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Why the electronic health record (EHR) market is poised for disruption

Brian Eastwood | Feb. 11, 2014
Simply put, 2014 is a big year for electronic health record vendors. They must adhere to stricter standards under the federal government's meaningful use program while convincing healthcare providers that they can meet future needs for information exchange, patient engagement and data analytics. Not everyone will make the cut.

Dan Riskin, CEO and co-founder of Health Fidelity, suggests that healthcare has built an EHR industry that merely captures data. It's like looking at a bowl of flour and insisting it's a cake, he says; many other ingredients are needed. Getting EHR software up and running, isn't the goal, he says; it's reducing costs and improving care.

The logical next step, Riskin says, is getting that full set of clinical data into a data warehouse - not just for reporting requirements, mind you, but for analytics and population health management. That requires full data sets. Right now, most EHR software provides only a tiny fraction of the data. Thanks to poor workflows, users ignore the myriad dropdowns in their EHR systems and instead make extensive use of free-form text notes that, as unstructured data sets, don't make it into the data warehouse.

Like Hanover, Riskin says turnkey systems, not EHR software itself, will be the answer here. (As an example, he points to the meaningful use stage 2 reporting modules popping up in today's EHR systems.) Why? Organizations with underperforming EHR systems face the Catch-22 of solving immediate problems with a bad architecture now or trying to re-architect in a few years' time.

If nothing else, market pressures will come into play. There's "no conceivable future," he says, when any EHR module will get an organization where it needs to be and it won't have to improve outcomes or reduce costs, whether it's through the accountable care organization (ACO), Medicare Home Health Compare or another risk- and value-based model.

Or, as Hanover puts it, "It's about monetizing those EHR investments, and hospitals can't do that without analytics."

Success Stems From EHR Best Practices
Given the state of affairs, can anyone succeed in the fragmented EHR market? In Software Advice's ongoing EHR Software User Survey, the top system that respondents use, by a huge margin, is Other.

As it stands, the EHR market is poised to grow for a few more years; only about half of U.S. hospitals have an EHR system. The challenge for vendors, of course, is that that segment is harder to convince than EHR early adopters. That said, many hospitals must replace homegrown or legacy EHR systems to meet stages 2 and 3 of meaningful use, as well as the more complex needs of the ACO model.

This prompted KLAS Research to conclude that the EHR market isn't as close to saturation as previously reckoned. KLAS also found that Epic Systems, the unarguable market leader, which claims to hold patient records for half of Americans, doesn't win as many contracts as it once did, increasingly losing out to Cerner. On top of that, in the most recent KLAS ranking, Epic lost its best EHR software rating to athenahealth, ending an eight-year reign.


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