According to a new survey, spending by the federal government on the healthcare IT market is set to reach as high as $6.5 billion in the year 2016. The survey was carried out by Deltek, Inc., a private enterprise software and information solutions provider. This means that the annual growth rate (compounded) of the industry is around 7.5 percent. This is a significant increase from the predicted growth of 1.1 percent for the overall federal expenditure on all non-health IT ventures in the same timeframe.
The spending by the federal health IT industry includes payments made for technology that makes it easier to provide healthcare facilities such as electronic health records systems as well as individually designed payment systems. It also includes spending to support and promote the research promotion of the health industry. Deltek has extensive experience in developing IT solutions for government contractors as well as private organizations.
The GovWinIQ report entitled “Federal Health Information Technology Market 2011-2016,” published by Deltek provides some startling insight into the industry. According to the report, even though most financial analysts observed that overall budget spending was going to decrease in the next few years, the growth of the IT market is not going to slow down at all.
The increase is primarily due to the escalating costs of healthcare in the United States. Other factors include a rapidly aging population in the country, gains from improved efficiency promised by the implementation of IT solutions and most importantly, the decrease in costs brought about by implementing new technological systems.
A senior principal analyst at NextGen EHR said that even though federal agencies use advanced EHRs, they have become relatively old. The conventional technologies and architectures that are still in use today could be replaced with something more efficient and more powerful.
Potential for Growth
One of the most important drivers in the increased amount of investment being put into the health IT industry is a forecasted expenditure increase that will take healthcare spending from $766 billion in 2011 all the way up to $1.4 trillion by the year 2020. This is mainly due to the expected increase of over 123 percent in the demographic of people with ages 65 and above by the year 2050. Needless to say, investors have begun to put in lots of money into the healthcare IT market because it is on the brink of a boom.