Physician adoption of health IT doubled in the past two years, motivated by the financial incentives in the 2009 HITECH Act. That legislative carrot, technology developments, private sector financial investments and patients morphing into health care consumers are driving forces shaping a growing, vibrant health IT market for 2012.
Here are my predictions for this space in the coming year.
A full-employment act in health IT.
According to a Nov. 30 HHS report, more than 50,000 health IT-related jobs have been created since the enactment of the HITECH Act. Furthermore, the number of health IT jobs is projected to grow by 20% through 2018, faster than the average growth for all occupations. Demand will exceed the supply of talent for health information workers with expertise in ICD-10, electronic health record implementation, data security, business intelligence, data analytics and informatics integration. New jobs will be created at health care organizations for people with experience in social media and revenue cycle management, as well.
Going slower to go fast . CDC found that 52% of office-based physicians in 2011 said they planned to meet meaningful use requirements, up from 41% in 2010. Physicians who have begun their journey toward meaningful use have expressed pain in this first leg of the four-year marathon toward 2014. HHS Secretary Kathleen Sebelius has provided positive strokes to providers participating in the meaningful use program, allowing those who meet Stage 1 criteria in 2011 to delay meeting Stage 2 standards until 2014. Meanwhile, CMS has given physicians more time to meet the new standards for filing electronic claims in the HIPAA 5010 format. This should be fairly simple for most physicians, whose IT vendors should verify they have switched to the new format. But it is the prerequisite to a larger standards migration: to the ICD-10, a diagnostic coding system implemented by the World Health Organization to replace ICD-9. ICD-10 is used in nearly every other country in the world. Expect a debate to ensue between professional physician associations and government agencies in 2012 regarding doctors delaying implementing ICD-10.
The epidemic of data breaches will be addressed and punished.
BusinessWeek reported that hospitals may be "scrimping" on security, resulting in a growing number of data breaches compromising information for 500 or more patients (the minimum scale of breaches reported to HHS). The Ponemon Institute reported that the frequency of data breaches at health care organizations grew by 32% between 2010 and 2011, at a cost of $6.5 billion annually. Behind the growth of data breaches is the finding that 53% of health care organizations say the lack of budget is the biggest weakness to preventing breaches. Furthermore, the proliferation of mobile platforms in health, among both clinicians and consumers, also is expanding the opportunity for personal health information to be compromised when sufficient security policies and technologies aren't in place. PricewaterhouseCoopers found that more than half of health care organizations have not addressed privacy and security issues associated with the use of mobile devices and that less than 25% have addressed privacy and security implications of social media use. While 2012 will no doubt see additional health data breaches, look for greater enforcement of a 2009 HHS rule that increased the maximum penalty for HIPAA violations to $50,000 per violation and $1.5 million annually.
Patients are more willing to share data but lack confidence in security. As consumers engage in online commerce in various aspects of their daily lives, they're looking to do more online with health care, as well. In particular, 73% of U.S. adults would use an online, secure tool to make it easier to communicate with their doctor and office staff, according to an Intuit Health Survey. Sixty percent of people would be comfortable sharing their personal health data for coordinating care, according to a PwC's survey. But health citizens are looking for that data to be handled securely, and they're right to be concerned: Less than half of health care organizations admit to addressing privacy and security risks associated with using patient data for purposes other than treating patients, according to PwC.
Health IT vendors will merge ...
The early December announcement that GE would absorb much of Microsoft's health care vertical business was a signal that consolidation in health IT will continue in 2012. The largest EHR vendors will consolidate their businesses to leverage scale economies and sales and marketing expenses. Those companies that have weak balance sheets and sales pipelines -- particularly in the crowded EHR space that grew like topsy after the passage of the HITECH Act -- will be likely candidates for acquisition. In addition, startups that have successfully created niche products to fill the gaps left by the larger suppliers will be attractive companies to complement core businesses.
... and more start-ups will cover the niches.
There continue to be opportunities not addressed by existing health IT vendors, and some of those gaps will be filled by innovative companies. In 2011, several venture accelerators fanned the flames of health tech startups: Rock Health in Silicon Valley; BluePrint Health in New York City and the Startup Health imprimatur of the national StartUp America effort. Entrepreneurs are matching up with existing suppliers and investors looking to innovate in the health sector. The mantra here is "invest in technologies to improve quality, reduce costs and expand access." These startups are addressing needs in both clinical/professional and consumer markets, from wellness to acute care and chronic condition management.
Data analytics gets practical.
With EHR implementation comes data liquidity and the ability to access bulky health information to address population health. Enter IBM's Supercomputer, Watson, which has gone beyond Jeopardy! to analyze health data. IBM in 2011 began working with health insurer WellPoint to develop evidence-based care protocol. One area in health care where this kind of data analytics should take off in 2012 is for addressing hospital readmission rates, which, under the Affordable Care Act, must be tightly managed beginning in 2013. Hospitals with higher-than-projected readmission rates will receive reduced Medicare payments for acute myocardial infarction, congestive heart failure and pneumonia. Hospitals with a focus in these areas will adopt more sophisticated data analytics tools, such as predictive modeling, in 2012 to prepare for this fiscal challenge.
Health care gets more connected, multi-platform and multi-channel.
With payment regimes changing toward greater accountable care, medical home models, bundling and paying for performance, health care providers must adopt the approach of U.S. Surgeon General Regina Benjamin, who says that health is where people "live, work, play and pray." People make micro-decisions at home and on-the-go outside of the purview of the doctor's office and hospital setting. Therefore, it behooves physicians and hospitals who take on new payment models to arm patients with tools that enable remote monitoring and feedback for chronic care support. Mobile apps, home-based monitors, Wi-Fi scales, text messaging and patient-physician email will gain traction to ensure patients stay well and, as appropriate, outside of the emergency department and hospital bed.
Patients will vote with their feet to satisfy their demands for online health. Of the three-quarters of patients who want online communication with their physician offices, one-half say they would consider switching doctors to one whose office offered online access, according to the Inuit survey. As consumer-directed health plan membership grows and health consumers pay increasingly more out-of-pocket, patients will look for more convenient interactions and higher levels of customer service from their health care providers. As a result, more patients will switch doctors, which will be a wake-up call for lower-performing providers. Consumer Assessment of Healthcare Providers and Systems scores also will play a prominent role in bolstering customer service in provider organizations.
Health politics in 2012 leaves a lot of wild cards on the table for forecasters. For example, how will the individual mandate fare in the Supreme Court? What will the November presidential election hold for the Affordable Care Act? Will the supercommittee or other members of Congress take on Medicare and Medicaid payment reform? The answers to these questions will affect health IT down the road, but in the short term of 2012, health care providers will continue to implement EHRs and be highly dependent on vendor support.
Expect health consumers and caregivers to be more demanding in terms of access to health information through portals and personal health records, looking for greater transparency of costs and quality to enable them to play the role that health plans and plan sponsors (employers, government agencies) expect them to play as informed, engaged health consumers.