Information technology has been hit by the current economic downtown, and healthcare IT might soon feel some of the impact, too, industry experts say.
There are two components of health IT affected: Vendors planning mergers and acquisitions, and providers investing in new technology both are eyeing their opportunities to either move forward or wait. Projects such as electronic health-record implementation that have been budgeted and planned already likely will be completed. But new projects and IT investments will suffer, according to Barry Alexander, a partner with Atlanta-based Nelson Mullins Riley & Scarborough and head of the law firms national healthcare group.
The recently completed merger between Misys Healthcare Systems and Allscripts Healthcare Solutions faltered slightly when Misys, the London-based parent company of Misys Healthcare, had to seek alternative funding sources after financial lender Lehman Bros. collapsed in the credit market failure last month. HLTH Corp. announced this week it would not be folded into its subsidiary WebMD because of the uncertain market as well.
The big health IT deals, like the ones that involved multiple lenders and levels of financing, will probably continue to be put on hold, Alexander said. But deals with lower capitalization values are still being sought because companies with synergistic products offer higher efficiency to customers, he added. Theres still tremendous enthusiasm in the sector, he said. Whether or not thats overly optimistic remains to be seen.
The bigger change is inside hospitals, said Winifred Hayes, president and chief executive officer of Hayes Inc., Lansdale, Pa., a research and consulting firm. Hospitals are conducting layoffs as they restructure their costs, and they have begun to rethink investment decisions. As consumers are squeezed by the stock market, they are deciding to put off elective, nonemergency proceduresand that is impacting hospital revenue streams, she said.
EHRs remain a priority, but as the belt-tightening continues, adoption likely wont happen as fast as advocates would like it to occur, Hayes said. I just dont think people will have the money.
A lot of the spending cutbacks should come from hospital investment in new technologies that havent been conclusively proven to improve outcomes over existing technologies, Hayes added. New technology spending accounts for a significant portion of hospital budgets; if hospitals spent more time evaluating the value of new technologies and determining which ones will truly improve care, they could cut that spending, she said. We need to make sure evidence is the foundation of whats driving business decisions, she said.
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