White Paper. How Small Healthcare IT Companies Can Profit In the Years Ahead. Published by BrownIT Corporation, July 27, 2013.
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1 White Paper How Small Healthcare IT Companies Can Profit In the Years Ahead Published by BrownIT Corporation, July 27, 2013 Page 1
2 July 27, 2013 How Small Healthcare IT Companies Can Profit In the Years Ahead Introduction The government currently spends over 10% of the gross domestic product in the healthcare industry a figure that is expected to double by the year Today healthcare is one of the fastest growing sectors of the economy with over 76% of fortune 50 companies being healthcare companies or companies that have a healthcare division. The mission of Health IT is to lower the cost of medicine by over 30%, increase the quality of medicine, and reduce many of the inefficiencies that currently plague the industry. Over the past several years, the government has offered huge incentives for the adoption of health IT (HIT). These incentives have lead to a large increase in companies that specialize in this type of information technology. Though most of the players in the health IT industry are large companies, the growth of this new industry also offers an opportunity for smaller firms. Smaller IT companies and how they fit in A company that offers health IT can specialize in a number of different sectors into which the industry is divided. These are: Supplying of HIT equipment this sector is reserved for companies that specialize in supplying medical practices with the necessary equipment to successfully implement health IT. Support for health IT once health IT systems are installed in any institution they require constant maintenance and repair. Consulting implementing IT services requires technical know-how, which most employees in medical practices do not have. To ensure smooth implementation of HIT most physicians hire consultants who perform feasibility studies and offer advice on the best HIT system to install. Small businesses that wish to profit from the growing healthcare industry can do so by participating in some of the following activities: Page 2
3 1. Development of smartphone applications Over the last few years, the smartphone application industry has grown at an astronomical rate. To date, about 40 billion applications have been downloaded from the Apple App store, and more than 20 billion of those apps were downloaded in 2012 alone. These apps generated more than 7 billion dollars in revenue for the more than 775,000 developers. Out of the 2 billion apps downloaded in 2012 more than 250 million were healthcare related apps a figure that accounts for more than 10% of the downloaded apps. The mobile healthcare app business will be worth an estimated 400 million by the year Some of the major areas where small IT companies can concentrate their efforts include; Smartphone apps that link with diagnostic tools several diagnostic tools are being developed to enable smartphones to monitor vital body signs such as heart rate and blood sugar level. By developing apps which make innovative use of these diagnostic tools, small IT companies can turn a huge profit. Smartphone apps that offer machine-to-machine links some of the equipment used in healthcare institutions require constant monitoring and re-calibration to work correctly. By creating a smartphone application that performs this task remotely, IT companies can make huge profits, and at the same time make the process of re-calibrating medical equipment easier and cheaper. Developing apps which promote healthy living and fitness approximately half of healthcare related apps downloaded to date are fitness apps. A lot of effort has been put into creating awareness on the importance of keeping fit and healthy living. This has lead to a high demand in fitness apps and devices that can be linked to smartphones such as the Nike Fuel Band, to monitor fitness related parameters such as the calories burnt during an exercise session. Fitness related applications thus offer small IT firms a chance to profit from the sale of smartphone applications. 2. Consulting opportunities With the government deadline on HIT compliance drawing closer, many healthcare institutions require urgent consulting on various issues. First, consulting is required in conducting organizational studies and evaluations so as to develop or adopt HIT compatible systems and procedures. Each healthcare organization differs from other institutions; hence, in each Page 3
4 institution a compatible IT system must be developed or acquired. Also, when a system is adopted, a well-defined procedure for its use must be adopted to ensure efficiency a job mostly done by consulting firms. Consultants are also crucial is in advising healthcare providers on how to optimize already adopted systems to maximize efficiency. In many cases, healthcare institutions adopt IT solutions in phases, a process that may lead to a lot of inefficiency if all systems are not correctly set up to work together. Many healthcare institutions hire consultants after adopting all necessary systems to conduct studies and make suggestions on how to integrate all the systems efficiently. 3. Offering support for adopted IT solutions The government spends about 4 trillion dollars in healthcare each year. About 40% of the total healthcare budget goes towards the acquisition or implementation of technology-based solutions in healthcare. This has lead to the growth of a huge support industry for IT-based solutions. Below are a few support services small IT companies can offer in the healthcare industry: Offering data storage facilities and solutions In 2012, an estimated 5 billion terabytes of medical data was produced; scanning a single organ for 1 second creates about 10 GB of raw data. Storing and backing up these huge medical files costs healthcare institutions a lot of resources, which is why most organizations outsource storage and backup of large medical files to other companies. Offering maintenance and repair services, and selling spare parts for implemented solutions The healthcare industry spends billions each year in maintenance and repair of already-installed technology. Small IT firms could make millions each year by offering these services to healthcare institutions. Installation and customization of medical software vendors of most medical software sell their software to institutions, and the task of installing and customization is left up to the organization s IT department. Since most medical practices do not have an IT department the task is outsourced to companies that specialize in software installation and customization. 4. Staff training in HIT systems All healthcare institutions are expected to adopt HIT systems by the year Most of the staff in medical practices will have to use these systems to help take care of patients. Since most of the people working in hospitals do not know how to use these IT-based solutions they will have to be trained. Page 4
5 Conclusion For small companies to succeed in an industry as competitive and safety conscious as the healthcare industry, a business must put effort into building trust and rapport with customers. A single mishap or mistake in the healthcare industry can lead to multiple deaths, which can lead to lawsuits and loss of business. Hence, for small companies venturing into healthcare, safety and error-free work should be a high priority. Page 5
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