Healthcare IT Trending Issues for 2015
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1 Healthcare IT Trending Issues for 2015 January 2015
2 Contents Providers Start to Really Pay Attention to Privacy and Security... 3 Hospitals Take a New Interest in Upgrading Administrative Information Systems... 5 Payer IT Comes Into Focus... 6 The DOD EHR Bid Could be a Game Changer... 8 Reference... 9 Legal Disclaimer The Frost & Sullivan Story
3 This time of year, the pundits are all weighing in with their top pics for key industry trends. We generally leverage the annual Health Information Management Systems (HIMSS) Annual Conference and Exhibition to issue our take on the state of the industry as this event offers the best chance to gain the widest perspectives. The HIMSS conference normally takes place in February but will be running a bit late this year, around mid-april. Look for our report and state of the health IT industry in late April. In the meantime, here s a taste of some hot areas we will be tracking for Providers Start to Really Pay Attention to Privacy and Security We believe that data security will become a key focus for healthcare organizations in The recent attack on Sony Pictures computer network is one reason payers and providers will substantially step up investments to secure the privacy and security of protected health information (PHI). The Sony incident is heightening awareness over the rising number of data breaches. Today, concern is not limited to corporate C-suites but is extending out to the general public. We can thank the 2013 attacks on Target and other popular retailers for that development. In 2014, data breaches specific to healthcare skyrocketed and the media certainly picked on these stories as well. Attacks on hospitals and other healthcare organizations accounted for percent of all major data breaches in 2014, according to the Identity Theft Resource Center the highest of any industry category. In September 2014, Websense researchers observed a percent increase in attacks on hospitals over the past months. Healthcare organizations are required to report data breaches affecting more than people to the Department of Health and Human Services' (HHS) Office for Civil Rights. According to HHS, the top five health data breaches in 2014 affected nearly million individuals. The single largest breach affected million individuals and occurred at Tennessee-based Community Health Systems, which runs over hospitals in states. That breach was attributed to Heartbleed, a vulnerability in OpenSSL. 3
4 There are a multitude of substantial risks to individuals and corporations related to the security of health data. Potential multi-million dollar fines from HIPAA violations are just part of the damages organizations can face. Payers and providers can be at risk for fraudulent medical claims resulting from a data breach. The cost of health data breaches could reach $ billion annually, according to a recent report from Experian. In addition to devastating financial ramifications for payers and providers, health data breaches can result in personal harm and exact untold damages to individual patients. How? First, compromised social security numbers leave individuals particularly vulnerable to fraud and identity theft. But most importantly, health IT security loopholes could potentially result in life-threatening risks in the event of disruption to computer-enabled medical devices like pacemakers and hospital monitors. That s why health data security is of increasing concern to the FBI s Cyber Division. Clearly, the total financial, business, reputation damages resulting from a breach in PHI can have far reaching consequences and significantly undermine an organization s future viability. Despite all the many positive ramifications of the growing adoption of health IT, data breaches present an uncomfortable and increasingly risky trade off. The rise of electronic health records (EHRs) and mhealth devices including wearables greatly increase the number of access points to PHI and other sensitive data. In recent years, healthcare organizations have been focused on laying the groundwork for new clinical IT systems in response to Meaningful Use incentive payments from CMS. Data security hasn t been ignored exactly, but it hasn t been a top priority either. This is somewhat cultural as the healthcare industry has underspent relative to other businesses. But that s changing because of more IT and more cloud-based IT. We predict that healthcare organizations will ramp up efforts to address growing cyber vulnerabilities, representing robust opportunities for IT vendors and consultants in this market for 2015 and beyond. 4
5 Hospitals Take a New Interest in Upgrading Administrative Information Systems Thanks to HITECH, clinical information systems (IS) have driven recent provider IT purchasing trends, especially for EHRs. However, that market has matured as most hospitals have locked up contracts for their core EHR systems. In addition to high levels of penetration of clinical IS, price pressures will continue to impact this market as hospitals face growing cuts in reimbursement and other revenue challenges resulting from changes in payer mix (e.g., more Medicaid and Medicare patients). In fact, we are noticing that many hospitals are starting to demand price cuts from IT vendors and this trend will likely accelerate in We see a trend, starting in 2015, where overall market revenues for clinical IS will be mostly flat for the next years or so 1. Instead, hospitals will turn their focus to creating new business models in order to survive under a dramatically transformed provider landscape which includes growing competitive pressures from non-traditional provider entities like retail pharmacies and third-party telehealth providers. So, where s the growth opportunity in hospital IS? Hospitals are now turning to upgrading legacy business and administrative information systems to better support new reform-driven business models. We think that growth in administrative IS will come from the need to better manage labor costs, drive productivity with new workflow tools, and maximize operational efficiencies. Thus, in 2015, administrative IS offers the most robust opportunities for IT vendors as this area has been somewhat ignored in recent years due to the scramble to implement EHRs to qualify for Meaningful Use incentives from CMS. Key opportunities in administrative IS include - 5
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