Fitch: Meaningful Use payments masking 'anemic' revenue growth

Although Meaningful Use payments will dry up when the incentive program ends, the benefits of electronic health records systems--including quality and efficiency gains--will mitigate the loss, according to global ratings agency Fitch. But the fact that the funds are non-recurring makes makes it tricky to predict the financial impact of EHRs. 

Meaningful Use funds could mask otherwise "anemic revenue growth" over the next four to five years. "Only hospitals that are already financially strong will be able to afford the high cost investment in EHR technology," the agency stated. "Hospitals unable to demonstrate Meaningful Use by 2015 will be penalized through their Medicare reimbursement. We expect this to lead to a wider gap between higher and lower credits."

The agency appears to be tempering its earlier outlook on the impact of Meaningful Use payments. In its recent quarterly review, Fitch stated that the incentive payments in 2011 helped to lift for-profit hospitals' earnings in an otherwise tepid year, and expected larger payments in 2012 and 2013 as the program progressed.

The picture may be even less rosy than what Fitch points out. A recent GAO report reveals that only 16 percent of eligible hospitals successfully attested to Stage 1 of Meaningful Use in 2011; while the median payment was $1.7 million, the payments ranged from $22,300 to $4.4 million. Acute-care hospitals and those in urban areas were the most successful attesters, raising concerns about the financial health of rural and critical access hospitals, who are lagging behind.

To learn more:
- here's the Fitch article
- read about Fitch's quarterly review
- here's the GAO report