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States want flexibility, but need guidance when it comes to health reform and IT modernization

Last week's 2011 State Healthcare IT Connect Summit hosted a mix of government participants coming together to examine key topics related to the transformation of health technology. The conference kicked off with keynotes from Julie Boughn, acting deputy director for operations at the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services (CMS), and Farzad Mostashari, the national coordinator for health information technology. Boughn said the country is not getting the health care its public is paying for. With 46 million Americans lacking coverage, the nation's health care is uncoordinated and fragmented. She said the whole system is generally unsupportive of patients and physicians, much less sustainable.

Mostashari discussed last year's notable trends including meaningful use, certification, health information exchanges (HIE), Beacon Communities, workforce programs, and regional extension centers. He predicted as progress is made in health reform, more transparency and data liquidity will occur, and governance will be established for the Nationwide Health Information Network. Ultimately, future direction of a national strategy will be deployed by the states' HIT coordinators, which Mostashai said are the true "boots on the ground" to make "HIE – the verb" happen.

Speaking of state HIT coordinators, California's Deputy Director for HIT Greg Franklin said the state is busy looking for its next HIT coordinator since the spot is currently vacant. For a state that spends $2 billion a year supporting applications, direction is crucial to progress toward future goals of accountability, cost control and privacy. Franklin spoke about the state's grant application for Level 1 establishment for the health insurance exchange project. Franklin said the $40 million grant proposal has $25 million set aside for planning and technology development. Ed Dolly, the state HIT coordinator and deputy commissioner at West Virginia's Bureau for Medical Services, spoke about IT initiatives in his state. After conducting a landscape assessment, Dolly said it was a real eye opener to see the duplicate efforts taking place across agencies. West Virginia received a series of transformation grants and harbored research and results from those efforts in order to reuse them as part of the state's collaborative reform efforts.

Minnesota's Chief Enterprise Architect and CIO for the Department of Human Services Thomas Baden said he was told the human services systems were 20-25 years old when he started his job. He was also told there was a negative budget and a fair amount of staff recently let go. He was then tasked with modernizing everything with no budget or staff. Therefore, Minnesota is using health insurance exchange funding to jumpstart exchange efforts, and Medicaid's 90/10 funding to get modernization efforts off the ground. The insurance exchange and Medicaid eligibility system funds have been moved into one account that is tracked back to their programs. This is a cost-effective measure and helps with sharing resources. Carol Robinson, state coordinator for HIT in Oregon, said the state will soon release a solicitation as it moves towards an operational HIE. Ivan Handler, CTO for the Office of HIT in Illinois, was mostly in a cone of silence since the state just released a request for proposals (RFP) for the ILHIE. The state anticipates contract negotiations in September 2011. Handler provided a description of the core services and peripheral services for the exchange as well as the state's cloud-based architecture.

A common cry from states is that while they want flexibility, they are in need of strong governance and guidance. Speedy health mandate deadlines are prominent stressors for states. Projects on state IT plates include ongoing operation and support projects, ICD10, provider incentive payments, insurance exchanges, eligibility modernization, and HIEs. States don't have time for 5-year build outs; therefore, faster turnarounds will be expected of vendors. Likewise, changes are needed to state procurement rules because the complicated and lengthy process can create barriers to implementation and upgrades. Vendors should be aware that some states are sharing their successful RFP documents and grant application templates with other states. Also, states will be pursuing technology that demonstrates user friendliness in eligibility systems and exchanges due to the sheer volume of people that will soon be participants in the systems.

Penny Thompson, deputy center director of the Center for Medicaid, CHIP and Survey and Certification at CMS, suggested that part of the reason the health environment is in the position it is today is because of the technology choices made 20 years ago. The existing systems are often outdated, disconnected and redundant. There may be temptation to make quick technology fixes to meet today's needs, but most of the time those solutions will not be sustainable for the future. States need to determine their vision for the future, and vendors need to help bridge the gap in the reality of getting there.

Additional insight from the event is available in an Analyst Recap report.

IACP LEIM holds 35th annual conference to discuss topics and issues surrounding public safety

This year, San Diego, Calif. played host to the 35th Annual International Association of Chiefs of Police (IACP) Law Enforcement Information Management (LEIM) Conference. In typical fashion, the conference covered issues directly impacting the nations crime-fighting abilities. Topics included radio interoperability, broadband networks, license plate technologies, and many more. Given its location, the conference offered insight into what border states like California are doing to combat crime and utilize enhanced public safety technologies. The attendees and presenters proved how border states operate under a totally different dynamic than land-locked states. Since border agencies require an added layer of protection, it is no surprise that the techniques and strategies used by these agencies are cutting edge and forward thinking.

