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The Best Opportunities for VARs

 
 
By Leah Gabriel Nurik
 
 
 

During the economic downturn, previously forecasted gains in market growth crashed across a variety of industries. However, healthcare IT remained a growth industry, fueled by a variety of factors, including new legislation outlining deadlines for the move to electronic medical records (EMR). This year alone, market research firm Competitive Intelligence predicts the healthcare IT market to reach $73.1 billion, with a forecasted growth into 2014 of over $14 billion.

The federal stimulus bill passed last year is, of course, a big driver for the move to electronic medical records. The "pay for performance" federal incentives are rapidly motivating doctors and hospitals that have not yet done so, to move to electronic health systems.  Organizations that make the investment will enjoy higher incentive payments on Medicare and Medicaid beginning in 2011. Organizations that do not move to an EHR system will suffer penalties, beginning in 2015.

Beyond stimulus and federal regulation, healthcare IT spending is also being driven by a need to increase the efficiency of monitoring and providing care to a rapidly growing percentage of an aging population as well as reducing liability of healthcare companies. To accomplish all of these goals, investments in systems and networks that support new applications, as well as the adoption of mobile applications, hardware, and other software to support patient care, patient records, and next generation medical diagnostics and imaging are all on the docket for the healthcare industry.

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For VARs, the EMR space poses challenges for market entry because of the limited availability of reseller opportunities for EMR software itself. Although, slowly, new opportunities are emerging,  few software companies are partnering with resellers and packaging their products for resale.

But even if you can’t ink a reseller deal with an EMR vendor, you can ride on the coattails of ongoing EMR implementations to provide supporting technology and solutions. 

"The federal stimulus funding in the HITECH Act has sparked the health care industry to invest in systems, software, and network infrastructure to support EHR implementation," says Stephanie Atkinson, Managing Partner at Compass Intelligence. 

"The push for compliance is uncovering pent up demand and giving light to delayed technology investments."



According to Wes Rishel, Gartner’s vice president and distinguished analyst for the healthcare sector, the best VAR opportunities include secure networking, diagnostic imaging, analytics and data warehousing and analytics products.

When eyeing the space and your strategy, don’t forget the importance of healthcare mobility applications. There are hundreds of potential healthcare mobile applications that can be run over WiFi networks or over public and private wide area networks (WAN). Think dosing applications that include bar code scanning of dosage cups and ID bracelets, home care applications for nurses as well as tablets with patient records.  Competitive Intelligence says in 2010 $705.8 million will be spent on mobile applications in the health care space.

If you’re getting into the space with custom-built applications or reselling supporting EMR technologies, be sure you have the expertise around the federal standards that have been set. Back in January, the government released a new set of standards and definitions around Electronic Medical Records  which provides a pretty clear footprint of what VARs need to adhere to in order to meet the requirements set forth by the Obama administration.

Some VARs are already having substantial success in the healthcare space. Dimension Data, for example, has a large healthcare practice that instead of focusing on deploying EMR solutions, focuses on supporting infrastructure solutions, like unified communications and VoIP, to support the move, including Cooper University Hospital.

Distributors are helping to educate, too.  Avnet sees the healthcare market as a critical and strategic piece of its VAR ecosystem, and expanded its offerings to VARs at the end of last year.  Through Avnet’s HealthPath practice, the distributor provides educational training and resources as well as access to technology suppliers that focus on the healthcare market.
 

This article was originally published on 2010-06-16