Report: State, Local Health IT Spending to Swell

The federal government is leading the way with funding and certification programs, and state and local governments will follow, according to government business specialist Input.

New legislation and certification programs will boost state and local government spending on health and welfare IT from $7.6 billion in fiscal year 2006 to $12.2 billion by fiscal year 2011, concludes a report from Input, a firm that helps companies do business with government.

In particular, the next 12 to 18 months will prove "a watershed period" for health IT as preliminary studies and prototypes mature, James Krouse, acting director of public sector market analysis at Input, said in a statement giving the reports conclusions.

The Input report credited health IT initiatives and a need to integrate programs as being the major factors behind the growth. "Both the amount of action and the type of action we are seeing are indicative of forward momentum for health IT," said Krouse, in Reston, Va.

/zimages/2/28571.gifMicrosofts venture into the field of health care IT is stirring up interest. Click here to read more.

Recently, a certification for electronic medical records has been implemented, regulations have been relaxed to enable hospitals to donate technology to community physicians, and the House of Representatives passed legislation to make permanent a federal office that promotes health IT.

"Theres going to be a lot of change coming up," agreed Margo Edmunds, vice president in the health practice policy practice at Quintiles Transnationals Lewin Group, a consultancy that is not affiliated with the report, based in Falls Church, Va. She described the health IT community as "very hopeful."

Krouse noted that CMS (Centers for Medicare & Medicaid Services) had announced grants providing states with $150 million in 2007 and 2008 to increase quality and efficiency of patient care through IT. "This is the first time that weve seen CMS provide grant funding for health IT, and at a level 300 percent greater than what the Department of Health and Human Services will likely issue this year," he said.

But in addition to grants, Edmunds said, the government can push forward health IT through other policies, by setting up incentives and shaping the market. When CMS sets new policies, she said, most private health insurers follow its lead.

Particularly important, she said, is the new official certification process, developed by industry groups but funded and endorsed by the government. "Now people are going to have better advice about making their decisions."

/zimages/2/28571.gifElectronic health records get the seal of approval from the Certification Commission for Healthcare Information Technology. Read more here.

The report concludes that, in additional to more federal health IT initiatives being created, more state and local governments will turn to IT to help root out fraud and abuse.

/zimages/2/28571.gifCheck out eWEEK.coms for the latest news, views and analysis of technologys impact on health care.