EMR and EHR Industry Ready to Contract

Considering the tremendous amount of political talk about EMR and EHR systems, you’d think that the number of EMR companies would continue to grow (see my EMR list of over 400 companies).  It makes sense that entrepreneurs would chase after the $$’s that they see being invested in EMR, EHR and health care IT.  However, I personally believe that the number of EMR companies will decrease in the next year rather than increase.

The number one reason that EMR companies will descrease over the next year is that we’re going to see an amazing number of EMR companies failing.  The current economic climate is not the best time to be an EMR company.  Those EMR companies who require sales of EMR software to survive are going to have major troubles surviving.  Many EMR companies gain most of their revenue through the upfront initial cost of the EMR.  It will be interesting to see how many EMR companies have enough financial reserve to survive the current economic crisis.  Within 6 months I expect to see a plethora of EMR companies shutting down their business.

I think we can also expect a number of EMR companies to consolidate.  Sometimes this will happen because of the previous point.  Other times it will just be a natural part of the growth of the industry.  Either way, we can expect to see a major consolidation in the industry.

Understanding what’s going to happen is really important for those using and selecting an EMR.  Expect support times to really slow down if a merger or acquisition occurs to the EMR software you’re using.  Also, if your EMR software company shuts down, how will that impact you?  Might be a good time to talk with your EMR company and try your best to measure their future viability as a company.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

7 Comments

  • Good points. I would add that before a decision to purchase is made, a thorough review of the contract is necessary. That said, my worst concern about companies going “belly up” is what will happen to the data contained in these systems. Can you get it out so that transfer to another system is transparent? This assumes you will go to a different vendor’s software.

    If there is a consolidation of companies, then the vendor will most likely provide the conversion to the new system to keep the customer.

    But that’s just the beginning… the REAL investment, as always, is the time needed to learn how to use the software properly and to ensure that the workflow is not adversely impacted.

    My 2 cents.

  • Some fine points Deborah. You also made me think about all the SAAS EMR that are popping up right now. Imagine what would happen if your SAAS EMR provider just decided to shut down. My guess is that most would give some notice, but when companies shut down there’s usually very little communication from the company. Definitely something to consider and plan for if you’re going with an SAAS hosted EMR.

  • I don’t understand, haven’t we seen incredulous growth even up to this point throughout this year? I guess your point is correct from the standpoint of acquisitions being made, but I still believe that this is a great time to be in the EMR business.

  • Francorp,
    No doubt it’s a VERY exciting time to be in the EMR business. As long as a vendor can weather the storm, they’re going to be very happy. However, as I predicted here: https://www.healthcareittoday.com/2009/02/28/ehr-adoption-will-be-slowed-significantly-by-hitech/ most EMR vendors have seen a slow down in actual EMR purchases. Interest has never been higher, but I believe EMR purchases are at a low. In the long run, those companies that survive are going to be sitting pretty.

    Considering there are 300+ EMR vendors out there, I think that this is a good thing for the industry.

  • Hello John,
    I am working with a company Etransmedia, based out of Troy, NY. I am really excited about the potential for this business and what they are doing. They are partnered with Alscripts and have in my opinion one of the best IP based solutions on the market. Are you familiar with this company? What kinds of attributes do you find critical to a company’s success in the EMR industry?
    Thank you,
    Chris

  • Francorp,
    Allscripts is one of the MAJOR players in the market. They became an even bigger player when they acquired MISYS (which was basically going bankrupt). How that acquisition will play out for Allscripts is still going to be interesting to watch. Many MISYS users weren’t happy with MISYS and there even less happy with the need to now move to Allscripts EMR. I’ll be interested to see if these users leave (losing market share for Allscripts) or if they all move and take all of Allscripts energy from acquiring new customers.

    All of that said, they are a huge company that’s spending a lot to capitalize on the EMR stimulus money.

    Another side of the coin is when you look at some of the comments about Allscripts in threads like this one: http://www.emrandehr.com/2009/08/18/evaluations-of-allscripts-emr/ Almost every user of Allscripts I’ve seen describes it like they do in the comments on that link. Basically, it has some nice features, but it’s missing a bunch of things as well.

    In regards to your question, “What kinds of attributes do you find critical to a company’s success in the EMR industry?” Do you mean a company like Etransmedia or an EMR vendor like Allscripts?

    Seems to me like Etransmedia is probably salivating after the acquisition of Perot systems by Dell for a few billion dollars. Seems like the path for them to exit with a big win is to scale as quickly as possible and sell off to a big company like Perot did.

    Allscripts on the other hand is publicly traded and has a much different set of priorities. At this point, I think there strategy is smart to find and support large partners like Etransmedia who will be the key to the success of their product. They can’t be everything to every doctor, but they can be everything to their key partners.

    I hope this helps. I’d love to hear your thoughts and what you’re working on with these companies.

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