SI Review: January/February 2014


Re-Engineering Systems

As healthcare IT evolves, the opportunities for staffing firms expand

By Greg Palmer

Through the HITECH Act of 2009, which was part of the American Recovery and Reinvestment Act, Congress created incentives for healthcare provider groups to implement electronic medical record (EMR) programs by the end of 2014, driving demand for information technology professionals in the healthcare arena.

When the program was kicked off, many information technology staffing veterans wondered if the industry would see another Y2K-type bubble. The adoption rate is high, with more than $10 billion in incentives having been awarded so far to healthcare organizations that have achieved a level of meaningful use, and the majority of system implementations are either completed or soon will be.

But industry leaders so far are optimistic about the future of healthcare IT. While the number of contract staffing IT and clinical professionals needed to implement the EMR systems is declining, the demand is shifting rapidly to optimization.

Provider groups face the challenge of getting the most out of their systems, and they need to invest in the training, integration, big data, security, mobility, business intelligence and system upgrades necessary to maximize their investments.

All of these involve the need for highly specialized staffing professionals to perform the work. As a result, the segment will continue to grow. The challenge will continue to be where to focus time and resources while the industry is experiencing unprecedented change. “It’s my belief that the U.S. healthcare system is in the first phase of a very long and complex re-architecture of information systems,” says Dave Philips, partner at Childs Partners, a leading investment banking firm in healthcare staffing M&A transactions.

The forecast for 2014 remains positive. According to the most recent survey from Healthcare Information and Management Systems Society (HIMSS):

  • 79 percent of healthcare providers and IT vendors plan to hire additional staff in 2014.
  • One-third of healthcare providers had to place an IT initiative on hold due to staffing shortages.
  • 76 percent of healthcare providers currently outsource a service rather than hiring in house.

Data from Oxford IT Staffing, a healthcare IT staffing provider and a division of On Assignment, are also promising. Its Oxford Index (see page 42), which projects the use of Healthcare IT consultants in the coming three quarters, suggests continued staffing growth.

Key Drivers

The HITECH Act kick started the entire EMR effort, but it is not the only driver. Billions of dollars in incentives were put into place to help organizations offset the enormous cost to install new enterprise-wide technology. These incentives run out at the end of 2014 and will be replaced by penalties. Both serve as encouragement to achieve levels of meaningful use of the systems. Here are other big factors driving the demand:

The Affordable Care Act. The massive insurance reform that was recently kicked off in the U.S., continues to drive change and the need for EMR systems. These efforts include — improving quality, improving care coordination, reducing duplicative tests and procedures, reducing overall costs, and rewarding hospitals for keeping patients healthier and out of the hospital. All this is made possible by widespread use of EMRs.

ICD-9 to ICD-10. The industry is also trying to get up to speed with the rest of the world in terms of how we account for services commonly called coding. The transition to the 10th revision of the International Classification of Diseases codebase will require the hiring of skilled personnel who understand both the clinical and financial implications of such initiatives. This conversion from ICD-9 to ICD-10 will also create demand because the coders’ productivity is expected to be lowered by more than 30 percent when the number of codes goes to more than 120,000 by year end from 13,000 today.

Security. The HITECH Act strengthened HIPAA privacy and security rules, but data breaches remain a huge concern. Expect 2014 to place a heavy emphasis on improving security.

Telemedicine will take off. A recent report by Research and Markets predicted 18.5 percent growth in the global telemedicine market through 2018. The shortage of physicians in rural areas, a higher prevalence of patients with chronic diseases, and the continuous development of telecommunications capabilities are expected to be primary drivers of that growth. And with the ACA driving insurance from a fee-for-service to cost-risk model, efficiency is key and will further drive demand.

Big data to improve health management. Healthcare organizations store terabytes of data. Most is unstructured and therefore currently sits in silos. Advances in business intelligence and predictive analytics technology make that data less unwieldy. For example, improved health management, when coupled with health information exchange, gives physicians a more comprehensive view of a patient by eliminating gaps such as missing lab results. Beyond treating individuals, big data drives health IT innovation by enhancing inventory management (to improve purchasing), collecting realtime temperature and humidity data (to keep tissue samples safe) and crunching population numbers. The latter point is huge: Determining which chronic conditions prevail among an institution’s patients and developing plans to reduce related readmissions save money and improves care for patients and providers.

Personal health records. It is believed that “interactive personal health records” will catch on in 2014. These digital tools link personal health records to electronic health records. Microsoft is betting on this category.

Mobile devices/mobile health. This segment of the industry offers excellent promise. It’s no exaggeration to describe consumers’ and physicians’ embrace of mobile health apps, smartphones and tablets as transformational.

Shifting Relationships

Meanwhile, the face of the healthcare provider client is expected to change.

