Analysis of Select Trends and Technologies

The current healthcare market is centered around two factors: cutting overall healthcare costs and providing to health conscious and health aware consumers. Every component of the patient cycle is affected including prevention, diagnosis, treatment, and therapeutics. One of the major efforts to satisfy these demands has been to develop the preventative portion of our healthcare business. This market insight aims to provide a top-level view of the preventative healthcare market, which include patient education, aging in place, and remote monitoring technologies.

Executive Summary

The U.S. health information technology (IT) market in early 2012 is highly complex, dynamic, and competitive, as witnessed at the recent Health Information and Management Systems Society (HIMSS) Annual Conference and Exhibition. Today, the health IT market attracts hundreds of companies offering a range of products and services for healthcare payers, providers, life sciences and medical device companies, and other related businesses. Impressive gains in innovation are being driven by the growing adoption of electronic health records (EHRs), the acceleration of data exchange and connectivity, and the ubiquitous use of mobile technologies by patients and providers alike. Market activity is highly influenced by a plethora of back-to-back government initiatives and regulations, in particular HITECH, PPACA, and the transition to the new ICD-10 coding standard.

As seen at HIMSS, a key focus of the health IT market continues to be transitioning to EHRs and preparing for Meaningful Use. While the market offers many opportunities related to the multi-stage progression toward full Meaningful Use, for many providers and vendors, Stage 1 is still top of the mind for the first half of 2012 due to the potential ICD-10 pushback, the delay in the start of Stage 2, and uncertainty surrounding the fate of PPACA (to be decided by the Supreme Court in June 2012). Therefore, the most robust market opportunities in health IT will continue to be focused on core clinical solutions that address Meaningful Use.

As providers begin to plan for more advanced EHR functionalities needed for Stage 2 and beyond and as the provider market continues to consolidate, the trend towards displacement of legacy EHR vendors in both hospital and ambulatory markets is expected to accelerate.

Introduction

The HIMSS Annual Conference and Exhibition was held in Las Vegas, Nevada, in late February 2012. The annual HIMSS conference is the key event for the health IT industry and provides a comprehensive overview of the state of the market from the perspective of various stakeholders, including health IT vendors, healthcare providers, and government regulators. The topics and tone of the meeting can be leveraged as a reliable harbinger for what is in store for the coming year. Frost & Sullivan was in attendance, and we present a summary of highlights, opinions, and market predictions as well as our “top ten” picks for health IT trends and companies emerging from the HIMSS event.

This Market Insight includes:
• a high-level overview of the conference, including summary statistics, notable speeches, special exhibitions, major announcements, and key themes
• excerpts from the 23rd Annual HIMSS Leadership Survey and our thoughts on implications of select findings
• our pick of the top ten industry trends for 2012 plus select vendors and solutions to watch in each category
• our pick of the top ten health IT companies of particular interest for 2012
• our thoughts on key takeaways and market/product focus for 2012

Conference Overview and Highlights

Summary Statistics
The HIMSS12 conference was the best-attended ever, attracting X attendees, an X percent increase from last year, as well as X exhibitors who offered a broad spectrum of health IT products and related services. The conference also provided a robust selection of educational content, with more than X sessions spanning X topic categories selected by a peer-review panel.

Notable Speeches
Farzad Mostashari, M.D., the head of the Office of the National Coordinator for Health Information Technology (ONC), gave an upbeat keynote address that focused strongly on the impressive uptick in the adoption of EHRs among hospitals and physician practices seen in the past few years and also provided perspectives on ONC’s future plans to build on the momentum around health IT, including what to look for in Stage 2 Meaningful Use. Mostashari described interest in Meaningful Use as “sky high” among providers and hospitals.
Biz Stone, co-founder of the wildly popular social media platform Twitter, provided perspectives on how social media will come to significantly influence healthcare by re-defining how providers and others share information.
Carolyn Clancy, M.D., director of the Agency for Healthcare Research & Quality, spoke of how the use of health IT has now reached critical mass across the provider landscape, thus continuously enabling quality improvements for a wide range of patients.

Special Exhibitions
The Interoperability Showcase—offered in collaboration with Integrating the Healthcare Enterprise (IHE), the exhibit featured vendors, solutions, and educational sessions focused on enabling connectivity.
The Intelligent Hospital Pavilion—offered in collaboration with the RFID in Healthcare Consortium. The exhibit provided simulated inpatient settings (ICU, step down, ED, etc.) featuring various technologies used in improving patient care, safety, and operating efficiencies, including auto-ID/Bar code scanning systems, RFID/RTLS, and sensors and wireless solutions.
Knowledge Centers—a first at HIMSS, these were six subject-specific exhibits designed to bring together educational sessions, vendor case studies, exhibition booths, and various HIMSS resources in one convenient location. Subject areas reflected some of the most critical focus areas in the health IT industry and consisted of Accountable Care Organizations, value-based purchasing, mobile health, medical devices integration, business and clinical analytics/intelligence, cloud computing, and ICD-10.
HIMSS Social Media Center—designed to provide various types of activities including educational sessions and networking with experts around how best to leverage social media in healthcare, including advice on strategies and tactics for branding, business development, mobility, and driving consumer engagement.

