Will Hospital Ownership of Small Practices Kill Ambulatory EHR Vendors?

There are a lot of interesting trends in the EHR and healthcare industry right now. One trend that everyone is seeing and talking about is the trend of hospitals buying up ambulatory practices. There are a number of reasons that we see this happening. Not the least of which is the move to Accountable Care Organizations. While I still think that this trend is cyclical, there’s some possibility that the small ambulatory practice might be in long term danger.

If the small ambulatory practice is in danger, what does that mean for EHR software vendors?

One of the first projects that hospital acquired practices experience is the move to the hospital owned EHR. In fact, I know of many cases where the move to the hospital EHR was part of the contract. I’m not sure all of the reasoning, but many hospital systems are moving their recently acquired practices onto EHR before they move their existing practices.

I have yet to see a hospital system use anything but a large EHR vendor. In many ways it makes sense. The hospital system is buying practices across dozens of specialties. Many of the smaller EHR vendors focus on a few different specialties and so they just aren’t an option for a big multi specialty environment.

Then, there’s the issues of scale and control. Can a smaller EHR vendor support such a large implementation? Can a smaller EHR vendor provide the hospital system the control they want of their EHR environment? The first one is an interesting challenge since I’ve seen some hospital owned ambulatory environments having scaling issues with some of the largest EHR vendors. The problem as I saw it from the outside was that the hospital system couldn’t get the attention of the right people at the large EHR vendor. This wouldn’t have been an issue at a small EHR vendor.

With that said, I do think that small EHR vendors will have a huge challenge getting into the large hospital owned clinical practices. Will enough small practices remain for ambulatory EHR vendors to survive? I enough will survive, but in the short term there could be some shrinking of that market.

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.

5 Comments

  • It’s not those EHR vendors with no adoption. Those will die regardless of the hospital acquisitions. It’s those small ambulatory EHR that have good adoption and great technology that makes physicians lives better. I’ve heard from so many physicians that were acquired by hospitals how much they hate the hospital EHR system.

  • John, Well, I agree with your observation that this is happening.

    Where we seem to differ is whether this is good or bad.

    IMHO the ambulatory EMR market is soooo oversaturated that anything speeds along consolidation is basically a good thing. Business and life are risky… not everyone survives.

    Lack of usability of the hospital EHR? Different issue.

  • This is indeed another cycle. Larger organizations have been able to afford to put in expensive EHR systems and subsidize physicians (typically >$100k/annual for primary care) because the PCPs are feeders into their profit centers. With health reform, and the migration away from fee-for-services, it will become increasingly untenable to subsidize these feeder physicians into what will become cost centers. However, the need for more data at the point of care will only grow. For example, the back office is not going to be able to code to the specificity of ICD10 after the encounter. ICD10 and the data needed to measure/improve care have to be in real time and it is insanity to simply add this to the burden of the clinicians which further reduces their capacity to manage a larger population of patients. The systems that use new technologies and workflows that create the coded data in real time for the physicians are going to thrive while those following the legacy approaches of doctor as distracted data trolls are going to struggle.
    Are patients and docs better served with the equivalent of a Motorola $1000 brick cell phone incorporating 1960-80’s technology from a monolithic vendor, or would they be better served with the equivalent of an iPhone or Android types application?

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