Stimulus deals off to 'great start' in healthcare

By Bernie Monegain
10:24 AM

Recent stimulus-induced EHR deals show sooner-than-expected adoption, especially in the hospital sector, according to investment firm Piper Jaffrey.

The second half of 2010 and all of 2011 are likely to show a large number of EHR deals, Piper Jaffrey analyst Sean Wieland wrote in his analysis Friday.

Wieland noted a growing trend of hospitals buying or subsidizing EHRs for physician practices.

"We continue to believe that mega-deals will continue as hospitals seek to capture first-mover advantage and HHS' finalization of stimulus criteria will act as a catalyst for stand-alone physician/group practices to jump into the deal foray," he said.

Wieland said an analysis shows that deals are "picking up pace and might be ahead of schedule" – especially with bigger hospitals.

Most of the mega-deals involve hospitals buying or subsidizing EHRs through a particular vendor (physicians get to keep their stimulus checks) and providing connectivity to their hospitals, the analysis shows.

Wieland expects physicians will take advantage of the stimulus incentives as soon as the criteria are finalized. Recent deals have highlighted big hospitals, he said, while physician group practices are waiting for the criteria to be made official.

The Department of Health and Human Services has issued a definition of "meaningful use" of IT as well as certification criteria, both of which are expected to be made official soon after the 60-day public comment period. "We believe physician/group practices will start exploring/finalizing EHR vendors and possibly signing on soon after the public comment period to be eligible for 2011 incentives," Wieland said.

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