State and Local Health IT market to reach $9.6b in 2014

Market research firm INPUT has just released a report, forecasting an increase in health information technology use among state governments from FY2009 through FY2014. The expected growth rate for the state and local market will be around 4.6 percent, increasing the health IT market value from $7.6 billion to $9.6 billion.

According to INPUT’s “Health IT Transformation: FY2009-FY2014 State and Local Market Forecast,” electronic health records (EHRs) at public hospitals and health organizations will be the primary driver for growth opportunity. Spending on EHR systems is projected to expand from $850 million this year to $1.85 billion in 2014. But EHRs are not the only health IT tools state and local agencies are interested. INPUT found there are at least fourteen different types of health IT products and services, including software and systems for clinical data, labs and pharmacies, patient tracking, decision support, telehealth, health information exchange, and disease outbreak management.

The American Recovery and Reinvestment Act will also push the health IT vertical market and EHR adoption, INPUT found, increasing agencies’ use from 2009 to 2013 with a 17 percent compound growth rate over the period. Other forces shaping the market include the states’ budget crunch, President Obama’s healthcare reform and other national health initiatives, EHR standards and certification rulings, as well as Health IT interoperability standards.

INPUT’s report also painted a complex picture for the market’s funding. There are at least three federal sources of funding, including the Recovery Act, Medicaid supplemental payments and annual budgets. And to complicate matters further, there are eleven or more different open hands asking for those funds at the state and local level, including hospitals, clinics, regional health organizations, mental health facilities, Medicaid, children’s health programs, prisons and IT departments.

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