[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
                  SUBCOMMITTEE HEARING ON THE VALUE OF
                  HEALTH IT TO SOLO AND SMALL MEDICAL
                               PRACTICES

=======================================================================

            SUBCOMMITTEE ON REGULATIONS, HEALTH CARE & TRADE
                      COMMITTEE ON SMALL BUSINESS
                 UNITED STATES HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 28, 2007

                               __________

                          Serial Number 110-11

                               __________

         Printed for the use of the Committee on Small Business


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                                 house


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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman


JUANITA MILLENDER-McDONALD,          STEVE CHABOT, Ohio, Ranking Member
California                           ROSCOE BARTLETT, Maryland
WILLIAM JEFFERSON, Louisiana         SAM GRAVES, Missouri
HEATH SHULER, North Carolina         TODD AKIN, Missouri
CHARLIE GONZALEZ, Texas              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              MARILYN MUSGRAVE, Colorado
RAUL GRIJALVA, Arizona               STEVE KING, Iowa
MICHAEL MICHAUD, Maine               JEFF FORTENBERRY, Nebraska
MELISSA BEAN, Illinois               LYNN WESTMORELAND, Georgia
HENRY CUELLAR, Texas                 LOUIE GOHMERT, Texas
DAN LIPINSKI, Illinois               DEAN HELLER, Nevada
GWEN MOORE, Wisconsin                DAVID DAVIS, Tennessee
JASON ALTMIRE, Pennsylvania          MARY FALLIN, Oklahoma
BRUCE BRALEY, Iowa                   VERN BUCHANAN, Florida
YVETTE CLARKE, New York              JIM JORDAN, Ohio
BRAD ELLSWORTH, Indiana
HANK JOHNSON, Georgia
JOE SESTAK, Pennsylvania

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

               Kevin Fitzpatrick, Minority Staff Director

            SUBCOMMITTEE ON REGULATIONS, HEALTH CARE & TRADE

                   CHARLES GONZALEZ, Texas, Chairman


WILLIAM JEFFERSON, Louisiana         LYNN WESTMORELAND, Georgia, 
RICK LARSEN, Washington              Ranking
DAN LIPINSKI, Illinois               BILL SHUSTER, Pennsylvania
MELISSA BEAN, Illinois               STEVE KING, Iowa
GWEN MOORE, Wisconsin                MARILYN MUSGRAVE, Colorado
JASON ALTMIRE, Pennsylvania          MARY FALLIN, Oklahoma
JOE SESTAK, Pennsylvania             VERN BUCHANAN, Florida
                                     JIM JORDAN, Ohio

        .........................................................


                                  (ii)

  
?

                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Gonzalez, Hon. Charles...........................................     1
Westmoreland, Hon. Lynn..........................................     3

                               WITNESSES

Kirk, Dr. Lynne M., MD, FACP, American College of Physicians 
  (ACP)..........................................................     6
Leavitt, Dr. Mark, MD, PhD, Certification Commission for Health 
  Information Technology (CCHIT).................................     7
Kelley, Dr. Margaret, MD, American College of Obstetricians and 
  Gynecologists (ACOG)...........................................     9
Shober, Dr. David R., D.O., Health Information Management System 
  Society (HIMSS)................................................    11
Napier, Dr. Kevin, Internal Medicine of Griffin..................    13

                                APPENDIX


Prepared Statements:
Gonzalez, Hon. Charles...........................................    33
Westmoreland, Hon. Lynn..........................................    35
Kirk, Dr. Lynne M., MD, FACP, American College of Physicians 
  (ACP)..........................................................    37
Leavitt, Dr. Mark, MD, PhD, Certification Commission for Health 
  Information Technology (CCHIT).................................    46
Kelley, Dr. Margaret, MD, American College of Obstetricians and 
  Gynecologists (ACOG)...........................................    53
Shober, Dr. David R., D.O., Health Information Management System 
  Society (HIMSS)................................................    58
Napier, Dr. Kevin, Internal Medicine of Griffin..................    73

Statements for the Record:
Gingrey, Hon. Phil...............................................    76
American Medical Association (AMA)...............................    80
The Computing Technology Industry Association (CompTIA)..........    85
National Association of Chain Drugstores.........................    92
SureScripts LLC..................................................    98

                                 (iii)

  


                   SUBCOMMITTEE HEARING ON THE VALUE
                     OF HEALTH IT TO SOLO AND SMALL
                           MEDICAL PRACTICES

                              ----------                              


                       WEDNESDAY, MARCH 28, 2007

                     U.S. House of Representatives,
                               Committee on Small Business,
           Subcommittee on Regulations, Health Care & Trade
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360 Rayburn House Office Building, Hon. Charles Gonzalez 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Gonzalez, Jefferson, Altmire, 
Sestak, Westmoreland, and Buchanan.
    Also Present: Representative Gingrey.

             OPENING STATEMENT OF CHAIRMAN GONZALEZ

    ChairmanGonzalez. It is five after, and by D.C. standards 
we are starting early. So it is my--and I am hoping that other 
members will be joining us, and we may even have a Member of 
Congress who has a great interest in HIT who is not a member of 
this particular Committee, but we are going to welcome him if, 
as, and when he gets here.
    I call this Subcommittee to order now, and, of course, this 
is the Subcommittee on Regulation, Health Care, and Trade, of 
the House Committee on Small Business. And the hearing today is 
entitled ``Value of Health Information Technology to Solo and 
Small Medical Practices.''
    I will be following the rules established by the chair of 
the full Committee, Chairwoman Nydia Velazquez, meaning that 
the chair--myself--and the ranking member, Congressman 
Westmoreland, will be making opening statements. However, all 
other members of the Subcommittee are welcome to submit written 
statements that will be made part of the record at a later 
date. And I appreciate your participation today.
    Today's hearing will offer an opportunity to examine ways 
we can expand and improve the implementation of health 
information technology. Health information technology has the 
potential to advance health care quality, but right now many 
small health care providers simply cannot afford to offer it.
    It is well known that HIT benefits are vast and wide-
reaching. Practices which we are fortunate enough to have 
access to this technology know that it reduces health care 
costs, improves administrative efficiency, and reduces 
paperwork. This leads to improved safety and quality and 
ultimately increased access to affordable health care.
    However, right now there are inadequate incentives for 
health care providers to adopt many of these technologies. The 
costs are too high in light of the benefits. As a result, a 
significant gap exists in health IT adoption between large and 
small practices.
    A study conducted by the Commonwealth Fund revealed that 57 
percent of physicians in practices with more than 50 physicians 
used health information technology, compared with only 13 
percent of solo practitioners. More importantly, 80 percent of 
all outpatient visits take place in medical practices with 10 
or fewer doctors, and solo practitioners comprise about two-
thirds of all medical practices which provide these services.
    Without changes in the way we promote health IT, small 
physician practices will be left behind the technological 
curve, and, as a result, patients will fail to benefit from the 
quality of care electronic health records provide.
    Congress needs to do more to help these smaller practices, 
where the majority of patient care is actually received. This 
is why I am introducing legislation that will provide financial 
incentives and other resources to increase the pace of health 
information technology adoption by smaller practices. These 
resources will include tax incentives, grants, and subsidized 
loans, all of which are instrumental to address this particular 
problem.
    I am pleased that the Small Business Committee also 
recently passed the Small Business Lending Improvements Act of 
2007, which will allow small medical providers in underserved 
areas to access small business administration loans for health 
IT. One of the most effective ways to do so is to provide 
financial incentives for such practices to adopt and implement 
health information technology. This will ensure that smaller 
practices are encouraged to purchase and implement health 
information technology while simultaneously protecting them 
from the financial burden of government regulations and 
mandates.
    It has been estimated that purchasing and installing an 
electronic health records system can cost more than $32,000 per 
physician, and maintenance can exceed $1,200 per month. My 
legislation would help defray some of these high upfront costs. 
Modern technologies benefits are felt across our country in our 
daily lives. We have seen and felt its benefits in education 
and the sciences. Now it is time for our health care system to 
catch up.
    This hearing will focus on the importance of health 
information technology to small practices, examine the barriers 
to its implementation, and identify the steps Congress should 
take to encourage greater adoption by small practices. Small 
health care providers are struggling and desperately need our 
help.
    Some of the witnesses before us today are pioneers in that 
they have taken the step and started implementing these 
technologies. But unless we increase the pace of adoption by 
smaller practices, there is little possibility that America's 
health care system will be transformed.
    I would like to thank each of our witnesses for taking time 
out of their busy schedules to discuss this important issue, 
and, of course, to share their own personal experiences 
regarding this very important issue that is coming before 
Congress and hopefully will be acted upon in the 110th 
Congress, which we failed to do last Congress.
    At this time, it is my pleasure to recognize my colleague 
and ranking member, Congressman Lynn Westmoreland, for his 
opening remarks.

