HHS Secretary Kathleen Sebelius and David Blumenthal, MD, head of ONC, announced yesterday the release of $235 million in health IT grants to communities. The recipients will be local governments and non-profit organizations that already have health IT in place. The goal of the funding will be to help them expand and demonstrate health IT's benefits for population health.

By being able to demonstrate improved health outcomes with the help of the funding, the chosen communities will then serve as "beacons" or models for other communities that are in the early stages of health IT initiatives. Hence the name of the program Beacon Community Cooperative Agreement.

This is a great move by HHS and ONC. A lot of the focus of the ARRA fudning had been on driving physician adoption of health IT. Even the recent bill for small business loans is geared toward removing the upfront cost barrier for small physician offices. Now there is funding for local governments and nonprofit organizations that already have the systems in place. While these early leaders have been able to fund the implementation of health IT systems, they still need funding to get to the next level, which is expansion and demonstration of improved health outcomes.

This is especially important to HHS and ONC, particularly given the recent Harvard reports on hospitals not saving any money from electronic health records. HHS and ONC need to show cost savings and improved quality of care with these federal dollars. If they succeed, everybody wins, from the federal government, local communities, healthcare systems, health IT vendors and, more importantly, the patient/consumer.