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How much next-generation health IT will be made in China

By | September 1, 2010, 6:05am PDT

Summary: The China opportunity will accelerate trends that were already underway. While the U.S. sstimulus grows the market, China will help move the mainline vendors ahead.

It could be quite a lot.

Mainline U.S. tech vendors like IBM and Dell are going all-out for China’s booming health IT market, which is expected to double in value over the next few years.

Even while U.S. health IT specialists like Cerner, McKesson and AthenaHealth obsess over that sweet, sweet stimulus cash, smart American entrepreneurs like Robert Lorsch of MMR Global are pushing heavily into the China market.

The task of seizing these opportunities will have to include hiring a lot of Chinese programmers. Even if the government there were not insisting on it, cost would drive such a move.

Taking standard offerings from U.S. companies and adapting them for the Chinese market may be job one. Job two will have to be enhancing them, making them more competitive with what U.S. programmers have been working on over the last decade.

China wants Electronic Medical Records (EMRs) for all its citizens, just as American policymakers have demanded through the HITECH Act, part of the U.S. stimulus. The cost of creating and scaling such solutions in China, based on existing U.S. designs, will be lower than enhancing them to the next level exclusively with American help.

I have written before here, several times, about how companies like IBM can be expected, over time, to take over the health IT space from specialists like Cerner. This is what has happened in every other area of IT. Once vendors learn the language of health care, they can replace specialists at lower cost.

China is giving them an incentive to do that, big contracts with which to do it, and low-cost programmers who can assure they do it.

The China opportunity will accelerate trends that were already underway. While the U.S. sstimulus grows the market, China will help move the mainline vendors ahead.

NOTE: I found this illustration from ZDNet’s Apple Core blog amusing. Mao is used today the way Americans use George Washington, as a unity symbol adaptable to any occasion. It doesn’t make them communists any more than it makes us bewigged slave owners.

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Disclosure

Dana Blankenhorn

Dana Blankenhorn has been a journalist, writer and part-time futurist for over 30 years. At the present moment I run only a personal blog in addition to my ZDNet open source blog. DanaBlankenhorn.Com has the subtitle The War Against Oil. In the past I have used it to write about political history, e-commerce, personal matters, some ideas related to open source, and The World of Always On, which is the idea of using sensors, motes and RFID to turn WiFi links into platforms for applications which live in the air. My IRA account at Schwab holds a few tech shares, most notably some Intel and Applied Materials, but there are no open source companies in it. I don’t even own any CBS stock.

Biography

Dana Blankenhorn

Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994.

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I expect an explosion in health devices from China
Ken_z 2nd Sep 2010
@DanaBlankenhorn
And it will be something like the iPhone/iPad situation where Apple invests major efforts and cash into designing products and they are manufactured/assembled in China.

The potential for patient level devices, once very expensive, is huge. There needs to be unit pricing that drives high volume, but there is no technical reason why it can't be a success.

One example is a home EKG. Devices about the size of a computer mouse have been available for decades for capturing the signals. Imagine the potential of systems in the home that can take those signals, evaluate them and follow the Doctor's orders in terms of response.

Now imagine that home device for $250 to $500.
0 Votes
+ -
What's new, other than more SOS
klumper 1st Sep 2010
The task of seizing these opportunities will have to include hiring a lot of Chinese programmers.

=> What's new? Pffft

The cost of creating and scaling such solutions in China, based on existing U.S. designs, will be lower than enhancing them to the next level exclusively with American help.

=> What's new? Pffft

This is what has happened in every other area of IT. Once vendors learn the language of health care, they can replace specialists at lower cost.

=> What's new? Pffft

China is giving them an incentive to do that, big contracts with which to do it, and low-cost programmers who can assure they do it.

=> What's new? Pffft

While the U.S. stimulus grows the market, China will help move the mainline vendors ahead.

And reap the profits (well, other than into the private money vaults of a few select "movers and shakers" of the decidedly multinational stripe).

=> What's new? Pffft

Hey Dana, instead of conquering abroad and enhancing Chinese (and other red) dreams, why don't all these hip "American" (ha!) corporations get to helping set things right here on the home front. They certainly engender enough clout with all the political stooges they buy and manipulate [OOPS I forgot, there no longer IS a home front! So much for chasing that much heralded "Americana dream, "now masked in ruby red.]
@klumper In the near term I expect Chinese Health IT to be a net positive for our balance of payments. In other words, they're buying more from us than we are from them. But because they're buying from mainline companies and not specialists, those mainline companies have to enhance what they have to make things work. It's after that I expect re-exporting.
@DanaBlankenhorn
And it will be something like the iPhone/iPad situation where Apple invests major efforts and cash into designing products and they are manufactured/assembled in China.

The potential for patient level devices, once very expensive, is huge. There needs to be unit pricing that drives high volume, but there is no technical reason why it can't be a success.

One example is a home EKG. Devices about the size of a computer mouse have been available for decades for capturing the signals. Imagine the potential of systems in the home that can take those signals, evaluate them and follow the Doctor's orders in terms of response.

Now imagine that home device for $250 to $500.

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