             OPENING STATEMENT OF MR. WESTMORELAND

    Mr.Westmoreland. Thank you, Mr. Chairman, and thank you for 
holding this hearing today, and it is a pleasure to work with 
you on this Committee. I would also like to thank all of the 
witnesses that are here today. I know you are solo 
practitioners maybe, and it is costing you money to be here, so 
thank you for your participation.
    Mr. Chairman, I am glad this Subcommittee's first hearing 
topic is one of such great importance. I look forward to 
working with you on strengthening America's small businesses 
during our time together on this Committee. Today we live in 
the age of information. We have all become increasingly 
dependent on having things at our fingertips at a moment's 
notice.
    It is now difficult to remember a time without Internet 
search engines, e-mail devices fastened to our hips, or GPS 
navigation systems in our cars. However, this wave of 
technology has not yet been fully implemented in one of the 
world's most important industries, and that is the health care 
industry.
    While the science of medicine makes dramatic advancements 
almost daily, the method of managing patients' medical records 
has lagged far behind. And this is why I am so glad to be here 
today to discuss this issue. I think everyone involved 
recognizes the tremendous value health information technology 
provides. Collecting patients' information in a more efficient, 
productive manner helps prevent medical error and reduces 
paperwork.
    Minimizing these two factors improves the overall health 
care system while also lowering cost. I applaud President Bush 
for his recognition of these benefits and for his call for the 
widespread adoption of the electronic medical records, the 
EMRs, within the next 10 years.
    Unfortunately, while these values are understood by all, 
the financial costs of implementing health IT are felt by most, 
and for some it can be the barrier against establishing IT in 
their own practices. This is especially the case for smaller 
health care practices like the ones throughout my district in 
Georgia. And even after addressing the financial burden, in 
most cases a small practice must still confront the complex 
state and federal laws that entangle all businesses.
    There are many proposals focused on addressing these 
problems, most of which use a mixture of financial incentives 
and policy changes. Although there is no quick fix for a 
national implementation of health IT, there is a considerable 
desire for it. And I am glad that the Chairman has introduced a 
bill, and also Congressman Gingrey has one, both that address 
this issue.
    For that reason, I believe that it is important that we 
take as many ideas into consideration as possible in order to 
make the best decision for our health care providers and our 
health care system. This Congress faces a great challenge as it 
tries to lower the overall cost of health care, and I am 
hopeful that the work of this Subcommittee will do its part in 
answering this challenge.
    I welcome this distinguished panel, and thank you all for 
your willingness to testify in front of us today. And, Mr. 
Chairman, I would like to request that all members have five 
days to revise and--legislative days to revise and extend their 
remarks.
    ChairmanGonzalez. Without objection.
    Mr.Westmoreland. Thank you.
    ChairmanGonzalez. I had indicated earlier that the 
remaining members of the Committee will be able to--or the 
Subcommittee will be able to submit their written statements 
for the record.
    To the witnesses, let me explain the little mechanism there 
on the lights. Obviously, green means go. When it is yellow, 
that means you have one minute left. When it is red, time has 
expired. As you have already been instructed, you have 
submitted written statements that obviously would exceed five 
minutes, but we are asking you to please summarize your written 
testimony in those particular five minutes, and then we will 
proceed with questions.
    At this time, though, I believe there may be an occasion 
for Congressman Phil Gingrey from the great State of Georgia to 
be joining us at a later time, and I would be asking at this 
time for unanimous consent to allow a non-member of the 
Subcommittee and the larger full Committee to sit here at the 
dais and participate with members of the Committee.
    So without any objection, it is so ruled. And when he gets 
here, if you will just direct him to have a seat up here. Thank 
you very much.
    It is my pleasure to be introducing the witnesses at this 
time. I will be deferring the introduction of two of the 
witnesses to my colleagues, but I will start off with Dr. Lynne 
M. Kirk is President of the American College of Physicians, the 
nation's largest medical specialty society. The American 
College of Physicians represents more than 120,000 physicians 
in general and internal medicine and related subspecialties.
    Dr. Kirk is also the Associate Dean of Graduate Medical 
Education and Associate Chief of the Division of General and 
Internal Medicine at the University of Texas Southwestern 
Medical Center. Welcome, Dr. Kirk.
    Dr. Mark Leavitt is Chair of the Certification Commission 
for Health Care Information Technology, and we will learn more 
about that particular commission during the testimony. The 
mission is to accelerate the adoption of a robust inter-
operable health information technology. The organization now 
actively certifies electronic health record systems and 
recently received official recognition from HHS as a 
certification authority.
    Dr. Leavitt is a Clinical Assistant Professor at the Oregon 
Health and Science University and is a fellow of the Health 
Care Information and Management System Society.
    Dr. Margaret Kelley--and welcome Dr. Kelley because she is 
a constituent--is a partner in Southeast OB-GYN Associates, 
located in San Antonio, Texas, and serves as the Chief of 
Surgery and Chief of Staff for Southeast Baptist Hospital. Dr. 
Kelley will be testifying on behalf of the American College of 
Obstetricians and Gynecologists, which has over 49,000 members 
and is the nation's leading group of professionals providing 
health care for women.
    At this time, I am going to recognize Congressman Jason 
Altmire for the introduction of Dr. David Shober.
    Mr.Altmire. Thank you, Mr. Chairman.
    Dr. Shober is from my district. He is a partner in Lawrence 
County Family Medicine Practice, located in New Castle, 
Pennsylvania. He and his partner own and manage their business. 
They installed an electronic health record in 2004. Their 
practice consists of two physicians, one physician assistant, 
and a nurse practitioner. They have two offices that operate 
simultaneously, a small one in a township and the other one in 
a rural setting.
    They provide in-patient medical care at one hospital and 
four nursing homes. In addition, Dr. Shober serves as President 
of the medical staff at Jameson Memorial Hospital. Previously, 
he served as Vice President and Chairman of the Department of 
Medicine. This is a 200-bed community hospital serving a 
population of 90,000 people.
    Dr. Shober is testifying on behalf of the Health 
Information and Management System Society, HIMSS. That is a 
membership organization focused on health care information 
technology representing more than 20,000 individual members and 
300 corporate members.
    ChairmanGonzalez. Thank you very much. And I would like to 
point out, in looking over the bios of members--and we don't do 
that until actually we have hearings and such--it is my 
understanding that Congressman Altmire has a master's in health 
administration. Is that correct?
    Mr.Altmire. That is right.
    ChairmanGonzalez. So we are looking for a little bit of 
leadership here.
    [Laughter.]
    At this time, I would like to recognize the ranking member, 
Congressman Westmoreland, for the introduction of our next 
witness.
    Mr.Westmoreland. Thank you, Mr. Chairman. It is my pleasure 
to introduce my constituent, Kevin Napier, M.D., who is an 
Internist with Internal Medicine of Griffin, in Griffin, 
Georgia. Dr. Napier has honorably served his community and his 
nation since graduating from the Medical College of Georgia. He 
spent five years practicing at numerous U.S. Navy medical 
clinics before entering civilian medicine.
    Dr. Napier has been a general partner with Internal 
Medicine of Griffin since 2001, where they made the transition 
to health IT in 2005. Former Chief of Staff of the Spalding 
Regional Medical Center, currently Dr. Napier serves on the 
Board of Directors of the Spalding Regional Medical Center.
    I want to thank Dr. Napier for being here to share his 
perspective as a small medical practitioner, and I look forward 
to hearing the testimony he has.
    ChairmanGonzalez. Thank you very much, and we will proceed 
with the testimony and the first witness, Dr. Kirk.

  STATEMENT OF LYNNE M. KIRK, M.D., FACP, PRESIDENT, AMERICAN 
                     COLLEGE OF PHYSICIANS

    Dr.Kirk. Thank you, Chairman Gonzalez and Ranking Member 
Westmoreland. As a general internist at the University of Texas 
Southwestern Medical Center in Dallas for the past 26 years, I 
have had the privilege of providing health care to thousands of 
Texans while training the next generation of American 
physicians.
    The American College of Physicians is the largest specialty 
society in the U.S., representing 120,000 internal medicine 
physicians and medical students. More Medicare patients count 
on internists for their medical care than any other physician 
specialty. Of our members involved in patient care after 
training, approximately 20 percent are in solo practice, and 50 
percent are in practices of five or fewer physicians. This is 
the group of physicians that is least likely to have the 
necessary capital on hand to invest in technology.
    We greatly appreciate your attention to the barriers small 
health care practices face in adopting HIT. ACP strongly 
believes the goal of widespread adoption and use of HIT to 
improve quality of care will only be successful if we first 
recognize the complex issues of financing, redesign of practice 
workflow, and the need for ongoing technical support and 
training.
    We believe it is absolutely essential for Congress to begin 
to offer targeted financial assistance programs to fund HIT in 
small medical practices. These practices need financial 
assistance for the initial startup costs of acquiring the 
technology, but also recognition of the ongoing costs as well.
    Numerous studies and policy experts have confirmed that 
full adoption and utilization of HIT can revolutionize health 
care delivery by improving quality and reducing health care 
costs. Despite these positive claims about HIT, few physician 
practices are able to afford the substantial initial capital or 
afford the costs associated with training for and maintaining 
the technology. This obstacle is especially acute for 
physicians practicing in small office settings where three-
fourths of all Medicare recipients receive their outpatient 
care.
    Acquisition costs can average as much as $44,000 per 
physician. The average annual ongoing costs can be about $8,500 
per physician. The business case does not exist to make this 
kind of capital investment. Another related barrier is that 
savings from HIT will largely go unrecognized for the 
physicians making these investments. Public and private payers, 
not the physicians, will realize the savings from physician 
investment in acquiring the necessary HIT.
    Therefore, ACP strongly believes that physicians' 
contributions must be recognized through implementation of 
reimbursement policies that allow sharing of the system-wide 
savings of HIT. First, the college recommends Congress build 
into the Medicare physician payment system an add-on code for 
office visits and other services provided with support of HIT. 
The amount of the add-on should relate to the complexity of the 
HIT adopted by the practice.
    Secondly, Congress should allocate the necessary funding 
for small practices to make the initial HIT investment. We 
believe that grants, loans, tax credits, or a combination of 
the three, coupled with the Medicare add-on, are sufficient to 
put the necessary HIT systems into the hands of small 
practices. That is why we are particularly supportive of the 
bipartisan bill H.R. 747, the National Health Information 
Incentive Act, sponsored by Subcommittee Chairman Charles 
Gonzalez, because it specifically targeted those small 
practices--the practices that are in need of the most financial 
assistance.
    We also believe that the offering of SBA loans, which is 
what this Committee has jurisdiction over, is an appropriate 
mechanism to accomplish this goal. HIT alone will not lead 
toward full recognition of the potential benefits that include 
improved quality and better outcomes.
    We believe that the use of HIT should be directly linked to 
the concept of organizing care around primary and principal 
care in a model called the patient-centered medical home. This 
model is based on the premise that the best quality of care is 
provided not in episodic illness-oriented care, but through 
patient-centered care that emphasizes prevention and 
coordination.
    In summary, the college strongly believes Congress should 
provide the necessary funding to offset the initial costs in 
obtaining HIT and should recognize the ongoing costs in 
utilizing this technology. It is the combination of one-time 
and ongoing financial incentives put forward by Chairman 
Gonzalez that we believe will substantially speak HIT adoption 
and the use of technology to foster improvements in quality of 
care.
    Only when Congress begins to recognize the contributions of 
physicians will we begin to achieve savings through the 
adoption of HIT. Therefore, we believe funding initiatives 
should allow for individual physicians to share in the system-
wide savings attributable to HIT.
    The college commends Chairman Gonzalez and the members of 
the Subcommittee for holding this important hearing. We are 
pleased that the Committee is examining the barriers small 
practices face adopting HIT. The benefits of full-scale 
adoption of interoperable HIT will be significant, leading to a 
higher standard of quality in the U.S. health care system.
    Unfortunately, without adequate financial incentives, small 
practices and their patients will be left behind this 
technological curve.
    Thank you.
    [The prepared statement of Dr. Kirk may be found in the 
Appendix on page 37.]
    ChairmanGonzalez. Thank you very much, Dr. Kirk.
    Dr. Leavitt?

