When the Health Information Technology for Economic and Clinical (HITECH) Act was passed and made billions of dollars available to EHR vendors by way of eligible hospitals and professionals adopting these systems, the number of EHR technologies certified for meaningful use swelled.
The reality is that the marketplace cannot sustain such a large number of certified EHR vendors and products, especially for those EHR vendors whose products were certified but never adopted and used for meaningful use attestation. It comes as no surprise then that the EHR market is already showing signs of changes, mainly in the form of mergers and acquisitions. And more is likely on its way.
“This market will consolidate,” Matthew Hawkins, CEO of Vitera Healthcare Solutions, told EHRintelligence.com following the company’s acquisition of SuccessEHS. “Obviously, the proliferation of vendors has mostly been driven by the HITECH Act of 2009 and the incentives associated with that. To keep pace with Stage 2 and Stage 3 Meaningful Use you need to have critical mass and be able to scale. There’s power in scale.”
According to Hawkins, whereas Stage 1 Meaningful Use led to new EHR vendors and products springing up across the country, Stage 2 and Stage 3 Meaningful Use are likely to check the growth of the market and in most cases push the number of certified EHR technologies and developers down:
This is the first of several consolidation plays to happen in the market. We are well positioned, and we are looking to grow our market share further. We feel there is opportunity for us in continuing to grow through just effective sales execution and demonstrating our software to prospects in the market, but we also expect to grow through a careful review of the market and acquisition of businesses that are attractive and that may not be able to make it forward to Stage 2 or Stage 3 Meaningful Use but have built a really nice presence in the market.
A major driving force behind how EHR vendor consolidation will play is the need for EHR interoperability so that data can flow between providers. This is especially important for hospitals that have acquired or affiliated with physician practices, many of which using a different EHR product.
If Vitera’s plans are any indication of what’s to come, those developers offering innovative methods for enhancing connectivity will be the most appealing candidates for acquisition.
“We’re looking at technologies — those that we’re developing and those that we’re looking to acquire — that add to our solution set,” continues Hawkins, “which can then take to providers whom we serve and be able to give them these technologies that allow and promote better patient engagement and empowerment.”
This growing emphasis on patient engagement shows the influence that Stage 2 Meaningful Use — the first phase of the EHR Incentive Programs to require certain percentages of patients to have access to have health information — is already beginning to exert.
“Healthcare lags overall as a marketplace in use of technology to drive consumerism,” explains Hawkins. “Consumerism can and will do wonderful things to help drive healthcare reform and empowering patients to take control of their own health.”
EHR vendor consolidation appears inevitable. What remains to be seen are the forms it will take and who or what companies will come out on top.
