A couple weeks ago, I had the chance to sit in on PTI's 2010 CIO & Leadership Summit in San Diego. Toward the end of the event, PTI director, Dr. Alan Shark, offered up some great advice, compiled from his interactions with city and county CIOs nationwide. His advice took the form of ten steps for surviving and succeeding during the current fiscal crisis. I'll paraphrase as best I can below.

1. Remember, the fiscal crisis is not your fault--IT is more a part of the solution than the problem.
2. Remember, it's not your responsibility to fix it. The political leaders have to make tough choices that go well beyond IT.
3. Be creative. The same old way of thinking won't get it done.
4. Consider attacking problems that you couldn't fix during the good times--particularly in the areas of funding and governance.
5. Be an innovator--a strategic visionary. Don't settle for playing defense.
6. Maintain a positive outlook. The boss hears enough bad news already.
7. Pursue peer networking. Pick up the phone. Find out what others are doing.
8. Don't wait for budget cuts to be handed down from on high. Decide your own fate now.
9. Don't let the decision makers believe you can do more with less. (They'll just wonder why they didn't cut your budget before.) Ask them what they want you to turn off. Let them know that black-and-white choices must be made.
10. Plan for a brighter day. Will you be ready?

A great example regarding point #9 was made by one of the CIO attendees. He had to ask his sheriff's department whether they wanted to continue to have their video records backed up on a mirror server or go without because the IT department could not provide this service based on cost reductions being sought by the sheriff. The sheriff considered his options and chose to go without. They hadn't been backed up for most of the past and they didn't need to be backed up now. Both the sheriff and the CIO could walk away knowing that the remaining service level agreements (SLAs) could be maintained in good conscience rather than diluted by wishful thinking.

The sorts of CIOs who attend summits like these in a time of constrained travel budgets tend to be among the most motivated in terms of thinking innovatively and executing effectively. Vendors might find these insights useful when dealing with IT leaders who aren't as proactive in seeking ways to overcome their fiscal circumstances. You might have to give them Alan's pep talk.

The American Recovery and Reinvestment Act of 2009 (ARRA) appropriated $17.2 billion for Medicare and Medicaid providers to adopt certified electronic health record (EHR) technology. Industry estimates of the actual total cost of incentive payments for providers demonstrating meaningful use range from $20 billion to $36.4 billion. As the meaningful use criteria is still being hashed out at the federal level, states are beginning to move forward by partnering with banks and establishing loan programs to provide financial assistance. These loan programs are another way to encourage providers to purchase and implement health information technologies (HIT) and then seek federal incentive payments down the road. Additional government support will be provided through the Regional Extension Centers (REC). Meanwhile, some vendors such as GE Healthcare have opted to offer interest free, deferred payment plans to alleviate concerns over IT costs.

One example is the North Dakota HIT Revolving Loan Fund recently establish via Senate Bill 2332. The state is partnering with the Bank of North Dakota to offer low-interest loans to health care entities looking to make investments in health IT. The process includes submitting an application for review and approval by the HIT Director and the HIT Advisory Committee. Approved applicants are required to complete an on-site readiness assessment then the next step is to complete the Bank's loan application for final approval.

Will states seek vendor support? Yes, it does appear that some states will be seeking vendor assistance, particularly for operations support and quality assurance (QA) services. New York recently completed a HIT Planning Advanced Planning Document (HIT P-APD) which indicated plans to obtain contract services through the New York State Technology Enterprise Corporation (NYSTEC) for planning services. NYSTEC staff will then assist the Department of Health with developing Request for Proposals(s) and procurement(s) to obtain contractors for operational support and program auditing/QA services.

HIT vendors should continue to consider offering financing options to assist providers with purchasing EHR solutions and to streamline purchases with a given states loan program and partnering bank to make the process simple and efficient. In addition, while meaningful use criteria will be the essential guideline for a system, don't forget to be innovative within those confines. Professional services HIT vendors should expect to see more states following New York's lead; as states begin to roll out plans for loan programs over the next couple of months they will have a better idea of where they will be seeking vendor's assistance.