GovWin recently released its Analyst Recap of IACP LEIM, which covers the following sessions:

  • Intelligence-led policing and the challenges of implementing technologies with the smaller agency
  • A discussion on mobile computing
  • The advantages of digital media: transitioning, safeguards and security
  • ALPR data sharing/interoperability, policy and procedures
  • Maryland State Polices LPR system
  • Fixed ALPR best practices

Like always, the IACP LEIM is a great opportunity for agencies to showcase their successes with the use of enhanced public safety technologies. This year was no different as California agencies had the ability to speak about the unique nature of safeguarding their communities, the state, and the country. The efforts to control and police the border are unmatched. With the help of ALPRs and the ARJIS, California stands at the precipice of public safety technology. On top of this, the state presents a sense of opportunity for agencies across the country. The lessons learned and policies enacted are beneficial to both the public and private sector.

It is no surprise that the conference has evolved into what it is today. With topics on ALPRs, information sharing, interoperability, and policies and procedures, the IACP LEIM is now the premier law enforcement IT conference. Vendors and government officials should make a point to attend this annual event to better understand the market they work in and the issues surrounding it.

California’s budget: Cleaning up the mess

The state of California's budget finally seems to have caught a break after a long, tedious ordeal. The road to the completed budget certainly wasn't easy. First came the $25 billion deficit, and then Governor Jerry Brown vetoed the budget presented to him by state legislators. The veto was California's first in more than 100 years. Now, with the beginning of the fiscal year fast approaching, it seems California and Gov. Brown may be out of the woods. If we backtrack to late last year and address the enactment of Proposition 25, we can determine how California got into this seemingly endless mess.

Proposition 25 was passed in November 2010 and changed many aspects of California's legislative process in an effort to speed up the budget-approval process. Prop 25 states that a two-thirds vote is no longer required for approval of budgets or budget-related items, and that a simple majority (50 percent, plus one) is sufficient. A two-thirds majority is still required for the raising of taxes. The proposition also states that if a budget is not passed by June 15, members of the legislature will lose pay, including salary and expenses, until the budget is passed. The resulting savings would be approximately $50,000 for each day past June 15 that a budget is not approved.

Gov. Brown vetoed the budget on its June 15, 2011 deadline. State Controller John Chiang confirmed the budget was not balanced and incomplete. As a result, legislators will not receive pay until a balanced budget is presented to Gov. Brown. The new budget needed to be completed by the start of the fiscal year on July 1, 2011, and for a short time, no one seemed to be backing down. The governor was proposing a solution that involved tax extensions, whereas Republicans were looking to make more cuts.

It seems the time constraints prevailed. On Monday, June 27, 2011, Gov. Brown presented a budget that proposes the deep spending cuts he was trying to avoid. The budget, created by Gov. Brown and Democratic legislators, proposes $14.6 billion in cuts, including $5 billion from the Department of Health and Human Services, and $1 billion from the Department of Corrections and Rehabilitation. The state's two university systems will also lose an additional $650 million in funding. Gov. Brown's new budget also depends on an originally unanticipated $4 billion to be brought in via tax revenue. The budget does not include tax extensions, which is a problem Brown hopes to solve by placing a tax measure on the November 2012 ballot via voter initiative.

Analyst's Take

California's budget became the mess we saw for a number of reasons, including a new governor who is looking to establish himself and separate from his predecessor, and a legislature looking to keep the status quo and their paychecks. I have to admit, I can see the issue from both sides; however, the people who are directly involved in the budget process are the ones who need to see both sides. Yes, sticking with the status quo would be detrimental to California's fiscal situation. It is, after all, what led to the staggering deficit the state was faced with for the upcoming fiscal year.

Governor Brown seems to have realized that his first California budget won't be exactly what he envisioned, and that some concessions have to be made. It should be kept in mind that those truly suffering during these troubling economic times are the citizens of California who elected these officials to solve the big problems. These citizens likely understand that political parties will always disagree on some matters, but they won't put up with the excessive bickering that's caused the delayed 2012 budget. When the going gets tough, the tough get going, and that's exactly what the legislature and Gov. Brown need to do in the future – buckle down and come up with a budget on time that puts California in the best position to successfully move forward.

