Tim Mullaney of USA Today says that about $100 billion of stimulus funding was earmarked for technology spending, according to tech consulting firm International Data Corp. Two-thirds was for energy technology, and most of the rest will subsidize doctors’ adoption of electronic medical-records (EMR) software. So far, the legislation has sparked adoption of electronic medical-records software and nurtured an electric-car industry that will sell at least 20,000 cars this year. At least 19 companies have gone public or filed for IPOs after getting stimulus money.

The stimulus has helped spark an 82% gain in the stocks of 11 health care technology companies. All these match or exceed the 51% gain in the Standard & Poor’s 500-stock index, and beat the 4.9% average annual gain in venture funds raised in 2008, according to Cambridge Associates.

More than 40% of doctors now use Electronic Medical Records, up from 29% two years ago, including 75% of those working in groups of more than 25 physicians, according to research firm SK&A.

Healthy gains

The clearest connection between the stimulus and the economy might be in health care software, in which the boost in companies’ value far exceeds the amount spent so far in a five-year program costing up to $30 billion. Together, the gain in value of companies such as McKesson, Cerner and Athenahealth since the stimulus bill was proposed is at least $20 billion.

The stimulus has paid about $100 million so far to clients of Cerner, the largest maker of electronic medical-records (EMR) software, said Piper Jaffray analyst Sean Wieland. Given Cerner’s 20% market share, that translates into $500 million in extra annual sales for the industry, which may double as lower Medicare reimbursements, also part of the stimulus law, kick in for doctors who don’t use EMRs by 2015, he said.

“This really did accelerate adoption,” said Jeff Townsend, chief of staff at Kansas City, Mo.-based Cerner, whose stock-price value is up 194% or $6.5 billion, since January 2009. Cerner’s new-software sales rose 26% in the first nine months of 2011 vs. 2010′s pace of 16%. He said extra spending will add to growth, as doctors upgrade their systems and connect them to each other.

That spending has lifted nearly all health information technology stocks. Allscripts Healthcare Solutions, an EMR company whose CEO Glen Tullman raised money for Obama in 2008, has seen shares rise 134%. Rival Athenahealth, which supplies Internet-based medical-billing and EMR services as a cheaper alternative to software, has doubled since mid-2010.

Companies benefitted from the administration’s decision to have Medicare reimburse doctors for regularly using EMRs, favoring pay-as-you-go Internet business models such as Athena’s, rather than paying for software purchases up front.

By government standards, the health care stimulus was fairly disciplined. Doctors aren’t reimbursed for software until they show they’re routinely using it for work such as prescribing medications. While knitting together networks owned by different doctors and hospitals will take time, data-sharing is essential to contain overall health care spending, he said.

With stimulus dollars helping EMR software companies, and the Government incentivizing the medical community to adopt the productivity-enhancing software, EMRs are bound to become ubiquitous in every medical practice, clinic, or hospital that you may visit.

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