As the time frame for year one of the meaningful use of electronic medical records (EMR) incentive program draws to a close, US policymakers will no doubt be examining what caused the adoption of this program to be so lackluster. One survey by the College of Healthcare Information Management Executives (CHIME) noted that only 26% of hospital respondents said that their organization had met the criteria for meaningful use as of September 30, 2011 (the end of the first full year of the program), while over 30% of respondents in a March survey predicted that they would qualify by that time. And it's not that the incentives aren't there eligible professionals can receive up to $44,000 over 5 years under the Medicare incentive program, or up to $63,750 over 6 years under the Medicaid program. Hospitals are eligible for payments starting at a base of $2 million under both programs.

So what happened? For physician practices, it seems likely that these systems are just too expensive to afford a client/server ambulatory EMR system can put a practice back by more than $20,000 per physician, and annual fees reaching up to 20% of the licensing fee would be required for maintenance. For a web-based system, where an initial purchase usually isn't required, annual fees can reach well over $6,000 per physician. For hospitals, the difficulty seems to stem from uncertainty regarding stage 2 criteria for meaningful use many hospitals are not yet willing to invest in this expensive technology to meet stage 1 criteria when they don't know what will be required for stage 2. As a result, many hospitals have made a strategic decision to postpone the implementation of EMRs until 2012, when the stage 2 criteria will be released; there is no immediate pressure on hospitals to adopt because total incentive payments for eligible hospitals will not start to decrease until 2014.

As a result of this slow adoption, the Health IT Advisory Committee recommended delaying the qualification date for stage 2 of meaningful use, although there is not yet a final word from the Centers for Medicare & Medicaid Services (CMS). Stage 2 was originally anticipated to begin on October 1, 2012.

Nonetheless, it should be noted that the shift toward EMRs is still happening overall MRG predicts that the US EMR market will reach a value of over $8 billion by 2016. Furthermore, the meaningful use program has had a positive effect on demand for related systems, such as high-acuity information systems, which can help facilities achieve meaningful use criteria. By contrast, however, systems that have not been included in Stage 1 of meaningful use, such as picture archiving and communication systems (PACS), have experienced lowered demand.

While incentive dollars has certainly proven to be a catalyst in the market for adoption, the underlying reason that health providers want an EMR is to improve both quality and efficiency of care. The meaningful use program has generated uncertainty in the market and has spurred rapid, and often unsuccessful, adoption. Overall, the approach that the CMS takes to stage 2 of meaningful use will set the stage for the industry over the next few years.

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