2010 Health IT Forecast

[rninformatics, DNP, RN]

From iHealthBeat

Monday, January 04, 2010

Innovation Inspired by Economics: 2010 Health IT Forecast

by Jane Sarasohn-Kahn

Health IT is one of the fastest-growing business sectors, expected to grow by 11% annually through 2013, according to Scientia Advisors. That's a bullish expectation, especially in the context of continued financial challenges for U.S. health providers.

Health IT purchases will be made despite fiscal constraints such as reimbursement pressure, inflationary costs for labor, supplies and other operating expenses, as well as high patient bad debt expenses.

Necessity being the mother of invention, a constrained economic environment will lead to health IT innovations in two ways.

First, lower cost technologies are emerging in health IT, such as open-source software, software as a service, and cloud computing, all of which will be priced lower than traditional health IT offerings. Cloud computing (the use of the Internet to store, manipulate and deliver data already existing on the Web) is seen by some health IT consultants as a useful tool in health, especially for small medical practices.

Necessity is the mother in a second respect. The financial risks and opportunity costs of health IT adoption will be managed with innovative deals struck by vendors and third parties who see this segment as a growth opportunity. IBM launched a program for financing electronic health record projects signed by Healthcare Management Systems, Lavender & Wyatt Systems, SCC Soft Computer, and Siemens Healthcare.

IBM's Global Financing arm will provide a financial bridge between health providers' initial cash layouts for EHR systems and the federal government's incentive payout of federal economic stimulus funding. While already a major player in health IT financing, claiming to be working with 40% of the top acute care EHR vendors, IBM's move solidifies its position as an IT financier face-to-face with GE Capital.

Providers Get Into Financing, Too

Don't only look to big business to help finance health IT in 2010. Large providers and health systems will get in the game.

A model for this is the North Shore-Long Island Jewish Health System, which will offer some 7,000 affiliated physicians up to $40,000 each over a five-year period to adopt EHRs. The hospital system can do this under exemptions included in the Stark physician self-referral and Medicare anti-kickback rules.

North Shore is blazing a trail for other health providers to be their own GE Capital and keep the transactions in the health system family. Even with innovative financing solutions, however, solo and small physician groups may still avoid EHRs due to general reluctance and a perceived lack of expertise.

Privacy, Security Remain Big Issues

With the whiff of EHR adoption in the air, there's still the nagging challenge of privacy and security to deal with in 2010, according to a report from the Ponemon Institute.

We can expect tougher privacy and security enforcement in health care in 2010 because of new and heftier privacy and security penalties written into the American Recovery and Reinvestment Act. The civil penalty cap will be raised from $25,000 to $1.5 million.

This is a major issue for 2010 because nearly 60% of business associates interviewed in a HIMSS Analytics survey in November 2009 were unaware that changes to HIPAA will go into effect in 2010. That's when consumers are guaranteed "prompt access" to an electronic copy of their health records.

This survey is a sober reminder that key links in the health care business chain -- from pharmacies and insurance brokers to claims processors and offshore transcribers -- aren't ready to manage the risks of health data breaches.

Breaches continued to plague hospitals in 2009: 50% of large hospitals -- including the likes of Children's Hospital of Philadelphia, Kaiser Permanente, Oregon Health & Science University, and Johns Hopkins Hospital -- had at least one data breach in 2009. In a survey conducted in Massachusetts, 71% of physicians were concerned about patient privacy breaches.

A New-and-Improved ONC

To help providers in the process of adopting EHRs, the Office of the National Coordinator for Health IT is making some changes.

David Blumenthal, national coordinator for health IT, is leading the reorganization and has publicly spoken about the framework for meaningful use to enable "lightweight" and "fairly cheap models of exchange" for health data.

In addition to his valuing "lite" health IT, his emphasis on transparency in the agency will be a very welcome ingredient to (most of) the health IT community. He wrote in the office's new blog, Health IT Buzz, "We want to do more to bring you into the conversation."

Health IT Help Wanted

One of the bright spots in an otherwise uncertain U.S. employment outlook is health IT: Recent forecasts project demand for at least 50,000 more health IT workers as providers continue to adopt electronic records.

There are currently a few more than 100,000 health IT workers in the U.S., according to HIMSS. Thus, the nation needs about 50% more health IT workers to usher in the new era of digital health information.

Blumenthal's office has announced a total of $118 million for various programs that will train, develop and test a larger health IT work force. These grants will kick off in 2010 over a two-year project period.

Remote Monitoring, in Bed and at Home

In 2010, we'll be moving well beyond the remote monitoring paradigm of, "I've fallen, and I can't get up."

With the penetration of broadband through the U.S., more inpatient institutions will be reaching out beyond urban centers to the hinterlands to both extend scarce clinical resources and conserve costs for institutions and patients.

The latest example of this emerging trend is the University of Mississippi Health Care system, which this month launched an eICU, focused on critically ill hospital inpatients in rural Mississippi.

Our Telephone, Ourselves

Not only will hospitals and institutional providers leverage bandwidth for telehealth, but so will patient-consumers on their own behalf. The emerging era of participatory health finds a first generation of highly engaged health consumers looking to collaborate with clinical experts, both professionals and fellow patients.

To enable patient-professional collaboration, we'll see further offerings of telehealth to the home, accessible by patients themselves.

The latest entrant here is Verizon Connected Health Services, which launched its telehealth offering in November.

For patient-to-patient collaboration, a growing array of social health networks is available to patients, the latest of which, MyBridge4Life, was developed by a veteran from the Disney Imagineering team and offers an interactive scrapbook and journal approach to recording personal health data and engaging in support from fellow patients, community members, friends and family.

Care Beyond the Home

Health is one of the fastest growing categories of "apps" in the iTunes Store. In 2010, we'll see more apps that go beyond being virtual reference books, as well as single-feature applications like calorie-counting and blood glucose data reporting.

Medzio from Adam is beginning to link apps and mobile health resources, incorporating a GPS function that enables the iPhone-using health consumer to access local health resources.

Expect to see richer health apps in 2010 with greater resolution and functionality.

Industry Consolidation and New Partnering

In 2009, a couple of large mergers occurred in the health IT industry that foreshadow more such deals for 2010.

Dell's acquisition of Perot Systems and Sam's Club's organizing for distributing EHRs to doctors set the stage for similar combinations that position the companies to leverage their larger scale in the morphing digital health information marketplace.

The name of this game will not be "size matters," but "interoperability is king." For that to happen, the longstanding large legacy players will, ironically, have to "think light."