Statement by
Tommy G. Thompson
Department of Health and Human Services

Administration's efforts to increase the use of information technology throughout the health care industry
before the
House of Representatives Committee on Energy and Commerce
Subcommittee on Health

July 22, 2004

Good morning Mr. Chairman and members of the subcommittee.  Thank you for inviting me here today to discuss the Administration's efforts to increase the use of information technology throughout the health care industry.  As you know this has been and continues to be a high priority for the President and me.  The time is right to take action and it is the goal of this Administration and my Department to promote and encourage the development of a nationwide information technology infrastructure that will transform America's health care and improve quality, decrease medical errors and reduce health care costs.  Electronic health information will provide a quantum leap in achieving more efficient and effective health care.  We cannot wait any longer.

The most incredible feature of this twenty-first century medicine is that we hold it together with nineteenth century paperwork.  This is just inexcusable.  And it has to change.

Patients deserve advice and care from providers who are fully informed about their medical history, including past injuries, tests, diagnoses, and treatments, as well as whatever research results and public health notifications might be relevant.  They shouldn't have to wait for redundant tests or calls to their previous doctors.

Doctors deserve to focus on the quality of their care, not the quantity of their paperwork. And both patients and doctors deserve systems that will prevent medical errors.

To achieve these aims, Americans deserve a seamless and secure national health information infrastructure.  This system must provide accurate, complete patient data to providers wherever they are, in time to be useful-even in an emergency.  It must allow doctors to prescribe medications electronically, so the medications can be checked for safety before they are administered.  And, it must do all this while continuing to keep personally identifiable health information secure and safe from unauthorized uses or disclosures.

Yesterday, my Department released a Framework for Strategic Action entitled, The Decade of Health Information Technology:  Delivering Consumer-centric and Information-rich Health Care.  This framework will guide discussion, investigation and experimentation to accelerate widespread adoption of health information technology in both the public and private sectors.


On April 27, 2004, President Bush called for widespread adoption of interoperable electronic health records (EHR) within 10 years and also established the National Coordinator for Health Information Technology position.  I appointed David Brailer, MD, to this position on May 6, 2004.  The President's Executive Order tasked the Office of the National Coordinator for Health Information Technology (ONCHIT) to report on its progress on the development and implementation of a strategic plan within 90 days of operation.  Yesterday, ONCHIT accomplished this task.

The benefits of information technology are evident in our everyday lives, from banks to grocery stores.  However, the benefits of information technology have not been applied as effectively to the nation's health information systems.  Transfer of information remains primarily a paper-based process.  Hospitals' use of electronic health records (EHR) in 2002 was reported at 13 percent; and for physicians' practices at 14 percent to a possible high of 28 percent.  Some reasons for slow health IT adoption include the following:

  • The size and variety of America's health system is large and locally based with many stakeholders.  This strategic plan is aimed at bringing together federal leadership along with the many stakeholders to take action.

  • A previous lack of cohesive federal policies supporting health information technology has also contributed to the lack of technology development.  Efforts have been accelerated and are a pertinent part of the strategic plan in which DoD, VA, and OPM have released reports as well to address accelerating federal action.

  • Perceived lack of return on investment has played a large role in limiting the adoption of health IT [HIT].  The Health Information Technology Leadership Panel announced at yesterday's Summit will evaluate the costs and benefits to society and identify immediate steps for both the private and public sector to take to drive adoption.  Additional steps will be taken to identify the best mechanisms to support training, private sector certification of EHRs, and alignment of incentives as well as other related issues.

Current Federal Health Information Technology Programs

I have vigorously pursued health information technology since I became Secretary.  Specifically, I have supported the efforts of the FHA to provide a framework for aligning and integrating information technology within the health business processes across the federal government.  In addition, since March 2003, I have announced federal adoption of twenty privately developed health information standards.  These data standards were selected through collaborative inter-agency work within the Consolidated Health Informatics [CHI] Presidential E-Government Initiative.  Adoption of health data standards within an architectural framework will allow federal agencies to share data and to achieve interoperability.  In FY 2004, total federal spending on HIT will total over $ 900 million. HHS alone will obligate close to $250 million related to HIT in FY 2004.  These federal HIT initiatives range from supporting research in advanced HIT (e.g., high speed Internet, imaging, bioinformatics) to the development and use of electronic health record (EHR) systems.

Standards and Implementation within the Federal Health Architecture

HHS, DoD and VA support the Federal Health Architecture (FHA), the goal of which is to develop a consistent and common architecture for HIT across all federal agencies.  This architecture allows for a disciplined approach to information technology investment, and provides a framework for implementation of health data standards.

