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Emergency Departments To Invest 30% More In IT

Federal health IT funding will promote growth in the high-acuity information systems market in 2011, reports Millennium Research Group.
Health IT Boosts Patient Care, Safety
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The Millennium Research Group reports the emergency department information system market, which was worth $110 million in 2010, will grow by over 30% in 2011 due to funding from the American Recovery and Reinvestment Act (ARRA).

The Nov. 30 report, U.S. Markets for High-Acuity Information Systems 2011, which relied on interviews with hospital CIOs, found that the high-acuity information systems (HAIS) market is rapidly growing and highly dynamic. HAIS systems include emergency department information systems (EDIS), perioperative information systems (POIS), and critical care information systems (CCIS).

The study noted that investment in this market has been spurred on by the introduction of the Health Information Technology for Economic and Clinical Health (HITECH) Act through the American Recovery and Reinvestment Act (ARRA) which has provided $40 billion of incentive funding for hospitals that adopt electronic health record (EHR) technology, creating new interest and immense demand for healthcare IT solutions, including HAIS.

This is especially true for EDIS because hospitals can demonstrate numerous measures of meaningful use of EHRs in the emergency department (ED), which, in turn, will allow them to qualify for incentive funding. POIS and CCIS will also benefit from the HITECH Act as hospitals seek to increase continuity in electronic data capture throughout the healthcare continuum.

"The emergency department information systems market for small and medium hospitals will see the most growth through 2015, with revenues expanding at compound annual growth rates of approximately 9% and 19%, respectively," Michelle Li, senior analyst at MRG and author of the report, said in a statement. "This is because many large hospitals have already adopted an electronic department information system."

Li also said larger facilities have always had a greater need for automation and more capital for purchasing these systems, so this market is fairly mature. The ARRA incentive funding will, however, encourage greater adoption in the small and medium hospital segments, where investments in these systems still need to occur.

"Adoption of emergency department information systems by critical access hospitals (CAH), the majority of which are smaller facilities, will also fuel growth in these segments because CAHs have historically been underfunded and have fewer IT resources. Unit sales and revenues will therefore grow at a faster pace in these facilities compared to large hospitals," Li said.

Although growth will be somewhat inhibited by competing IT needs among various departments in the hospital -- in addition to tough economic conditions and physician pushback regarding information system adoption -- the market for HAIS is an extremely attractive one and will exhibit significant growth through 2015, the report said.