Today Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced approximately $800 million in economic stimulus grant awards for advancing the widespread adoption and meaningful use of health information technology (HIT), as well as, providing funding to train the health care workforce. $375 million has been awarded to the first round of 32 non-profits to support the development of regional extension centers (REC). RECs will provide technical assistance to providers as they work towards implementing the meaningful use of electronic health records (EHRs). Forty states agencies and State Designated Entities (SDEs) received awards in the first round of health information exchange (HIE) grant funding which totaled $386 million. Additional HIE and REC awards are expected to be announced in the near future. In addition, Department of Labor (DOL) Secretary Hilda Solis announced the $227 million job training portion, which is expected to train 15,000 people in health IT related job skills and lead to the creation of 10,000 new jobs. The grants will support 55 separate training programs in 30 states.

States have four years, from 2010 to 2013 to utilize HHS grant funding to build capacity for exchanging health information through an interoperable HIE network. State matches start in 2011. Below is the first round of HIE grant recipients:

• Alabama Medicaid Agency- $10,564,789
• Arizona Governor's Office of Economic Recovery- $9,377,000
• Arkansas Department of Finance and Administration- $7,909,401
• California Health and Human Services Agency- $38,752,536
• Colorado Regional Health Information Organization- $9,175,777
• Delaware Health Information Network- $4,680,284
• Government of the District of Columbia- $5,189,709
• Georgia Department of Community Health- $13,003,003
• Office of the Governor (Guam)- $1,600,000
• The Hawaii Health Information Exchange- $5,602,318
• Illinois Department of Health Care and Family Services- $18,837,639
• Kansas Health Information Exchange Project- $9,010,066
• Kentucky Cabinet for Health and Family Services- $9,750,000
• State of Maine, Governor's Office of Health Policy & Finance- $6,599,401
• Massachusetts Technology Park Corporation- $10,599,719
• Michigan Department of Health- $14, 993,085
• Minnesota Department of Health- $9,622,000
• Missouri Department of Social Services- $13,765,040
• Nevada Department of Health and Human Services- $6,133,426
• New Hampshire Department of Health and Human Services- $5,457,856
• Lovelace Clinic Foundation, New Mexico- $7,070,441
• New York eHealth Collaborative Inc. - $22,364,782
• Commonwealth of NMI, Department of Public Health- $800,000
• North Carolina, Department of State Treasurer- $12,950,860
• Ohio Health Information Partnership LLC- $14,872,199
• Oklahoma Health Care Authority- $8,883,741
• Pacific Ecommerce Development Corporation (American Samoa) - $600,000
• State of Oregon- $8,579,992
• Commonwealth of Pennsylvania, Governor's Office of Health Care Reform- $17,140,446
• Oticina del Gobernador La Fortaeza (Puerto Rico) - $7,770,980
• Rhode Island Quality Institute- $5,280,000
• State of Tennessee- $11,664,580
• Utah Department of Health- $6,296,705
• Vermont Department of Human Services- $5,034,328
• Virgin Islands Department of Health- $1,000,000
• Virginia Department of Health- $11,613,537
• Washington Health Care Authority- $11,300,000
• West Virginia Department of Health and Human Resources- $7,819,000
• Wisconsin Department of Health and Family Services- $9,441,000
• Wyoming Office of the Governor- $4,873,000

INPUT's Take:

The amount of HIT funding provided in the stimulus package is game-changing; funding will help states break through cost barriers, especially at a time when state budgets are tight. With federal momentum, significant funding, and aggressive timelines, states are going to move quickly, yet methodically, on their HIE initiatives. Contractors need to actively participate in HIE workgroups and attend HIT events as a way to strengthen relationships with states and better understand their plans for standardized system that meets their needs. In addition, in order to ready for the anticipated contracting opportunities, vendors should be engaging in marketing activities to position themselves for the market, hiring, and educating staff for upcoming HIE business opportunities.

Day Two of GOVERNING's Outlook in the States and Localities began with murmurs from participants echoing in ballroom at the National Press Club, as they hoped the states' outlook would be less dreary than the previous day. However, as the first panel of speakers began, the dark cloud that hung over the room on Day One, had indeed returned.

The first panel of the day discussed state issues, priorities and politics. Speakers for the panel included David Adkins, Executive Director of the Council of State Governments (CSG); William Pound, Executive Director of the National Conference of State Legislatures (NCSL); and Ray Scheppach, Executive Director of the National Governors Association (NGA).

