North American healthcare provider and payer spending on IT is expected to total $39.5 billion by 2008. These investments will be largely driven by national and regional drives toward electronic medical record (EMR) adoption.
Shifting dynamics drive IT investments
Like healthcare in other regions of the world, the healthcare industry in North America is undergoing a period of significant change. It appears that the healthcare and pharmaceutical industry as a whole is undergoing a fundamental shift that impacts the way that healthcare is delivered, financed, and managed.
In the context of national and regional governments playing a greater role in healthcare, there are a number of other factors at play, such as the increasing influence of individuals as consumers in the selection and financing of their healthcare.
One way through which healthcare organizations can address these shifting power dynamics is by investing in specific technologies, such as EMR and telehealth.
Identifying priority areas of investment is key
Recent Datamonitor research suggests that most healthcare providers simply are not convinced of the long-term cost reduction and benefits that IT services, outsourcing in particular, can help their organizations realize. However, in the broader context of needing to ‘do more with less,’ it is anticipated that IT services will experience the fastest growth over the five-year period, as compared to hardware or software. Key business pain points that directly drive technology investments among payers include claims processing, customer service, and consumer-directed healthcare.
In the US market, physician offices will show relatively aggressive growth over the forecast period, driven by demonstration projects funded by the federal government. Additional drivers include health plans and associations increasingly rewarding physicians who adopt technology through pay-for-performance measures, and the growth of industry research focused on the business case for IT adoption among physician practices.
The Canadian healthcare IT industry will experience an 8.1% five-year compound annual growth rate (CAGR) through 2010. Much of the attention paid to IT investments in the Canadian healthcare system will center on electronic medical records, medication and laboratory information systems, digital imaging, and telehealth networks. In addition, health surveillance systems will be critical to managing localized and national public health problems.
Healthcare providers and payers playing ‘catch up’
The healthcare industry as a whole looks to be approaching a tipping point, a point beyond which investment in IT will become a ‘must have’ rather than a ‘nice to have’.
The aggressive investment in IT by the healthcare industry that we see today follows on the heels of only tepid IT investment by healthcare. As the industry works to build an increasingly compelling case for the quantifiable value of IT in healthcare, the strong growth predicted for healthcare should continue for the foreseeable future.
