HIT to Become a $60 Billion Market by 2013

by Brendon Nafziger, DOTmed News Associate Editor | November 11, 2009
Government stimulus
spurs health IT growth
Thanks in part to pressure from the world's governments, health information technology is set to command an 11 percent compound annual growth rate until 2013, according to analysts.

In a report published Tuesday, Cambridge, Mass.-based health tech consulting firm Scientia Advisors predicts that HIT will take an increasingly big bite out of the $1 trillion global health care pie, growing from 4 percent to around 5 percent of the total market over the next four years. This means HIT could witness market expansion from $35 billion in 2008 to over $60 billion by 2013.

And much of the incentive to adopt HIT comes from financial treats dangled by governments that see HIT as a way to improve service and even, ultimately, cut costs.

Scientia estimates that the American government is feeding $20 billion into HIT, driven largely by the HITECH provision in the American Recovery and Reinvestment Act signed by President Obama earlier this year. Under HITECH rules, Medicare will start offering payment incentives for hospitals and "eligible professionals" who set up HIT systems probably by some time in 2011.

While the details of the Medicare incentives are still being worked out -- the plan calls for HIT to be tied to a "meaningful use" criterion that has yet to be really defined -- they are helping to grow the HIT market.

"Hospitals are adopting them at various levels," Harry Glorikian tells DOTmed News. "It's becoming a must-have," he says.

Rest of world should not be ignored

Though the U.S. HIT market is around 65 percent of the global total, the rest of the world is rapidly growing, and, as with the U.S., national programs fuel much of the growth. While Europe has fed billions into HIT -- the U.K. alone dropped $12 billion into HIT since 2002 -- Scientia believes that many secondary markets, especially China, offer great opportunities for HIT companies.

"Our anticipation is, by 2013, China will spend about $4 billion a year on HIT," says Glorikian.

Already, China's HIT sector is booming. Since the launch of a modernization project 25 years ago, the Golden Health Project, China has been aggressively pushing for HIT. In 2004, China passed a law requiring hospitals to spend 5 percent of their yearly revenues on HIT improvements.

Nonetheless, the field, while fertile, is open. Chinese HIT adoption still remains quite low, with China's Ministry of Health claiming that 70 to 80 percent of Chinese hospitals need HIT upgrades, especially in digital medical records, PACS and clinical decision support systems. According to Scientia, only 31 percent of Chinese health centers possess an established hospital information system (HIS).