Ray Scheppach was the first bearer of apparent bad news as he described what he called a "lost decade" and his prediction that it would be 2012 and 2013 before states will begin to see the same revenue numbers that were seen in 2008. While Scheppach praised the American Recovery and Reinvestment Act of 2009 (ARRA) and the flexibility it allowed for state spending, he explained how states are still acting in survival mode as they work fervently to make the most out of the little resources they have. Scheppach highlighted three big issues that will largely shape the outlook of the states for 2010: healthcare reform, some form of a jobs bill, and President Obama's recent recommended budget. William Pound began by highlighting numbers, specifically the budget shortfalls seen in 2009 and those already seen in 2010. Pound pointed out that this trend will continue as stimulus funds – which currently make up approximately 20% of a state's budget – are suspended. Pound predicts that the Federal government's action or inaction will largely shape the future outlook of the states such as healthcare reform and whether or not it will alleviate the current Medicaid burden for which states are responsible. David Adkins alleviated some of the doom and gloom atmosphere by opening with a quote from Woody Allen in which two paths – one to despair and utter hopelessness, and the other to total distinction – depict the current choices states are now faced with. However, despite Adkins' comical, yet negative opening, he offered some hopeful discussion as he pointed out the opportunity that has arisen from our current dire economic environment. State leaders will be forced into adaptive leadership. Common practices and where funds are spent will have to be readdressed in order to produce the same services at a lower cost. Adkins concluded his portion of the panel by pointing out that in US history the nation has endured thirty economic recoveries; there still is a light at the end of the tunnel.

The second panel of the day, covering 2010 revenue and spending consisted of panelists, Sujit CanagaRetna, Senior Fiscal Analyst at the Council of State Governments (CSG); Scott Pattison, Executive Director of the National Association of State Budget Officers (NASBO); and Ron Snell, Director of the State Services Division at the National Conference of State Legislatures (NCSL). Pattison began the panel's discussion by introducing the concept of a New Normal. In terms of state revenue and spending, a New Normal defines a projected slower increase in growth. Pattison pointed out that already 36 FY2010 state budgets have been cut with the possibility for future cuts. According to Pattison, Medicaid and education take up approximately 62% of a state's general fund budget. Ron Snell reported that 40 states predict to see lower revenues for FY2010 compared to FY2009. In a survey of state legislative state fiscal offices, the majority of responding states do not foresee a return to peak revenue collections until the years 2012 and 2013. Snell cautioned that once ARRA funds cease, states will face a cliff when it comes to funding. States will have to reevaluate their spending in order to continue to function normally. Sujit CanagaRetna discussed programs that states are likely to see a surge in expenditures, with a specific case study on Unemployment Insurance. CanagaRetna also cautioned that despite a decrease in revenue, states are likely to see surging expenditures in other major areas such as healthcare, education, and public pensions.

Following the Revenue and Spending panel, three issue panels covering Technology Trends, Health Reform, and the Census 2010 took place. In the Technology Trends issue panel, speakers included Steve Fletcher, Chief Information Officer of Utah; Bert Jarreau, Chief Information Officer of the National Association of Counties; Doug Robinson, Executive Director of the National Association of State Chief Information Officers (NASCIO); and Bill Schrier, Chief Technology Officer of Seattle.

Steve Fletcher kicked off discussion in the Technology Trends panel as he initiated discussion of a common term used throughout the session: consolidation. According to Fletcher, government needs to be perceived more like a business in the current economic environment. In order to enable government services, business processes must be reevaluated and redesigned. Fletcher spoke of opportunities in enterprise technology and cloud computing that could help engage state governments. Doug Robinson echoed the sentiments of Fletcher in regards to consolidation, but also emphasized collaboration, and the possibility for regional clouds. Bert Jarreau and Bill Schrier however discussed the possible inefficiencies of consolidation efforts. Schrier spoke from personal experience when he brought up the possibility of failure, and Jarreau pointed out that while the technical aspect of consolidation may not be difficult, the collaboration of people and local entities can be difficult. Schrier and Jarreau emphasized broadband technology as the key to transformational government. According to Schrier, broadband enables citizens to aid state and local government in the provision of some services. When asked what the upcoming FCC Broadband Plan should include, answers from the four panelists included better overall service, access to rural areas, wireless as well as fiber needs to be addressed, and some sort of adoption strategy needs to be addressed. Other technological innovations were discussed, such as the idea of a virtual, mobile workforce. Though advocates of a virtual workforce, the panelists pointed out impediments state and local governments endure such as a bleak public perception.

