PACS and the new economy

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The Psilos Group, a New York city-based healthcare venture capital firm, issued a report late last month that said the new healthcare economy will depend on innovations that simultaneously drive down costs and improve quality of care, and will also require better alignment of economic incentives across payors, providers and patients.

However, Psilos foresees an "innovation gap" that may prevent successful reform, due to a lack of U.S. venture capital investment in healthcare services and technologies.

This gap was punctuated by data also released last month from the National Venture Capital Association, which showed just $195 million invested in healthcare services-- less than one percent of the $28.3 billion invested by the venture industry in 2008.

Similar data from Dow Jones VentureSource shows only $354 million invested in healthcare IT and $357 million for healthcare services in 2008, less than three percent of all venture investments.

PACS, a game-changing technology in healthcare delivery, has enjoyed ever-wider adoption beyond its birthplace in the academic medical center environment. However, just as many smaller practices and hospitals are poised to deploy PACS, the recession is causing a top-to-bottom realignment in healthcare budget priorities.

In addition, as access to credit dries up many facilities are facing higher borrowing costs, investment losses and a jump in patients — many recently unemployed or otherwise underinsured — not paying their bills, exacerbating an already stressed fiscal reality.

What venture capital groups have proved reluctant to try, the U.S. federal government appears poised to deliver a significant investment in healthcare IT as part of a stimulus package to reinvigorate an ailing economy—approximately $20 billion.

Both PACS developers and potential adopters of the technology should keep a close eye on the initiatives spinning out of the multi-billion dollar stimulus for healthcare IT—as it appears to offer perhaps the most significant boost to widespread deployment yet.

In other news, if you’re looking to add or bolster the PACS capabilities of your practice in the coming months, please stop by our Healthcare Tech Guide. We have listings for vendors, systems, training, services and white papers for a variety of products spanning the healthcare environment.

In closing, if you have a comment or report to share about PACS in your practice, please contact me at the address below. I look forward to hearing from you.

Jonathan Batchelor, Web Editor