Health IT Honchos Advise Obama

(MoneyWatch)  Before President-Elect Obama even takes office, prominent health IT executives are already weighing in on how he should promote the adoption of health IT.

Glen Tullman, CEO of Allscripts-Misys Healthcare, predicted that the Obama Administration will invest less in health IT than the $50 billion that Obama pledged during the campaign. Speaking Dec. 8 at a forum sponsored by NASDAQ OMX Group and Leerink Swann & Co., Tullman said that government incentives to purchase electronic medical records, similar to the 2 percent bonus that Medicare will pay doctors who switch to electronic prescribing, would have a marked effect. He also suggested that federal subsidies for EMRs be in the form of loans and be tied to physicians' use of the systems in patient care.

On the day Tullman spoke, shares in Allscripts rose 14 cents, or 1.9 percent, to $7.38 on the Nasdaq exchange. But overall, neither Allscripts stock nor the shares of other publicly traded health IT vendors have done better this year than the market as a whole. Perhaps that will change, however, when President Obama actually proposes health IT spending to Congress.

Meanwhile, athenahealth CEO Jonathan Bush, in an online interview with the Wall St. Journal's Vanessa Fuhrmans on Dec. 12, said that the Obama Administration should not expend federal funds on the kind of packaged software used in "legacy" computer systems. "The damaging side [of Obama's plan] would be if help from the government ended up in the form of subsidies for broken approaches that have not worked," he said. He noted that software "isn't the dominant approach in financial services or retail banking or anywhere else, and it shouldn't be in health care."

Bush's firm is an application-service provider (ASP) that provides practice management and EMR programs over the web from a remote server. So his remarks could be interpreted as a challenge to the larger and better established vendors, such as McKesson, Siemens, GE, Epic, NextGen, and Allscripts-Misys, that serve hospitals and large physician groups. But his point has a wider resonance in light of the fact that smaller practices increasingly favor ASP-model systems, which require less upfront investment than do onsite client-server systems using packaged software.

It is becoming clear that software is moving to the web and that some kind of web-based system will be required to connect all of the islands of data trapped in providers' legacy systems. Some experts believe that web-based personal health records will, in the long run, be a more viable model for health data exchange than regional health information organizations that link systems together either through central repositories or federated networks. But that's a stretch of the imagination, since neither consumers nor physicians have yet shown much interest in PHRs.