The finalized numbers for the federal Electronic Health Record (EHR) incentive program (Meaningful Use) allow for some insights into the state of the EHR vendor industry. A table of successful Stage 1 Meaningful Use attesters for 2011, including which EHR was used by each individual attester, is available at data.gov, and can be downloaded here.
Certainly, successful Meaningful Use attestation in 2011 is a fairly small subset of total EHR users. Many physicians either did not qualify, or did not qualify in time for 2011 attestation, or were short on some of the criteria and were unable to achieve their status as “successful attesters.” Nevertheless, a review of the publically available data for successful Meaningful Use attesters can give insights into the EHR vendor landscape.
Meaningful Use for ambulatory practices
About 49,000 “eligible professionals” successfully attested to Stage 1 Meaningful Use in 2011 – this is for the Medicare version of the program. Given that the Medicaid version of the program is administered by each state, the data.gov report only includes Medicare payees; Medicaid payments by vendor is not centrally available. Nevertheless, when compared to total 2011 registrations, the number is small: there were 123,921 registrants in the Medicare program for 2011 (49,051 in the Medicaid program), according to CMS. That means that only 39.6% of those who registered for the Meaningful Use program were successfully able to attest in 2011.
For ambulatory Meaningful Use, there were 284 different EHR systems used. That is a very wide field, and speaks to the challenges in achieving interoperability between different systems used by different clinicians – even those who were active, successful Meaningful Users. However, much of the usage is concentrated in a relatively small handful of vendors. In fact, only 12 different vendors were used by over 1,000 physicians – those 12 vendors account for 70.7% of all attestations. After those top 12, the numbers fall off pretty quickly
One way of seeing the relative vendor utilization for achievement of Meaningful Use is in this table:
|Epic Systems Corporation||11,075|
|Greenway Medical Technologies, Inc.||1,650|
|Community Computer Service, Inc.||1,264|
|All Others (272)||14,358|
Another way of looking at this data is with a pie chart:
Conclusions? The vendor landscape is extremely scattered among a large number of products, each with relatively small uptake (once you get past the top 12). This presents a challenge in interoperability. There will likely be consolidation in this market, with many of the smaller players either being acquired, or going out of business, or addressing a particular unique niche among physicians. On the other hand, this is a setting where innovation from relatively new start-ups can make an impact, which has been the case in the past few years.
Another point to make is about Epic. Epic is clearly the largest apparent vendor in the ambulatory space, yet it is mainly a system used in hospitals, academic medical centers and integrated delivery networks (IDNs) – it does not really address ambulatory care in a stand-alone capacity. It does not market to independent clinics, or even independent physician groups (like free-standing IPAs). All of its ambulatory usage is found in owned or affiliated clinics who use the “ambulatory” add-on of an Epic-using hospital. The dominance of Epic in the ambulatory Meaningful Use arena indicates the extent to which clinical office practices are owned or operated by Epic-using hospitals.
Hospital Meaningful Use
The vendor landscape is even more concentrated on the hospital side. Much of the focus of Meaningful Use has been on the hospital side, and many of the criteria are really stemming from hospital workflows (CPOE, Transition of Care, etc.). The loudest voices over the difficulty in achieving Meaningful Use has come from hospitals.
CMS data shows that 3,077 hospitals registered for Meaningful Use in 2011, but successful hospital attestations totaled 1,913 – or 62.2% of registrants were able to successfully attest in 2011 (Medicare). This is better than the ambulatory (“eligible professionals”) successful attestation rate of 39.6%
There were 59 different systems used by hospitals for Medicare attestation. The top 5 systems, however, accounted for 72.5% of hospital attestations – much more concentrated than on the ambulatory side. In tabular form, the vendor distribution looks like this:
|Epic Systems Corporation||349|
|HCA Information & Technology Services, Inc.||264|
|CPSI (Computer Programs and Systems), Inc.||148|
|All Others (54)||526|
Graphically, the vendor distribution among hospitals looks like this:
Looking at the data on successful Meaningful Use attestation (Medicare) for 2011 can yield some good insights into the EHR vendor community. Granted that these figures under-count actual EHR usage in this country in 2011, they nevertheless portray patterns found in the most active and successful EHR users among physicians.
The ambulatory EHR space is very broad, with some concentration at the top – the 12 top vendors represent 70.7% of all attestations, with the remaining 29.3% being distributed among 272 other vendors. Clearly, there will be consolidation in these ranks in the future, though small niche players still have opportunity.
The hospital EHR side is much more consolidated among very-large enterprise vendors, with 5 vendors accounting for 72.5% of hospital successful attestations. Much more money is concentrated here – a successful ambulatory practitioner can get up to $44,000 in EHR incentives from the Medicare program (up to $18,000 the first year), whereas the average hospital attester receives in the range of $1 million each. Given the consolidation in the hospital EHR arena, the inherent complexity of hospital workflows, and the very-large enterprise installations in that setting, innovation from inventive start-ups is less likely to move that needle than in the ambulatory space.
This is a challenge for the industry – how can innovation, which has been prominent in the ambulatory space, make an impact on hospital systems? It seems that external forces (federal policy) may have more of an effect than innovation-based market competition. New capabilities around interoperability and patient engagement are prominent in Stage 2 Meaningful Use proposed rules, which exerts outside pressure on these vendors to change. Absent such external forces, there may be little other pressure to effect change in the hospital EHR realm. It will be interesting to see how Stage 2 and Stage 3 Meaningful Use play out, particularly in the landscape of EHR vendors that address the hospital side of the leger.