Stimulus Funds Could Widen Digital Health Divide : Shots - Health News Hospitals that care for the poor may have trouble getting their share of federal stimulus money to support electronic medical records.
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Stimulus Funds Could Widen Digital Health Divide

Federal stimulus spending meant to bolster the uptake of electronic medical records could wind up shortchanging hospitals that treat more poor patients, deepening a "digital divide" between the rich and the impoverished.

Plugging into stimulus funds may be tricky for hospitals serving the poor. iStockphoto.com hide caption

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Plugging into stimulus funds may be tricky for hospitals serving the poor.

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At issue is whether cash-strapped state governments will ante up their share of the money, says a study just published online by the journal Health Affairs. As part of the stimulus package, $30-billion-plus in money for improvements to health IT is available from Washington, but states have to shell out for overhead costs in order for hospitals with lower-income patients to get their piece of the pie.

Hospitals with wealthier patients aren't likely to have funding problems because they'll get plenty of bonus money from the federal Medicare program to cover overhead. Poorer hospitals, though, tend to have fewer Medicare patients, and their stimulus money will be tacked on to payments from the state-run Medicaid programs, which cover the poor. States would have to pay 10 percent of the administrative costs of distributing the stimulus money.

While the overhead fee may seem minor at first glance, some states are already trimming Medicaid or contemplating cuts as budget deficits balloon. For instance, Michigan's program pulled coverage for routine eye exams this summer, and the program faces further cuts. Beginning in December, Iowa's Medicaid program will lop off $15.5 million in spending.

What would it mean for patients if states are unable or unwilling to participate? Dr. Ashish Jha, a Harvard School of Public Health professor and author of the study told us the IT money could make a big difference. Hospitals that treat poorer patients tend to provide lower-quality care. But, his study found that the quality gap closes when poor hospitals boot up electronic records system. For now, few hospitals -- rich or poor -- have begun using the records, but predictably, richer hospitals are ahead in the race.

The study concludes that electronic records "may be helpful in reducing the disparities in care between... hospitals. While the Obama administration and Congress seek to craft effective policies to stimulate the adoption and use of health IT, it will be critical to ensure that institutions that care for the most vulnerable Americans are not left behind."

A spokesman for the Centers for Medicare and Medicaid Services, which runs the Medicare and Medicaid programs at the federal level and is in charge of implementing the stimulus' e-health initiative called the issue "a new wrinkle," but said officials weren't prepared to comment.

Jha's comment to us: "Unless we make sure that we track this issue very closely, five years from now, you and I are going to be having a conversation where the gaps are huge."

Weaver is a reporter for Kaiser Health News, a nonprofit news service.