Aug 31, 2010 (09:08 AM EDT)
EHR Revenue To Hit $3 Billion In 2013
Read the Original Article at InformationWeek
Published this month, the U.S. Ambulatory EHR Market report said that, while the federal funds from the American Recovery and Reinvestment Act of 2009 and the Medicare and Medicaid EHR incentive programs are contributing to the acceleration of EHR adoption, there are other factors such as the need to improve safety and the drive to build greater efficiency into physician workflows that are important drivers in the adoption of EHRs.
"I think the number one driver [of ambulatory EHR adoption] is the change in reimbursement, the fact that it is becoming so complicated to document the process of care to get paid by the government as well as commercial payers," said Nancy Fabozzi, a senior industry analyst at Frost & Sullivan and the report's author. "Everybody thinks that fee-for-service is doomed and we have to have a new system of reimbursing physicians for the quality of care instead of the quantity of care because costs are exploding."
In an interview with InformationWeek, Fabozzi said another reason for the adoption of ambulatory EHRs is that many providers have practice management systems that are old and need to be updated as they move to ICD-10 and HIPAA 5010 requirements.
She also said that there has been an ongoing upward trajectory in the adoption of EHRs for the past decade, albeit slow prior to the injection of federal funds to jumpstart EHR adoption.
"It's been slow but it has been a continual upward trajectory. That train was moving anyway, but it's now moving a little bit faster because of the policies of the Obama administration. If you're pumping $40 billion into a marketplace it's going to have some impact," Fabozzi added.
Over the past year, the Health Information Technology for Economic and Clinical Health (HITECH) Act has significantly increased public awareness around the issue of EHRs. In addition to direct payments to physicians and hospitals for the meaningful use of EHRs, HITECH will indirectly stimulate the market by enticing additional stakeholders like commercial payers, professional medical societies, healthcare manufacturers, and various nonprofit organizations to help physicians and other providers successfully adopt IT in their practices.
The ambulatory market is described as volatile and highly fragmented and is served by more than 300 vendors supplying a variety of basic to advanced EHRs to approximately 261,000 physicians, or 44% of physicians in an ambulatory practice for 2009.
Fabozzi, who interviewed 20 EHR vendors, health IT managers, and other stakeholders for the report, also observed that ownership of physician practices is rapidly changing and is a huge factor that is impacting the ambulatory market.
She said many physician practices are facing financial difficulties and the result is physicians are increasingly selling their practices to hospitals, entering into joint ventures with hospitals, or joining larger group practices.
"This whole reshuffling and realignment among ambulatory physicians is going to have a huge impact on the vendor market because many of these 300 vendors that we talk about are a lot of mom and pop EHR companies that have under a million dollars in sales annually," Fabozzi said.
She added that if physician practices are going to be a part of a big hospital network or a large medical practice group they are going to buy EHR products from larger vendors.
Fabozzi also noted that vendors and providers should keep the patient in mind as they adopt EHRs because the technology has the potential to be a marketing tool in the future. She said patients may get to the point where they'll say "'if my doctor doesn't have an EHR what else is he behind on?' That's a mindset that's going to be out there."