Venture investment in health IT products such as electronic health records and practice management systems continues to increase, as a new report from Dow Jones VentureSource indicates that total investment in this area grew by 19 percent in 2010, according to iHealth Beat.
The report shows that capital investment in health IT hit $460 million in 2010, which is up from the $387.5 million in capital raised in 2009. This growth trend is expected to continue in the years to come, as investors will likely be interested in reaping some of the rewards generated by the government's EHR incentive program.
Jessica Canning, the researcher who collected the data, told InformationWeek that investment in healthcare IT is also strong because these technologies generally offer a quicker return on investment than some other vehicles.
"The information management and software area is really the sweet spot for venture capitalists whether in healthcare or in IT overall," she told the news source. "It fits their investment model the best because it's much easier to get up and running. It has a shorter investment lifecycle compared with trying to develop new drugs or new cancer research."