Marsha Gold, ScD; Mynti Hossain, MPP; Dustin R. Charles, MPH; and Michael F. Furukawa, PhD
The Health Information Technology for Economic and Clinical Health (HITECH) provisions of the American Recovery and Reinvestment Act of 2009 set ambitious goals for using health information technology (HIT) to improve healthcare delivery. Critical first steps for success involve rapid nationwide adoption of electronic health records (EHRs) and electronic health information exchange to support delivery improvements. In previous work, we examined critical drivers of adoption and exchange, finding that some of these drivers were not directly under HITECH or government control.1
In this study, we examine in more depth the evolution of one such driver: the availability of vendor products offering EHRs to eligible professionals, especially in office-based practice. (Other drivers of adoption are affordability, practice integration, and provider attitudes.)
Availability is particularly relevant to ambulatory care. Before HITECH, use of EHRs in office-based practice was much less developed than in the inpatient environment; products serving smaller office-based practices were particularly limited in both number and functionality.2,3
While the percentage of office-based physicians making any use of an EHR has risen over time,4
adoption rates are uneven, with uptake substantially lower for certified products that meet uniform nationwide standards. The HITECH objective was to combine such standards with meaningful use incentives and regional extension center support for high-priority roviders to accelerate development of a strong vendor market with certified EHR products suitable to ambulatory and inpatient settings.STUDY QUESTIONS AND METHODS
This study sought to further our understanding of the industry, which is evolving to meet the demand for HITECH-relevant ambulatory EHRs. It addressed 3 questions:
1. How has the vendor market for ambulatory products evolved with the implementation of HITECH?
2. What role do vendors play in the market, and how do they function currently?
3. How will the market evolve in the future, and what tools do policy makers have to shape it?
Because the vendor market is relatively new, there is not a welldeveloped, peer-reviewed literature on the industry and many available sources are proprietary. To begin filling this gap, we used available information to answer these 3 questions. Three main sources of information were used:
Documents, including available industry reports and information on company websites (the “grey literature”).
Operational data that federal agencies have developed in the context of certifying vendor products and reviewing applications from eligible professionals for meaningful use payments.
Telephone interviews with 10 diverse vendors in the ambulatory EHR market in March and April 2012.
Lacking an established sample frame, we used information in the trade press to identify a mix of vendors active in the ambulatory market that were diverse in company origins (hospital industry versus others), age, target market, and product design features as reflected in trade publications. Before finalizing our recommendations, we discussed them with Office of the National Coordinator staff, including high-level leadership familiar with the industry. Interviews were guided by a semistructured protocol covering topics relating to market position, marketing and provider support, certification, meaningful use requirements, interaction with federal programs, and future directions and issues. We asked to speak for 45 minutes with each firm’s most senior executive(s) who had strategic and operational oversight of product development, sales, and provider support of certified electronic medical record product(s). To encourage cooperation, we assured interviewees that their comments would be confidential and not reported by firm.We also elicited the cooperation of the Healthcare Information and Management Systems Society Electronic Health Record Association, which then encouraged its members to respond. (The Electronic Health Record Association had no role in choosing interviewees or topics covered and played no role in the analysis.) Interviews were conducted in March and April 2012; 10 of 11 solicited vendors responded. Our lead author conducted each interview, and a research associate participated in the call, taking detailed notes to support analysis.Table 1
shows selected characteristics of the vendors we interviewed. While most were relatively large, their gross revenues ranged from the low millions to billions, sometimes including revenue from a parent company. Most currently are publicly traded, sometimes as subsidiaries of larger parent companies such as General Electric and Quest Diagnostics. Epic, founded in 1979, remains a private, employee-held company. e-MDs is privately held, as is Practice Fusion, a start-up firm founded with capital from Silicon Valley entrepreneurs. The origins of the 10 vendors also differ. Some were founded by clinicians for ambulatory uses (Greenway,e-MDs), and others added EHRs to existing product lines that tend to emphasize practice management products (athenahealth, NextGen, Cerner) or HIT in support of laboratory testing (MedPlus). Vendors also differed in the emphases of their marketing (see the Company Public Tag Line column, Table 1).
Given their small number, interviewees obviously did not represent all vendors; however, they did represent a sizable share of the market (57% of all eligible professionals receiving stage 1 payments by October 2012). Interviewee responses also reflected the vendor perspective and should be understood in this context. We relied on vendor reports to describe the way the industry functions but applied a critical eye in assessing the policy implications.MARKET EVOLUTION AND CURRENT STRUCTUREMarket Scope
The market for ambulatory EHR products is potentially quite large. Frost and Sullivan estimated that the US market was likely to double, from $1.3 billion to an estimated $2.6 billion in revenue between 2009 and 2012, peaking at $3 billion in 2013 before falling off as saturation occurred.5
These are large numbers. Customers for ambulatory products are diverse, including not only new practices but also those looking to replace existing systems with new certified options that better position them to meet increasingly stringent meaningful use requirements in HITECH stages 2 and 3.6
One analysis found that 35% of practices considering acquisitions were replacing their existing products (vs buying new ones), with replacement particularly likely in larger practices.Market Growth
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