STATEMENT OF MARK LEAVITT, M.D., Ph.D., CHAIRMAN, CERTIFICATION 
          COMMISSION FOR HEALTH INFORMATION TECHNOLOGY

    Dr.Leavitt. Thank you. Chairman Gonzalez, Ranking Member 
Westmoreland, and distinguished members of the Subcommittee, 
thank you for inviting me today. My name is Mark Leavitt, and I 
am Chair of CCHIT, an independent non-profit organization with 
the mission of accelerating the adoption of health IT.
    The topic of health IT in small practices is near and dear 
to me. I started solo practice 25 years ago, and I realized 
that paper-based record-keeping would be not only inefficient 
for me but dangerous for my patients. So I created one of the 
first electronic medical records for myself 25 years ago.
    A quarter of a century later my colleagues--fewer than 1 in 
10--have the benefit of this technology today. I assume that is 
why I am here, and that is why we are talking about it.
    I think that others will speak to the issue of the benefits 
of health IT as well as the costs, but there are really two 
major barriers that I think we need to focus on. One is clearly 
cost, and the other is risk. And we are going to hear about the 
cost of health IT, the figure of $15- to $50,000 per physician 
is a good one, or $32,000 per physician.
    And, by the way, it is highest per physician the smaller 
the practice, because they cannot amortize the fixed costs. The 
ROI, the return on investment, is slow or absent. There is no 
additional reimbursement when a provider adopts electronic 
health record technology.
    Now, besides the costs, physicians face significant risks 
when they move to electronic records. Many have made mistakes 
selecting and implementing these systems. Sometimes it can even 
threaten the financial viability of their practices, and also 
we are all familiar with the risks to patient privacy when 
computer systems are not adequately secured.
    Finally, the question: how can the government help 
accelerate the adoption of health IT in these small practices? 
Well, starting with the President's appointment of a national 
coordinator for health IT in 2004, and followed by the 
establishment of strategic advisory panels by the Secretary of 
HHS, a number of federal initiatives have already been 
launched.
    Now, the organization which I chair represents one of those 
initiatives. CCHIT was awarded a three-year contract with the 
first year devoted to accelerating the adoption of health IT in 
physician office practices. We think that certifying these 
electronic health record products can help practices in four 
ways.
    First, reducing the risk when they select and purchase an 
electronic health record. Second, making sure that these 
systems will be interoperable. In plain English, it means they 
will plug in and connect and exchange information--receiving 
data from a lab, sending a prescription electronically, or 
forwarding a record when they refer a patient.
    Third, we hope that certification can enhance the 
availability of financial incentives or regulatory relief. And 
finally, and very critical, by making sure that when we move 
from a paper to a digital health care information world, 
privacy is enhanced rather than reduced. And I believe that is 
possible.
    Our efforts are showing signs of success. In just nine 
months, we have certified 57 products targeted to ambulatory 
care to physician practices, so they have a wide selection of 
products to choose from. By the way, over 70 percent of these 
products come from companies that are themselves small 
businesses, and the majority of them serve small practices--
one, two, three, up to five doctors.
    Also, we are seeing payers now keying some financial 
incentives. In Hawaii, Blue Cross Blue Shield of Hawaii is 
offering $50 million in incentives for physicians who buy 
certified electronic health records. We are also seeing health 
information networks relying on certification. In New York, a 
Medicaid project to share prescription history with doctors is 
relying on certification to ensure that the systems are 
sufficiently secure.
    For this success to continue, it is critically important 
that adequate funding be continued for the Office of the 
National Coordinator and for these key enabling projects. Your 
legislation should build on this momentum. I believe the most 
effective policy stimulus involves physician payment 
incentives, first for IT adoption and later for using the IT to 
measure and improve quality.
    The Medicare Physician Voluntary Reporting Program, PVRP, 
offers a 1.5 percent bonus for reporting certain quality 
measures. It is a step in the right direction, but it is too 
small in magnitude by a factor of five to ten to have a 
financial impact on these practices considering electronic 
records.
    Summing up, health IT promises all of us enormous quality 
and cost-saving benefits, but small offices are struggling to 
adopt it. The strategic federal initiative launched in 2004, 
including certification of health IT products, is showing 
positive results. I encourage you to offer legislation that 
builds on this momentum, and help us achieve electronic medical 
records by 2014.
    Thank you for inviting me today, and I look forward to your 
questions.
    [The prepared statement of Dr. Leavitt follows:]
    [The prepared statement of Dr. Leavitt may be found in the 
Appendix on page 46.]
    ChairmanGonzalez. Thank you, Dr. Leavitt.
    Dr. Kelley?

     STATEMENT OF MARGARET KELLEY, M.D., SOUTHEAST OB-GYN 
ASSOCIATES, ON BEHALF OF THE AMERICAN COLLEGE OF OBSTETRICIANS 
                       AND GYNECOLOGISTS

    Dr.Kelley. Chairman Gonzalez, Ranking Member Westmoreland, 
and all of the members of the Subcommittee, thank you for 
inviting me to share my experiences in adopting information 
technology in my OB-GYN practice. I am speaking today from my 
experiences as well as on behalf of the American College of 
Obstetricians and Gynecologists.
    My father, Dr. Harmon Kelley, and I operate a two-physician 
practice, Southeast OG-GYN Associates, in San Antonio, Texas. 
We have about 14,000 patient visits a year and deliver about 
300 babies annually. In 2004, we made the decision to convert 
our antiquated records system to an electronic medical record 
or an EMR. We wanted a more efficient and productive office.
    Also, given the litigious environment in obstetrics and 
gynecology, my father and I wanted to make sure we were able to 
document everything that we do in our practice. An EMR would 
allow us to keep a much more comprehensive and legible record 
than our paper-based system did.
    The initial cost of upgrading to an EMR was approximately 
$100,000, $50,000 per physician. My father and I had to 
carefully weigh the pros and cons of purchasing such an 
expensive system, and ultimately decided that it was an 
investment that we had to make, so that we could better meet 
the needs of our patients.
    Our staff of 10 took two full weeks away from patient care 
to train on the new system with trainers provided by the EMR 
vendor, but the formal training was just the beginning. 
Virtually every aspect of our practice had to be modified. 
Where we used to simply just jot down a note on a patient 
chart, we now had to learn to navigate the new system and type 
our notes into an electronic form.
    Because of our learning curve, each patient visit took 
longer, reducing the number of patients we could see in a given 
day. This caused patients to wait longer to schedule 
appointments, and because we were seeing fewer patients, our 
practice revenue dropped as well. Ours was a frustrating 
transition for staff, physicians, and patients alike.
    In fact, it took our practice approximately two years to be 
able to accommodate as many patients as we did before we 
invested in our EMR. The investment of $100,000 up front, and a 
diminished number of patients that we could see, made the 
initial months of implementation very lean indeed.
    Three years later our staff and our patients are finally 
able to appreciate the full potential of health information 
technology in our practice. Our old way of doing things seems 
completely archaic in retrospect, and I could never go back.
    One of the biggest benefits is 24-hour access to all 
patients' charts. If I am at the hospital in the middle of the 
night laboring a patient, and I need her prenatal record, I can 
view it and print it through any computer that has Internet 
access. I can view the patient's record, including her plan of 
treatment, medications, when I am at home on call. And I also 
can catch up on reviewing lab results and telephone calls 
without coming into the office on the weekend.
    There are also obvious patient benefits. Our EMR allows us 
to view a patient record's drug allergies, check for drug 
interactions, and so medications are prescribed more safely. It 
links to the ACOG guidelines to facilitate the practice of 
evidence-based medicine. We also add the patient's picture to 
our medical record. It helps us remember the patients, but it 
also reduces medical errors.
    We received a positive response from our patients. They 
like seeing doctors using modern technology, and it gives them 
peace of mind because they know our commitment to their health 
and safety is behind the change. The most obvious barrier in 
the adoption of information technology in small practice is the 
initial cost, usually about $50,000 per physician. This 
investment is somewhat of a gamble.
    The technology changes rapidly, and systems often do not 
communicate with each other well. Many physicians are fearful 
that this year's investment will be outdated or obsolete in a 
few short years.
    Some people mistakenly believe physicians will easily 
recoup their investment, because the technology will make them 
more efficient and able to see more patients. The irony is that 
health information technology makes many offices significantly 
less efficient for months, or even years after upgrading to an 
EMR. And even when the practice adjusts to the new system, it 
doesn't necessarily translate into more patients or more 
revenues.
    We want to use the technology to make our office visit 
minutes more meaningful, not to strip additional minutes off of 
an office visit that is already too short. Medicare and private 
sector health insurers are complicit in keeping us in a paper-
based system. Private insurances and Medicare constantly expect 
us to deliver more care for less money.
    For one of my insurers, global fee for prenatal care is 
only $1,200, which includes the delivery, the care, and 60 
days' postpartum care. Medicare is slated to cut physician 
payment by 10 percent in 2008, and 40 percent over the next 
eight years. As the rates continue to be cut from all angles, 
it can be difficult for many practices to justify an investment 
in health information technology.
    I am a firm believer in the enormous potential of health 
information technology, but leadership from the Federal 
Government spearheaded by this Subcommittee is necessary to 
make it possible for small and rural physicians.
    Thank you for holding this important hearing and striving 
to help small practices provide the best care to their 
patients.
    [The prepared statement of Dr. Kelley may be found in the 
Appendix on page 53.]
    ChairmanGonzalez. Thank you very much, Dr. Kelley.
    Dr. Shober?

