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An Unprecedented Opportunity: Using Federal Stimulus Funds to Advance Health IT in California

California HealthCare Foundation, Manatt Health Solutions, and Robert Mittman

This issue brief examines how California can maximize the impact of the billions of dollars in federal funds made available by the 2009 economic stimulus bill, which offers unprecedented opportunities to speed health IT adoption in the state.

Unlike most other industries that have implemented information technology advances, health care has retained many of the characteristics of a cottage industry. Despite decades of attempted automation, health care practice remains largely unchanged, fragmented, and only intermittently automated. But the federal stimulus bill signed by President Obama in February 2009 offers unprecedented opportunities to increase health information technology (health IT) adoption among California providers, and to facilitate the secure exchange of patient health information, according to an issue brief published by the California HealthCare Foundation (CHCF).

Based on an analysis of provisions of the stimulus legislation, the issue brief calls on the state to take specific steps to assist physicians, hospitals, community health centers, and others to qualify for federal incentive payments to adopt and implement electronic health records, and to be competitive as various new federal grant programs become available.

The Health Information Technology for Economic and Clinical Health (HITECH) Act, a component of the American Recovery and Reinvestment Act of 2009 (ARRA), provides some $36 billion over six years for health information exchange infrastructure and incentive payments to physician practices adopting electronic health records (EHRs), chronic disease management systems, and other technologies. In California, the funding could add up to more than $3 billion.

CHCF has made specific recommendations to Governor Schwarzenegger and the California Legislature regarding each of the HITECH programs:

  • Health information exchange planning and implementation grants
  • Medicare and Medi-Cal EHR incentive payments
  • EHR loan fund
  • Health IT regional extension centers
  • Workforce training
  • New technology research and development

The full text of the issue brief is available under Document Downloads. A related brief on ARRA's impact on the expansion of telehealth and broadband is available on the Center for Connected Health Policy's website through the External Link below.