Are Large EHR Vendors More Likely to Shut Down an EHR Than Small EHR?

As most people who have read this blog for a while, you know that I try to bring you raw perspectives on things that a lot of people don’t want to talk about. Plus, I don’t mind arguing the other side of topics in order to provide a more well rounded view of an important topic. One of my main goals is to provide the information necessary for doctors to make great decisions.

I recently got into a lengthy discussion with someone about EHR vendor selection. They suggested that doctors should look to the 5 EHR market leaders in their EHR selection process (I believe he sold one of those EHR market leaders). He made some very good points about the market leaders ability to support all stages of meaningful use, that they have a solid business model that will support doctors for the long term, and that they have the resources to support an EHR software for the long run. He also provided some reasonable cautions around small EHR vendors with skeptical business models that might not be around a few years from now.

Certainly the points he makes have merit and are worthy of consideration. Although, unlike this person, I’m not so ready to throw the rest of the non-top 5 EHR vendors out and I think it’s a mistake for a doctor or practice manager to do so as well.

As I considered on this discussion, I realized that over the past 5-7 years, it’s many of the big EHR vendors that have closed up their EHR software. Possibly even more than the various startup EHR companies. Here are just a few examples of large companies shuttering their EHR: Misys (billion dollar company if I remember right), Epocrates and GE Centricity Advance (one of GE’s suite of EHR). Of course, Misys merged with Allscripts (if you call it a merger since they were going bankrupt), but I know a lot of unhappy Misys users that don’t know what to do now. GE has many other Centricity products as well and seems to have made a smoother transition for their Centricity Advance users. At least that’s within the same company. Epocrates is a large company, but didn’t have many EHR users.

My point of course is that even EHR software from large EHR vendors aren’t safe from possible future issues. In fact, I could make a reasonable case for why a smaller EHR vendor that’s grown in a sustainable way over a long period of time is in a better financial position than a HUGE company with a lot of overhead. Plus, I know personally A LOT of these small EHR vendor CEOs. They love what they’re doing and they’re in this for the long haul.

Now with 600+ EHR vendors out there, I’m certainly not saying that all of them have great business models. I was blown away when I met one at MGMA who had 1 doctor using their system. I hope whoever they sign up second is aware of the situation and is going in with both eyes open. There are certainly risks associated with being the second doctor on an EHR software, but there are also plenty of benefits as well. When you suggest something be changed, there’s a good chance you’ll get that change.

Conclusion
There are good small EHR companies.
There are good large EHR companies.
There are bad small EHR companies.
There are bad large EHR companies.

I guess what I’m saying is that size doesn’t matter in EHR selection. There are much more important factors to consider.

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.

8 Comments

  • Great article John. I think it’s important to put some of the comments I made in context. The previous conversation we had where I made these comments were in regards to providers making a vendor decision and still meeting MU for 2012. If I were going to narrow the field of EMR vendors down quickly to accomplish this, I would hedge my bets and choose a company who has been in business more than 5 years, has a large revenue stream, has staff in place to meet an exponential increase in implementation and support volume, and who has a record of spending large amounts of money on R/D for the product I was looking at.

    I do sell a product for what many would consider a top 5 EMR company nationwide. I’m actually one of the top reps in the nation selling this product. From the front lines, half of all purchases that were made by my clients last year were practices moving off a smaller EMR who either closed it’s doors or had no sustainable model for year 2-5 MU or plans to connect with HIEs (Health Information Exchanges).

    My point still is that there is too much at stake for small practices trying to meet MU in 2012 with plans to take advantage of all 5 years of MU to choose a smaller EMR company who does not have a long track record in the industry, whose annual revenue is less than the amount larger companies are spending in research and development on the product the practice is looking at, and who don’t have strong business models (such as those who offer low or no cost solutions to meet stage1 MU by selling deidentified patient data to third parties because they were not able to sell their original product based on it’s merits).