 STATEMENT OF DAVID R. SHOBER, D.O., PRESIDENT, MEDICAL STAFF, 
   JAMESON HOSPITAL, LAWRENCE COUNTY FAMILY MEDICINE, PC, ON 
   BEHALF OF THE HEALTH INFORMATION MANAGEMENT SYSTEM SOCIETY

    Dr.Shober. Chairman Gonzalez, Congressmen, Congresswomen, 
it is a pleasure to have this opportunity to meet with you 
today.
    We were motivated to purchase an electronic health record 
for a number of reasons--we wanted the instantaneous 
connectivity between both offices, we wanted access to our 
files from outside locations, insurance and medical legal 
requirements driving a need for more thorough documentation, 
need a more efficient record-keeping system. We wanted to be 
able to reduce documentation errors, standardize our record to 
a level not possible with a handwritten chart. We wanted to be 
able to electronically audit our performance.
    Unfortunately, as you will see, the road to using the 
electronic health record system is a difficult one. We 
purchased our system three years ago. The cost was 
considerable. Our initial investment was $200,000. Our annual 
costs are $50- to $60,000. While we have been able to recoup 
some savings, the record is still an expenditure for us.
    We realized a number of benefits and challenges with our 
implementation of the electronic record. The initial challenge 
was deciding which system to purchase. Our next challenge was 
to develop an electronic connection between our two offices. 
With no Internet access to our rural office, we installed a 
dedicated T1 line, which is a high-volume telephone data line, 
at an additional cost of over $200 a month.
    The implementation of our records system required 
considerable staff and physician education and training. It has 
created a financial challenge for a small business. We were 
required to commit a considerable amount of time, both inside 
and outside of the office, and this was quite difficult in a 
busy practice.
    While we have eliminated the cost of creating a paper 
record, we still have the cost of scanning and shredding all of 
the unnecessary paper that continues to arrive at our office. 
We also found ourselves dependent upon a reliable electrical 
system. We needed to install generators at the offices in order 
to keep our system running with outages.
    The system has allowed us to create a more complete note. 
The development of templates for standard portions of exams 
creates further efficiency. I am, however, concerned that the 
use of templates has been scrutinized by the insurance chart 
reviewers and attacked in the courtroom or deposition. I 
believe that for us to move forward templates must be accepted 
as an adequate method of record-keeping.
    Another challenge is that we have not been able to 
integrate some of the standard federal forms into the EHR, 
examples being the FMLA, DOTCDL. Normally, companies create or 
purchase their own versions of these forms, and hand signatures 
are required. For the electronic record process to move 
forward, legislation will need to standardize the forms and 
permit electronic signature.
    Medical record copying now being easier for us to 
accomplish, we have found ourselves still limited by the fact 
that other entities are not capable of accepting the electronic 
transfer of information. At present, we are the only practice 
within a 30-mile radius that has an electronic record. When it 
comes time to move a record, we need to copy it on paper and 
then mail it or give it to the patient, adding further 
inefficiency.
    Currently, we hand write, print, or fax prescriptions. We 
are not able to e-prescribe to all pharmacies or the VA. This 
inconsistency creates additional work and inefficiency. Some 
insurance carriers and mail order pharmacies even demand that 
we cut and paste on our old prescription pads.
    I believe all pharmacies should be required to accept e-
prescriptions. One of our major barriers is our ability to 
communicate with other electronic health record media. In order 
for us to communicate with these difference license programs, 
an interface between systems must be built. As a small 
business, I can't afford to pay for multiple interfaces.
    Federal regulations should require that health IT software 
have the capability to interface with other licensed programs, 
to allow free market pricing and break down costly 
communication barriers. In order for us to maintain and operate 
our system, we have had to dedicate a full-time employee as a 
computer specialist.
    From a payer standpoint, electronic health records with 
universal connectivity could eliminate the unnecessary 
repetition of testing, which often occurs when test results are 
not available in a timely manner. Not only will it save money, 
but it will certainly improve the quality of patient care.
    In small communities like mine, the physician and the 
hospital are dependent upon each other to deliver quality care. 
Jameson Hospital, our local facility, is struggling with the 
acquisition on information technology, trying to perform a 
balancing act as they provide necessary hospital services, try 
to bring their staff along with information technology.
    I see the only initial way to provide an incentive for 
adoption of health information technology is to provide 
financial assistance. As you can see, the burden for electronic 
record acquisition is significant. The ongoing cost is fixed. I 
believe the physicians and hospitals should be given financial 
assistance to cover their acquisition costs, as well as 
reimbursement to help cover the ongoing cost of this program.
    In spite of the significant cost, time, and effort required 
to implement a system, I am optimistic that with universal 
adoption of electronic health record efficiencies for payers, 
physicians, and health care providers will materialize. Most 
importantly, my experience demonstrates that the EHR system 
will help improve the quality of patient care.
    Thank you.
    [The prepared statement of Dr. Shober may be found in the 
Appendix on page 58.]
    ChairmanGonzalez. Thank you very much, Dr. Shober.
    And before we proceed with the next testimony, I wanted to 
welcome our colleague, Congressman Phil Gingrey, from the great 
State of Georgia. Welcome, and thank you for your participation 
today.
    Mr.Gingrey. Thank you.
    ChairmanGonzalez. And next witness, Dr. Napier.

