This article is in response to John Lynn’s recent posting, Is It a Hot or Cold Hospital EHR Buying Market?
In his recent posting, John Lynn asked the question “Is it a Hot or Cold Hospital EHR Buying Market?”. In it he highlights a recent KLAS report that over 490 hospitals, a staggering 10% of the entire market, were involved in an EHR decision in 2015. After reading his posting, I wanted to take a moment to share my observations.
2015 was indeed an amazing year for EHR sales, partly driven by the pending sunset date of Mckesson Horizon forcing many customers to switch EHR solutions. Some of those customers are going to Paragon, but many more purchased or are evaluating other solutions. During a recent trip to Epic University, I was surprised to find that nearly half of the attendees of the classes were hospitals switching from Mckesson Horizon to Epic – and all had just recently completed their purchases (late 2015/early 2016) and were facing the same live dates of late 2017/early 2018.
Hospitals who have purchased and implemented Epic or Cerner are very unlikely to make a change. Regardless of which solution is preferred, the investment in these solutions and the level of effort required to switch from one to another is so high, that it would take a significant triggering event for a hospital to make that change. Therefore it is likely that customers on these solutions will not be making a change in the near future.
However, KLAS reports that nearly 40% of MEDITECH customers would change EMR’s if they could, and that Paragon customers also report unrest. Therefore in addition to the shrinking number of those that have not implemented a viable EHR solution, the possibility that there will be a wave of customers switching from one of these solutions to Epic or Cerner remains a consideration. There is also the question of how the recent spin-off of Mckesson’s software division will impact the future of Paragon. If Paragon were discontinued or sold, it could lead to another explosion of EHR decisions. If instead there was a significant investment in the solution, it could become a more viable alternative as customers look to switch from one EHR to another.
I suspect that 2016 will be another strong year from EHR sales in general and for Epic and Cerner in particular. Beyond that, much will depend on the strength of the other solutions and which ones break out into the top tier. Regardless, the recent explosion of EHR sales and the rush to replace Horizon will in many cases lead to minimized installs – where the bare minimum work was completed and there is significant opportunity to improve business processes, implement new modules, and roll out advanced functionality within those solutions. As a result I believe that within a few years, the market will be more stabilized with fewer customers switching solutions, and instead focusing on maximizing what they have.
Unless another player comes in and disrupts the marketplace or a significant shift in the industry creates a reason to make a change yet again…
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