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Wired MD: NJ Plugs Into Funding to Digitize Patient Records

Medicaid providing $40 million to entice initial investments in electronic medical records

New Jersey announced a milestone Thursday in the long journey to convert the state’s hospitals and physicians to electronic medical records: Nearly $40 million in federal incentive funds is flowing this week from Medicaid to the first 70 healthcare providers in New Jersey to go digital.

Over the next decade, state officials estimated that 3,000 providers would receive up to $500 million in Medicaid incentive payments to help defray the cost of installing the computers and software that will maintain patient records -- prescription medications, lab tests, exams, surgery -- in digital files that ultimately will be accessible via the Internet, anywhere in the world.

That sounds like a lot of money, but Colleen Woods, who heads the state Office of Health Information Technology, said the Medicaid incentive payments, authorized under the 2009 federal stimulus law, fall short of covering the full cost of the investment that hospitals, doctors, labs and pharmacies have made -- and will continue to make -- in electronic medical records.

Woods and healthcare executives who announced the Medicaid incentive payments said the real payoff isn’t financial but clinical, and will appear in the form of fewer medication errors, unnecessary tests and procedures and hospital stays, and improved health outcomes.

New Jersey is building a wired healthcare world designed to link hospitals, doctors and patients no matter where they happen to be in the state. Woods predicted New Jersey will lead the nation.

“We’re hoping that by the end of 2012, given the investment and the technology infrastructure that is being built, that we in New Jersey will be the first state that will be able to exchange clinical information on a statewide basis,” she said.

The goal is for every New Jerseyan to have a personal electronic medical record by the end of 2014.

The state has created five regional electronic health information exchanges, where doctors, labs, hospitals, pharmacies and other healthcare providers exchange information on a regional basis. The next step is empowering these regional organizations to link together into a network that weaves the entire state together.

Other states have also built regional healthcare data exchanges, Woods said, “but none to my knowledge is covering them across the state, so you see big white spaces in Texas and California where there just isn’t the capacity to share data. New Jersey, perhaps being a small state, and because of all the investment that our providers have made, we have the potential to be the first. That is really our goal and what we are striving for.”

The incentives payments to help healthcare providers are being paid by Medicaid, but the value of switching to digital medical records benefits all the patients who use that provider, not just the Medicaid beneficiaries.

Valerie Harr, who heads the Medicaid program in the state Department of Human Services, said digital medical records will play a key role in the state’s efforts to improve the health of the state’s more than 1 million Medicaid members.

“Medicaid recipients frequently have chronic illnesses and go to a variety of hospitals and physicians,” Harr said. Switching to digital medical records “will enable the providers to coordinate and improve the quality of care for our Medicaid beneficiaries and improve the patient experience.”

Dr. Vinnakota Rao is a pediatrician in Warren who switched to using electronic medical records nearly six years ago. “The interesting thing is we have all the data about the patient in the computer. It tells us who needs what -- who needs an immunization, who did not come back for a follow up visit, everything at the touch of a button.”

Digital technology has reduced administrative overhead, Rao said. “We used to have something like nine staff members, and now we have five and we can perform infinitely better. The quality of care is absolutely different.”

Read more on NJ Spotlight.

NJ Spotlight is an issue-driven news website that provides critical insight to New Jersey’s communities and businesses. It is non-partisan, independent, policy-centered and community-minded.


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