 STATEMENT OF KEVIN NAPIER, M.D., INTERNAL MEDICINE OF GRIFFIN

    Dr.Napier. Chairman Gonzalez, Ranking Member Westmoreland, 
and members of the Committee, thank you for the opportunity to 
testify before you today regarding my experience in information 
technology and health care.
    My name is Kevin Napier, M.D., and I practice internal 
medicine in Griffin, Georgia.
    Information technology is a subject of great importance to 
members of the medical community and government, as well as the 
general public. Internal Medicine of Griffin has nine 
physicians and admits patients to Spalding Regional Medical 
Center, which is a facility with 180 beds.
    We made the transition to electronic health records in 
February 2005. Prior to that point, the health records were in 
traditional folders where loose paper was placed in the order 
in which it was generated, which generally included office 
notes, laboratory reports, radiology reports, physician 
correspondence, insurance correspondence, as well as Medicare 
correspondence.
    This led to frequent episodes of the inability to locate 
items needed for care, and occasionally not being able to 
locate the chart at all on the day of the visit. Internal 
Medicine of Griffin evaluated systems for two years prior to 
our selection of a vendor. After that decision was made, it was 
nearly another year prior to implementation of that system due 
to hardware installation and training needed for physicians and 
staff.
    It was recommended to us by our vendor that, due to the 
complexities of the system, we should consider reducing our 
schedules for a short period of time to allow the practice to 
adjust. The final cost including training was nearly $400,000. 
Six of the physicians in my group are primary care physicians, 
and we quickly learned that we were going to be financially 
impacted during this transition period.
    We financed the cost of this IT implementation and began 
paying $1,000 per month per doctor, and we will continue to do 
that for the next three years. After considering the yearly 
threat of payment reductions from the Centers of Medicare and 
Medicaid Services, CMS, it is easy to see why more practices do 
not quickly transition to EHR.
    In the first year after implementation, we did see a 
reduction in both the number of patients treated as well as a 
reduction in our incomes. However, as we start our third year 
on the system, I am pleased to report that we have become more 
proficient, and we now see more patients than ever.
    The benefits for our patients and physicians now include 
immediately available and legible office notes, laboratory data 
automatically entered into the system by the laboratory 
company, digital EKGs, and remote access to the entire record. 
We believe that this has improved the quality of our care, both 
for hospital-based as well as hospitalized patients.
    Recently, the hospital we utilize announced that its 
emergency department was also implementing an electronic 
record, and they selected the same vendor that we utilize. This 
further promises to improve information flow and quality.
    Our story is not unlike most practices that have made this 
transition. I recently had the opportunity to meet with several 
solo practitioners in southern Georgia, some of which also 
utilized EHR. The number one barrier to full implementation 
reported by these physicians was cost. Another area of concern 
includes the lack of a uniform standard between EMR vendors.
    If a solo practitioner were to join another group, he could 
not integrate his old patient files into the new practice 
without a costly conversion process. Physicians also worry that 
the increased productivity offered by the system does not 
balance the additional cost.
    Due to the nature of health care, certain specialties feel 
that EHR is not easily adaptable to their style of practice. 
However, despite these reservations, I feel that the benefits 
of IT in health care outweigh these risks. There are several 
options for fostering implementation in IT and health care. 
These include offering tax credits rather than deductions for 
IT implementation, and offering technology bonuses for 
practices treating Medicare beneficiaries that utilize IT.
    The creation of a common standard for EHR companies would 
further enhance the portability of the public's health records. 
It is my belief that physicians want to adopt information 
technology into their practices, but simply allowing market 
forces to steer that change is not enough. Health care 
providers are feeling pressure more than ever, and assistance 
with this transition is greatly needed.
    Thank you for the opportunity to testify.
    [The prepared statement of Dr. Napier may be found in the 
Appendix on page 73.]
    ChairmanGonzalez. Thank you very much, Dr. Napier.
    I have been informed that we were going to have a series of 
votes, but they have been postponed. So we might have an 
opportunity to go uninterrupted this morning, which would be 
very nice.
    One of the benefits of chair is I get to go first. That is 
kind of--which I enjoy quite a bit.
    [Laughter.]
    Dr. Leavitt, we have some prepared questions. And, 
generally, I go all over the place, but I am going to stick to 
this particular script, because I think there is some important 
information that we need to gather today. A critical step 
toward a national health information technology network will be 
some way to evaluate the systems themselves, and to ensure that 
they will not quickly become obsolete.
    You have already heard the concerns expressed by the 
practitioners in different parts of our country. Small 
practices often do not have the financial resources, expertise, 
or time to perform extensive evaluations of the quality, the 
price, the support, ease of use, and impact on productivity of 
information technology systems.
    Now, are you aware of any organizations, independent of 
your own, that is engaged in the practical evaluation of health 
information technology products sold by vendors today that 
might assist the physicians as they go through that process 
that has already been described by Drs. Kelley and Shober and 
Napier?
    Dr.Leavitt. This is a very good question. And as you know, 
we focus on part of that, which is the compatibility of the 
systems and the functionality. But we don't publish prices, and 
we don't do surveys of end users.
    To my knowledge, there is no organization doing that with a 
public mission. It is being done commercially by consultants, 
but, unfortunately, that generally just adds to the cost of 
buying the system. In fact, sometimes part of the cost of 
buying the system is retaining a consultant to help you pick 
one.
    So in terms of a way to efficiently help the physicians in 
a way that doesn't increase their costs, I am not aware of any 
initiative other than the certification initiative.
    ChairmanGonzalez. So if I was a physician, and I was 
looking for some guidance, there is no really recognized 
organization that doesn't have a product or service to be 
marketing that I would be able to turn to.
    Dr.Leavitt. That is correct. Your professional 
associations, most of them--the American College of Physicians, 
the American College of Obstetricians and Gynecologists, the 
Family Physician Organizations--they are actually helping. But 
it is probably not appropriate for them to actually start 
selecting vendors and saying this commercial company is one 
that you should use, so I think they tend to steer away. They 
simply help educate their members. So what you are asking for 
doesn't exist as a--in the marketplace today that I know of.
    ChairmanGonzalez. Thank you very much.
    Questions for Dr. Kelley--small practices that are part of 
an integrated care system are more likely to adopt health 
information technology than those that are not, help networks 
provide financial support, technical assistance, and legal 
protection. In your opinion, why are more small practices not 
part of an integrated care system? I know that you and your 
dad--and you know other practitioners, and they may be part of 
a greater group--if you understand my question, or I can try to 
clarify it.
    Dr.Kelley. Are you asking why--I guess if you could 
clarify, you are asking why small practices, individual 
practices, aren't in a larger network to help--
    ChairmanGonzalez. Correct. Is it possible to--in other 
words, it is just you and your father. But is it possible to 
expand that with other of your colleagues to maybe minimize 
that cost?
    Dr.Kelley. I think that it really doesn't minimize the 
cost. It actually expands the cost. And I think that also it is 
just such--this is not widespread now, and there is such great 
hesitancy that it is not a real driving force right now for 
smaller practices to integrate, just for implementing 
information technology in the practices.
    ChairmanGonzalez. The biggest barriers that you pointed 
out, first of all, was going to be the cost, just the cost to 
your and your father exceeding--was it $100,000?
    Dr.Kelley. $100,000.
    ChairmanGonzalez. And yet you did that, and then you--I 
think the testimony or your experience was actually the same 
experience that the other physicians had, and that is that 
there is the learning curve, which means you have less time to 
tend to the physicians, you have a drop in the patient 
caseload, and obviously that translates to less income and 
such. That was your experience?
    Dr.Kelley. Correct.
    ChairmanGonzalez. And having experienced that, I think the 
most telling sentence that you had was you still would not go 
back to the old system.
    Dr.Kelley. Correct.
    ChairmanGonzalez. So it was worth the investment.
    Dr.Kelley. Yes, sir. It was quite worth the system. The 
practice three years later runs much more smoothly. You have 
everything in one resource. You don't have missing--as other 
physicians said, you don't have missing lab reports, you don't 
have missing charts.
    Another point that I really, really love about the system 
is documentation of telephone calls with physicians and 
patients. Typically, you just don't--on call at night, you 
don't have documentation of that conversation with patients, 
and it becomes a bigger problem in larger groups where a 
physician is covering three or four other doctors. You just 
have no documentation of a conversation between a physician and 
patient, and all of those conversations can be documented 
within the patient's chart.
    And also, laboratory follow-up. You have the laboratory--
you have the results, you have the plan of care, and you have a 
checking point to make sure that the care was--the plan of care 
was carried out. And so you have checks and balances that you 
now have better control over and documentation of, and that 
improves safety for patients.
    ChairmanGonzalez. I appreciate it.
    My time is up, and at this time I will recognize the 
Ranking Member, Congressman Westmoreland.
    Mr.Westmoreland. Thank you, Mr. Chairman.
    Dr. Leavitt, you mentioned that your organization did not 
certify how the end user I guess, how this affects the end 
user. Don't you think that is an important part? And I guess 
the other part of the question is: do you look at the 
integration factor for all of these systems as how they would 
integrate with each other, or if they had that capability?
    Dr.Leavitt. Very good questions. So the first question is 
the user experience. We definitely have physicians and other 
users of these systems asking CCHIT if we could measure the 
usability of the systems and rate them. And it is right now a 
concept, but you have to be able to do this objectively. And 
sometimes what works for one physician doesn't work for 
another.
    So usability of a system is not something that everyone 
agrees on how to measure. But we hope to be able to move into 
that. We do it in a crude way now, in that the systems are 
inspected. There are actually expert jurors, and one has to be 
a practicing physician. And they observe the system, and it has 
to go through a scripted demonstration. If it runs over a 
certain time limit, the system would not be certified. So that 
is a rough measure of usability.
    Now, your second question, what are we doing about making 
sure that the systems integrate? That is actually one of our 
major roles is making sure that the systems are interoperable, 
and this year we are requiring that the systems can send 
prescriptions and refill prescriptions electronically, so you 
can't be certified if your system doesn't do that.
    We also require that they can receive laboratory results. 
And I was talking to Dr. Shober before the session, and the 
laboratories are telling him, ``We can't hook up to your system 
unless you pay us, because we have to customize it.`` That has 
to stop. It needs to be plug and play.
    You buy the system, it connects securely, just as if anyone 
has used--so many systems on the web, whether those are 
personal finance applications that connect to your bank or your 
credit card and download the information securely, the 
physician system should be able to download the labs securely, 
transfer patient records securely, and we are pushing toward 
that. It will take several years, but we raise our criteria 
every year.
    Mr.Westmoreland. Well, I think that is going to have to be 
a goal, because I can see where some small practitioners, when 
you start talking about investing $100- or $200,000, and it may 
not even be compatible or be able to be upgraded or--you know, 
that is a big investment to make, not having any security, 
especially just for a short term.
    Dr. Napier, in your testimony, you said you implemented 
this information about two years ago. And just to give Mr. 
Leavitt some help, is there anything you would have done 
differently in looking at--in how you did it? Is there anything 
that you might suggest to some other practices, if they were 
going to do this today, different than what you did?
    Dr.Napier. Well, as I testified, we spent about two years 
evaluating systems before we finally moved forward with a 
vendor, because of these issues that have already been listed 
out by the other experts here today. We really felt like we 
went with the best vendor that we had available to us, and in 
looking back we would still choose the same vendor that we did.
    However, I think that we would have spent more time--and as 
I mentioned, we spent a year before full implementation of the 
system after purchasing it. And two months of that was in 
customization of templates. A lot has been talked about 
templates here today, and we spent two months customizing 
templates.
