In the highly fragmented European hospital information systems (HIS) market, established vendors tend to have a distinct advantage due to the strong relationships they have formed with pockets of provider groups that continue to use their legacy systems. Many of these providers do not have the funds required to upgrade to more sophisticated systems.
New vendors are therefore finding it extremely difficult to break through the barriers and reach potential clients. While some cash-rich vendors have attempted to address this issue through the acquisitions route, the fact that customers give preference to old relationships is acting as a roadblock in many cases. This is perhaps one of the most significant challenges facing HIS vendors in Europe today.
To overcome this challenge, vendors will have to provide compelling evidence by way of success stories. They will also have to offer competitive pricing and simultaneously convince prospective clients about the need for advanced functionality in their systems.
Even supposing clients' budgets permit them to make expensive upgrades, the drive to integrate new modules with existing systems is likely to favour vendors that can offer integrated healthcare IT solutions with established track records. In fact, vendors that have recently snagged contracts are realising how highly customers value such solutions that can also guarantee a longer product life cycle.
"Given the high costs of HIS, first-time clients and new medical centres are keen on purchasing state-of-the-art systems that have advanced capabilities and functions to support their needs for many years," remarks Industry Analyst Siddarth Saha from Frost & Sullivan. "This is likely to be a critical challenge, especially for smaller vendors that tend to package and sell a varied mix of sub-systems."
Low budgetary allocations are another obstacle in the uptake of HIS. Traditionally, European healthcare budgets have given less importance to IT and prioritised diagnostic equipment acquisition and general infrastructure improvements instead. Additionally, with the public sector being the major healthcare provider, and hence the largest buyer of HIS, vendors often have to contend with bureaucratic and time-consuming procedures that can stand in the way of increased adoption.
Again, it will be an urgent priority for HIS vendors to convince health authorities about the pressing need to stay abreast of the latest technology developments.
Notwithstanding these challenges, the future of the European HIS market is promising. The market is projected to grow from USD 3,131.0 million in 2003 to USD 6,343.0 million in 2010, primarily driven by the active implementation of hospital clinical information systems in major European markets such as the United Kingdom, Germany and France.
Increasing evidence of the cost of medical errors and inefficiencies in healthcare delivery is also expected to contribute to market growth. Concerns about patient safety as well as data security are on the rise, causing providers to seek information systems that have specific capabilities to mitigate such errors and eliminate inefficiencies.