Admittedly, our predictions for 2011 were modest. Most of those predictions were logical and did not take a whole lot of imagination to envision thus our success rate, 7 “hits”, 2 “toss-ups” and 2 “misses was quite high. And though are biggest accomplishment, predicting Blumenthal’s departure just a few short weeks before he actually announced such intentions is laudable, by and large these predictions just didn’t go far enough. So for 2012, rather than make simplistic predictions such as “analytics will be a high growth area” or “mHealth will create greater security concerns” or even “ACOs will begin to take hold” as none of these are all that thought provoking. Instead, we’ll go out on a limb with many of our predictions. Hopefully that limb won’t crack sending us crashing to the ground.
Without further adieu, here are our predictions:
Consumer/Patient Engagement – Not What it Seems
Despite the best efforts of the team at ONC to beat the consumer/patient engagement drum, providers by and large are still struggling with such basic issues of going live their certified EHRs, making the transition to ICD-10, meeting physician demands to have everything served up on their new iPad and of course mapping out future strategies in anticipation of payment reform that consumer engagement will remain a tertiary issue in 2012. Just too many other pressing priorities at the moment. WebMD’s implosion on Jan. 10th may portend that this is not such a bad move – at least in the near term.
Bloom is Off the Rose, EHR Market Plateaus
Going out on a limb, we see 2012 as the year when we start talking of the post EHR-era. Yes, there will be plenty more EHR sales in the year to come but over 2012 we will also see EHR sales growth begin to plateau and level off by end of Q4’12. Yes, you heard it here first folks, it is time to collect your EHR winnings and seek new places to invest.
Finally, We’ll See Some Fairly Competent Tablet Apps from Legacy Vendors
Though physicians continue to adopt iPads at a rapid rate, they struggle to effectively use them in the hospitals to which they are affiliated simply because most hospital HIS cannot serve up an application effectively on an iPad. Sure, many have tried using Citrix as a stop-gap measure but this is just isn’t cutting it. In speaking to one CIO of a major IDN recently, he was so frustrated with his core EHR vendor’s slow pace of development that he is about ready to self-fund the development of an App for his physicians. Fear not CIOs and frustrated physicians, we have had the opportunity to see several alpha versions of iPad Apps that major EHR vendors are developing and they actually look pretty good. Look to Q2-Q3 ’12 for general availability release.
At Gunpoint, Direct Project Gains Traction
In 2011, the message came down from on high, or at least from the feds, that all State HIEs must include the use of Direct in their strategic plan. Pretty clear that this was politically motivated as to date, for the $500M plus we, as taxpayers are spending on these public HIEs, there is very little to show for it and now we are running headlong into an election year and this administration needs to show something, anything, in the way of success as it pertains to health information exchange. Sure Direct facilitates health information exchange (the verb), but so does a fax machine and frankly, Direct is only a modest, very modest step beyond faxing. Therefore, Direct will gain traction in these “forced” instances but we do not see it extending its reach into the much larger market of private, enterprise HIEs and thus Direct’s overall impact in the market will be small and fade to nothing in three years time.
First CPT Codes for mHealth Apps Issued
mHealth Apps for care provisioning have not seen any significant adoption beyond pilot studies, studies which typically show some efficacy in their use. The big hang-up is a simple one, the risk to reward ratio for physicians to adopt and use mHealth Apps as part of the care process is too low. What might change that risk-reward ratio though is a CPT code whereby a physician actually gets paid to use, or have a patient use an App as part of the care process. WellDoc is one of the few mHealth App companies that is quite aggressive in moving the ball forward and we would not be too surprised if they also did industry ground-breaking work to secure the first CPT codes for their diabetes management App.
Train has Left the Station as Supreme Court Rules on ACA
Though the Supreme Court will hear arguments for and against the constitutionality of the Affordable Care Act, it is unlikely that their subsequent ruling will throw out all of ACA (they may prune it) and more importantly, the move to value-based reimbursement models is already in full swing, which is something that will not be reversed. Whatever the Supreme Court rules, its impact will be minimal and the changes we are seeing take place today will continue as the train has already left the station.
Changing of the Guard as Dynamic Duo Departs
Last year we predicted the departure of ONC head, Dr. David Blumenthal. This year is an election year and it is expected that there will be a significant changing of the guard across the administration. We predict that the dynamic duo that is Anish Chopra, White House CTO and Todd Park, HHS CTO will both be leaving their posts by end of the year.
M&A Continues, but at far more Reasonable Valuations
Okay, yes we have had this prediction for three years running, but we just can’t help ourselves as we see far too many vendors in this market (some 300+ EHR vendors alone!) and some rationalization must enter at some point. We are seeing rationalization on valuations (e.g., no one was willing to pay what Thomson Reuters wanted for their healthcare business unit despite there being a sizable number of bidders) and this will create an opportunity for acceleration in M&A activity in 2012.
Floundering HITECH Initiatives Attract Political Spotlight
Yes, we are seeing some modest success and adoption of EHRs as a result of the HITECH Act but the preponderance of such success is at hospitals that first have had some form of EHR already in place and also have a lot to lose if proposed reimbursement cuts from CMS come to fruition at the end this multi-year march to certified EHR adoption and meaningful use. Yet, under the covers we are still not seeing wide-spread EHR adoption at the ambulatory level, especially among smaller practices, State HIE initiatives struggle to define what they’ll actually be when the grow-up, the Beacon programs have not reached the promise land, and the RECs, well we were never a big fan of these for obvious reasons we outlined previously. As this is an election year, healthcare and anything with the stamp of the Obama administration on it, will become fair game and dragged into the limelight. Get ready for healthcare to become the political piñata of 2012
HIE Vendors Stumble
By the end of 2012, the final awards for State HIEs will conclude and with it the evaporation of the $500M plus honey-pot that attracted so many vendors into this space. What’s next for these vendors? Some will stumble out of the market with little to show for their efforts. Others will work with their public clients to stand-up these public HIEs in order that they provide value to their respective communities, which will not be easy and lead to more stumbling. And of course HIE vendors who have traditionally been focused on public markets will reposition themselves for the private, enterprise market. Some of these vendors are now stumbling in this transition to the enterprise market (requires different sales resources and tactics, technology requirements, etc.). This will result in yet another shakeout in this niche industry sector. (Our forthcoming HIE Market Report will provide further details)
The funny thing about doing these predictions is that as one actually goes through the process of thinking about this market, which is currently going through nearly unprecedented change, one ponders so many other predictions that just end up on the cutting room floor. Some of those include:
Payers continue to struggle with exactly what they’ll offer on the State Health Insurance Exchange.
Pharma companies look to insert themselves directly into physician workflow, via HIT.
Despite rising cost share, consumers still struggle to make intelligent, informed decisions.
Telehealth gets some wind under its wings as big telecoms start aggressive lobbying efforts.
You get the idea, plenty of turmoil, no lack of potential trajectories in technology adoption and use within the healthcare sector and we here at Chilmark Research look forward to continuing to provide thoughtful insight on this ever evolving market in 2012.
So now it’s your turn. Are we on the mark with our predictions? Did we reach too far? Is there a particular prediction that you have which we totally missed?
John Moore blogs regularly at Chilmark Research.