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Will the US Hospital EMR Market See Major Disruption in the Next Few Years? Commentary 

Will the US Hospital EMR Market See Major Disruption in the Next Few Years?

With HITECH rewards coming to an end, the likes of Cerner, Epic, and McKesson are looking for the next big windfall to feed their billion-dollar companies but may find that their customers are looking in the other direction to save money, not spend more. There are few who will argue that hospital profit margins will be growing in the coming years. In truth, hospital executives are all scrambling to figure out how to be more efficient and save money as reimbursements continue to dwindle.

IT budgets grew rapidly during the rush to meaningful use but will now be under huge pressure to cut costs as reimbursement continues to drop in real dollars. What many outside of the software business might not realize is that the trend in healthcare IT will follow other industries as real competition and newer technologies arise that are lower cost, more intuitive to use, and more adaptable to smaller hospitals.

We only have to look at other software markets to see how this happens. In the 1980s, there were any number of accounting software systems for small business including Peach Tree, BPI, AccPac, Sage, and others, all pretty pricey. Then, along came QuickBooks with a cheaper, simpler, and more intuitive interface and all the functions most businesses needed. The rest is history, QuickBooks now dominates the small business accounting market and QuickBooks online is growing rapidly every year pushing Intuit’s stock to all time highs.

In the Customer Resource Management (CRM) space, Salesforce pulled off a very similar disruption and now dominates sales management with a cloud-based application that is sold as Software As A Service (SAAS.) In both these cases, the established players had their knees cut out from under them and were not able to adapt to lower pricing and more intuitive competition.

In the world of hospital EMR’s the time is ripe for this to happen. As the dinosaurs of the industry continue to push high-priced solutions hoping to keep their stock price up, startup companies like Electronic Health Records International (EHRI Inc.) in Sebastopol, California are ready to step into the market with their cloud-based application HarmoniMobile that runs on inexpensive mobile devices and is priced based on patient visits. Instead of costing millions, these systems will be cheaper than paper to operate and come with future upgrades baked into the subscription price.

The corporate suites of Epic, Cerner and Meditech will likely not see this coming until it is too late but we can be assured it will happen as hospital executives are forced to seek out more affordable IT solutions.


Digital Health Technology

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