With healthcare spending in the US totalling more than $2 trillion a year and 45 million people in the US lacking health insurance, healthcare reform is a top priority for the Obama Administration and the 111th Congress. As a proven tool for improving efficiency and effectiveness of healthcare, health IT is seen as critical to reform.

As part of his healthcare platform during the presidential campaign, Senator Obama called for a $10 billion-a-year investment over the next five years to foster the broad adoption of health information technology initiatives such as electronic medical records (EMRs), electronic health records (EHRs), personal health records (PHRs), and electronic prescribing (e-prescribing), due to their potential for transforming the delivery and payment of healthcare in the US, and improving population health and the overall efficiency and effectiveness of healthcare.

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA). Included in this legislation was the Health Information Technology for Economic and Clinical Health (HITECH) Act which provides over $20 billion for stimulus measures relating to health information technology (HIT), including incentives for adoption of electronic health record (EHR) systems.

The largest allocation of funding — approximately $17 billion — is for incentive payments through the Medicare and Medicaid reimbursement systems to encourage providers and hospitals to implement EHR technology systems. The incentive payments are triggered when a provider or hospital demonstrates it has become a 'meaningful EHR user'. Payments are paid over time, with larger payments in the early years and lower payments over time, totalling as much as $48,400 for eligible professionals and up to $11 million for hospitals. On the other hand, hospitals and eligible professionals suffer penalties through reduced Medicare reimbursement payments if they do not become meaningful users of EHR by 2015.

In addition to this funding, the HITECH Act establishes additional government and agency involvement in setting policy, standards, specifications, and criteria for HIT and EHR systems. The Offi ce of the National Coordinator for Health Information Technology (ONCHIT) is established within the U.S. Department of Health and Human Services (HHS), and will be the primary agency involved in this effort. ONCHIT will be headed by a national coordinator to be appointed by the Secretary of HHS (Secretary). The national coordinator is charged with developing a nationwide HIT infrastructure that improves health care quality, reduces health care costs, and protects patient health information.

Other measures include:

• Grants for HIT/EHR research and development programs
• Investment in the nationwide HIT infrastructure
• Grants for integrating information technology into clinical education
• Financial assistance to universities to establish or expand medical informatics programs
• Funding for extension programs and regional centers to provide technical assistance with respect to adoption/use of HIT
• Grants to states and Native American tribes to provide funding to facilitate and expand the exchange of electronic health information
• Competitive grants for loan programs for health care providers to acquire and use EHR technology

The Department of Health and Human Services has named Dr. David Blumenthal, M.D., M.P.P., (most recently the director of the Institute for Health Policy at Massachusetts General Hospital, as well as a Harvard Medical School professor) as the Obama Administration’s choice for National Coordinator for Health Information Technology. As the new National Coordinator, Dr. Blumenthal will lead the implementation of a nationwide interoperable, privacy-protected health information technology infrastructure as called for in the American Recovery and Reinvestment Act. Blumenthal will also be instrumental in setting the various standards and reporting policies for participation in the HITECH Act.