States’ success with Medicaid EHR incentive due to collaboration

At the recent Healthcare Information and Management Systems Society's (HIMSS) 2011 Government Health Information Technology (GHIT) Conference and Exhibition, Jessica Kahn, technical director for Health IT at Centers for Medicare and Medicaid Services (CMS), gave us a glance at the Medicaid electronic health record (EHR) incentive program that resulted from the HITECH Act. The voluntary program launched with 11 states in January 2011, and 17 states have launched as of early June 2011. Most remaining states are anticipated to launch by the end of year.

As of late June 2011, 12 states are making payments, with $28 million paid to date to eligible professionals (doctors, nurses, physician assistants, dentists). There are 8,326 eligible providers registered so far, and 1,325 have been paid. Louisiana, considered a "pace-car" state, has paid the most. One lesson learned is that states initially underestimated how many incentive payments would be made in the first quarter. States had to guess how many providers might receive the incentives, and many states had to go back and ask the federal government for more money.

CMS is investing time and resources into technical assistance to enable states' success. Activities to ensure success include accepting draft state Medicaid HIT plans in order to save time; employing communities of practice to share templates and best practices on what worked and what didn't; and peer-to-peer support with some states offering the code for how to develop the systems.

Kahn highlighted program successes like testing and interfacing the CMS registration and attestation system with 35 states. She also noted the success of provider and stakeholder outreach and education. There has been much collaboration with the Office of the National Coordinator for Health Information Technology (ONC) in messaging for consumers, privacy, certification, and the EHR incentive program. However, the program doesn't come without challenges. The multistate solutions were a great idea, but were not as easy to operate at a federal level. CMS is used to funding initiatives one state at a time, so things got a little hairy with multistate collaboration. Vendors and states should work on best practices to share how they can improve these processes in the future.

Kudos to states that have moved forward so quickly on this initiative while staring down the barrel of looming deadlines for significant projects like health insurance exchanges. Since states are managing multiple health-related initiatives, it is amazing the level of progress many have made. Remember that this is a 10-year program, and though states are only five months into the program, they have made significant progress in creating new system capacities.

For more insight into the GHIT Conference, please see the Analyst Recap of the event.

Illinois balancing FY 2012 budget deficit with tax increases, spending cuts, and debt management

Challenged by an anticipated budget shortfall of more than $13 billion, IL Governor Quinn and the state legislature passed tax increases in January, 2011 that are projected to create more than $6 billion in increased revenue per year. Then, in February, Quinn unveiled his FY 2012 recommended budget. The budget was framed as a continuation of his "Five Pillars of Recovery" plan. This five pillars plan is aimed at the state's fiscal crisis identifies job creation, cost cutting, strategic borrowing, federal assistance, and increased state revenues as the strategies towards right siding the state.

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The governor's budget details $52.7 billion all-funds operating appropriations in FY 2012, a 1.5 percent decrease from $53.5 billion in FY 2011. The Illinois legislature-approved FY 2012 budget currently on Quinn's desk is touted to make more cuts to state spending than Quinn's budget. Quinn and legislators are working through concerns in an attempt to agree on budget differences as quickly as possible to avoid further special legislative sessions.

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While some verticals see slight increases in all-funds operating appropriations (justice/public safety, public finance and transportation), all state agencies are experiencing some form of funding disruption translating to increased expectations for efficiency and accountability in government operation and service delivery.

Analyst's Take

Governor Quinn has established his priorities and outcomes. Now, map your solutions to the state's goals and pain points:

  • Health care costs and case loads
  • Education achievement and college/career preparation
  • Government operation and collaboration
  • Consolidation of administrative business processes and tools
  • IT maintenance and modernization
  • Revenue realization through improved collections and detection

Without earmarks, will states be seeing red?

Last summer, GovWin reported on fiscal year 2011 (FY 11) federal funding requests for the public safety and homeland security markets. For FY 11, approximately $1.29 billion was available for state and local agencies to utilize for various projects including new radio systems, computer aided dispatch software and personnel, and employing more officers. The funding available last year enabled agencies in dire need of money to pursue projects to improve public safety. The same cannot be said for FY 12 since President Obama placed a ban on federal funding requests, or earmarks.

It is no secret that many state and local agencies have been buried in a deep financial hole over the past two or three years; many localities have put a freeze on nonessential projects. One may argue whether purchasing a new radio system to replace an antiquated system from the mid-1990s is essential, but it would be hard to ignore the benefit of increased interoperability. Moving from old public safety software to new, state-of-the-art systems may not be at the top of a mayor's list when determining how to bring the city's budget out of the red, but projects like these are necessary to improve public safety and, in the long run, save lives.

