Healthy Choice

Public-sector health care covers a broad spectrum, according to SOGM respondents. Nearly three-quarters of VAR respondents said they get the majority of their revenue in that space from publicly owned hospitals. Health- and human-services organizations ranked second in the survey for current revenue, followed by research institutions, public-health clinics, veterans-affairs offices, Medicaid, Medicare and nonprofit charities.

Asked to rank the public health-care segments for revenue growth potential, the SOGM respondents kept the list in the same order, with public hospitals outpacing the rest by a wide margin.

"Everything that applies to the private sector applies to public hospitals in terms of need. The difference is that public hospitals have lower margins and, therefore, less money to invest in things such as technology. That's the nub of the problem," says Betsy Carrier, vice president of education and operations at the National Association of Public Hospitals and Health Systems (NAPH) in Washington. "Those things that offer a quick return on investment get the most attention and are implemented first."

Carrier says the NAPH last year completed a report that shows its member hospitals have made progress implementing clinical applications in radiology and lab-management information systems, but were lagging behind their private-sector counterparts in the larger and more important areas of electronic medical records (EMRs), clinical data repositories (CDRs), and picture archiving and communication systems (PACS). While 90 percent of NAPH members ranked EMRs, CDRs or PACS as highly important technologies, only half had either installed or were in the process of installing EMRs in the inpatient, ambulatory and emergency-department settings.

"It is a little early in the year for a good analysis, but I believe there are more health-care facilities coming to solution providers at a greater rate than other verticals because the health-care industry is much farther behind in technology than other segments as a whole," Sands says. "They need more assistance in implementing complex enterprisewide solutions like new security policies, identity management, access controls, etc."

James certainly sees public hospitals as the sweet spot in health care. "I believe that public-sector hospitals will be making the next significant investment within the health-care segment," she says. "Where private facilities had to prioritize technological automation to increase profit in the wake of HIPAA, public hospitals tend to take a 'make due' position due to lack of funding. Now, however, with commercial, off-the-shelf solutions coming down in price and into the mainstream, I believe that public hospitals will be taking a second look at the more successful commercial installations and attempting to seek public support for their funding."

"I believe that public hospitals, health clinics and research institutions are the sweet spots now," Sands says. "The dollars in this segment will come from the need to comply with HIPAA, which will be reflected in the increased acquisition budgets of their IT departments."

NEXT: Why public funding is vital.