- The DOD contract to Cerner, Leidos and Accenture will end a period of “open-ended and premium pricing” for EHRs, according to a new IDC Health Insights perspective paper.
- The well-publicized contract will create a ROI benchmark for the large private and government EHR markets.
- The DOD based the $4.3 billion decision on the Cerner’s cost and ability for DOD to own the data, compared with the IDC-estimated $11 billion price tag for Epic System’s EHR.
In an online post, Judy Hanover, IDC research director, wrote: "Perhaps most importantly for buyers of EHR technology, the DOD award outcome focuses attention on the ROI of EHRs and increases the expectations placed on all EHR suppliers in the market."
She wrote the decision has a number of implications for the EHR market, including:
- Pricing resets: Cerner’s bid was a business clarion call to position Cerner as motivated and competitive;
- Growing focus on ROI: The contract was big on ROI and increases pressure for EHR suppliers to provide;
- Changing competitive dynamics: The contract will allow Cerner to gain traction especially in custom tiers; and
- Interoperability: The vote for Cerner wass a vote for interoperability. Such capability and open architecture will be key going forward for vendors and customers.
“IDC Health Insights expects that the DOD's ROI calculus will gain credibility among other potential buyers of EHR solutions and intensify competition not only between Epic and Cerner but between additional EHR suppliers and systems integrators across the broader EHR market,” Hanover wrote.