By Maria Saporta
Friday, November 26, 2010
The Atlanta region now has one more way to sell itself — as the nation’s capital for health-care information technology.
The Georgia Department of Economic Development, the Metro Atlanta Chamber and the Technology Association of Georgia (TAG) have all seized on the state’s prominence in health-care IT as a way to market itself to national medical software firms.
Hans Gant, senior vice president of economic expansion for the Metro Atlanta Chamber, said that it is expected that the health-care IT industry is going to dramatically grow over the next decade as new national health-care strategy is implemented.
“More health exchanges will have to be created both in states and nationally, and that will require health-care software backup information between hospitals, clinics and doctors,” Gant said. “Everybody is going to have to bone up their health-care IT systems.”
As a result, it is expected that the health-care software industry will require hundreds of thousands of new jobs, he added.
“Because of the high concentration of health-care IT companies that we already have, Atlanta has a great opportunity to get more than its fair share of those jobs,” Gant said.
The chamber and TAG have mapped out 135 firms that are in the health-care IT industry that operate in metro Atlanta and the state.
“We are still finding more Georgia companies,” said Tino Mantella, TAG’s president and CEO. “I expect when the dust settles there will be over 175 health IT companies currently headquartered in Georgia. So, with a strong base of health IT companies we have created a cluster, something to build on.”
Georgia has been able to claim that it’s the capital of the health-care IT industry thanks to the industry magazine Healthcare Informatics’ HCI 100 ranking of the top firms in the country.
The largest firm in the country is Alpharetta-based McKesson Technology Solutions, which had nearly $3.1 billion in sales in 2009.
In all, Georgia has nine of the top 100 companies; they have combined revenues of $4.36 billion.
By comparison, Texas has five of the top 100 health-care IT firms; they have combined revenues of $3.15 billion.
And California, which is also home to nine of top 100 firms, has combined revenue of $3.09 billion.
Georgia also has other distinctions in the field. The Health Information and Management Systems Society, the industry’s association, was founded at Georgia Tech in 1961 with a goal of improving patient services and reducing health-care costs.
It was founded by Georgia Tech professor Harold Smalley, who co-authored “Hospital Industrial Engineering,” and who served as the group’s first executive director. The organization was based in Atlanta before moving to Chicago.
Also, according to a recent Georgia Tech survey, the industry currently employs about 10,000 people in the state, and it is among the fastest-growing sectors in the state.
Bill Linginfelter, chairman of both the Metro Atlanta Chamber and Georgia Research Alliance, said health-care information technology represents one of the industry sectors where a cluster of companies already exists.
“It is a huge platform in which to leverage job growth,” Linginfelter said.
In 2009, the chamber released the results of its New Economy Task Force report where it identified several industry sectors with the greatest potential for growth.
Two of the major categories were the bio-medical industry and the high-tech industry. The chamber then established committees to focus recruitment efforts on both of those sectors.
The Bioscience Leadership Council is chaired by Donna Hyland, president and CEO of Children’s Healthcare of Atlanta. And the Technology Leadership Council is chaired by Paul Garcia, chairman and CEO of Global Payments Inc., and it is co-chaired by Michael Capellas, chairman and CEO of VCE; and John Yates, partner with Morris, Manning & Martin LLP.
Linginfelter described both councils as having “incredible leadership,” and said they are working on industry recruitment efforts both nationally and internationally.
“So, what do we need?” Mantella asked. “One thing is more investors into this space. The health venture fund that’s currently under discussion would be a big step.”
Atlanta Business Chronicle reported Nov. 19 that a new investment fund, HealthTrain Ventures, aims to help launch about 100 Georgia companies over the next three years.
Gant said the chamber and its partners will now launch a direct marketing campaign to seek new investment.
“We have identified a targeted list of companies — nationally and internationally — that we think are great candidates for recruitment and expansion to the Atlanta region,” Gant said. “We have got the talent base. We have got the jobs. And we have got the companies here. That can provide a backbone for growth.”