Frost & Sullivan Records Strong Growth Potential Within Australian Health IT Industry

SINGAPORE, July 22 /PRNewswire/ -- Keen interest from the Australian government towards eHealth initiatives is one of the major drivers of ensuring a double digit Compound Annual Growth Rate (CAGR) of 10.15% from 2009 to 2014 for the Health IT market.

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Frost & Sullivan reported that the USD 525million revenue achieved in 2009 for the Health IT market is forecasted to increase by another USD 333million by 2014. This marks a 38% rise in revenue, primarily resulting from various national and state funded initiatives promoting the implementation of a National E-Health System.

Dr. Pawel Suwinski, Director, Frost & Sullivan commented that this growth projection for the Australian Health IT market is mostly attributed to the strong commitment by the central government towards creating a national healthcare information highway promoting safer, efficient, and more equitable care through seamless health information exchange (HIE). As part of the initiative, in 2005, the National E-health Transition Authority (NeHTA) was established to map-out the most suitable strategy plan for the implementation of countrywide e-health infrastructure and services.  In the following 3 years, under NeHTA direction, several studies have been conducted to identify the complexity of processes, information pathways, and interdependencies between different participants within the healthcare services industry, and in December 2008 the National E-Health Strategy has been formulated to guide the consolidated effort of Commonwealth, States, and the Regions.  

NeHTA's main objective is not only to develop a strategic plan for the e-health system, but also to oversee the implementation of various programmes to ensure that by 2012 Australia would have the necessary foundation for integrated e-health services that includes a priority plan of e-health solutions deployment, training support, and governance of e-health usage.

Moving in that direction, the Australian state governments are actively campaigning for a technological evolution within the local healthcare system. State wide campaigns such as the 'careconnect.sa' web portal developed by South Australia will be amongst the first of an integrated state wide electronic health record system. The portal was designed with the intention of establishing a one-stop personal web based entry-point portal to store and access patient health information. The careconnect.sa campaign will cost South Australia USD 315million in development funds and will most likely finish its implementation by 2017.

Western Australia has also invested USD 300million to develop their own version of Health IT infrastructure. The 'ehealthWA' program was created to link valuable information across multiple platforms including pharmacy, patient administration system (PAS), clinical information system (CIS) and notification and clinical summaries (NaCS) across the state.

"The e-health initiative has recently received a much needed boost in the form of AUD 466.7million budget commitment (passed on 11/05/2010) for the next 2 years to support plans for the Personally Controlled Electronic Health Record (PCEHR) system developed to promote health information exchange between different stakeholders responsible for care management and delivery within the entire healthcare value chain. It is estimated that this investment could generate AUD 7.6billion of benefits annually by the year 2020 as reported by Booz & Company, more than 65% would be achieved by eradicating medical errors and complying to best practices – enhancing quality. It is therefore obvious that seeing through the initial investment is the most important task as many healthcare IT initiatives are plagued with failures resulting from poor management and lack of commitment and involvement by the major stakeholders. Judging from the current progress, Australia is wading exceptionally well through all the pitfalls of nationally launched IT initiatives, and the passing by Parliament on 24th June the Healthcare Identifiers Services bill is keeping up the momentum in the right direction," says Suwinski.

In an Australian healthcare industry survey conducted by Frost & Sullivan in 2009, close to 80% of Chief Information Officers (CIOs) interviewed reported intentions to increase budgets allocated for Health IT by more than 10% and affirms that this budget trend will most likely carry on until 2011.

"Healthcare IT systems will soon become an integral part of the healthcare delivery system at all levels. Under the guidance of NeHTA we already notice the transformation that is marked by the transition from an isolated 'silo' healthcare IT environment towards greater interoperability by adoption of Electronic Medical Records (EMR) featuring standardized interoperability (HL7, DICOM) and common medical knowledge framework (including ICD10, DRGs, and CASEMIX) by most Australian public and private hospitals," says Suwinski.

Clinical IT systems which include departmental systems (Medical Expert Systems – by medical specialty), Radiology Information Systems, Laboratory Information Systems, Critical Care Information System and Knowledge Management Systems – Business Intelligence, together with advanced forms of Remote Monitoring Systems including Telemedicine are expected to be the main growth opportunity following the Australian government's intention to implement e-health vision.

It is expected that revenue from deployment of departmental systems in 2010 will soon reach USD 160million and have a 15.3% CAGR. Modernization of the healthcare system, implementation of more accurate and reliable systems and a shift from lengthy to short and more clinically intense hospital stays is driving investment in departmental systems for hospitals.

Statewide implementation of electronic health records also presents major opportunities for business expansion. State e-health programs such as 'Healthelink' by New South Wales and the government's commitment towards developing the right technology necessary to deliver the best e-health system will accelerate the growth in this segment. In 2010, the market size is expected to be approximately USD 45million with a high 17.3 CAGR.

There are also other opportunities to be found within Patient and Revenue Cycle Management solutions. The steps taken by healthcare facilities to improve the quality and outcome of healthcare, reduce the administrative burden, and adopt a more standardized approach towards application of information systems is the key driver for this market segment. Spending on patient and revenue cycle management solutions is forecasted to expand at a 6.1% CAGR and be worth approximately USD 104million by the end of 2010.

"The Australian Health IT market is growing rapidly due to positive government policies favoring the e-health vision to be established within the next 10 years. The market is definitely set for major expansion," closes Suwinski.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

SOURCE Frost & Sullivan

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