Reducing Barriers to Financing HIT in California

Healthcare Information Technology (HIT) has significant potential to save California money – as much as $8 billion annually from greater efficiency and reduced medical errors, according to one study by the RAND institute – and improve substantially the quality of care. Implementing HIT, however, is expensive, requiring standardized electronic records, the computer equipment to store and retrieve the records securely and efficiently, and the networking capacity to connect systems statewide. California has taken another step towards implementing a comprehensive HIT system; CCST will assist in understanding and reducing the practical barriers impeding such a system.

As part of the $300,000 project, “Reducing Barriers to Financing HIT in California: Market Assessment and Policy Options,” CCST will provide the peer review process and publication for the final report of the Governor’s HIT Financing Advisory Commission. The primary research is being conducted by a team of investigators under the direction of Robert Miller, professor of Health Economics at the University of California, San Francisco. The Commission is one of the HIT measures announced by Governor Schwarzenegger in January 2007; others include the establishment of a Deputy Secretary of HIT, with a goal of implementing universal e-prescribing by 2010; developing standardized personal health records (PHR) within the public and private sectors; and implementing a county-level pilot electronic medical record system for mental health patients within the requirements of Proposition 63, the Mental Health Services Act.

CCST has been focusing on the potential benefits of HIT to California since 2005, when it featured HIT as the principal theme of its October Council meeting (held jointly with the Institute of Medicine). It has been working with both the Governor’s office and the Legislature, both of which have been active in promoting HIT. This year, the governor issued Executive Order S-06-07 aimed at advancing California’s efforts to adopt health information technology (HIT); last year, via Executive Order S-12-06, he directed the Secretaries of Health and Human Services and Business, Transportation and Housing and the Director of the Department of Managed Health Care to devise strategies to expand the use of HIT. In the legislature, Senator Elaine Alquist put forth legislation this year (SB 320) that requires the state office that oversees the implementation of the federal Health Insurance Portability and Accountability Act to establish and operate the California Health Care Information Infrastructure Program. Another HIT bill that she proposed in 2006 (SB 1338) was superseded by ES S-12-06.

The HIT project in which CCST is involved will identify market segments/sub-segments that are experiencing barriers to financing clinical information systems, and determine reasons why these barriers to financing exist, such as poor financial health, lack of access to capital, or other factors. The project also will obtain data on private/public CIS financing initiatives within California and in other states, and present alternative policy options to the Commission.