NATIONAL REPORTS-Providers in North America will spend up to $39.5 billion on information technology (IT) solutions by 2008, according to a report recently released by Datamonitor.

The increase in healthcare IT spending is being driven largely by national and regional initiatives that promote the adoption of electronic medical record (EMR) systems, says Jocelyn Young, research director for Datamonitor and author of the study, "Technology Opportunities in the North American Healthcare Market."

The report predicts that healthcare IT spending among providers in the United States will experience a 7.4% five-year compound annual growth rate. Provider offices in the United States will show relatively aggressive growth during the forecast period, driven largely by the increasing adoption of pay-for-performance measures by health plans as a way to reward providers that adopt technology, the report says. Other drivers include the growth of industry research and government-funded demonstration projects that focus on the business case for IT adoption among provider practices.

Hospitals, which have been at the center of IT adoption for the past decade, will continue to embrace technology, Young says.

BARRIERS TO ADOPTION

While investment in IT by providers will fuel much of the anticipated growth in the coming years, Young says that barriers to provider IT adoption still exist. Many physicians remain concerned over IT support and the costs involved.

Still, she points out, an increasing number of provider groups will begin to implement technology solutions during the next several years.

"That's the next level of IT investment," Young says. "Part of it will be convenience and workflow. We've certainly come a long way in recognizing the value of technology."