Financial Technology, Data, and Analytics

Last week we attended HIMSS, the largest HIT conference. Although we were warned that the mood could be somewhat subdued, and despite a few cautionary signs, we came back inspired by the technologies we saw, the entrepreneurs we met and the outlook for the future. Here are a few of our observations.

1. Most vendors appeared cautiously optimistic. Whether TrumpCare repeals or replaces ACA, people believe that the same IT sectors such as data integration, analytics, care management, and consumer technologies will remain as key priorities for healthcare organizations.

2. Healthcare settings show continued signs of unbundling. Things that used to happen in doctors’ offices are now being handled at home. This shift has massive consequences for the entire industry. Mobile technologies, remote monitoring, self-diagnostic tools, etc. have started to re-arrange the economics of our sector. The power of companies like Apple, Google or even Amazon will soon reverberate throughout the industry. Apple Watch, to some viewed as a failure, generated $10 billion of revenue for the company; more than the sale of the entire EHR industry. We say watch for powerful new entrants.

3. Medicine becomes personal. Predictive analytics vendors have moved from using IT to aggregate a variety of clinical, socioeconomic, life style and genetic data sets to turbocharging their clinical risk engines with AI capability. Cognitive medicine is no longer a promise but a reality. We saw real live cases of treatment plans designed with the level of precision that were previously unimaginable. But we still have some ways to go.

4. Interoperability is re-defined to create room for implementing the new incentive programs. Interoperability is no longer just an API ecosystem. We saw some encouraging technologies similar to “clinical code processors” that can be used to extract and compute clinical metrics. These technologies can cohabitate with interoperability players and will undoubtedly ease the pain of certification for the EMR vendors. The technical requirements for the next generation incentives such as MIPS and MACRA present daunting challenges for the EMR companies. Companies that can facilitate the migration will win big.

5. Tech spending of the largest health systems ballooned over the past few years but the heyday is over – budgets for 2017 will be flat to down. Many of the CIOs that we talked to are determined to keep their costs down, consolidate their vendors and decrease operational complexities. The only way CIOs will entertain buying/piloting new technologies is if they can optimize the use of current systems and save hard dollars.

6. The government will be the biggest spender. Several branches of the government, from VA to DoD, are overhauling their entire clinical systems. These two organizations alone are projected to spend over $5-6.0 billion on HIT in 2017. Clearly, this bodes well for consulting, SI and large or small software vendors that can deliver robust solutions with high degree of interoperability. Looking back at over 10 years of attending HIMSS, we are more convinced than ever that our industry is in the midst of a huge tidal change. Silicon Valley has moved into our zip code and plans to settle in.