Report: Hospitals To Invest More in Non-EHR Health IT Systems

February 9, 2015 in News

Hospitals’ investments in administrative IT systems,  health information management and revenue cycle analytics are expected to surpass electronic health record purchases over the next few years, according to a Frost Sullivan report released last week, Health IT Analytics reports (Bresnick, Health IT Analytics, 2/5).

Report Details

According to the report, the largest immediate driver of investments in health information systems is a shift toward value-based reimbursements, which hospitals said would be a major area of focus over the next one to two years.

The report also noted that increased demand for health care services and consolidation among health care providers will drive health information system investments, particularly as hospitals implement cost-saving measures, participate in value-based reimbursement models and address increasing amounts of EHR data.

Overall, the report noted that:

  • The U.S. health information system market was valued at $11.1 billion in 2013 and is expected to grow by a compound annual growth rate of 5.7% from 2014 to 2020; and
  • U.S. health information system market revenue is expected to steadily increase until it reaches $17.6 billion by 2020.

The report also assessed individual market segments and found that:

  • Investment in administrative IT systems will be the fastest growing market segment, at a compound annual growth rate of 10.4% from 2014 to 2020;
  • Investment in financial IT systems will grow at a compound annual growth rate of 9.7% over the same time period; and
  • Investment in clinical information systems will grow less quickly than other market segments, with a compound annual growth rate of 0.6%.

Meanwhile, the report also listed several potential health information system market restrictions, including:

  • Financial challenges related to changing reimbursement structures, which could affect the market for the next five years (Murphy, EHR Intelligence, 2/4); and
  • Apprehension about the future of federal EHR incentives and other health IT programs (Health IT Analytics, 2/5).

The report noted that the shift in the hospital IT market indicates changes in health care consolidation and reimbursement.

Nancy Fabozzi, connected health principle analyst at Frost Sullivan, in a statement said, “Hospitals understand they must establish new business models in order to survive under a dramatically transformed provider landscape.” In addition to value-based reimbursements, she noted that hospitals will be focused on “cuts in Medicare reimbursement required by the Affordable Care Act,”  consumers’ obligation to select their own plans and provider networks through the health insurance exchanges and increasing competition from retail pharmacy clinics and telehealth providers (EHR Intelligence, 2/4).

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