G.E. offers loans for e-health record purchases

Jun 17 2009

"General Electric Co. said its GE Capital division will make no-interest loans to hospitals and health-care providers that purchase GE's health-care information technology," The Wall Street Journal reports.

The company "expects to offer $100 million in interim financing to hospitals and health-care providers for projects that are expected to qualify for funds from the U.S. government's economic-stimulus package" as part of a program called Stimulus Simplicity. "GE said the move offers doctors, community health clinics and hospitals a bridge to qualify for stimulus funds and faster access to electronic medical records."

The federal stimulus package "allocates $19 billion to health-care information technology," but Vishal Wanchoo, "president and chief executive of GE Healthcare IT, said many hospitals are cash-strapped and unclear on when stimulus funds will start flowing." Vinchoo adds that Simply Stimulus will "take away a lot of the concerns hospitals have" and will help GE "increase our market share." Currently, "healthcare IT makes up only 10% of GE Healthcare's $17 billion in annual revenue," but the company hopes to "expand its presence in the fragmented health-care IT market" (Glader, 6/16).

The New York Times adds that the loans, which are to buy GE's Centricity electronic health records, will "carry no interest until the institutions begin receiving government money." The plan "addresses one big worry for many doctors who are interested in taking advantage of the government incentives (up to $40,000 per physician over a few years) to make the move to digital patient records: a shortage of upfront capital." Details of the government's new standards for electronic health records are still uncertain, so "G.E. is issuing a guarantee that its electronic health records will meet the government standards, regardless of the final details." GE is not the first company to offer health IT financing—"in April, I.B.M said it would make up to $2 billion in financing available as bridge-loans to jump-start high-technology infrastructure projects likely to qualify for federal stimulus spending" (Lohr, 6/15).

The AP reports that "only about 20 percent of U.S. health providers" use electronic medical record technology "in part because of the relatively high start up costs." In the long run, electronic records are "supposed to make health care cheaper by cutting down on paperwork and more efficient by streamlining the way patient files are stored and shared" (6/15).