By Forrester Research
Special to CNET News.com
February 26, 2004, 12:00PM PT
By Eric Brown, principal analyst
In areas from clinical quality to drug development to consumer-driven plan design, information technology is becoming more important to health care stakeholders with each passing year.
Here are Forrester's insights into what's to come in 2004, a year that will bring accelerating technology adoption among health plans, care providers and life sciences companies:
In the looming pharmaceuticals downsizing, IT will be spared. As sputtering new-drug pipelines, more complex manufacturing processes and the specter of widespread reimportation at discount prices weigh heavily on pharmaceutical companies, many will turn to work force reductions in 2004 to trim costs and mollify investors. But amid significant layoffs, IT professionals will largely be left in place.
Health plans will shift claims processing to Texas, India and beyond. With an increase in transactions that comply with the(HIPAA) and with margin pressure bearing down on health insurers, 2004 will be the year when job slashing hits the claims operations of major health plans.
Reluctant payers will be forced to take the outsourcing plunge just to keep pace with leaders like Aetna and UnitedHealthcare that are forging offshore deals directly or hiring integrators to help. Next year, power players Affiliated Computer Services and Perot Systems--sporting cost-effective operations with the capacity to take on tasks from data entry and adjudication to call center services--will double their revenue for business process outsourcing of claims.
Sales in the electronic medical records field will blow past practice management system revenue. Driven by Medicare, health plan and employer demands for error reduction, quality improvement and cost containment, clinical software has become the next hot application for health care providers.
This year will mark a shift of IT attention from the back office to the exam room, as software and service revenue for electronic medical record vendors crosses the billion-dollar mark and eclipses practice management system sales. Two huge deals in 2003--Epic Systems with Kaiser Permanente and IDX Systems with Britain's National Health Service--are just the prelude.
In 2004, look for more billion-dollar projects and a flurry of activity among the next wave of adopters--the two-thirds of physicians who work in group practices of eight or fewer.
"eDetailing" will spread to nurse practitioners and physician assistants. In 2004, pharmaceutical companies will abandon their eDetailing elitism and reach out to allied health professionals--nurse practitioners and physician assistants. Pharmaceutical executives at eDetailing leaders like AstraZeneca Pharmaceuticals, Aventis and GlaxoSmithKline will take advantage of vendors' low recruiting fees, allowing pharmaceutical companies to repurpose doctor-focused programs for their new audiences at a minimal cost.
eDetailing vendors like Physicians Interactive and Aptilon Health, eager to differentiate themselves as industry consolidation continues, will tout that they--unlike competitors--have each already delivered eDetailing to more than 5,000 allied health professionals. Forrester expects these two companies to launch market insight and recruiting products geared specifically to the nondoctor audience in 2004.
As adoption of consumer-directed health plans takes off, other products will imitate their style. Enrollment in such plans will balloon in 2004 to almost 1.2 million, from a base of some 500,000 last year. That's a big jump but just a drop in the ocean of the country's 160 million commercial health plan enrollees. Enrollment will climb most significantly in 2006 when rising product availability--spurred by the Health Savings Accounts (HSAs) approved in the Medicare reform bill--meets growing demand from midsize and small employers that lag behind jumbo businesses in benefits innovation.
By that time, only high deductibles and coinsurance provisions will distinguish consumer-directed health plans from preferred provider organizations (PPOs) and health maintenance organizations (HMOs), as employers demand HSAs, quality and price transparency, self-help tools and a marketplace of providers competing for patients as part of all health plan products.
Pharmaceuticals representatives will trade laptops and personal digital assistants for Proscape Technologies tablets. Fueling a fourfold increase in the company's installed base next year will be a best-of-breed mobile sales force application, solid co-marketing relationships with Siebel Systems and Dendrite, and strong backing from Microsoft, Hewlett-Packard and Accenture.
With five of the top 10 pharmaceutical companies as customers and other enviable deals in the works, Proscape will find 2004 to be a breakthrough year. Expect the company's users to expand from 7,500 today to more than 30,000 by the end of the year.
Online prescription purchasing will reach one-sixth of U.S. households. In the coming year, press coverage of rogue and overseas online pharmacies, state initiatives to reimport drugs for government employees and the fanfare surrounding the Medicare drug bill will continue to boost consumer awareness of the Net as a viable pharmacy option.
Forrester expects to soon report 50 percent year-on-year growth in the number of online prescription purchasers in 2003 to 18 percent of online U.S. households; and we project 50 percent growth again to 27 percent in 2004. That's two-thirds of the 41 percent of online U.S. households that buy prescription drugs through any channel--and roughly a sixth of all U.S. households. Look for Medco Health Solutions to make a strong push to maintain its mail service dominance by wooing Medicare beneficiaries with a discount drug card program.
Health plans will boost site usability with natural language search. Plan members ask questions like, "Why did I get a bill from my doctor?" Call center reps know to translate that query into a claims search, but plan Web sites currently maroon members who aren't fluent in plan-speak.
In 2004, Forrester predicts that health plans with industry-leading member sites--like UnitedHealthcare, Oxford Health Plans and Aetna--will implement natural language search tools from vendors like Verity and Autonomy. The smartest of these companies will sift through logs of free-form user queries for the most common member questions phrased in simple user lingo--and use that language to drive site redesigns and refinement of voice response menu options.
Disease management will hitch a ride on real-time eligibility checks. As the impact of HIPAA transactions radiates throughout the health care infrastructure, providers will enjoy a more real-time connection with payers for transactions like referrals, claims submission and electronic remittance. Up first will be eligibility checks that can be performed just prior to a patient visit or admission.
In 2004, vendors like NaviMedix and WebMD will add co-pay levels and remaining deductible amounts to these transmissions to help providers collect the right patient fees at the point of care. And plans will begin to take advantage of this timely communication channel to insert a message of their own: "Yes, the member is in the plan, and by the way, the patient is a diabetic, hasn't had an eye exam in two years and should really get one."
Pharmaceutical companies' love affair with electronic data capture (EDC) takes a breather. Industry giants Novartis, Schering-Plough and Bayer have made executive-level decisions fully committing their companies to EDC for clinical trials. While 2004 will see growth in EDC adoption--more platform deployments and EDC trial starts--no additional drug companies will make a wholesale switch in the coming year. Skeptical clinical trial managers will be watching the results of the early committers closely before deciding their 2005 strategy.
© 2004, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.