Consolidation and other insights from the 2014 Meaningful Use EHR Market Share Report

EHR review site Software Advice recently published their 2014 Meaningful Use EHR Market Share Report (a SlideShare version is also available). They reported that in contrast to the buzz about this impending market consolidation, they found a trend toward fragmentation; in fact, the number of vendors in the health space with MU attestations actually grew 25% in the past year alone. The report was nice enough that I reached out to Melissa McCormack from Software Advice to see what further insights we could glean from the report. Melissa indicated that while there weren’t any big upsets in market leader ranking, the real surprise comes in the proliferation of new vendors. We both wondered aloud why are they entering a market when there seems to be an established order, with the constant speculation of looming consolidation? The data demonstrates that MU has been successful at driving lots of market entrants and lots of attestations. But once those MU dollars are out of the equation, where will that leave vendors? And will providers stick with their MU-certified solutions? Here are some other questions I posed to Melissa, along with her responses:

What key lessons should an independent small physician practice take from the EHR Market Share Report?

If Meaningful Use attestations could be considered as “votes” for a particular product or vendor, then we’re seeing the same vendors being voted into the top 10 for two years running. However, this is by no means proof that these “top” systems are the best systems. It only demonstrates that they’re consistently the most used for the purpose of attestation.

But the MU program has an (admittedly fluid) expiration date. If providers want to keep using these systems long-term, they’re going to want solutions that do more than just check a box on the MU criteria list, especially given the price tags on most of these systems. My advice to providers is to take a step back, and carefully consider which system makes the most sense for their unique needs and pain points in the long term. Established brands might seem like the safest bet, but it’s possible a less-recognized EHR product is a better fit.

On the other hand, if you do opt for a smaller brand, you’ll want to consider their viability. If they disappear in a few years, or even if they’re acquired by a larger company, that could create some big headaches for your practice.

What key lessons should a developer of a new or existing (but not high market share) EHR product take from the report? How can innovators who want to enter the health IT or EHR market use the report to help them figure out whether to enter a market or not?

Thanks to the HITECH Act and the MU incentive programs, new products over the last few years have been focused mainly on meeting ONC-ATCB certification criteria. But once the stimulus money dries up, there may be the opportunity for innovative products that address unmet clinical needs to steal the spotlight.

As it stands, the market remains very fragmented, so new entrants need to figure out how they can differentiate themselves from the slew of existing vendors and products. The fact that the market continues to support an increasing number of vendors—and that the market leaders are only maintaining, rather than gaining, share—suggests that many providers have needs not being addressed by the existing crop of software. Vendors should figure out what those are, even if they’re outside the scope of MU certification criteria, and consider what they can offer that the market leaders don’t.

One frustration I hear voiced frequently among the practitioners I talk to is the lack of specialty-specific features in generic EHR systems. I see definite opportunity around solutions designed specifically for one specialty or a group of related specialties.

What key lessons should a developer of an existing, highly ranked, EHR product company take from the report?

To me, the fact that the top 10 vendors are not actively gaining share is significant. They’re at risk of stagnation, so it’s important for them not to get complacent. And while the ambulatory attestation picture didn’t change much, the hospital market did see some shifts in 2013. Epic, the long-time leader, remains at the forefront, but lost share in 2013. Epic losing share in the hospital market indicates that no EHR is immune to competition from other, innovative products. To the established, dominant vendors, I’d suggest something similar to what I suggest for new entrants: figure out what people need outside the context of Meaningful Use, consider expanding features, consider specializing.