- While fewer large hospitals and health systems are buying EHRs nowadays, those that do opt for Epic, KLAS Research reports. Among the only three large private-sector organizations that purchased EHRs in 2018, all went with Epic, switching from Cerner or Allscripts.
- For the second straight year, Cerner inked the most new hospitals, thanks to its $10 billion deal with the Department of Veterans Affairs, which includes 147 acute care and 20 specialty contracts. That momentum was tempered, however, by the loss of 65 Millennium EHR customers in the private hospital sector — 52 from one health system.
- Together, Epic and Cerner dominate the large, 500+ bed hospital space, with a combined 58% and 27% market share respectively of 85% overall. Among all acute care hospitals in the U.S., the pair command 54% of the market, with Epic claiming 28% and Cerner 26%.
EHR purchases in 2018 outpaced those of the previous two years, with a total of 445 decisions across the hospital spectrum. Helping to fuel those deals was continued consolidation in the healthcare industry. As organizations merge, they often seek to integrate onto a mutual platform — a trend that has benefited Epic and Cerner. Since 2014, a fifth of all EHR switches at acute care hospitals have stemmed from mergers and acquisitions, according to the report.
On the losing end of M&A is Meditech, which lost 16 of its 33 hospitals in 2018 as a result of industry mergers. Consolidation also impacted Allscripts, which saw 14 hospitals (nine from one organization) ditch its Sunrise Clinical Manager platform for Epic. Another 16 hospitals left switched from its Paragon EHR to Cerner, Epic, Meditech or CPSI.
By now, most large organizations are heavily invested in a single, enterprise-wide system, meaning future deals will be hotly contested and require major do-overs, KLAS researchers say. Just four vendors remain in this space: Epic with 163 hospitals, Cerner (77), Allscripts (16) and Meditech (12). Only Epic and Cerner have seen net market share grow over the past decade.
Location also matters, as hospitals look to match their EHRs with those used by other organizations in their area. "Even though Carequality and CommonWell help make interoperability between EMR vendors more possible, many organizations still prefer to achieve interoperability by using the same system as the hospitals in their network," the report says.
In the small hospital space, athenahealth's growth slowed in 2018, with no verified new contracts for eClinicalWorks and customers that contracted for its inpatient system still awaiting the initial beta product, the report says. Organizations reported that the vendor "paused sales and stopped responding to RFPs" in the second half the year amid uncertainty about its future. The company, which has been diversifying its revenue streams as hospital adoption of EHRs has neared saturation, was acquired by Veritas Capital and Evergreen Coast Capital, a subsidiary of Elliott Management subsidiary.
Benefiting from athenahealth's "pause" was CPSI, which faced pressure in recent years from athenaClinicals for Hospitals & Health Systems. Seven hospitals that had left CPSI for athenahealth returned in 2018, the report notes. Both CPSI and Medhost saw a significant drop in losses last year and more stable market share.
KLAS also rates vendors' EHRs based on performance data in six categories: culture, loyalty, operations, product, relationship and value. Epic's EpicCare Inpatient EHR scored the highest with an overall rating of A-, the only system evaluated that ranked higher than B.
Meditech and athenahealth each got B's overall for their Expanse and athenaClinicals for Hospitals & Health Systems products, respectively. The lowest score went to Allscripts' Paragon EHR, which earned an F in all categories except operations, which got a D-.