Healthcare // Electronic Health Records
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8/31/2010
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EHR Revenue To Hit $3 Billion In 2013

Changes in reimbursement practices more important that government incentives in driving physician practices to adopt electronic health record software, reports Frost & Sullivan.




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A study by Frost & Sullivan predicts that revenue for the U.S. ambulatory electronic health record (EHR) market will double from $1.3 billion in 2009 to an estimated $2.6 billion in 2012. Further, by 2013, the market will reach its peak, posting revenue of $3 billion. However, by 2016 market saturation will have occurred and revenue is expected to fall to $1.4 billion.

Published this month, the U.S. Ambulatory EHR Market report said that, while the federal funds from the American Recovery and Reinvestment Act of 2009 and the Medicare and Medicaid EHR incentive programs are contributing to the acceleration of EHR adoption, there are other factors such as the need to improve safety and the drive to build greater efficiency into physician workflows that are important drivers in the adoption of EHRs.

"I think the number one driver [of ambulatory EHR adoption] is the change in reimbursement, the fact that it is becoming so complicated to document the process of care to get paid by the government as well as commercial payers," said Nancy Fabozzi, a senior industry analyst at Frost & Sullivan and the report's author. "Everybody thinks that fee-for-service is doomed and we have to have a new system of reimbursing physicians for the quality of care instead of the quantity of care because costs are exploding."

In an interview with InformationWeek, Fabozzi said another reason for the adoption of ambulatory EHRs is that many providers have practice management systems that are old and need to be updated as they move to ICD-10 and HIPAA 5010 requirements.

She also said that there has been an ongoing upward trajectory in the adoption of EHRs for the past decade, albeit slow prior to the injection of federal funds to jumpstart EHR adoption.

"It's been slow but it has been a continual upward trajectory. That train was moving anyway, but it's now moving a little bit faster because of the policies of the Obama administration. If you're pumping $40 billion into a marketplace it's going to have some impact," Fabozzi added.

Over the past year, the Health Information Technology for Economic and Clinical Health (HITECH) Act has significantly increased public awareness around the issue of EHRs. In addition to direct payments to physicians and hospitals for the meaningful use of EHRs, HITECH will indirectly stimulate the market by enticing additional stakeholders like commercial payers, professional medical societies, healthcare manufacturers, and various nonprofit organizations to help physicians and other providers successfully adopt IT in their practices.

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