We're From the Government and We're Here to Help

Alan Dove, PhD
Published: Friday, Feb 27, 2009
The AHRQ Health IT Resource Center

Financial help for physicians who are willing to implement, test, and help optimize health IT systems.

If economics is the dismal science, Health economics is its most dismal branch. Hardly anything in medicine is priced rationally, inefficiencies abound, and cost-effective solutions are rare. Consider health IT, the sales pitch for which sounds irresistible: it promises to slash prescription costs, reduce errors, and streamline the entire healthcare system. Even better, recent studies have shown that some of those claims are actually true. How can doctors continue to reject such a compelling business argument? Easily. The costs of health IT systems fall almost entirely on physicians and hospitals, but most of the benefits flow to insurers, patients, and the public. Worse, health IT is still in its infancy, so early adopters must invest considerable time and money just to figure out which systems work best. Doctors simply can’t afford to do the right thing. An economist would diagnose this as a “positive consumption externality,” and prescribe a government subsidy to treat it.



In 2004, Congress earmarked money to do just that, through the Agency for Healthcare Research and Quality (AHRQ). “What they realized was there are a number of activities or research areas that sort of cut across the standard organizational structure of the agency, centers, and offices, and health IT is certainly one of those,” says Bob Mayes, senior advisor to AHRQ’s Center for Primary Care, Prevention and Clinical Partnerships.

Harder than it looks

As a research organization, AHRQ focuses on funding studies to test and optimize health IT systems, but it can also help clinics and hospitals make the initial purchase. Indeed, the first round of grants was aimed at getting the technology into small, rural hospitals. “There had been some successful examples of electronic medical records and other uses of health IT to improve safety and quality, but historically they had been really confined to larger institutions, big academic medical centers, or other large integrated delivery systems, such as the VA or Kaiser,” says Mayes. “The question really was ‘Why hasn’t it trickled down into smaller facilities?’”

Although money is certainly part of the problem, AHRQ’s research has revealed more insidious difficulties as well. For example, newcomers to e-prescribing often view it as a simple series of data transactions; the reality is far more complex. A physician must write the correct prescription, and a pharmacy with an entirely different system must fill it, raising numerous compatibility and implementation problems. After those hurdles, the e-prescription faces an even tougher challenge. “The most important piece of the whole thing is did the patient actually take the medication?” says Mayes, adding that “We’ll continue to look at e-prescribing, but we also are looking more at how we move into the whole area of adherence.”

To address such multifaceted problems, AHRQ funds a wide range of health IT grants, from $100,000 to $1.2 million, enabling everything from small-scale, proof-of-concept studies to large, demonstration projects. With a total annual budget around $45 million, the agency must turn down many applicants, but Mayes says they take pains to make the process straightforward.

“One of the things we’re trying to do is get involvement with a broader cross-section of the health sector,” says Mayes. “Ultimately, if we put out findings, we need to have people go on the website and look at the kinds of things that research has been done on and say ‘oh, yeah, that’s me, that’s my practice.’”

Those efforts seem to be paying off. “The AHRQ folks were very easy to work with,” says Rick Breuer, MD, an attending physician at Community Memorial Hospital in Cloquet, MN, and the lead investigator on a recent AHRQ health IT project. “Going after a Federal grant was kind of scary for us because we weren’t sure how much of a jumble of paperwork and regulations we might have to meander through, but it was really a very good process.”

The pharmacist is always in

The Minnesota team used its AHRQ grant to see whether small, rural hospitals would benefit from using a networked e-prescribing system. The project connected small facilities across the state with a 24-hour pharmacy at St. Luke’s hospital in Duluth. “That’s really what the purpose of this whole project was: to give everybody access to that 24-hour pharmacy coverage,” says Breuer.


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