The Obama administration is allocating $19 billion to computerize medical records as part of the stimulus plan to kick-start the US economy. Israeli companies will be seeking a piece of the pie but they will have to partner with US firms, or have American subsidiaries to be in contention.
Susan Berson and Stephen Weiner, partners at Boston based law firm Mintz Levin both know well the medical computerization sector in the US. Its clients include the various players in this area, including hospitals, insurance companies and computer firms. Berson was last week appointed to chair Mintz Levin's Israel Business Practice Group, and Weiner attended the Israel Venture Association High-Tech conference in Israel where he said that computerizing the US medical sector will be a highly complicated matter.
At present only 10% of personal records at family doctors in the US are computerized. In Israel only 10% of personal records are not computerized because most doctors work with the four large health funds that dominate the sector, whereas in the US most doctors work in private practices.
Weiner said, "According to the stimulus plan that was published, it is clear that the administration recognizes this and has stressed support standards only for products that can connect up and unify various systems."
This provides opportunities for Israeli companies because it does not require an in-depth understanding of the daily work procedures of the US health system.
"Globes" Has the US stimulus plan increased investment in the medical devices sector?
Weiner "Venture Capital funds and institutional investors are interested but want to see the program get going. At present they are bringing forward due diligence examinations so that when the decision is finally passed they will be able to enter the sector swiftly."
"Globes" What type of companies are operating in this sector?
Berson "The entire size range from the giants to very small local companies. Microsoft and Google have entered the sector on the consumer side by setting up personal medical records that the consumer can carry around."
"Billing companies are also very active in this area including those who are dedicated to the medical market; companies that are concerned with connection such as Qualcomm; companies that computerize certain processes in hospitals such as digitalization of pictures and laboratory tests and IT security companies."
The security sector can also provide an opening for Israeli companies, which are very advanced in this area. Some of them have already passed the beta site stage in IT security in Israeli medicine and that's a great advantage."
In general Israeli companies also have a cultural advantage they come from a country where there is no need to convince the public that medical technology works for their benefit. On this base they can show examples of their success and talk on every topic in a most persuasive way."
"Globes" Which Israeli companies in this sector do you know?
Berson "A number of Israeli companies have already built a presence in the US. We can mention, for example, iMDsoft and dbMotion. In addition, IBM's Israel center is stron in the medical sector. American Well, which develops medical data banks is a company with Israeli roots."
"Globes" Is the stimulus plan completely open to companies that are not American?
Berson "Some sort of US presence will probably be required, which not only makes a formal contribution but also of course provides better understanding of how to navigate between laws."
Published by Globes [online], Israel business news - www.globes-online.com - on May 24, 2009
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