Thursday, March 5, 2009

Health-related Technology poised for a big boost

Recent spending bills have authorized $19 billion to accelerate the use of computerized medical records in doctors' offices. The legislation calls for incentive payments of more than $40,000 -- spread over the next few years -- to physicians who buy and use Electronic Health Record (EHR) systems.

Last year, the New England Journal of Medicine found -- in a government-sponsored survey -- that about 17% of the country's physicians are using computerized patient records. The incentives, then, are a significant part of the government's effort to expand their use to the other 83%. Market leaders in EHR technology, such as GE Healthcare, Health MedX, and eClinicalWorks are no doubt ramping up efforts to take advantage in this change in the technology landscape. Professional services providers should follow suit, primarily by preparing small-market solutions to serve the 1-10 physician doctors' office.

Because over 75% of the country's doctors practice medicine in offices with 10 or fewer physicians. These small practices have been hit hard by a number of economic factors, not least the increases in insurance costs over the past 15 years. Yet, they will still want to take advantage of EHR systems, especially now with this incentive in place.

An EHR provider who can offer this capability in a Software-as-a-Service (SaaS) model, while successfully addressing security and performance concerns, will have a distinct advantage in the overall market. Can a cloud-based EHR work? I'd be interested to hear what you have to say.

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