Studies published by the Institute of Medicine and others have indicated that fragmented, disorganized, and inaccessible clinical information adversely affects the quality of health care and compromises patient safety. In addition, long-standing problems with medical errors and inefficiencies increase costs for health care delivery in the United States. With health care spending in 2006 reaching almost $2.1 trillion, or 16 percent of the gross domestic product, concerns about the costs of health care continue, and many policy makers, industry experts, and medical practitioners contend that the U.S. health care system is in a crisis. Health IT offers promise for improving patient safety and reducing inefficiencies. The expanded use of health IT has great potential to improve the quality of care, bolster the preparedness of our public health infrastructure, and save money on administrative costs. For example, as we reported in 2003, a 1,951-bed teaching hospital reported that it had realized about $8.6 million in annual savings by replacing outpatient paper medical charts with electronic medical records. This hospital also reported saving more than $2.8 million annually by replacing its manual process for managing medical records with an electronic process to provide access to laboratory results and reports. Technologies such as electronic health records and bar coding of certain human drug and biological product labels have been shown to save money and reduce medical errors. Health care organizations also reported that IT contributed other benefits, such as shorter hospital stays, faster communication of test results, improved management of chronic diseases, and improved accuracy in capturing charges associated with diagnostic and procedure codes. However, according to HHS, only a small number of U.S. health care providers have fully adopted health IT due to significant financial, technical, cultural, and legal barriers, such as a lack of access to capital, a lack of data standards, and resistance from health care providers. According to the Institute of Medicine, the federal government, as a regulator, purchaser, health care provider, and sponsor of research, education, and training, has a central role in shaping nearly all aspects of the health care industry. According to the Centers for Medicare and Medicaid Services, several federal health care programs, such as Medicare and Medicaid, spent almost $450 billion on health services in 2006, accounting for 23 percent of the nation’s health care expenditures that year. Given the level of the federal government’s participation in providing health care, it has been urged to take a leadership role in driving change to improve the quality and effectiveness of medical care in the United States, including an expanded adoption of IT. In an effort to leverage the federal government’s role in health care, the President called for the Secretary of Health and Human Services to appoint a National Coordinator for Health Information Technology. The Secretary appointed the first National Coordinator in May 2004. Two months later, HHS released a framework document as the first step toward the development of a national strategy; the framework described goals for achieving nationwide interoperability of health IT and actions to be taken by both the public and private sectors to implement a strategy for reaching these goals. In 2005, the Secretary formed the American Health Information Community, a federally chartered commission, to advise the department on achieving its goals in this area: in particular, developing interoperable health information exchange through a future Nationwide Health Information Network and providing most Americans with access to secure electronic health records by 2014. The community is made up of representatives from both the public and private health care sectors. In 2005, it identified components of health care that could potentially achieve measurable results in two to three years, including electronic health records. The community makes recommendations to the Secretary for advancing interoperability in these areas, along with recommendations directed toward the identification of health IT standards, the advancement of nationwide health information exchange, the protection of personal health information, and other related issues. Additionally, in furtherance of the federal government’s initiative to achieve expanded health IT adoption, in August 2006 President Bush issued an executive order calling for federal health care programs and their providers, plans, and insurers to use IT interoperability standards recognized by HHS. From its establishment in 2004 through 2008, the Office of the National Coordinator has received about $200 million in funding to support new efforts to ensure the adoption of health IT nationwide through the development of data standards and the implementation of projects on priority areas identified by the American Health Information Community. For the first 2 years of its operation (fiscal years 2004 and 2005), funding was provided from departmental discretionary funds allocated by the Secretary of Health and Human Services, and in fiscal year 2005 the office received $20 million. In fiscal year 2006, the department began submitting budget requests for the office. Table 1 shows the department’s requested and actual budget for the office for fiscal years 2006 through 2008 and the amount requested for fiscal year 2009. HHS’s overall departmental budget request for health IT for fiscal year 2009 is almost $115 million for various new and continuing initiatives within multiple HHS divisions. Besides the $66 million for the initiatives of the Office of the National