Obama’s Health IT Chiefs on Tap for Governor Patrick’s Big Health Technology Ball

3/17/10

Massachusetts is going to be the focus of the health IT universe late next month — if it isn’t already. Governor Deval Patrick and his staff have invited power players in both the healthcare and technology fields to Boston in April for a conference that is expected to highlight the state’s fast-growing health IT sector.

The conclave comes as state organizations in Massachusetts and other parts of the U.S. begin spending more than $1 billon awarded to them by the federal government since February for regional and statewide systems for sharing electronic health records. To headline the conference, the governor has attracted at least two of the top federal officials involved in national health IT initiatives: Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, and David Blumenthal, the national coordinator for health information technology. The conference is slated for April 29-30 at the Westin Boston Waterfront hotel in South Boston.

Several factors are playing into Patrick’s strategy for bringing these and other heavy hitters to the state, according to people involved with the conference. Massachusetts has a huge stake in President Obama’s plan to invest $19.5 billion from the federal economic stimulus passed last year to drive adoption of health information technology over the next several years; a bright spot in the mostly stormy economy in recent years has been the growth of tech companies such as Athenahealth, eClinicalWorks, and Meditech that provide software and services to hospitals and other healthcare organizations. These Bay State firms are competing with companies around the world for their share of the billions of dollars in new business that will be generated by Obama’s health IT initiative, which is expected to create jobs while reducing healthcare costs and improving patient care.

Bay State officials have invited state health IT and Medicaid leaders from around the country, as well as healthcare software firms from Massachusetts, to the conference. To help ensure their participation at the conference, the plan is to pay for the travel expenses of many of the government officials on the guest list, covering those bills with revenue generated by the conference, according to David Martin, director of policy at the state’s Executive Office of Health and Human Services.

Blumenthal—who was a physician and policy head at Massachusetts General Hospital in Boston before he took his job in the Obama administration—is in charge of the President’s multibillion-dollar initiative to develop a national infrastructure for exchanging electronic health data. One of Blumenthal’s big tasks is to lead a process to establish the all-important “meaningful use” standards for electronic health record systems, due to be out later this year. Companies need to make sure their health IT products help doctors and hospitals to comply with these standards, for doctors to earn incentives for their use of electronic health records.

“Having these kinds of policymakers in Massachusetts is significant to us is because we have thousands of providers in Massachusetts that are on our network,” says John Hallock, a spokesman for Watertown, MA-based Athenahealth (NASDAQ:ATHN), which provides physicians with Web-based software and services to manage their billing and to store electronic health records. “Our customers are concerned about how the government plans to define ‘meaningful use.’”

Athenahealth, which plans to participate in the conference, has an entire department dedicated to gaining new customers through government-funded programs around the U.S. to establish health information systems, according to Hallock. The company has recently sent in a proposal to officials in Massachusetts, which got a $13.4 million grant from the federal government last month to create a so-called regional extension center. The Massachusetts e-Health Institute, a nonprofit that Patrick designated to operate the center, is reviewing proposals from Athena and other electronic health record (EHR) firms to decide which ones will be certified to provide EHRs to some 2,500 physicians who qualify for services from the center.

Exact statistics on the economic impact of the health IT industry in Massachusetts are hard to come by, according to Martin, of the state’s health office, and others. However, it’s safe to assume that the companies in this sector employ thousands of workers and generate revenue that is easily in the hundreds of millions of dollars. Athena, for one, reported this week that its annual revenue in 2009 grew 38 percent from the prior year to $188.5 million. Other Massachusetts-based firms in the health IT sector such as eClinicalWorks and Phase Forward (NASDAQ:PFWD) also reported double-digit-percentages of revenue growth for 2009, a year in which business was down dramatically in other industries such as manufacturing and construction.

When the Patrick administration brings in government and healthcare officials for the conference in Boston next month, it wants to showcase such success stories and pave the way for future growth in its health IT industry.

“Massachusetts has a leadership position in health information technology, and has for a while,” Martin says. “We want to make sure people know that Massachusetts is the place to go for health information technology, particularly as federal funding ramps up.”

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