In 2001, we picked healthcare for pretty simple reason, the world’s population was aging as people get older they spend more in healthcare. So, we reasoned that the healthcare industry would have more money to spend on us, IT services. Healthcare was 16% of the GDP in 2009, 17% in 2010, it’s projected to be 20% of the U.S. GDP by 2015. There are lot of forecasts out there that speculated as the Baby Boomers gets older that the U.S. may have to spend as much as 40% of the GDP just on healthcare. Now, we don’t know if the U.S. will ever hit the 40% mark or not. What we do know is healthcare was the fastest growing major industry in the world during the last five years and its projected to be the fastest growing major industry in the world for the next decade and that’s really why we are focused on it. We want to participate in that growth.
Taking a look at some growth drivers, one is certainly in inadequate medical record systems, President Obama went to Congress in the first quarter of 2009 and he asked for money for electronic medical records and he got a lot of it. There is $19 billion in the stimulus package, they are a legislation for electronic medical records, less than $1 billion of that’s been spent. So, there is $18 billion yet to come. In addition to the RL legislation on the same day, Congress passed the HITECH Act. Under the HITECH Act, every physician in the United States gets between $44,000 and $64,000 each. Every hospital gets between $2 million and $11 million each. They can prove a meaningful use of electronic medical records. Those payments are in the form of higher payments under the Medicare and Medicaid system between 2011 and 2014. In aggregate, it’s estimated those payments will amount to $40 billion to $45 billion. So in one day, President Obama got somewhere between $59 billion and $64 billion for electronic medical records. HITECH Act is an unusual piece of legislation and here is both a carrot and a stick.