It's no news that the hospital segment of the health information technology market is exploding, but speculation about the size of the boom always is interesting if you're a health IT systems buyer, user or, particularly, a developer.
Hospital IT should hit $6.5 billion in 2012, report says
The latest report by market watcher Frost & Sullivan says hospital IT revenues in 2009, the year the American Recovery and Reinvestment Act was passed, were just shy of $1 billion ($973.2 million), according to a news release about the report.
By 2012, total hospital market IT revenues should peak at $6.5 billion, these researchers say, with much of the growth coming on the strength of new licensing fees and upgrades for EHRs. By 2013, revenues are expected to “retrench” slightly “due to increased market saturation and price competition.”
The lit fuse on this growth explosion, of course, is the estimated $30 billion or so in EHR incentive payments in the ARRA, but the gun powder is the threat of cuts to Medicare reimbursement payments if hospitals don't become meaningful users of an EHR by 2015, according to the researchers.
“It's hard to precisely gauge how beneficial the actual stimulus funds will be for individual hospitals,” said Nancy Fabozzi, a Frost & Sullivan analyst in a news release about the report. “Most hospitals may end up paying more than they earn. However, the prospect of Medicare penalties is very significant. The majority of hospitals have little choice but to do their best to adopt EHRs, and do so rather quickly. It is this reality that is driving dramatic growth in the market today.”
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