Forecast: HHS to Spend $5 Billion on Technology in 2007

The U.S. Department of Health and Human Services will probably spend more than $5 billion on 670 technology initiatives in 2007, according to forecasts from a company that helps businesses find federal contracts.

According to fedXccel, the spending represents a 9 percent increase over 2006 levels, though it is a mere drop in the bucket for a department with a budget of nearly $700 billion. Other reports predicting total health IT spending in the United States and Canada have ranged from $25 billion in 2009 to $39.5 billion in 2008, according to the Health Information Management and Systems Society. Such spending will come largely from hospitals.

HHS Secretary Mike Leavitt is fond of saying that the U.S. government is the countrys biggest health care spender and that the government intends to use its power as a purchaser to move markets. The government has recently asked large employers to sign on to a commitment promoting cost and quality transparency and advocating health information systems that can share information across disparate systems.

In August, President George Bush signed an executive order that government agencies should demand interoperable health care systems when upgrading or acquiring relevant systems.

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However, HHS has also been criticized for its own implementation of health IT. A report from the Government Accountability Office found that Medicare patients medical data is vulnerable to theft. Medicare said it was aware of and addressing the problems.

fedXccel predicted that HHS spending will be geared toward promoting the adoption of centralized health record management and allowing systems to share data to help contain rising health care costs. “Consolidation of data centers, connecting systems and a technology refresh to component-based architectures are thrust areas,” said fedXccel head Gauray Pal. “Private firms with expertise in these areas are likely to be called upon to help with this transition.”

However, other health IT measures have stalled. According to Government Health IT, the 109th Congress has introduced more than 50 bills related to health information technology and personal medical records, but only one seems likely to become law, and the Senate and House versions of the bill differ on whether the law would include additional funding.

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