However, analysts then expect smaller increases in the market during the next three years because of the economic downturn, high oil prices, Medicare reimbursement cuts and other factors. Also, several issues will compel a new focus on revenue cycle management systems.
That’s the forecast from Dave Garets, president and CEO of HIMSS Analytics, during a media conference call on June 30. The cost of oil alone, he notes, will drive up costs of plastics products, which hospitals use a lot of.
Based on data reported annually by all 5,084 non-federal acute care hospitals in the nation to the HIMSS Analytics Database, analysts forecast the U.S. hospital I.T. market to be $29.4 billion to $33.0 billion in 2008. The market figure includes applications and the hardware--such as PCs and servers--that support the applications. It does not cover I.T. infrastructure costs such as networks, security and disc storage.
Garets also outlined the progress hospitals have made in implementing electronic health records systems. HIMSS Analytics defines the degree to which a hospital has adopted EHRs in seven stages.
Stage 0 indicates a hospital has not installed three major ancillary applications--laboratory, radiology and pharmacy information systems. Stage 7 means all data in a hospital, including the legal medical record, is digital; the organization can create a standardized continuity of care document from the EHR; and the organization is using data warehousing/mining technology.
As of the first quarter of 2008, 18.9% of hospitals are at Stage 0 and 13.1% are at Stage 1, meaning they have all three major ancillary systems. The new data from HIMSS Analytics shows 35.3% of hospitals are in Stage 2 by using to some degree a clinical data repository, controlled medical vocabulary, clinical decision support interface engine and possibly document imaging.
Another 28.4% of hospitals are at Stage 3, meaning they also have clinical documentation (flow sheets), clinical decision support for error checking, and picture archiving and communication systems outside the radiology department. Stage 3 is the fastest-growing stage, with 10% of hospitals at that level in 2005, Garets says.
Few hospitals, however, are in the higher stages. Only 2.1% have reached Stage 4 by adding computerized physician order entry and decision support for clinical protocols. Another 1.3% have hit Stage 5 after implementing closed loop medication administration systems in addition to the aforementioned systems.
HIMSS Analytics lists about 50 hospitals, or 1% of the total, at Stage 6, with 16 of the hospitals verified. Facilities at this stage have added physician documentation with structured templates, full clinical decision support covering variance and compliance issues, and a full radiology information system/picture archiving and communication system.
No hospitals are yet at Stage 7, although three from the previous stage soon may be verified as having made the jump, Garets says.
Hospitals verified at Stage 6 are: Midland (Texas) Memorial Hospital; Clarian North Medical Center in Carmel, Ind.; Newport (R.I.) Hospital; 3 hospitals of Evanston (Ill.) Northwestern Healthcare; Citizens Memorial Healthcare in Bolivar, Mo.; Memorial Health University Medical Center in Savannah, Ga.; and Our Lady of the Lake Regional Medical Center in Baton Rouge, La.
Also: St. Clair Memorial Hospital in Pittsburgh; St. Agnes Hospital in Baltimore; University Health System in San Antonio; Carle Foundation Hospital in Urbana, Ill.; HCA-Lewis Gale Medical Center in Salem, Va.; and the University of California San Diego Medical Centers (Hillcrest and Thornton).
HIMSS Analytics believes hospitals now are in the early stages of a “revenue cycle revolution” where emphasis is renewed on revenue cycle management technology.
New diagnosis-related group coding requirements, adoption of consumer-directed health plans and the forthcoming claims attachments standards will compel replacement of many existing revenue management systems, Garets says. This, in turn, will take money away from investments in clinical I.T. “This is where the money is and they really have to get their acts together,” he adds. “Money is going to be diverted from the clinical side in the next two to five years.”
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