The Keynote Speech, delivered by Mark Zandi, Chief Economist and Co-Founder of Moody's Economy.com, followed the issue panels. In his speech, Zandi walked through the recession from its beginning in December 2007 to its recovery in August 2009. Zandi attributed the end of the recession to ARRA, claiming that the recession officially ended once ARRA funds began to trickle downward to the state and local level. Though the recession is officially over, Zandi does not foresee a full recovery anytime soon. While layoffs are abating, companies are still not hiring largely due to a lack of confidence in the economy and policy uncertainty. Housing foreclosures are still rising, while revenue is still decreasing. According to Zandi, policy-makers need to remain aggressive and work diligently to get something solidified in order for the precursors to self-sustaining growth to begin. Zandi provided a timeline in which he predicted self-sustaining growth will begin in Q1 of 2011, however fiscal pressure will intensify by Q4 of 2011 due to the rising debt to GDP ratio, which according to Zandi, the President's recent recommended budget only worsens.

Following the Keynote Speech, issue panels were once again offered, this time in energy, tax, and transportation. In the Energy Outlook panel, speakers consisted of Jeb Brugmann, Interim Executive Director of ICLEI – Local Governments for Sustainability; Mandy Mahoney, Director of Sustainability for the City of Atlanta; and Mark Wolfe, Executive Director of the Energy Programs Consortium. Panelists discussed the growing trend of energy efficiency and key initiatives taking place at the state and local level. Unfortunately, because the trend is still new, there is a huge gap between those states and localities that have advanced in energy efficiency, and those that are still searching for a definition. Panelists agreed that ARRA has helped by providing funding for specific programs, and increasing support. Mark Wolfe discussed how selling energy efficiency still remains difficult, however upgrades to software tools that track and measure energy consumption could benefit the effort.

The final panel of the event consisted of Alan Ehrenhalt, Former Executive Editor of GOVERNING; Josh Goodman, Staff Writer for GOVERNING; and Charlie Mahtesian, National Politics Editor of Politico discussing the political races to watch this fall. As previous speakers already pointed out earlier in the day, 36 governors are up for reelection this fall, which could have a tremendous effect on state and local government for the upcoming years. Panelists agreed that Florida's race will act as a weather vane for other states, and to watch states with unelected governors – such as New York and Arizona – for their outcomes will likely be interesting.

At the conclusion of GOVERNING's Outlook in the States and Localities 2010, it became evident that the upcoming year will hold its fair share of hurdles for state and local government. However, if leaders can adapt and work toward transforming processes, state and local government may be able to bear the long road ahead with few scrapes and bruises.

GOVERNING magazine held its annual Outlook in the States and Localities conference on February 2-3, 2010. The conference, which took place at the National Press Club in Washington, D.C. brought together both the public and private sectors as a thorough outlook of what is to come in 2010 was provided by a series of guest speakers who covered everything from the fiscal forecast to political races to watch. As a proponent of shared ideas and expert insight into the state and local arena, GOVERNING's 2010 Outlook, though bleak, still offered a plethora of opportunity for all industries working within current economic boundaries.

Day One of the conference began with City and County Concerns amidst a post-stimulus reality. Speakers for the first panel included Don Borut, Executive Director of the National League of Cities; Chris Hoene, Research Director of the National League of Cities; Larry Naake, Executive Director of the National Association of Counties; with moderator, e.Republic's Todd Sander.

A bleak picture was painted as localities were described by Chris Hoene to be heading into the eye of the storm. Hoene expanded his metaphor as he discussed the current budget shortfalls states and localities are facing and their remedies thus far which include layoffs and furloughs, the delay or cancellation of major projects, and even a revisiting of employee pensions and benefits. Hoene called for the need of transformational government, which Don Borut echoed as he discussed stimulus funds, and though helpful as they have been for states and localities, are scheduled to run out leaving local government entities to alleviate their own tension. Borut proposed a transformational government in which localities consolidate functionality and even the possibility of down-sizing and allowing citizens to take over functions governments once provided. The sole county representative on the panel, Larry Naake agreed with both Hoene and Borut's transformational ideas and highlighted issues like healthcare reform and immigration reform that must be addressed at the Federal level in order to alleviate the burden on counties. All three gentlemen, though pointing out a rather morbid time frame – anywhere from two to five years – for local recovery, concluded that in the midst of a tumultuous storm, opportunity can be found in the local governments' need to innovate and continue to provide their services with fewer resources.

