MASSDEVICE ON CALL — Health care providers frozen out of federal funds allocated for digital conversion of medical records are fighting to improve their position within President Barack Obama’s health care overhaul.
New money for health information technology was budgeted by the Health Information Technology for Economic & Clinical Health Act to the tune of $50 billion. The measure allots funds to Medicare and Medicaid to distribute to providers who use electronic medical records to improve their practices.
As the bill moved through the legislative process in 2009, Congress narrowed the criteria for participation in the program and lowered the budget to $27 billion, leaving many providers out in the cold.
Physicians, chiropractors, dentists, optometrists, podiatrists, psychiatrists and most hospitals were made eligible to receive the incentive payments, the Center for Public Integrity’s iWatch News reports.
“Those providers who were included had an inside track,” Al Guida , a lobbyist for the behavioral health community, told iWatch News. “By the time it came out and you realized you were left out, there was little time to lobby the process to get yourself back in.”
Nurses, physician’s assistants, behavioral health providers, home-care practitioners, emergency medical services, long-term care providers, post-acute providers, federally qualified health centers, rural health centers, rehabilitation hospitals and cancer centers were excluded from participation in parts or all of the program, according to iWatch News.
Risky Investment: Medical device start-ups have gotten pricier
Medical device start-ups have gotten so risky and expensive that some venture capitalists might change their business models, said panelists at Thursday’s MedTech Investing Conference in Minneapolis.
The amount of data necessary to satisfy strategic partners means venture capitalists have to spend a lot more on clinical trials, said Jan Garfinkle, managing director of Ann Arbor-based Arboretum Ventures.
The increased cost has Arboretum re-thinking their business model. Arboretum used to be 75 percent focused on medical devices, but that will likely be modified to 60 percent, Garfinkle said.
Arboretum’s own portfolio company VasoNova cost it nearly four times the $5 million it had expected to invest, and took much longer to sell than Arboretum had planned, according to the Star Tribune.
VasoNova Inc. sold to Teleflex Inc. (NYSE:TFX) in a deal valued at up to $55 million earlier this year, a win that took the investment "from flip to flop to save," Garfinkle said. Teleflex’s VasoNova catheter won clearance from the Food & Drug Administration in March of this year.
Start-ups may do well to develop strategic partnerships with larger firms that may eventually acquire them, panelists said. Companies themselves should consider building products to sell to strategic partners, said Eric Simso, former vice president of strategic alliances for Boston Scientific Corp.’s (NYSE:BSX).
Boston Heart Lab, Spiral Biotech re-brand
Boston Heart Lab, based in Framingham, Mass., announced it is changing its name to Boston Heart Diagnostics in order to reflect the company’s reach beyond lab results, according to a press release.
The company, which focuses solely on cardiovascular disease, launched their new name and logo at the National Lipid Assn. conference in New York City.
And Advanced Instruments Inc. announced that it will re-brand the entire Spiral Biotech product line as Advanced Instruments by the end of the year, according to a release.
Advanced Instruments made the announcement at the meeting for the American Society of Microbiology in New Orleans.