Forecast to grow at a 12% compounded annual growth rate (CAGR), the market for electronic medical records (EMR) has grown steadily with advances in IT technology. The value of an advanced IT infrastructure for doctors, researchers, laboratory technicians, universities and even patients has not gone unnoticed and has, as such, drawn significant government funding in recent years.
Interoperability between systems is, however, a serious barrier and calls have been widely made for standardisation to allow for greater access to information for medical centres and hospitals in sections of the developing world where information technology is yet to progress. Beyond the obvious advantages to less advanced centres, the sharing of information between hospitals and laboratories across Europe for instance holds huge potential if a shared system can be agreed upon.
Whatever the scenario, it is universally agreed that IT reform is a crucial component of healthcare reform - at least from a technology point of view - and a state that is likely to encourage growth in this market for some time. GlobalData's "Electronic Medical Records (EMR) - Global Opportunity Assessment, Competitive Landscape and Market Forecasts to 2016" provides an in-depth overview of an information hungry environment.
The global EMR market is forecast to grow at a 12% CAGR to reach $9,123m by 2016. Hospital / enterprise EMR will continue to be the largest subsegment, and will grow at a 12% CAGR during 2009-2016.
In the same period, the ambulatory EMR segment is forecast to grow at 11% CAGR to reach $958m by 2016. The market will be driven by government financial incentives in countries such as the US, Australia, China and Canada to create a robust healthcare IT infrastructure.
Government funding to accelerate demand
Over the past decade, governments across the world have recognised the importance of IT in healthcare. There has been growing evidence of the time and cost efficiencies that healthcare IT systems can bring into an already overstretched healthcare system.
Since creating an IT infrastructure requires a significant amount of funds, governments have stepped up the funding for various IT programmes. In addition, all healthcare IT solutions require a significant amount of services to get the system in place and to maintain it after installation. With the growing adoption of healthcare IT, the demand for healthcare IT services is also likely to go up.
In 2009, the US Government dedicated a $19.2bn stimulus package to healthcare IT infrastructure and electronic health record (EHR) implementation by hospitals and physicians under the Health Information Technology for Economic and Clinical Health Act (HITECH). Besides the HITECH Act, the migration to the International Classification of Disease -10 (ICD-10) and the Health Insurance Portability and Accountability Act (HIPAA) 5010 are further expected to boost the healthcare IT services market in the US.
The Australian Government recently announced health reforms to improve and modernise the country's healthcare system.
The government plans to invest more than A$7.4bn in the healthcare system, which includes an allotment of A$464m towards healthcare IT.
Similarly in China, the government announced a healthcare overhaul in 2009 with funding of $124bn. The government is expected to spend about 1.5% of that amount on building an IT infrastructure.
Demand for tight system integration and interoperability
With increasing emphasis on improving patient mobility and on healthcare being delivered by different professionals and organizations working from separate locations, there is a growing need for interoperability. Legacy EMR systems cannot compete with the newer EMR systems which are designed specifically for enabling easy exchange of information. Thus, they will have to be replaced by newer systems which allow interoperability.
Interoperability not only provides freedom of movement to the patient, but also improves the quality of care by enabling consultations between specialists from remote locations. Previously, EMR was restricted to a physician's practice or a hospital. However, newer solutions now allow physician practices and hospitals to exchange data freely, making the process of referrals simpler.
These solutions are also able to interact with diverse departments within or outside the hospital which are also involved in the patient's care such as the radiology, laboratory as well as long term care. Besides interoperability of clinical information systems, these systems are tightly integrated with the administrative and financial systems involved in patient scheduling, billing and filing insurance claims.
Small hospitals and physicians markets to drive growth
Small physician practices and hospitals where most of the primary care occurs have traditionally been slow in the adoption of healthcare IT technology. A recent New England Journal of Medicine article revealed that the adoption of EHR in small practices was as low as 4%. There are two reasons for this, the lack of technology know-how and the lack of a proven return on investment (RoI). For instance, small practices are often family-run operations with modest IT skills.
In these small practices, EHRs have yet to prove themselves as a benefit and are often seen as a serious detriment to delivering efficient care. However, these perceptions are now changing as most practices incorporate electronic records for effectively managing their workflows. The non adopters will thus be forced to adopt HER / EMR to stay competitive.
Products customised to cater to small hospitals and physician practices are expected to drive demand in the EMR market. In the past, most of the large software vendors offered high-end EMR products, with prohibitive upfront costs attached to them. Now, a large numbers of companies offer affordable solutions, customised to suit the needs of small providers. Small hospitals are also trying to bring interoperability between the different departments of the hospital because legacy systems confined data to a single department and were not built to allow exchange of information between them. Small hospitals are expected to replace their legacy systems with newer systems designed to facilitate interoperability, thus driving the market.
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