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Regional extension centers starting to pick preferred EHR vendors

The nation’s regional extension centers (REC) are beginning to name the electronic health record vendors toward which they intend to steer providers who need to implement EHR technology. It’s still early in the game — only six RECs in five states have listed their preferred vendors — but a recent report from investment firm Morgan Keegan suggests there nonetheless are some trends worth noting.

  • EHR vendors with a strong regional foothold should do well. eClinicalWorks LLC and MDLand International (in the Northeast), and Electronic Healthcare Systems Inc. (in the Southeast) have all made the cut in their respective regions thus far, though it’s too early to tell if they will be able to grow beyond their borders.
  • So too should companies that cater to small practices. Because the regional extension centers aim to help providers with just a few users of EHR software, it’s no surprise that such vendors as eClinicalWorks, athenahealth Inc. and especially, Greenway Medical Technologies Inc. have nabbed a greater REC share than their overall market share. Greenway is in a particularly good position, according to Morgan Keegan: “[T]he REC program could be a life-changer for this company.”
  • Bigger is not necessarily better. This applies both to EHR vendors that target large practices, such as General Electric Co. and Epic Systems Corp., and to large companies with a rather fragmented customer base built through acquisition, such as McKesson Corp. and Sage Software LLC. For the former group, missing out on preferred status among regional extension centers is no big deal — and in fact, represents a sound strategy. For the latter group, such losses may be a missed opportunity.

As stated, it’s still early. More than 50 regional extension centers must still declare their intentions, and Morgan Keegan estimates that as many as one third of all RECs will opt for an open program that names no preferred vendors. Still, the process bears at least a slight resemblance to Social Darwinism, and it will be interesting to watch.

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