GE Announces Loans for Electronic Medical RecordsReena Jana
GE Healthcare today launched Stimulus Simplicity, a new financing and product-certification program that will offer zero percent interest loans to physicians’ offices, hospitals, clinics, and other organizations. The concept is to help them cover investments in electronic medical records (EMRs). It’s the first concrete offering in the GE’s much-publicized “healthyimagination” initative, a $6 billion investment the company is making into creating low-cost, easily accessible healthcare products and services. The company will offer $100 million in loans.
A lack of capital to invest in new EMR systems is widely cited on physicians’ blogs and online message boards as the main barrier for doctors’ and smaller hospitals’ adoption of digital records. While the American Recovery and Reinvestment Act provides for federal stimulus funds to help pay for EMR systems, this money won’t be available until 2011. GE’s Stimulus Simplicity offering is meant to bridge the gap. For those who qualify for the loans, which are being offered via GE Capital, no interest will be due until 2012.
“When speaking to our customers, we heard loud and clear from physicians’ practices and also hospitals directly that there is a crunch on capital,” says Vishal Wanchoo, president and CEO of GE Healthcare IT. “This was the fastest we’ve ever moved on this scale [to create a new offering]. It only took a couple of months to organize and launch. But we wanted to do what our customers wanted.”
The Stimulus Simplicity program will also include a certification warranty for EMR-related products from GE. This is meant to help ensure that the EMRs follow the guidelines necessary for future federal reimbursement, according to the Stimulus act.
The two-pronged offering is meant, of course, to suggest a quick, all-inclusive solution of equipment and financing from a single company, for those who are interested in adopting EMRs fast. That could mean new revenues for GE. Wanchoo says that GE Healthcare’s IT business now brings in approximately $1.5 billion annually. And he expects that Stimulus Simplicity will likely bring double-digit growth to this unit.
However, he also acknowledges that the financing program, tied to the troubled GE Capital unit, could in theory be problematic. ““We won’t have any immediate payments from our customers. We have some risk with this [program],” he says.
Still, the idea was fast-tracked internally once the Obama administration pushed the Stimulus Bill forward, with a direct request to do so from GE’s CEO Jeff Immelt.
In addition, Stimulus Simplicity will also offer contracts that feature extremely simple language, Wanchoo says, which could be seen as an “innovation” in itself. The idea was to help doctors understand how the equipment worked and the terms of the loans as efficiently as possible. The warranty information, for example, is intentionally only one paragraph long, versus a page or two as in typical documentation for medical equipment.
Wanchoo says that the target customers are small physician practices outside of large metropolitan areas, although Stimulus Simplicity will also be offered to larger organizations who might not yet have the EMR infrastructure in place.
“There are thousands of doctors’ offices out there who have been interested in EMRs, and know they are important, but couldn’t make an up-front investment in them,” says Wanchoo. “GE has said that the healthyimagination program is about ‘access,’ and this is what Stimulus Simplicity is about.”