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NC Department of Health and Human Services
Health IT

About Health IT in North Carolina

Advanced utilization of health information technology (HIT) is a critical component for achieving optimal health outcomes for our residents.  Surprisingly, the computer is fast becoming one of the most important instruments of modern medicine for all provider types.  The Federal Government is using health information technology (HIT) to drive health reform.  New HIT developments will result in changes to how health care is delivered that are designed to increase quality, improve health, control costs, and empower health care consumers.

Both the Americans Recovery and Reinvestment Act of 2009 (ARRA) and the Patient Protection and Affordability Act of 2010 (Health Reform) lean heavily on HIT to transform healthcare over the next decade.  Just in the last year alone, the federal government has invested more than $90 million in HIT grant funds to North Carolina for the purpose of building HIT infrastructure and encouraging healthcare providers to use it.  In addition, an estimated $750 million dollars will come to North Carolina in the form of incentive payments to eligible providers and hospitals in return for adopting and making meaningful use of electronic health records (EHR) over the next five years.  The goal is for every man, woman, and child in the nation to have an EHR by the year 2014.

North Carolina is blessed with more than our share of nationally recognized leaders and institutions, both public and private, who are devoted to improving health and healthcare.  The North Carolina Office of the Health Information Technology is committed to helping North Carolina achieve its full potential in regards to HIT.  This will require careful planning, alignment of investments, and collaboration across a wide range of stakeholders including state agencies, not for profit organizations, private industry, and healthcare consumers.  Collaboration and innovation is what we do best.  North Carolina can lead the nation when it comes to HIT and improved health.  In fact we MUST!

Legislative Report

The Challenges and Opportunities for NC

Advances in information technology systems have dramatically altered the world in which we live. Huge investments, both public and private, make it virtually impossible to carry out the activities of daily living without utilizing some form of automation. For a variety of reasons, the healthcare delivery industry has been slow to take advantage of new technology on a broad scale. Only a small percentage of healthcare providers have successfully integrated information technology into their own practices. Even fewer have connected their systems with other providers in any meaningful way to improve care coordination and exchange of health information. Consequently, currently in North Carolina most medical records remain paper based, and the vast majority of providers provide ambulatory care in small practices which do not exchange healthcare records on a regular basis with other medical providers. For HIT to be adopted widely, not only must it be affordable, provide value to the practitioner, be easy to implement and cost-effective to maintain over time, it must also engage the public’s trust in the safety and security of the system.

NC aims to establish the statewide health information exchange (HIE) infrastructure and capacity to support clinicians in quality and population health improvement, provide new models of care delivery along with prevention and wellness initiatives. The health IT transformation programs is a part of the state’s agenda to advance patient-centered care and enable improvements in health care quality, affordability and outcomes for each person, family and business in North Carolina.

North Carolina is uniquely positioned to evolve a model of health that can more effectively serve our nation. The critical elements for success already exist: a culture of collaboration and innovation, successful pilot projects and programs, substantial IT investments and infrastructure, thought leaders that reside in our academic medical centers, a robust biomedical research community, private funding partners who have a track record of investing in HIT, large military bases and VA medical centers, the Eastern Band of the Cherokee Indians, a strong underpinning of safety net providers, and strong core public health programs at the state and local levels.

American Recovery and Reinvestment Act of 2009

The large and complex federal stimulus legislation known as the American Recovery and Reinvestment Act of 2009 (ARRA) contains authorization for nearly $36 billion in funding for health information technology (HIT) infrastructure over six years. The concepts for how this unprecedented investment in HIT is to be spent are set forth in the Health Information Technology for Economic and Clinical Health (HITECH) portion of ARRA.

The overall goal of HITECH is to create a nationwide health information infrastructure that enables electronic health information to be recorded, shared and utilized in a way that improves health. Broadly described, this includes three major components:

  1. the wide adoption of electronic health records (s)
  2. establishment of interoperable systems for health information exchange (HIE), and
  3. aggregate data reporting to improve the quality of individual healthcare as well as overall population health reform.

Of the total authorized funding, the largest portion, roughly $34 billion, is set aside as incentive payments by the Medicare and Medicaid programs for providers who implement HIT in their practices. More specifically, to qualify for these incentive payments, the provider must adopt a certified electronic health record, demonstrate meaningful use of the HER in their practice, and provide data for quality reporting.

The complex payment formula for these incentives stipulates that eligible providers can begin receiving payments as early as 2011. In 2016 incentive payments come to an end, and providers who have not adopted meaningfully used HIT by that time will actually receive reduced payments for failure to comply. The remaining portion of ARRA HIT funding, approximately $2 billion, is appropriated to the Office of the National Coordinator of Health Information Technology (ONC).

States have the opportunity to access a portion of the $2 billion through:

  1. planning and implementation grants for HIE development;
  2. loans for EHR adoption available on a match basis of $1 non-federal for every $5 in federal funds; and
  3. HIT extension programs for the establishment of Regional Extension Centers.

Federal funds may not provide more than 50% of the cost required to create and operate a Regional Extension Center.

A state must have an HIT strategic plan in place that is consistent with the National HIT Strategic Plan in order to apply for funds under the HITECH portion of ARRA. Although North Carolina is recognized as a national leader in the development of HIT & HIE systems and policies, this comprehensive HIE strategic plan is needed to guide policy decisions and prioritize funding decisions.

