February 08, 2010, 8:24 PM — In addition to being a top priority for legislators and the press, healthcare has become a major target for IT vendors. Driven by economic pressures that force hospitals to merge and consolidate, regulations that force better documentation and security, and legislation that may fundamentally change the industry's business models, healthcare companies will spend more on technology this year than any other type of company, according to a study released Jan. 31 by Enterprise Strategy Group.
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Much of the attention focuses on endpoint devices such as the iPhone, the new iPad and other gadgets doctors or nurses can carry during patient exams. However, the real spending will be for core applications such as billing and records systems, business-information systems, and upgrades that standardize IT after mergers or acquisitions, according to Mark Bowker, analyst at ESG.
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The ESG survey of 515 companies with IT budgets greater than $50 million showed 52 percent have IT budgets larger in 2010 than 2009; in healthcare 67 percent of companies will increase spending.
Half of all healthcare companies plan to add IT staff positions this year as well -- more than any other industry surveyed.
"We have seen some gadget-y technology in healthcare environments. Certain endpoint devices become attractive as mobile options for a certain class of users, but IT has to deploy them in a way that's in compliance with regulations," Bowker says.
Top priorities for IT spending are business intelligence systems, network upgrades and improved security, according to ESG's survey.
Billing Software, Virtual Desktops Top of Mind
The highest priority for healthcare companies is to capture billing data immediately -- in real time as a doctor provides the services -- so the hospital can bill an insurance company as quickly as possible, according to Leo Carpio, vice president for the Health Care IT & Services practice of equity research firm Caris & Co.
Weighing the Pros/Cons of Desktop Virtualization
"A lot of iPhones have apps that tie in to medical records programs, and can let a doctor pull up prescription data, look at labs, or put in orders from the phone," Carpio said. "[Doctors] can use the tools to avoid staying in the office to clear up paperwork."
Virtual desktop implementations from Citrix, Microsoft, VMware and other vendors may be able to provide secure access and keep data locked up even if the device is stolen, but the effort to support handhelds may be more effort than it's worth.
Citrix, seeing the opportunity to extend its leading share in the terminal-services and VDI markets into the smartphone market, last week announced a reference architecture called the "nirvana phone" that would support full-function virtual desktops on smartphones. Citrix and development partner Open Kernel Labs, which develops embedded virtualization software for handheld devices, are promoting the design to smartphone manufacturers and carriers. Most successful access or desktop virtualization projects in healthcare focus on systems that are beefier than handhelds -- workstations in exam rooms or on mobile carts on hospital floors, for example, Bowker said.
"One client we had deployed VDI to accelerate access to applications in exam rooms," Bowker said. "Without VDI it took several minutes for a doctor to log in to all the apps, and this cut that to just seconds. At the end of the day that allowed them to increase billable hours on a daily basis; that justified the cost easily."
That kind of in-place, controllable access is much more workable -- and much more cost-efficient -- than trying to build virtual-desktop access into iPhones and other relatively insecure devices, according to Carl Labbadia, director of information systems at Grove Hill Medical Center in central Connecticut.
About 350 of the 450 or 500 employees at Grove Hill need to access medical records on a daily basis -- demand the IT department meets easily using Citrix terminal services software running on six physical servers, Labbadia says.
