Report: Stimulus money for IT may boost hardware sales, too

By Bernie Monegain
10:05 AM
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A new report by Kalorama Information concludes that federal stimulus funds to increase the use of healthcare IT will also boost hardware sales.

The New York-based research firm expects hardware sales to increase by nearly 11 percent annually through 2013.

According to Kalorama, as the Obama administration provides incentives to push doctors and hospitals to upgrade their healthcare IT solutions, there will be a greater need to replace antiquated computer hardware with newer, more powerful systems that can support the vast amounts of information created by EMR, wireless, RFID, electronic physician order entry (CPOE) and other advanced software that is rapidly being adopted.

"Healthcare Computer System Markets and Trends in HIT Buying" notes that approximately 56 percent of the nation's healthcare organizations have increased their IT department budgets for 2009 despite the recession.

While discussions have mainly focused on healthcare IT software applications, Kalorama also sees an opportunity in healthcare for hardware providers.Hardware sales represent about 23 percent of healthcare computer system sales, or $1.11 billion. This figure doesn't include software or services, which are also anticipated to grow.

With increased investment in healthcare IT, Kalorama expects spending on this sector to grow at a faster pace than IT spending as a whole in the near term, or about 10.7 percent annually through 2013. These sales are usually made by companies such as McKesson or Eclipsys who buy from hardware manufacturers and package systems to meet the needs of healthcare entities.
 
"The EMR incentives in ARRA are aimed at software, but they will open up conversations between customers and vendors for new IT spending, and hardware will be part of that," said Melissa Elder, an analyst with Kalorama Information and author of the report. "The top IT-related technologies and applications that physicians and facilities are focusing on include identity management, bar coding technology, speech recognition and handheld personal digital assistants (PDA). All of these will require investment in new hardware."
 
A wide range of hardware is available for hospitals, health clinics, pharmacies and other health facilities, including workstations, servers, PDAs, tablet PCs, carts on wheels and networking hardware. Given the demands of the hospital environment, healthcare IT hardware must be tailored to withstand a rigorous and sanitary environment.

Some portable devices are also being built to withstand a drop of up to three feet. In May, Tangent announced the launch of the new MCA Medix 10T touchscreen tablet PC. It runs Windows, has a water- and dust-resistant exterior for disinfection and runs without a fan.