Three developments at the state and federal level since March are moving electronic health records closer to becoming a reality for all practices.

With a March 14 executive order, Gov. Arnold Schwarzenegger added more state muscle to a push for adoption of health information technology that began with a July 2006 executive order. The recent order contains several stipulations directly impacting physicians, including a requirement for purchasers to measure and report provider "performance and aggregation of data for quality transparency and consumer choice."

Schwarzenegger's order also makes a promise to strengthen the ability of the Office of Statewide Health Planning and Development to "collect, integrate and distribute data on health outcomes, costs, utilization and pricing for use by purchasers, health plans, providers and consumers to help inform and drive decision-making." The text of the governor's executive order can be found at www.gov.ca.gov/index.php?/executive-order/5626/.

At the national level, a bill making its way through Congress would give physicians-including solo and small group practices-access to grants, loans and tax incentives for purchasing health information technology. The National Health Information Incentive Act, also known as HR 1952, was introduced by Rep. Charles Gonzalez (D-Texas) and includes both one-time incentives and sustained funding opportunities.

The Internal Revenue Service ruled in early May that hospitals will not jeopardize their tax-exempt status if they provide electronic health record technology and technical support to medical staff physicians.

According to a May 11 IRS memo, the agency will not find a hospital's information technology assistance violates its 501(c)(3) status "if the benefits fall within the range of Health IT Items and Services under the [Health and Human Services] EHR Regulations" and the hospital enters into a Health IT Subsidy agreement with affiliated physicians.