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The American Recovery and Reinvestment Act of 2009 (AARA) included the Health Information Technology for Economic and Clinical Health (HITECH) Act, which earmarks nearly $21 Billion for healthcare IT spending. The magnitude of this opportunity is starting to be felt in hospitals and medical groups across the country as organizations ready their systems and processes for "meaningful use." To discuss meaningful use and the healthcare IT space, Consulting magazine recently caught up with Andrew Smith, managing partner of Impact Advisors, a healthcare IT firm based in Naperville, Ill. In September, Impact Advisors was named The Best Small Firm to Work For by Consulting magazine.
Consulting: IT healthcare—including electronic medical records—has certainly gotten a lot of attention lately. Is that where Impact is doing most of its work right now?
Andrew Smith: EMR is the issue in IT healthcare right now. In our business, we're finding organizations are in one of the following stages. If they have an EMR, they're taking a pretty hard look at how they use it, looking into their adoption rates and contrasting that against meaningful use criteria. The second group would be those in the implementation phase, and that group is busy trying to accelerate their timeframe in order to meet meaningful use criteria. The third group would be smaller hospitals that don't have EMR, and they're in the planning stage to see what they can do. Then there's a small subset that aren't using the AARA or the HITECH act as a catalysts and are just going on their merry way.
Consulting: You mentioned the term "meaningful use" a few times. Can you elaborate?
Smith: Sure. AARA was passed in February of this year and as part of that was the HITECH Act, which was meant to incentivize hospitals and care providers to implement electronic medical records. The criteria for how that federal money will be paid out is still being developed, but it will be determined but what they're calling "meaningful use" criteria. There will be 50 or 60 criteria that will have to be met for providers to be eligible for federal dollars. Those requirements start in 2011, and then they get more stringent in 2013 and 2015.
Consulting: Are most clients close to meeting those standards or is there still a lot of heavy lifting than needs to be done?
Smith: There's a tremendous amount of work to be done. Depending on what study you look at, somewhere between 3 percent and 15 percent of hospitals have computerized physician order entry installed, which is one of the meaningful use criteria. I have to say that it's really an interesting time right now. For most providers it's really an issue of when—not if— they should implement EMR. When do they have the capital resources; when do they have the time; when can they sustain the changes. There's tremendous change involved in these technology. For most the question is: When is the right time to do this?
Consulting: What impact does the current economy have on all of this?
Smith: As the economy tanked last year, a lot of people put major projects on hold. We mainly do two types of business—planning work and implementation work. A lot of the implementation work has slowed down, but we've seen an uptick on the planning side of the business. People didn't have the money to do big capital operation investments, but they knew they had to do something. We've done a lot of planning work over the last year and it seems that now the implementation business is poised to take off next year. Actually, we're already seeing that there's a huge uptick in the implementation work getting started. It sort of reminds me of the year 2000. There was a tremendous amount of work in 1999 to prepare for the year 2000. Then, there was almost a hard reset for everybody in 2000—that was a very tough year for professional services. Everyone sort of threw out the consultants. But the need for technology doesn't really ever decrease so that demand is pent up and things start back up again. It sort of feels like that again, only this time the reset was the economy.
Consulting: And you're optimistic about the future? The pipeline is storng?
Smith: The pipeline is a little nutty, actually. It seems to have really taking off over the last few months. We've talked to all the major vendors, and they're all ramping up for 2010. If you do the math, it becomes almost overwhelming to think how many hospitals and providers are going to want to move quickly in 2010 and 2011 to keep up with the HITECH incentives, and, maybe even more importantly, to stay up with their neighbors because the industry is moving so quickly. The pipeline is really robust. This is going to be a good space with lots of work. As it usually does, it'll come down to talent. We're all in the people business, so it goes without saying that the firms with the best resources and the best talent are going to prosper.
Consulting: Will Impact Advisors be ramping up to meet the coming demand?
Smith: We've already started. We've hired five full-time people in the last 30 days, and we'll be hiring more. We have a conservative budget that calls for 50 percent to 60 percent growth in both headcount and revenue in 2010. We're going to have to continue to grow and expand in order to meet our clients needs, and that's a great situation to be in. We have an incredible robust pool of candidates—we've got between 300 and 400 people we're looking at right now and we have incredible high standards on hiring. Our typical person has 15 years of IT experience and 10 to 15 years of operational experience. I'm completely biased, but I believe we have the best team in the industry, and that's a real difference-maker. [LOAD:kicmag_RHC|art643692] [LOAD:kicmag_HEADER|art643703]
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