Detail’s of Obama’s EMR Stimulus Package

UPDATE: Check out more specific details on Obama’s EMR stimulus package.

UPDATE 2: Many of you will find my presentation on the ARRA EMR Simulus money of interest.

Details about Obama’s health care stimulus package are out. I prefer to call it Obama funds EMRs for medical practices. Here’s a summary of some proposed changes via HISTalk and John Glaser, VP and CIO at Partners HealthCare System (and thanks to Chris Paton for linking me there).

  • Provision of $40,000 in incentives (beginning in 2011) for physicians to use an EHR
  • Creation of HIT Extension Programs that would facilitate regional adoption efforts
  • Provision of funds to states to coordinate and promote interoperable EHRs
  • Development of education programs to train clinicians in EHR use and increase the number of healthcare IT professionals
  • Creation of HIT grant and loan programs
  • Acceleration of the construction of the National Health Information Network (NHIN)

He also adds. “All of these changes (and more) are accompanied by the infusion of $20B into the healthcare sector. To put this in perspective, in 2007 the HIT industry in the US was $26B (Gartner).”

It’s also important to note like John did that this is still just proposed legislation. In the next 30 days it will be turned upside down. However, what we can guarantee is that the government is going to make a huge investment in health care IT and in particular EMR and EHR software. Man, big EHR and EMR vendors must be licking their chops right now.

The funny thing is that I mentioned this investment in EMR to my wife’s OB/Gyn and she started to laugh. She said, “Like the government’s ever done anything to help the provider.” While I think the response was a bit jaded, you could tell that she sincerely felt like the government wasn’t going to help her get an EMR and honestly I don’t see her ever changing to one.

However, the perspective that the health care IT industry was $26B in 2007 and they’re looking at investing $20B really jumps out at me. It goes back to my thought that there aren’t enough health care IT, EMR, and EHR professionals out there right now. Can the health care IT market really support an infusion of $20B right now? I have my doubts. Of course, I don’t think that’s going to stop anyone in Washington. Plus, I find the possibilities for someone like myself who has experience incredibly exciting.

I’ll save my details response to these points for posts of their own, but it’s going to be a really interesting next couple months as we watch Obama’s investment in health care come to fruition. Of course, this assumes that the money doesn’t just get stuck in the political process and never actually makes it to the doctors who need the money to implement an EMR and EHR.

About the author

John Lynn

John Lynn

John Lynn is the Founder of, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


  • One thing that I believe is widely misunderstood about the healthcare IT legislation is that $18 billion of the $20 billion is incentive payments that are only paid to providers AFTER they spend their own money on the front end to adopt an appropriate level of technology and get themselves in a position to report the hundreds of quality data points that CMS will require. There is no great windfall of cash coming down the pipeline that people will have to figure out how to spend. Providers will have to figure out where to get the money to invest in the IT in the next 2-4 years, or there will be no incentive payments. No adoption, no incentive payments.

  • John,
    I hadn’t heard the specific parameters that you described. However, I had heard that pay for performance was going to be a major part of this investment. What are your thoughts on it? Good, Bad, Ugly?

    My feeling is that it probably reinforces the notion that many of the doctors just won’t get the money. So, it’s putting a little prize out there that no one will actually get to enjoy or use to help HIT adoption.

    Also, I find it really hard to put easily measurable performance guidelines out that actually improve patient care. Unfortunately, I have a feeling that these payments according to a provider’s performance are not going to do a good job of encouraging what we should all truly want: improved patient care. Instead doctors will be focused on some crazy set of performance measures instead of improving the care they provide for patients.

    I haven’t studied the subject in depth, but those are my initial thoughts.

  • There is no mention of pay for performance in the legislation that I have seen. The two criteria to get the incentive payments are being a meaningful EHR user and reporting the quality data. Honestly, I think the government has very little data to work with right now for most providers and no infrastructure in place to do meaningful analysis. Improving EHR adoption and creating something like a Federal Health Board will be the focus for the next 2-4 years. Once we have the data, then it can be leveraged to move toward paying providers for outcomes instead of volume of care.

  • Thanks for coming back John Smith. I wonder how the government plans on measuring meaningful EHR user and quality data. Do you have any links to information on what they propose. I’ve been searching and haven’t found anything yet.

