The federal government is now offering a new series of grants worth $235 million to communities with electronic health programs already in place. The new grants are to allow the communities to strengthen their health information infrastructure and data exchange.

The $235 million is coming out of the $2 billion that was set aside for discretionary program spending within the $20 billion federal stimulus package. InformationWeek reports that so far, 75% of the $2 billion in discretionary funds have been allocated to projects.

The funds will allow the so-called Beacon Communities to track goals and measure improvements in efficiency and quality of care related to the use of electronic health records and other health IT systems.

The grant funds will be given out based on merit and will not be given to communities to set up health IT programs. The Beacon Communities chosen will be required to coordinate with state health information exchange programs such as the VA and DoD who are already working on promoting the exchange of health data.

The $235 million in funds will be broken down for different uses. $220 million will be given as grants to 15 different Beacon Communities for projects to help clinical decision support, infrastructure, and other tasks. The funds left over will be broken into a $5 million chunk for technical assistance to the communities and $10 million will be used for an independent evaluation of the program.

In August, $1.2 billion in grants were announced that would be given out in 2010. These grants will be given to help hospitals and health care providers to build the infrastructure needed to move to digital health records. At the time U.S. health secretary Kathleen Sebelius said that the move to electronic health records was a fundamental part of reforming the health care system in America.

In July, the DoD started to use electronic health records in some of its medical facilities and is looking to use similar technology in more facilities going forward. Fast access to medical records can help speed diagnosis of illness in patients and save money by preventing duplication of effort and other problems.

Privacy of digital health records remains a big concern for many. The DoD is making the program opt in only and the patient records don’t go online unless the patient specifically agrees to join. Both Google and Microsoft are involved with the DoDs efforts. Special arrangements to ensure the medical data is only stored on private servers was made with both technology giants. Penalties for mishandling the patient information by Microsoft or Google were also put in place. The huge amount of funds spent to revamp health IT is expected to eventually save the U.S. about $77 billion each year.