IT Still A Hotbed In Healthcare

By Ken Congdon, editor in chief, Health IT Outcomes

Two studies were released recently that indicate, while the overall U.S. economy may still be on shaky ground, IT spending in the healthcare sector is as solid as ever. First, Mercom Capital Group recently released its annual and fourth quarter merger and acquisition and funding report for the healthcare technology sector in 2011. The report showed that nearly half a billion dollars came into the sector through venture capital investment compared to $211 million in 2010. The bulk of this funding ($336 million) was raised by health information management companies, including $83.3 million raised by personal health record companies, $27 million raised by ABILITY network (a web-based healthcare network), and $23 million raised by Practice Fusion, a web-based EMR company.

Federal incentives driving the use of EMRs and the electronic capture and exchange of health data in clinical settings certainly helped to drive this investment activity. However, the most compelling reason for the financial interest in the healthcare technology sector is likely demand for new IT solutions from the healthcare provider community. In an unrelated study, CDW IT Monitor discovered that 53% of the IT decision makers it surveyed in the healthcare space were confident about IT budget increases within the next 6 months. The healthcare market was the most confident in this category, followed by manufacturing (50%), and retail (46%). According to CDW's report, hardware investments are driving many of these budget increases, with 90% of healthcare IT decision makers planning to invest in data storage (79%), desktops (77%), and mobility (66%).

This trend would indicate that many healthcare facilities are well down the path to their EHR investments and implementations and are now looking to add the complementary hardware that will enhance the usability and productivity of the EHR. This point is further supported in the report by the fact that overall spending on IT software solutions decreased by seven percentage points since August. However, health IT spending on these software solutions were still 15% higher than the average of all corporate sectors. One also has to take these metrics with a grain of salt, considering that CDW is largely in the business of selling hardware.

That being said, once considered a laggard, the healthcare industry now appears to be the booming market in terms of IT adoption. It will be interesting to see how the healthcare IT investment and spending landscape continues to evolve in 2012. What are the IT spending plans for your healthcare facility in 2012? Are your IT budgets increasing in line with those surveyed by CDW, or are you facing cuts? What is driving this activity? Use the comment field below to tell us more. We'd love to hear from you.