Hospital EHR adoption is expected to expand significantly as advanced systems are implemented to meet Meaningful Use criteria, a Frost & Sullivan study says.
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Total market revenue for electronic health records (EHRs) is expected to hit $6.5 billion in 2012, which is more than a sixfold increase from the $973.2 million posted in 2009, a study from Frost & Sullivan predicts. The rise in EHR revenues is primarily due to new licensing and upgrades as hospitals get their EHR systems ready to meet Meaningful Use requirements.
"Sales of EHR systems doubled from 2009 to 2010 so you can really say that that was a direct impact of the HITECH Act," Nancy Fabozzi, industry analyst at Frost & Sullivan, told InformationWeek Healthcare. "There was such a low baseline to move up from and everyone I talked to said there is an almost singular focus in hospitals today in terms of purchasing EHRs and getting that functionality to be able to meet Meaningful Use."
[ Legally, EHRs are double-edged swords: They protect clinicians from malpractice litigation but also put them at greater risk. See Will Your EHR Land You In Court? ]
Fabozzi, who is also the report's author, said she relied on existing research and spoke with key market participants such as technology vendors, healthcare CIOs, and payers to develop its findings. She said key executives stressed the importance of the Medicare and Medicaid EHR Incentive Programs, saying that for many hospitals EHR incentive payments are worth millions of dollars, which is money that these organizations can't afford to leave on the table. Hospitals are also very aware of the penalties they will face if they don't implement EHRs after 2015.
Fabozzi also pointed to other factors that are encouraging EHR adoption, including the role that computerized patient information plays in advancing the practice of evidence-based medicine and comparative effectiveness research. And then there are Accountable Care Organizations (ACOs), which require data analytics to verify quality and cost performance, and health insurers who want to collect more data about the process of care and care outcomes.
In recent years, clinicians have also embraced mobile devices that connect with EHRs, providing a new method of entering and accessing patient data from their iPads or smartphones.
"Hospitals absolutely understand that they have to have a new business model and EHRs are at the heart of that change," according to Fabozzi. "It's about collecting, analyzing and exchanging data--they can't do that without an EHR, which is why for hospitals the adoption of an EHR is inevitable."
The report also predicts that as health IT executives implement new clinical systems and practice management software, they are looking at reducing the number of vendors and reorganizing the way they do business with technology providers. While many hospitals have already picked their key clinical systems vendors, they might still change vendors further down the road.
According to Fabozzi, this shift is being prodded along by the fact that larger hospitals are purchasing smaller ones and larger physician groups are buying smaller physician practices. These mergers and acquisitions in the hospital sector present hospital executives with an opportunity to reduce number of technology vendors they use.
"We are going to see a natural consolidation and vendor rationalization is happening across the board, as the Cerners and the Epics move in and take larger and larger market share," Fabozzi said. "Hospital CIOs don't want to deal with so many vendors; they want to replace some of their systems and, as much as possible, have one single vendor to keep track of more easily."
. We've got a management crisis right now, and we've also got an engagement crisis. Could the two be linked? Tune in for the next installment of IT Life Radio, Wednesday May 20th at 3PM ET to find out.