I'm sure that in this election year, many politicians will continue their rants about the US government needing to trim its spending as a way to achieve the goal of fiscal responsibility. However, one recently published study shows that at least in one area -- health information technology -- federal spending is poised to grow for many years to come.
According to a GovWin IQ study released by Deltek Inc., federal spending on Health IT will increase from $4.5 billion in 2011 to $6.5 billion by 2016. The funds will be spent to purchase a variety of hardware, software, and IT skills to design an IT infrastructure that supports payment systems, the exchange of digitized health information over Internet networks, and database systems that operate federally funded health research.
The study notes that several shifts are occurring, most notably the transition away from patient paper charts to the adoption of electronic health records (spurred on by federal government incentive programs). The government has also increased its focus on access to care through telemedicine, and is steadily spending on upgrades to its legacy infrastructure.
As federal health agencies modernize their systems and find new ways to deliver healthcare services, companies like Hewlett-Packard Co. (NYSE: HPQ) -- which recently won a contract to provide advanced technology solutions across multiple functional areas at the US Department of Veterans Affairs (VA) -- and Lockheed Martin Corp. -- which provides the US Department of Health and Human Services (HHS) with hardware, software, and technical support under a five year $170 million contract it won in 2009 -- are a few of the many companies tapping into new opportunities that the transformation in healthcare delivery offers.
Furthermore, as healthcare costs continue to rise, the federal government views purchasing technology as a way to drive greater operational efficiency, which will save money in the long run. Key findings of the report include:
- Technology advances, as well as potential long-term cost savings and better health outcomes, drive demand for mobility, telehealth, informatics, decision support, interoperability, and common EHRs. Federal agencies possess the most advanced EHRs in the world; however, due to their age and legacy architectures and technologies, they are overly ripe for a major transformation.
- The federal government is the single largest payer of healthcare services in the US, and as such must transform from a "pay for service" model to a "pay for health" model in order to reduce costs and improve population health outcomes. Data security, program integrity, care coordination, political agendas, and the deficit present challenges to federal and nationwide health IT adoption and implementation.
As high-tech executives explore opportunities at federal agencies providing health-related services, Angie Petty, Deltek's senior principal analyst, advises that OEMs familiarize themselves with the agency's current and planned IT environment.
According to Petty, as OEMs approach this market, they need to ask a few critical questions, such as how might the agency's current workflow change with healthcare practice transformation; what problems might transformation and change bring; and what process improvements can OEMs devise as they bring technology to bear on clinical decision-making, population health analytics, collaboration, and coordination of care and change management training?
"Move fast," Petty advises high-tech executives. "This will get very competitive since health IT is one of a few bright spots in a declining federal IT market."
That's the kind of advice that should bring good cheer to high-tech executives as they ponder their business strategy in the year ahead.