NCPA - National Center for Policy Analysis


February 11, 2009

Democrats are using the economic "stimulus" bill to create a health information monopoly that will help centralize government control of the health-care market, says the Wall Street Journal.

In theory, electronic medical records are among the few stimulus ideas that might do some actual good.  Democrats and Republicans agree that exchanging the paper files we mostly use now for digital versions will lower costs and cut down on medical errors:

  • Both the House and Senate stimulus bills include about $20 billion in incentive payments (mainly through Medicare and Medicaid) to encourage the digitization of medical records.
  • But one of the reasons only an estimated 17 percent to 29 percent of doctors use health IT is because there are still many technical issues to work out.
  • Different systems must be compatible so doctors can communicate with each other, coordinate care and share information -- and they don't want to invest in a platform that could become as obsolete as HD-DVD.

Democrats have decided that the way to jump this gap is for government simply to pick the next Blu-Ray.  Instead of building on a voluntary public-private standard-setting body created by the Bush Administration, the stimulus bill codifies it as a federal office and gives it broad new powers if private companies are not "substantially and adequately" meeting the needs of doctors and hospitals.  The health IT outfit will soon be deciding which platforms are up to code and shutting down competitors.

This will certainly muffle innovation. Anyway, what's the rush, asks the Journal?  Democrats give the game away by mandating that most medical providers who aren't linked into the government-approved health information network after 2016 will start to be penalized.

Their ultimate political goal, however, is cost control, explains the Journal.  For the Pete Stark Democrats whose ambition is Medicare for all -- no exceptions -- giving government exclusive control over electronic health information and reporting is a step toward "comparative effectiveness" research. That in turn will be used to impose price controls and deny some types of medical treatment and drugs. And because government is able to skew the whole health system through Medicare and Medicaid, comparative effectiveness could end up micromanaging the practice of medicine.

Source: Editorial, "A Health-Tech Monopoly; Another surprise in the stimulus fine print," Wall Street Journal, February 11, 2009.

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