Sales of EHR systems to new customers continue to trend lower
KLAS Research finds another decline in new implementations, as hospitals direct IT investments elsewhere and financial pressures grow.
In a healthcare IT market in which nearly all hospitals have electronic health records systems in place, it shouldn’t be surprising that now, there’s little market left to sell new systems.
After a surge of implementations and EHR system purchases in the years after the HITECH Act was enacted in 2009, sales of new records systems first tapered, and now have declined three of the last four years, according to data from KLAS Research, a Pleasant Grove, Utah-based consultancy and research firm specializing in health information systems.
Some of the steepest declines in new system sales have occurred in the past two years, KLAS noted in a report released this week. The number of “net-new” EHR purchase decisions dropped substantially in 2025, down 40 percent compared with the previous year, and those sales are 50 percent down from 2023.
It’s not just market saturation
The KLAS report, U.S. Acute Care EHR Market Share 2026, says the significant decline in system purchases have been “driven by several converging factors.” Unsurprisingly, several of those factors have threads that are linked to costs, providers’ financial performances and the need to maintain operating margins.
The vagaries surrounding evolving and uncertain government policies are one factor cited by KLAS researchers. Beyond reimbursement policy, there’s growing worry about changes that call into question the extent to which there will be reductions in payments and the number of covered lives.
Additionally, healthcare organizations are looking to direct limited technology dollars to other investments that hold more promise to provide an immediate return. KLAS says these include flirtation with artificial intelligence and “other solutions designed to improve operational efficiency.”
(In terms of EHR vendor performance, KLAS data suggest that Epic is only one of two vendors it covers that reported an increase in the number of hospitals that newly contracted for systems in 2025, adding a net of 77 facilities last year. Epic now has a 43.7 percent share of the U.S. acute care hospital market, KLAS data suggests. TruBridge added a net of two facilities, KLAS data shows. Oracle, which for the second year declined to report its new contracts to KLAS, was estimated to have lost 56 hospitals as customers – the consultancy said it relied on “internal research methods as well as publicly available information” in arriving at that estimate.)
Weighing other factors
However, the report also carries the prescient subtitle of “Market uncertainty significantly cuts buying decisions.” It's clear that several significant factors are likely to be causing providers’ hesitancy to commit to new EHR system purchases.
For one thing, the acute care market is nearly completely saturated with records systems, and has been for more than a decade. As of 2021, an estimated 96 percent of hospitals had implemented EHR systems, according to data from the Office of the National Coordinator for Health Information Technology. That percentage has remained nearly constant since 2014.
Many providers and integrated health systems rushed to implement EHR systems to qualify for incentives that the HITECH Act provided. And many of them waited for technology to mature and to reassess their initial purchases before swapping into new systems.
However, making system transitions have proven to be expensive, particularly when it comes to challenges in porting patient information from one system to another, or when factoring in costs related to maintaining legacy systems as a backup or until data can be archived to meet data retention requirements.
Now, as health systems aim to consolidate on EHR platforms, more attention and investment is being directed toward optimization of the systems in place to deliver the best results, whether it’s improved data accessibility, efficiency or knowledge transfer.
That’s also, in part, because of the desire to reduce the strain that EHR systems have placed on clinicians. For example, a Stanford Medicine poll indicated that 71 percent of physicians reported that EHRs contribute to burnout, and 59 percent believe EHRs need a complete overhaul. Efforts to incorporate AI, particularly applications that automate the note-taking or coding process, are a direction in which organizations are moving in hopes that these EHR-adjacent projects will help relieve clinician burden.
Bottom-line uncertainty
A growing number of hospitals are taking on IT initiatives that are most likely to increase efficiency in the wake of federal policies that appear likely to trim revenue because they are expected to take away health insurance from millions of Americans.
Late last year, Congress eliminated enhanced subsidies for those covered by the Affordable Care Act. Despite promises to the contrary, there’s been no proposed replacement for the program, and without the subsidies, premiums for ACA coverage have risen by hundreds of dollars per month for those using its coverage.
A recent review of rates indicates that the average premiums on the health insurance marketplaces are up 58 percent. For a typical family earning $65,000 a year, a 60-year-old head of family would face an annual cost of $11,040 a year. The net effect is that a large percentage of those covered by ACA marketplace plans have stopped paying premiums and no longer have health insurance.
Medicaid rolls are also expected to shrink, particularly as a result of mandatory work requirements and other stipulations for those seeking coverage from the federal-state plans. The U.S. Census Bureau now is predicting that the number of people in the U.S. without health insurance – which reached a low of 24.8 million in 2024 – could increase to 37 million Americans by 2034, primarily due to reductions in Medicaid coverage.
This concern has been bolstered by results of a recent survey, which found that two-thirds of U.S. healthcare finance leaders cited government funding uncertainty and Medicaid cuts as their top concerns this year. The survey results, revealed in Strata Decision Technology’s newly released 2026 Healthcare Financial Outlook Report, show the concern over "policy-driven risk as organizations work to stabilize margins and sustain recent gains."
That raises the financial stakes for hospitals, which are likely to see more patients who no longer have any health insurance coverage, which will put pressure on bottom lines and potential future investment in new EHR systems.
That’s while other expenses, including for labor, utilities, energy and supplies, continue to grow, as national inflation rates trend higher, as they have in recent months.
Fred Bazzoli is the Editor in Chief of Health Data Management.