How the health IT gold rush game will be played

How the health IT gold rush game will be played

Summary: Health IT markets will not be driven by speeds and feeds, or feature comparisons. They will be driven by the power of large regional institutions to dictate what both public and private groups in their area do.

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Spurred by claims that their market will be worth as much as $53.8 billion in five years, big health IT vendors are signing alliance deals aimed at making certain they get their share.

Health IT markets will not be driven by speeds and feeds, or feature comparisons. They will be driven by the power of large regional institutions to dictate what both public and private groups in their area do.

Smart vendors know this, and are acting accordingly.

North Shore and Long Island Jewish Hospitals have done their "alliance" deal with Allscripts. They put a $400 million price tag on automation through the SaaS vendor, with hopes that 7,000 doctors will start using Electronic Health Records (EHRs) over the next five years, with help from $40,000 each in government money funneled through the hospitals.

The deal is the hospitals will push Allscripts down their own doctor supply chains, paying 50-85% of implementation and subscription costs, then getting that sweet, sweet HITECH stimulus money once results are proven.

As The New York Times notes this is not all altruism. It doesn't just cement Allscript's bottom line, but could assure the hospital group of market dominance as well.

Cerner has a different way of doing this. It has signed a deal with the University of Missouri to take on 100 MU employees as what it calls the Tiger Institute for Health Innovation. (MU's athletic mascot is the Tiger) The Institute claims it will bring $1 billion in benefits over the next few years.

By aligning with the state university, Cerner gets the upper hand in selling its software across the state. The deal puts political pressure on doctors and hospitals across the state to favor Cerner, which is based in Kansas City, Missouri.

Both these deals have the same goal, to make one IT vendor dominant within a geographic region. This is the way the insurance and hospital businesses run, through regional concentration rather than a truly free and open market, so it's no surprise health IT vendors are playing the same game.

Topics: CXO, Health, IT Employment

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3 comments
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  • It's an interesting concept

    On one side you have the regionals and on the other you have new
    ideas in data access.

    I need more than average medical data available to me and use my
    iPhone for the primary portable storage. (A wallet card is the portable
    "backup")

    With this very cheap approach I can carry digital copies of all imaging,
    including x-rays, CT Scans and a PET/CT Scan and present them to a
    doctor for viewing using Osirix. Other data is in Bento, or images of
    various reports.

    I can see copies of lab reports being delivered to me via email at some
    point, and doctor files also available.

    What I believes that will me is that the big Health IT systems are giong
    to need to bend to devices available to doctors and patients. We're
    talking about computers, devices like the iPhone/touch and probably
    the emerging world of tablets.

    An example of the pressure I see from these individual level devices
    would be range of professional apps for the iPhone/touch that are
    available to doctors, students, nurses, etc. on the AppStore. The range
    under Health goes from free to professional references that cost
    hundreds of dollars. Tell doctors the new system won't work with an
    iPhone is a kiss of death for new Health IT products.
    Ken_z
    • right now doctors don't count

      At the present what doctors think, about iPhones or anything else, doesn't seem to count. It's the hospitals that are driving the medical office purchases, and dictating to doctors associated with them what they will do.

      Who cares if it works with your iPhone? You want to get paid? You want to maintain your admitting privileges?
      DanaBlankenhorn
  • RE: How the health IT gold rush game will be played

    Hi,

    In my opinion, the outsourcing option may become more prevalent. While it is not a good option to outsource a critical strategic service, IT is not often viewed a strategic enabler in organizations. This may cause more outsource of department.

    My other perspective is that it will be a tough leap to adoption and usage if individuals haven't already made headway with some of the foundational apps, like results reporting and supply orders.

    Hope this helps,
    Elyse
    http://www.anticlue.net
    Anticlue@...