Recently I was preparing a lecture to our state specialty society on Meaningful Use / HITECH incentives. During my research I was again disgusted by typical government intervention at work. The Feds took a simple and worthy idea – encouraging physicians to adopt EMR – and made it as complicated and burdensome as possible.
They should have modeled EMR incentives after effective, relatively simple government incentives that already exist, such as the home mortgage interest deduction. Ironically, this deduction is now under fire from the Deficit Commission. If you pay mortgage interest on a home you live in, you can deduct the interest from your taxable income. I know it’s more complicated but that is pretty much the idea.
What if home mortgage interest deduction rules looked like HITECH rules?
- The incentive would be fixed payments, not a variable payment based on expenses.
- The people living in your home would have to be “Eligible Occupants.”
- Your home would have to be a “Certified Dwelling.” There would be hundreds of pages of specifications for Certified Dwellings. An entire industry would spring up dedicated to getting your home certified. After spending the money to get your house up to specifications, a federal certification agent would visit your home (after a several month wait) and hopefully provide certification if your house meets the requirements. Because many of the rules would be ambiguous and unclear, certification would depend quite a bit on the agent’s judgment. No potential for corruption there…
- Next you would have to demonstrate “meaningful occupancy.” There would be a required minimum number of occupants. Each occupant would have to sleep in the house a minimum number of nights per year. Doesn’t take much imagination to make the list of requirements go on forever. And not only would you have to follow all these rules, you would have to document it somehow.
- Finally you would have to report on Quality Measures for your home such as electricity and water use. You would also have to report on Quality Measures that do not apply to your home, i.e., homes with electric heat would still have to document natural gas use. This would require running a gas line and gas meter to your house even if you don’t use gas.
- You would have to do all of the above every year in order to get the incentive. Failure to meet any of the above requirements would mean no incentive payment.
- All the above specifications would get more stringent every year. But the incentive payment would go down and be phased out completely after 5 years – even though mortgages go on for 30 years in most cases.
New homes would be designed not for comfortable living but to satisfy Certified Dwelling and Meaningful Occupancy requirements for as little money as possible.
At some point the incentive becomes more trouble than it is worth. Maybe it would be smarter to go the other way and make Meaningful Use rules look like the mortgage interest deduction: Tax credits up to $20k per provider, enhanced tax deductions for expenses beyond that. But that would be too easy.