Government stimulus funds will help, but not quickly cure, the lag in health IT adoption caused by years of failure to invest in new technology.
The federal government's stimulus investment in healthcare IT is not a panacea, primarily because during the last decade the healthcare industry failed to invest in technology innovation. For that reason, it will take two to three years for the healthcare industry to catch up to other industries such as retail and banking, a new report concludes.
The report, published this month by Crosstree Capital Partners, a Tampa, Fla.-based investment banking firm, also predicts that the only place where completely new inventions are expected is in the wireless device space.
"While there are a few, mostly generic, applications used by doctors on their iPhones and Blackberrys, the devices are still pretty much used as cell phones, text messaging devices, and for e-mail," said Rob Tholemeier, author of the report and a principal covering health IT at Crosstree Capital. "In the next two to three years this will change dramatically as wireless communications and devices will proliferate throughout all aspects of healthcare delivery."
Tholemeier also expects to see a dramatic increase in the use of handheld and wireless devices and says doctors will progress from the BlackBerry to the iPad and other even more advanced personal wireless devices that can deliver huge productivity improvements for doctors and other healthcare providers who can take advantage of new user interfaces and greater mobility.
"We expect a new wave of wireless connectivity between and amongst diagnostic devices, and with the widely deployed EHR systems," Tholemeier explained.
With regard to electronic health records (EHRs), Tholemeier is not impressed with the current crop of products on the market, which he said can act as a digital substitute for paper records and file folders, but are not adequately designed to meet the requirements that healthcare workflow processes require.
"They are mostly clumsy client/server or browser based apps requiring a lot of mousing-around and typing. The other place EHR comes up short is in data integration and device interfacing. Most of the input into EHR is typed or image-scanned when there are much better, more efficient electronic data capture means available," Tholemeier said.
Because EHRs have fallen behind in implementing state-of-the-art user interface or data integration technologies, most of the money spent today will have to be re-spent as the technology catches up with the functional demands of health professionals, the report says.
Changes are also occurring among vendors as competition for new market opportunities opens up. According to the report, for the last two decades health IT, particularly healthcare application software, was primarily developed and sold by technology vendors who exclusively focused on the health IT sector, or by independent business units of companies like GE and 3M. However, today the entrance of larger vendors such as IBM, Oracle, Microsoft, HP, and Intuit is talking place.
Healthcare is seen as a growth industry with an increasing number of mergers and acquisitions, the attraction of research and development dollars and a repositioning of existing technology. Nevertheless, private equity investments in healthcare IT may still be slow in coming.
"Healthcare IT purchasing decisions and deployment options are becoming much more complex. New vendors, new technology, more pressure from regulators, increasing costs, and lower reimbursement fees will make the healthcare IT evaluation and selection process very difficult," Tholemeier wrote.
Among Tholemeier's other predictions are: there will be a push toward better use of information technology to support clinical decisions; consumer involvement in healthcare will grow; the recession will shift redundant qualified IT workers to the healthcare industry as job opportunities expand; Software-as-a-Service for health applications will increase; hardware and communications costs will decline; and open source software and standards will pressure proprietary offerings.