Healthcare reform remains and high tech rejoices
(MoneyWatch) Despite the ongoing debate over the Supreme Court's decision to uphold the Patient Protection and Affordable Care Act, one industry is undoubtedly delighted -- high tech.
That's because much of healthcare reform will depend on using technology to increase efficiency, reduce redundant work, and improve outcomes. Among other things, that will mean new computers, software, R&D, to help hospitals, doctors, and clinics become compliant and who will want their share of incentive payments that could reach $27 billion over the next decade.
One of the major areas of spending will be electronic medical records (EMRs). The move to computerized storage of data rather than a dispersed collection of paper and photographic film, a major focus of the legislation, will mean that healthcare providers will more easily obtain and exchange an individual's medical information.
Many healthcare institutions have already moved toward EMR and automated processes, propelling the revenue for companies such as health information systems vendor Cerner (CERN). The ruling increases the pressure to have all providers on such systems, and will expand the pool of business. Growth in the area has helped companies such as Athenahealth (ATHN), which provides cloud-based EMR support and practice management for individual physicians. And federal establishment of standards and specifications for healthcare records, something provided by the law, will only accelerate the process.
If healthcare executives are given financial incentives to move to electronic record keeping, expect to see faster adaptation. It's possible performance bonuses will depend on the implementation of clinical decision support and other tools to collect data and then use it to better direct patient care. That is separate from EMR systems and will be another revenue channel for healthcare IT. Then there is the pressure in the legislation to move as much payment activity as possible through electronic means, rather than slower paper-based systems. There are also provisions to expand use of telemedicine -- the delivery of services by video conference when in-person meetings are difficult -- as part of home healthcare delivery.
Not all the money will go to hardware and software. Implementation, consulting, and training are just a few of the other activities necessary to make electronic systems work. But, taken all together, there will be considerable pressure now to expand spending on healthcare IT as a way to control spending in how care is delivered. And that's going to be a significant transfusion of money into the tech industry.
Image: RGBStock.com user Littleman, photo manipulation by Erik Sherman