Government Incentives Build Empires

The American Medical News reports that Fitch, a global investment rating service, found that incentives paid to hospitals for the adoption of electronic health records (EHR) went to increased profits.  Fitch also concluded that:

“…the hospital companies analyzed in the report are not expected to use their positive cash flow to reduce debt. They are expecting acquisitions of other hospitals to remain a top priority. Fitch could not provide specifics on expected acquisition activity, but did say that Community and HCA had the most acquisition activity in 2011.”

A paradox in free market societies, especially the United Sates, the belly of the beast, is that pro-market advocates often support giving corporations incentives to meet public policy goals. One would assume in a capitalist economy private companies would make investments that boosted their revenue and profit.  If government payments are contingent upon EHR adoption it would seem a sound business decision to make those investments to get the money. Corporations adapt their behavior to attract business from other corporations, why should they be treated differently by public purchasers?

One result of using public dollars to finance private corporations is that we lose control over how that money is spent.  In a public health care system if the money is not needed for EHRs then it could be repurposed to improve access, or quality, or some other democratically decided upon goal, rather than financing corporate empires.

The Link to the American Medical News article is:

Explore posts in the same categories: Electronic Health Records, Funding-Cost For-profit Delivery, United States

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