Healthcare: NYC’s health-tech sector holds promise
President Barack Obama’s stimulus funds could fuel job growth as doctors and hospitals scramble to revamp systems.
Bolstered by a wealth of health care professionals, technology experts, and patients, New York City is well-positioned to become the nation’s capital when it comes to health care information technology, according to a report released Monday by the Center for an Urban Future.
“The health IT sector has enormous potential to help the city diversify its economy and spark new job growth,” said Jonathan Bowles, director of the Center.
As part of President Barack Obama’s overhaul of the healthcare system, hospitals and healthcare providers are expected to convert all paper-based patient records into electronic documents by 2015. The switch, for which the federal government has allocated $19.2 billion in stimulus dollars, means a bounty of new companies, and thousands of jobs centered on the development of electronic health record systems.
When compared with other regions, the Big Apple-home to 65 hospitals, 1,300 outpatient clinics and more than 30,000 doctors-stacks up well. The New York metropolitan area’s health care IT sector has attracted more than $61 million in venture capital funding since the beginning of last year, according to the report. That’s nearly 15% of the national total, and more than all but three other regions (the San Francisco bay area, the Potomac region around Washington, D.C., and New England). Overall, the New York IT sector received $32 million in venture capital funding in the first quarter of 2009, according to a MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association.
New York City is also home to at least 43 companies that provide health care IT services, according to the report, citing a survey from HIMSS Analytics. In its own estimation, the Center puts that number at closer to 80 firms, compared with 47 in Chicago, 14 in Los Angeles, 14 in San Francisco and six in Washington, D.C.
“The fact that we’re not yet way behind Silicon Valley or Boston or San Diego is really promising for health IT,” said Mr. Bowles. “At this point, we still have a chance to capture a significant share of the jobs in this sector.”
New York has already started the ball rolling. The city’s Department of Small Business Services is developing a program to help doctors’ offices make the switch, and since its 2007 launch, the health department’s Primary Care Information Project has converted more than 1,300 physicians and 226 medical practices to electronic records. Nor is PCIP stopping at patient records-one of the project’s pilot programs is testing whether health care reminders sent via text message will spur patients to schedule needed appointments.
“The most important thing that my staff does is provide end-to-end project management structure,” said Farzad Mostashari, an assistant commissioner for the health department and director of PCIP. “The poor doctor’s office; they’re just trying to get through the day with 10-minute patient visits.” He estimates his program could more than triple in size once the federal stimulus money starts to come in.
But challenges remain. Few electronic-health-record vendors are based in New York, and a lack of a local industry association makes it difficult for vendors to develop compatible systems. Additionally, the development of electronic-health-record programs, as well as training medical staffers to use them, will require more jobs and more money, just as many hospitals are up against a cash crunch.
For its part, the Center calls on the government, and in particular the city’s Economic Development Corp., to create programs that fill the gaps in training, funding and support. Citing mounting job losses and the collapse on Wall Street, the report urges development agencies to get on board for what “may be the closest thing to a sure thing when it comes to the city’s future economic growth.”
By Kira Bindrim