As a consultant, I worked with a startup EMR firm during the past two years only to discover that the government subsidized market will now support only those companies which built their customer base(s) years ago. As soon as the government established Regional Extension Centers offering free consulting services to assist healthcare providers across the nation in adopting EMR solutions, these centers set a defacto standard by blanket recommending that no one should purchase an EMR from a vendor who didn't already have a very substantial customer base, and hadn't been in business for at least 5 years. Meaningful use was probably number 3 on the list, as the standards for it weren't yet established. Ease of use, security, interoperability...these were even further down on the list of criteria.

Then as REC centers established their fees for evaluating vendors for inclusion on their lists ($3K was one price I recall) the already high cost of going to market in 50 states rose even more. You see, the RECs don't necessarily share evaluations or approval status state to state, or even REC to REC within a state. Vendors have to pay fees to each REC (or intrastate group of RECs in some cases) to make it on the REC list there. Therefore the cost of entering the REC pipeline is far more than that of obtaining certification. So another barrier to entry for small, innovative, startup companies was introduced. And RECs are just one of many important channels you have to enter to be "seen". There are many other venues. You must advertise, lobby and spend your resources just to establish enough of a presence to be seen and heard above the din. And people wonder why the cost of EMRs is so high.

While our little company dramatically reduced our cost of development and ongoing support by utilizing some truly breakthrough technology, nothing could reduce the marketing costs I just described. And absolutely nothing could buy us a customer base of 10,000 users over the past 5 years. Our technology didn't even exist 5 years ago. I suppose we could have bought an existing company to access the market. Which is exactly what's happening now.

Never mind that the companies who have been in business for at least 5 years sell the very (old) technology that serves as subject matter for numerous studies (over 50 I think it is) which indicate that these EMRs do not deliver on the promises of ease of use, lowering healthcare costs, or improving patient outcomes. So while we clamour for better designs, better implementations, better interoperability, we exclude those companies most likely to introduce innovation, new ideas and new blood into the industry, while enriching those who have the most to lose by changing what they've already developed, and which got them into this market in the first place. We will reap what we have sown.

I predict there will be at most 10 major players in the EMR marketplace by the time incentives run out, and many of those will be divisions of large IT companies like IBM, ADP, GE, Cerner (if someone doesn't buy them) etc, maybe even a Google or Microsoft. These companies have a poor record of serving the interests of many small customers versus concentrating on large institutional customers. They will war for market share supporting artificially low prices until smaller players are driven out. They can do this because they have the capital to do so, as long as Wall Street considers healthcare IT a darling. This trend towards large vendors will encourage a subsequent consolidation of healthcare providers, practically eliminating the small independent family practice.

I don't know if that will be a good thing or a bad thing in the end as far as access to care, improved cooperation among providers, etc. But I think it's something we should think about instead of just waiting to see what happens.