State and local governments rely on funding sources outside of tax revenue. As the recession pummels many parts of the country, those localities, more than ever, need funding sources that aren't local. Federal grants such as the Byrne Jag Grant and the COPS technology grant can provide funding for many projects, but the competitive nature of grants leaves many agencies without requested funds. On the other hand, making the case to your district's congressman may be slightly easier.

Another means of obtaining funding is through 911 surcharges. State and local governments typically have fees attached to landlines and cell phones, which creates a 911 fund that can pay for dispatching services and other projects. Having citizens vote on a higher 911 fee could raise additional funds to pay for new projects. Seeking funding through earmark requests enables small localities to obtain funding for projects they desperately need.

Vendors that provide NG911 and state-of-the-art P25 compliant radio systems rely on earmarks as well. If state and local agencies do not have money to buy new communications systems or software, it will also affect the vendor. How can vendors assist in this regard? It is unlikely that the ban on earmarks will be lifted, at least for this fiscal year; therefore, vendors must look to local governments and promote the development of consortiums and other groupings of towns, cities and counties. Together, several localities may be able to raise funds via grants, bonds or other means. Providing a more cost-effective solution that lasts longer without the need for an upgrade can help agencies save money in the long run.

The question remains: Without these funds, will state and local agencies still be able to pursue these projects? The answer is yes for the larger agencies that have been able to hold off on some large-scale projects, but smaller agencies' budgets may remain in the red. Grant programs will be even more important to those localities. In the future, earmarks may become something completely of the past and, therefore, agencies must learn to move forward without those funds as a failsafe. Vendors must do the same. There will always be agencies that can afford such projects, but for every agency that can afford a new radio system, there are others that will simply not be able to.

Classic power showdown in Texas over HB 2499 and its impact on state IT procurement

In his June 17, 2011 veto message for HB 2499, Texas Governor Rick Perry enumerated many salient points about his calculated action to block passage of the Department of Information Resources' (DIR) sunset bill. Importantly, he expressed concern that "substantive changes to the operation of the agency" might negatively impact future IT operations. Perry continued:

House Bill 2499 seems to ignore the progress DIR's new leadership has made in improving agency operations and efficiencies. The bill also undermines executive branch authority by removing a single state agency from data center consolidation, removing qualified and hardworking board members from their positions without cause, and removing DIR's important procurement function during the ongoing re-procurement of data services.

The DIR was subject to sunset review during the previous biennium. In the current session, which includes the FY 2012 to 2013 budget, bill sponsors Representative Cook (R-Corsicana) and Senator Nichols (R-Jacksonville) introduced HB 2499 to deal with the sunset. The bill includes provisions that would change the role of the DIR and expand the role of the comptroller's office. Notably, the comptroller would take over IT procurement, IT contracts, and rule setting from the DIR. In an attempt to make this huge power shift more palatable for passage, a provision was added to require the comptroller to report IT procurement activities to the legislature in the FY 2014 to 2015 budget cycle. This was intended as a required check and balance to allow future legislative sessions the option to either continue IT procurement with the comptroller in charge or change IT procurement again with some other option.

The source of some of this political wrangling may be the widely criticized and delayed consolidation of 28 state agency data centers under the direction of the DIR and management of IBM. The project was under such scrutiny, that Perry appointed Karen Robinson as the new CIO in 2009 to get it back on track. The project is currently being restructured and rebid in an attempt to salvage efforts. As a result of this process, it is likely that some departments are skeptical of the state's ability to centrally manage large projects across agencies. Other agencies may be resentful at losing autonomy in managing their own IT.

Effectively, Perry's veto in conjunction with the DIR's sunset legislation creates many potential challenges for the state. Understanding the impact of his decision, Perry asked the currently convening special legislative session to extend all DIR operations through 2017 by adopting an additional legislation. If the special session passes this measure, most current IT projects will be able to complete on schedule, and state IT operations will continue as planned.

Analyst's Take:

This veto is a clear shot across the bow by the governor indicating his keen and continued interest in state IT. The warning should be well-heeded by those in the legislature or other agencies wishing to wrest centralized control of IT procurement from executive authority. HB 2499 was an attempt to change the political power landscape in the state by taking authority away from the governor (the DIR's director and board are appointed by the governor; the comptroller is an elected official). Many in the business community, including some involved in state lobbying, were interested in HB 2499's passage and believed that decentralizing the IT procurement and rule-setting processes to the comptroller would improve the business environment. Importantly, it may have improved bidding and competition options. Additionally, state agencies may have been able to exercise greater control in IT purchasing, which may have resulted in increased IT procurement. However, HB 2499 would have brought bifurcation in IT governance with issues such as strategic IT planning and procurement. Inevitably, this would have caused some measure of difficulty in state IT operations.

