Debates over the value of federal stimulus spending inevitably focus on job creation. But one effect in northeast Indiana is aimed at making health care more affordable, understandable and safer. More than $4 million in stimulus money helped Lutheran Health Network speed up the health care system’s transition to electronic health records.

The example is a good reminder of the role government can and should play when market forces don’t encourage the best result. The U.S. spends more per capita on health care than other developed countries. It has one of the highest growth rates in spending and realizes poorer outcomes than many.

While other fields have used technology to drive down costs and improve service, the payment model in health care actually serves as a disincentive to converting. It leaves physicians still scrawling orders on paper and patients without easy access to their own medical information.

Dr. Steve Orlow, chief medical information officer for Lutheran Hospital, said the health network was already moving toward implementing the technology because it was the right thing to do. Then federal stimulus money helped cover costs for software and equipment to meet the government’s new “meaningful use” requirements. Lutheran’s own investment was greater than the incentive payment, he said, including a lot of staff time to prepare for the conversion.

The 2009 federal Health Information Technology for Economic Clinic Health Act was paired with stimulus dollars to compel health care providers, including hospitals, to “meaningfully use” an electronic health record system.

In so doing, “providers will reap benefits beyond financial incentives – such as reduction in errors, availability of records and data, reminders and alerts, clinical decision support, and e-prescribing/refill automation,” according to the Centers for Medicare & Medicaid Service.

Carrot and stick

About a third of the nation’s hospitals received stimulus dollars to move toward the 2014 goal. The carrot approach is required because of the built-in disincentive for sharing health information. If a hospital can’t access lab test results performed at a family doctor’s orders, it can order, and charge for, the same test.

There’s a stick involved, too, Orlow notes. Those health care providers who don’t make the conversion by 2015 won’t be eligible for Medicare reimbursements.

Dr. Matt Sprunger, chief medical information officer for Dupont Hospital, said the first-stage goal is converting to electronic health records that capture patient information in a software system certified by the federal government. Information-sharing among providers is the goal. So the software used by all must be compatible, the same way as financial institutions share data.

Parkview Health also is working to meet the new federal requirements, according to spokesman John Perlich.

“We have successfully certified our current environment to meet the requirements of stage one – meaningful use in our hospitals – and are actively engaged in demonstrating our use of these measures in the care of our patients,” he said.

Perlich said the Parkview system also is configuring a data system to use in its physician offices beginning in July and in its hospitals in early 2013 to meet the second-stage goals.

High-tech equipment has brought remarkable progress in improving medical care; the transition to electronic health records for all Americans will complete the industry’s technology transformation and probably lead to even better outcomes. It’s a life-saving role for the federal government and one stimulus dollars have helped bring about.