Health-technology companies wishing to do business with state and local governments over the next five years need to begin positioning themselves now for the opportunities that will grow out of the increased investment in health IT.
Reston, VA (Vocus) September 11, 2009
INPUT , the leading authority on government business, today announced the release of its research report, Health IT Transformation: FY2009-FY2014 State and Local Market Forecast, which analyzes the health IT market. The report examines the flow of money, technology evolution, contracting opportunities, and other trends and market drivers that will influence the course of state and local health IT spending over the next several years.
INPUT research reveals that U.S. state and local government health organizations will increase their investments in health IT systems and services from $7.6 billion in 2009 to $9.6 billion by 2014, a compound annual growth rate of 4.6 percent during the forecast period. The first-of-its-kind report is designed to enhance a vendor's business-development planning process with relevant strategic analysis and market forecasts. The forecast provides recommendations to guide vendors in maximizing their market positioning and buyer relationships to best take advantage of state and local health IT business opportunities.
"Businesses that present innovative, cost-effective IT solutions for public hospitals and health organizations will be rewarded in this booming market," said Tim Dowd, chief executive officer of INPUT. "Health-technology companies wishing to do business with state and local governments over the next five years need to begin positioning themselves now for the opportunities that will grow out of the increased investment in health IT."
- National health care reform and President Obama's initiatives will spotlight the need for health care IT.
- The American Recovery and Reinvestment Act--the economic stimulus package--devotes $22.8 billion to health IT over a period of six years. Outlays include Medicaid incentives, workforce training, and health IT research and development, while fund recipients include providers, hospitals, Medicaid agencies and students.
- The current financial burden imposed on the federal government by health care costs is not sustainable. This will drive improvements in efficiency through the use of cost-effective and innovative health IT.
Trends to Watch For
- Funding of $1 billion in stimulus money for community-based strategies and state-level infection reduction will spur additional investments to respond to outbreaks of influenza pandemics and food-borne illnesses.
- Funding of $2.5 billion for community-based health care centers will drive investments in facilities modernization, electronic medical records (EMRs) and the workforce.
- The national health IT effort--combined with increased enrollment as unemployment spikes--will push states to invest in solutions that reduce waste, fraud and abuse.
Challenges Facing Health IT Adoption
- Privacy and security issues will be highlighted, such as patient distrust leading to the withholding of information, the presence of varying security levels for passing information among government agencies, and states being left to fill in the gaps of federal privacy laws.
- Patients and providers might not see many benefits from EMRs in terms of paperwork reduction and continuity of care until the national effort to create and connect regional health information exchanges--that is, networks of EMR data--is under way.
- Technology will have to be updated continually for increasingly complex clinical data collection and analysis, creating an opportunity for IT vendors and consultants.
INPUT Recommendations and Conclusions for Vendors
- Electronic health record (EHR) implementations and upgrades at public hospitals and health care facilities present the greatest growth opportunity for vendors in this vertical market.
- Maximize the stimulus funds by aligning your partnerships before the money is available, and plan for comprehensive grant applications.
- Offer creative financing and purchasing options, such as Software-as-a-Service, or have providers pay after they receive their government stimulus incentives.
- Focus efforts on marketing, as EHR buyers will seek information on purchasing decisions from vendors.
- Software companies should offer modular solutions that can be easily integrated with other health information systems.
The Health IT Transformation: FY2009-FY2014 State and Local Market Forecast is available on INPUT's Web site at the following link: http://slhealthit09.input.com.
Chris Dixon, manager, State & Local Industry Analysis, is available for media inquiries.
INPUT is the authority on government business. Established in 1974, INPUT helps companies develop federal, state, and local government business and helps public sector organizations achieve their objectives. Over 2,000 member organizations, including small specialized companies, new entrants to the public sector, and the largest government contractors and agencies, rely on INPUT for the latest and most comprehensive procurement and market information, consulting, powerful sales management tools, and educational & networking events. For more information about INPUT, visit http://www.input.com or call 703-707-3500.
Proper use of name is INPUT.
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