While the future of state IT procurement and operation is uncertain after the veto, the governor has shown an interest in seeing current projects through. If special legislation is not passed, and the power struggle continues this year, then state IT procurement and operations will certainly become more interesting. Current projects and operations could potentially be in jeopardy; however, very few in Austin would want to risk the shutdown of an agency that is integral to state operations. Beyond setting a bad precedent for future legislation and state governance, the resulting firestorm and political capital expenditures would be more than most politicians could endure.

Look for Texas to resolve this issue by passing special legislation to expand the agency's current sunset provision through at least FY 2013. This would allow for many current projects to complete and operations to continue for the next several years. Additionally, I would expect the power struggle to continue in the next biennial budget cycle (FY 2014 to 2015). If this conflict does continue, the next legislature and budget sessions should be fertile grounds for IT projects and procurement-related legislation, as various political factions seek to capitalize on the turmoil.

For more analysis, read the Analyst's Perspective on HB 2499, here.

Sources: GovWin, HB 2499, Governor's Veto Statement [June 17, 2011].

For more information on the Texas budget and IT budget, read this GovWin blog.

For additional information on the Texas budget and DIR, go to the GovWin state profile.

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Pivotal Ohio budget nears completion

When John Kasich (one of our nation's 36 new state governors) was sworn in January 10, 2011, he immediately set out to craft a budget to address Ohio's expected $8 billion shortfall in what is potentially the toughest budget the state has ever tackled. Kasich and appointed Director of the Office of Budget and Management Tim Keen prepared and presented the FY 2012-2013 executive budget, which they called "the jobs budget," to the State Legislature on March 15, 2011. The budget is currently in the hands of a legislative budget compromise committee that consists of three senators and three House representatives. The group is working to establish final decisions on important issues like health care, education, and local government funding. The legislature must make the budget official by July 1, 2011. On June 15, OBM Director Keen provided updated revenue estimates that benefit from higher-than-expected income tax receipts. While some of these funds will be used for existing costs, stakeholders are currently debating whether the rest should be used to restore budget cuts or to pad the state's rainy-day fund.

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The governor's budget details $26.9 billion general revenue appropriations in FY 2012 and $28.6 billion in FY 2013. When you roll the general funds up into all funds, totals for FY 2012 are more than $59 billion and $60 billion in FY 2013. The numbers for FY 2012 show an increase of 1.1 percent in general revenue funding, while the all-funds total decrease by more than 5 percent. This differs in FY 2013 where both general revenue funds and all-funds totals increase by 6.4 percent and 1.3 percent, respectively.

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Despite being coined "the jobs budget" by Governor Kasich, funding for economic development and regulation takes a minor hit in FY 2012, and a much more substantial 22 percent cut in FY 2013. These numbers characterize the balancing act of investing while cutting. Kasich and his team tried to be surgical in cuts by allowing continued funding for successful programs and business-friendly tax cuts.

Analyst's Take:

Despite flat IT project investment in budgets, the environment for business process and government modernization through information technology is ripe in Ohio. Both state and local governments are considering and will consider all opportunities to maintain and improve service levels under the current compressed budget scenario. Local Ohio governments are seeking opportunities similar to the state-level shared services to help make ends meet as their state funds and local revenues decrease.

More Courts are Looking to Implement or Upgrade E-Filing Systems

Electronic filing offers countless opportunities for various types of vendors, and there is still time to get in the game. These chances exist not only for e-filing service providers (EFSPs), but also for more peripheral vendors who are capable of providing applications or extra security to the process.

Recently, there has been increased demand across all jurisdictions for electronic filing systems to help streamline court document processes and make records more accessible to parties inside and outside jurisdictions. Electronic filing (e-filing) allows clerks, judges, attorneys and anyone else filing court documents to do so online while avoiding the pain of driving to the courthouse and standing in line to turn them in. Everything from case initiation documents, summonses, complaints to payments, affidavits, pleadings and motions, through to verdict documents can be filed and edited online. This means courts now have the ability to decide whether they want or need to retain these documents in hardcopy format, which takes up space in courthouses and document warehouses, in addition to taking time for the court staff to maintain.

