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WASHINGTON (Reuters) – The U.S. government on Thursday announced grants of almost $1.2 billion to help hospitals and healthcare providers implement and use electronic health records.

The Obama administration has made the overhaul of the $2.5 trillion U.S. healthcare system the centerpiece of its domestic agenda, including the use of technology to improve efficiency and cut costs.

The grants include $598 million to set up some 70 health information technology centers to help healthcare institutions acquire electronic health record systems and $564 million to develop a nationwide system of health information networks, Vice President Joe Biden's office said in a statement.

"Expanding the use of electronic health records is fundamental to reforming our healthcare system," said Health and Human Services Secretary Kathleen Sebelius, unveiling the grants with Biden in Chicago.

"Electronic health records can help reduce medical errors, make healthcare more efficient and improve the quality of medical care for all Americans."

The grants will be funded by the American Recovery and Reinvestment Act of 2009 and be made available in 2010, the statement said.