By Matthew Healey
2013 saw a lot of activity in healthcare technology. While the media focused on the politics of the Affordable Care Act (ACA) and problems with the healthcare.gov rollout, many other important technology stories in healthcare took place throughout the year. Buried behind the politics and the public facing problems, there was significant effort on the part of healthcare providers to ramp up internal systems in anticipation of dramatic patient increases.
Areas of Investment
When people think about healthcare technology, they tend to focus on advanced treatments, medical devices, and electronic health records (EHR). While these do represent a considerable amount of spending, the largest forecast increases in IT spending in 2014 have more to do with internal operational efficiency than publicly facing projects.
Patient increases combined with a rise in the amount of information collected on each patient plays a role in the need to replace physical records with EHR, which results in opportunities that drive efficiency through analytics.
A recent Technology Business Research, Inc. (TBR) study shows that spending on business intelligence (BI)/analytics represented the largest percentage increases in 2014 healthcare-related software spending. The two most cited areas in BI/analytics spending were business process management and reporting. This shows that healthcare organizations are turning to analytics to help drive internal operations.
TBR reports that spending on business applications represents the second largest increase in 2014 healthcare-related software spending. Specifically, accounting and finance software is the most cited area of spending. Analytics, combined with the use of business software to improve internal operations, points to the need to prepare for increased demands on existing systems. In many cases, the ability to increase the capacity of the healthcare system is limited. Hospitals take time to build and doctors and nurses require years of education before they can practice. However, increasing the number of patients a system can handle with existing resources is considerably easier.
Is Healthcare Ready for the Cloud?
The healthcare industry is one of the most heavily regulated industries in the U.S. and as a result has not been able to take full advantage of one of the more flexible deployment models for IT—the cloud.
In 2014 that trend is expected to shift. Healthcare providers and payers are still not migrating to public cloud as fast as other industries, but they are moving towards private cloud architectures to augment existing, on-premise deployments.
Private cloud deployments provide many of the same benefits as a public cloud, but with advanced security and regulatory compliance. For 2014, more healthcare organizations indicated that they were looking to deploy new technology solutions in private cloud environments than any other option.
Migrating to a private cloud is part of the need to improve operational efficiency. With a private cloud, providers and payers gain access to mobility throughout the internal network, greater integration of applications, and potentially lower IT administrative costs.
While the initial impact of the ACA will be most acutely felt in 2014, long-term trends in healthcare IT are expected to follow those of other industries. As the amount of healthcare data collected continues to increase, the use of analytics drives efficiency gains, improvements in patient care, and streamlined operations.
One major hurdle inhibiting the adoption of these tools in healthcare is the more stringent regulations regarding the use of patient data. Over time, as regulations catch up to the advances in technology and security and privacy concerns are addressed, the use of analytics will expand. Regardless, there is certainly no shortage of opportunities for healthcare organizations to use IT to help improve operational efficiency. SW
Matthew Healey, principal analyst for TBR’s software practice, leads the firm’s SourceIT program, which is a research initiative that analyzes customer-buying behavior by vertical industry.
Feb2014, Software Magazine