Show me the money!

Investment banking firms are lining up to cash in on the big HIT boom that will be spurred on by the ARRA legislation.  Their eyes are gleaming with the thought of billions of dollars that will flow to this sector.  I had the chance to meet with some investment bankers recently and they were keenly interested in the CIO / customer perspective of what ARRA will mean to the vendor community.

So – Are we looking at an Internet craze type financial upswing where companies will be beating off customers with a stick, and the financial community will be tripping over themselves to hand out money to anyone who knows all the right buzz phrases?  I, for one, don’t think so.  True, there are billions being made available through ARRA, but regardless of how meaningful use finally emerges later this year, the bar will not be low and I see several scenarios emerging.

On the positive side, there will be many healthcare organizations that have already made investments in technology which will have a good shot at stimulus funds with some additional investment.  For the most part, these investments will be made with existing vendors to deploy or enhance critical functionality.  Much of the investment may involve more professional services than software licensing or hardware.  Skilled professionals are already in short supply – so the narrow pipeline will fill quickly and revenues will be capped by virtue of the vendors’ inability to source new talent.  Cost for skilled professionals will rise and have a somewhat negative impact on both the provider and vendor.

Organizations that have not made significant investments in technology will be faced with a critical question in comparing the total cost of deploying the necessary technologies compared with the alternate uses for those funds and resources.  Some may decide that it is not worth the capital outlay and will forgo the stimulus funds and take the penalties.  Others will make the effort but come up against the long cycle for a successful implementation of these technologies and the above mentioned limited resources to deploy.

In short, I see the resource constraints as the number one limiter to a financial windfall for the HIT industry, followed by capital constraints on the provider / customer side.  Much of the vendor focus will need to be on getting existing clients compliant, making large growth in new business difficult.  The investment bankers may want to hold onto their wallets on this one.