Sushil Panta

Healthcare Providers: Getting the Most Out of ARRA Funding

Providers that start early stand to benefit more, not only in terms of reducing costs, improving care and enhancing competitive advantage, but also in terms of receiving a greater share of the stimulus funding.

by Sushil Panta, September 2010

As part of the American Relief and Recovery Act of 2009 (ARRA), the U.S. government has appropriated US$19 billion for health information technology (HIT) investments. The objective of this funding is to help transform the currently inefficient, error-prone, and disconnected health information system into a secure, efficient network that improves patient care and lowers overall delivery cost. The premise of this vision is simple: Timely access to secure, relevant health information improves decision-making and reduces waste.

To ensure that the above stimulus dollars actually improve the quality of care provided — and do not just simply digitize existing health records — the act requires that potential recipients of HIT funding demonstrate “meaningful use” of the pertinent electronic health records (EHR) technologies. Examples of meaningful use would entail improved medical records sharing (e.g., a new provider can view patient records across all past providers, thus eliminating duplicative tests), optimized medication management (e.g., caregivers can tailor, or even eliminate, certain medications based on patient’s overall health/medication history), and enhanced care coordination (e.g., patient and family members can receive all critical care information at the time of discharge or later over the Internet).

By committing US$19 billion, the U.S. government has shown a strong commitment to the use of IT in modernizing the currently outdated healthcare system. By outlining meaningful use guidelines, it has made it clear that providers must improve care and clinical outcomes. Finally, by making this funding a part of the stimulus plan, it has signaled its belief that the appropriation will create certain economic benefits — particularly, reducing system-wide healthcare expenditure.

With U.S. annual per-capita healthcare costs highest among all developed nations (around $8,000 in 2008) and total costs rising faster than GDP (6.2 percent cost inflation versus 4.1 percent GDP growth forecasted for 2008-2018), it is a foregone conclusion that the U.S. healthcare industry needs to find innovative ways to reduce costs while improving health care. Moreover, as a result of the historic passage of the U.S. healthcare reform bill in early 2010, experts believe that providers will soon start seeing reduced payments (e.g., in Medicare) and new fees. One CNN report, based on preliminary analysis from the Congressional Budget Office (CBO), estimates that the reform bill will save the U.S. government $500 billion by reducing payments to providers, and generate new revenues of $438 billion, including over $100 billion in new fees on the healthcare industry. Given these cost pressures on the one hand, and the unprecedented government incentives to adopt HIT on the other, the time for action is now.

It is also noteworthy that providers that start early stand to benefit more, not only in terms of reducing costs, improving care and enhancing competitive advantage, but also in terms of receiving a greater share of the stimulus funding. This is because the government assesses meaningful use in three stages: in stage 1, the criteria focus on capturing/sharing data; in stage 2, the focus shifts to advanced care processes and decision support; and in stage 3, the assessment converges on improved outcomes. Needless to say, the earlier one begins this transformation, the sooner one can expect to reach the government milestones and start receiving HIT funding.

In keeping with the government’s timetable, which calls for the completion of stage 1 by 2011, stage 2 by 2013, and stage 3 by 2015, providers might wish to develop a five-year strategic roadmap that would help them invest in phases and start achieving some benefits as early as 2010. Such a stage-gate approach would further enable the business and IT functions to agree on specific priorities for the short, medium, and long terms, while ensuring progress toward the ultimate vision of IT-enabled secure, efficient healthcare. As with any significant transformation, the end solution is not IT adoption, but rather the empowerment of healthcare stakeholders that leads to better clinical outcomes at lower costs. But as with most other business transformations, IT, when coupled with the right strategy, culture and processes, can both enhance and accelerate the benefit realization.

Oracle offers a range of products and solutions that can help healthcare providers achieve meaningful use of their electronic health records (EHR) initiatives and start qualifying for the ARRA funding. While the relevant solutions may vary depending on the specific challenges and maturity level of a given provider, Oracle solutions generally enable five broad sets of capabilities:

1. Health Records Management
2. Exchange of Information (within and across Health Information Exchanges)
3. Collaboration between Healthcare Stakeholders
4. Analysis of Health Information
5. Security of Health Records

By providing a complete, open and integrated solution set, Oracle not only enables such EHR transformations, it also accelerates them, while improving the returns on investment. To learn further how Oracle can help, please contact the Oracle Insight team at


Sushil Panta is a Senior Director of Industry Strategy and Insight at Oracle and leads the Global Practice Team focused on Enterprise Collaboration, Web 2.0 and Knowledge Management. He can be reached at