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Deltek says federal health IT market will survive federal budget cuts

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Federal spending on health IT will increase from $4.5 billion in 2011 to $6.5 billion by 2016, which represents a compound annual growth rate of 7.5 percent, according to a new research study from Herndon-based Deltek Inc.

Federal health IT spending includes funding for payment systems, technology to deliver services including electronic health records (EHRs) systems and technology to support federally-funded health research and promotion. In Deltek’s GovWinIQ report, “Federal Health Information Technology Market, 2011-2016,” Deltek analysts noted that while the overall federal market will face budget shrinkage over the next few years, the health IT market will continue to grow due to rising health care costs, the aging U.S. population and efficiency gains that IT promises.

“Federal agencies possess the most advanced EHRs in the world, however due to their age and legacy architectures and technologies, they are overly ripe for major transformation,” Deltek senior principal analyst Angie Petty said in a statement.  “The Department of Defense and Veterans Affairs are on the cusp of creating a joint records system that will serve soldiers from their induction into the military through the rest of their lives.”

A key driver for the expected increase in health IT investment is a projected near doubling of federal health care expenditures from $766 billion in 2011 to $1.4 trillion in 2020. This will stem largely from an expected 123 percent increase in the population of those age 65 and older by 2050.

 


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