Healthcare Strategy Builds on Desktop, Acquisitions

The healthcare industry generates about US$1.5 billion a year in revenues for Microsoft, but this is a small fraction of the estimated US$22 billion that healthcare organizations spend worldwide on software each year. Microsoft believes it can leverage its visibility as a software vendor, along with strategic acquisitions and new products for hospital management and electronic health records, to tap into one of the fastest-growing software markets. However, the company’s strategy is still being molded, particularly in terms of the specific markets it will address and how partners will be involved.

Technology in Healthcare

In pharmaceuticals, medical devices, and strategies for care, healthcare is an area of enormous technological development, but it remains a backwater when it comes to using software to run the healthcare system itself. Each department of a hospital—cardiac care, pediatrics, and imaging, for example—may have its own medical records and database (or filing cabinets filled with paper: in an interview with CNET, Intel CEO Paul Ottelini called healthcare the industry “least penetrated by IT in the world”). Physicians frequently keep patient charts on paper in manila folders, and every health insurer may have its own payment policies and codes for medical procedures, which is particularly a problem in the United States, which has more than 1,500 private insurers as well as hundreds of public insurance programs. Regulatory and legal standards impose special constraints on how records are designed, stored, and shared.