If attendance at the annual Health Information Management Systems Society (HIMSS) conference is a barometer of the state of the health IT industry, then the sector continues to grow at a rapid pace, but is starting to converge. HIMSS 2014 set a new record for attendance, with close to 38,000 participants. If that’s not significant enough, over 1,200 health related IT companies exhibited in the cavernous 50,000 square foot exhibit hall. Even some of the relatively new companies to enter the market claimed large spaces in the exhibition hall, validating the willingness of venture capital and angel investor money to both launch and fund these ventures.
If you think of the main exhibit hall as an ecosystem, at the apex of the food chain stood the dominant EHR providers: Epic, Cerner, Allscripts and McKesson. Emerging quickly in numbers to challenge this hierarchy are the many and adaptable population health management (PHM) companies. Deep in the peripheral tributaries of the exhibit hall were emerging raptors, small in stature this year, but positioned to evolve quickly (or die), including healthcare analytics companies, optimization consultants and care coordination platforms. The idea-to-market timeline continues to shrink for new and innovative solutions – a far cry from the decades of application theory and beta testing for electronic health records. We see this all too critical acceleration in product development as a very strong driver for continued health IT business initiatives and company launches, as well as future 3rd party investments.
What sense can we make from the maze of exhibitors, EHR vendors, PHM technology companies, health IT start-ups, clinical management technologies, and volume-driven to value-based conversion entities? Now more than ever before, there are unique and compelling opportunities for health IT business development for the immediate and long term time frames. Growth in the opportunities to apply technology and to change the business of care delivery exist, with plenty of room for expansion, which will come as the healthcare industry pivots and explores new approaches to provide comprehensive care to defined populations.
Additionally, we see a coming “applification” of healthcare; a dawning of an insatiable need for functionality, with more companies bringing forth application development programs for care coordination, patient engagement and analytics. There is a natural adaptation that will seize upon this need and work tirelessly to find that “sweet spot” for providers and payers to digitally link to patients, thus creating an umbilicus for shared health information that flows in near real-time, bi-directionally and is secure. This is on the horizon, and we can expect steps toward this reality in the very near future.
The question post-HIMSS14 is: In a world of declining growth in revenues from traditional RVU-based sources, how will organizations continue to pay for these needed IT support solutions that are becoming required elements of survival for healthcare providers? Early adopters of the ACO model are already seeing that the level of investment required to create the infrastructure needed to support the care collaboration is higher than expected and ongoing. Meanwhile, targets will likely become harder to hit, revenues will become more and more restrained, and simple gains in efficiencies could become harder to find.
The value over the next few years, and the differentiator among the thousands of health IT vendors who exist today and those that will survive into the future will be based on two things
- the flexibility of the tools to adapt to the changing targets of analytics to come as new data sources are brought into the mix, and,
- the ability of the vendor to help health care organizations use these tools to change the way they do business (i.e., change care delivery processes)
Vendors who can do the former are likely to be the favorites of the largest healthcare providers, who will be early adopters and who will lead in the march toward implementation of big data analytics. Vendors who can do the latter may be those that help the widest range of provider organizations to survive to participate in HIMSS24.
Patrick Riley, Connected Health Senior Industry Analyst, Frost & Sullivan, contributed to this blog post.