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HITECH Spurs EHR Vendor Competition and Innovation, Resulting in Increased Adoption
Seth Joseph, MBA; Max Sow, MBA; Michael F. Furukawa, PhD; Steven Posnack, MS, MHS; and Mary Ann Chaffee, MS, MA
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HITECH Spurs EHR Vendor Competition and Innovation, Resulting in Increased Adoption

Seth Joseph, MBA; Max Sow, MBA; Michael F. Furukawa, PhD; Steven Posnack, MS, MHS; and Mary Ann Chaffee, MS, MA
This is the first empirical evidence to demonstrate increased competition and innovation in the EHR industry as a result of the HITECH program.
There are several limitations to our study. First, the comparison of EHR vendors was based on measuring EHR and e-prescribing vendors with at least 1 active prescriber on the Surescripts network and at least 1 eligible professional who successfully attested for the EHR incentive program. While we believe this type of comparison is the most valid way to compare data between Surescripts and ONC/CMS, it is possible that a comparison of all vendors certified by each organization (regardless of whether they have demonstrated market viability) may yield different results.

Second, we had a limited ability to positively identify applications as either Web-based or traditional software; while (Surescripts) certifies vendors and applications, we do not collect information during the certification process as to whether the technology is Web-based or software. During the course of our study, between 42% and 49% of new physician users each year selected an application we were unable to positively identify here as either Web-based or traditional. While we are confident in the remaining data as representative of market trends, our findings as presented in Figure 4 should therefore be considered directional only at this point.

Third, because this study uses e-prescribing data from the Surescripts network, it is important to note that our visibility to EHR users is limited to providers who not only adopt an EHR but also e-prescribe through Surescripts. While the majority of providers nationwide were actively e-prescribing through Surescripts as of the study period, it is possible that our study may underrepresent certain market segments or EHR vendors.

Finally, our study should be considered within the broader context and timeline of implementation of the HITECH Act and MU stages. We have reviewed industry and market data through the first quarter of 2012, which provides insight only through the very beginning of MU Stage 1. Given the more rigorous technical interoperability requirements moving forward, our data and findings should be viewed as representative only of early-stage progress.

DISCUSSION

Policy makers enacted HITECH to spur physician adoption of HIT, believing it a significant step towards facilitating increased care coordination, improving outcomes, and empowering providers and patients by giving them access to more information. HITECH authorized a multipronged approach to support this effort, including financial incentives, the establishment of a certification program, funding for health information exchanges, regional extension centers to provide education and support services, and grants to advance test specific use cases for HIT, such as to improve care coordination. These provisions, designed to remove barriers to adoption, also created an initial environment of uncertainty among providers and EHR vendors.

Despite that uncertainty, however, the results from this study suggest that HITECH is driving fundamental market and industry changes that we believe increase the likelihood that physician use of EHRs will become a central component of how medicine is practiced. For example, the proliferation of EHR vendors since HITECH was enacted in 2009—from 96 to more than 229 as of early 2012—suggests that the legislation has spurred increased competition among these vendors. During the same time, we have seen business-model innovation from EHR vendors to attract small office practices; this seems to be resonating in the marketplace, as evidenced by the proportion (15%-35%) of small office prescribers now adopting Web-based applications. In addition, as the final barometer of success, the number of prescribers using an EHR to e-prescribe increased close to 300%, from 103,458 to 401,651, in the 3 years between HITECH’s enactment and the end of the study period.

We believe there have been 3 key components to HITECH’s success in driving substantial industry and market changes thus far. First, the Act provides financial incentives for providers, which puts the market (not the federal government) in the position of determining which vendors most effectively meet provider needs. Additionally, we believe these financial incentives created a catalyst for the EHR industry to compete for market segments that were previously economically unappealing.26,27 New market segments attracted private capital and increased competition, which spurred industry business model innovation that appears to be resonating with small practices.28

Second, the Act called for a certification process for EHR vendors, which reduced provider uncertainty by establishing an unbiased validation service to ensure that certain functionality is available. Equally important, ONC was able to quickly determine the certification criteria and implement them within a very short time frame by establishing a novel public-private approach that leveraged existing expertise within the federal government (National Institute of Standards and Technology) with private entities possessing HIT certification expertise.

Third, the Act requires providers to meaningfully use certified EHR technology. By staging the requirements to meet MU, CMS has set the expectation that providers must commit to the continued use of EHR technology over a period of years. While debates continue over the measurement thresholds and programmatic timelines, the basic premise of MU requires that both sides—physician market and EHR industry—work together to improve care delivery.

CONCLUSION

We believe it is premature to judge HITECH’s overall impact since its numerous programs will continue to evolve and shape the healthcare landscape for many years. This study documents, for the first time, that in addition to provider adoption, there is change occurring in the EHR industry that has matched the pace of market changes. Tracking market behavior and EHR vendor activity over time may provide clues about the program’s lasting impact. We are encouraged by its findings and therefore hopeful that as HITECH’s programs continue, we will see the market continue to respond to greater demands for interoperability and patient engagement.

Author Affiliations: Surescripts, Arlington, VA (SJ, MS, MAC); Agency for Healthcare Research and Quality, Department of Health and Human Services, Rockville, MD (MFF); Office of National Coordinator for Health Information Technology, Department of Health and Human Services, Washington, DC (MFF, SP).

Funding Source: None reported.

Author Disclosures: The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (SJ, MS, MFF); acquisition of data (SJ, MS); analysis and interpretation of data (SJ, MS, MFF); drafting of the manuscript (SJ, MS, MAC); critical revision of the manuscript for important intellectual content (SJ, MS, MFF, SP); administrative, technical, or logistic support (MAC).

Address correspondence to: Mary Ann Chaffee, MS, MA, Surescripts, 2800 Crystal Dr, Arlington, VA 22202. E-mail: Maryann.chaffee@surescripts.com.
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