Following City and County Concerns, was the Local Leadership Forum. Headlining the Forum were leaders Jon Dickinson, a Senior Policy Advisor to Mayor Bloomberg's Office of Long-Term Planning and Sustainability in New York City; Bill Schrier, Seattle's Chief Technology Officer; David Smith, County Manager of Maricopa County in Arizona; A.C. Wharton, Mayor of the City of Memphis; with Todd Sander once again as acting moderator.

Unlike the daunting concerns of the city and county panel before them, the leaders in the leadership forum took the opportunity to discuss current innovative initiatives taking place in their home localities, as well as providing their stance on the state and local environment. The leaders stressed the need for local governments to seize the opportunity found within the present crisis. Transformation was once again the word of the hour as the leaders shared their views on the need for government to reevaluate the services they currently provide and develop new methods of providing those services with reduced means. Mayor Wharton stressed that though it will be a good two to five years before states and localities are free of the burden of recession, localities should still plan and function as though recovery may arrive sooner. Bill Schrier took the opportunity of the forum to share his idea as to how a local government can perform the same services at limited cost: broadband. According to Schrier, advancing and expanding the sharing of information is the key for increased functionality in government as it opens doorways for constituents to provide the possible tools and information for government to run efficiently.

Following the Leadership Forum, conference participants were invited to join one of four roundtable discussions in the areas of Fiscal Forecast, Technology Trends, Sustainability Challenges, and Regional Initiatives. Within the Technology Trends Roundtable, led by Seattle Chief Technology Officer, Bill Schrier, participants were asked to provide a technological government need, as well as an innovation. Themes were revisited as participants discussed the need for government to consolidate in order to increase functionality and efficiency. Innovative remedies that were mentioned include business intelligence and project management tools, enterprise technology tools, and the more recent trend of cloud computing. Another innovative practice that was brought up in the Roundtable consisted of the notion of larger shared services, such as a Medicaid Management Information System (MMIS) shared amongst multiple states.

As the first day of GOVERNING's Outlook drew to a close, it appeared the only ray of sunshine in the murky 2010 forecast is the notion of transformation, from which opportunity may arise.

As president Obama put it last night during his State of the Union Address, "The worst of the storm has passed, but the devastation remains." In an attempt to re-establish America's confidence in his administration and Washington, and to put the U.S. back on the road to prosperity, Obama outlined a number of strategies to support the U.S. economy and middle class families:

• Create Jobs
• Implement Financial Reform
• Encourage American Innovation
• Increase Exports
• Invest in Skills and Education
• Relieve the Burden on the Middle Class
• Reduce the Federal Deficit
• Reform Politics
• Support National Security

Most noteworthy to government technology contractors are Obama's plans to support innovation, continue to sustain national security, and reduce the federal deficit.

President Obama supports passing a Clean Energy & Climate bill that would create more clean energy jobs, build clean, safe nuclear power plants, and would increase investment in bio-fuels and clean coal technology. Efforts in the area of clean energy would continue to support companies and government contractors that have strong research, development, and technology innovation capabilities. Look for more Congressional action in this area which could result in new contracts and grants from the Department of Energy and Environmental Protection Agency.

Continuing to support national defense remains a high priority for the administration. INPUT predicts continued investments in homeland security, terrorism initiatives, and defense war-fighting technologies. President Obama also renewed his commitment to support veterans and military families, which could result in technology investments related to services supporting these groups such as health care, counseling, education, and benefits systems.

However, President Obama's vow to reduce the federal deficit is likely to have the greatest impact on the government contracting community. Starting in FY2011, the president proposes a three year freeze on discretionary spending, not to include defense, homeland security, social security, or Medicare. This amounts to approximately one-sixth of the total federal budget, and the category where most government information technology investments reside. A step in the right direction, maybe, but this move does little to tackle the skyrocketing deficit.

