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Promoting Innovation and Competitiveness
A New Generation of American Innovation

Transforming Health Care: The President’s Health Information Technology Plan

“By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care.”

--President George W. Bush, State of the Union Address, January 20, 2004

  • President Bush has outlined a plan to ensure that most Americans have electronic health records within the next 10 years. The President believes that better health information technology is essential to his vision of a health care system that puts the needs and the values of the patient first and gives patients information they need to make clinical and economic decisions – in consultation with dedicated health care professionals.
  • The President’s Health Information Technology Plan will address longstanding problems of preventable errors, uneven quality, and rising costs in the Nation’s health care system.

The Problem: Challenges to the U.S. Health Care System

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  • The U.S. health care system has a long and distinguished history of innovation. Discoveries move from the laboratory bench to the bedside, as basic research results are translated into new understanding of diseases, better diagnostic tools, and innovative treatments.
  • At the same time, our health care system faces major challenges. Health care spending and health insurance premiums continue to rise at rates much higher than the rate of inflation. Despite spending over $1.6 trillion on health care as a Nation, there are still serious concerns about preventable errors, uneven health care quality, and poor communication among doctors, hospitals, and many other health care providers involved in the care of any one person.
    • The Institute of Medicine estimates that between 44,000 and 98,000 Americans die each year from medical errors. Many more die or have permanent disability because of inappropriate treatments, mistreatments, or missed treatments in ambulatory settings. Studies have found that as much as $300 billion is spent each year on health care that does not improve patient outcomes – treatment that is unnecessary, inappropriate, inefficient, or ineffective.
  • All these problems – high costs, uncertain value, medical errors, variable quality, administrative inefficiencies, and poor coordination – are closely connected to our failure to use health information technology as an integral part of medical care. The innovation that has made our medical care the world’s best has not been applied to our health information systems. Other American industries have harnessed advanced information technologies, to the benefit of American consumers. Our air travel is safer than ever, and consumers now have ready and safe access to their financial information. Unlike these other industries, medicine still operates primarily with paper-based records. Our doctors and nurses have to manage 21st century medical technology and complex medical information with 19th century tools. America’s medical professionals are the best and brightest in the world, and set the standard for the world. It is a testament to their skill that they are able to achieve high-quality care in this antiquated system. In this outdated, paper-based system:
    • A patient's vital medical information is scattered across medical records kept by many different caregivers in many different locations – and all of the patient’s medical information is often unavailable at the time of care. For example, patients with medical emergencies too often are seen by doctors with no access to their critical medical information, such as allergies, current treatments or medications, and prior diagnoses.
    • Physicians keep information about drugs, drug interactions, managed care formularies, clinical guidelines, and recent research in memory – a difficult task given the high volume of information.
    • Medical orders and prescriptions are handwritten and are too often misunderstood or not followed in accordance with the physician’s instructions.
    • Consumers lack access to useful, credible health information about treatment alternatives, which hospitals and physicians are best for their needs, or their own health status.
    • Physicians do not always have the best information to select the best treatments for their patients, resulting in an unacceptable lag time before new scientific advances are used in patient care. They also do not have ready access to complete information about their patients, do not know how other doctors are treating their same patients, or how other health care providers around the country treat patients with the same condition. These conditions set the stage for preventable medical errors.

