Congressman Gingrey Testifies on Electronic Medical Records

[Admin]

Washington, Apr 6 -

U.S. Congressman Phil Gingrey, M.D. today testified before the House Committee on Small Business, Subcommittee on Regulatory Reform and Oversight. Gingrey discussed H.R. 4641, the ADOPT HIT Act, legislation he introduced to encourage the adoption of Health Information Technology by increasing tax breaks for physicians who invest in new technology. The hearing was titled: Can Small Healthcare Groups Feasibly Adopt Electronic Medical Records Technology?


H.R. 4641, the ADOPT HIT Act, includes provision to:

Amend the Internal Revenue Code to increase the deduction allowed for the purchase of qualified health care information technology by health care professionals.
More than double the first year deduction of rapid depreciation for qualified Health IT equipment from $100,000 to $250,000.
Increase maximum purchase costs for qualifying equipment from $400,000 to $600,000 in any given year, allowing physicians to include other medical equipment purchases in the same year they purchase Health IT systems.

Congressman Gingrey’s remarks follow:


Testimony of U.S. Congressman Phil Gingrey, M.D.

on H.R. 4641, the ADOPT HIT Act

Small Business Subcommittee on Regulatory Reform and Oversight

April 6, 2006

Chairman Akin, Ranking Member Bordallo, and Members of the Regulatory Reform and Oversight Subcommittee, on behalf of the citizens of Georgia’s Eleventh Congressional District, thank you for allowing me the opportunity to testify before you today. I want to take this time to discuss with you what I have discovered as I have researched and investigated economic viability of healthcare information technology.


Every day we read in the headlines about the rising cost of health care and what it means to every American in this country. More and more businesses are no longer able to afford health care benefits for their employees, too many Americans are uninsured, health care premiums continue to rise each year and the neediest of our nation are not given the access to the quality care they deserve.


There are many ways to tackle the problem of skyrocketing health care costs, but today I am here to focus on healthcare information technology. Why does Congress need to be invested in the adoption of health care information technology? In September of 2005 RAND released a study that showed how a health information technology system that is implemented correctly and widely adopted could save the American health care system more than $162 billion annually. Since we all know the tremendous stress our healthcare system is currently operating under, these savings alone are a very compelling justification for congressional involvement. However, it was not until I went out into my district, met with physicians and representatives from the health IT industry that I realized the answer to the question of congressional action.


The key to the report and my personal research centers around the concept of “widely adopted” and this is why we are gathered today. What role can and should the government play in ensuring healthcare information technology is “widely adopted.” There a variety of thoughts, opinions and pieces of legislation centered around this question. The RAND study simply states that in order to take full advantage of this potential savings we need incentives for physicians to buy quality systems. So the question becomes not only what would be the most effective way to incentivize physicians, but what is the most fiscally-responsible way to incentivize physicians.


As a physician Member of Congress, I was anxious to go visit doctors’ offices that were utilizing health information technology to see what differences it makes out in the real world. I stopped practicing medicine just three short years ago, and I remember vividly the overwhelming burden of administrative paperwork. It robbed physicians of time with their patients, taking away from them the reason they had decided to go to medical school. What I saw put into practice was amazing to me.


I visited a three doctor OB/GYN practice in Carrollton, GA, which purchased their electronic health record system in 2002. I was able to watch Dr. Martin as he demonstrated the established routine he follows during a patient visit utilizing his computer tablet. He stated that their vendor company worked hard to ensure the process flowed to his liking and the words and phrases that he used most frequently were utilized in the chart template. It was amazing to me how efficient it was to document a patient’s chart, pull up any necessary tests or images; all at the point of care, when it was needed. After my time with Dr. Martin in Carrollton, I realized how revolutionary health IT was to the healthcare world. It transforms how physicians do business on a daily basis by streamlining the process, giving them the tools and the information they need when they need it. It even left me thinking if my political career doesn’t work out, how I would want to jump back into medicine with both feet.


My discussions with these physicians, their office managers and representatives from vendor companies, left me astounded by the recurring theme of satisfaction. The physicians I spoke with are enjoying a higher quality of life, more efficiency in follow up with their patients and the flexibility to complete charts and take “call” from the comfort of their home. The office managers spoke emphatically about the almost immediate increased revenue from automating their coding and billing process. Not only did they receive payment from insurance companies quicker; and they received more accurate payments.


An increase in revenue to a physician’s bottom line is one of the biggest wins in purchasing an electronic health record system. The system not only automatically codes the patients’ visits but correctly codes the visits to ensure the physician is reimbursed accurately for the services rendered. In medical school, physicians learn quickly that it is easier to “down” code a visit than submit a claim that is rejected by an insurance company which requires your office to resubmit the claim; wasting staff time and taking money away from the practice.


There are perceptions in the health care system and the federal government that there are numerous hurdles preventing physicians from practically incorporating health IT into their offices. These concerns range from the time and energy required of physicians to learn a new system, a potentially unsustainable decrease in productivity and the natural apprehension that comes with any large financial investment.


However, I want to present an example of what one practice saw as a return on investment in their first year of purchasing a complete health IT system. I would like to submit for the record an example administered by Microsoft Windows Server System. They performed a customer solution case study on an OB/GYN practice in New York that sees about 200 patients a day. For this practice, implementing an integrated electronic health record system has cut down on the administrative work required of each doctor by one hour every day, it has allowed them to see an additional 25 patients each week and has given them a first year return on investment of $407,000.


It is for this particular reason that I believe the best thing Congress can do is to create incentives for physicians to incorporate health information technology into their practices and then get out of the way. This is why I introduced H.R. 4641, the ADOPT Health IT Act, which creates just such incentives by increasing the deductions offered under section 179 of the tax code for health care providers that purchase an EHR system. I have heard from physicians and industry alike that section 179 is the strongest element of their decision to move into the world of health IT; but it is not extended far enough to be as useful as possible. Under current tax code, small businesses can deduct around $100,000 of the cost of qualified business expenses that are placed into service that tax year. My legislation increases this maximum deduction to $250,000; therefore, creating a more realistic incentive to spur adoption amongst physician practices of all sizes.


Currently small businesses have a maximum threshold of $400,000 for qualified equipment purchases in any given year. My legislation would increase that to $600,000, again narrowly defined to include only those health care professionals that purchase an EHR system.


The logic behind this idea is that physicians, like all small business owners, look at what the tax code can offer them as they consider purchasing equipment for their business.


H.R. 4641 allows Section 179 of the tax code to better represent the actual cost of an EHR system. For example, the cost of a system for an average practice that includes between 4-6 physicians can be as much as $200,000. This then restricts what other medical equipment that office can purchase that year. By appealing to a physician's business instinct and allowing the tax code to provide incentives, we can create a much more effective way of getting health care information technology into every physician's office around the country. These incentives will work far better than simply dumping federal grants into the health care system.


In closing, I again want to express my gratitude for this opportunity and respectfully ask for your consideration of the initiative I laid out today. Mr. Chairman, I am prepared to respond to any questions or comments you or other members may have on this legislative proposal.