The more wired a hospital, the better off its patients; and that leads to fewer deaths and complications, and lower bills. That's the conclusion of a large study of Texas hospitals. Unfortunately, only a small number of hospitals and doctors' offices in the U.S. are wired. A $20 billion cash influx, part of the U.S. government's proposed stimulus bill, is expected to change that.

Dubbed the Health Information Technology for Economic and Clinical Health Act (HITECH), the plan is intended to encourage doctors and hospitals to use electronic record-keeping and ordering systems by providing $18 million in incentives through Medicare and Medicaid reimbursements. Starting in 2011, physicians who show that they are “meaningfully” using health IT would be eligible for $40,000 to $65,000, and hospitals would be eligible for several million dollars. The incentives would be phased out over time, with penalties in place by 2016.

The bill allocates $2 billion over the next two years for planning and training, including ensuring that new programs adhere to specific interoperability standards. That will be necessary making certain that data can be transferred between different medical centers and physicians, and that doctors are schooled in how to incorporate electronic record keeping and other technologies into their practices. It would also strengthen privacy and security laws to protect the growing amount of personal medical information that will become electronic.

Less than a quarter of U.S. physicians use electronic health records (EHRs). Bill authors say the stimulus spending will overcome two adoption barriers: lack of funding and misaligned incentives, according to John Halamka, CIO and dean for technology at Harvard Medical School. Currently, doctors must invest time and money to implement EHR systems, and then it's the insurers and payers who ultimately benefit, thanks to a reduction in unnecessary tests and medications.

Halamka says the bill could create 50,000 new IT jobs. “We're not talking about MDs or PhDs. We can take tech professionals and train them in healthcare in the next two years.”

A study from the Archives of Internal Medicine suggests that broad adoption of IT systems may provide significant health benefits for patients. Researchers at Baltimore's Johns Hopkins University School of Medicine rated clinical information technologies at 41 hospitals in Texas and compared those results with discharge information for more than 160,000 patients.

The researchers found that hospitals rating on electronics note taking had a 15% decrease in the odds that a patient would die while hospitalized. Hospitals with rated decision-support systems also had 20% lower complication rates. Researchers found that electronic systems reduced costs by $100 to $500 per admission.