The rise of the EHR replacement market
Results from the 7th Annual HIMSS Analytics Ambulatory Practice Management (PM) and Electronic Health Record (EHR) Study indicate that as the ambulatory market is nearing universal EHR adoption it will likely enter a transitional phase as users begin to contemplate replacing their original EHR to suit changing needs.
The shift toward a 'replacement market' or one in which consumers already experienced in EHR selection begin to exhibit more advanced purchasing preferences, will likely begin to emerge in the next few years in the wake of near universal EHR adoption among ambulatory practices. In this transitional phase, more users will reach a 'tipping point' in dissatisfaction with their existing EHR’s capability and set out in the marketplace for “greener pastures” lured by the emergence of more advanced EHRs.
What is the driver behind the EHR replacement market?
A significant driver behind this transition appears to involve concerns arising from the development of more stringent MU requirements, particularly the proposed MU Stage 3 rules. This is confirmed by the HIMSS survey whereby Ambulatory practices showed a decrease in confidence in their vendor’s ability to meet the Stage 3 criteria. Respondents reporting a high level of confidence dropped from roughly 53% in 2014 to 43% in 2015. This drop in confidence was also paralleled by a slight increase in those reporting low confidence (11% in 2014 to 15% in 2015).
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Despite this rising user anxiety concerning their vendor’s ability to provide MU compliance mass defections to new systems will likely not emerge for a while with Stage 3 set to begin as an optional requirement for physicians and hospitals in 2017 and mandatory compliance in 2018.
At what stage is the EHR replacement market?
The HIMSS survey data shows a market in the early stages of transition based on evidence of modest shifts in indicators of user dissatisfaction. Despite growing dissatisfaction, only a small minority of practices are considering defecting to a replacement system in the immediate future. Survey data from HIMSS shows that only 12% of respondents that currently have an EHR solution are leaning toward purchasing a new or replacement solution. The study further reports that over half of the respondents with EHR investment plans, roughly 5%, are looking to make an investment in the next 12 months. This data also shows that there has been an increase of respondents with investment plans occurring within 13 to 24 months, from 24% in 2014 to roughly 38% in 2015.
Based on the findings one can surmise that among the small minority of ambulatory practices contemplating a change, a majority appear to be hatching longer-term strategies for a change, likely with the MU Stage 3 phase in dates in mind.
Where is the EHR replacement market headed?
While the demand side of the replacement market has not fully materialized, the seeds have certainly been planted given the regulatory environment. Some questions that remain unanswered from the HIMSS study involve the question of whether user dissatisfaction and waning confidence in existing ambulatory EHRs will interact with considerations of the ROI in a replacement EHR. Alternatively, whether the practices believe a replacement EHR with advanced features will provide benefits related to cost savings and quality of care and not simply a measure to meet MU compliance. The next year will likely answer these questions as user attitudes become more salient.
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