    Can a small emr company meet year 1 MU in 2012,go on to provide year 2-5 MU and connect with HIEs? Absolutely. But there are too many to sift through quickly and it’s a gamble. They may be great right now, but what happens if they have 100 clients through 5 years and they add another 100 clients in Q2 and Q3 this year? I would venture to say that all 200 clients would suffer from the company growing too big too fast.

  • Biff, I value your perspective. I somewhat disagree though, based on the proposal that if all we have left is large EHR companies, then we have basically ruined a perfectly good, competitive marketplace.

    Let me be the devil’s advocate – the “threat of MU” (or not having it, and the fear of “can the smaller EHR company” get there) is a familiar one.

    However, there are many providers who are less concerned with incentives, and even the penalties, and more concerned with doing the best they know how, they way they know how right now. They aren’t afraid of the government’s carrot or stick, and they still want the best things for their patients. MU is important, but I think it’s wrong to place it as the be all end all that everyone should do. Especially when we can see that MU2 is practically unrealistic in many of its demands.

    One size does not fit all!

    That said, for EHR companies, the bottom line is clear from all of this: perception is everything. The survival of EHR companies depends on how customers perceive them. Perception depends on a lot of factors, as you and John have stated. Perception can drive people to make the right, or the wrong decisions. EHR vendors may lie, overpromise and under-deliver. Or they may truly innovate and knock it out of the park. In the end, the scrutiny of vendor offerings brought about by MU may be useful, might drive innovation, and “evolution”. Or it may have been a colossal waste of time, or just something to eat up time and drive economic activity (“keep us occupied”). I don’t think you, nor I, nor anyone else can say for sure, and we won’t know for a long time to come.

    MU has certainly brought much anxiety to a great many vendors & providers, especially smaller ones. Small businesses are the backbone of this country, and a huge burden through MU in a time of economic decline has been fairly painful. There is good and bad with “boiling the ocean”.

    A favorite quote is that “the only law that applies to government is the law of unintended consequences”.

    This post needed to be written and published, and thank you John for doing so.

  • I think you are missing my point. My original comments that John used in the article were in response to a question he asked on another blog in regards to a big shift to EHR in the next 6 months (because of MU deadlines) and whether we agreed or disagreed. I tried to qualify my comments as clearly as possible in this post. I’m not selling MU or trying to sell around MU, simply clarifying the context of my original statement:

    “Great article John. I think it’s important to put some of the comments I made in context. The previous conversation we had where I made these comments were in regards to providers making a vendor decision and still meeting MU for 2012.”

    If I were a provider/office manager making the decision to choose an EMR vendor in order to meet MU in 2012,with the limited amount of time to make a vendor selection, I would simply eliminate high risk, smaller companies.

    If I were a provider/office manager and I didn’t care about MU, I would have another set of criteria that I would be using to narrow down my vendor list.

  • I understand, and thank you for the clarification.

    To confirm what you’re suggesting – a provider running out of time for MU in 2012 and still wanting it should consider eliminating high risk/smaller companies from the running.

    Should the size of the vendor really matter though? A large EHR vendor can do just as lousy (or great) of a job implementing MU as a small EHR vendor.

    Perhaps the advice could be, seek out “well-established” EHR companies with good reputations irregardless of their size when you are in a rush. Well-established companies have good products, in the right position regarding certification for their industry, with some existing customer base which is relatively happy with their product. It doesn’t matter if that vendor has 10 or 1,000 employees, if the product works and has a good reputation.

    Perhaps the more vendor-neutral question we should be asking is whether a provider should rush to make a decision at the last minute on an EHR/EMR from any sized vendor at all? That could be a more costly mistake than suffering a penalty or missing the incentive. What is the cost of the choosing the wrong EMR/EHR vs. the penalty/missing the incentive?

    For that matter, in Medicaid this issue does not apply at all since there is no penalty, and you still have many years to apply for the incentive and still receive the entire amount. “Missing the MU incentive” only applies to Medicare.

