Market to Market predicts that the global Healthcare Information Technology (HIT) market will be worth $56.7 billion by 2017 (using a Compound Annual Growth Rate [CAGR] of 7 percent on the $40.4 billion reported in 2012). Cerner, a global healthcare provider, is in the process of paying $1.3 billion for Siemens Healthcare. Healthcare Delivery Organizations (HDOs) are paying vendors like Cerner, EPIC, and Siemens enormous sums, largely to achieve meaningful use (and receive large sums in return from the government). Consulting fees are through the roof. Are we spending too much on HIT or not enough?
Evaluating ROI
Asking whether $56.7 billion is too much to spend is a reasonable question. A better one would be, are we getting enough value from our investments? While many organizations have been busy implementing electronic health records and moving through the first two meaningful use stages and receiving government payments, the real value of their investments has yet to be recognized. This is not to say that meaningful use is a waste of time or not valuable in and of itself. Many healthcare organizations are in a much better position today due to the increased functionality and interoperability capabilities that came with meaningful use. Additionally, there are often incremental IT investments made without the appropriate level of big picture justification and analysis of the projected benefits. Things like health information exchanges, desktop virtualization, enterprise data warehouses, and mobile apps sure seem like great investments, but are they really? Sometimes we guess right. Many times we end up changing directions or never even installing that for which we paid handsome sums. However gratifying implementing that cool, new technology or achieving meaningful use and receiving a check may be, in most cases it is not fundamentally transforming the delivery of healthcare in ways that drive efficiencies and quality.
Where can health delivery organizations focus their ever-shrinking resources to achieve greater (demonstrable) value? In Part 2 of this post, I will discuss the four areas in which additional investment or re-channeling existing budgets can pay off.
