(AP) -- The Obama administration on Tuesday rolled out an ambitious five-year plan for moving doctors and hospitals to computerized medical records, promising greater safety for patients and lower costs.
Starting next year, doctors' offices and hospitals can get federal money to help defray the costs of the systems, which can run to millions of dollars for hospitals. Providers who don't comply by 2015 will face cuts in Medicare payments.
Federal incentive payments for doctors and hospitals to buy computerized systems could reach $27 billion over 10 years, and that's only a fraction of what technology vendors stand to take in. It's hoped the investment will streamline the delivery of medical care, yielding long-run savings.
Patients get the benefit of systems that can warn doctors before they make a mistake - prescribing a drug that could cause a severe reaction, for example. And there's also the convenience of being able to access records online.
The move by the Health and Human Services Department came with the release of two regulations hundreds of pages long. The main one described how doctors and hospitals can qualify for federal money by acquiring systems that meet certain "meaningful use" standards. A companion rule outlined how the systems will be certified.
Initial reaction from key interest groups was guarded. As lawyers pored over the text of the regulations, the American Medical Association said it was withholding judgment.
Federal officials said they tried to address doctors' concerns that the initial draft of the rule asked them to do too much, too quickly. More than half of family doctors practice in groups of four or fewer. A majority of small and medium offices have opted not to adopt electronic records because of costs and unresolved questions, according to the American Academy of Family Physicians.
David Kibbe, an adviser to the group, said that may start to change. "This is pretty good news," he said. "It will almost certainly translate into more physicians becoming participants in the electronic health records incentive program."
Money for electronic records was included in the 2009 economic stimulus bill.
Administration officials said they lowered the number of initial, "core" capabilities that the systems have to demonstrate in order for providers to get federal money, and allowed a longer period of time to achieve others.
They also lowered several additional requirements. Only 40 percent of medications will have to be electronically prescribed, as opposed to 75 percent as the government initially proposed.
The result "strikes the balance that was needed," said Steven Findlay, a policy expert with Consumers Union. "They give doctors the financial support to promote electronic records adoption without undue burdens. But they also hold doctors accountable for actually improving care and the health status of their patients."
The top government official overseeing the transition program says that reflects what happened to him in a previous stage of his career, when as a middle-age primary care doctor he was forced to learn to use electronic medical records.
David Blumenthal, now national coordinator for electronic health records, said the computer once saved him from prescribing a drug to a patient who was allergic to the medication. On many other occasions, he was able to avoid ordering duplicative tests, because earlier results stored in the system told him what he needed to know.
"I watched it make my care better before my eyes," said Blumenthal, formerly a prominent Boston area physician and Harvard professor.
Doctors' offices can receive as much as $44,000 through Medicare and $63,750 through Medicaid for installing computer systems that meet federal standards. Hospitals can receive millions.