Healthy Choice

The NAPH says public funding is vital, especially with regard to President Bush's electronic-records mandate. Public hospitals will require targeted funding to help them keep pace with IT investments being made in the rest of the hospital industry. With average operating margins of just 0.4 percent, public hospitals often lack the working capital to reinvest in infrastructure and technology with government subsidies.

Dr. David Brailer, named by Bush in 2004 as the National Coordinator for Health Information Technology specifically to oversee the 10-year electronic-records initiative, has said that funding for such health IT rollouts needs to be a public-private partnership. His department's request for $50 million for regional initiatives was cut out of the omnibus spending package approved by Congress last year. Brailer resigned last month, but before he left office, the Health IT czar said he remains confident in the administration's commitment to improving health care through technology.

"We have seen many industries have long-term conversions to new ways of doing business by using IT, and much of the sustained productivity improvements in our economy come from the dividends we're reaping from that," Brailer told the House Ways and Means Committee. "Health care has lagged behind."

Industry insiders praised Brailer's leadership and vision for a national health-information network.

"Dr. Brailer's strong advocacy in Washington for a market-based approach to creating health-information-exchange networks, and his pioneering work on the Santa Barbara Care Data Exchange project, all played an important role in motivating California's health-care leaders to come together just over a year ago to create and provide initial funding for [the California Regional Health Information Organization]," says Jo Ellen Hylind Ross, CalRHIO board chair and president and CEO of Lumetra.

The SOGM survey shows that the ratio of new-customer revenue to existing-customer revenue is greater in health care than in VARs' overall public-sector business. New customers make up 41 percent of health-care revenue, while traditional government and education sales are attracting only 37 percent of their revenue from new engagements.

But those new health-care engagements often require no small amount of hand-holding, as many VARs are discovering. Experts say it's fear that tends to keep the medical community on the technology sidelines even when the players know they have to get in the game.

HIMSS analytics vice-president Jack Price recently told the House Committee on Small Business that physicians are skittish about technology being expensive and difficult.

"We conducted a random sampling of 2,500 physician-group practices across the country," Price said. "When asked if the practice had a Practice Management System for billing, 100 percent answered yes. But when asked if the practice had an Electronic Medical Record System/Electronic Health Record, only 26 percent said yes. We then asked the 74 percent who do not have an EMR-EHR if they plan to purchase [one] in the next 24 months; 75 percent said no."

Price also said that health-care organizations are most concerned about the cost of software, hardware, implementation, training and support. The amount of work associated with implementations can be daunting and disruptive to the practice as well, he added.