	Introduction

The Institute of Medicine (IOM), the National Committee on Vital and Health Statistics(NCVHS), and other expert panels have identified information technology (IT) as one of the mostpowerful tools for reducing medical errors, lowering health costs, and improving the quality ofcare. There are significant financial, legal, andtechnical obstacles to the adoption of health IT systems. Congress and the Administration have already taken a number of important steps to promotehealth IT. The 2003 Medicare Modernization Act instructed the HHS Secretary to adopt electronicprescription standards and establish a Commission for Systemic Interoperability. The Commissionis charged with developing a comprehensive strategy for implementing data and messaging standardsto support the electronic exchange of clinical data. On April 27, 2004, President Bush called for thewidespread adoption of interoperable electronic health records (EHRs) within 10 years andestablished the Office of the National Coordinator for Health Information Technology (ONCHIT). ONCHIT has developed a strategic 10-year plan outlining steps to transform the delivery of healthcare by adopting EHRs and developing a National Health Information Infrastructure (NHII) to linksuch records nationwide. They include: providing grants to stimulate EHRs and regionalinformation exchange systems; offering low-rate loans and loan guarantees for EHR adoption;amending federal rules (e.g., Medicare physician self-referral law) that may unintentionally impedethe development of electronic connectivity among health care providers; and using Medicarereimbursement to reward EHR use. Lawmakers in the 109th Congress are likely to consider legislation to boost federal investmentand leadership in health IT and provide incentives both for EHR adoption and for the creation ofregional health information networks, which are seen as a critical step towards the goal ofinterconnecting the health care system nationwide. Congress laid the groundwork for establishingan NHII when it enacted the 1996 Health Insurance Portability and Accountability Act (HIPAA). HIPAA instructed the HHS Secretary to develop privacy standards to give patients more control overthe use of their medical information, and security standards to safeguard electronic patientinformation against unauthorized access, use, or disclosure. (3) 

	Barriers to the Adoption of Health IT

The U.S. health care industry, which represents about 15% of GDP, lags far behind othersectors of the economy in its investment in IT, despite growing evidence that electronic informationsystems can play a critical role in addressing many of the challenges the industry faces. The framework identifies several potential policy options for providing incentives for EHRadoption. H.R.
The Institute of Medicine, the National Committee on Vital and Health Statistics, and otherexpert panels have identified information technology (IT) as one of the most powerful tools forreducing medical errors, lowering health costs, and improving the quality of care. However, the U.S.health care industry lags far behind other sectors of the economy in its investment in IT, despitegrowing evidence that electronic information systems can play a critical role in addressing the manychallenges the industry faces. Adoption of health IT systems faces significant financial, legal, andtechnical obstacles.
Congress and the Administration have taken a number of important steps to promote healthIT. The 2003 Medicare Modernization Act instructed the HHS Secretary to adopt electronicprescription standards and establish a Commission for Systemic Interoperability. The Commissionis charged with developing a comprehensive strategy for implementing data and messaging standardsto support the electronic exchange of clinical data. On April 27, 2004, President Bush called for thewidespread adoption of interoperable electronic health records (EHRs) within 10 years andestablished the position of National Coordinator for Health Information Technology. Pursuant tothe President's order, the National Coordinator has developed a strategic 10-year plan outlining stepsto transform the delivery of health care by adopting EHRs and developing a National HealthInformation Infrastructure (NHII) to link such records nationwide.
The strategic plan identifies several potential policy options for providing incentives for EHRadoption. They include: providing grants to stimulate EHRs and regional information exchangesystems; offering low-rate loans and loan guarantees for EHR adoption; amending federal rules (e.g.,Medicare physician self-referral law) that may unintentionally impede the development of electronicconnectivity among health care providers; and using Medicare reimbursement to reward EHR use.
Health IT has broad bipartisan support among lawmakers. The 109th Congress is likely toconsider legislation to boost federal investment and leadership in health IT and provide incentivesboth for EHR adoption and for the creation of regional health information networks, which are seenas a critical step towards the goal of interconnecting the health care system nationwide. Severalhealth IT bills were introduced during the last Congress and, to date, two bills ( H.R. 747 , S. 16 ) have been introduced this year. Congress laid the groundwork forestablishing an NHII when it enacted the 1996 Health Insurance Portability and Accountability Act(HIPAA). HIPAA instructed the HHS Secretary to develop privacy standards to give patient morecontrol over the use of their medical information, and security standards to safeguard electronicpatient information against unauthorized access, use, or disclosure.