Best
-jp

The HiTech Act definitely imposes some new requirements on IT resellers and solution providers, especially in the areas of privacy and security. Before HiTech, privacy and security requirements were imposed on business associates (i.e., companies that are entrusted with PHI), but only if the contract between the business associates and the covered entities (e.g., doctors, insurance companies, etc.) specifically allocated that kind of responsibility to the business associates. Under HiTech, compliance with HIPAA’s security and privacy rules is now mandatory for all business associates, regardless of whether an appropriate contract with the covered entity exists.

So, to the extent that IT solution providers are engaged in business associate-type activities, they (i) need to know what the law is, and (ii) follow the law, or they will leave themselves vulnerable to prosecution by the federal government.

Also, patients’ requests for access to their records will likely increase under HiTech. IT solution providers need to anticipate this, and should start offering solutions to their clients that allow access to records with relative ease and convenience. The solution providers who offer the best access solutions will, in my opinion, have a significant market advantage over those that don’t offer easy-to-use navigation and/or access capabilities.

Regarding the “challenges” of entering the healthcare space, perhaps a standards-based “federation” approach might help to overcome all the nuances of addressing the individual needs of the many small physician practices that exist.

Maybe this approach has been tried before and failed, but if some government incentives were applied to furthering IT adoption, then it might be possible to attract otherwise independent thinking people to this common cause.

All great points! Thanks for your insight.

Of course, healthcare IT is front and center in the news these days, with congress and the president talking about 7 and 8 figure dollar amounts to throw into the industry in order to bring it along. Anyone considering getting into this vertical should do so with as much information as possible. I liken it very much to getting into the banking IT vertical.

To expand on your post a little further, here are some tips for anyone interested in healthcare IT:

- Physicians are notoriously difficult to sell to
- Understand the difference between IT and IS, particularly on the
hospital side of things
- Previous experience is almost a MUST. Healthcare as a business is
extremely complex, understanding the role of IT in it is critical
to staying in business
- The industry is heavily fragmented, with the average family
practice operating no less than 2 entirely separate networks with
4 business critical applications
- You MUST be able to show more value than being able to save
practices a few dollars. Develop your value proposition very
carefully and perfect it
- Any industry expertise you can gain will be valuable to you.
Working with a practice is NOTHING like working with a lawyer,
accountant or retail store
- Hospitals and private practices are very, very different

All of these points may seem like I am being a serious downer, but each of these challenges can be overcome by the right people who are willing to work hard at it. The reality is that like the banking industry, the significant challenges healthcare presents to the entrepreneur also presents a significant opportunity.

The other upside is that investors are starting to look at companies that specialize in this niche very seriously. We are working with angel groups right now that see the opportunity, and are working on the due diligence process with us.

All the best,

Mark