Healthcare IT: Areas of Compliance-driven Overspending

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.

With HITECH, HIPAA 5010, ICD-10 and MU compliance deadlines looming, where are healthcare organizations overspending on IT this year? Below is a list of technology investments that -- driven by timing urgency and complex pricing -- present the highest risk of overpayment. Best-in-class purchasers will take specific steps to avoid the over-payment (which means their 2011 budgets will go much farther -- every dollar they save is a dollar that funds another project):

Coding & Billing Systems: HIPAA 5010 and ICD-10 require significant changes to existing billing and coding systems. With few organizations prepared for the January 2012 HIPAA deadline, IT departments will be pressured to hastily upgrade or replace their current billing solutions.

EHR Software: An estimated 90 percent of hospitals in the U.S. will have to install or upgrade EHR systems in order to qualify as meaningful users, according to business consultants at Accenture.

Storage & Archiving: One aspect of HITECH and HIPAA compliance is the ability to store and retrieve patient data for certain periods of time. This, along with a tremendous increase in patient data, communications and medical imaging, has made storage, archiving and data retention a top budget drain.

Business Intelligence: With an explosion in the volume of patient, clinical and business data, spending on BI solutions is expected to skyrocket in 2011 as organizations seek to analyze this data to understand patient and delivery trends.

Security: Since the HITECH breach notification rule went into effect in September 2009, more than 240 major health information security breaches have occurred, leading to high-profile legal actions and penalties. Information security has become a growing concern for today's healthcare IT organizations.

Ethernet: The demands on the hospital network have exploded over the last decade. As a result, Insight Research estimates that, by 2014, healthcare IT departments will be spending $11.6 billion to link staff and facilities.

High Availability: Network availability is more critical than ever as an increasing volume of patient data and applications must be accessed through the hospital network. As a result, IT spending in the areas of network redundancy and high availability are increasing.

-- Jeff Muscarella, EVP of IT, NPI

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