained that the systems can be clunky to use and can slow them down. Some also argue that they spend too much time staring at a computer screen rather than interacting with their patients. Advocates agree that switching over can take some adjustment, but say that most doctors who have done so are pleased with the results.

The “meaningful use” rules, released one day before the Dec. 31 deadline, were long awaited by technology companies that are expecting a major new market for their products.

Among other things the rules set timetables for the benchmarks doctors and hospitals will have to meet over the next five years to qualify for reimbursements.

Federal officials said on Wednesday that they are hoping for significant feedback from the public on the proposed rules and would make changes if warranted. Final regulations are expected to be released in the spring.

Help support this work

Public Integrity doesn’t have paywalls and doesn’t accept advertising so that our investigative reporting can have the widest possible impact on addressing inequality in the U.S. Our work is possible thanks to support from people like you.