The Present and Future of the EMR App Market

For the past nine years, HIMSS Analytics has tapped into its massive database on the state of health IT adoption in hospitals across the country to compile a market overview report. Two years ago, the new vice president of market research, Lorren Pettit, decided to shake things up.

"Last year's was the first edition where we really presented the depth of all the information we have," says Mr. Pettit. The HIMSS Analytics database contains information on the health IT adoption at 5,400 hospitals across the country, kept up to date by an entire team at the HIMSS Analytics offices in Chicago who spend their days calling all the hospitals for IT updates. All this information allowed Mr. Pettit and HIMSS Analytics to begin compiling reports giving an unprecedented in-depth look at the state of the industry.

This year, the report focuses on the health IT apps related to progressing up the HIMSS Analytics EMR Adoption ModelSM. The report details the rate at which hospitals have been acquiring apps that add functionalities and value to EMRs, such as computerized physician order entry, pharmacy barcoding and clinical decision support.

One of the largest growth areas in the market currently is what Mr. Pettit calls "legacy systems" — pharmacy management, laboratory management and similar systems associated with basic-functioning EMRs, or stage 1 on the HIMSS Analytics' EMRAM model. These systems have all been on the market for years and are currently installed in more than 95 percent of hospitals and health systems across the country — laboratory information system penetration has hit 97.3 percent, followed by pharmacy management (96.2 percent) and radiology information (95.4 percent) systems.

However, a growing replacement market as healthcare organizations upgrade their systems and refine their strategies will keep sales up, says Mr. Pettit. The report predicts laboratory information system sales will grow 1.1 percent during the next five years, with growth continuing in pharmacy management (1 percent) and radiology information systems (0.3 percent) as well.

One of the largest growth areas predicted by the report is for clinical business intelligence and data mining apps. These systems are currently used by 27.1 percent and 44.3 percent of hospitals and health systems, respectively, but the increased interest in these apps coupled with their relatively low market penetration suggests room for significant expansion in the coming years. The report predicts the market for these systems will grow 4.4 percent during the next five years, the largest growth expected for any app studied.

"Hospitals have been gathering technology to gather information for a while," says Mr. Pettit. "Now they're realizing its time to do something with all that information."

The report also analyzed shifts in market share among vendors. Researchers calculated vendors' "win-loss" performance by tracking the hospitals that had one vendor's app one year and another vendor's app the next, identifying shifts in favor of or against specific vendors. One of the biggest "winners" was Cerner, which has seen an uptick in net gains over the past four years, says Mr. Pettit. "It really suggests Cerner has instituted some strategy that's resonating with people," he says.

Cerner's gains were mostly offset by losses for Epic, says Mr. Pettit. "Epic has had a huge rock-star trajectory over the past four or five years, and in many ways has had more 'wins' than Cerner," he says. "But they're the ones who seem to take the hit [from Cerner's gains]."

The health IT market will continue to grow in 2014 and beyond, as hospitals continue to acquire and replace needed technologies. However, the report also found overall hospital acquisitions of EMR apps have been slowing relative to recent years. This does not necessarily mean the market has peaked, says Mr. Pettit, just that for the past few years, federal incentives caused hospitals to purchase technology at a furious pace.

"Meaningful use created what I call an 'unnatural market;' the government came in and through all these incentives directed the attention of hospitals to apps related to EMRs," says Mr. Pettit, causing hospitals to acquire a vast amount of technology very quickly. "But as hospitals meet these [meaningful use] requirements, there will be a natural decline in the marketplace, and that's what we're seeing here."

Eventually, as meaningful use fades into the background in the next few years, the EMR market will become driven solely by market forces. "And what will happen when the market transitions back to natural?" says Mr. Pettit. "That will be fascinating to see."

More Articles on EMRs:

Study: EHRs Linked to Less Physician Eye Contact With Patients
The Case for Involving Physicians in Data Analytics
CIOs Share 7 Best Practices for Reaching HIMSS Stage 7

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