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Medicine is an increasingly
hitech business, but doctors and hospitals around the world remain bogged down
in paperwork. The result can be lost records, clerical errors and mis-prescribing
of drugs.
Now, in a bid to improve
patient care, governments in Europe and North America are pushing for the
adoption of electronic records and data transfers, which is kick-starting the
growth of a hybrid business that attracts companies from both the healthcare and
tech arenas. Worldwide, the healthcare information technology market is
estimated to be worth more thant $ 50bn a year and industry executives lining up
for a slice of the action told a conference this week its growth would be in
double digits for the foreseeable future.
The sector has become a lure
for industrial giants such as General Electric and Siemens AG, both of which
have targeted health as an area for future growth.
Traditionally, IT has been used within healthcare mainly for back office
functions, such as billing and hospital admissions. The big prize, however, lies
in incorporating IT into patient treatment via a process known as "clinical
decision support" that can guide physicians through their options.
GE, like its German rival
Siemens, reckons it can become a major player in this business by combining its
IT skills with its existing capability in making medical monitoring equipment.
The healthcare IT business currently is fragmented and represented by a large
number of often regional players.
But consolidation is picking
up. GE made a splash in September by agreeing to buy IDX Systems Corp, a maker
of software used to track patient records for $1.2bn in a move to help it
compete with rivals such as Cerner Corp and McKesson Corp.
In Europe, meanwhile, Belgium's
Agfa Gevaert has struck a number of deals to secure its position in digital
picture archiving and communication as hospitals move away from traditional
medical film products.
Spending on IT currently
accounts for just 2.2% of sales in healthcare against 3.9% in retail and 11.1%
in financial services, according to consultancy INPUT. In part, that may reflect
the complexity of a medical diagnosis. But cheaper computing power is starting
to change the attitude toward spending on IT, and governments including those of
the United States, Canada, Germany and Britain are putting in place specific
healthcare policies that are expected to accelerate demand for IT services.
In the United States, where a
bill to encourage IT development cleared the Senate's Health, Education, Labour
and Pension Committee in July, a recent study predicted that computerised
medical records could save $81bn a year. Roche Holding AG, the world leader in
diagnostics, believes it also stands to gain from the growing demand for more
sophisticated health information.
"Governments and payers are
increasingly asking for better ways to decrease medical errors and increase
accuracy," said Per-Olof Attinger, general manager of Roche's Instrument Center.
In the past, diagnostic tests produced simple, easily interpreted readouts such
as blood glucose levels. But the analysis of complex diseases such as leukemia
produces hundreds of data points, putting a premium on interpretation, he said.
(Ref: Economic Times dated
November 26, 2005)
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