Ambulatory EHRs fall short, Frost & Sullivan says, but primed to pick up through 2020
While the market for inpatient electronic health records is mature, there's still plenty of upside for ambulatory systems as accountable care organizations and patient-centered medical homes struggle to function seamlessly across the continuum of care, according to a new report by Frost & Sullivan.
In its report, U.S. Ambulatory Electronic Health Record Market: 2015–2020, the research firm sees big changes for the outpatient EHR market in the years ahead, as "value-based reimbursement provisions, payer consolidation and EHR optimization agendas" accelerate adoption among ambulatory practices.
Merger and acquisition activity will continue to gain steam as hospitals and large practices snap up smaller practices to bolster bottom lines and grow market share. Meanwhile, on-premise EHR limitations and low returns on investments will often spur practices to move toward cost-effective, cloud-based products that offer remote access and agile IT upgrades, according to the report.
While the U.S. ambulatory market has grown across all practice sizes thanks to meaningful use, the imperatives of payment reform and population health management are ushering a new era of system optimization in the near future, said F&S researchers, who project an expansion by 30 percent over the next five years, increasing at a compound annual growth rate of 5.3 percent until 2020.
"Revenue growth will peak during 2019 to 2020 as more ambulatory practices are expected to embrace more expensive, integrated EHRs," said Frost & Sullivan Transformational Health Senior Research Analyst Koustav Chatterjee in a statement.
Large practices of 10 physicians or more will be the highest EHR revenue contributor (49 percent) according to the report. They're seeking more advanced functionalities including automating data entry; risk stratification; care coordination, patient engagement and clinical performance benchmarking.
"With healthcare providers' desire to benchmark outcomes at a network, practice and patient level, their need for integrated EHRs will only grow," said Chatterjee.
Frost & Sullivan suggest that fragmentation among customers and ambulatory EHR vendors is currently posing challenges to market growth, but that consolidation will help iron out those issues in the years ahead, as big practices acquire smaller ones or collaborate with accountable care organizations, using the savings to invest in EHRs.
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"Vendors are focusing on software-as-a-service-based EHRs due to increasing cost pressures as well as the low productivity and return on investment efficiency of on-premise solutions," said Chatterjee. "Not only are cloud EHRs less expensive than on-premise solutions, they are also easily implemented, interoperable, auto-scalable, remotely accessible and compatible with disparate healthcare systems."
Meanwhile, there are other challenges: EHR audits and underperforming legacy systems are slowing innovation. And interoperability, as always, is a challenge – "a difficult milestone to achieve, as the existing IT infrastructure will be hard pressed to comply with the evolving regulations imposing futuristic technical guidelines."
Still, Frost & Sullivan expects outpatient EHRs to be a key enabler to population health management by 2020. Winners along the way, according to the report, will offer "provider-oriented, specialty-specific, cost-competitive technology" capable of managing the healthcare industry's "unique combination of risks and rewards."