The Same Fate of ERP Software Will Happen with Hospital EHR Software

I’ve often thought of the challenge associated with selling an EHR or other related enterprise software to a large hospital. As I think about this purchase process it’s made me wonder why any hospital would change out that software. I’ve often said that Epic’s approximately $1 billion contract with Kaiser (along with a number of other similar contracts) is one reason that Epic is going to be in the healthcare IT business for a long time to come.

In fact, these contracts and the process of change in hospitals has often led me to feel like change in the hospitals is almost impossible.

The amazing thing is that the same arguments could be made for ERP software in large companies. I know some people don’t like the comparison, but I think there are a lot of really interesting similarities.

In fact, I was reading through this somewhat older article which talks with Aneel Bhusri and Dave Duffield who founded PeopleSoft which was taken in a hostile takeover by Oracle and Larry Ellison. Turns out that Aneel and Dave decided to start another company a few months after the takeover of PeopleSoft. As he describes it, “we had a lot of fun so should we start another one?”

Aneel offers this insight that they found with their new Workday software as it tries and competes with the larger Oracle and SAP ERP software systems:

The big vendors are vulnerable because they require big expensive upgrades. Workday doesn’t go into startups — it’s selling to big companies that have HR and financial software in place. But companies have to update this software periodically, and the traditional vendors like Oracle and SAP make it hard and expensive to upgrade. That’s when startups like Workday jump in.

Can you see the Hospital EHR fate the same as what’s mentioned above?

Sure, the other big hospital EHR vendors will continue doing business much like Oracle and SAP are doing in the ERP world. However, there is a great opportunity for the people that have the right connections and knowledge of the hospital world to do a startup hospital EHR company that steps in and gains some market share.

I will admit that it’s going to take a gutsy hospital CIO to make this happen, but you can be sure that it will happen. Many of these hospital CIO will be rewarded handsomely for the choice as well.

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.

3 Comments

  • Meditech 6.0 is giving gutsy CIO’s plenty of opportunity to explore other options. But for now they all seem to be going with the safe bet: an expensive first-generation EMR that is a clicky disappointment to end-users.

  • Brian,
    It’s a really good point. That is a good example of the type of opportunities that will be available to hospital EHR startup companies. It will just take the right person with the right vision for the software. I don’t think we have that person or software yet. Thus we get the results you describe.

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