The transformation of health IT

The events of 2009 have set up a transformation of the health care Information Technology (IT) industry, and we will start to see the results through next year.

IBM's financing of several major industry players, including Siemens, is just a taste of what is to come.

As the year began health IT was a closed club of proprietary vendors whose annual trade show, HIMSS, was like a Comdex from the 1980s. These vendors defined industry standards through a certification committee they had created, and those were based on specifications, not whether the stuff worked.

The most vital industry standard was a billing code, controlled by the American Medical Association. Health IT was not about health -- it was about getting paid.

With the passage of the Obama stimulus a bureaucratic war began to control the money. The industry lost. Instead, committees under new National Coordinator for Health IT, David Blumenthal (above), defined "meaningful use" and eligibility for stimulus money functionally.

It's no longer, does this software have these features and codes set up by the industry. It's does this software actually deliver meaningful data that can transform how an office works.

To underline all this, the first grants will go to so-called "beacon communities," small cities that are already drawing valuable data from their health IT systems, and acting on that data. The money will boost those efforts in hopes of creating best practices others will follow.

Power in the industry has shifted, in other words, from software designers who code specifications to consultants who act on what data tells them. It's no longer about the inputs. It's about using the outputs.

The smell of stimulus cash drove Hewlett Packard's purchase of EDS, and Dell's purchase of Perot Systems. The industry is being pushed toward a systems approach, and the mainline IT industry is responding.

As 2009 began the health IT vendors to know were Cerner, McKesson, GE Healthcare and Siemens. As 2009 ends the names to know are HP. Dell, Microsoft and IBM. Oracle gets a seat at this table because Sun Microsystems, which it's in the process of buying, sold the tools to make NHIN-Connect, which is now being called the "Health Internet."

The easiest prediction to make for 2010 is there will be a lot of merger and acquisition activity in this space. IBM's financing of major vendors gives it visibility as this financial dance begins.

The industry that greets 2011 will be nothing like the one that saw in 2009.

This post was originally published on Smartplanet.com