Proposal: Tax health insurers to pay for EHRs and RHIOs

December 28, 2007

When hospitals and doctors implement electronic health records, it's said, the return on investment accrues mostly to health insurers. So why not make these insurers help pay for the technology?

When hospitals and doctors implement electronic health records, it's said, the return on investment accrues mostly to health insurers. So why not make these insurers help pay for the technology?

The proposal to soak the rich insurers, as it were, comes from a healthcare think tank called the Commonwealth Fund. In a recent report titled "Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending,"

the organization suggests that the federal government could create a healthcare IT war chest by levying a 1-percent tax on premiums paid to health insurers. The feds could up the ante by dedicating the equivalent of 1 percent of Medicare outlays to promote this technology as well, according to the proposal.

The money, to be divided between the states and the health IT office of HHS, would be doled out to struggling regional health information organizations as well as small practices in the market for new computer systems. Of course, such assistance would only be fair. After all, the Commonwealth Fund recommended in November that all doctors should be required to use EHRs and participate in RHIOs within five years.

The group's most recent report acknowledges that insurers—not providers—stand the most to gain economically whenever healthcare IT is implemented. They would eventually recoup what they pay out in IT taxes—and then some—as computerization reduces medical errors, streamlines testing and drug utilization, improves care coordination, and yields better health outcomes.

The report notes that government funding of RHIOs is desirable because "free market mechanisms" are unlikely to promote their growth. Such networks, it states, represent a public good "and therefore have difficulty identifying a business case for their operation without external support."

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