The U.S. Healthcare Information Technology market is in the early phases of a massive consolidation that will ultimately devolve into a handful of mega firms that form Healthcare IT superstores -- or "Healthcare Information Networks," according to a recent survey.
The confluence of technologies is at a pivotal point to enable radical changes at relatively reasonable costs. In addition to continuing advancement in the field of medicine, major breakthroughs in telecommunication, data management, infrastructure, and analytics technologies have laid the foundation for more innovative solutions for the industry.
In the not too distant future, a few companies will emerge to lead the healthcare information industry much as Bloomberg and Thomson Reuters lead the financial information technology arena.
A few companies will successfully integrate the key components of a healthcare information network -- and thereby will be in a position to set industry standards. From that position, they will be positioned to provide comprehensive integrated information, analytics, communication, administrative, clinical and revenue cycle management tasks all via a seamless network, accessed through the web or dedicated terminals. The future will involve providers, payers and patients who conduct the majority of their healthcare business through these integrated, seamless, real-time Healthcare Information Networks.
Another prediction: a quickening pace of M&A between administrative (payer and provider sides), revenue cycle management, and analytics businesses. Payers will take a more active part in individualizing medicine in order to avoid becoming commoditized.
There is an increasing trend toward outsourcing, which will lead to the creation of a new breed of BPO companies that will focus on managing the information flow in many of the HIEs (Health Information Exchanges).
Several companies may be looking to build the next generation Healthcare Information Network including incumbents in the healthcare IT industry such as Ingenix (a wholly-owned subsidiary of unitedhealth group), to telecommunication or large technology companies like Verizon, AT&T or Microsoft and IBM.
Comment from Afsaneh Naimollah, partner at Marlin & Associates: The responses reveal that that the social and economic imperatives for a better healthcare system have never been so pronounced. Solving the cost of healthcare from the fringes has never worked. Now, with the healthcare IT mandates in the federal healthcare reform bill, coupled with a stream of superior technologies, we are finally in a position for technology to have a measurable impact on the costs and the quality of care delivery. Payers have to invent new products and pricing such as pay for performance with providers or behavioral based premiums for the consumers. It is the only way that they can stave off the commoditization train. Verizon, AT&T, etc. all have pieces of the puzzle. The question is: Which firm will be first to assemble a truly comprehensive information and transactional healthcare platform? You need vision, money and the right leadership to get there, not a small task if you are creating a comprehensive healthcare platform.
Government standards have been helpful, but ultimately the private sector will set the standards for the industry; just as Microsoft and Intel set technology standards in the 1980s.
About the report: The market commentary was issued by Marlin & Associates, a financial advisory firm specializing in the technology and healthcare industries. "BACK TO THE FUTURE: HEALTHCARE REBOOTED" offers five predictions on the future of healthcare IT.
Contact: Download the report here.
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