Supreme Court Obamacare ruling may accelerate e-health spending

The Supreme Court just gave one sixth of the U.S. economy a lot of clarity. More health IT spending could follow.
Written by Larry Dignan, Contributor

The Supreme Court upheld the requirement in President Obama's Affordable Care Act that individuals buy health insurance and may have accelerated the industry's massive investment in information technology.

To be sure, the Supreme Court's ruling wasn't going to derail the move to electronic health records and medical software implementations. What may have changed, however, is the pacing of these deployments.


Credit: Cisco

Why? Capital spending typically likes government and regulatory certainty. The Supreme Court just gave one sixth of the U.S. economy a lot of clarity.

Meanwhile, that clarity points to additional information system strain. The big parts of the Affordable Care Act (ACA)---coverage regardless of pre-existing conditions and a mandate to buy insurance---start in 2014.

According to the Wall Street Journal, 30 million new people will hit the insurance rolls somewhere. In addition, state exchanges will need to be built. All of those exchanges will require systems, hardware and software.

Also: ZDNet Health | Smart Planet's Rethinking Healthcare

Between state, federal and healthcare companies a lot of IT spending will be needed in advance of the complete ACA rollout.

Neal Patterson, CEO of Cerner, a leading health IT company, was asked May 18 about how the Supreme Court ruling would affect profits.

He said:

The environment of healthcare -- so we live in healthcare and we live in an information technology. So if something fundamentally changes in either one of those two spheres, it's going to impact us.

So they are basically -- the Supreme Court is basically going to adjudicate the question of is it in the province of a federal government to mandate a commercial activity.

So we are going to be fine either way. That will not just ripple through us. It does change the landscape one way or the other and the whole health reform legislation that I got tagged to indirectly. That whole legislation has the possibility of shaping the landscape of healthcare.

As an entrepreneur, you kind of like change because change creates new requirements, creates more clarity -- a lot of times something like that will be what I would call a trigger event in a marketplace and so it goes off and then the market then changes and if you can anticipate and see that change you're ahead.

In other words, the Supreme Court's ruling on the ACA could be a trigger event for more IT investment. That reality isn't lost on big tech vendors. IBM, Dell, Cisco, HP and a host of others are chasing health IT dollars.

Dell's chief medical officer, Andrew Litt, M.D, said he expects new models on reimbursement to emerge and IT will be critical to cutting costs. Naturally, Dell---along with ever other e-health player---wants to help the healthcare industry with IT.

There has already been a surge in e-health spending courtesy of the American Relief and Recovery Act of 2009 (ARRA), which allocated $30 billion to health IT investment. That stimulus was aimed at everything from electronic health records to telemedicine to security tools. The Supreme Court may have just green lighted another wave of health IT spending.

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