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33–807 PDF 2007

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

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

HOUSE COMMITTEE ON SMALL BUSINESS

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman

JUANITA MILLENDER-McDONALD, 

California 

WILLIAM JEFFERSON, Louisiana 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

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 GONZA ́ LEZ, Texas, Chairman

WILLIAM JEFFERSON, Louisiana 

RICK LARSEN, Washington 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

LYNN WESTMORELAND, Georgia, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

MARILYN MUSGRAVE, Colorado 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page

Gonza ́lez, 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: 

Gonza ́lez, 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) 

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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 Gonza ́lez 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Gonza ́lez, Jefferson, Altmire, Sestak, 

Westmoreland, and Buchanan. 

Also Present: Representative Gingrey. 

OPENING STATEMENT OF CHAIRMAN GONZA ́ LEZ 

ChairmanGONZA ́LEZ. 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 Vela ́zquez, 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 

2

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 

3

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. 

4

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. 

ChairmanGONZA ́LEZ. Without objection. 

Mr.WESTMORELAND. Thank you. 

ChairmanGONZA ́LEZ. 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 GynVerDate 0ct 09 2002 17:55 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33807.TXT LEANN
5

ecologists, 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. Thank you very much, and we will proceed 

with the testimony and the first witness, Dr. Kirk. 

6

STATEMENT OF LYNNE M. KIRK, M.D., FACP, PRESIDENT, 

AMERICAN COLLEGE OF PHYSICIANS 

Dr.KIRK. Thank you, Chairman Gonza ́lez 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 

7

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 Gonza ́lez, 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 Gonza ́lez 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 Gonza ́lez 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.] 

ChairmanGONZA ́LEZ. 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 Gonza ́lez, 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 

8

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 

9

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.] 

ChairmanGONZA ́LEZ. Thank you, Dr. Leavitt. 

Dr. Kelley? 

STATEMENT OF MARGARET KELLEY, M.D., SOUTHEAST OBGYN ASSOCIATES, ON BEHALF OF THE AMERICAN COLLEGE 

OF OBSTETRICIANS AND GYNECOLOGISTS 

Dr.KELLEY. Chairman Gonza ́lez, 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. 

10

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. 

11

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.] 

ChairmanGONZA ́LEZ. 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 Gonza ́lez, 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 finanVerDate 0ct 09 2002 17:55 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33807.TXT LEANN
12

cial 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 inVerDate 0ct 09 2002 17:55 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33807.TXT LEANN
13

formation 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.] 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. And next witness, Dr. Napier. 

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

GRIFFIN 

Dr.NAPIER. Chairman Gonza ́lez, 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. 

14

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. 

15

[The prepared statement of Dr. Napier may be found in the Appendix on page 73.] 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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 

16

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—

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. I appreciate it. 

My time is up, and at this time I will recognize the Ranking 

Member, Congressman Westmoreland. 

17

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 venVerDate 0ct 09 2002 17:55 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33807.TXT LEANN
18

dor 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. 

ChairmanGONZA ́LEZ. 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. 

19

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. 

20

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. 

ChairmanGONZA ́LEZ. 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 

21

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 conVerDate 0ct 09 2002 17:55 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33807.TXT LEANN
22

tinue 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. 

ChairmanGONZA ́LEZ. 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 

23

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? 

24

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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. Anyone else? 

[No response.] 

Thank very much, Dr. Gingrey. 

Dr.GINGREY. Thank you. 

25

ChairmanGONZA ́LEZ. 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 CDROM, 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, evidencebased 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 

26

for reimbursement for a place like Parkland to be able to make 

that investment. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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 

27

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. 

ChairmanGONZA ́LEZ. Thank you. 

Dr. Napier? 

Dr.NAPIER. You raise the question, Chairman Gonza ́lez, 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. 

ChairmanGONZA ́LEZ. 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. 

28

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. 

29

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. 

ChairmanGONZA ́LEZ. 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 

30

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. 

31

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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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. 

ChairmanGONZA ́LEZ. 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 

32

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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