- Smaller hospitals are now the fastest growing segment of the EHR market, accounting for 80% of the 216 acute care hospital contracts last year, according to a new Klas Research report.
- However, resource constraints led more than half of smaller hospitals (up to 200 beds) to choose more modestly priced or less resource-intensive EHR platforms such as athenahealth, MEDITECH and community deployment models offered by Epic and Cerner.
- Among small hospitals, athenahealth’s inpatient product was the clear favorite with 41% of contract wins, followed by Cerner (22%), Epic (19%), MEDITECH (15%) and eClinicalWorks (2%).
The report underscores smaller hospital eagerness to get on board the digital train and EHR company efforts to stand out in a maturing market.
Hunger for interoperability drove many EHR decisions, with organizations leaning toward Cerner and Epic to solve that issue. “So far, no vendor offers vendor-agnostic plug-and-play interoperability, but organizations using Epic report higher interoperability satisfaction,” the report says. Epic customers also reported higher satisfaction with integration.
Across all hospital sizes, Cerner had the most wins in 2017 with 38 hospitals, but also suffered some losses, to claim 24.8% of the acute care EHR market. The report notes that 60% of Cerner's losses were due to customer standardization activity and not performance challenges. Epic had 28 wins, but no losses, which bumped its market share up to 26.7%.
As the two companies struggle for market dominance, they are also feuding over contracts. Cerner has alleged that Epic won a recent $62 million contract by unfair means, (a claim Epic denies) and Cerner President Zane Burker told shareholders last week an unnamed competitor had spread false claims about Cerner's project with the Department of Defense. That's not the only contentious issue for vendors right now. Athenahealth is facing a forceful buyout offer from an activist investor, and the company is under a lot of pressure to take the deal.
Interest in cloud solutions also drove deals last year, the report shows. MEDITECH registered its first increase in three years, thanks to its Expanse cloud-based tool. Nearly six in 10 legacy EHR customers who opted for a new system in 2017 went with Expanse versus other vendors’ products. Healthcare organization continue to be interested in cloud storage and applications, but maintain privacy and security concerns. Still, the global healthcare cloud computing market is expected to reach $35 billion by 2022.
Allscripts, which acquired McKesson’s Paragon and Horizon EHRs to nearly double its acute care customer base, lost sales to hospitals that decided to switch to other vendors. In particular, two large health systems switched from Allscripts’ Sunrise Clinical Manager to Epic in a move to simplify their IT infrastructure and integrate systems enterprise-wide, according to the report. SCM sales were down 20% overall for the year. Paragon and Horizon sales also declined by 12% and 15%, respectively.
Allscripts, which reported increased revenue and bookings for the first quarter of this year, has been refining its business strategy recently. The company is focusing on platforms, and has made acquisitions that boost patient engagement and cloud-based offerings. Allscripts CEO Paul Black, speaking earlier this month at HLTH 2018, emphasized that EHR companies need to be thinking about interoperability. "There's no way that there's only going to be one electronic medical record that's out there. It's just impossible for that to occur," he said. "There are multiple different transaction systems. That begins the need for adding a couple of new, innovative ideas."
Epic, meanwhile, rolled out its new Sonnet EHR in March. The system, a scaled-down version of its enterprise EHR All Terrain, is aimed at smaller hospitals with ancillary services, post-acute care facilities, physician practices and critical access hospitals.