Is EHR Vendor Consolidation Ahead?

HDM Breaking News, April 6, 2009

Funding for electronic health records in the economic stimulus package will hasten the consolidation of EHR vendors who cater to physician groups, the leader of one consulting firm predicts.

“This is such a defining moment for EHRs, that if you don’t capture market share now, it will only get more difficult,” says Deward Watts, group president, health care sector, at Computer Sciences Corp., Falls Church, Va.

In an interview with Health Data Management at the 2009 HIMSS Conference in Chicago April 6, Watts predicted many of the larger outpatient records vendors will merge and smaller ones won’t survive. That’s because only much larger vendors will be able to access adequate capital to keep up with a groundswell of demand while meeting tough government requirements for software functionality, he says.

CSC’s hospital consulting clients are scrambling to develop revised capital plans, setting priorities on how to allocate scarce financial resources, Watts said. Then they plan to accelerate their analysis of clinical software vendors so they can meet the deadlines for earning the maximum amount of federal incentive payments, he adds.

For many hospitals, weighing a software investment against other major projects, such as building a new intensive care unit, will prove challenging, the consultant says. Even though the stimulus funding will help defray some of the cost of acquiring technology, “they still need to invest in institutional change to get value out of that technology,” Watts said. And that involves reinventing workflows, which can prove costly and time-consuming.

--Howard Anderson

 

For more information on related topics, visit the following channels:

• Electronic Health Records
• Stimulus
• Hospitals
• Group Practices