Additionally, the president is calling for more transparency in government earmarks, and asking all of Congress to publish earmarks on-line. Even in the face of a $1.4 trillion deficit, earmarks remain alive and well in Washington. In the FY2010 Defense appropriations bill, lawmakers set aside more than $4 billion in earmarks. According to Tax Payers for Common Sense, the FY10 Omnibus bill contained more than 5,224 disclosed earmarks totaling $3.9 billion. Curbing Congressional earmarks would add to deficit trimming measures, but would likely negatively impact large defense contractors.

Unwilling to accept the Senate's blockage Tuesday of a proposal to establish a bipartisan fiscal task force, President Obama plans to issue an executive order to create such a fiscal commission. In Obama's words, "The commission will have to provide a specific set of solutions by a certain deadline." If modeled after the Senate plan, the commission will consist of the Secretary of Treasury, an officer of the executive branch, eight members of the Senate, and eight members of the House. It will have the authority to enter into contracts with federal and state agencies, private firms, institutions, and individuals for the purposed of performing its duties and responsibilities. The commission will submit a bill and final report to the President, the Vice President, the Speaker of the House, and the Majority and Minority Leaders of both Houses, no later than November 15, 2010.

Contractors should note that recommendations from such a commission could greatly impact federal spending and therefore contracting dollars. Vendors should monitor commission recommendations.

Lastly, President Obama's address also offered several implications for state and local governments and their contractors:

• Stimulus is still ramping up and will continue to provide opportunities, especially in transportation and transit related spending.
• The passage of a jobs bill would help state and local economies by creating jobs and strengthening small businesses through financing and tax credits.
• Renewal of the Elementary and Secondary Education Act and expansion of its reforms to all 50 states could open the door to education related technology contracts.
• Continued reforms and subsidies for the housing market will bolster state and local revenues via property value/tax increases.
• Freezing discretionary spending may adversely affect non-exempt programs such as state and local grants.

INPUT will be analyzing the President's FY2011 Budget Request (expected next week) to determine how these priorities will impact budget and technology initiatives.

The Maryland Health Care Commission's (MHCC) effort to pre-approve vendors and aggregate electronic health record (EHR) data is very valuable to state physicians interested in these systems, but lacking technology expertise. The state is taking the first steps towards educating physicians to make smart EHR purchases and to help them meet the requirements for meaningful use incentive payments as outlined in the economic stimulus package.

MHCC has maintained a Physician EHR Product Portfolio website since 2007 to provide evaluation and comparison data on available software packages. The 26 approved vendors have met the Certification Commission for Health Information Technology (CCHIT) certification standards relating to functionality, interoperability, and security. MHCC evaluated and selected these vendors based on CCHIT adherence, a product demonstration, and software specs. The listed vendors have provided details on their product information, including privacy, security policies, standard pricing, contact information, and discounts. The pricing information is available in several formats, including line items and practice size. MHCC has provided its own analysis and assessments, including vendor comparisons.

Other states will likely develop similar tools and portfolios for providers and hospitals to utilize. Pre-approved vendor lists that are maintained by states could eventually be linked with master term contracts that physicians could buy off of. Contractors need to ensure that their EHR software packages are CCHIT certified, since the entity will likely be designated by the federal government as the official certifying commission. In addition, vendors should consider providing discounts to larger practices or offering alternative financing and/or loan options.

Wrangling over health reform has eclipsed some recent events that point toward the likely avenues Congressional Democrats will take for economic stimulus when both houses reconvene after the New Year. However, health care negotiations could linger in conference through January, delaying discussion of new stimulus until February. This would allow President Obama to lay out his goals for a new jobs-oriented stimulus in his State of the Union address in late January or early February.

In a December 8th speech at the Brookings Institution, Obama provided early insights into his goals for this stimulus, including eliminating capital gains taxes for small businesses, non-specific infrastructure spending, residential "green" retrofitting, and a variety of emergency relief to seniors and the unemployed.

12/16: The House passed a $154 billion "Jobs for Main Street Act" (H.R. 2847) that is intended to redeploy unused funds from bank bailouts to keep a lid on unemployment, which increased at a rate not anticipated by the initial $787 billion stimulus package. This bill truly piggy-backs on the earlier stimulus program, inserting additional funds into highways, an "Education Jobs Fund," school renovations, public housing and various benefits extensions.