    I’m not suggesting providers SHOULD continue postponing it, but small providers especially can really suffer making the wrong choice and possibly having to switch later. It’s a real risk.

  • Amen. I think that you should visit the other blog that John had posted on LinkedIn as we talked through this scenario. I think that making the wrong decision for a smaller practice could mean closing the doors. Hence my advice on a proven company and proven solution.

    I think ten or 10,000 employees very much matters in the situation I outlined. If I have 10 employees and have 100 satisfied clients that have signed on with my “established” emr company over the last 5 years, how will I handle if I sign on 100 more in 3-6 months? Looks great on the bottom line for the company, but it’s a horrible outlook for the all 200 clients. It’s not feasible for a 10 employee shop to implement and support a 100% increase in clientele even if they doubled their staff to 20.

    What we also outlined in that blog on LinkedIn is that not all vendors, resellers, or reps are created equal and that large or small, you need to validate training, implementaiton, and support for all three.

    You are spot on. If I was a provider, I absolutely would not make my decision, rush my training and implementation, and have a horrible experience to ensure I get all 5 years of MU. I would take my time, find the right vendor that suits my practice based on my specific criteria, reap the benefits of the ROI for making the transition, and if at the end of the day, qtr, or year, I get a MU check, that’s just icing on the cake.

    Now, if you are going to make the decision anyway and you can afford to make it (the time to research, implement, train, and qualify) in Q2 and Q3, do it, because MU money can benefit your practice and it’s patients as well.

    I appreciate the post Jon. The more information and perspective we can get out there for providers who have not yet made decisions, the better for them. That’s really what it’s about. I’m not going to make a dollar more this year because of the posts I’m making here, I’m just giving my advice based on my experience and based on the topic of the post.

    In response to John’s original question, large EMRs are very likely to shut down more EMRs than smaller EMRs because they will have bought out smaller EMRs and then will transition those clients to their market segment flagship product.

    It’s probably already been asked and written on, but how many of the, give or take, 600 EMRS on the market today will be around in 3 years? What will happen to them? Will they go under (if they do, what happens to the patient data), will they sell out (if they do, it means another emr transition for the practice in a short period of time), or will they just take the money they earned from the stimulus boom and retire? Every business has an exit strategy, especially start ups. It’d be interesting to know what they are and how it will affect their clients.

  • Great discussion.

    Biff,
    I didn’t realize your comments were with the rush to MU qualification. I don’t think many people in your position are that nuanced, but it’s clear from our conversations that you’re unique. I wonder what criteria you’d use if you were a provider/practice manager and weren’t worrying about MU.

    We have discussed a lot of the questions you asked. One post that shows my thoughts on the EMR consolidation question is this post: http://www.emrandhipaa.com/emr-and-hipaa/2010/03/22/50-emr-markets-instead-of-1-emr-market/

    I’m pretty sure all the EHR vendors will sale out. Some for big gains and others in a “fire sale.” Although, based on the post linked above, I don’t think we’ll see the consolidation that many are predicting. Healthcare is localized and that’s true to some extent with EHR vendors too. A few thousand doctors can last a long time.

  • In that situation, I would have a unique set of criteria based on what’s best for my practice and my patients. It would contain, but would not be limited to sustainability, connectivity to HIEs, ability to improve workflows, and successful users in my area to name a few. The rep I’m dealing with would have to have a list of personal/client references, the reseller would have to give me 3 good references and one negative reference in regards to support and implementation, and the support would have to be local to the US.

    I don’t think you are baiting me here, but these would be some of MY criteria if I were a provider or a practice making a vendor decision inside or outside of the scope of MU.

    I think the biggest difference between making the decision based on MU or not taking MU into consideration is the amount of time you have to vet the numerous vendors.

  • No bait indeed. Just interested to hear thoughts on the difference. Plus, it’s interesting to consider how MU has corrupted (for good or bad) the EHR world.

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