Health Industry Gets IT Savvy: A Report

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Omar Bouhaddou comments:

The following article illustrates the state of healthcare IT, and I agree.  Today, there is an unprecedented growth in health IT investment all around the world.  Many countries are recognizing the potential improvement in quality, reduction in errors and inefficiencies that health IT can bring.

However, there are still many challenges faced by IT suppliers:

  1. When compared to other industries, health IT still lags behind in the level of IT expenditures.  For instance, healthcare IT represents less than 5% of the healthcare revenues (in the US market, healthcare industry spends $2B or less than 1% for ambulatory care and $24B or 5% for acute care), while the finance industry spends comparatively 12% of its revenue on technology support
  1. Health IT expenditures all over the world are increasing
    1. Asia: 13.1% to reach $4.83 billion in 2010 as compared to $2.95 billion in 2006
    2. Canada: Canada Health Infoway aims to establish an electronic record for 50% of Canadian citizens by the end of 2009. Independent healthcare providers will purchase their own systems that must be interoperable with national systems. []
    3. France: legislation to create a Dossier Médicale Personnel (DMP) was passed in June 2004. The DMP will contain a range of health information that can be viewed online. Patients who will legally own their record will control access. The DMP system is being implemented between 2006 and 2010 at an estimated cost of 1.2­1.5 billion euros. Independent healthcare providers will purchase their own systems that must be interoperable with national systems. [http://]
    4. USA: a number of integrated electronic records systems already exist, for example the VistA system used by the Veterans Affairs Administration. In 2004, President Bush set out the goal of establishing electronic health records for “most” US citizens by 2014.
    5. UK: existing IT systems are being replaced by new IT systems purchased centrally by Connecting for Health on behalf of hospitals and other local organizations. This is possible largely because the majority of providers in England form part of the NHS. Budget a billion pound per year.
  1. The drivers behind this increase are the same as observed in the Asia market:
    1. efforts to improve care, reduce medical errors, and increase efficiency
    2. patient focused care requiring the development of a longitudinal patient record, including a personal health record – healthcare is information and the patient is the center point
    3. health information sharing with other healthcare partners
    4. increased privacy/security regulations
    5. increased adoption from all stakeholders including patients, clinicians, insurances, employers, and government
  1. The barriers to overcome today are NOT technology or infrastructure but rather include
    1. EHR (Electronic Health Records) adoption is low but increasing. Penetration is less in small outpatient practices (5%) and greater in hospitals and ICUs (25%).
    2. Governance issues are not completely worked out. Who owns the data, who has access to it? How is the exchange of information between institutions funded?
    3. Privacy and security issues are not defined in standard ways across institutions and there is a need for national minimums in this regard. A recent survey in the US found that about 47% of U.S. residents said paper-based systems are more secure than electronic health records. Still, a majority of respondents indicated that the benefits of electronic health records in an emergency or to reduce medical errors outweigh any privacy or security risks.
    4. Clinicians and patients buy-in is still lagging, and this is a large challenge. However, when privacy and security issues are addressed, and with real world health information exchanges in place, these important stakeholders will be re-assured and will engage.
    5. Redundancy: where EHRs and e-medical records are already widely used, often there are regulations that require paper back-ups.  These extra costs are a drain on new implementation and expansion.
  1. The benefits anticipated are significant. For instance, it is estimated that a fully
    standard-based health information exchange of patient data could save the US $77.8 billion each year in redundant testing and administrative overhead ………OB

Note: While healthcare expenditures historically have not decreased with structural efficiencies, savings from healthcare IT represent significant new opportunities for increased services and access…….HK


Health Industry Gets IT Savvy: A Report
By CXOtoday Staff
Mumbai, Sep 11, 2007

The total market for IT in the healthcare industry in Asia is expected to grow at a Compound Annual Growth Rate (CAGR) of 13.1% to reach US $ 4.83 billion in 2010 as compared to US $ 2.95 billion in 2006, reveals the latest research on IT and technology in the healthcare industry in Asia (excluding Japan) conducted by Springboard Research.

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On October 20, 2007
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