Report: State, Local Health IT Spending to Swell

By M.L. Baker  |  Posted 08-04-2006
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 report's 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.

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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.

"There's going to be a lot of change coming up," agreed Margo Edmunds, vice president in the health practice policy practice at Quintiles Transnational's 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 we've 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.

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