To set matters straight, our I.T. consultancy, HIS Professionals LLC, relied on decades of experience, publicly available earnings reports, corporate releases, government and commercial Web sites, and direct consultations with HIT vendors to come up with a list of top health information technology players whose business primarily comprises sales of "Hospital Information Systems," each word defined as follows:
* Hospital: The target market is primarily hospitals, not physician practices, managed care organizations, long-term care facilities or other health care organizations. Granted, many vendors sell to multiple markets, but we required the majority of their revenue to come from hospitals, which eliminates vendors that sell primarily to physician practices.
* Information: The full suite of applications needed to automate most major departments in a hospital: financial (access, HIM, and revenue cycle), and clinical (EHR, nursing, and major ancillary departments). Thus, specialty vendors that sell laboratory, time and attendance, and enterprise resource planning systems, to name a few ancillary technologies, are not included.
* Systems: The complete package of hardware, software and implementation needed to convert a hospital, and the ongoing software maintenance and support needed to keep it running. This excludes vendors like Dell whose billions in annual revenue are quite impressive, but offer hardware and consulting only, not software.
In some cases, estimates had to be made, for companies that are privately held and don't publish annual figures, or are parts of large conglomerates whose revenue includes many non-health care sectors. Estimates were based on past years when HIS revenue was reported and adjusted for market share growth/decline since that time.
The top vendors
McKesson: The Provider Technologies division continued its dominance of the HIS market by posting nearly $3.2 billion in 2011 revenue, up a tad from revenue of about $3.1 billion in 2010. The minimal year-over-year growth may reflect the peaking of sales of its Horizon line of clinical and financial applications, now that the company has announced it will shift development efforts to its Paragon suite. McKesson's HIT division represented 44 percent of the parent pharmaceutical company's profit from its $112 billion in total revenue, so expect a continuing stream of investments in its health I.T. offerings.
Cerner: Revenue grew by 20 percent in 2011 compared with 2010 as sales of its Millennium suite of EHR products yielded annual revenue of around $2.2 billion, earning the company a solid second place in this analysis. (A long way for a firm that was a two-man start-up in 1980, kudos to co-founders Neal Patterson and Cliff Illig.) Cerner is selling strongly in the community hospital market through its remote-hosted solutions, has a strong international presence, and now offers "Community Works" suite of hosted applications to Critical Access Hospitals (CAH), under 25 beds.
Siemens: The company's $1.7 billion in HIS revenue is an estimate based on analyzing earnings reports of the complex parent organization, based in Germany, which does over $110 billion worldwide. More than $15 billion of that corporate revenue is sales of medical equipment. The Siemens Soarian EHR continues to sell strongly, and the company has hundreds of current clients that need to transition from Invision and MedSeries4 systems to an upgraded EHR, creating a potentially lucrative base for Soarian sales.
Allscripts: The company reported $1.4 billion in 2011 revenue, thanks in part to its 2010 acquisition of Eclipsys Corp., which was a big player in the high-end HIS market via its Sunrise suite of products. Prior to the acquisition, AllScripts had been a major force in the physician practice market, and its impressive revenue figure reflects an increasing amount of sales into the burgeoning community-hospital EHR market, where health systems are standardizing inpatient and ambulatory facilities onto a single EHR vendor.
Epic Systems Corp.: The company is another amazing growth story, going from $27 million in revenue in 1996 to nearly $1 billion in 2011, according to a recent press release. Its EpicCare suite continues to roll up significant sales in the high-end multi-IDN market and is becoming the foundation for a number of health information exchanges.
GE Healthcare: The corporation's Centricity product line comprises the former IDX CareCast hospital EHR and practice management systems, as well as MedicaLogic's Logician ambulatory EHR. Our analysis estimates that HIS revenue dropped to $900 million in 2011 from $950 million 2010, while the overall health care division, which sells myriad technology products in diagnostic imaging and cardiovascular systems, posted $18 billion in 2011 sales.
Meditech: The $545 million in 2011 revenue is a 19 percent jump from 2010 revenue of $459 million, a testimonial to the company's ability to juggle three product platforms with hundreds of hospitals running on each: Magic, Client/Server and Release 6 (now being called Meditech Advanced Technology, or MAT). Revenue growth is almost as impressive as its 35 percent profit margin.
NextGen Healthcare Information Systems: A division of Quality Systems, the company was primarily a practice management systems vendor but carved out a position in HIS circles, with an estimated 2011 revenue of $353 million, thanks to several acquisitions: Opus' highly functional inpatient EHR, Sphere's full suite of financial systems, and Rick Opry's IntraNexus (successor to the Allegra system from SMS, which was acquired by Siemens). Like Allscripts, NextGen offers a total inpatient/ambulatory HIS suite for smaller hospitals, and has strong sales for its combined EHR/PM system for practices.
Computer Programs and Systems Inc. (CPSI): The company is the leader in the small (under 100 bed) hospital market, with $174 million in 2011 revenue, up 14 percent from 2010 thanks to strong sales of its CPSI System clinical/financial/administrative HIS for community and rural facilities. The suite is installed in over 600 hospitals, most of which are buying and installing the extra modules needed for their EHRs.
