Market research firm INPUT estimates that state and local government health organizations will increase their purchases of healthcare information technology from $7.6 billion in 2009 to $9.6 billion in 2014 at a compound annual growth rate (CAGR) of 4.6 percent.

INPUT's Health IT Transformation: FY2009-FY2014 State and Local Market Forecast states that the market will be driven largely by the purchase of electronic health records at public hospitals and health organizations

Key market forces currently shaping the healthcare IT market, according to INPUT include:

* The budget crisis;
* National healthcare reform and Obama healthcare initiatives;
* Stimulus funding for electronic health record adoption (American Reinvestment and Recovery Act);
* Standards and certifications;
* Health IT Interoperability.

Health IT will enable healthcare reform by reducing costs and improving outcomes, the report notes. State and local governments' reliance on technology in the healthcare arena continues to present opportunities for vendors who are agile and present creative, cost effective solutions for public hospitals and health organizations. Electronic health records implementations and upgrades at public hospitals and healthcare facilities present the highest growth opportunity for vendors in this vertical market.