12/24: The Senate passed a $290 billion increase in the nation's debt limit to $12.4 trillion. (The House passed similar legislation the week prior.) This will allow the federal government to borrow money through February. Congressional Democrats had originally sought an increase that would cover borrowing for all of 2010.

INPUT's Take

• I'll declare the debate over health care refom legislation to be over when the President signs a bill and not one second before. We won't know until next week (at the earliest) how much trouble Speaker Pelosi will encounter in trying to line up enough of the pro-public-option members in her chamber to support the Senate's public-option-free version of reform. It's not inconceivable that this could take weeks and maybe even scuttle reform altogether.
• So far, the Democrats--Obama included--are not proposing any radical new visions as part of their jobs stimulus. They are simply proposing a supplement to the American Recovery & Reinvestment Act of 2009. (Call it "Stimulus, Jr.") However, if Congressional Republicans have been willing to mount an endless rear-guard action on health care reform, it will come as no surprise if they do the same on additional stimulus spending. (And we haven't even begun the debate on climate change legislation!) Exhaustion could easily result in a Congressional stalemate on additional stimulus.
• As it now stands, government IT vendors should make plans for 2010 that depend in any way on the timing or amount of any jobs stimulus finding its way into federal or state and local agency coffers.

INPUT's newly released report, Statewide Health Information Exchanges: a $910 MM Market by 2014, examines the Health Information Exchange (HIE) marketplace, HIE Cooperative Agreement Program (CAP) grant details, and forecasts the State & Local HIE spend from 2009-2014. Highlights include:

• Medicaid's role in advancing HIEs and the recession's impact on health information technology (HIT)
• INPUT's top ten HIE business opportunities offering a snapshot of state HIE planning projects, system requirements, and procurements
• Recommendations to vendors on how to approach the market and where to find business

The American Recovery and Reinvestment Act of 2009 (ARRA) allocated an unprecedented amount of HIT funding, providing momentum to assemble stakeholders and mobilize states. The Health Information Technology for Economic and Clinical Health Act (HITECH) section of the stimulus package set-aside $564 million in HIE CAP grants for states to develop a core infrastructure. States are spearheading HIE initiatives, charged with convening, coordinating, and managing activities. With aggressive timelines, federal drive, and a significant amount of funding state are going to move quickly and seek technical assistance from consultants, systems integrators, IT equipment providers, and software and services providers along the way. These efforts provide a down payment on the Administration's health care reform agenda.

Coinciding with the release of the HIE report, INPUT will be hosting a webinar on the topic on Tuesday, January 26th, 2010. Please contact your member advisor if you are not able to obtain the report.

On December 9, 2009 the Centers for Medicare and Medicaid Services (CMS) awarded $16 million in federal economic stimulus grant funding to six states and the U.S. Virgin Island for Medicaid health information technology (IT) planning and implementation efforts in preparation for the release of provider electronic health record (EHR) incentive payments. These states join the Iowa Medicaid program which was the first to receive an award in the amount of $1.16 million in November. Other states are expected to receive awards in the future. Reportedly, state Medicaid Offices, not CMS, will be tasked with managing up to $63,750 over six years in incentive payments to providers who demonstrate meaningful use. Grant provisions include a 90% federal match for state health IT planning activities. The following states received federal matching funds:

• California- $2.48 million
• Georgia- $3.17 million
• Idaho- $142,000
• Montana- $239,000
• New York- $5.91 million
• Texas- $3.86 million
• U.S. Virgin Islands- $232,000

States will utilize the funding to study existing EHR adoption barriers, provider eligibility and requirements for incentive payments, conduct a comprehensive analysis of state HIT activities and determine the needs for consumer-controlled personal health records (PHR). In addition, states will develop a State Medicaid Health IT Plan as part of the statewide HIT roadmap.

INPUT's Take:

Medicaid agencies are tasked with conducting environmental scans and developing strategic plans which may entail assistance from technology consultants. State Medicaid Offices will leverage existing resources and continue to work collaboratively with state designated Health Information Exchange (HIE) entities which are currently detailing strategic and operational plans, as well as, revisiting state health IT roadmaps. It will be vital for Medicaid Management Information Systems (MMIS) to align with state health IT goals and federal requirements. Further, contractors may be called upon to assist states with managing incentive funding through tracking tools and technologies.