For years, the health-care IT sector had been America's economic outcast when it came to investments. With many health-care providers hesitant to pour money into new products and programs, IT staffs were stuck with ailing systems and no support.

According to Forrester Research, health-care enterprises in North America spend just 22 percent of their IT budgets on new IT initiatives, compared with 28 percent for businesses in other sectors, the Financial Times reports.

But in the past year, health IT has gained more prominence. The IT sector is reaping huge financial rewards from the American Reinvestment and Recovery Act of 2009 (ARRA) and activity is poised to grow even more with the sweeping health-care reform overhaul President Barack Obama signed into law in March.

Now, with mandated adoption deadlines looming, governments have no choice but to seek health IT support in areas such as electronic health records (EHRs) and medical coding standards. As states try to get a handle on a massive health-care makeover projected to provide insurance coverage to an additional 32 million Americans, here are three ways health-care reform will impact IT systems.

1. Expanding Medicaid/Medicare

Starting Thursday, April 1, states could start moving on the massive expansion of insurance coverage, which is the flagship of the health care overhaul.

The new law expands Medicaid programs to cover low-income Americans who earn up to 133 percent of the poverty level (or $14,404 for an individual and $29,326 for a family of four). Expansion is not required for all states until 2014, but states can apply for federal funding now.

"Many of them are starting from the very beginning," said Cindy Hielscher, an Accenture senior executive and leader of the firm's North American public health practice. "They're anxious to hear what the rules are going to be and what the funding is going to look like. They can't put this off for too long."

But across the country, budget shortfalls threaten to put more financial stress on states, such as California, that have the largest uninsured populations. A Kaiser Health News article points out that this vast increase could bring 15 million more people into the safety-net program nationwide, according to the Congressional Budget Office.

With so many patients added to the programs, states will have to figure out how to give more people health coverage while maintaining quality systems.

"Eligibility is many times done in silos and this [health care reform] is trying to bring it together," Hielscher said. "We'll need to have some sort of portal to identify patients more holistically."

The expansion of Medicaid will force states to examine the roles of various agencies, she said. But Medicare, under the new law, also will help drive costs down through value-based purchasing, quality reporting and a national pilot program to establish a bundled payment for specific services.

"Now there are incentives to change technology to focus on populations," said Steven E. Waldren, a physician and director of the Center for Health Information Technology (CHiT) with the American Academy of Family Physicians. "We can figure out how to deliver on quality, how to reach out to patients who don't come to see me."

2. Building health insurance exchange networks

By 2014, every state will be required to establish an online marketplace to make it easier for residents and small businesses to compare and purchase affordable health insurance coverage.

Cash-strapped states may partner to build regional networks, or they may choose to use a template that will be developed by the U.S. Department of Health and Human Services. In any case, the purpose of these Web portals is to collect data from individuals in an interactive system that ties together treatments, outcomes and payments.

"How do you engage the consumer in that process and allow them to

Russell Nichols  |  Staff Writer