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HHS and Labor Dole Out $1 Billion for Health IT Awards

By Jane Norman, CQ HealthBeat Associate Editor

Feb. 12, 2010 -- More than $1 billion awarded under the economic stimulus law and designed to push health information technology into high gear was announced Friday by two Cabinet secretaries.

Health and Human Services Secretary Kathleen Sebelius and Labor Secretary Hilda L. Solis, in a call with reporters, emphasized that the money will flow out across the country and train U.S. workers for jobs in health IT, as the Obama administration continues to stress the link between health care and employment. With the health care overhaul stalled in Congress, it's a way for the administration to continue to push advocacy for change in the system tied to both efficiency and quality of care.

Sebelius and Solis said the aim is to make health IT expertise available to more than 100,000 hospitals and primary care physicians by 2014, and, separately through the Department of Labor, train thousands of people in the skills needed to build careers in health care IT.

Sebelius said the awards will help the health care industry cut costs and reduce paperwork, and assist doctors in delivering high-quality health care. Only about 20 percent of doctors and 10 percent of hospitals currently have even basic electronic health records, she said. "We have some distance to cover," said Sebelius.

Also in on the call were Jared Bernstein, executive director of the "Middle Class Task Force" at the White House and chief economist to the vice president, and David Blumenthal, national coordinator for health information technology.

The $750 million coming from HHS will be divided up, with $386 million going to 40 states and qualified "State Designated Entities" to make electronic information more readily shared securely at the state level through "Health Information Exchanges." Awards will go to entities such as state Medicaid agencies, departments of health and governors' offices. States are frequently large providers of health care services and also regulate local health services.

Such information sharing, though, also raises concerns about patient privacy when records can be accessed across providers and agencies. "I want to make sure everyone understands as we look at health IT, patient privacy is a priority," said Sebelius.

Blumenthal said privacy is a foundation for the success of the health IT effort. Security and privacy protections are required under the law, and firms that allow a breach can be fined up to $1.5 million in a year, he said. A chief privacy officer is expected to be appointed soon at HHS, and the agency is studying new ways of using encryption, a system to block unauthorized access, said Blumenthal.

The second chunk of HHS money, $375 million, will be awarded to 32 nonprofits to support the development of "regional extension centers" to help health care providers. The centers, much like the agricultural extension offices that advise farmers, will offer help to doctors, hospitals and other providers as they adapt to electronic record- keeping. The awards went to organizations such as the Fund for Public Health in New York, Northern Illinois University and the District of Columbia Primary Care Association, and it's expected that overall some 3,000 people will obtain jobs working at the centers.

Health care providers don't have time to research various computer systems and will be assisted by the grant recipients, said Sebelius. "The centers will be a great sort of boots-on-the-ground resource," she said. The aim is to build a national network eventually.

The third pot of money will flow from the Department of Labor. Solis said that $225 million will be used to funnel grants to 55 programs and educational institutions in 30 states that will train workers in the skills they need to obtain employment in health IT. The expectation is that jobless people will be able to land stable, long-term jobs as nurses, pharmacy technicians or information technology specialists, officials said. Some $25 million is reserved for communities affected by auto plant job reductions and layoffs.

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