I’ve regularly talked about my belief that there isn’t just one major EMR market. Instead, I firmly believe that there are a number of EMR markets that are divided by clinic size, medical specialty, and possibly even location. In fact, there’s likely even other factors. There are just far too many EHR companies for this to not be the case.
I think this was also well illustrated in this blog post on Kevin MD about the “Perfect EMR Traits.” Here’s the perfect EMR trait #1:
Perfect EMR Trait #1: The ideal medical record would be tailored to the specific needs of a clinician, only exposing them to portions of the record which are relevant to their work.
Knowledge within healthcare is rapidly changing. Possibly more so than another other industry. Techniques which were considered state-of-the-art, can change in a matter of weeks. The electronic medical record has the potential to be the tool which disseminates those changes down to the clinician, through point-of-care decision support. EMR software should facilitate the clinician decision making, rather than requiring clinicians to keep track of the latest and greatest. This individualistic attitude creates discrepancies in care, which inherently leads to imprecise care.
While it is certainly technically feasible for an EMR vendor to be able to create software that satisfies Perfect EMR Trait #1, it’s just not practically feasible for an EMR vendor to satisfy every clinic size, medical specialty, and in many cases locale. This means that we’re going to see a wide variety of EMR software that satisfies the various EMR market needs.
With this as a preface, consolidation of EMR companies is going to become a very very real thing. However, I’d caution EMR companies that choose to just directly sunset an EMR software acquisition. In some cases, this is a reasonable solution based upon the EMR company’s existing EMR software. Plus, in many cases EMR vendors will be acquiring the EMR market share for their existing EMR software. I’m sure we’ll see more of this.
My recommendation for EMR vendors acquiring EMR software, is to be more selective in the types of EMR software that you acquire. It’s definitely worth considering the idea of sustaining the EMR software development of multiple EMR products. Is it really that hard to see a large EMR company that has an ED EMR software, a General Medicine EMR software, an OB/GYN EMR software, a Pediatric EMR software, etc etc etc.
An EMR vendor making a decision to act in this manner will require them to change how they look at EMR acquisitions. The EMR acquisition targets will dramatically change. Instead of looking for failing EMR companies where they can cheaply buy more EMR market share, EMR companies with this approach should be focusing on a quality EMR software that hasn’t yet achieved the EMR market share that they deserve.
The cool part about the strategy of maintaining multiple EMR software instead of the strategy of sunsetting one or the other is that you purchase a bunch of happy EMR users instead of alienating a whole mass of EMR users that’s software is no longer supported. Of course, this will require proper communication of your goals and objectives so that current EMR users see the benefit of the acquisition and aren’t left wondering what the acquisition means to them. I’m not just talking about standard PR spin. I mean real tangible communication and interaction which demonstrates your plans for the acquired EMR going forward.
An EMR company with this method of EMR software acquisition, also needs a different set of skills. After sunsetting an acquired EMR, you need to have a strong set of integration and transition services to make the change to your EMR as smooth as possible. You also require a unique sales force that can sell the transition to your EMR over a transition to an altogether new EMR software. None of these services are needed if you continue to maintain the acquired EMR. Instead, your company must focus on other redundant services like marketing that could be leveraged across companies.
Of course, this isn’t an easy task to do well. Acquisitions rarely are an easy process. However, I think this is a lesson that was recently learned by Google as well. There’s value after an acquisition to keep autonomous business units. In fact, doing so opens up a whole new set of acquisition targets in a less competitive environment.
If I were a board member at an EMR company, this is the type of stuff I’d be considering. Certainly not every EMR vendor is 1. in a position to do these things and 2. has the culture to make it happen. However, I predict that the EMR company of the future will be a conglomerate of multiple specialty specific EMR software and not just a one size fits all atrocity.
Yes; it has to be strategic acquisitions with a view of integrating the support functions and possibly sales functions but not sunsetting the software; sunsetting the software is not a easy solution for the Physicians. Most of the times, its getting to learn a new application and more importantly – managing the transition of all the templates and work flow customizations that need to be done.
There’s also HR functions, Finance functions, etc that can be integrated as well. To me it just makes sense in many cases to develop the EMR software separate. Certainly there are some synergies that could be had between development too. For example, you could create a Fax Interface for one that could work for the other or things like that as well.
There’s just such a large switching cost when you sunset an EMR product after acquisition.
There are 400 EHR companies because at least 400 physicians could not find an existing product that could work in their practice, so they went about creating their own EHR. This custom system worked so well for them that they then went about marketing their custom solution. Most commercial business today uses Microsoft Office to automate their systems and then constantly improve their Word documents and Excel Spreadsheets as things change, so there is no “Sun Set” for these business tools they simply improve constantly. To survive in these rapidly changing markets EHR vendors must be able to change their solutions quickly and inexpensively to meet the unique needs of each individual user.
[…] a proponent of the role of specialty specific EHRs. In fact, at one point I suggested that a really great EHR company could be a roll up of the top specialty specific EHRs. I still think this would be an extraordinary company that could really compete with the top EHR […]