Major Announcements
Proposed Rules for Stage 2 Meaningful Use—The proposed rules were announced toward the end of the conference. Although there was little time for review or discussion, the initial general consensus seemed to be positive, as the rules seemed to a logical continuation of Stage 1. Although the total number of required core and menu items has been reduced from Stage 1, the measures associated with these requirements have been strengthened, particularly around CDS, CPOE, HIE, reporting clinical quality measures, and patient engagement. The proposed Stage 2 rules stipulate that physicians need to meet at least X core objectives in addition to three of five menu objectives while hospitals are expected to meet X core objectives in addition to two of four menu objectives. The final Stage 2 rules are due out around June 2012.
ICD-10 Delay—Although announced just prior to HIMSS12 rather than at the conference, the potential delay in implementing ICD-10, originally due to go into effect in October 2013, was much discussed and there was some grumbling. It is unclear how much leeway will be given on the original deadline, but most industry insiders thought that HHS would propose a nine- to 12-month delay; some even speculated that ICD-10 might be delayed indefinitely and passed over until ICD-11 is ready. General comments at HIMSS indicated that while some vendors and providers are unhappy about this disruption given the considerable time and expense they have already invested in changeover to ICD-10, a potential delay will provide many hospitals and physician practices much-needed time to focus on getting their core EHR projects in line for Meaningful Use.

Key Themes
Meaningful Use and EHR Adoption Trends—the most important them for HIMSS12. As noted by Mostashari in his keynote speech, EHR adoption has been quite robust since the passing of the HITECH Act three years ago. Statistics supporting this trend were repeatedly noted in various conference speeches and educational sessions. According to CMS, $X billion in Stage 1 EHR incentive funds had been paid out through the end of February 2012, consisting of almost $X billion to X physicians and $X billion to X hospitals around X to Xpercent of providers (both physicians and hospitals). In addition, recent figures from the National Center for Health Statistics (NCHS) show that X percent of U.S. physicians in ambulatory practices now are using either a basic or comprehensive EHR, the same percent of EHR adoption by U.S. hospitals according to a recent announcement by HHS secretary Kathleen Sebelius.
Connectivity and Interoperability—The concept of connecting systems and people for coordinated care was ubiquitous, and many vendors are incorporating this concept into their marketing messages: Connected Health Working Better Together (Cisco); Connecting People to Connect Care (Siemens); Health Connections Brought to Life (RelayHealth); A Connected Community of Health (Allscripts); Enlightened Action. Connected Care (InterSystems); Connected and Cool (Epic).
Payment Reform—Payment reform, namely moving away from fee-for-service to reimbursement based on value and outcomes, was strongly evident in the messages that many vendors were using to promote their “next-generation” revenue cycle management solutions. The notion of “accountable care” continues as a key focus, although diminished somewhat from the enthusiasm seen at HIMSS11, where Accountable Care Organizations as defined by the Medicare Shared Savings Program generated substantial buzz.
Health Insurance Transformation—Another topic of interest related to payment reform was the idea that health insurers need to brace for a completely new way of doing business, as dramatically noted by Aetna president Mark Bertolini in a speech where he talked about “the end of insurance companies.” This attitude is mostly brought on by changes due to PPACA, like the new rule around the minimum medical loss ratio, which requires insurers to spend X to X percent of all premiums received on claims.
Mobility—Once again, mobility was a prominent theme, with almost every vendor featuring an iPhone or iPad app and hospital chief information officers (CIOs) talking about the need to manage the “BYOD” (bring your own device) trend.
Population Health—Many vendors promoted new solutions around the growing need to manage populations. Web or “cloud”-based solutions that aggregate patient data in electronic data repositories and warehouses and use predictive analytics to improve quality and efficiency were featured. Solutions demo’d by vendors like eClinicalWorks, Optum, and others were specifically designed to appeal to emerging coordinated care models like Accountable Care Organizations and Patient-Centered Medical Homes.

Table Of Contents

Table of Contents

Executive Summary 3
Conference Overview and Highlights 6
Excerpts from the 23rd Annual HIMSS 2012 Leadership Survey 12
Top Ten Industry Trends 21
Top Ten Featured Companies 32
Top Takeaways and Health IT Focus for 2012 43
Appendix 49
The Frost and Sullivan Story 51

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