Posted by: adoseofliberty | December 23, 2009

A Health Care Market? You Don’t Say…

Joseph Rago of the Wall Street Journal recently interviewed Jonathan Bush, chairman and CEO of Athenahealth, a major player in information technology services for physicians. Bush’s perspective on the current health care reform debate is simple yet elegant.

The CEO speaks frankly about the politicians in Washington, saying “they’re living in this alternate universe where there’s no such thing as a market in health care and they don’t understand why one might be remotely useful.”  And to go one step further, in this alternate universe of theirs, it’s difficult to identify a market in just about anything.  With endless regulation and political interference in the economy these days, it’s no surprise that health care reform faces the same type of challenge.

Mr. Bush definitely understands the consequences of the current health care debate (and just about any broad-reaching legislation):

“The problem is when you have a baby with an Uzi, right, they might accidentally mow you down.”

Athena is a leading health information technology company that designs and markets software used to digitize medical records and automate billing.  The company differs from most other providers of electronic medical record systems, or EMRs, in that they employ a large health network, connecting smaller health providers (five doctors or fewer) and solo practitioners, unlike the larger health IT firms which sell proprietary software and hardware systems to large hospitals, with little connectivity to other systems and several other problems.

This “athenanet” system is among the few health-tech offerings based on “cloud computing”—in the sense that the applications are accessed on the Web, instead of a computer’s hard drive, allowing constant updates and refinements. If a regulation changes or an insurer adjusts a payment policy, it is reflected on athenanet almost in real time; on the clinical side, the program can adapt at the same rapid pace as medicine itself.

Mr. Bush argues that “government imposes standardized rules and mandates with no concern for how much they will cost or who will bear the burden.”  And ObamaCare does nothing to address this problem; rather it exacerbates the problem of consumers not being able to choose which health services they want and which provider they wish to buy from.  When individuals are allowed the responsibility to weigh the trade-offs in making health care decisions, that is “the only lasting way to enforce discipline in health spending.”

Despite Mr. Bush’s criticisms of the Democratic health agenda, his company will most likely benefit greatly if ObamaCare passes.

“It’s probably terrible that all this new bureaucracy is being created,” Mr. Bush says. “But there’s going to be 50 new Medicaid-type plans in these insurance exchanges, run by the same insurance commissioners, these same sort of glazed-over-looking state secretaries of health. You know, just not really the brightest bulbs in the chandeliers of the world. Medicaid, the worst payer in the country by a factor of four! Mother of pearl! So I feel a little bit like a robber baron. I am going to make oil money dealing with them.”

The CEO is both encouraged and disappointed with the $47 billion stimulus for health IT that is being pushed by the White House.  He is excited that there is a shift in attention towards the sector but frustrated that this bailout will keep his out-dated, legacy software competitors unnaturally afloat.

“People in Washington think in terms of things that we’ll buy and then they’ll be there. Buildings. Roads. Tanks. What Lockheed Martin makes. Things.

And this isn’t that. This is a market: its a set of agreements, it’s a language. What’s needed is a way of exchanging value and making choices, that’s ethical—and, you know, nobody, nobody, not nobody, has said a word about that.”


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