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Nashville Could Become Next Major Health IT Hub, Report Finds

August 25, 2016
by Rajiv Leventhal
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Nashville, Tenn. very well could become the next big health IT “hub” in the U.S., according to a new analysis from the Brookings Institution’s Metropolitan Policy Program.

According to the report, “A national center of hospital management, the Nashville area possesses important expertise relevant to HIT, including in clinical care, disease management, behavioral health and wellness, diagnostic testing, data management, and the management of physician transactions.” Rooted in the founding of the Hospital Corporation of America, Nashville’s unique healthcare cluster encompasses 15 publicly traded companies that own and operate nearly 40 percent of all investor-owned hospitals in the U.S. and more than 4,000 establishments engaged in some form of the business management and delivery of care, Brookings’ authors wrote.

And, according to a recent report in The Tennessean, healthcare investments accounted for about 60 percent of the $1.6 billion in Nashville-area venture capital investments over the last decade, per findings from the Nashville Capital Network and Nashville Health Care Council. “Young healthcare companies around Nashville received more than $940 million from 2005 to 2015, an explosion of venture capital investment that aligns with both the city’s rise to national prominence and the implementation of the Affordable Care Act,” that article stated.

However, the area will have to overcome some challenges, the Brookings’ fellows attested. “At the same time, the region’s university-based medical research lacks a heavy focus on IT, its solid medical and health business workforce remains thin on software competencies, and the area’s emerging tech ecosystem has not fully integrated efforts to sustain small-firm growth in HIT,” they wrote.

According to the report, the region’s traditional strengths in healthcare management imbue it with significant expertise in every aspect of how the system works—knowledge that should provide important competitive advantages even over regions with more extensive IT capabilities. “However, its traditional strengths also pose potential barriers. Its major proprietary healthcare systems compete against one another, making collaboration difficult, and, in the face of disruptive change, Nashville’s present success and the dominance of legacy industries could hamper movement into new directions. Further, studies of the region’s workforce have found significant skill gaps and weaknesses in IT fields, where both wages and pay increases have exceeded other sectors.”

As such, the analysis found that metropolitan Nashville possesses a unique opportunity to leverage its strengths in health management in developing a unique HIT cluster. To that end, the report recommends three actions by which Nashville (and other metros) strengthen their HIT ecosystem. These steps include: expand the region’s innovation infrastructure; build the HIT skills base; and deepen the HIT ecosystem.

Regarding the health IT vendor community, several top earners are headquartered in or around Nashville. According to this year’s Healthcare Informatics 100 ranking of the top 100 health IT revenue companies, two major vendors—Change Healthcare, a start-up acquired by Emdeon (#11) and HealthStream (#49) reside in Nashville, while multiple others on the list are located nearby in Franklin.

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