Why meaningful use has penalties

Jeff Rowe, editor of EHRWatch, is unhappy that the government will impose penalties for providers who do not achieve meaningful use of electronic health records. His hypothesis: penalties are there only because policymakers want to “exercise their inner regulators” and that therefore the penalties should be dropped. He ends his piece with an acknowledgment that maybe he’s missing something, and he invites responses.

So here’s mine.

The meaningful use rules went into effect as part of the ARRA stimulus, and started out with bonus payments for those providers who successfully deployed EHRs relatively quickly. The government also provided a variety of grants, cooperative agreements and support programs through the Office of the National Coordinator of Health IT in order to encourage rapid uptake. The incentives were front-loaded, consistent with the idea of jump-starting the economy and also matching the overall timing of the stimulus.

But many providers didn’t quality for meaningful use in the first go-round. Some were just too far away from implementation to try it, others were not interested in EHR in the first place, and some had other priorities.

Some people are motivated by incentives, but almost everyone hates to lose. So the penalty phase provides a motivation to get moving, even to those providers who missed out on the bonuses.

But the penalties are even more clever than that. In an era of big budget deficits, penalties are quite durable. They can last forever because by budget accounting they save the government money. It doesn’t cost anything to fund the program, and yet repealing the penalties would boost the deficit.

Providers are also great at pushing for delays or cancellations of requirements. ICD-10 being exhibit A for this argument. Having penalties in place that providers can escape simply by doing what many of their peers have already done is a good way to keep special interests from overturning or delaying policies that most people support. Rowe quotes an American Hospital Association official making the predictable point that the date for compliance is “unrealistic.” He asks, why not 2017 or 2020 or 2025?

He also insists that the government should “prove” its case for EHRs before imposing these rules. It might more reasonably be suggested that healthcare providers prove that they should stick with paper rather than move into the digital era like every other industry.

David Williams blogs regularly at the Health Business Blog.