Sunday, July 25, 2010

Peter Orszag’s Resignation: Why CIOs Should Care

Before I levy my criticisms on Orszag and the mess that his philosophies will leave behind for healthcare CIOs, you need to understand that I’m as politically liberal as they come. I voted for Obama and celebrated in Grant Park when he was elected. However, while I’m a spendthrift with my money, I’m a tightwad when it comes to spending other people’s money, and therein resides the problem that Peter Orszag created for healthcare CIOs.

Unless we pause now and deliberately change course, Peter Orszag’s economic policies are going to leave healthcare CIOs with a crop of under-performing, over-priced electronic medical records and surrounding products. While Osrzag leaves his current position at OMB to chalk up another score on his glowing resume, his think-tankish, economic behaviorist policies are going to leave the rest of us with a giant mess and healthcare in the US will suffer.

Orszag is the outgoing Director of the Office of Management and Budget under the White House. He was in that position for a very short period—not even two years–starting in November 2008, but in that time frame, drove the economic policies behind the White House and designed the Obama budget, including HITECH funding. His background is as academic as they come– and I would give my right leg to share—Exeter, Princeton, London School of Economics. Orszag believes that healthcare spending is at the root of the US economic meltdown, which may not be entirely true, but I concur it is to a large extent. He was also a key architect in the bailout of the banks and automotive industry. In a recent interview with John Stewart, the non-academic Stewart asked the highly-academic Orszag to explain why more of the ARRA funding didn’t flow directly to the consumer—why must the money pass through the banks first, in the hope that it would eventually make its way into the hands of the average citizen with a failing mortgage? Orszag replied, “Because you don’t want to create an incentive [in consumers] for defaulting on their home loans.” Stewart’s eyes illuminated at the irony and he howled in laughter. The brainy Orszag was caught with his economic pants down.

There are two extremes of political-economic thought—democratic capitalism advocates think that hands-off, free-enterprise business will eventually benefit the populace and world—less government is better. Socialism believes in cooperative ownership and governance of wealth and business, all for the common good—more government is better. It’s pretty clear to me from empirical evidence that neither extreme works, and that the most successful countries in the world today are a mixture of both, with the socialist-leaning horses leading the race by half a length.

I would assert that Orszag’s $19B in HITECH funding, a cornerstone of his strategy for addressing the ever-increasing costs of healthcare, has gone too-far socialist and will strangle the efficiencies and creativity of free-market capitalism out of the EMR market…unless we pause now to withhold some of those funds and invest them– venture-capital style– to seed development of a new generation of EMRs that reflect a new model for healthcare delivery. There are numerous models in government for successfully funding innovation—DARPA is the best example. DARPA takes advantage of government power and free-market ideas, balancing capitalist and socialist economics extremely well.

Dr. Blumenthal—Return some free-market balance to the healthcare IT economic model. Don’t let Peter Orszag’s economic policies drive healthcare IT into the mud of mediocrity for the next 20 years. Withhold some of that HITECH money and invest it in innovation—create a DARPA for healthcare IT please!!

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