WSJ: The Push For Paperless Health Records

The Wall Street Journal has a nice article The Push for Paperless Health Records, an interview with David Brailer, who served as national coordinator for health information technology under the Bush administration.

On the lack of federal spending for health IT during the Bush administration:

“The reason we avoided federal spending on this is once the federal government weighs in and says, ‘We will pay you to do this,’ market forces die. Nobody will ever do it anymore without federal money. The federal government is going to spend the next $65 billion at some point. Why would a doctor pay out of pocket to do this if the federal government has owned the market? I think it completely changes the health IT market to much more of a government-driven marketplace.”

Interesting; this is of course exactly what is happening now under the Obama administration, as part of the overall stimulus package.

On investing in electronic health records after the stimulus:

“It’s kind of hard as an investor to know which company to invest in because everyone has little chunks of the market and no one’s positioned as an aggregator, and I don’t think economic forces are pointing towards aggregation of the market. I do think the one effect it’s definitely had is it’s created a tremendous froth in valuation expectations in electronic record companies that are aimed at doctors that make it almost impossible for investors to make money in the long run in this space. Ironically, the stimulus has, I think, led to a capital risk that’s sitting on top of a capital risk.”

I think one or more companies will emerge as aggregators, that is a business model which is sure to attract some investors.  Regardless they will all have to incorporate pathology information, and hopefully use Aperio's technology to do so!