VAR500 Integrators Poised To Reap Gains In Changing Health-Care Climate

Top systems integrators see an unprecedented level of opportunity this year in health care, one of their traditional powerhouses. But with a changing health care landscape and the emergence of new adversaries -- particularly former systems integrators who are now the services arms of tier one vendors -- the competition, too, is unprecedented.

That was the takeaway at last week's Healthcare Information and Management Systems Society (HIMSS) in Atlanta, where various VAR500 stalwarts describe needing to align strategies around where health care dollars were headed: stimulus opportunities, certainly, but also the influx of new technologies and trends, such as cloud and open source, into the vertical.

"The industry is starting to formalize what it's going to do, and it's started at the state and local levels," said Tori Sullivan, healthcare sector manager for Capgemini (2009 VAR500 rank: 7). "It's progressing. Not as fast as we would like, but it's progressing. But on the other side of the coin, there's a lot on the plate. There's too much going on, and that slows anybody from pursuing anything in particular."

Health-care organizations are being hit with double and triple regulatory whammies on a regular basis, from the "meaningful use" standards that will define electronic medical record (EMR) systems to ICD-10, the World Health Organization's new set of codes for diseases and diagnoses whose root work goes back to 1983.

Sullivan, who chairs HIMSS' ICD-10 task force, said the glut of regulatory moves is forcing many health care enterprises to turn to consulting for help sorting it all out. Therefore, the role for systems integrators -- and outsourcers, and business analytics providers, and other solution providers -- is expanding.

"There are too many decisions to be made and things that have to be done to make those decisions, and that's at a federal level and at a corporate level," she said. "Some of it's a huge distraction. But the technology is being embraced. We've gone through phases where the industry's been hesitant because the technology has been changing faster than the industry. But providers are also much more agile in how they can implement these. We're embarking on a huge wave of emerging technology."

Among emerging technology trends, one of the most dominant is open source -- or, more specifically a move away from rubber stamping proprietary systems, said Amy King, vice president of Health IT Programs at Northrop Grumman (2009 VAR500 rank: 8).

"You're seeing that move," she said. "But the security of health information is still the big thing. I tell you, one 9/11 or cyberattack or something bad happens to all of this data? All bets are off. I think you'll see more influence on health care from the intelligence world. That's going to drive new types of solutions to the security problem, because in health care, security is still what keeps our customers up at night."

"There's still the question of HIPAA," said Ron Lindsay, health-care manager for Emtec (2009 VAR 500 rank: 206). "The stimulus package is opening doors for us to lead with point products and then begin conversations about infrastructure. But they all want to know how safe it is."

Lindsay said the stimulus, though more than a year old, has taken a long time for many health care organizations to understand. Clarified regulation, including "meaningful use," means that many are beginning to make their IT investments now. If they aren't yet ready to embrace cloud-based infrastructure and the promise of cloud computing, they're asking questions, he said.

"We can integrate hardware, software and cloud, which for them can be a big thing," Lindsay added. "But they just don't have the oomph yet, to do it, and they're afraid of cloud backup and recovery. Cloud is in its very early stages here."

Next: The Integrator Picture Gets Cloudier

Of all the messages integrators are hearing from physicians and CIO right now, one still resounds above the rest: "Help me."

"Getting the right hardware in there, with the right connection, with the right level of security -- the ability to access data quickly and securely -- is just not easy," said Cheryl Campbell, vice president of CGI Federal at CGI Group (2009 VAR 500 rank: 38).

"We see physicians who are just forlorn about this," said Dr. John Moonsk, CGI's Chief Medical Officer. "But it's a slow process. Look how long it took HIEs [Health Information Exchanges] to get where they are. We were talking about those 10 years ago. What we're in right now? This is 1.0."

Some integrators came to HIMSS looking different than in previous years. Both Perot Systems (2009 VAR 500 rank: 51) and Affiliated Computer Solutions (2009 VAR 500 rank: 23) have new parent companies since the past HIMSS, having been respectively acquired by Dell and Xerox.

Mark Boxer, senior vice president and group president, government health-care solutions, at ACS, said having Xerox and its R&D resources behind the integrator helps ACS grow its health-care footprint dramatically. Its services will be needed regardless of how the partisan climate in Washington continues to unfold, he argued.

"I'll take the optimistic view: we're on the cusp of great change, and HIT [health-care IT] is an important part of that change," Boxer said.

ACS' strength -- business process outsourcing -- will be a boon to health care organizations revamping their infrastructures for the paperless era, he said. ACS, now called ACS, a Xerox company, is equipped to help them immediately with that transition and let them direct dollars they'd otherwise spend on business processes to more important projects.

Boxer and Will Saunders, chief operating officer and senior vice president for ACS' Government Healthcare Solutions Business, suggested health-care business will be won and lost on how integrators manage, not just move around, the enormous volumes of enterprise data.

"People want to do business with those they trust," Saunders said. "When a lot of people enter health care for the first time, they focus on transmitting data versus using data. That's how you build an HIE and how you build ROI."

Northrop Grumman's King suggested the consolidation wave probably still has some legs, though the channel probably won't see another big-ticket buy like those by HP, Dell or Xerox in the short term.

Northrop is more concerned, she said, about competitors ramping up their health-care capabilities or new competitors coming into the vertical with enticing messages.

"Everyone wants to be in health care," she said. "We compete against a lot of the companies out there, but in different areas. It's different on the state side, versus the federal side, versus the agency side."

The competition for health-care IT dollars is only just beginning, however.

"It won't be this year, or really next year," King said. "2013, 2014? That's when the motor is really going to start to hum."