ARRA to drive pace of health IT deployment
“The total hospital spend forecast for 2008 is essentially flat, which should come to no surprise as we were in a recession at that point in time,” Davis commented.
HIMSS Analytics forecasts that the combination of operating and capital IT spending in 2009 will be down somewhere between 6 to 9 percent as the economy begins to recover. As ARRA health IT funding becomes available, the group sees a steady uptick of spending on systems occurring over the next five years.
Of note are the higher growth applications—those projected to see a greater than five percent compound annual growth rate (CAGR)—between now and 2014. Not surprisingly, given its legislative mandate for implementation, EMR applications are expected to see an 11.76 percent CAGR.
Although EMR systems are in the spotlight, older health IT applications are also projected to enjoy vigorous growth, according to HIMSS Analytics. The group forecast that ADT/patient registration, chart deficiency, financial modeling, encoder, general ledger, patient billing, patient scheduling, remote-hosted transcription, turnkey portal and RIS software will see a solid 6.4 percent CAGR.
As sunny as these projections of re-invigorated growth in the health IT sector are, vendors should not grow complacent. Davis noted that there the primary barrier to EMR adoption is that the design of the products is impacting ease of implementation, support and adoption by physicians.
“You’ve probably seen, or in many cases read, the challenges that doctors see in this, which is that it takes them longer to do their patient care processes in the EMR environment,” Davis said. “Part of the challenge to this is that in the past, vendors didn’t do a very good job with creating appropriate workflows or allowing flexibility in workflows. We think, that in the past couple years, vendors have resolved many of those conflicts—although they’re not quite totally there yet in some cases.”
The total cost of ownership—how much it costs to purchase and maintain an EMR system over a five-year period—is also tossing up a barrier to adoption.
“Many physicians, being understandably very tight with their money, have a real challenge in this area,” Davis noted. “As we look forward, we believe that you will see more solutions in this market that are remote hosted. We’re seeing this model more and more in the hospital environment, where they are opting for remote-hosted solutions to help them out so they don’t have the overhead and expense of trying to maintain these systems within their own staffing sets.”
The other big challenge for successful EMR adoption is the issue of interoperability.
“It’s been very, very difficult in the past to effectively exchange information between systems because many of the vendor environments were set up as proprietary environments,” Davis observed. “They weren’t set up to be service oriented architectures that could easily share information from the data stream generated from these systems.”
Efforts underway by HL-7 and the Certification Commission for Healthcare Information Technology (CCHIT) will, hopefully, resolve these issues, he said.
In addition to the adoption barriers, funding challenges remain an issue. According to Davis, banks are not lending relative to hospitals’ ARRA strategies. In addition capital markets are still tight, the bond markets are recovering slowly and endowment funds were crushed with the stock market plunge.
This situation creates an opportunity for deep-pocket vendors to finance solutions with their clients, said Davis--which some developers, such as GE Healthcare, have seized.
HIMSS Analytics also forecasts that implementation resources will be the gating factor for EMR implementations from 2010-2015. A lack of skilled personnel to implement and integrate systems may be the largest roadblock to deployment.
“The industry does not have enough implementation personnel from vendors or consultants to implement EMRs in both the acute and ambulatory markets,” Davis said. “This may result in significant market challenges for vendors and providers for implementing EMR systems to meet funding deadlines.”