INPUT: U.S. Health Reform, Stimulus Package Drives Tech Spending for Next 5 Years

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INPUT report identifies key developments shaping federal health IT investment

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Whatever form the country's health care reform legislation ultimately takes it will create the need for more technology innovation, which will require planning and insight to remain ahead of the curve.

INPUT , the leading authority on government business, today announced the release of its research report, Health IT Transformation 2009-2014, a comprehensive study that analyzes trends that will impact federal government health care IT spending. INPUT's federal health IT market forecast, based on technology spending within the President's fiscal year 2010 IT budget, predicts that the U.S. health IT market will experience "disruptive change" as the American Recovery and Reinvestment Act and national health care legislation increase the need for innovative health care technology that also reduces costs. As more of the U.S. population ages and joins the rolls of Medicare and Medicaid, the toll on our nation's existing IT infrastructure will force change.

The U.S. federal budget and debt crisis will drive growth opportunities in the health care IT market as technology offers the ability to dramatically cut health care costs. Simultaneously, the stimulus package is setting the groundwork for the next stages of IT investment by making $2 billion available for the Office of the National Coordinator of Health IT (ONC). INPUT's research also predicts that the Obama administration's push for greater adoption of electronic health record (EHR) systems will open up adjacent IT market opportunities.

"As the federal government begins analyzing the data collected through EHR systems, a wide array of new health care IT market opportunities will emerge for vendors," said Tim Dowd, chief executive officer of INPUT. "This includes companies supplying health information systems, decision support automation, data warehousing, data mining tools and middleware to connect EHRs to regional information exchange organizations and other internal systems."

Health care reform will continue to drive growth in critical health care IT segments such as EHR, health information/decision support systems and claims processing. INPUT predicts that ongoing health care reform initiatives will dictate significant change within the country's current health care IT infrastructure. These changes include:

1.    The demand for IT systems that enable the federal government to transition from a "pay-for-service" to a "pay-for-performance" compensation model;
2.    A progression in health care standards, certifications and interoperability, which are key in facilitating the information sharing that is critical for cost savings;
3.    Advanced information security; and
4.    Evolution in the "medical home" regarding such things as mobile monitoring devices and telehealth.

"The Obama administration's efforts to forge ahead with an aggressive health care IT improvement plan are not without their challenges," Dowd said. "Whatever form the country's health care reform legislation ultimately takes it will create the need for more technology innovation, which will require planning and insight to remain ahead of the curve."

Other challenges facing health care IT adoption in the next five years include:

1.    Public backlash about a government-run option, as well as provider backlash about the costs of buying and maintaining systems, and training staff to manage and oversee a new federal health care program;
2.    The additional work needed to ensure security and privacy of data, since it will be transferred among different providers; and
3.    Building IT systems that track health outcomes to satisfy the federal government's desired method of compensating providers.

Forecast Availability

The Health IT Transformation: FY2009-FY2014 Federal Market Forecast is available on INPUT's Web site at the following link:

Author Availability

Deniece Peterson, manager, 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 or call 703-707-3500.

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