In a move which startled seasoned financial industry observers, a coalition of Wall Street investment banks announced that they were investing heavily in high-ticket EMRs — even though they don’t deliver any form of healthcare.
Stock prices for Goldman Sachs (GS), Credit Suisse (CS) and Citigroup (C) rose sharply on the announcement, which comes on the heels of their widely-criticized decision to seek incentives available under the HITECH Act.
“When our industry got bailed out by the federal government, we got hooked,” admits a senior executive with one of the firms. “Besides, we’re already experts at making a huge profit on complicated systems. Compared with managing credit-default swaps, EMR adoption is a piece of cake.”
In an echo of the activity preceding 2008’s market meltdown, bank executives said that they planned to issue “collateralized patient care obligation” bonds, essentially picking up the Meaningful Use risks assumed by hospitals and clinics currently using EMR technology.
The bonds could generate billions in incentive payments for the investment banks, which have suffered as emerging market currencies struggle, equities face downward pressure from a still-troubled U.S. economy and countless mortgages remain near foreclosure.
“Do we know whether patients are getting safe care? No. But does it matter? Only if hospitals and doctors all default on their EMRs,” said Goldman Sachs chairman Lloyd Blankfein. “And that couldn’t possibly happen. Really. We’re serious this time. ”
Blankfein believes healthcare is a no-lose proposition for firms like his. “If the EMR rollouts don’t work out longer term, and the bonds go south, it’s no big deal — we’ll already have our money,” he said. “More importantly, who will push through an Epic installation for a 200-bed hospital in the middle of Kansas if we don’t do this? We’re doing God’s work.”