Industry, lawmakers say budget request a start, but funding could be tight

The White House's request for $125 million for health care information technology-related projects in its fiscal year 2006 budget is a good starting point, according to several lawmakers and healthcare IT industry representatives. However, they warn that getting the funding for such initiatives could be a struggle in a tight budget year.

The Bush administration's $125 million request is a "baseline," Thomas Leary, director of federal affairs for the Healthcare Information and Management Systems Society, told a packed audience at a Steering Committee on Telehealth and Healthcare Informatics meeting on Capitol Hill. "Just getting the $125 million is going to be a chore," he said. To that end, HIMSS and other industry groups are attempting to educate congressional leaders about the value of IT in healthcare.

The $125 million budget request includes $75 million for the Office of the National Coordinator for Health Information Technology, an office led by National Health Information Technology Coordinator David J. Brailer, MD. In addition, the White House has requested $50 million for the Agency for Healthcare Research and Quality for grants to "promote, accelerate and demonstrate" development and adoption of healthcare IT, including in small and rural communities.

Also tucked into the budget are a handful of healthcare IT provisions scattered in different agencies, including the Centers for Medicare & Medicaid Services pay-for-performance demonstration program that would reward 10 physician groups across the nation for improving care for chronically ill patients. The project could encourage physicians to adopt IT to provide better care management for these patients. In addition, the budget contains $3 million in interagency transfers for evaluation funds for healthcare IT. Congress has until Sept. 30 to pass the budget.

Still, David Bowen, deputy minority staff director for Sen. Edward Kennedy (D-Mass.) on the Senate Health, Education, Labor and Pensions Committee, said the United States is still spending far less than other countries on healthcare IT. "We're aiming too low," he said of the budget.

Sens. Kennedy, Mike Enzi (R-Wyo.), Chuck Grassley (R-Iowa) and Max Baucus (D-Mont.) were crafting legislation that would "make a real investment" in healthcare IT, Bowen said. The bill would help align incentives for providers to adopt technology, not pay for it outright. Bowen said he did not know how soon such legislation would be introduced.

Rep. Tim Murphy (R-Pa.), co-chair of the House 21st Century Health Care Caucus, said he would reintroduce a bill (H.R. 4805) he sponsored last year to establish a demonstration program to offset the costs of electronic prescribing systems for Medicare healthcare providers. But ultimately, the private sector must bear a lot of the costs for healthcare IT initiatives, he said.

Also at issue is whether a $50 million request in the fiscal year 2005 budget for the Office of the National Coordinator for Health Information Technology will be funded. Congress failed to fund the office in its 2005 budget, but the Bush administration has asked Congress to reprogram the money for Brailer's office.

Sue Quantius, a staff assistant on the House Appropriations Subcommittee on Labor, Health and Human Services, said several factors contributed to Congress cutting funding for ONCHIT. "The problem is that it was partially the timing of it and competing forces within the appropriations budget," Quantius said. "It was easy to target a program that was new and not terribly defined at that point."

Quantius said current spending levels and already thin budgets don't make it a favorable environment to reprogram the money for Brailer's office. Those negotiations are ongoing and a decision is expected soon.

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