Kalorama: ARRA stimulates health IT hardware, software budgets

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Despite the recession, 56 percent of healthcare organizations in the United States have increased their IT department budgets in 2009, according to a report from the life science market research firm Kalorama Information.

The report, “Healthcare Computer System Markets and Trends in Health IT Buying,” finds that much of that spending is going towards computer hardware. Hardware sales represent about 23 percent--or $1.11 billion--of healthcare computer system sales, Kalorama found, and are expected to grow at a faster pace than IT spending as whole in the near term--10.7 percent annually through 2013.

These sales are usually made by health IT companies such as McKesson or Eclipsys who buy from hardware manufacturers and package systems to meet the needs of healthcare entities, according to the report.

“The EMR incentives in ARRA [American Recovery and Reinvestment Act] are aimed at software, but they will open up conversations between customers and vendors for new IT spending, and hardware will be part of that,” said report author Melissa Elder, an analyst with Kalorama ”The top IT-related technologies and applications that physicians and facilities are focusing on include identity management, bar-coding technology, speech recognition and handheld personal digital assistants. All of these will require investment in new hardware.”