The American Recovery and Reinvestment Act of 2009 and Pediatricians

After receiving my third invite to a $450 “Learn What the ARRA Funding Will Do For You” seminar this week, I’ve decided to run a piece I wrote for the SOAPM newsletter that was released a few weeks ago.  Of course, you can become a SOAPM member and get these messages (and better/more!) a lot sooner – $30 a year.  Do it.

 


The American Recovery and Reinvestment Act of 2009 and Pediatricians

By the time this article is published, I will have undoubtedly received three or four dozen requests for information about the “free stimulus money” from the present federal administration.  I am dismayed by the glassy-eyed, wishful looks and expectant tones I hear in these questions, knowing that my response is likely to disappoint most people.  Especially anyone who took Microeconomics 101.

Let’s review the offer – the Obama administration’s American Recovery and Reinvestment Act of 2009 provides the first ever federal incentives to invest in health information technology (HIT), specifically EHRs.  If your practice invests in a “certified” EHR and shows “meaningful use” of the product, you might be paid!  [Note that, at the time of this writing, neither previous quoted phrase is defined and many industry folks see significant problems with both potential definitions.]  This promise of money has already driven practices I know to bizarre – but expected – behaviors.  Although having the federal government focus on the promotion of HIT is a good thing and it’s quite possible that the stimulus money will benefit you and your practice, on the whole it will do little more than more tax payer dollars from your hands and into the owners of the (large) EHR companies.

The problems are many.  First, to qualify as a pediatrician, at least 20% of your patients must be covered by Medicaid.  For many of you, getting to that number eliminates any “bonus” you might get.  Especially when you consider that pediatricians only receive 2/3s of the posted benefits that everyone else receives.  That’s right – somehow pediatricians need less money to computerize their records.  It must be that high margin and low volume in all the practices I work with (note the sarcasm, please).

Maybe you’re already at 20%  Medicaid or higher.  Maybe you already have your eye on a certified vendor who really understands your pediatric needs.  And maybe you trust your state Medicaid program to distribute the money to you once they get it.  That’s all swell.

But it’s still not going to save you any money.  Why not?   Think back to Microeconomics 101 and what you learned about  the effect on a market when there is a known subsidy.  Although there are many variables to consider (the elasticity of demand, whether the subsidy is given to the purchasers or producers, etc.), don’t you know what will happen in the EHR world?  When the EHR companies know that you will qualify for $40,000 of subsidy money over 5 years, what will happen to the price?  Isn’t it more likely that the price pressure will be, in fact, negative?  Will you also follow the lesson learned a million times a day in retail stores that your “rebate” will actually drive you to purchase more than you need?

I believe that this distortion to the market is not going to improve the quality of care in this country at all.  And the race to find a certified EHR is going to find many pediatric offices purchasing inappropriate systems, given the paucity of pediatric understanding among them.  And I am particularly afraid that this subsidy program will mimic the results of agricultural subsidies here in the United States, where the top 1% of recipients receive over 30% of the subsidies – the analog of which is that the hospital-focused EHRs are only going to become more dominant and your experience in the private practice world will become less relevant to them.

Here’s what really gets me, though – the average pediatrician generates about a half million dollars in revenue every year.  Some generate much more than that.  The amount of money, at most, a pediatrician might receive from this program is…less than 2% of that?   For most of you, that’s a little more than additional well visit every week.  Think about that!  Squeeze in 2 extra well visits every week, and you can have your own stimulus!

Ask anyone who has purchased or sells an EHR  and he or she  will agree: purchasing the right EHR for your practice at the right time is worth far more than the money being offered in the stimulus package.  If your practice isn’t ready or you choose the wrong EHR, it will cost you much, much more.

My advice?  If you find the right EHR for you – one that doesn’t zap your productivity, one that you’re comfortable using, one that understands your pediatric needs – then get it.  Don’t even think about the stimulus.  As those among us who have already purchased their right system for themselves will tell you, it’ll be worth every penny – just as the wrong one isn’t worth it at ½ the cost.

==> Read Newer Articles about Meaningful Use at pedsource.com/ehrmoney

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