The Solution – Health Information Technology

  • Today, the President announced an ambitious goal of assuring that most Americans have electronic health records within the next 10 years.
    • Within the next 10 years, electronic health records will ensure that complete health care information is available for most Americans at the time and place of care, no matter where it originates. Participation by patients will be voluntary.
    • These electronic health records will be designed to share information privately and securely among and between health care providers when authorized by the patient.
  • President Bush believes that innovations in electronic health records and the secure exchange of medical information will help transform health care in America - improving health care quality, preventing medical errors, reducing health care costs, improving administrative efficiencies, reducing paperwork, and increasing access to affordable health care.
  • The steps we need to take across the Nation are already underway in some places. Health information technologies – electronic medical records, computerized ordering of prescriptions and other medical tests, clinical decision support tools, and secure exchange of authorized information – improve quality, reduce medical errors, and prevent deaths. In the past three years, some communities, hospitals, clinicians, patient groups, and information technology companies have acted to improve their health information systems. These pioneering communities are taking the initiative and showing that health care can and must be modernized.
  • The President envisions a dramatically changed system:
    • When arriving at a physician’s office, new patients do not have to enter their personal information, allergies, medications, or medical history, since it is already available.
    • A parent, who previously had to carry the child’s medical records and x-rays in a large box when seeing a new physician, can now keep the most important medical history on a keychain, or simply authorize the new physician to retrieve the information electronically from previous health care providers.
    • Arriving at an emergency room, a senior with a chronic illness and memory difficulties authorizes her physicians to access her medical information from a recent hospitalization at another hospital - thus avoiding a potentially fatal drug interaction between the planned treatment and the patient’s current medications.
    • Three patients with unusual sudden-onset fever and cough that would not individually be reported, show up at separate emergency rooms, and the trend is instantly reported to public health officials, who alert authorities of a possible disease outbreak or bioterror attack.

The President’s Health Information Technology Plan

  • To achieve his 10-year goal, the President is taking the following steps to urge coordinated public and private sector efforts that will accelerate broader adoption of health information technology:
    • Adopting Health Information Standards. The President called for the completion and adoption of standards that will allow medical information to be stored and shared electronically while assuring privacy and security. The necessary work is already well underway and much of it has already been completed. In the last several years, the Department of Health and Human Services (HHS) has been collaborating with the private sector and other Federal agencies to identify and endorse voluntary standards that are necessary for health information to be shared safely and securely among health care providers. Federal agencies are accelerating their use of these standards. As part of this effort, HHS has recently negotiated and licensed a comprehensive medical vocabulary and made it available to everyone in the Nation at no cost. The results of these projects include standards for:
      • Transmitting X-Rays Over the Internet: Today, a patient’s chest x-ray can be sent electronically from a hospital or laboratory and read by the patient’s doctor in his office.
      • Electronic Laboratory Results: Laboratory results can be sent electronically to the physician for immediate analysis, diagnosis and treatment, and could be automatically entered into the patient’s electronic health record if one existed. For example, a doctor could retrieve this information for a hospitalized patient from his office, assuring a prompt response and eliminating errors and duplicative testing due to lost laboratory reports.
      • Electronic Prescriptions: Patients will save time because prescriptions can be sent electronically to their pharmacists. By eliminating illegible handwritten prescriptions, and because the technology automatically checks for possible allergies and harmful drug interactions with other drugs, standardized electronic prescriptions help to avoid serious medical errors. The technology also can generate automatic approval from a health insurer.
    • Doubling Funding to $100 Million for Demonstration Projects on Health Care Information Technology. To build upon the progress already made in the area of health information technology standards over the last several years, the President’s proposed FY 2005 budget includes $100 million for demonstration projects that will help us test the effectiveness of health information technology and establish best practices for more widespread adoption in the health care industry.
      • This increase builds on the President’s FY 2004 budget which included $50 million, and these new resources will support more local and regional grants so that pioneering communities, physicians, and hospitals can show that health care can be transformed by adopting and implementing health information technology.
      • In April 2004, more than 600 applications for funding were received for these grants, and HHS will be awarding grants this summer, following their peer-reviewed process for selecting grantees.
    • Using the Federal Government to Foster the Adoption of Health Information Technology. As one of the largest buyers of health care – in Medicare, Medicaid, the Community Health Centers program, the Federal Health Benefits program, Veterans medical care, and programs in the Department of Defense – the Federal Government can create incentives and opportunities for health care providers to use electronic records, much like the private sector is doing today. The President will direct these agencies to review their policies and programs and propose modifications and new actions, and to forward the recommendations to him within 90 days.
    • Creating a New, Sub-Cabinet Level Position of National Health Information Technology Coordinator. The President announced that he is creating a new sub-Cabinet level post at HHS, to provide national leadership and coordination necessary to achieve his 10-year goal. The individual will report directly to the HHS Secretary, and will be charged by the President with:
      • Guiding ongoing work on health information standards and working to identify and implement the various steps needed to support and encourage health information technology in the public and private health care delivery systems.
      • Coordinating partnerships between government agencies and private sector stakeholders to speed the adoption of health information technology.