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The former health IT czar is urging biotech executives and investors to find cash by fixing the nation’s health care system.

David Brailer, speaking Jan. 9 at the JPMorgan Healthcare Conference in San Francisco, where company executives woo investors and partners with the new treatments they are developing, predicted growing business in IT intensive practices such as delivering health services and tracking patients’ health remotely, ultra low cost medical records, and specialized search engines. “These are the equivalent of a new molecule or a new device,” he said.

Brailer became the nation’s first health IT coordinator when President Bush created the position in 2004. He was widely popular but stepped down in 2006, saying that he’d laid a strategic framework and was ready to return to the private sector.

Brailer said that the pervasive problems in U.S. health care are creating a growing market for health IT. He said the government would support health IT solutions that made people healthier and saved money, but the government needed entrepreneurs to bring such products to the market before that could happen.

He chided investors for their lack of vision. “Many health care investors remind me of Washington,” he said. In other words, they know they are heading to a future where current solutions don’t work but are unwilling to take up new ones.

Speaking with reporters after the event, Brailer made some upbeat predictions for 2007. He predicted a surge in the number of community doctors using electronic health information records in the last half of the year, now that anti-corruption rules have been relaxed so that hospitals and health care insurers can help doctors purchase equipment. He also thought that hospital liability underwriters in certain regions would declare electronic health records as “medically necessary devices,” causing more hospitals to adopt these systems.

Nonetheless, the current health care system is set up on perverse rewards. Continuing to pay by volume (i.e., for each service a doctor or hospital performs), he said, meant paying for errors and for overly intensive care. But, he said the current Washington climate had reached a “standoff” where “it’s in no one’s interest for anyone to take the leadership role in major health care initiatives.”

Such a situation could actually be a boon for business, he said. “The more official D.C. neglects issues in health care, the more open it is to private solutions.”

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