Healthcare IT spending is expected to reach $40 billion by the end of this year, according to a study from market research firm RNCOS.
Much of that growth will come from spending on electronic health record (EHR) systems, mobile health applications and efforts to comply with new government standards.
Boosted by increased spending on healthcare software -- which is needed for the rollout of EHR systems -- the U.S. healthcare IT market is expected to grow at a rate of about 24 percent per year from 2012 to 2014, the study said. Spending on healthcare software rose 20.5 percent in the past year, from $6.8 billion in 2010 to a projected $8.2 billion this year, according to RNCOS.
Recent mergers and acquisitions in the healthcare IT market also point to growing private-sector interest in software, which will see sales grow at rate of more than 30 percent annually from 2012 to 2014, the report said.
The study attributed some of the increase in spending to the Healthcare Reform Act, the new ICD-10 coding system and adoption of EHR systems, which will be mandatory by 2015. Also a factor: Medicaid enrollment, which is expected to increase by 16 million people by 2019.
ICD-10 is a comprehensive medical coding system that includes more than 55,0000 codes; hospitals are required to be using it by Oct. 1, 2013.
And the adoption of EHR technology -- hastened by the requirement that healthcare facilities must achieve "meaningful use" of such systems -- is forcing hospitals and other healthcare providers to move ahead with technology implementations faster than ever.
In addition, the RNCOS report noted that consumers are keenly interested in the benefits of mobile health technology. The mobile health market is estimated to hit $2.1 billion by the end of the year. It has grown by 17 percent in each of the past two years.
The main driver behind that double-digit growth rate is the increasing use of smartphones. By the end of 2011, 50 percent of mobile phones in the U.S. are expected to be smartphones, up from 21 percent in 2009.
As a result, according to market research firm Research2guidance, healthcare-related smartphone apps are set to become hugely popular. The research firm projects that some 500 million people will be using such apps within five years.
According to the Global Mobile Health Market Report 2010-2015 compiled by Research2guidance, more than one-third of 1.4 billion smartphone users in 2015 will be running some kind of mobile healthcare app.