Consolidation. Healthcare provider consolidation will continue as hospitals seek to gain scale, reduce costs and capture a greater portion of the healthcare continuum. Health systems will focus on geographic markets where they can concentrate resources and better utilize assets. This may mean that in larger markets, a system may consolidate four acute care providers into three sites and convert the fourth to post-acute care services. Medical groups and independent practice associations will consolidate as well, given that many physician organizations will not have the capital to invest in the necessary infrastructure (e.g., IT, care models, protocols). Many physician organizations are populated by baby boomers who are beginning to consider retirement and may be looking to sell.

Lower-cost settings. Hospitals will continue to provide the vast majority of the opportunities; however, there is a decided shift away from the hospitals to lower cost settings such as home health and hospice, urgent care, skilled nursing and assisted living.

The payers. Not to be overlooked are the payers. Insurance companies are using more and more clinician, administration and IT talent in case management, coding and billing.

EHR software providers. With more than 600 EHR systems to choose from, the winners are emerging, with Cerner, McKesson, Siemens, GE Healthcare, Epic and Allscripts collectively controlling about 50 percent of the EMR market. Staffing firms need to recruit not only for skills but also partner with the right software providers.

Workforce arrangements. Telemedicine apart, both IT and coding professionals will be increasingly working remotely. The reasons are straightforward: the tightness in labor, improvements in systems and broadband, employee satisfaction, lower real estate costs, and lower travel and relocation costs are all contributing to the trends.

Top Sought-After Skills

It is estimated by the BLS that more than 50,000 healthcare IT jobs are going unfilled today. There are a number of reasons for the skills gap in EMR and the growing number of job openings going unfilled. The primary reasons include changing demographics, lack of affordable training, cost restrains, and technical and clinical skills are often both required for a single position. The current most sought-after skills as described by the most recent HIMSS survey are shown in the chart below.

The Top Emerging Skills

The following skilled positions are well-positioned for greater-than-industry growth rates.

Healthcare navigators. With the proliferation of accountable care organizations, there is an emerging need to achieve quality and cost targets. Positions are emerging that focus on prevention and include making sure patients are going to the doctor, are taking meds and stay on course of treatment. Similar positions are likewise being developed on the payer side.

Social media experts. Several organizations are dedicating personnel to effectively manage and maintain their presence on social media platforms.

Medical scribes. The costs of scribes range from $10 to $20 an hour, according to a 2011 white paper by the American College of Emergency Physicians. The ACEP paper estimated, based on interviews with scribe service providers, that 1,000 hospitals and 400 physician groups are using them.

Medical informatics specialists. These professionals are also expected to be in greater demand in 2014 and beyond. A recent survey by IDC Health Insights suggests that the rate of clinical informatics adoption will reach 80 percent by 2016, creating many employment opportunities for skilled workers qualified to operate such systems and provide the business intelligence everyone is desperate for.

Mobile app developers. Apple recently announced that it sold more than $10 billion in mobile apps in 2013 from the Apple Store. As mobile devices proliferate in the world of healthcare and more providers and patients want instant access, the same trend is emerging toward healthcare solutions available through mobile devices.

Coders and billers. As hospitals work toward compliance with ICD-10, demand for coders will rise. And, as stated previously, the added number of codes will affect demand.

Clinical. Clinical positions are also evolving as a result of EMR. More and more clinicians are opting out of practicing medicine and into the IT world to help fill the demand for workers. With the healthcare model going from fee-for-service to outcome-based with a biased lower cost, there is an increase in demand for “extender” positions (i.e., nurse practitioners and physician assistants). In primary care, many doctors are also opting out of a traditional medical practice and shifting to an employee model and signing on at hospitals. This is leading to a dramatic growth in hospitalist physician positions.

How to Prepare

It’s important to recognize the space has gotten very crowded over the last two to three years. If a firm were thinking about jumping in to the fray, it should carefully plan its entry and most likely select a fast-growing niche. The experienced firms should consider shifting focus and planning around anticipated opportunities while holding on to as much of their core competency as possible. Here are some recommendations.

Create a plan. As the market evolves and shifts, a flexible strategic plan needs to be created and continuously updated. The two critical questions you should ask are: Where can I play to my strengths and successfully execute? And how am I going to recruit the talent to meet the demand?

Continually monitor and adjust the plan. The shifts in the industry will be evolving over the next decade. The winners will be those who can anticipate the direction of change and modify their organizations to meet the opportunities.

At the end of the day, it’s clear that there will be less talent being deployed for IT implementations, but more needed for coding and business intelligence. There will be a shift to lower cost venues away from high-cost hospitals. At the same time, the payers and providers will be going from ICD-9 to ICD-10 reimbursement models, making getting paid more costly and complicated. We will also witness a growing proliferation of mobile devices and more creative work arrangements than we have ever seen before. Given these moving parts coupled with the tight supply of labor, demand will grow. Pricing and margins should be stable and they could improve. All this adds up to the belief that there will remain evolving opportunities to participate in. However, the pace of change is going to be dramatic, coming at a speed never seen before.

Firms need to follow the trends and execute accordingly. Fasten your seat belts. It’s going to be a crazy ride.

Greg Palmer is founder of GPalmer and Associates. He can be reached at


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