Spending for IT Expected to Significantly Increase
A report posted by INPUT, a government business market research firm, indicates that spending on health information technology by the federal government is expected to significantly grow over the next five years. The complete report is available on the company’s website.
Currently, federal health spending for 2008 is noted at $3.2 billion. It is expected to grow by more than $4.5 billion by 2013, assuming that the compound annual growth rate (CAGR) is 7.1 percent. This rate of growth is higher than that noted in the overall information technology market for the federal sector.
The CAGR is based on forthcoming plans by both the Departments of Veterans Affairs and Defense to modernize existing systems. Additional efforts underway will expand the use of information technology systems to support both laboratory and pharmacy operations.
INPUT further notes that the VA has requested increased funds for fiscal year 2009. Compared to FY 2008, the request is an increase of 19 percent. The total request for 2009 is $4.2 billion. A significant portion of those funds will be used to enhance the agency’s existing electronic records system.
It is expected that the DOD will request similar funds, with an increase on par with that of the VA. The DOD has yet to release a detailed budget request describing health IT spending.
The report from the company indicates that there will be growth in the overall health information technology market. Agencies and organizations that have relationships with these organizations as well as domain expertise are best positioned to reap the benefits of these increased funds.
This will be fostered by the aging of veterans, military personnel returning to the U.S., and the aging baby boomers. Those factors will also foster modernization and enhancements to IT systems to support healthcare.