Growth in Health Care IT Might Benefit Network Equipment Manufacturers
The Wall Street Journal on Wednesday examined how the demand for health care information technology offers "tremendous potential for growth" for network equipment manufacturers, such as California-based Cisco Systems, that can provide products to improve efficiency for hospitals, health clinics and government agencies.
According to the Journal, "While the technology industry has been hit by slowing growth in revenue, health care information technology ... is one of the few projected bright spots, as pressure increases to provide greater efficiencies." Cisco, one of the largest manufacturers of network routers and switches, in the past two years has increased focus on health care IT.
Industry analysts expect health care IT spending growth of 8% to 10% annually but expect global IT spending growth to decrease to 7% in 2007 from 8% in 2006 and continue to decrease in future years. In addition, Input, a market research company, expects state and local governments to increase spending on health care and welfare IT from $7.6 billion in 2006 to $12.2 billion by 2011 (Fleetwood, Wall Street Journal, 12/20).