Healthcare IT spending to hit $40B this year

More than 72% of physicians in the U.S. use smartphones

Healthcare IT spending is expected to reach $40 billion by the end of this year, according to a study from market research firm RNCOS.

Much of that growth will come from spending on electronic health record (EHR) systems, mobile health applications and efforts to comply with new government standards.

Boosted by increased spending on healthcare software -- which is needed for the rollout of EHR systems -- the U.S. healthcare IT market is expected to grow at a rate of about 24% annually from 2012 to 2014, the study said. Spending on healthcare software rose 20.5% in the past year, from $6.8 billion in 2010 to a projected $8.2 billion this year, according to RNCOS.

Recent mergers and acquisitions in the healthcare IT market also point to growing private-sector interest in software, which will see sales grow at rate of more than 30% annually from 2012 to 2014, the report said.

The study attributed some of the increase in spending to the Healthcare Reform Act, the new ICD-10 coding system, and adoption of EHR systems, which will be mandatory by 2015. Also a factor: Medicaid enrollment, which is expected to increase by 16 million people by 2019.

ICD-10 is a comprehensive medical coding system that includes more than 55,0000 codes; hospitals are required to be using it by Oct. 1, 2013.

And the adoption of EHR technology -- hastened by the requirement that healthcare facilities must achieve "meaningful use" of such systems -- is forcing hospitals and other healthcare providers to move ahead with technology implementations faster than ever.

In addition, the RNCOS report noted that consumers are keenly interested in the benefits of mobile health technology. The mobile health market is estimated to hit $2.1 billion by the end of the year. It has grown by 17% in each of the past two years.

The main driver behind that double-digit growth rate is the increasing use of smartphones. By the end of 2011, 50% of mobile phones in the U.S. are expected to be smartphones, up from 21% in 2009.

As a result, according to market research firm Research2guidance, healthcare-related smartphone apps are set to become hugely popular. The research firm projects that some 500 million people will be using such apps within five years.

According to the Global Mobile Health Market Report 2010-2015 compiled by Research2guidance, more than one-third of 1.4 billion smartphone users in 2015 will be running some kind of mobile healthcare app.

A recent online survey sponsored by the wireless industry association CTIA found a similar level of interest in health-oriented apps. In the CTIA survey, 78% of respondents said that they were interested in mobile health products and services and 15% said that they were extremely interested in learning more. "This signifies that the awareness among the consumers regarding [mobile health] services is increasing, which has played an important role in the growth of the market," the RNCOS report said.

More than 72% of physicians in the U.S. are now smartphone users, according to the RNCOS report. And tablet devices are also catching on in the medical community: More than 20% of all U.S. physicians have iPads.

Healthcare apps for smartphones are one of the main reasons for this increased usage. There are already more than 10,000 mobile applications related to health, and about 40% of those are designed for healthcare professionals. That figure includes remote monitoring and healthcare management applications. Even Apple's iTunes store has about 6,000 mobile health apps.

As the mobile health market surges ahead, there is an emerging call within the medical community for a dedicated wireless spectrum for healthcare use. That spectrum would augment commercial mobile broadband networks, which have significant coverage gaps and face reliability issues.

Earlier this year, healthcare providers and the aeronautics industry association urged the Federal Communications Commission (FCC) to approve a mobile body area network (MBAN) plan. The MBAN radio spectrum would create a wireless body sensor network for remotely monitoring critically and chronically ill people via small wireless devices. That would allow caregivers to track a person's health status and take swift action in any emergencies.

The American Telemedicine Association also has asked the FCC to consider setting aside small portions of spectrum for the exclusive use of healthcare professionals. No decision on the spectrum requests has yet been made.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas's RSS feed . His email address is

Copyright © 2011 IDG Communications, Inc.

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