Health Information Exchange

The North Carolina HIT Collaborative envisions a future in which all residents of North Carolina have accurate and secure health records available at the point of care. Technology exists to design and build a fully integrated and connected health information system that will enhance efficiency, quality and effectiveness of the delivery of healthcare. Technology can also enhance the patient’s ability to be an engaged consumer of healthcare and an important partner in their health management. Setting aside the issues of cost, there are significant overarching policy decisions and guiding principles upon which such a system must be founded. Each of the guiding principles below must be addressed and satisfied before HIE will be widely used and accepted.

Guiding Principles
The HIE solutions must be consumer-centered. A critical element toward improving health is an engaged consumer who has the means, information, opportunity and the know how to better manage their own health and lifestyle choices. Engaged consumers will have easier access to and more control over their individual health records and they will be able to play a more active role in managing their own health. Sharing information between multiple providers and across disciplines will improve the decisions providers and consumers make and result in better continuity of care.

Better health, not just better healthcare, must be the goal. Better health requires looking beyond just HIT and the traditional practices of healthcare providers and payers to create a virtual “health home” where care is coordinated and collaborative. Prevention is the key. It must be a shared commitment of public and private employers, government non-governmental organizations, communities and individuals.

Privacy and security must be guaranteed. Individual personal health information must be protected. Consumers will accept sharing sensitive personal information if it is done on their behalf to assure that the right information is shared at the right time and for the right reasons. At times this means immediate and secure access to certain critical information from any location in the system.

Automating what we already do will not work. We cannot expect to get better health outcomes by simply applying information technology on top of the existing system of inefficiencies, silos, ad uncoordinated care. A reengineered HIT system seeks to eliminate the cost associated with redundant care or care not supported by clinical/scientific evidence.

HIT investments must support improved individual health as well as population health. Use the federal stimulus funds to drive the changes needed in the overall system that will create sustainable and continuous quality health improvements. The new HIT system and policies should leverage existing investments in technology, take advantage of innovations, and identify opportunities for new investments.

The system must be inclusive and comprehensive. The system must be standards based. Whether physical or behavioral health, long term or acute care, public or private provider, insured or uninsured, veteran or civilian, rural or metropolitan, all can be part of the system. The HIT system is provider and insurer-neutral. Its design and implementation does not favor or disadvantage any provider type, practice setting, or insurer.

The system must be collaborative. No single entity can accomplish the HIT vision alone. Working together, North Carolina’s hospitals, providers, therapists, laboratories, pharmacists, in-home care providers, educational institutions, public agencies, and non-profit organizations will improve the health of residents and communities. Collaboration among communities will enhance North Carolina’s response to public health threats, disasters and state and national emergencies.

Effectiveness and continuous quality improvement is fundamental. The ability to analyze and share data across entities will reduce duplication of services, identify best practices, better utilize resources, reduce health disparities, lead to better practice management, and inform future policy and planning decisions and expenditures.

Innovation will be required. Ongoing research and analysis of changing needs and technologies will keep the system dynamic and timely. Implementation and continuous improvement strategies will require an iterative approach that maximizes resources and follows national standards and certification requirements.

Sustainability is the key. The system will be sustained by a support network providing technical and professional education, training and consultation. The long term stability of HIT will be built upon financial incentives and value-added functionality rather than a mandate to participate.

This is a marathon not a sprint. HIT systems will be built incrementally. Every stakeholder in the process must be able to move ahead from where they are on the continuum from minimum HIT involvement to fully electronic and interoperable networks. This means that the implementation process will accommodate a broad range of participants including the small independent community practitioner as s/he decides to implement an EHR in the practice, as well as a large hospital health system with an existing sophisticated HIT system.


To date, the North Carolina market has been characterized by multiple uncoordinated HIE initiatives, most of which are in early stages of development. These initiatives are attempting to address specific regional needs or the needs of a specific health system and have resulted in valuable lessons learned. However, a coordinated statewide governance approach is required to meet North Carolina’s vision and goals for HIE, to take advantage of significant federal investment in health IT, and to create a policy infrastructure that allows North Carolina’s providers to meet the goals of meaningful use including the ability to exchange health information.

In the spring of 2009, a statewide HIT Task force of key public-private stakeholders developed a Health Information Technology (“HIT”) Report for Improving Health and Healthcare in North Carolina. This report represents a process of engaging stakeholders throughout North Carolina to identify guiding principles for HIE and the strategic action steps to realize those principles. The HIT Task Force Report created an excellent starting point for HIE development in our state.

In order to develop a coordinated approach, Governor Perdue designated the North Carolina Health and Wellness Trust Fund Commission (“HWTF”), a division of the North Carolina Department of State Treasurer, as the State Designated Entity (SDE) and established the North Carolina HIT Collaborative as an interim governing body in July, 2009.

Since then, HWTF/NC HIT Collaborative and its partners have performed an environmental scan of the North Carolina market place as well as surveyed approaches of multiple other states to leverage lessons learned. The NC HIT Collaborative actively engaged North Carolina stakeholders to understand their interests and requirements.

Intent to build on North Carolina’s history of vision, ambition, and unprecedented potential, the NC HIT Collaborative has developed a new vision of health in which information technology systems are used as powerful tools to achieve outstanding quality in healthcare delivery, resource coordination, cost efficiency, and patient safety. North Carolina’s health and information technology leaders, both public and private, are convinced this work is essential and now is the time to make it happen.



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