E-filing, like most technological advances, provides more options for the various entities that interact with the court on a daily basis. While each court has its own system of e-filing with requirements varying across jurisdictions, many jurisdictions have provided guidelines and instruction manuals on how to complete the process to ensure no steps are missed. Once acclimated to the system, e-filing has the ability to save time and money for lawyers, judges, social workers and a myriad of other workers.

In the same way that different systems have different requirements for filing, they may also have different capabilities; but no matter which system is chosen, e-filing has streamlined and revolutionized the court process. Prosecutors no longer have to wait to view documents filed by the defense, and vice versa. Documents are usually available immediately, even if they are filed after traditional business hours. Through many systems, case workers can add their notes and other reports to be filed with briefs and other documents directly to the system. Any fees associated with filing the documents can also be paid online, and frequent users can keep a credit card on file to be automatically charged.

E-filing saves time not only in the actual filing process, but in the retrieval process as well. With e-filing, all documents are stored on a secure, cloud-based Internet site that any party involved in a case can access at any time. The documents can often be searched by the name of the involved party, or if a party frequently uses the system, by a list of the cases they have worked on. By reviewing the case page, you can view all of the documents filed in the case as well as judicial notes. It also allows those with the proper privileges to withdraw incorrectly filed motions and then re-file them, often without penalty.

Analyst's Take

Even though the majority of jurisdictions currently have an e-filing system, it does not mean there is a shortage of vendor opportunities. Opportunities for new systems (such as the Request for Information released by Kentucky on June 13, 2011) are still being released, though less frequently perhaps than a few years ago. Many courts, particularly the large number that began offering the service several years ago, need to upgrade or expand their current system, or will need to in the near future. For example, the Superior Court of California, county of San Francisco, released an RFI in late 2010 to expand its current e-filing system. Many of the jurisdictions with e-filing systems also have plans to make the electronically filed documents available for public view, which could act as a selling point for those vendors looking to procure business through upgrading current systems. With such a vast system with so many potential users and chances to expand, current vendors are well positioned to continue seeing high sales as the popularity of these systems grows.

For more information on e-filing trends, go here.

Health care or bust: U.S. health system could be a goldmine

In a recent report by Price Waterhouse Coopers' (PWC) Health Research Institute, the U.S. health care market was called a goldmine of opportunity. This sector for opportunity has inspired companies and entrepreneurs to run to the health care market in ways that evoke the spirit of the 49ers who flocked to California in search of treasure. Unlike those singularly-focused, often disappointed prospectors, the PWC report and current market indicators give business prospects far more concrete information to base their gold fever.

Though focused mostly on businesses that sell products to other businesses or health care providers, I think the PWC report could also be adapted to the needs of the government with respect to health information technology (HIT). The fact that 76 percent of Fortune 50 companies are involved in health care came as no surprise to those of us at Deltek who study the health care market. Indeed, the riches that await those companies when selling a solution or innovation to the government are not hidden in hard-to-access places. Instead, they are published daily in legislation, grant applications, and federal regulations. The passage of the Affordable Care Act (ACA) is the most notable example of gold on display for business in the HIT space.

With the passage of the ACA, new products, systems, innovations, and, yes, the magic device that can eliminate fraud, waste, and abuse are encouraged across the nation. Indeed, this last concept I encountered for the first time on the state legislative level with an attempt to fix a bankrupt unemployment insurance (UI) trust fund. It was said then, as is often alluded to now, that eliminating fraud, waste and abuse can be the silver bullet to solvency. While that is no truer with the U.S. health care system than it was with a UI trust fund, it is clear that waste is rampant in the system. With $2.2 trillion spent annually on health care, it is estimated that $1 trillion of that adds no value to the health or outcome of the consumer. That figure is staggering and provides a great opening to any business that can adapt solutions that cut down on waste in the system.

Combine the massive amount of money wasted every second with the rising costs of health care (estimated at nearly 20 percent of our GDP by 2015; compared with 5 percent in 1960), and it is takes no clairvoyant or brilliant prospector to find the goldmine. Delivery of efficient service at the lowest cost to the consumer (or in the case of government, the taxpayer) is the goal. The successful prospector will have exploited that idea.

The ease with which we have located this goldmine should not be used to imply that extracting the gold from the rock will be an easy task. Indeed, the difficulty of breaking into a highly-regulated system that most often relies on third-party payments cannot be understated. Combine it with government procurement regulations and guidelines, and many a good company fails to thrive. Industry knowledge and understanding is the key to success for any company descending into the health care market goldmine.

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