My Department has led the government-wide effort in endorsing and adopting health information technology standards for government use through the Consolidated Health Informatics (CHI) initiative.  Standards adoption has been a core federal initiative led by HHS, DoD, and VA, and has been vetted to the private sector through the National Committee for Vital and Health Statistics (NCVHS).  Through the leadership of the ONCHIT, we hope our efforts will stimulate the industry to adopt the standards agreed upon by these large federal health care providers and payors.  CHI is one of the 24 e-Gov initiatives supporting the President's Management Agenda.

As a result of HHS's acquisition of a license for SNOMED CT, which I announced in May 2003, this medical vocabulary now can be downloaded for free by anyone in the United States through HHS's National Library of Medicine.

HHS is also contracting with the Health Level 7 (HL7) standards development organization to create a standard that would allow interchange of complete electronic health records between any two systems.  This is critical to achieving the interoperability we need to be able to ensure that patients' records are always available when and where they are needed.  We expect this standard to be available in 2005.


The new Medicare law requires HHS to recognize or adopt initial e-prescribing standards by September 2005, to pilot test them in 2006 as we roll out the new Medicare drug benefit, and to promulgate final standards no later than 2008.  The MMA further provides for grants to physician offices to enable the purchase of e-prescribing systems.

Population HIT

NIH is working to develop an information technology infrastructure to support clinical research.  This will enable a system that can interface with health information exchange networks.  CDC is facilitating the implementation of a public health information infrastructure and has already demonstrated results.  The incident reporting times have dropped from an average of 30 days to 1-2 days.  The Public Health Information Network (PHIN) supports a broad range of public health activities including interoperability with clinical care.

Facilitation and Support

The Agency for Health Research and Quality (AHRQ) will spend $50 million in FY 2004 on HIT research and demonstration projects aimed at improving the safety, quality, efficiency, and effectiveness of care.  These funds will also support establishment of a Health Information Technology Resource Center to provide technical assistance, education and expert HIT support to HHS grantees.

The Health Resources and Services Administration (HRSA) with the Foundation for e-Health Initiative announced $2.3 million in contracts to support the Connecting Communities for Better Health program.  The program is providing seed funds to implement health information exchanges, including the formation of regional health information organizations.

Framework for A Strategic Plan

Yesterday, we released the Department's framework for a strategic plan.  This is the nation's first strategic framework report on the 10-year initiative to develop electronic health records and other applications of health information technology.  The framework exemplifies our commitment to working closely with the private sector to bring about the enormous benefits of modern information technology for our health care system.  Yesterday, I also held a Summit that provided a forum where leaders from the public and private sectors could provide feedback on this strategic plan to realize the President's vision.

There are four major goals that will be pursued in realizing this vision for improved health care:

  • Inform clinical practice
  • Interconnect clinicians
  • Personalize care
  • Improve population health

Inform Clinical Practice

This goal centers on efforts to bring electronic health records directly into clinical practice.  Both patients and doctors deserve systems that will improve care and make health care delivery more efficient.  Providing complete and useful patient information to clinicians when and where they need it is fundamental to achieving the goal of informing clinical practice.  Three strategies will enable realization of this goal:

  • Incentivize EHR adoption - The transition to safe, more consumer-friendly and regionally integrated care delivery will require shared investments in information tools and changes to current clinical practice.  Options for reducing the financial disincentives to electronic health records (EHR) adoption should meet at least the following four criteria:

    1. Business case improvement.  Policy options should consider, in part, the economic expense borne by a hospital or physician when purchasing or using an EHR
    2. Compatibility with existing programs and regulations.  Policy options for EHR adoption should be compatible with or incrementally build on existing reimbursement and regulations.
    3. Budget cost-effectiveness.  Policy options should be cost-effective and deliver the largest impact for the smallest expenditure.
    4. Stakeholder alignment.  Policy options should align physicians, hospitals, and other stakeholders toward a common goal of improving quality and efficiency.

  • Reduce risk of EHR investment - Clinicians who purchase EHRs and who attempt to update their clinical practices and office operations face a variety of risks that make the decision unduly challenging.  Low cost support systems that reduce risk, failure, and partial use of EHRs are needed.

  • Promote EHR diffusion in rural and underserved areas - Practices and hospitals in rural and other underserved areas lag in EHR adoption. Technology transfer and other support efforts are needed to ensure widespread adoption.  Currently, there are pilot projects underway that are assessing the feasibility of transferring federal applications, such as VA's computerized patient record system, in rural and underserved areas.