    And in retrospect, we should have spent about four months 
customizing templates, because once you go live with the system 
it is very difficult to put the additional time into going back 
and doing more customizing. And so we would have spent more 
time on the front end with customization.
    Having said that, I think part of the certification 
process, it would be nice if we had specialty-specific 
certifications for various programs that are available, because 
many companies they are trying to sell as many products as they 
can. And many of them do not fit for certain specialties, and 
they are not going to tell you that up front. And it would be 
nice if we had an independent way of knowing which ones are 
appropriate for which type of practice and in which specialty.
    Mr.Westmoreland. Just to follow up on that, you practice 
internal medicine.
    Dr.Napier. That is correct.
    Mr.Westmoreland. Would you be able to share your template 
with other internists that were going to get on an IT system? 
Would you be able to share that with them, or is that now the 
product of the vendor?
    Dr.Napier. That is a product of the vendor, and what we end 
up doing is we create what are called test patients, and we 
build templates on these test patients, and we will often print 
these out and share them with other people that use our system 
to allow them to see how we did it.
    But there is not a current way of simply sending that to a 
practice, for example, in Atlanta for them to integrate into 
their system.
    Mr.Westmoreland. Thank you. I see my time is up. I will 
yield it back.
    ChairmanGonzalez. Thank you very much, and the chair will 
recognize the gentleman from Pennsylvania, Mr. Altmire, for 
five minutes.
    Mr.Altmire. Thank you, Mr. Chairman.
    Dr. Shober, as a rural practitioner, how has the health IT 
better allowed you to serve your patients? You just said a 
little bit, but if you could go into maybe some more detail on 
that with your practice. And do you feel that there are unique 
challenges for rural practitioners that health IT can help 
address above and beyond what we have heard from the witnesses 
today?
    Dr.Shober. As far as the first question, our practice per 
se, we have one office which is in a township-type setting, the 
other is more rural. As I mentioned, we had a hard time 
obtaining a connection. We had to get a dedicated line with the 
telephone company, and there is no Internet access. It ended 
half a mile down the road one way and a mile down the road 
another direction.
    So we bought the system, and then realized that, yes, we 
had to go to the local information sources, whether that be the 
telephone company, the cable network, and really negotiate with 
them to see how best we could be connected. Satellite really 
wasn't an option, security and all other measures being 
considered. That was definitely a challenge for that office.
    But the nice thing about having the information technology 
available connecting these two offices live, patients often 
roam between offices. I mean, they are 12 to 15 miles apart, 
but they will show up at one on one day and go to another one 
the next day. And if they are sick driving down the road, they 
stop in.
    And we are linked live right now, so we are able to pull up 
their record at the front counter when they walk in, address 
their issue, and know what happened at the other office 
yesterday, or what happened on the phone call this morning, if 
they called on a cell phone and spoke to a nurse at the other 
office on the way in.
    So it has really helped us provide much better care, much 
better continuity of care. As far as the challenges for us in 
the setting that we are in, we are in a small town. We have one 
hospital. We have a number of outpatient labs that are national 
vendors. We have a few outpatient X-ray centers.
    The information technology that we have in the office is 
nice, but, again, our problem is we need to be able to connect 
to everyone else. There seems to be a lot of apprehension out 
there in the community as far as the safety of connecting with 
someone else's software. We hear excuses of, well, we don't 
know if we could trust that vendor, or we don't know if it is 
going to cause us a problem running our system.
    So I share some of the concerns that some of the experts 
here have brought forward. There has to be a standardization, 
so it--we are not on the island. We don't have a beautiful 
system in the office. We can't use it in the community, to be 
able to run this out through the community, expand it to the 
hospital, have a nice flow of information to help everyone.
    Mr.Altmire. That actually leads into my next question, and 
there does need to be widespread adoption of IT for it to be 
fully--for us to fully realize the benefits. If it is not 
widespread, then we are not going to see the implementation be 
beneficial.
    So even with financial assistance, many doctors might be 
reluctant to change from traditional record-keeping. So do you 
have any thoughts of what methods beyond financial incentives 
that we would use to encourage doctors to adopt health IT?
    Dr.Shober. From what I have seen in my experience, when we 
move from an old X-ray system at the hospital to a PAX or an 
integrated digital system, the only things that will move 
physicians oftentimes are deadlines.
    And we have to--just like happened with Medicare and 
billing where you had to submit billing electronically, you 
have to say to the practicing physicians, ``Listen, in X number 
of years, you need to move forward with this. In order to help 
you with this, we are going to incentivize you up front 
financially to help pay for the system, provide financial 
incentives as we move along.'' That would help pay for the 
education, help pay for the extra time in the office, help pay 
for that consultant to come in.
    I think we have to move forward making all of the other 
media electronic. Cardiology is a good example. That is moving 
in the electronic direction; cardiology has moved forward in 
that direction.
    When it comes to prescribing, we see a lot of resistance. 
We have a lot of small-town Mom and Pop pharmacies. They don't 
want to do it. They actually gave us a very hard time when we 
started to fax prescriptions to them electronically. We would 
fill a prescription in the system, and it would be sent to 
their fax machine, because that was the only mode of 
communication.
    Some of them now complain that it was costing them money on 
the fax paper. In my mind, the benefit of handwriting 
inaccuracy is tremendous. But if we help move these other 
entities forward, then we are all going to move in that same 
direction.
    ChairmanGonzalez. The chair is going to be recognizing 
members of the Subcommittee, and then Dr. Gingrey will be able 
to ask questions. But, first, I will recognize for five minutes 
of questioning my colleague and member of the Subcommittee, Mr. 
Jefferson from Louisiana.
    Mr.Jefferson. Thank you, Mr. Chairman.
    I think this is a very important hearing, and I appreciate 
the chance to participate. We, of course, in New Orleans were 
made to be well aware of this problem when we lost tens of 
thousands of medical records of citizens that were simply paper 
records when the storms came, and for the hospital system and 
private physicians' offices, all of it.
    And had there been some way to electronically preserve 
these, they would have been somewhere out there safely tucked 
away in cyberspace in somebody's computer way outside of town. 
It would have made life a lot more simpler for physicians, and, 
of course, we would have had better outcomes for patients, 
especially those that have special issues like young cancer 
patients, and like people who had diabetic treatments, and all 
of these things that required so many repeat treatments.
    But in any event, we recognize the need for it in our area 
I think more than most. I want to ask you this about--each of 
you has talked about developing standards for IT, for the use 
of IT, I guess for the standards with respect to systems and 
equipment and all the rest.
    Who should develop these industry standards? I mean, should 
they come from us, should they come from the private--should we 
just enable the private physicians associations to do it, or 
should there be some other way that we come up with what we 
call standard? Because it all depends on who is writing the 
prescription for the things and who gets the business at the 
end of it. But how do we end up with the public purpose coming 
out of this that will just--so who should set these standards?
    Dr.Leavitt. There actually is an effort--and that is a very 
good question. Standards don't do much good if there is 100 
different standards. There actually is already a very powerful 
effort to--the word is ``harmonize'' standards, and that is one 
of the initiatives that was launched in parallel with the 
Certification Commission.
    There is a health information technology standards panel 
that is also under contract with HHS, and they basically 
organize--the standards are developed by groups called 
standards development organizations, and they actually have to 
be accredited as such. But the problem is you have competing 
and conflicting standards, so this harmonization is done by 
this panel. And as I said, it is a parallel contract to our 
certification.
    So when we test the systems, we make sure they comply with 
the accepted standard. They can't choose from 100 different 
standards to comply with. It is the accepted standard for 
transmitting prescriptions, or the accepted standard for 
receiving a lab result.
    Mr.Jefferson. Should the Congress give any guidance with 
respect to how these standards ought to be arrived at?
    Dr.Leavitt. Congress needs to make sure that it is being 
done through a transparent and consensus-based process. I think 
it would be a mistake to try to legislate the details of a 
standard, because we need these standards to evolve and move 
forward, so that they can keep up with technology and with the 
needs of health care.
    So I don't think you want to cast standards in law. You 
actually want to create an office that supervises the 
harmonization of standards, and you have that in Office of the 
National Coordinator.
    And there is also the question of funding. The funding of 
these organizations is important. If you leave the funding to 
chance, then there are issues, because then standards become 
kind of a commercial football, and you really--they are a 
public good. And so I think federal funding to help develop the 
standards to fund the organizations is appropriate.
    Mr.Jefferson. The other common grain that cuts through all 
the testimony is the issue of cost that a physician must incur 
to adapt to this new system. Someone has talked about credit, 
various other incentives. And there are also--there has also 
been some talk about credits for the industry representatives 
as opposed to the physicians.
    Who should get the credits in this? If we should authorize 
credits, how deep should they be, if you have a suggestion 
that? Who should get the credits? Should there be some for 
industry? Should it be for the physicians? Or should it be for 
somebody else up and down the line? And how do you see this 
whole issue of incentives--having the credits apply not just to 
what you buy but also to training for physicians and training 
for staff?
    Dr.Kelley. I personally think that the credits ought to 
apply to who is expending the money to purchase it, so in 
practices I believe that it should be--the practice was the one 
that purchased the information technology. That practice should 
be able to have a tax credit.
    And, furthermore, you have to keep--think about that you 
have the maintenance costs from here on out once you establish 
that. That is a tremendous expense for practices, and any tax 
relief from--that can be given for practices that make that 
investment would be greatly appreciated.
    Dr.Kirk. I think credits, things like credits, tax credits, 
loans, and grants, for as we have heard the initial startup, 
which is so expensive, but I think our reimbursement system 
needs to take health information technology into account in an 
ongoing fashion to maintain these costs that we all have as we 
roll these out and continue on upgrading, training staff, 
changing our systems to incorporate those.
    And I think that needs to be accounted for in the 
reimbursement system, that if you are using the technology--and 
I think we are reaching a tipping point here, and it will 
happen very quickly if some of these incentives can be built 
in, that it will be much easier for physicians to incorporate 
those into their practice.
    Dr.Napier. Congressman Jefferson, if I may add also, if 
those credits are passed to the vendors, they already, as costs 
of some of the certifications that are presently there, those 
costs are simply passed on to the physician practices anyway in 
the form of the purchase price. And so whatever costs are going 
to be extra, in order to ensure interoperability, as well as 
whatever privacy concerns the government may have, those costs 
will be passed on directly to the physician practices that are 
implementing these.
    And so it is my opinion, and I think most physicians' 
opinion, that whatever credits are going to be given by the 
government should be given to the ones who are actually 
purchasing those systems.
    Mr.Jefferson. Mr. Chairman, if I might just clarify--I know 
that the time is up--I didn't mean--I understand what you're 
saying in that regard, but I meant with respect to having those 
in industry adopt standards and create the interoperability of 
this equipment, so that it works, you know, across the board, 
so that one doesn't necessarily have to exclude the other.
    Dr.Shober. Can I address that real quickly? If, indeed we 
create independent systems, in order for them to operate and 
communicate with each other, I think if you set the standard, 
they must communicate with each other at no cost to the 
individual purchasing the system. That mandate alone will drive 
that industry to sit down and talk to each other.
    And if they are going to maintain their licensure, which 
should be a mission for--we are assuming about paying a 
physician practice more, you would have to enroll within a 
licensed program. So you make that a mandate. If I want to buy 
a program, make it a licensed program. If it is going to be 
licensed, it has to communicate with everyone else. That way I 
am going to look at it before I buy it, and the industry itself 
will have to sit down and they will decide which language they 
