Epic sees opportunity in smaller hospital, physician practice space

The EHR giant is looking to roll out parsed down versions of their legacy systems later this year.

Epic is wading into the smaller hospital market with less expensive, scaled-down versions of its electronic health records (EHR) system, due out later this year. In addition to the full enterprise EHR, called All Terrain, Epic will offer a mid-range version with fewer modules called Utility and a more slimmed down model with even fewer advance features and modules.

Utility will target mid- to small-size organizations, such as community hospitals with select specialties. Sonnet is poised for smaller hospitals with limited ancillary services, post-acute care facilities, physician practices and critical access hospitals.

While Epic is still figuring out the specific feature sets, both Utility and Sonnet will offer smaller application and feature scopes, lower price points and shorter project timelines than All Terrain.

“The goal is to trim out some of the features that might require additional decisions during the install process,” Adam Whitlatch, research and development team lead at Epic, tells Healthcare Dive. “But also what we’re focusing on are features that already aren’t available in other major EHRs, so the difference isn’t going to be something noticeable if you use Sonnet versus a different product.”

Whitlatch declined to discuss pricing of what specific features and capabilities the new products will have, but insisted they will not veer far from Epic’s enterprise EHR. “It’s still the same Epic … it’s fully integrated inpatient-outpatient, rest cycle, patient portal,” he says.

“You become part of the Epic community … and you get the benefits of our interoperability network Care Everywhere.”

Adam Whitlatch

Research and development team lead, Epic

Utility and Sonnet users will also have a “clear upgrade path” to the more robust All Terrain EHR system, Whitlatch added.

Stirring up competition

This isn’t the first time that Epic has set its sights on down-market opportunities. In 2003, the company teamed up with Philips to offer integrated EHRs to small and mid-sized organizations, but the partnership ended three years later.

Now Epic is looking down-market again and the move will put it in direct competition with vendors like athenahealth and Greenway Health.

Thomas Handler, vice president of research at Gartner, Inc., thinks Epic could get traction in the down-market space. “They have a pretty successful community connect program where the smaller hospitals are really being hosted by bigger hospitals,” he says.

“Certainly, in those areas where for whatever reasons the smaller hospitals don’t want to be tightly connected to the bigger hospitals, this in an opportunity for them.”

Thomas Handler

Vice President of Research, Gartner, Inc.

A lot will depend on how Epic prices its new products and how they’re able to leverage potential customers, he says.

The EHR market is expected to reach about $24 billion globally in 2020, according to Transparency Market Research. Driving growth are advantages offered by EHRs, such as quick access to patient data and improved efficiencies and workflow, and financial incentives mandated under the HITECH Act. Currently, about 85% of hospitals have chosen an EHR and those that haven’t are smaller facilities.

Meanwhile, more than 80% of physicians are using EHR systems and solo and small practices that haven’t adopted them will have to do so if they want to get incentives under MACRA, which requires some level of certified EHRs.

Betting on the cloud

If news of Epic’s new EHRs should be worrying athenahealth, it isn’t. Small hospitals have a hard time dealing with the “really heavy infrastructure, server costs and maintenance" that come with implementing some of these systems, Kyle Armbrester, chief product officer at athena, tells Healthcare Dive. "It’s too hard for them to get a CIO and a security team into rural America,” he adds

He sees the future for small hospitals in cloud technology that operates like Amazon, letting users access features across the whole network. Even with ASP models where a customized server hosts the system remotely, “it’s still a single siloed instance of software,” Armbrester says. His views reflect those of athena CEO Jonathan Bush, who recently discussed the merits of a networked approach.

Currently, athena has nearly 10% of independent small hospitals in the U.S. with 50 beds or fewer, and the goal is to reach 20% by year’s end, he says.

“Our strategy is to completely dominate the small hospital market.”

Kyle Armbrester

Chief Product Officer, athenahealth

The Watertown, MA, company is working on new mobile workflows and building out more access to clinical data and data analytics capabilities. Clinical decision support is another area athena is focusing on this year, Armbrester says. The goal is to show cash flow improvement with shorter documentation times, eliminating paper in the practice and killing manual workflows, he adds.

Understanding small hospitals’ needs

What small and rural hospitals are looking for is someone to come in and identify what their needs are and their level of IT sophistication, Frank Beaman, CEO of Faith Community Hospital in Jacksboro, TX, tells Healthcare Dive.

The rural hospital went through four EHR systems in five years before settling on athenahealth’s cloud-based system. Cost was one factor, but so was athena’s model of having skin in the game — the vendor only makes money if the hospital does. Rather than having to conform to a set product, athena asked how they could enhance Faith Community’s revenue cycle and make it work quicker, faster and cleaner, Beaman says.

Beaman also sees better security in the cloud. “All of the issues we ever had with either not having access or having any kind of security concern took place with [legacy model] systems in our building,” he says. “Not once have we had any issues with the cloud-based system.”

Beaman is skeptical that Epic will be the answer to truly small, rural hospitals. For hospitals that are part of a large system as a rural provider, it may make sense, since it would mean better continuity and information exchange. “But a freestanding rural hospital without another provider within 40 or 50 miles, I would have a hard time understanding the logic behind that,” he says.

While Epic is looking down-market and limiting functionality, athena is going upstream with an acute care product that was designed for very small hospitals and turning it into a generation 3 enterprise, Handler notes. athena acquired the product from RazorInsights in 2015, and has since partnered with University of Toledo Medical Center to speed development of an inpatient EHR.

“What we’re going to be watching is to see how well athena understands the acute care setting. They did very well in the ambulatory; let’s see how they do in acute care."

Thomas Handler

Vice President of Research, Gartner Inc.

Epic, meanwhile, will be joining big ticket EHRs like Cerner and Allscripts that have already started moving toward the smaller end of the market. “Epic has a pretty good track record of doing things the right way, so one would think that this would be successful,” Handler says.

Filed Under: Health IT Hospital Administration Practice Management
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