NORTH CAROLINA

N.C. pursues $100M for electronic records From [Triangle Business Journal - by Leo John]

North Carolina’s three-pronged fundraising effort includes a proposal to access up to $40 million to build a statewide IT network, called a Health Information Exchange; another effort to garner $20 million to $30 million to hire 40 to 45 employees at nine regional support centers; and a third effort to access $28.1 million in stimulus dollars for the broadband backbone necessary to zip medical images from one provider to another.

By placing medical records online and connecting physicians and hospitals in a vast secure network, policymakers hope to reduce duplicated tests and medical errors and improve the quality of health care by providing more medical information to physicians.

“This is going to be very important for North Carolina,” says Holt Anderson, executive director of the North Carolina Healthcare Information & Communications Alliance. “The evidence is quite clear that we do not run a high quality health care system – not for a lack of good quality professionals but because of the complexity of health care. Information is not flowing today; it’s mostly on paper and it’s mostly unavailable.”

HEALTH INFORMATION EXCHANGE

Through a July executive order, Gov. Beverly Perdue charged the North Carolina Health & Wellness Trust Fund with leading the state’s proposal for a health information exchange.

Vandana Shah, executive director of the Health & Wellness Trust Fund, says a 12-member group of industry executives under the Health Information Technology Collaborative is also advising the effort.

States can seek between $4 million and $40 million for the four-year project to establish an exchange, and North Carolina plans to pursue the most available. “We’re going to apply closer to the maximum,” says Shah.

State proposals will be rated, among other factors, on their “sustainability” – the ability to pay for ongoing operations – and their “governance” – appropriate levels of access for insurance firms, patients and providers.

While North Carolina’s network is planned to be part of an interoperable national system, states have been given leeway in creating each system independently. “So far, it wasn’t clear who was going to lead the effort,” says Shah. “With (the American Recovery and Reinvestment Act), Obama has clearly put the monkey on the states’ backs.”

FINDING SAVINGS

Some state matching funds will have to be deployed toward the effort, and maintenance of the system is likely to create new costs. Still, without specifying amounts, proponents say an electronic system, once it is embraced by enough health-care providers, can weed out many existing inefficiencies.

“This is a down payment on an important change,” says Steve Cline, deputy state health director, who authored a 70-page report outlining the goals of such a network. “I am cautious about predicting savings, but there are certainly a lot of inefficiencies that result in cost-ineffective treatments,”

Cline says that starting in 2011, physicians and hospitals will begin to receive supplemental money from Medicare and Medicaid if they install and share electronic medical records. He says the incentives could amount to about $40,000 per physician over four years.

To assist physician practices with installing and sharing electronic records, North Carolina is pursuing $20 million to $30 million to establish nine “regional extension centers.”

Tom Bacon, director of the North Carolina Area Health Education Centers program at UNC School of Medicine, says the funds would go toward hiring 40 to 45 employees to staff the centers, which would assist the state’s 10,000 or so physicians spread across 1,800 practices.

“Physician practices, mostly in rural parts of the state, don’t have the resources to install electronic medical records technology,” says Bacon, whose organization is leading the submission for the extension centers.

The funds would be used “to place consultants out in the field who can provide technical assistance to physician practices in assisting them in selecting, adopting and purchasing electronic health records,” he says.

By hiring workers statewide, the effort also would fulfill the stimulus legislation’s main goal: to create new jobs.

NETWORK BACKBONE

Unlike funds for the exchange and regional centers, expected to come from the U.S. Department of Health and Human Services, the broadband network would be funded by $7.2 billion in stimulus money allocated for broadband projects to the federal Commerce and Agriculture departments.

Joe Fredosso, CEO of MCNC, a nonprofit that operates the University of North Carolina System’s high-speed Internet network, says the organization has submitted a proposal to obtain $28.1 million from the federal government in what he described as a public-private partnership.

“We are the infrastructure piece (of the health-care proposal),” says Fredosso. “We’re the piece of the stimulus application that is foundational. It’s the piece that people actually take for granted.”

Despite growth in the availability of broadband statewide, Fredosso says several rural areas are underserved. Even in urban areas, the infrastructure cannot support projects such as remote diagnosis through high-definition video conferencing that demands large amounts of bandwidth.

Fredosso says the federal government was deluged by applications for grants, and there is no guarantee MCNC will get the money. Even so, he predicts the state will find a way to pay for the infrastructure. “We will have to find money,” he says.