WASHINGTON – President-elect Barack Obama's pick to run the Office of Management and Budget has said in the past that federal intervention would be needed if the country were to move forward on healthcare IT adoption.

Peter R. Orszag, 39, will return to the executive branch where he worked as economic adviser in the Clinton administration. Following Tuesday's announcement, he stepped down immediately from his post as director of the Congressional Budget Office and wrote his final blog, titled "Life is a series of hellos and goodbyes."

Testifying before the House Ways and Means Subcommittee on Health last July, Orszag said waiting for the free market to tip the scale toward adoption of electronic health records would prove too slow.

"If the federal government chose to intervene directly to promote the use of health IT, it could do so by subsidizing that use or by requiring it," he told the panel.

Paying bonuses, he said, is not the way to go. The bonuses would reward the 10 percent or so of physicians who already use healthcare IT, he said, and it would be too costly to the federal government, with little progress achieved.

Health and Human Services Secretary Michael Leavitt, a strong supporter of healthcare IT, has advocated a free market approach. He is also a proponent of bonuses as a way to encourage adoption. Beginning next year, Medicare will pay physicians who use electronic prescribing an extra 2 percent. The incentive is in addition to a 2 percent incentive payment for 2009 for physicians who successfully report measures under the Physician Quality Reporting Initiative (PQRI).