The federal government's failure to release $500 million in promised funding has slowed the next phase of the multibillion-dollar national effort to implement electronic health records (EHRs), says Canada Health Infoway President Richard Alvarez.

The year-long freeze on federal funding has compromised plans to rollout initiatives designed to improve physician uptake of electronic records, Alvarez said. This will do nothing to improve Canada's status as an international EHR laggard, Alvarez said.

"The next very serious phase is basically in community physicians' offices," said Alvarez, head of the federal agency created in 2001 to promote provincial and territorial EHR programs. "The vast majority of the [new] money was earmarked for that. That's an absolutely crucial step in this journey. We've been slowed down. If we don't have money to invest in that area we obviously can't do that until such time as the money is reinstated."

The $500 million was promised in the 2009 federal budget, raising the government's overall EHR investment to $2.1 billion. Since 2001, Ottawa has now paid $1.6-billion for an array of programs in which federal funds have been matched by provincial and territorial monies to build nationally compatible systems and platforms. Alvarez estimates that about $3 billion has been invested to date by various levels of government in the development of EHRs in Canada.

A 2007 study, prepared for Canada Health InfoWay in collaboration with McKinsey and Company, indicated that the total incremental cost of creating a nationally integrated EHR system by 2017 would be in the neighborhood of $10-to-$12 billion. An additional $4 billion would be needed to provide integrated systems to allied health professionals and the broader community care such as long-term care facilities, home care, public health, and mental health. As well, McKinsey estimated a national system would cost between $1.5 billion and $1.7 billion annually to operate.

But once fully implemented, electronic records will quickly pay for themselves in terms of cost savings to the health care system, Alvarez said. "In the studies that we've done the benefits are anywhere between six and seven billion dollars annually."

Canada's progress to date in the adoption of the EHRs has been slow in comparison with that of other nations. In a study of EHR adoption among 11 wealthy nations released by the New York-based Commonwealth Fund in November 2009, Canada ranked last in physician utilization at 37 percent. In Australia, Italy, the Netherlands, New Zealand, Sweden and the United Kingdom, EHRs are nearly universal.