Interconnect Clinicians

Clinicians will be able to obtain more comprehensive health information quickly as they care for patients if we have an interoperable information infrastructure.  Interconnecting clinicians will allow information to be more accessible by providers as consumers move from one point of care to another.  Three strategies for realizing this goal are:

  • Foster regional collaborations - Local oversight of health information exchange that reflects the needs and goals of a population should be developed.

  • Develop a national health information network - A set of common intercommunication tools such as mobile authentication, Web services architecture, and security technologies are needed to support data movement that is inexpensive and secure.  Standards defining a national health information network that can provide low-cost and secure data movement are needed.

  • Coordinate federal health information systems - There is a need for federal health information systems to be interoperable and to exchange data so that federal care delivery, reimbursement, and oversight are more efficient and cost-effective.  Through FDA and CHI, these efforts are currently underway.

Personalize Care

To fully complete interoperability, the ability to use information at the consumer level is essential.  Consumer-centered information helps individuals take responsibility for their own health and more fully participate in making health care decisions regarding their health and well-being.  Strategies to realize this goal include:

  • Encourage use of Personal Health Records (PHRs) - Consumers are increasingly seeking information about their care as a means of getting better control over their health care experience, and PHRs that provide customized facts and guidance to them are needed.

  • Enhance informed consumer choice - Consumers should have the ability to select clinicians and institutions based on what they value and the information to guide their choice, including the quality of care providers deliver.

  • Promote use of telehealth - The use of telehealth can provide access to health services for consumers and clinicians in rural and underserved areas.

Improve Population Health

Population health improvement requires the collection of timely, accurate and detailed clinical information to allow for the evaluation of health care delivery and the reporting of critical findings.  This information is important to the future of care delivery and the standard of living in America.  Strategies to realize this goal include:

  • Unify public health surveillance architectures - An interoperable public health surveillance system is needed that will allow exchange of information, consistent with HIPAA and other laws, to identify public health threats and better protect against disease.  Currently, the PHIN is working in conjunction with the Department of Homeland Security on the President's Biosurveillance Initiative, to develop public health surveillance systems that are not only interoperable within the public health arena, but also with law enforcement and other federal agencies.

  • Streamline quality and health status monitoring - Many different state and local organizations collect subsets of data for specific purposes and use it in different ways.  A streamlined quality-monitoring infrastructure that will allow for a complete look at quality and other issues in real-time and at the point of care is needed.

  • Accelerate research and dissemination - Information tools and standards are needed that can broaden the availability of health data to researchers and accelerate the development of scientific discoveries and their translation into clinically useful products, applications, and knowledge.

Key Actions

Enormous utility will be realized once a national infrastructure is in place.  This is necessary to realize the President's vision.  A range of actions was announced at yesterday's Summit covering initiatives already underway or soon to be launched.  These key actions will advance the strategic elements of the framework.

Establishing a Health Information Technology Leadership Panel

I will soon appoint a panel of executives and leaders to assess the costs and benefits of health information technology to industry and society, and develop options for immediate steps by both the public and private sector, based on their individual business experience.  The Health Information Technology Leadership Panel will deliver a report on these options to me no later than Fall 2004.

Private sector certification of health information technology products

EHRs and even specific components such as decision support software are unique among clinical tools in that they are not required to meet a set of minimal standards to be used to deliver care.  To increase uptake of EHRs and reduce the risk of product implementation failure, the federal government is exploring ways to work with the private sector to develop minimal product standards for EHR functionality, interoperability, and security.  A private sector ambulatory EHR certification task force is determining the feasibility of certification of EHR products based on functionality, security, and interoperability.

Funding community health information exchange demonstrations

A health information exchange program through the Health Resources and Services Administration, Office of the Advancement of Telehealth (HRSA/OAT), has a cooperative agreement with the Foundation for e-Health Initiative to administer contracts to support the Connecting Communities for Better Health (CCBH) Program totaling $2.3 million.  This program is providing seed funds and support to multi-stakeholder collaborations within communities (both geographic and non-geographic) to implement health information exchanges, including the formation of regional health information organizations (RHIOs) to drive improvements in health care quality, safety, and efficiency.  The specific communities that will receive the funding through this program were announced and recognized during the Summit on July 21.

Requiring standards to facilitate electronic prescribing

CMS will be proposing a regulation to adopt the first set of widely used e-prescribing standards in preparation for the implementation of the new Medicare drug benefit in 2006.  When the final standards are adopted, the Medicare Prescription Drug Plan (PDP) sponsors will be required to support e-prescribing, which will significantly drive adoption across the United States.  Health plans and pharmacy benefit managers that are PDP sponsors could work with RHIOs, including physician offices, to implement private industry-certified interoperable e-prescribing tools and to train and support clinicians.

