Health information exchanges to blossom in 12 to 18 months

The health information exchange (HIE) infrastructure will change dramatically over the next two years, according to the new report from IDC Health Insights. The driver for change will be the funding for HIE technology investments that becomes available through approximately $20 billion in incentive payments for healthcare information technology (IT) under the American Recovery and Reinvestment Act (ARRA) of 2009.

"Typical of nascent markets, the HIE vendor market is volatile with new entrants and market consolidation. We can expect dramatic changes in the next 12 to 18 months as HIE technologies become a commodity and dominant players acquire their way into a crowded market currently made up of many small, privately held vendors," says Lynne Dunbrak, program director, IDC Health Insights.

To demonstrate meaningful use of electronic health records (EHRs) and thus qualify for incentive payments under the ARRA, healthcare organizations will have to invest in HIE technologies, spurring market evolution and maturation. Organizations that fail to demonstrate meaningful use by 2015 will face penalties in the form of reduced Medicare and Medicaid payments.

IDC Health Insights anticipates that enterprise HIE companies serving integrated delivery networks, health, or hospital systems will be the fastest-growing market segment of HIE organizations. Unlike regional health information organizations and statewide or national HIEs, enterprise HIEs can establish a sustainable business model and are not as encumbered by organizational and data governance issues.

The IDC Health Insights report evaluates 14 vendors supplying health information exchange (HIE) solutions for enterprise, regional, and statewide (or countrywide) health information organizations. The evaluation is based on two assessments: "fit to market needs" and "ownership confidence." Fit to market needs includes 10 criteria to evaluate the strength of a product in terms of feature/functionality, interoperability, architecture, quality of service and support, and cost. Ownership confidence includes five criteria to evaluate the soundness of a technology supplier's strategy, financials, commitment to an industry, and customer satisfaction.