Healthcare IT growth potential
Today, Kim Hart at the Washington Post wrote an interesting column about one of the positive effects of the recently passed American Recovery and Reinvestment Act of 2009 (stimulus package) for the health care industry. Approximately $19 billion of the package is specifically targeted for health information technology (HIT) upgrades for providers such as hospitals, clinics, and individual physician practices. As discussed previously, improved HIT is a cornerstone of a long-term plan to improve the quality and decrease the costs of health care in the US.
Investment in HIT should have some positive consequences to the healthcare industry:
Much of the investment will be targeted to digitize health records, which will require interoperable software and hardware, along with fast data networks. Some of the benefits of such systems would be early detection of infection, improved management of chronic diseases, and better analysis of the price and quality of procedures. These benefits can lead to reduction in costs of healthcare.
There is clearly a vast market opportunity here for companies that can provide the right software and hardware solutions for the physician office or clinics. A recent article that analyzed HIT in the physician’s office provided some interesting information:
With the $19 billion to be invested in acquisition of these technologies, software and hardware companies that provide the right solutions for medical office can profit handsomely in the upcoming years. There are several key growth opportunities in this market:
To get these products into the physician’s or clinic offices is going to be challenging. Any marketing effort by resellers, consultants, or companies is going to take knowledge of physician’s needs and time. If one goes in with the attitude of “I’ve got a better mousetrap, and they’ll beat a pathway to my door” is going to fail spectacularly. Marketing of pharmaceutical products and medical devices has been refined over the past 40 years (give or take a few years), and a lot of this knowledge will need to be transferred to the software and hardware industry.
A lot of companies, such as Welch-Allyn has made a lot of investment into hardware and software that links into EHR systems. However, they aren’t developing the actual software for ERH and billing.
The successful EHR and billing software idea needs to link to several different technologies, overcome resistance in medical community, and build a strong marketing effort. There’s a huge opportunity here, but the software companies need to look to how the big medical products companies have been successful to understand what it will take to get the right products to be adopted by the physician customer. Anyone who thinks it’s going to be easy is the one that will fail.
By Michael W Simpson
Investment in HIT should have some positive consequences to the healthcare industry:
- Improve health care quality
- Prevent medical errors
- Reduce health care costs
- Increase administrative efficiencies
- Decrease paperwork
- Expand access to affordable care
Much of the investment will be targeted to digitize health records, which will require interoperable software and hardware, along with fast data networks. Some of the benefits of such systems would be early detection of infection, improved management of chronic diseases, and better analysis of the price and quality of procedures. These benefits can lead to reduction in costs of healthcare.
There is clearly a vast market opportunity here for companies that can provide the right software and hardware solutions for the physician office or clinics. A recent article that analyzed HIT in the physician’s office provided some interesting information:
- As of 2008, only 14.5% of physicians offices had fully converted to electronic health records (EHR). Another 14.7% had partially converted to ERH.
- Many offices that had not converted to EHR were concerned about issues such as privacy, security, costs, limited benefits, intrusion into the clinician-patient relationships, and lack of knowledge.
- 100% of offices had adopted software to manage billing and coding, although few were linked to an EHR system.
- Adoption of key technologies, such as wireless data streaming from medical equipment to records, to implement an EHR system was small.
- Solo and small practices had much lower adoption of ERH than larger practices.
With the $19 billion to be invested in acquisition of these technologies, software and hardware companies that provide the right solutions for medical office can profit handsomely in the upcoming years. There are several key growth opportunities in this market:
- Software for billing and coding. Products that can link to both third-party payors and to the EHR can benefit the physician’s office by both increasing accuracy and cash flow. There can be added benefit of higher productivity for the office staff, but training and other issues may make it a higher investment at first.
- Wireless technology. Most physician’s offices contain medical equipment ranging from scales to EKG to blood pressure, and transferring data from them to the ERH will improve the accuracy of patient records (which will lead to better patient management). In fact, having easier data transfer will reduce intrusion into the patient/physician relationship, so that the clinician can spend more time with their patients in conversation rather than entering data.
- ERH software. Obviously, an easy-to-use and manage system is critical for this whole system to succeed.
To get these products into the physician’s or clinic offices is going to be challenging. Any marketing effort by resellers, consultants, or companies is going to take knowledge of physician’s needs and time. If one goes in with the attitude of “I’ve got a better mousetrap, and they’ll beat a pathway to my door” is going to fail spectacularly. Marketing of pharmaceutical products and medical devices has been refined over the past 40 years (give or take a few years), and a lot of this knowledge will need to be transferred to the software and hardware industry.
A lot of companies, such as Welch-Allyn has made a lot of investment into hardware and software that links into EHR systems. However, they aren’t developing the actual software for ERH and billing.
The successful EHR and billing software idea needs to link to several different technologies, overcome resistance in medical community, and build a strong marketing effort. There’s a huge opportunity here, but the software companies need to look to how the big medical products companies have been successful to understand what it will take to get the right products to be adopted by the physician customer. Anyone who thinks it’s going to be easy is the one that will fail.
By Michael W Simpson