Healthcare Technology and News: Obama's Stimulus Plan to Benefit Pure-Play Healthcare IT Companies

Stories linking President Barack Obama to communications technology emerged long before he took the White House – before analysts estimated that his stimulus package would yield 500,000 new IT jobs, before he eased restrictions on Cuba that will allow U.S. telecom companies to set up TV and mobile phone services there and before he leveraged a Web-based management tool as a sort of online testing lab for citizens’ ideas.

 

Obama leveraged the Internet to win the White House and shatter campaign fundraising records, then fought to keep his BlackBerry for personal use when he moved from Illinois to Washington, D.C.

 

And since he arrived, Obama named tech whiz Vivek Kundra as the nation’s first CIO, announced plans to nominate a former newspaper executive to the Federal Communications Commission and began addressing the nation each week on YouTube.

 

One major focus of Obama’s campaign that appears to be coming to fruition now is a promise to leverage technology to ease healthcare spending – specifically, to create an electronic medical health record system.

 

The president’s economic stimulus package includes $19 billion for that effort, and IT insiders now are saying that transition will serve as a shot in the arm for many in the sector.

 

“While some traditional technology names will benefit from this portion of the American Recovery and Reinvestment Act of 2009, it’s the healthcare IT companies that will see the biggest boost and represent the biggest opportunities for investors,” reports John Moore of CNBC. “Forrester Research expects about $14 billion of the $19 billion will be available to technology vendors through purchases of technology gear and related services. Much of the money will come in the form of grants the federal government makes to healthcare providers.”

 

Naturally, the tech world has taken notice.

 

Just this week, GE announced that it’s spending more than $3 billion over the next six years to “help deliver better care to more people at lower cost.” The company says it’s committing $2 billion of financing and $1 billion in related technology and content to drive healthcare information technology and health in rural and underserved areas.

 

According to Moore, pure-play healthcare IT companies stand to benefit the most.

 

“Companies such as Quality Systems, Allscripts, and Athenahealth specialize in EMR products for small and mid-size physician practices, while Cerner develop solutions that primarily target hospitals.

 

According to one analyst that Moore interviewed – Sean Wieland, senior research analyst at Piper Jaffray – there is $30 billion of incremental spending pumped into an industry that does $20 billion a year in revenue.

 

“It’s going to move the needle,” Wieland reportedly said.