Federal incentives have hospitals and doctors' practices planning to spend more on IT this year.
For years, the federal government has been prodding hospitals and doctors to use e-health record systems and other IT to improve efficiency, cut costs, and boost quality of care and patient safety. But money talks and the healthcare sector is finally responding.
The federal government's HITECH program is providing more than $20 billion in monetary incentives to healthcare providers that meaningfully use digital records, and that's undoubtedly a significant factor in the IT spending plans of these companies. Three-quarters of healthcare companies expect to spend more on IT this year compared with last. That's significantly ahead of the InformationWeek 500 overall, where 57% of companies expect 2010 spending to exceed 2009.
Average revenue for InformationWeek 500 healthcare companies is $3.18 billion, and they expect to spend 3.5% of that on IT this year, up from 2.9% in 2009. That's also significantly higher than the 2.9% of revenue that InformationWeek 500 companies overall expect to spend. The healthcare spending level is similar to the spending plans of two industries that have close ties to healthcare: biotechnology and pharmaceuticals (3.7% of revenue is expected to be spent on IT), and insurance (3.3%).
The top three technologies that InformationWeek 500 healthcare companies say boosted productivity most in the last 12 months were business intelligence tools (58%), collaboration software (50%), and videoconferencing (39%). The percentage of healthcare companies rating BI and collaboration tools' contributions to productivity high is similar to InformationWeek 500 companies overall. Videoconferencing ranked significantly higher among healthcare companies than most others, driven by telehealth initiatives.