Coordinator, this amount includes ● $3.8 million to fund the second year of a project at the Centers for Medicare and Medicaid Services that provides financial incentives to physician practices to adopt certified electronic health record systems, and ● $45 million for the Agency for Healthcare Research and Quality to fund health IT investments aimed at enhancing patient safety. The budget request also supports the continuation of an electronic health record system for all direct health care sites of the Indian Health Service. Since the Office of the National Coordinator has been funded, congressional interest in the expansion of health IT has increased. According to the Healthcare Information Management Systems Society, 41 pieces of legislation related to health IT were introduced by the 109th Congress, and, so far, the 110th Congress has introduced about 12 bills, reports, and resolutions; subjects addressed include grants and financial assistance to help support the implementation of health IT, provisions for incentives to health care providers for IT implementation, standards for exchanging health information, and protection of privacy and security of electronic health information. Additionally, in his 2008 State of the Union address, President Bush called for the 110th Congress to expand the use of health IT. Since 2005, we have reported and testified on HHS’s efforts to define a national strategy for achieving widespread implementation of health IT, including an approach for ensuring the protection of electronic personal health information. We reported that through the Office of the National Coordinator for Health IT, HHS has taken a number of actions to promote the acceleration of the use of IT in the health care industry. For example, in late 2005 the National Coordinator’s Office awarded several contracts to address a range of activities important for expanding the implementation of health IT; these activities include ● defining criteria and a process for certifying the interoperability of electronic health records to help increase the number of health care providers adopting electronic health records, ● defining health information standards needed to ensure the interoperability of electronic health records and health IT systems, ● defining requirements for exchanging health information throughout a nationwide health information network, and ● defining privacy and security policies to ensure the protection of electronic personal health information. In our previous work, we reported that although HHS had made progress in these areas, it still lacked an overall implementation strategy, including the detailed plans, milestones, and performance measures needed to ensure that the outcomes of its efforts are integrated and that the President’s goals for the implementation of nationwide health IT are met. In May 2005, we recommended that HHS establish detailed plans and milestones for the development of a national health IT strategy and take steps to ensure that its plans are followed and milestones are met. We reiterated this recommendation in March 2006 and again in September 2006. We have also reported on HHS’s efforts to ensure the privacy of personal health information exchanged within health information exchange networks. According to our work, although HHS had initiated several activities to help ensure the protection of health information, it had not defined an overall approach for health information privacy or an implementation strategy that included key elements such as timelines and milestones for completing its privacy-related initiatives. We recommended that HHS define and implement an overall privacy approach that identifies milestones for integrating the outcomes of its initiatives, ensures that key privacy principles are fully addressed, and addresses challenges associated with the nationwide exchange of health information. HHS and the Office of the National Coordinator have been pursuing various efforts to implement health IT solutions. Among other activities, the department has been relying on recommendations of the American Health Information Community to assist the office’s health IT initiatives in several key areas aimed at the expansion of electronic health records, identification of health IT standards, advancement of nationwide health information exchange, protection of personal health information, and other related issues. In this regard, HHS and the Office of the National Coordinator have taken actions in the areas of electronic health records, standardization, networking and information exchange, and health information privacy and security: Electronic health records. To help expand the implementation of electronic health records, among other actions, HHS issued a contract for the Compliance Certification Process for Health IT. This contract, awarded to the Certification Commission for Health IT, is to define criteria and a certification process to ensure that various electronic health records products can be exchanged among different systems in health information exchange networks. In May 2006, HHS finalized a process and criteria for certifying the interoperability of outpatient electronic health records and described criteria for future certification requirements. Certification criteria for inpatient electronic health records were finalized in June 2007. To date, the Certification Commission has certified about 100 products offering electronic health records. The results of this effort are intended to help encourage health care providers to implement electronic health records by providing assurance that they will be able to use electronic records effectively and exchange them with other health IT systems. Standardization.