Summary:
The healthcare information technology (IT) market is swelling, thanks to the federal government’s legislative and financial incentives for technological progress. While most industries have adopted technology much earlier, the health¬care industry is really just now catching up.
These changes are coming in waves. The first wave encour¬aged digital infrastructure and electronic health records adoption, a market which is now mature. This wave was initi¬ated in 2009, when Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act, which offered healthcare providers a carrot and stick approach to adopting meaningful use of this technology. This act incentivized hospitals, medical groups and doc¬tors’ offices with more than $30 billion to change from paper patient medical records to electronic medical records (EMRs), and use them in a meaningful way.
This white paper explores the current and future healthcare IT trends. It lays out the technology under development and explores how it will be funded.
Overview:
As of April 2015, 95% of all eligible and critical access hospitals have demonstrated meaningful use of certified Health IT. Office-based physi¬cians are lagging behind, with only 54% doing the same.
The Affordable Care Act (ACA) in 2010 set the stage for the second wave of technology, which builds on EMR adop¬tion by adding performance and quality reporting metrics into the mix. The ACA changes the payment paradigm in healthcare by tying revenue to value and outcomes, versus volume of patients seen. Thus, new technologies are neces¬sary for gathering, sharing and analyzing vast amounts of data to manage the health of an entire patient population. Other technologies are addressing connectivity and interop¬erability issues, since moving to a value-based outcomes model requires better care coordination.
Another factor currently influencing the healthcare IT market is the Centres for Medicare and Medicaid (CMS) announce¬ment in early 2015, which stated that 90% of Medicare fee-for-service payments will be linked to quality and value metrics by 2018, with smaller goals starting right away. Also by 2018, the CMS will tie 50% of all traditional Medi¬care payments to alternative payment models. It’s not just Medicare: Of the largest private payers, 70% have the same payment goals, as do more than 50% of state governments.
“The growing demand for solutions to help with the transition to value-based care, as well as evolution of new technologies designed to power the next genera¬tion of solutions for the U.S. healthcare market, creates significant opportunity for the HCIT market to more than double in the near term,” said Karan Jolly, Director of Healthcare Investment Banking at KeyBanc Capital Markets. ”Specific segments of healthcare IT expected to drive growth include revenue cycle management, health¬care data analytics, population health management and consumer-driven healthcare technologies.”