    I’d love to see the criteria they plan on using since that criteria will be the key to how effective the legislation is at encouraging EHR adoption.

    I do agree with you 100% that we don’t really know what effect EHR will have on clinical outcomes, because not enough people are using EHR and the data isn’t portable. Once we have the data in an EHR, we can try to port it in a way that’s useful. That could be really interesting to watch.

  • Is there any money/grants for small companies looking to developt a CCHIT approved EHR? If so, how does a company apply?

  • Jason,
    There really isn’t any provisions from what I’ve seen in the HITECH EHR stimulus act that would fund the creation of a new EHR (and hopefully CCHIT won’t be the certification criteria).

    The only thing close is that HHS can put out an open source EHR version and also HHS has $2 billion in discretionary funding that I guess could possibly be used for this purpose, but very likely won’t.

    I’m sure that most people would argue we have enough EHR, it’s about improving what we currently have and getting doctors to adopt them.

    You might also read my post called Develop Your Own EMR – Are you crazy? to see my feeling about creating a new EMR.

  • The bill language says the EHR has to be a ‘certified EHR technology’, which is almost certain to mean CCHIT certification. All this really means is that it is likely to significantly limit the number of physicians who implement an EHR, because CCHIT applications tend to be the pricier of those that are available.

  • Even if it’s almost certain, I can still hope that someone will see the light of day and not make it the case. Your second sentence is just one of a number of reasons why I hope that CCHIT isn’t selected as the criteria.

  • Even as late as 12 Mar 09 there are major IT media outlets that see a line of Golden Cows lining up to exit DHHS that they can lasso and brand en route to sales to providers.

    Given the great credit market and bond capital markets … HCOs and PCPs need to foot the bill for implementing EHR… then they have to perform to some vague unknown criteria to be deemed a “meaningful user” of a certificated system before they might get some portion of their acquisition “incentivized”.

    This is like going to going to Best Buy and buying a piece of electronic equipment that has a mail in rebate coupon deal for $200 bucks back if you respond in some vague way with a cutout off the box … and the check will be sent in 10 – 12 weeks from an unknown location in Nebraska.

    Best Buy tells you the price is $2000 for the component you just bought including store coupons and mail in manufacturers rebate coupons.

    Folks in California were supposed to get refunds from their tax returns too … so maybe once you have implemented EHR … you don’t need to be incentivized any more … so DHHS can save the bucks and use it to pay uninsured health care benefits instead.

  • Don,
    I like your Best Buy comparison. I love how the government can give some vague promise of rebates (essentially what this is) but with unknown stipulations. They’re going to spend more managing the program than it’s worth.

  • The effect I am seeing in the market is that most large groups and hospitals supporting the groups have frozen EMR implementations and waiting to see how this proposal shakes out. This may actually result in slowing down the EMR adoption!

  • With or without help from Washington, it makes sense from both a care and economic standpoint ti implement EHR.

  • I am a Family Nurse Practitioner and was informed that Mid levels are not able to benefit from the incentives- which is not fair as we are a fairly large group of providers (PAs included)- I work in a private family practice – from what you guys are saying I am getting the sense that even if the practice uses EMR and they do everything right, there is no guarentee that they will get this supposed windfall that they are all talking about. Is this correct?

  • diana,
    Medicaid has some exceptions for mid level practitioners. I think there’s also an exception if you’re the only medical provider in that area (if I remember right).

    Yes, you are correct. At least if past government incentives are any reference, there are going to be many doctors that want to get the incentive, but end up getting nothing. Or at least nothing the first year. Maybe they can correct it the second year and get a little something.

  • And does he realize that means the loss of even more jobs? Medical transcriptionists are not needed with an EMR system. I’m losing my job due to EMR. It’s flawed, a pain in the butt and your doctors now spend more time on computers than you and your health issues. One more place the government should stay out of. Our health care. Thanks a lot idiots.

  • I understand your pain Lori. No doubt transcriptionists are worried and should be with this evolving marketplace. However, I’ve been seeing at least some trend happening with transcription companies integrating with EMR software. 2 of those companies are advertisers on my site (look in the right side bar). I’d reach out to them if I were you and see how you might be part of what they’re working to accomplish with the integration of transcription and EMR.

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