State and Local Health IT Spending to Grow

Development of state health insurance exchanges and new quality-based care systems for Medicaid will help drive a $2.7 billion increase in IT spending by state and local health and human services agencies over the next five years, according to a new market report.

IT spending by these agencies will increase from $16.6 billion this year to $19.3 billion in 2017, for a compound annual growth rate of 3.1 percent, according to the State & Local Health Care and Social Services Market 2012-2017 report by Deltek. Other factors in the anticipated market growth are increasing federal efforts to reduce fraud, waste and abuse in health-care payment systems; the introduction of new guidelines to modernize the architecture of systems supporting benefit programs; and an expectation that state and local revenue streams will begin to stabilize.