Does This From The US Remind You Of What Has Been Happening In Australia?

This popped up a little while ago.

Beyond the HIT Boom

By Steven Heck

MAY 20, 2013 12:52pm ET

The thriving health care information technology industry is no longer news. But, much like the real estate market, there’s a crash coming, and soon.

The American health care industry is normally described in three distinct sectors – providers, insurers and life sciences. While all three sectors contribute to health care, they operate in very different ways, with periodic blurring of relative roles and responsibilities. Life sciences include multi-national pharmaceutical and biotech corporations that focus on research and manufacturing. The health care insurance industry has consolidated dramatically over the last twenty-five years and now less than half a dozen corporations provide the vast majority of private insurance in the United States. The insurance sector has periodically increased patient care related interventions, but normally has just passed on ever increasing medical expenses to employers. The provider sector consists of a highly fragmented delivery system of primary, acute and post-acute caregivers. This sector is mostly non-profit and historically local and/or regional in nature. All of these sectors are dramatically impacted by government policy and reimbursement rates.

In 2009, Congress passed the HITECH Act and a year later the Affordable Care Act (ACA). The laws created a set of “carrot” and “stick” incentives that resulted in the health information technology boom. The government, armed with $20 billion in incentives told providers to deploy electronic health records and use them in a very prescriptive manner. The activity level has been dramatic. Vendors, consultants and I.T. professionals have had the best bull market in their history. Virtually every health care provider across the country is automating and integrating. I.T. -related capital spending has garnered a disproportionate share for many years. I.T. operating expense has increased dramatically while internal governance struggles to identify and realize tangible offsets in overall operating costs. Given strict deadlines under law, most of these information systems are being “installed” rather than “implemented.” As a result, most providers have deferred difficult workflow and operational decisions until the “optimization phase” currently anticipated to begin in 2014-2015.

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Steven Heck, president of the consulting firm MedSys Group, has over 35 years of health care information technology experience. This includes consulting and sourcing skills in the provider, payer and life sciences segments of the health care industry.

Lots more here:

http://www.healthdatamanagement.com/blogs/-46161-1.html

Looks like it is not only in Australia can government policy and incentives can cause all sorts of distortions with both care providers and the vendor industry. We certainly have seen it in Australia.

David.