Investors' POV: Scoping out Health IT
Today, I listened to the recorded presentation given by a panel of health information technology (HIT) leaders at the recent JP Morgan Healthcare Conference (Jan 10-13). The panel included:
- Eric Schmidt, CEO of Google
- Todd Park, CTO of HHS and Athenahealth co-founder
- Anish Chopra, CTO of the US government
- John Doerr, partner, Kleiner Perkins Caufield & Byers
My reasons for sharing this is that HIT is transforming so quickly that it's helpful to hear both public and private sector panelists get on the same page. Also, HIT has the potential to affect every stakeholder -- payers, providers, pharma, legislators, and patients--in healthcare. (Of course, don't forget the investors.)
This presentation marked the first time ever that the JPM Healthcare Conference hosted a health IT panel in its 29-year history, named "Innovation Opportunities for the Health IT market driven by HITECH and the Affordable Care Act". It may be been more appropriately titled "What Are the Incentives to Making Money in Health IT."
Note: To listen to the session for yourself: Edit: The webcast can also be directly viewed here, via Vimeo (Thanks to Ahier). Or, visit the JPM webcast site, enter your info, and find the session "Innovation Opportunities for the Health IT market" under the Keynote section.
Here are some highlights from the panel:
(Due to the conversational nature of the webcast, many quotes couldn’t accurately be attributed to their authors)
- "Meaningful use….is a presidential priority...[is] a shift of incentives for physicians..." Anish Chopra
- "[Now's] the best time to be an entrepreneur at the intersection of healthcare and IT."
- "I can think of several new companies…has the potential to be multi-billion dollar companies."
- "Meta-tags…and interoperable is key" Eric Schmidt
- "Figure out a way to get the consumers [patients] to love the product [EHRs]. How? Patients care about their health" Eric Schmidt
- "When the doc says you have some long-named disease, you type it in Google and BOOM now you can discover all the other diseases you may have." Eric Schmidt
- "Meaningful use is an appetizer… bait. Payment reform is the entree...current structure is [Fee for Service]...you get what you pay for. Payment reform needs to change."
Amusing exchange during Q&A:
- British gent: "How about also liberating banking data of patients so we can know if a patient has bad behaviors like buying unhealthy food, so that the information can be used in treatment."
- Eric: "I'm pretty sure what you suggested is illegal.”
Overall, the tone of the panel was one aimed at championing HIT and to woo a room filled with deep pockets. When asked about the risks of investing in HIT startups, Anish Chopra answered that the risk was "very low." I would disagree with this as I feel the current environment is actually rather high risk due to changing policies, dominance from the incumbents (Epic/GE/McKesson/Cerner, etc), and the lack of interoperability. The question should be is the reward high enough relative to risk.
Eric Schmidt repeatedly called for interoperability of HIT systems, and as he should since Google is the king of organizing (and monetizing) massive data sets. He also seemed to imply that the status quo of HIT incumbents was the reason for sluggish progress on interoperability. I would've liked to see him expand on the topic by making a business case to motivate incumbents.
Overall, there was positive energy in the room during the panel, and one thing everyone agreed on was to "follow the money."