$100 Million in Interest Free EHR Loans from GE

Posted on June 20, 2009 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Today I came across this coverage of an announcement that GE Capital will be providing $100 million of loans to “accelerate adoption of electronic health records (EHR).” The loans from GE will carry no interest until the institutions obtaining these loans begin receiving government money, typically in 2012.

Does anyone see a problem with this?

GE Capital isn’t giving EHR loans to you because they are doing charity work. They are a business and they know that in 2012 a large number of these loans will start earning them a bunch of interest. This could easily happen because a doctor’s office was unable to implement the GE Centricity EHR software in the alloted time frame or maybe they couldn’t get GE Centricity EHR to show meaningful use (through GE Centricity’s fault or their own). Either way, GE is banking on the fact that many of these loans won’t be repaid. What better debtors could they have than high earning doctors?

Doesn’t this sound a lot like those 0% interest credit cards? The credit card companies have been making a killing getting people into debt over their head and down the road charging incredible interest rates when a large number of the people can’t repay. Seems like GE Capital is trying to do the same with this EHR financing plan. Of course, if someone does pay it off, then GE health is still making a nice chunk of money from selling an expensive EHR platform.

There are so many different EHR pricing models and financing options available. EHR selection should focus on what’s best for the office. I’ve never known EHR financing to be a problem with purchasing an EHR. There are lots of options out there.

People who choose to go with a no interest loan in the hopes that the EHR stimulus money from ARRA will repay those loans are playing with fire. No doubt some people are going to get burned.