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Another ObamaCare ‘Glitch’: $30B blown on non-operational medical record system

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July 14, 2013: An employee is shown working in the reception and office area of a clinic in Altamont, Tenn.Reuters

The rollout of ObamaCare has been plagued by problems these past two weeks, as thousands complained they couldn’t sign up for coverage due to a deeply defective website.  

But this process could have been easier if a nine-year, government-backed effort to set up a system of electronic medical records had gotten off the ground. Instead of setting up their medical ID for the first time, would-be customers would have their records already on file.

Unfortunately for patients -- and taxpayers -- the long-running project has produced tangibly few results despite costing the government, so far, at least $30 billion.

Under a George W. Bush-era executive order, all Americans should have access to their medical records by the end of 2014, part of a concept referred to as e-health. President Obama then made electronic medical records (EMRs) central to the success of the Affordable Care Act

Health care IT providers were tasked with creating a system connecting patients, health care professionals, hospitals, laboratories and medical facilities. But despite being paid vast incentives by the government’s Centers for Medicare & Medicaid Services (CMS), they’ve dragged their feet.

Doctors have so far received $14 billion in sweeteners, and hospitals have been handed more than $16 billion. Officials indicate that incentives could eventually reach $45 billion, though there is no universally integrated system anywhere in sight.

Taxpayers lose here, but so do patients.

The system, if and when it is operational, could prove invaluable in an emergency. Consider a person being rushed to the ER, with the hospital having no knowledge of the individual apart from the name on their driver’s license. The medical records system would immediately produce that individual's private medical history, helping doctors determine treatment right away. 

Doctors, practitioners and hospitals, though, have been enriching themselves with the incentives to install electronic medical records systems that are either not inter-operable or highly limited in their crossover with other providers.

“The electronic medical records system has been funded to hospitals at more than $1 billion per month. Apparently little or none of that money went to the enrollment process which is where the bottle neck for signing up to ObamaCare’s insurance exchanges appears to be,” Robert Lorsch, a Los Angeles-based IT entrepreneur and chief executive of online medical records provider MMRGlobal, told Fox News.

Specified medical practitioners are eligible to receive up to $44,000 via the Medicare EHR Incentive Program and up to $63,750 through the Medicaid EHR Incentive Program. 

According to the CMS website, as of August 2013 more than 320,000 health care providers received payments for participating in the incentive programs – more than half of all those eligible.

“The incentives [for doctors and practitioners] were designed to help small family practices because some of these record systems were getting very expensive, and they couldn’t afford it,” a California-based former health care IT developer told Fox News, speaking on condition of anonymity due their close relationship with some of the corporate incentive recipients.  “But there was a handsome windfall for those making decent money,” she added. “Why did all these other people get a windfall?”

In the case of hospitals, the incentives run into the many millions. One example cited by a director at the Office of the National Coordinator, established to oversee the incentive programs, demonstrates one hypothetical hospital receiving $6 million for adopting an EMR system under Medicare. The presentation indicates even more could be received under Medicaid handouts

The incentives began in earnest under Obama’s 2009 American Recovery and Reinvestment Act and the Health Information Technology for Economic and Clinical Health Act. Between January 2011 and August this year, $15.8 billion to hospitals was handed out in Medicare and Medicaid program incentives. According to one prior estimate by an ONC director, $44.7 billion may eventually be available through Medicare and Medicaid payments.

A large proportion of the overall money paid out has gone to a group of leading health IT specialists, some of which have close connections to the Obama administration. Cerner board member Nance DeParle became the director of the White House Office of Health Care Reform. Epic’s CEO, Judith Faulkner, is a highly influential Obama donor and was given a key role on a federal health IT committee. While these big companies have tinkered with their systems, none has reached comprehensive inter-operability.

Last year, after Congress launched an investigation over why so little progress had been achieved, members of both the House and Senate called on Secretary of Health and Human Services Kathleen Sebelius to cease and desist EHR incentive payments and demand more scrutiny on those who had received money. Sebelius publicly disregarded their requests.

"I'm concerned that this program isn't focused on creating an inter-operable system that would allow unaffiliated systems to share medical information,” Sen. John Thune, R-S.D., said in an emailed statement to Fox News. “It is essential that CMS and the Office of the National Coordinator for Health IT heed feedback from stakeholders and ensure the program they are creating is a wise use of taxpayer dollars," he added.

Lorsch, at MMRGlobal, offered the U.S. government what it describes as a user-friendly personal health record system for one dollar per month per family – a fraction of what it has cost the taxpayer so far.

“It would have cost less than $1 billion in the year versus more than $13 billion in handouts to hospitals with no EMR interoperability. Plus, unlike under ObamaCare, the patient would be in control of their health information and, most importantly, their privacy,” Lorsch said.

MMRGlobal already owns at least eight U.S. patents related to personal health records and e-health. It is currently suing or settling with big health care information users like Walgreens, AllScripts, WebMD. It has also informed hospitals they may be infringing its patents.

Before his recent departure, the head of the National Coordinator for Health Information Technology at the ONC warned that hospitals are the biggest stumbling block in the adoption of EMRs.

Farzad Mostashari told delegates at a California healthcare conference that hospitals are the “biggest problem in getting inter-operability going” and that “the government will pay more to hospitals to get them to do what they were paid” to do in the first place.