are going to use to communicate or set those--set up those 
interfaces.
    That doesn't fall to our laps. I don't have to understand 
why one can't talk to the other. Let us let the industry fix 
their own problem and set that as a condition.
    Mr.Jefferson. That is what I am talking about. I appreciate 
that very much.
    ChairmanGonzalez. Thank you. And, Dr. Shober, we are real 
sensitive to that particular concern, and Dr. Leavitt I know 
could discuss it with you at length, but we are very, very 
aware of that being a huge factor.
    At this time, the chair is going to recognize our colleague 
from Georgia, who may not be a member of this Committee, but we 
welcome his input today, and that is Dr. Gingrey.
    Dr.Gingrey. Mr. Chairman, let me first of all thank you, 
because I know it is not traditional that a guest is allowed 
the opportunity to ask a question from the dais, and I really 
appreciate that courtesy. I am very happy to be here at the 
Small Business Subcommittee hearing on health information 
technology as a physician member.
    I thank my colleague, Representative Westmoreland, as well 
for submitting my written statement for the record and for 
inviting Dr. Napier from his district in Griffin, Georgia.
    I want to address my first question, though, to Dr. Leavitt 
in regard to the line of questioning between Representative 
Westmoreland and Dr. Napier in regard to the certification 
process and that it is--I think Dr. Napier recommended that 
maybe it should be specialty-specific. I think that is a very 
good recommendation, but Representative Westmoreland was asking 
you more specifically about what advantage was it, what 
information could physician groups, subspecialty groups, get 
from you in regard to the value of a particular vendor.
    And you explained that very well, but can you tell us what 
the value is of a vendor being certified versus one that is not 
certified. I wanted to particularly ask that question.
    And then maybe, Mr. Chairman, if you would indulge me, I 
have a follow-up question in regard to how to deal with the 
cost.
    Dr.Leavitt. Certainly. Thank you. The value of 
certification is that a physician office may not have to spend 
the one or the two years evaluating 10, 20, or more systems to 
determine which ones meet their needs. And when we certify a 
system, we inspect it against some 250 criteria of 
functionality, which is what it does and how it works; 
interoperability, how well it connects to other systems; and 
security, does it protect the information, does it require 
passwords, does it track every access in an internal audit log.
    That would be a lot of work for every physician office to 
go through with all of these products. So we do it once, and 
they can all benefit from it at no cost to the physician 
office. That is really the value. At the end of our first year, 
we heard from the physician community, ``We like this, but we 
want you to make it more relevant to us, so we want you to 
address our specialty or our setting, and we actually just 
announced a launch of an expansion.''
    So we are going to address professional specialties, which 
might be obstetrics, it might be cardiology, we are going to 
address settings--for example, the emergency department, it is 
not a doctor's office and it is not quite like the rest of the 
hospital, and we are even addressing populations.
    And this is how we are addressing children, because 
children are not just cared for by pediatricians, they are 
cared for everywhere, so there are features in the products 
that should be there for the safety of children, checking the 
medication dose. It is very dangerous--
    Dr.Gingrey. Dr. Leavitt, thank you. I don't mean to 
interrupt you, but my time is limited. But basically, what you 
might suggest, then, I guess to any of the three practicing 
physicians--OB-GYN, family practice, internal medicine--that 
are part of the witness panel is that maybe you ought to call 
Dr. Leavitt's office and find out if the vendor--the particular 
vendor who is in your office trying to sell you a product, are 
they indeed certified? Would you agree with that?
    Dr.Leavitt. Yes, we have published on the web a list of the 
certified products, and we have a communication effort to reach 
physicians everywhere and let them know that that's available.
    Dr.Gingrey. Mr. Chairman, my last question before my time 
expires. In regard to the doctors in private practice--and you 
mentioned as an example it would be great if there were a tax 
credit. Now, let me just suggest to you that part of that 
problem is that we estimate that there are 400,000 physicians 
in this country who actually do not have electronic medical 
records systems, certainly not one that is fully integrated.
    And if you gave a $1,000 credit, and Dr. Kelley was saying 
it was going to cost her and her dad $100,000 for a system, if 
you gave a $1,000 credit to each of those 400,000 physicians, 
you are talking about--I believe that would be about, if my 
math is correct, how many--would that be $40- or $4 billion? 
But what--in any regard, it is a lot of money. And it is not 
likely that we are going to be able to do that with all of the 
priorities we have on the taxpayer's dollars.
    But what I want to let you know in my time remaining is 
that I have an idea, and I think it is a good idea, and it is 
called the Adopt HIT Act, Adopt Health IT Act. And basically 
what it would try to do would be to incentivize these 400,000 
physicians. With the Tax Code, there is a Section 179, which 
now would allow any small businessman or woman, not just 
physicians, to write off $100,000, to take a tax deduction, not 
a credit, in the first year of an expenditure for a capital 
improvement like an electronic medical record.
    And I think this is the way we need to go. We would expand 
that for the purchase of electronic medical records to $250,000 
for, say, doctors in a nine-member group, if that is how much 
they spend. And then, they would also be able to rapidly 
depreciate other assets, capital improvements for their 
practice, also under Section 179.
    So if there is any time permitted, Mr. Chairman, for them 
to respond to that, I would love to know what their opinion is 
on that.
    ChairmanGonzalez. No. Go ahead. Please proceed. You all may 
respond if you have your own thoughts regarding that particular 
proposal. Dr. Shober?
    Dr.Shober. My only thought with that would be, as with Dr. 
Napier here, in a larger group, if you have one corporate 
entity, if that tax credit is based on the single corporation, 
there would need to be some mechanism in there to allow for 
that greater cost. I know you mentioned the $250--
    Dr.Gingrey. There is a mechanism in the bill to do that.
    Dr.Shober. Okay. That way, if you have a larger group or 
there are groups of 30, 40 doctors on a system where it is much 
more expensive than mine, that credit would be able to roll 
through.
    Dr.Napier. And I would echo that an expansion of the 
deductibility of the cost of these systems would certainly be a 
dramatic improvement over what we have now.
    ChairmanGonzalez. Anyone else?
    [No response.]
    Thank very much, Dr. Gingrey.
    Dr.Gingrey. Thank you.
    ChairmanGonzalez. We are going to go into a second round of 
five-minute questioning, because we have that luxury, the few 
members that are remaining. I do have a couple of questions.
    I guess in addressing Dr. Gingrey's proposal, which I would 
be supportive of, I think we just need to be creative and have 
a combination, as already--as has been touched on by Dr. Kirk 
in her presentation this morning, and in her written statement, 
that it should be a combination of assistance in grants, loans, 
taxes, and such.
    The big thing, of course, is going to be Medicare, and the 
proposal there of course is simply that government is going to 
save a lot of money. It is a good investment for government, 
and I am approaching it from that particular standpoint.
    Dr. Kirk, there was a revolution in the legal field when I 
was a lawyer when we went into--we replaced our libraries with 
CD-ROM, we went crazy, the old guys anyway. But I know this, 
that law students that were coming out of law schools and such, 
they were totally proficient on it. I mean, we were the 
dinosaurs.
    But I did learn this, and that is Einstein once said that 
information is not knowledge, so you had a lot of information, 
not necessarily knowledge. But what are the medical schools 
doing? Because this is really important. It is preparing the 
doctors, introducing them into the technology, and advise 
them--and I don't even know if you do that particular aspect in 
the educative process.
    Dr.Kirk. Right. I think we are very good at immersing them 
in the technologies that we have available at our academic 
health centers, which can be very variable. I think as the 
other doctors here mentioned, you remember the day that you 
switch to an EMR. Mine was October of 2004 in my health system 
at the University of Texas Southwestern Medical Center, because 
it is such a change in your life.
    I also practice a significant amount of time at Parkland 
Memorial Hospital, and I must say we are not there yet, because 
Parkland is a public hospital. We are phasing it in, but we 
still--I was just in clinic yesterday with charts ``this'' 
thick. So what our students and residents get exposed to is 
variable, depending on the practice they are in, but we have 
all made a commitment to move in that direction as quickly as 
we can given the resources of the health care systems in which 
we practice.
    It is an integral part or is becoming an integral part of 
teaching how staff--looking at clinical decision-making and 
health information technology. One of the core competencies 
that is now required for all residents training in the United 
States through the Accreditation Council for Graduate Medical 
Education is what we call systems-based care and practice-based 
learning, which seem real gobbledly-gooky.
    But what that means is that we have information at our 
fingertips from the patient, and information from our 
fingertips--at our fingertips, like Dr. Kelley mentioned--
clinical guidelines, evidence-based medicine, and how to 
practice, and we bring those together to make the best 
decisions for the patients.
    So we are very facile at doing that, but we need to move 
more quickly and some of these resources will be helpful there, 
especially for reimbursement for a place like Parkland to be 
able to make that investment.
    ChairmanGonzalez. Thank you, Dr. Kirk.
    And then, a question--Drs. Kelley, Shober, and Napier. You 
all made the decision to go ahead and purchase health 
information technology. I can't help but think that somewhere 
along in that consideration there may have been a discussion 
about maybe additional liability exposure as a result of this 
type of information that you are maintaining.
    First of all, it is a new method, a new manner, you have 
guidelines, you have mandates, you have all sorts of 
requirements on privacy, for instance, but now you have it in 
an entirely different manner or form. That is one 
consideration. The other is just civil liability. Should you 
know a lot more, again, your exposure is out there. You have 
the benefit of the latest technology that would have kept you 
informed regarding the proper care for a patient.
    All of that, the fact that you have a new method that you 
are utilizing, and somehow you have to apply all of the 
mandated governmental standards on privacy, and, in addition, 
the potential, just the potential that there may be greater 
exposure for you on the civil liability end, was there that 
discussion? And, obviously, it wasn't something that kept you 
from actually adopting HIT.
    Dr. Kelley?
    Dr.Kelley. Well, in regards to the privacy issues, we are 
completely--at least in our practice we are dependent on the 
vendor stating that at the time when we implemented it is when 
the HIPAA laws were just coming into regulation, and so that 
was very important, that the vendor was HIPAA-compliant with 
those issues.
    With the issue of patient privacy, one aspect of the system 
that is available that we decided not to was the ability for 
labor and delivery nurses to get into patient's prenatal 
records. And in our practice, we decided not to do that, just 
because--mainly because of patient privacy issues, that it just 
didn't seem secure enough to have whatever nurse was there, 
nurses change at the hospital, being able to get into a 
patient's prenatal record just to print it out.
    So if we need a prenatal record at the hospital, only my 
father and I will print it out. The nurses--we do now allow the 
nurses to have accessibility to the patient's record.
    ChairmanGonzalez. Dr. Shober?
    Dr.Shober. Similar lines. When we initially put our system 
in--granted, we are wireless within the office, so we are 
always worried about wireless connectivity. Drug reps would 
come in, and they tell us they tried to break in and they 
couldn't. They are all wireless. They are connected all over 
the place.
    So we had mainly the vendor, plus another consultant come 
by to make sure this place was fireproof and nobody could get 
in. As far as connectivity to the hospital, very similar to Dr. 
Kelley here, the only people that could access our records are 
myself and my partner. We are apprehensive about a free 
exchange between the ER physician when patient X comes in, or 
can they be given a code to get into my system.
    Granted, we worry about them getting into that patient or 
another patient or that code being lost. I am very much behind 
the development of some type of system whereby that free flow 
could take effect, where myself as the recordholder would not 
be held liable in the sense that Dr. X or the emergency 
department was given access to records on this patient, because 
they are a mutually cared for patient.
    As soon as that patient walks in the ER, he is the patient 
of that doctor. We really need to give that doctor the 
opportunity to get all the information he can, whether it be 
from maybe my office, the X-ray department upstairs, or the lab 
medical records, whatever it may be, or even the next health 
system over where the patient was discharged from yesterday.
    Again, this bears back to the free flow of information, but 
you worry about liability. The hospital itself is apprehensive 
about tying into other systems. Everybody sort of has their own 
little system, whether it be a larger entity, teaching hospital 
system, or a community hospital like the one I work in. You 
have to sit down at your computer, log into one or log into the 
