At HIMSS 2014, the top EHR vendors will be lining up for bragging rights as they look to capitalize on new business.
There seems to be movement afoot as U.S. healthcare providers are going through sometimes-expensive trial-and-error EHR adoption. While it might seem that new EHR implementations are slowing as meaningful use moves into stage 2 and market saturation occurs, some large health systems are changing EHRs midstream. Others are worried that their vendor might not survive later-stage ONC certification and are researching replacement systems should they become necessary.
Health IT M&As remained flat in 2013, with 165 transactions taking place versus 163 in 2012.
Mercom Capital Group LLC
Here are 10 findings that seem to bear this out, from leading market research firms who recently issued updates on the EHR vendor landscape:
1. Many physicians are unhappy with their EHRs, and 67% of 967 respondents to an MPI Group survey for Medical Economics saidthat functionality drives EHR purchase or replacement decisions.
2. Providers feel EHRs cost too much. According to the same survey, 77% of groups of 10 or more physicians said they cost more than $200,000 but...
3. ...69% indicated they don't feel that their EHRs improve care coordination. Almost half said that costs will influence their decision to purchase or change EHRs.
4. Physicians' faith in their EHR vendors is waning. In that survey, 38% doubted their EHR system would be viable five years from now.
5. Cloud health IT services are moving up, taking advantage of this discontent. According to Mercom Capital Group LLC, which aggregates financial data for health IT, athenahealth Inc. reported 48% revenue growth in the fourth quarter of 2013 over the fourth quarter of 2012. For the year, its $595 million revenue represented 41% growth over 2012.
6. Cerner Corp. was heard from, too. End-of-year reports from Cerner's website indicate Q4 2013 revenue was up 12% over 2012, and full year ($2.91 billion) was up 9%.
7. McKesson Corp. is even bigger. According to GlobalData, McKesson brings in the most EHR software and services revenue ($3.3 billion in 2012) among publicly traded companies, with Cerner in second. Because it is privately held, Epic Systems Corp. was not included in GlobalData's rundown of the largest vendors. Analysts at this firm believe there will be opportunities for "consolidation and collaboration" among EHR vendors in the coming months.
8. Because of physician discontent with EHRs, a market shakeout might be coming -- but it hasn't yet. Mercom, which tracks merger and acquisition activity in the health IT space, said that M&As remained flat in 2013, with 165 transactions taking place versus 163 in 2012.
9. That being said, the $644 million acquisition of Greenway Medical Technologies by Vitera Healthcare Solutions LLC was the second-largest reported health IT merger transaction of 2013. athenahealth's $293 million acquisition of mobile drug reference apps vendor Epocrates came in third. First was Experian's $850 million acquisition of Passport Health Communications Inc., which isn't an EHR vendor, but rather specializes in healthcare payments and operations management.
10. Epic's dominance of "Best in KLAS Overall Software Vendor" ended. Health IT vendor rankings company KLAS Enterprises LLC crowned athenahealth, Inc. the top health IT vendor according to a survey of thousands of healthcare providers. Since KLAS started the category in 2008, Epic Systems Corp. had won every year. Both Epic and athena took top EHR awards in different categories for provider size and healthcare settings, so while this particular battle is over, the war isn't even close to done.