Prognosis good for health IT spending

Federal spending for information technology in the health care sector is expected to grow by a steady 5.5 percent over the next five years.

Fueled by homeland security spending and the demands of an aging population, a new forecast by the Government Electronics and Information Technology Association (GEIA) shows solid IT spending at the departments of Health and Human Services and Veterans Affairs and in Defense Department health affairs.

The total IT budget for these health agencies is projected to increase from $6.6 billion in fiscal 2003 to $8.4 billion in 2007, according to Mary Freeman, manager of business development for Verizon, which conducted the study for GEIA.

"One of the drivers for this growth is continued need to put many additional resources for processing Medicare and Medicaid applications, and the other is simply a need to make sure health care components have the products they need to share resources and have the best systems available," Freeman said in an interview April 18.

She said many agencies are feeling pressure to have backup systems and sophisticated disaster recovery technology in the wake of the Sept. 11 terrorist attacks.

And the Pentagon is looking at delivering battlefield theater medical care using the latest in technology as the United States continues the war on terrorism abroad, according to Ed Allen, vice president for e-business and homeland security at Oracle Corp.

"Readiness to DOD is like revenues to a company," Allen said. "You are already seeing an increase in lightweight, mobile and wireless [technology] on the battlefield."

In addition, DOD health spending at home also is likely to increase for military personnel and their dependents in the United States, Allen said.