Anthony J. Pennings, PhD


Healthcare IT and the American Recovery and Reinvestment Act of 2009

Posted on | December 11, 2011 | No Comments

Citation APA (7th Edition)

Pennings, A.J. (2011, Dec 11) Healthcare IT and the American Recovery and Reinvestment Act of 2009.

Within weeks of his inauguration, President Obama signed the American Recovery and Reinvestment Act of 2009, abbreviated ARRA, as part of a $787 billion stimulus package to help revive the ailing economy suffering from the Great Financial Crisis (GFC) of 2007.[1]

In 2008, the nation was teetering on the edge of economic ruin. Oil peaked at $157 a barrel in July, and the highly leveraged global securitization and credit default scheme collapsed, and with it the inflated housing market. The Dow-Jones Industrial Average (DJIA) fell from its closing high of 14,164 on Oct. 9, 2007 to a low of 7,882 on Oct. 10, 2008, just a few weeks before the election.

The Act has been criticized by the Left as too small and by the Right as a gift basket for US Congress members. However, the legislation did push a number of technological initiatives that would change the future of IT in healthcare.

One of the most important initiatives designated $19.2 billion towards an interoperable, standards-based infrastructure for the secure exchange of electronic health care information and medical records (EHR or EMR) among doctors, hospitals, laboratories, pharmacies, and healthcare research facilities.

The initiative got its start in the Bush Administration with a 2004 executive order creating the Office of the National Coordinator for Health Information Technology. It became part of the Department of Health and Human Services (DHHS) headed by then-Secretary Michael O. Leavitt (See video above). The Office was only funded at $60 million a year though, and the legislation never received congressional approval. The program engaged in only preliminary planning with its report, The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care that called for a ten-year plan to develop a Nationwide Health Information Network (NHIN) of health care providers.

This network would connect regional health information organizations (RHIO) with regional health information exchanges (RHIEs), both of which would integrate clinical and public health data via electronic health record systems (EHR-S) with the goal of improving patient safety and delivering quality health care. It specified four objectives:

  • Bringing information tools to the point of care, especially by investing in EHR systems in physician offices and hospitals.
  • Building an interoperable health information infrastructure so that records follow the patient and clinicians have access to critical health care information when treatment decisions are being made.
  • Using health information technology to give consumers more access and involvement in health decisions.
  • Expanding capacity for public health monitoring, quality of care measurement, and bringing research advances more quickly into medical practice.[2]

With the Obama administration’s ARRA stimulus program, the diffusion of health information technology and the protection of medical records’ privacy and security were legislatively codified. Notably, the Health Information Technology for Economic and Clinical Health Act (HITECH) secured the national coordinator position and office. HITECH also provided some $2 billion for discretionary spending, primarily for grants and loans to implement health-related information and communications technologies.

To rush money into the economy, it established two related federal advisory committees to address healthcare ICT. One committee addressed standards to design a system of networked and interoperable electronic health records. The other committee developed policies to protect patient privacy and security. Together they worked with the private sector and consumer groups to develop the specifics of a health information network. The network permitted the ready exchange of certified electronic health records and other data while protecting patient privacy.[3] Much of the support was offered through “immediate funding” via federal agencies and grants to states, including a loan program to help providers purchase EHR systems as well as related training and technical support.

Most significantly, the HITECH Act allocated $17.2 billion in Medicare and Medicaid financial incentives for physicians and hospitals to implement Electronic Health Record (EHR) systems. Participating physicians could earn between $44,000 to $64,000 over the following five years for utilizing an electronic record system, providing they make “meaningful use” of the EHR installation.

Meaningful use included implementing certified EHR technologies with electronic prescribing capability meeting Department of Health and Human Services (HHS) guidelines: connectivity to other healthcare providers providing interoperable access to a patient’s health history, and; the capability to report to the HHS on how they are using the technology and its effectiveness, including fewer errors, clinical decision-making support, alerts, and other reminders.


Whether the “stimulus package” saved the country from the economic abyss of the “Great Recession” will require a historical accounting of its positive economic impact on employment, GDP, and inflation. The economic stimulus package was often derided as a failure, even as unemployment fell from 8% to 5% by the end of the Obama administration.

Likewise, its influence on health care will require examining costs, mortality counts, patient care, and the populace’s overall well-being. As the 2012 elections for US President heated up, “Obamacare,” the Patient Protection and Affordable Care Act (PPACA) got most of the attention. The American Recovery and Reinvestment Act of 2009 propelled several technological initiatives, and its impact on the deployment of health information and communications technologies deserves a separate analysis.

Citation APA (7th Edition)

Pennings, A.J. (2011, Dec 11) Healthcare IT and the American Recovery and Reinvestment Act of 2009.


[1] The American Recovery and Reinvestment Act of 2009. H.R.1.
[2] Quoted from “DHHS Office of National Coordinator for Health Information Technology (ONC).” Public Health Data Standards Consortium PHDSC – Promoting Standards Through Partnerships. Web. 11 Dec. 2011.
[3] Steinbrook, M.D., Robert. “Health Care and the American Recovery and Reinvestment Act.” N Engl J Med 360 (2009): 1057-060. March 12, 2009, 12 Mar. 2009. Web. 11 Dec. 2011.



Anthony J. Pennings, PhD has been on the NYU faculty since 2001 teaching digital media, information systems management, media economics, and global communications. © ALL RIGHTS RESERVED


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