CMS takes baby step toward national network

The grand plans of the Centers for Medicare & Medicaid Services to create a national health information network will soon be off to a humble start. CMS plans to recruit five to 10 small group practices to test what it hopes will become a widely used electronic medical record. However, if physicians were hoping to get a free system from the CMS, they're out of luck. Even those participating in the test will have to pay.

The select group of practices will take a year-long test drive of the VistA-Office Electronic Health Record software, which is a modification of the EMR that U.S. Dept. of Veterans Affairs hospitals have used for 20 years. CMS says that after a post-test evaluation of undetermined length, it would release a full production version of the software.

The VistA-Office EHR software itself is only $37, but those test practices will be required to pay $2,740 in licensing and maintenance fees. For any practice with more than seven users for that software -- a user being anybody, physician or otherwise, who uses the system -- that price will go higher, though CMS didn't say how much.

Those costs, while lower than most EMRs on the market, are giving some physicians pause.

"It's going to be hard for someone to just volunteer and go ahead and implement this for evaluation if they have to spend this much just to get it up and running," said Steven E. Waldren, MD, assistant director of the Center for Health Information Technology at the American Academy of Family Physicians.

The licensing and maintenance fees are costs "that CMS does not have the authority to pay for," said Cynthia Wark, deputy director of the information systems group in the office of clinical standards at CMS.

The agency is not selling the system directly. Instead, it is licensing the VistA-Office system through private vendors.

Some believe that doctors who volunteer despite the cost could benefit by helping shape the final product. "If they are an early adopter, they may want to jump in on this to try it out and experiment. If they are more cautious, they should wait," said AMA Secretary Joseph M. Heyman, MD.

Testing stage

VistA-Office is one of the pieces in a large puzzle that the federal government is assembling to realize the Bush administration's 10-year goal of implementing a national health information network and electronic records for most Americans.

EMRs would be used by, or hooked into, localized regional health information networks -- more than 100 of which are online or in planning stages -- that can be linked to form a national network.

For its EMR test, CMS is looking for "small offices with one to five physicians that are committed to engaging in a meaningful beta test, which includes having the electronic health record installed, participating with the vendor in the configuration of that [system in] their particular office, staying current with [product] updates and providing us with feedback," Wark said.

VistA-Office does not include a billing system, but doctors can pay vendors to develop interfaces to their practice-management software systems, CMS said.

The administration hopes that the eventual full-scale release of VistA-Office will encourage doctors in small practices to adopt electronic records by offering them a lower-cost alternative to other EMRs. Though costs vary widely depending on the vendor and the services offered, even a small practice can easily spend $50,000 per physician on hardware and software.

A money issue

Physicians interested in testing VistA-Office can contact an approved vendor through the Web site of WorldVistA, the official vendor qualifying organization. AAFP's Dr. Waldren is not sure his members will sign up.

Before CMS announced the details of its VistA-Office program, six AAFP members had expressed interest in testing and reviewing the EMR for the medical society's membership.

At the time, the would-be volunteers believed VistA-Office would be a finished or nearly finished software product that would be available for free, rather than as a beta version costing them at least $2,700, Dr. Waldren said. As a result, he is skeptical that those doctors will sign up for the test.

Doctors also would need to pay for hardware to install and run VistA-Office, Wark said. That cost will vary.

Based on a survey of EMR vendors that AAFP did earlier this year, a three-doctor office starting from scratch can expect to pay $20,590 for hardware for a stand-alone EMR, Dr. Waldren said.

In addition to the startup costs, any physician acquiring VistA-Office would have to pay at least $1,140 a year to a vendor for software support costs.

Although the cost associated with VistA-Office creates problems for some physicians, it is inexpensive compared with many EMRs sold today, Dr. Heyman said. He hopes the entry of CMS in the EMR market will drive vendors of EMRs to lower their prices.

"I don't think that there's ever any harm in adding a product to the market, especially if it's an inexpensive one, [because it] becomes a goal for some of the private vendors to try to compete with that either on cost, value, function or something else," he said. "I think that's a good thing."

So far, the program complies with AMA policy because use of the EMR is voluntary.

Also, to the extent that VistA-Office supports the government's goal of creating a national health information network, the AMA supports the network "as long as patient privacy is protected and there aren't any unfunded mandates for physicians," Dr. Heyman said.