A common practice in the analyst community is to take a look back at what has occurred and project forward as to what we might see in the coming year. I won’t spend anytime on what has occurred as you can always drift back to previous posts.
Following are the Top Ten predictions for 2008. Note, these predictions are primarily focused on our core research competency – Personal Healthcare Technology. And if these top ten differ from yours, by all means give us a comment providing your list.
1.) Election Year Puts Many Initiatives in Neutral
2.) Telehealth Continues to Gain Momentum Driving Consolidation
3.) Consumer Electronic Manufacturers Jump on Telehealth Bandwagon
4.) Legacy HIT Vendors Copycat AthenaHealth with Their Own SaaS Offerings
5.) PHRs Still in Headlines, While Adoption Stumbles Along
6.) Attention Turns to PHSs, but Vision Remains Well Ahead of Reality
7.) PDF – Healthcare Hits the Streets, Retail Clinics Love it, Physicians Less So
8.) Personal Identifier Initiatives on the Hill are DOA in ‘08
9.) Employers Expand High Deductible Plan Offerings, Consumers Challenged
10.) HIEs Hold Steady, RHIOs Fade Away – Major Re-thinking of NHIN
Election Year Puts Many Initiatives in Neutral
As the Bush administration continues to see high-ranking officials leave office, no new healthcare-centric initiatives are launched and those, such as the ill-fated National Health Information Network (NHIN), are put on life-support. Even pay for performance (P4P) activities are pulled back until a new administration is in place (mid 2009).
Telehealth Continues to Gain Momentum Driving Consolidation
2007 saw several reports touting the efficacy of telehealth practices, from interacting with a physician over the Internet to the migration of outpatient care and monitoring to the home via health sensor networks and the Web. This will be one of the strongest areas of growth in healthcare technology in 2008 with annual percentage rate growth in the mid-teens. Growth will drive consolidation, as large established players such as Philips, GE and Siemens acquire smaller device manufacturers with either unique technology platforms or specific vertical market presence.
Consumer Electronic Manufacturers Jump on Telehealth Bandwagon
The growth in telehealth and simple demographics (this market will only get bigger) will attract other electronic manufacturers with strong Brand and established consumer distribution channels. Think Sony, Toshiba, LG. Still too early for Nokia and Apple, but they are coming. These companies will also look to acquire, or partner with established players in the personal health technology market to gain domain knowledge and market presence. The upcoming CES confab in Las Vegas may shed some light on who will make the first move.
Legacy HIT Vendors Copycat AthenaHealth with Their Own SaaS Offerings
The success of AthenaHealth in the market and on Wall Street (10th best performing IPO in 2007) is certainly not lost on the traditional Healthcare IT (HIT) vendors. Like the software firms in the enterprise market who have all tried to replicate Salesforce.com with their own SaaS CRM solution, expect the legacy HIT vendors to do the same in their attempts to replicate AthenaHealth. Expect the same lack of success. To date, none of the traditional enterprise software vendors have been able to catch Salesforce.com, which still shows remarkable momentum in the market.
PHRs Still in Headlines, While Adoption Stumbles Along
With the impending release of Google Health in the first half of 2008, we will continue to see a lot of press dedicated to Personal Health Records (PHRs). Despite the press and employers who continue to adopt these solutions for their employees to foster better healthcare practices, there remain many significant challenges that will prevent the PHR market from really breaking out. Expect 2008 to be a build-out year for PHR vendors, thus tracking large customer wins, partnerships and alliances of these vendors will be critical to assess long-term viablity.
Attention Turns to PHSs, but Vision Remains Well Ahead of Reality
Microsoft has HealthVault, employers have Dossia and Google will have Google Health (or some other Brand name) by mid-2008. All of these are Personal Health Systems (PHSs). They are not a PHR, but a data repository and ultimately a utility that other applications, including PHRs can tap to serve the consumer. Each of these PHSs have enormous resources behind them, but their vision is far ahead of what they will be able to deliver in 2008. There is a lot of heavy lifting (standards, tagging, document management, security, etc.) that these entities will need to address, consuming most of 2008. Look to mid-2009 for these systems to be at a level of functionality that is useful to the broad market.
PDF-Healthcare Hits the Streets, Retail Clinics Love it, Physicians Less So
The “Best Practices Guide” for the use of PDF-Healthcare is making its way through the formal review process with expected release in the next month or so. Currently being used by one of the largest retail clinics, PDF-Healthcare has demonstrated its utility for this retail clinic that is now exchanging over 10,000 unique PDF-Healthcare documents a day throughout its organization.
While this retail clinic has reaped a number of advantages through the use of PDF-Healthcare, and larger healthcare providers will do so as well, smaller physician practices will be challenged by this format as most are ill equipped to accept such digital documentation. Thus, PDF-Healthcare will become another forcing function for physician adoption of EMR, something that most have been loathed to do.
Personal Identifier Initiatives on the Hill are DOA in ‘08
Several proposals surfaced in 2007 calling for the establishment of a personal identifier for American citizens to better track/tag their medical records. This is becoming increasingly relevant as use of digital records accelerates. Despite a very real need for personal identifiers, this issue exacerbates existing fears of privacy and government intrusion. Thus, this will not see the legislative light of day in 2008. A new administration may take it up in 2009 if they receive a strong mandate from the public (i.e., a landslide victory).
Employers Expand High Deductible Plan Offerings, Consumers Challenged
Building upon the growing trend we saw in 2007 of employers seeking new ways to lower their exposure to double digit growth in medical benefit costs, consumer-driven health plans, most often with high deductibles, are now in vogue. Young, healthy employees sign-on to such plans, chronic care sufferers reject them and middle-age employees with families struggle to determine what is best for them. Unfortunately, for this latter group few resources are available to assist them with making the best choice. And as for those young, healthy and very often Internet-savvy employees, they look to the Web to help them pick a doctor and control expenses. But they to will come up empty handed as cost transparency will remain elusive in 2008.
HIEs Hold Steady, RHIOs Fade Away – Major Re-thinking of NHIN
The reports released at the end of 2007, the first on the relatively dismal state of Regional Health Information Organizations (RHIOs) and the second on the modest success of Health Information Exchanges (HIEs) were simply a harbinger for 2008. Expect 2008 to deliver more of the same for RHIOs as they continue to struggle to establish a value proposition that will overcome competing entities participation in a RHIO. And there is the nagging issue of a revenue model for RHIOs to make them self-sustaining long-term – to date, this issue has not been solved. Both of these problems will lead to nearly a third of the remaining RHIOs closing their doors by the end of 2008 and another third will be best characterized as the walking dead.
While RHIOs fade, HIEs will continue to operate and see modest growth. Unlike RHIOs, HIEs are formed by entities that have a strong desire to share information, not withhold it. But HIEs will not be the panacea to the need for a NHIN as their reach will be limited and highly localized. This will limit the overall growth of HIEs and subsequently, their impact to the market.