Healthcare IT Dilemma: iPad Lust Meets Software Reality

IT vendors are excitedly wooing healthcare customers, thanks to big spending plans shaped by regulation pressures and industry consolidation. The buzz centers around gadgets such as the new Apple iPad, but buying plans will emphasize core applications such as billing systems and standardization-minded upgrades, analysts say.

By Kevin Fogarty
Mon, February 08, 2010


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.

Slideshow: Apple's iPad: The Key Capabilities, at a Glance

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 priorites 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 toLeo 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 (MSFT), VMware (VMW) 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.

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