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Tech Ventures in Georgia Prosper As Health Care Law Kicks In

Thu, January 9, 2014 9:33pm

Story by Jim Burress, WABE




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EndoChoice CEO Mark Gilreath.

Georgia is fighting the health care law at every political turn.

Gov. Nathan Deal, a Republican, chose not to expand Medicaid, despite the increased federal funding made possible by the Affordable Care Act. And Ralph Hudgens, the state's insurance commissioner, publicly vowed to obstruct the law.

But that doesn't mean that Georgia isn't seeing some financial benefits from the law.

Take Premedex, a 2-year-old company that works with hospitals and doctors to keep hospital readmissions down. Founder and president Van Willis says that just a few years ago, a company like his would've been a hard sell. Impossible, even. But financial incentives for hospitals to reduce readmissions are getting a boost from the Affordable Care Act.

Scattered around a half-dozen office cubicles, Premedex employees put on telephone headsets on a recent morning and sit down in front of computers that automatically dial patients. After telling patients they are calling on behalf of doctors and hospitals, the workers ask some simple but important health questions: Have you had any fever? Are you in any pain?

How patients answer could mean the difference between a hospital's profit and loss. A persistent fever could signal that a patient is having trouble and should see a doctor. Under the Affordable Care Act, hospitals are penalized if Medicare patients are readmitted within a month for several specific illnesses. Private insurers will probably follow Medicare's lead. Willis says that's creating a new market for companies like Premedex.

"We've got clients across the country — small clients, large clients — they all feel the same pressures," he says.

Premedex started with five employees. It's up to 25 and growing. The company's story is one told over and over across Georgia, says Tino Mantella, who heads the Technology Association of Georgia.

Health information technology companies have become essential for digitizing the health care system, providing tools to help doctors and hospitals improve the quality and efficiency of patient care.

Georgia is seeing a boom. "We like to say it's the health IT capital of the nation," he says. Tech jobs, including those in health IT, pay well — an average of $81,000 a year. Mantella says the Atlanta suburb of Alpharetta actually has as many tech companies as startup mecca Austin, Texas.

Medical device company EndoChoice is one company that calls Alpharetta home. It manufactures equipment like flexible cameras used to check for polyps in the colon.

Mark Gilreath, EndoChoice's founder and CEO, says the company's workforce has grown exponentially in almost no time. "We were in my basement a few years ago with an idea, and today we're approaching 400" employees, he says.

Gilreath says the company's technology helps doctors perform procedures more effectively, reduce infections and give better care to patients. Those are all things encouraged by the Affordable Care Act.

Despite EndoChoice's success, Gilreath is concerned a provision in the health law will stifle innovation and kill medical device startups before they get off the ground.

The law imposes a 2.3 percent tax on medical device sales. "It's shaking the investment community," he says. "It's shaking the device industry. It's forcing companies to do dramatic things, and it's just not healthy for the United States."

Gilreath says he's cut back on research and development as a direct result of the tax. Even so, his company is on track for more than $100 million in revenue this year.

This story is part of a partnership among NPR, WABE and Kaiser Health News.

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