Healthcare spending will represent nearly one-fifth of the U.S. gross domestic product by 2019, and much of that money can be attributed to new regulations requiring better health information technology and mobile health apps, according to a report by consulting firm PricewaterhouseCoopers.
For example, in 2010, health providers spent $88.6 billion on developing and implementing electronic health records (EHRs), health information exchanges, and other health IT initiatives, making healthcare a rich market for healthcare IT jobs.
PwC’s report, titled “The New Gold Rush” (registration required), states that nearly one in three American adults have worked, now work or would like to work in healthcare. Jobs in healthcare increased 65% between 1990 and 2009, while the rest of the workforce increased 16% over the same time period.
In fact, 75% of Fortune 50 companies are either in the health industry or have health divisions, according to PwC’s U.S division. “The booming health market is driving a surge of activity from companies looking to mine opportunities for growth, differentiation and jobs,” the report states.
PwC said that exponential increases in healthcare data and the need for meaningful analysis of that data, as well as government spending and new regulations will drive the healthcare industry for the foreseeable future.
Technology companies that support the integration of information across healthcare sectors and that can address regulatory requirements, such as HIPAA (the Health Insurance Portability and Accountability Act) and Meaningful Use, will thrive.
Over the next two years, 58% of small physician practices plan to roll out EHRs. And by 2014, the federal government wants more than half of all healthcare facilities to use EHRs, according to the U.S. Office of the National Coordinator for Health Information Technology. If healthcare facilities have not rolled out EHRs by 2015, physicians’ practices, clinics and hospitals will face penalties.
Other technology companies will thrive developing products that will determine how to provide meaningful analysis of medical data and how the data can be used to support initiatives such as personalized medicine and targeted drug therapies.
“People are short-term motivated, and there are some tools coming out to help, such as medication reminders. If we can understand why people miss their medications, we can improve treatments and outcomes,” Rick Cnossen, director of Intel’s Worldwide Health IT Program Office, said in a statement.
Additionally, 92% of hospitals are using some form of social media to reach consumers, but only 13% say social media is driving an increase in patients and revenue, according to PwC.
Consumer spending trends
A survey of consumers by the PwC Health Research Institute (HRI) found that consumers are willing to spend a significant amount of money on new health-related services and products.
For example, new out-of-pocket consumer spending in health-related services and products includes an estimated $4 billion on health-related video games, $8.9 billion on resources that rate physicians and hospitals, and $700 million on mobile health applications, according to PwC.
A new generation of tech-savvy consumers, PwC stated, is creating a market for digital and interactive health. Consumers between the ages of 18 to 24 are twice as interested in mobile health applications or programs and three times more interested in health-related video games than those over the age of 65.
Overall, the mobile health market is estimated to grow from $1.4 billion in 2008 to $12.7 billion by 2014, the report states.
According to market research firm Research2guidance, healthcare-related smartphone apps are set to become hugely popular. The research firm projects that some 500 million people will be using such apps within five years. More than a third of the estimated 1.4 billion smartphone users in 2015 will be running some kind of mobile healthcare application, Researchtoguidance stated in their report.
For online healthcare information, 56% of consumers will most likely turn to media or information service companies, such as iVillage or WebMD; 16% will use government organizations, such as the Centers for Disease Control and Prevention and the Food and Drug Administration. Another 16% will use health services and manufacturing companies, such as Johnson & Johnson or the Mayo Clinic, and 12% will get their information from consumer-driven organizations, such as Patients Like Me and Angie’s List.
PwC’s health survey found that consumers are three times more likely to get information from news media and information services companies, such as WebMD, than any of the other sources.
“Clearly, these healthcare media outlets have branded themselves as trustworthy sources of information for consumers as more consumers utilize the Web for information,” PwC statest. “Prospectors will have an opportunity to broker those new areas of health information because consumers may require neutrality and noncommercial sources of information.”
By Lucas Mearian