Market for health IT most favourable for big business

The report, compiled by Frost & Sullivan’s industry analyst for healthcare business Siddarth Saha, says that the European healthcare IT sector is set to be worth £3500m by 2010, but problems such as comparatively low sums of money allocated, legacy systems, and the fragmented nature of the market. Although “information technology solutions adoption is an inevitable eventuality", new or small vendors are likely to find breaking into supplying such technology difficult.

“Given the high costs of HIS, first-time clients and new medical centres are keen on purchasing state-of-the-art systems that have advanced capabilities and functions to support their needs for many years,” said Saha. “This is likely to be a critical challenge, especially for smaller vendors that tend to package and sell a varied mix of sub-systems."

The main way that suppliers can counter these problems is by offering pre-tested and modelled IT solutions with a good previous track record; something that larger vendors can already provide. Small businesses are likely to succeed if they focus on a niche in a local market, and make strategic alliances. Global vendors, on the other hand, “will not give up the fight to attain respectable share”, and a “fair amount of consolidation [is] expected in the industry".

“With the trend towards integrated healthcare, clinical systems such as electronic medical records are set to play a pivotal role in achieving the continuity of care envisioned,” said Saha. “In addition, there is a growing industry trend towards improving healthcare revenue cycles as an outcome of clinical automation instead of relying only on financial modules. These factors are driving the growth of the hospital clinical systems market."

The situation is likely to be completed by cash-rich global health providers consolidating their power and making alliances to maximise their revenue across Europe. “Bureaucratic systems" for purchasing, resulting from the organisation of numerous public sector bodies, could also become a problem and create difficulties with overall adoption of new technology.

Elsewhere in the report, the NHS’s National Programme for IT is singled out for praise in helping to get the market moving, as it shows the NHS’s “commitment" to the rollout of health information technology and modernisation. Furthermore, the report notes that both NPfIT and e-health initiatives at European Union level are going a long way towards developing the market.