WASHINGTON (AP) -- After years of promoting electronic medical records as a way to improve the nation's health care system, software companies are slated to get a multibillion-dollar boost from the forthcoming stimulus package.

But even on the cusp of this federal windfall, company shares slid last week on concerns that the government's payout may be smaller -- and slower-coming -- than initially expected.

President-elect Obama and congressional Democrats are working to hammer out a mammoth stimulus plan, which is expected to cost nearly $800 billion. Along with tax cuts for workers and businesses, the package will fund a number of projects, including health IT systems for hospitals and doctors' offices.

By replacing reams of paper files with electronic records that can be shared online, the Obama administration hopes to cut down on clerical work and reduce medical errors. Proponents say the effort could cut government and private spending by preventing duplicative medical testing and unnecessary treatment.

News of the plan sent shares of health information technology companies soaring in December. Allscripts-Misys Healthcare Solutions Inc., which makes online prescribing software, rose 60 percent during the month, while medical-record maker Cerner Corp. climbed more than 17 percent.

For nearly a decade investors have eyed health IT as an industry poised for major growth, citing the nation's aging population and calls to improve U.S. health care. Encouraged by those trends, diversified giants like Siemens AG and General Electric Co. have increased their investment in the sector.

But despite solid performance by specialty companies like Cerner -- the leader in hospital-installed electronic records -- the sector itself has remained relatively small, at an estimated $10 billion to $20 billion. That represents barely 2 percent of the $973 billion U.S. information-technology market, as estimated by research firm Gartner Inc.

"If you go back five years there was a lot of promise for this sector, but the software systems weren't mature enough," said Leerink Swann analyst Bret Jones. "Now you're looking at a situation where systems are mature, but the cost is prohibitive for some customers."

By providing cash-strapped hospitals and doctors with money to purchase IT systems, industry observers say, the stimulus plan could trigger a new boom in heath IT spending.

"This is the culmination of everybody's efforts to get health IT on the front burner," said Thomas Weisel Partners analyst Steven Halper. "You don't just walk into Congress and say, 'We want health IT funding.' They've been working on it for years."

But company shares gave up some of their earlier gains last week on word that it could be a year or more before federal dollars make their way to health IT firms.

While the specifics of the bill are still taking shape, Congress is expected to fund the initiative by awarding grants to hospitals and clinics so they can purchase new technology. The government is also expected to try to spur those purchases by awarding bonus payments through Medicare to physicians who use health IT.

In either case, industry experts say it will take months to distribute the funding, and companies are unlikely to see a boost on their balance sheets before 2010.

"This is a very long, very intricate system we're trying to build, so seeing a rapid economic turnaround in a few months would be a tall task," said David Merritt, a director with the Center for Health Transformation, a group founded by former House Speaker Newt Gingrich.

Citing the extended timeline for the package to take effect, Leerink Swann's Jones last week downgraded shares of Cerner Corp., AthenaHealth Inc. and other companies.

Jones argued that sales of some software could actually fall in 2009 ahead of government action.

"Physician practices will probably put a freeze on health IT spending this year if they know there's a chance the government might be picking up the tab," Jones said.

Wall Street is also skeptical about the ultimate size of the plan.

The Healthcare Information and Management Systems Society, which represents the industry in Washington, has recommended the government allocate at least $25 billion.

But analysts say the actual figure could be closer to $15 billion, and even as low as $5 billion.