If you've been following the US government's efforts to modernize the nation's healthcare information technology infrastructure, you might have noticed that current trends promise to create a flood of new opportunities for high-tech companies.
Last week a study from PricewaterhouseCoopers (PwC) seemed to confirm the point. The study noted that the booming healthcare market is expected to account for nearly one-fifth of US GDP by 2019. Further, PwC researchers found that consumers are willing to spend more than $13 billion of their own money per year for non-traditional healthcare products and services. These would include $4 billion on health-related video games, $8.9 billion on resources that rate physicians and hospitals, and $700 million on mobile health applications, according to PwC.
IDC Health Insights released another study last month that examined telecommunications providers' engagement in tele-health activities, noting that 2010 appeared to be a tipping point in their go-to-market strategies. According to IDC, the total addressable market for telecom providers in home tele-health in the US will grow to 60.3 million households in 2015.
Tele-health, which uses telecommunications technologies to transmit medical information over long distances, is a growing business that relies on applications such as videoconferencing capabilities, patient monitoring devices, and the increasing use of smartphones and tablets that allow physicians simpler and faster access to medical information.
The trend has encouraged telecom companies to jump into the market. Last November, AT&T launched AT&T ForHealth, a practice area devoted to delivering wireless, networked, and cloud-based solutions specifically for the healthcare industry.
Also last year Verizon unveiled the Verizon Health Information Exchange, a cloud-based service that consolidates clinical patient data and makes it available over the Internet.
As the healthcare sector moves from paper-based systems to digitized medical records, tech companies are focused on managing the growing volume of medical data that is being computerized, largely thanks to the federal government's injection of $19.2 billion to support the expanded adoption of health information technology. An additional $27 billion is also being disbursed under the Centers for Medicare and Medicaid Services' EHR Incentive Programs, which reimburse eligible hospitals and physicians that successfully adopt electronic health records and can show that they are using the technology to improve the quality of care.
In 2010, healthcare providers spent $88.6 billion on developing and implementing electronic health records, health information exchanges, and other health information technology initiatives, according to PwC. These huge budgets, along with expanded US investment in medical electronics and information, has spurred high-tech companies into action. For example, Dell is helping hospitals manage their datacenters and implement EHRs, and has recently struck a deal with Microsoft to provide a cloud computing offering to healthcare customers.
Last month, IBM expanded its Health Analytics Solution Center to incorporate some of the same analytical tools used in IBM's Watson supercomputer as a way to provide solutions for healthcare.
The Massachusetts Institute of Technology launched the Medical Electronic Device Realization Center (MEDRC) in May. MIT, in collaboration with Analog Devices and GE Global Research, will develop technologies aimed at improving patient-monitoring devices, point-of-care instruments, communication technology, and ultrasound imaging equipment.
In the meantime, more opportunities to provide cloud computing, storage technology, mobile devices, and wireless and networking capabilities are envisioned further down the road. According to PwC:
- The 10-year implementation of the Patient Protection and Affordable Care Act (PPACA) will bring similar waves of opportunities as it changes the business models of insurers, providers, and pharmaceutical companies. That in turn opens further opportunities: for all kinds of service and product companies. For example, the government is attempting to redesign the health system through outcomes-based payments, health insurance exchanges, comparative effectiveness research, medical homes, and accountable care organizations.
High-tech companies looking for additional revenue streams may well find healthcare IT to be the cure for what ails them.