IBM Buys White House Prescription for Health IT

Big Blue expects a raft of vendors armed with IBM health care solutions to tap into the $19 billion in the stimulus package designated for health IT records modernization. In addition to the stimulus funds, IBM hopes to cash in on what is predicted to be a landmark rush to other health care reforms promised by President Obama.

After prying $19 billion for health care IT initiatives from lawmakers in the stimulus package, the White House indicated Feb. 23 that efforts to reduce a trillion dollar deficit will almost certainly include even more health care reform.
"The path to fiscal responsibility must run directly through health care," Obama's budget director Peter Orzag told a White House Summit on the deficit. "The single most important thing we can do to put the nation back on a sustainable [fiscal] course is slow health care costs. It is the key to our fiscal future. We can no longer let the urgent get in the way of the important."

White House Press Secretary Robert Gibbs further underscored the point in briefing reporters before Obama's Feb. 26 unveiling of his first federal budget. "The health IT in the economic recovery plan will make health care more affordable, will save patients' lives, and increase the quality and the outcome of the health care that millions of people are provided," Gibbs said. "Reform is important in order to cut the incredible increases in cost that we see each and every year as businesses and families and individuals struggle to keep up with the pace of health care inflation."

All of this is music to IBM, which expects many of the vendors scrambling to tap into the stimulus funds (and the even more funding likely to be in Obama's budget) to deploy IBM health care IT solutions.

"There are organizations waiting to step up," said Dan Pelino, head of IBM's IT health initiatives. "In addition, there will be significant activity outside of the stimulus such as home monitoring devices and the medical home doctor concept."

The stimulus funds are expected to be used within 24 months, but it'll be at least a year before the government begins granting money for the health IT reforms. Pelino explained that 2009 will be used by the government to establish standards and best practices. That effort alone will take $2 billion of the $19 billion.

Pelino said IBM vendors will be focusing on health IT infrstructure; analytics for best practices for base solutions, databases and tool kits; and collaborative solutions for hospitals and doctors.

Most of the stimulus funds are earmarked for hospitals with 500-bed units slated to receive as much as $11 millon each to modernize their records. Hospitals with less than 500 beds, which constitute the majority of U.S. hospitals, could receive as much as $3 million. Physicians will also be entitled to receive funds to upgrade to EMT (electronic medical records).

"We're on a journey," Pelino said. "Where we have lacked incentives to ask [hospitals and physicians] to buy into the EMR system, we now have those incentives."

Pelino also dismissed the privacy concerns often cited for the lack of EMT takeup.

"All records are already digitized in some way or another. Administrative systems are already digitizing medical records, as is the pharmaceutical industry," Pelino said. "The only place it isn't happening is between you and the doctor."