Establishing a Medicare beneficiary portal

An immediate step in improving consumer access to personal and customized health information is CMS's Medicare Beneficiary Portal, which provides secure health information via the Internet.  This portal will be hosted by a private company under contract with CMS, and will enable authorized Medicare beneficiaries to have access to their information online or by calling 1-800-MEDICARE.  Initially the portal will provide access to fee-for-service claims information, which includes claims type, dates of service, and procedures.  The pilot test for the portal will be conducted for the residents of Indiana.  In the near term, CMS plans to expand the portal to include prevention information in the form of reminders to beneficiaries to schedule their Medicare-covered preventive health care services.

Adopting standards to automate clinical research

FDA and NIH, together with the Clinical Data Interchange Standards Consortium (CDISC), a consortium of over 40 pharmaceutical companies and clinical research organizations, have developed a standard for representing observations made in clinical trials called the Study Data Tabulation Model (SDTM).  This model will facilitate the automation of the largely paper-based clinical research process, which will lead to greater efficiencies in industry and government-sponsored clinical research.  The first release of the model and associated implementation guide was finalized prior to the July 21 Summit and represents an important step by government, academia, and industry in working together to accelerate research through the use of standards and HIT.

Commitment to standards

A key component of progress in interoperable health information is the development of technically sound and robustly specified interoperability standards and policies.  As discussed previously, there have been considerable efforts by HHS, DoD, and VA to adopt health information standards for use by all federal health agencies as part of the FHA and CHI initiatives.  The agencies have agreed to endorse 20 sets of standards to make it easier for information to be shared across agencies and to serve as a model for the private sector.  Additionally, the Public Health Information Network (PHIN) and the National Electronic Disease Surveillance System (NEDSS), under the leadership of the Centers for Disease Control and Prevention (CDC), have made notable progress in development of shared data models, data standards, and controlled vocabularies for electronic laboratory reporting and health information exchange.  With HHS support, Health Level 7 (HL7) has also created a functional model and standards for the EHR. We hope that these efforts will stimulate the industry to adopt the standards agreed upon by these large federal health care providers and payors.

Public-Private Partnership

Leaders across the public and private sector recognize that the adoption and effective use of HIT requires a joint effort between federal, state, and local governments and the private sector.  The value of HIT will be best realized under the conditions of a competitive technology industry, privately operated support services, choice among clinicians and provider organizations, and payers who reward clinicians based on quality.  The Federal government has already played an active role in the evolution and use of HIT.  In FY04, total federal spending on HIT was more than $900 million.  Initiatives range from supporting research in advanced HIT to the development and use of EHR systems.  Much of this work demonstrates that HIT can be used effectively in supporting health care delivery and improving quality and patient safety.

Role of the National Coordinator for Health Information Technology

Executive Order 13335 directed the appointment of the National Coordinator for Health Information Technology to coordinate programs and policies regarding HIT across the federal government.  The National Coordinator is charged with directing HIT programs within HHS and coordinating them with those of other relevant Executive Branch agencies.  In fulfillment of this, the National Coordinator has taken responsibility for the National Health Information Infrastructure Initiative (NHII), the FHA, and the Consolidated Health Informatics Initiative (CHI), and is currently assessing other health information technology programs and efforts.  In addition, the National Coordinator is charged with coordinating outreach and consultation between the federal government and the private sector.  As part of this, the National Coordinator will coordinate with the National Committee on Vital Health Statistics (NCVHS) and other advisory committees.


Transforming health care through health IT will result in better care-care that is higher in quality, safer, and more consumer-responsive-and at the same time more efficient.  Our national strategy for HIT is needed to achieve transformation.  Interconnecting clinicians, consumer-centric customized health information and care, more treatment options and choices will be realized.  HIT will improve population health so that public health risks, and clinical research can be enhanced.

The time is now to meet this challenge, however the changes necessary are inevitable, needed and beneficial.  The Administration has put forth the framework, we look forward to the actions that will be taken over the next decade to ensure Americans they will be the beneficiaries of the best health care that can be delivered.

Your thoughtful leadership and that of your subcommittee toward achieving this goal are widely recognized.  I look forward to your continued support and leadership that will further enable the Executive Branch and private sector leadership to transform our paper based health care system into an electronic, quality-based system that we all can count on.  I look forward to your questions.

Last Revised: July 26, 2004