Federal, state and local governments will need to invest more than $5 billion in health IT: INPUT

The recently passed health care reform legislation will require significant investment in IT solutions and system upgrades throughout its implementation. A new report, IT Implications of Health Care Reform, released by INPUT, predicts federal, state and local governments will need to invest more than $5 billion in health IT and traditional IT solutions in order to implement requirements of the new law.

Analysts looked at the underlying requirements of the Patient Protection and Affordable Care Act (P.L. 111-148) and subsequent Health Care and Education Reconciliation Act (P.L. 111-152), and identified potential areas of opportunity in four categories:

• Health IT (e.g., electronic health records and clinical decision support systems)
• Medical Technology (e.g., diagnostic equipment and imaging hardware/software)
• IT in the Business of Health Care (e.g., billing systems, case management, and document management)
• IT for Health Care Reform Management (e.g., Web portals and IT infrastructure for new organizations)  

"Based on the numerous requirements for reform, IT investments are likely to occur within the first five years of implementation," said Senior Analyst Angie Petty. "We estimate that the Internal Revenue Service will be required to spend as much as $2.5 billion in IT related to eligibility determination, documentation, and verification processes for premium and cost-sharing subsidies. Health and Human Services will need to spend approximately $1.8 billion to implement changes to Medicare, Medicaid, and related systems, and to implement other legislative mandates. States will also be investing $2 billion in startup costs to implement health insurance exchanges."

This report also provides critical insight into:

• Major elements of health care reform legislation
• Understanding its impact on federal, state, and local governments
• Market technology trends driving health IT and existing IT solutions serving the health care market
• Target markets in federal, state, and local governments for these technologies
• Potential IT opportunities resulting from health care reform legislation

INPUT draws upon its extensive expertise on the government IT industry to analyze and project technology needs arising from health care reform enactment. Government contractors will find opportunities relating to electronic health records, health information exchange, and comparative effectiveness research. In addition, traditional IT vendors will find emerging opportunities resulting from upgrades to agency systems, call center development, web portal design and support, and hardware and software solutions.