other.
    But, again, if you think about that ER concept, over the 
care and management of the patient, you need to be able to give 
that physician the capability to access the information.
    ChairmanGonzalez. Thank you.
    Dr. Napier?
    Dr.Napier. You raise the question, Chairman Gonzalez, about 
civil liability risk, and that is something that we were very 
concerned about, because, unfortunately, in the earlier EHR 
programs that were available, it looked very dry in terms of 
the interaction that you had with the patient. And not only in 
civil malpractice cases did they look at what you did, but, 
more importantly, why you did that. And that is the thing that 
is often lost in electronic records is the way, the discussion 
of why decisions were made.
    And as I mentioned to you, we should have taken longer in 
our customization. That is exactly the thing that we are 
working continually on is enhancing the ability to integrate 
into our record the reasons behind the decisions that we are 
making in order to justify those.
    ChairmanGonzalez. Thank you very much.
    The chair recognizes the Ranking Member.
    Mr.Westmoreland. Thank you, Mr. Chairman.
    Dr. Kelley, on coding--and I am assuming that when you--if 
you are doing it electronically to get your reimbursements, 
whether it is Medicaid, Medicare--do you do Medicaid and 
Medicare?
    Dr.Kelley. Yes, sir, we do.
    Mr.Westmoreland. Or if it is from Blue Cross Blue Shield or 
United Healthcare, or whoever it is from. Do you see your 
system, or does it work with all of those insurance--with all 
of the reimbursements?
    Dr.Kelley. No, it does not.
    Mr.Westmoreland. Okay.
    Dr.Kelley. And this is an example of evolving technology. 
When we purchased the system three years ago, it basically was 
just an electronic medical record. It didn't integrate into the 
billing system that we have in the office or what you are 
asking to other insurance companies and things.
    So right now, as it stands, it is now--the other aspect of 
it, to be able to even implement the electronic medical record 
we had to change the--purchase a new operating system that we 
use for patient scheduling and billing and all of that, to be 
able to integrate basically the appointments from the 
electronic medical record into the operating system for the 
office.
    But still, that automatic billing process, if you see a 
patient that is coded and you file it with insurance, still, it 
is in place.
    Mr.Westmoreland. Okay. And, Dr. Shober, did you find it 
similar? I mean--
    Dr.Shober. What we had done--our system allowed us to start 
with the scheduling. We actually bought a system, a scheduling/
billing EHR, with open ends to other possibilities. When we 
started to build that, we really have to add patient names. You 
can't work with it until everybody is in it. You have to build 
and add the names, and we started actually, before we used EHR, 
to build patient names and demographics.
    This is a process of an active office where you have to add 
your existing patients to that roster. So from our sense it was 
a process, but it was internal within one system.
    Mr.Westmoreland. Dr. Napier?
    Dr.Napier. Yes, we purchased a system that includes both 
the practice management, which is in scheduling and billing, in 
addition to an EHR, and they are fully integrated with one 
another. Furthermore, old practice management software, we 
purchased an interface that allowed us to simply electronically 
transfer all of the demographics for our patients, so that our 
process was a little easier than it sounds like Dr. Shober's 
was, but that came at additional cost, though, to the practice.
    Mr.Westmoreland. So can you bill Medicaid and Medicare, 
United Healthcare, Blue Cross Blue Shield, TRICARE, you are 
hooked up with them right now and can you get your 
reimbursements?
    Dr.Napier. Every practice utilizes a clearinghouse to 
manage the claims, and so your claims are submitted at the end 
of each business day to a clearinghouse, and those 
clearinghouses then have independent contacts with all of our 
carriers. And so the answer to the question is, yes, it is 
fully connected, so at the end of each business day we simply 
enter in the charges and that goes to the clearinghouse, and it 
is done. and it has dramatically improved our turnaround time 
for reimbursement, I must add that.
    Mr.Westmoreland. Well, that is good. A follow-up to what 
the Chairman asked about the privacy. You know, the HIPAA 
regulations that you have now, I would assume there has got to 
be some concern about these records getting out into cyberspace 
out there and somebody getting hold of all of them.
    But has it affected your practice insurance? Do you get a 
break on it, or is it costing more because you have an IT 
program?
    Dr.Kelley. Actually, our medical malpractice insurer is 
Texas Medical Liability Trust. And when we implemented--after 
implementing the EMR, the malpractice insurance carrier came 
and did a site visit to make sure they had certain standards 
that they wanted in place, and after passing that inspection 
then we did get a discount on our medical malpractice.
    Mr.Westmoreland. Ten percent? Five percent? One percent?
    Dr.Kelley. Oh, probably more like two, maybe two, three 
percent. Less than--anything helps, but it was--
    Mr.Westmoreland. No, I understand.
    Similar situation with you, too?
    Dr.Napier. We did not get any break on our malpractice 
rates, and they are certainly higher now than they were when we 
implemented the system.
    Dr.Shober. Likewise. We had no change. They continue to go 
up by the year.
    Dr.Leavitt. I think there are three or four malpractice 
insurers that are offering discounts of two to five percent. I 
had never heard of a 10 percent discount.
    I have not heard, though, of any that increased their rates 
because of an electronic record. In general, they are 
associated with higher quality care, and less likelihood to 
forget something or lose track of a lab result. So they are 
generally associated with a decrease in liability, but the 
issue of privacy is still really an open question.
    ChairmanGonzalez. I am happy to welcome my colleague again 
from the great State of Pennsylvania, and that is going to be 
Congressman Joe Sestak. And at this time, Congressman, you are 
recognized for five minutes for questioning.
    Mr.Sestak. Thanks, Mr. Chairman. I apologize I wasn't here. 
And if my questions are redundant, please, I will move on to 
the next.
    I had been curious, have there been any cost-benefit 
studies done that are accessible to kind of try to see the 
tradeoffs between large medical providers versus small medical 
providers in terms of going into the IT and electronic health 
records?
    I mean, the reason I am fairly interested in this is I have 
watched what the VA has done and been quite taken with it, 
sitting over there in the hospital and somebody calls in all of 
a sudden and I am sitting there and they are doing some 
checkup, and the doctor goes boom, boom, boom, yes, give her 
this, and then in seconds it is all done. I was quite taken 
with the efficiency.
    But are there cost-benefit analysis studies on this, if 
that hasn't been asked already? Please.
    Dr.Leavitt. I don't know of formal studies, but it is 
generally accepted that the cost-benefit ratio, the return on 
investment is most favorable for the largest organizations.
    Mr.Sestak. Right.
    Dr.Leavitt. And least favorable for the smallest, and I 
will mention a few reasons why. This is why the VA, once it 
computerized, recognized an enormous benefit. The larger the 
organization, the more different places a paper chart can be. 
So there is an overhead cost. You know, one doctor office, 
generally you know where the chart is, generally, although 
there are still five or six places it can be.
    In the VA, the chart could be in thousands of places, so 
you realize a savings on just managing and finding the paper. 
You also realize a savings on things such as transcription. 
Some doctors are able to stop dictating and start clicking or 
typing in a few notes, and that can be quite a savings. Again, 
if it is a small office and it is the front office clerk who 
does the typing, you are not going to fire your front office 
clerk if you are not able to realize that benefit.
    And, of course, the big system amortizes the fixed costs, 
like the server and the technical expert. So it is--the bigger 
the system, the more likely the return. That is why in the 
largest clinics, over 100, more than a third of them now have 
EHR, whereas in the solo offices probably fewer than 10 percent 
have EHR.
    Mr.Sestak. What would one think about, then, as the proper 
incentive to be able to move smaller ones towards this type of 
system which bodes so much I think? What are the right 
incentives to get them? I mean, if you don't have a cost-
benefit analysis study done for the break-even point, so to 
speak--and I gather we don't for smaller ones--I understand the 
general concept, but what is the right incentive, then, to try 
to move--which I think our whole national health care has to 
move. But what is the right incentive financially to move them, 
do you have any ideas on that?
    Dr.Leavitt. Well, of course, that has been the topic of 
discussion here, and I think most of the witnesses have agreed 
multiple mechanisms, whether those be grants, loans, tax 
credits, tax deductions, and incentives, I would personally 
suggest that one of the most powerful is an actual incentive 
payment from Medicare, because anything Medicare does is 
instantly recognized and often flows out to the private sector.
    So even though federal dollars are about half of health 
care, the other half tends to follow the federal lead. So if 
there were a bonus payment in Medicare for seeing a patient and 
using this technology, and eventually there might be a 
decrement for using paper, so that you're revenue neutral, it 
not only is a financial incentive, it sends a signal.
    Mr.Sestak. And one last--I am sorry. Please, Doctor.
    Dr.Kirk. Just to add--and I think you alluded to this--in 
terms of the efficiencies, I think both for large and small 
practices, most of them aren't actually realized by the 
practice or by the physician. For example, if because you have 
access to the information you don't order something that has 
already been done, then that is--the payer saves for that, for 
not paying for that additional blood test.
    And it is very hard for those savings to come back to the 
physician, because that is in a different bucket of money. So I 
think multiple mechanisms, depending on the size of the 
practice and depending on the way that technology is financed, 
is going to be most helpful to move the most people in that 
direction.
    Mr.Sestak. And I gather part of the--for the smaller 
practitioners--last question--is that part of the challenge, 
then, is not just the changeover, but I gather the 
administrative staff and the continuing cost of that?
    Dr.Kelley. Correct. One aspect--one additional cost that we 
now have is having service with a computer technology company. 
I personally don't--I mean, I never was a computer guru, so 
when the computers go down I don't have the knowledge to know 
how to fix it. So you have to have the company that comes in, 
since the--we call him the ``computer dude''--to come in to 
figure out what is going on.
    But it is now an additional expense that we have to have, 
because we have this technology that we didn't have before, and 
we don't really have a way to increase revenue to compensate 
for this cost.
    Mr.Sestak. Thank you. I am sorry to repeat the questions 
that you already had gone over. I just was so--I spent 31 years 
in the military, and then I went to the VA system, and I was 
just so taken by watching the efficiency, and then watching 
what happened with Katrina, that this bodes well for us. And I 
am sorry I wasn't here for the rest of it.
    Thanks, Mr. Chairman.
    ChairmanGonzalez. Well, thank you for your participation.
    And I see that Congressman Altmire is back. We went through 
a second round of questioning, Jason. Is there anything that 
you want to ask at this point?
    Mr.Altmire. No.
    ChairmanGonzalez. All right. The chair is going to 
recognize the Ranking Member.
    Mr.Westmoreland. Thank you, Mr. Chairman, and I just want 
to close with this. Remember that when government gets involved 
in stuff, it tends to screw it up. And so what I would like to 
ask each one of you to do, and especially the doctors, go to 
your organizations, whether it is internal medicine or the OB-
GYN, whatever it is, come up with some solutions and some ways 
that we can help you.
    And I ask Dr. Leavitt the same thing, and Dr. Kirk, with 
your organizations to come up with what we can do to help you. 
When we think we are helping you, sometimes we are not. And so 
you will be better telling us what we can do to help you than--
trust me, than us trying to help you on our own.
    And that is all I had. Thank you.
    ChairmanGonzalez. Thank you very much.
    And, of course, here we go into the philosophical 
differences.
    [Laughter.]
    I think government can be an agent of change for good, and 
if we do it right and if we do it smart. And that is the whole 
purpose of this hearing. But I think that we recognize that 
government is going to have to get involved to some extent, 
whether it is the Tax Code or more aggressively and creatively, 
and just that we do it right.
    But there is no doubt of the advantages that are there to 
be had by the adoption of health information technology. I 
applaud and commend the doctors that are here today, that 
before we had all the incentives in place, because it is going 
to get better, that you took the bold step. I think it makes 
you a better practitioner. I think your patients are the true 
beneficiaries.
    And, again, this is going--unless we have anything further, 
this is going to conclude this hearing. The record will remain 
open for five days. I want to thank all of you for taking the 
time to be here. Continue to give us your suggestions.
    I do believe we have to move forward. Government, in 1965, 
decided it was going to take a huge step in covering the 
medical needs of its population, and we are there today, and we 
are not going to be retreating from that. That is the reality. 
Now, let us just figure out how we are going to do it, and do 
it where the best interests of all citizens are served.
    Again, thank you, and this Committee stands adjourned.
    [Whereupon, at 11:36 a.m., the Subcommittee was adjourned.]

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