Healthcare in Canada is admired by many Americans. Jeff Immelt spoke in Toronto last month and said, "Canadian health care should be a #1 expertise exported to the world." GE is benefiting from Buy Ontario where the government is trying to reduce costs by buying from big suppliers, like GE, but shutting out small Canadian companies.
Our Canadian Government needs to support Canada more.
A full story on this appears in this week’s LBO Wire.
Health-care reform and stimulus spending were pilloried in the recent American election, but the government’s drive to digitize the sector has found support from private equity.
One of the main objectives of reforming health care is to improve the quality of the care while reducing costs. Health-care information technology companies that focus on capturing revenue and implementing electronic medical records provide important tools necessary to achieving that outcome.
Making sure that hospitals and doctors get paid is an increasingly difficult task as providers grapple with bad debts and face tighter reimbursements from insurance companies, Medicare and Medicaid. Revenue cycle management software that boosts reimbursements, clears insurance eligibility, and helps the uninsured find coverage is in big demand.
There have been several PE deals in this area recently. In October, for example, health-care payment systems provider Emdeon Inc., backed in part by General Atlantic LLC and Hellman & Friedman LLC, bought PE-backed reimbursement specialist Chamberlin Edmonds & Associates Inc. for $260 million.
“Wiring the system,” as the industry puts it, is another driver behind health-care IT investments. The plan to adopt electronic health records — championed by the oddly allied Newt Gingrich and Hillary Clinton in 2005 — is getting a big push from the 2009 federal stimulus package, which will spend about $40 billion by 2016 to help hospitals and doctors go digital.
Although there is a lot of money floating around, picking the winners in the fragmented health-care IT market is a challenge for investors, especially as a wave of consolidation unfolds in the sector.
Large hospitals, which evaluate vendors based on their track record and ability to invest in upgrades and services, will likely award contracts to the dominant players, said Dr. Bruce Darrow, a cardiologist and assistant professor at Mount Sinai Medical Center, who is leading the implementation of the hospital’s new electronic medical records system.
“We look for companies that are actually going to be around when you’re done implementing the system,” he said.