Archive for July, 2010

Research Roundup #4

Friday, July 16th, 2010

We’re well into another sweltering summer here in the District, with policy debates that seem to raise the mercury even higher.  Take a few minutes to cool down with a crisp, refreshing study from the authors below.  Don’t miss the Vigdor and Ladd piece, which provocatively argues that “students who gain access to a home computer between 5th and 8th grade tend to witness a persistent decline in reading and math test scores.”  Readers with a mind for engineering over economics may prefer Bauer, Clark, and Lehr’s thorough analysis of “speed” definition and measurement in “high-speed Internet access.”  And of course there are a few articles for the lawyer in all of us, including two on intellectual property rights.

(Click through to the full post to see the list of papers and abstract excerpts)

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Meaningful Use Rule: Just the Beginning of Tightening Regulation of Electronic Health Records

Wednesday, July 14th, 2010

Yesterday the Centers for Medicare and Medicaid Services (CMS) announced its long-awaited rule specifying the requirements that physicians and other health care providers must meet in order to qualify for roughly $19 billion in federal subsidies for electronic health records. But the issuance of the rule, which runs 864 pages, will not end widespread concern about a lack of clarity of the required criteria.

In its proposed meaningful use rule, issued in January, CMS set forth numerous measures for hospitals and physicians to show they were using electronic records to improve quality of care. The measures address safety, patient engagements, care coordination, and privacy and security. During the comment period, many health groups, including the American Medical Association and the American Hospital Association, complained that the criteria were too ambitious and confusing. They asked for greater flexibility and more time to meet the requirements.

The final rule appropriately abandons the initial all-or-nothing approach and offers health care providers some amount of flexibility, allowing alternative ways of demonstrating meaningful use. But this is not the end of the process. More rulemaking is forthcoming. CMS will set further meaningful use criteria in two additional stages between today’s issuance and 2013, with the final stage covering payment year 2015 and thereafter. CMS will tighten the requirements at each step.

Thus, uncertainties and doubts remain about which systems will qualify for payments, increasing investment risk and reducing the incentives to innovate in a rapidly evolving environment. Future regulatory uncertainty will hold back health care providers and software developers as they contemplate the investments they must make in order for the benefits of electronic health records to be realized. Uncertainty can slow innovation and adoption of electronic health records, contrary to the intent of the subsidies.

President Obama’s Spectrum Announcement

Tuesday, July 6th, 2010

The Obama Administration announced last week that it is adopting as Administration policy the spectrum portion of the FCC’s broadband plan.  This announcement is important because it will take a concerted effort on the part of the Administration to achieve the goals of the plan – i.e., to free up 500 MHz of spectrum for wireless broadband, primarily from reluctant federal agencies and broadcasters.  The spectrum initiative is arguably the most important part of the broadband plan.  (For another discussion of some of the options for increasing spectrum for broadband, see the TPI paper by Larry White, James Riso, and me.)

President Obama issued a memorandum to the heads of executive departments and agencies, outlining how the Administration intends to achieve this goal.  The memorandum is a good start, but it will take more than that for this effort to be successful.

The memorandum states that the Secretary of Commerce must submit progress reports twice a year to the National Economic Council (NEC), the Office of Management and Budget (OMB), and the Office of Science and Technology Policy (OSTP).  Making those reports public would be a useful next step since that could create more pressure for agencies to show results.

NEC Director Lawrence Summers expanded on the President’s memorandum in a speech at the New America Foundation.  His speech may mark an important turning point in spectrum policy if it truly helps free up 500 MHz of spectrum.  Two other aspects of his speech, however, raise some questions.

Summers explained that the Administration proposes to use the auction proceeds first, for a public safety network, second, for job-creating infrastructure investment, and, a distant third, for deficit reduction.  The implication is that any new government revenue must be spent.  While many worthwhile projects certainly exist, hopefully new spending ideas will be subject to careful benefit-cost analyses.

Summers also placed the spectrum initiative in a broader economic context, and in the process seemed to imply that public action is generally a prerequisite for private sector investment and innovation.  That’s clearly the case with spectrum, but spectrum is a special case because the government controls it.  So, obviously, the government needs to act to free up spectrum for private sector activities.  In other cases, Summers’ proposition is debatable.