New Study: Health IT Sector Could Be Key to Boosting City's Economy

Taking a quick break from PdF-related coverage, an interesting press release just came in from Center for an Urban Future.

According to the results of a new study the Manhattan-based urban policy think tank released today, New York City could "capture a significant share" of the 212,000 jobs that the stimulus is expected to create nationwide in the health IT sector.

According to the Center’s report, New York City’s small but fast-growing Health IT sector will benefit enormously by the fact that no other place in the country has as many patient records ready for automation. The city is home to 65 hospitals, 1,300 outpatient clinics and over 30,000 doctors --- and only a small fraction of them have previously converted to electronic health records (EHR). The city has other things going for it as well, including a more developed local health IT infrastructure than most other regions. For instance, the city's Department of Health and Mental Hygiene pioneered one of the first local initiatives in the nation to help physicians adopt information technology.

The study echoes some remarks we reported on during Internet Week New York back in early June. Throughout the week, there was talk of how New York's digital sector is poised to help the city recapture some of the economic power that Wall Street lost as a result of the downturn. During one such panel discussion, called Start Me Up: Investing in New York's Digital Industry, NYC Investment Fund Senior Vice President Jalak K. Jobanputra also cited the digitization of hospitals as a key opportunity for New York city.

"Given the amount of stimulus money that will be available for digitization in the health care sector, I think it’s a particularly interesting area," she said.

You can read the Center for an Urban Future report in PDF here. Full press release is after the jump.

For Immediate Release:

 

June 29, 2009 – A new study released today by the Center for an Urban Future, a Manhattan-based think tank, concludes that the Health IT sector is one of New York City’s best bets for reigniting and diversifying the city’s economy. According to the report, the inclusion of billions of dollars in federal subsidies in the 2009 federal stimulus bill for health care providers to convert paper-based patient records into electronic documents makes the Health IT industry poised for rapid growth in the coming years and will likely lead to the creation of dozens of new companies and thousands of new jobs in the five boroughs. The report finds that no other city is better positioned to capitalize on the federal government’s push to digitize health records.

 

Previous studies have estimated that the Health IT sector will create up to 212,000 jobs nationwide in the short run. The Center’s new report argues that New York City could capture a significant share of these jobs and become a leading hub for the sector. According to the Center’s report, New York City’s small but fast-growing Health IT sector will benefit enormously by the fact that no other place in the country has as many patient records ready for automation. The city is home to 65 hospitals, 1,300 outpatient clinics and over 30,000 doctors --- and only a small fraction of them have previously converted to electronic health records (EHR). The city has other things going for it as well, including a more developed local health IT infrastructure than most other regions. For instance, the city's Department of Health and Mental Hygiene pioneered one of the first local initiatives in the nation to help physicians adopt information technology.

 

The report points out that the city already has a modest foundation of Health IT companies to build upon. New York City is currently home to an estimated 80 health IT companies and is among the top four regions that receive venture capital investments in this industry. While there is no reliable data on the total number of Health IT companies in the U.S., the Center showed that New York City has more companies in one key subsector of the Health IT industry than Los Angeles, San Francisco and Boston combined. The city is home to 43 companies that provide Health IT products and services to hospitals, second to Chicago (which has 47 such companies) among the nation’s major cities --- Los Angeles (with 14), San Francisco (14), Boston (12) and Washington, DC (6) all have considerably fewer of these firms. (Overall, we estimate that New York has roughly 80 Health IT companies).

 

The city’s health IT cluster currently includes dozens of firms that specialize in electronic health records, build software platforms for medical labs, design business intelligence applications for hospitals, and provide Internet-based appointment scheduling services for health care consumers. A handful of these firms have hundreds of employees, including CureMD, one of the nation’s largest and highest-rated EHR vendors; ActiveHealth Management, an industry leader in drug interaction alert technology; and Waterfront Media, a Brooklyn-based firm which attracts 25 million unique visitors a month. In addition, Google and Microsoft both have plans to grow their health IT divisions in the city through partnerships with local hospitals like New York-Presbyterian.

 

The study points out that while there’s little question that the health IT field will produce thousands of new jobs across the five boroughs, the extent to which New York develops this sector is still up in the air. Currently, no single region in the United States is home to an overwhelming share of companies in health IT. Thus, the door is open for New York to emerge as a major hub in the field. But, according to the Center, for New York to seize this opportunity, city economic development officials will need to put health IT high on its agenda, help local firms overcome existing obstacles and develop a strategy to ensure that a major share of the industry’s future growth occurs in the five boroughs.

 

“New York City desperately needs to diversify its economy and identify new sources of future job growth,” says Jonathan Bowles, director of the Center for an Urban Future. “Health IT will be critical in helping the city to achieve these goals. There are other sectors in New York with clear growth potential as well, but none are as much of a sure thing in the near term as Health IT. The federal subsidies for digitizing health records make this sector particularly ripe for growth.”

 

The Center for an Urban Future is a Manhattan-based think tank dedicated to independent, fact-based research about critical issues affecting New York’s economic future. This is the most recent in a long line of studies the Center has published about how to grow and diversify the city’s economy. Previous reports by the Center have focused on the city’s video game development sector, the biotechnology industry, the air cargo sector, the creative economy and the role of immigrant entrepreneurs as a sparkplug for economic growth.