Health Reform and IT Innovation: A Potential Partnership?

John Edwards has come out with his healthcare reform plan (.pdf description here). We now have several state proposals to consider, as well as Ron Wyden’s Healthy Americans Act and the implicit statements in Sen. Barack Obama’s first speech on the issue. (I summarized and commented on that speech last week.)

Other leading Democrats might be expected to follow similar paths. In a recent speech, Gen. Wesley Clark endorsed the concept of single-payer insurance but suggested a gradualist approach that “harnessed” the talents of the health insurance sector. Sen. Clinton has not presented her health proposal, but her 1994 initiative bore some resemblance to both the Edwards and Wyden plans (although they go considerably further in some areas).

There’s always the possibility that none of these initiatives will come to pass, but wary investors may already be withdrawing from health sector investments. If the health sector begins to suffer financially because of political uncertainty, the result could be higher premiums and less coverage than we’re seeing today.

There are, however, areas where health reform goals and private sector investment might work together extremely well. Certain types of health venture funding, particularly in IT, could be sound investment decisions that would a) enhance the likelihood that health reform could succeed, and b) have a good chance of succeeding even if wholesale reform doesn’t happen in the next few years.

Here are some examples of investments that have a better-than-average chance of succeeding - and improving the healthcare system - both under an Edwards/Wyden type plan, and if our basic system remains essentially unchanged: