HIPAA could mean big business
- By Dibya Sarkar
- Jul 19, 2002
INPUT Health Insurance Portability and Accountability Act Update
As they try to meet federal deadlines for the way health information is
stored, processed and transmitted electronically, states likely will outsource
most of the work, creating a $3 billion market for information technology
Input, a Chantilly, Va.-based market analysis and research firm, based
the figure on a Department of Health and Human Services estimate for implementation
of the Health Insurance Portability and Accountability Act over five years.
"Actually $3.8 billion was their estimate, and then we kind of broke
that down considering what the states would try to do in-house vs. what
they would outsource," said Meredith Luttner, manager of state and local
databases at Input. "So we considered the states would probably try to outsource
as much as 80 percent of that number, so that's where we arrived at about
the $3 billion."
She added that the figure is a conservative estimate. The report, released
July 18, said states are issuing or planning to issue solicitations for
a variety of IT services, including analysis, planning, system design, implementation,
project oversight and maintenance. It said that overall, the HIPAA initiative
is about 20 percent to 30 percent IT-related.
Enacted in 1996, HIPAA is intended to better protect patient health
information and streamline business processes through standardized electronic
data interchange. The federal government has issued or will issue rules
on security, privacy, transaction and code sets and their compliance deadlines.
Enforcement regulations are also being drafted.
But state and local governments and other groups have complained that
deadlines are too stringent and the issue too complex. Many want more time
and guidance from the federal government. The federal government has offered
extensions in some cases.
But another major problem is funding. With most states projecting budget
revenue deficits, state officials are looking for more matching federal
States are "kind of griping to them saying, 'OK, you want us to make
this date, but there's no way we can do it without your assistance,' " she
said. "But I think the budgetary issues are the main thing that are presenting
the opportunity for IT vendors to do so much business because states just
can't afford to do this in-house as much as they thought they would have
at the initial session."
She said she didn't know how many vendors are providing HIPAA solutions
and services, but said that the group likely includes every large systems
integrator and all the big consulting firms. Many subcontracting opportunities
will be available for smaller firms, she added.