WASHINGTON – By all measures, the early days of 2005 in Washington, D.C., policy circles signaled a very promising start for the healthcare information technology industry.

Senate Majority Leader Bill Frist (R-Tenn.) talked about the need for better information sharing and technology in healthcare during his opening floor remarks for the 109th Congress.

Heavy hitters from op-posite sides of the aisle in the Senate - including Edward Kennedy (D-Mass.), and Michael Enzi (R-Wyo.) – called for the Bush administration to provide more funding for healthcare IT initiatives in the 2006 budget. Even President Bush weighed in, saying that electronic health records could help address the issue of rising medical costs.

But several policy analysts and experts close to the issue say that while it's too early to tell where Congress and the administration will go on healthcare-IT related issues, prospects appear dim for passage of any bills that fund large-scale investments.

Congress: Similar cast

Look for familiar faces in Congress to re-champion efforts to modernize healthcare. The 108th Congress saw a number of healthcare-IT related funding bills introduced, only to languish in committee or go unbudgeted.

On the House side, Rep. Nancy Johnson (R-Conn.), who introduced healthcare IT legislation last year, is likely to take up the cause again. Johnson will continue as chair of the House Ways and Means Health Subcommittee, an important checkpoint for any healthcare IT bills that make it to the floor.

Look for Rep. Patrick J. Kennedy (D-R.I.), to re-introduce the Josie King Act (H.R. 4880), which provided some funding for regional health information systems to improve patient safety. Kennedy garnered some support for the bill from former House Speaker Newt Gingrich and is talking with Rep. Tim Murphy (R-Pa.) about signing onto the bill. Murphy will co-chair the 21st Century Health Care Caucus, a 17-member group in the House that supports the use of IT in healthcare.

Although very few bills will be aimed solely at funding healthcare IT projects, ongoing Medicare debates and efforts to limit medical malpractice liability could offer a forum for funding healthcare IT.

Another early vehicle for such funding may come through patient safety legislation, introduced in the last congressional session but never passed after lawmakers failed to reconcile competing House and Senate versions. The House version (H.R. 663) contained a few provisions for healthcare IT funding that the Senate version (S. 720) did not. It's likely that House patient safety legislation could again include such measures.

As with the House, Senate players on the healthcare IT issue remain largely similar to those in the last session. Sens. Kennedy, Judd Gregg (R-NH) and Hillary Rodham Clinton (D-NY) all introduced healthcare IT- related measured last year and are likely to take up the cause again.

Uncertainty remains over funding for HIT czar's officeThe healthcare IT industry is still taking a wait-and-see approach to the administration's 2005 plan. The White House landed healthcare IT squarely on the policy landscape map last year when President Bush, in his State of the Union address, called for the need to provide EHRs to most Americans within a decade. The administration quickly followed up, appointing David J. Brailer, MD, as the national coordinator for health information technology within HHS.

But several things have changed since then. The fiscal year 2005 federal budget originally contained funding for healthcare IT projects, $50 million of which was intended to support Brailer's office. Congress failed to provide the $50 million in the 2005 appropriations bill, a move that took many in the industry by surprise.

"When push came to shove, the talk was not backed up with action," one congressional source said of Congress' omission of the funding.

HHS can use some of the discretionary funds in the agency's budget to make up for the $50 million, and negotiations for the 2006 budget are already under way.

Several industry sources say even if healthcare IT doesn't get a separate line item in the 2006 budget, hospitals, insurers and other organizations will still move forward with large-scale healthcare IT projects.

Adding to the uncertainty, HHS Secretary Tommy Thompson, a strong advocate for healthcare IT issues, resigned late last year. Though it's unclear how much of an emphasis the incoming secretary will place on healthcare IT, some observers see Bush's appointment of Michael Leavitt to lead HHS as a promising sign. A former governor of Utah, Leavitt led several statewide technology projects and is considered friendly to healthcare IT issues.