Notes on a Volatile EHR Market

Right now, the health information technology sector is volatile. Vendors are entering and exiting the sector, and mergers and acquisitions are common. HITECH has driven enormous investment in the sector, and these dollars support innovative companies like Practice Fusion, as well as driving up the share prices of publicly traded HIT companies.

In a recent piece for the Huffington Post Investigative Fund, Emma Schwartz points out that some doctors have been burned by fallout from the volatile environment. Some doctors found it hard for example, to regain access to their patients’ records and recoup monetary losses when they chose to part ways with an EHR vendor.

Here are some thoughts about volatility in HIT:

1) Volatility affects all companies in the sector. Large-sized companies are not immune to volatile economic times as Bear Stearns, Lehman Brothers, AIG, GM and Chrysler recently discovered. And GE—which markets an EHR and has been around a 100 years—had a near-death experience let’s not forget, due to severe underperformance in its financial services division.

And sheer size didn’t protect a Fortune 50 company from losing a “can’t lose” opportunity to a virtual start-up back in 2000, when the National Health Service announced plans to hold an open procurement for a national provider of phone-based nurse triage services (known as NHS Direct).

In that instance, the NHS proposed a service in which all UK citizens could call a toll-free number and speak with an NHS Direct nurse about their medical symptoms. The nurse, using specially-designed clinical algorithms, collected data and recommended an appropriate level of care (e.g. “you should contact your GP right away”).

The Fortune 50 company had established working pilot programs in the UK and was a prohibitive favorite to win the bid. But the small company offered better software and content that could be customized to meet the local standard of care.

The small company partnered with a big UK-based company and the partnership won the bid. In the aftermath, the Fortune 50 company, which had been an unchallenged leader in this particular part of the HIT sector, faded precipitously.

2) Since the sector volatility is in part driven by HITECH, should the government “do something”? Thankfully, the Feds have said no. They have left it to the market to decide. In fact, federal rule making as it relates to HITECH is silent on the matter of the financial performance of EHR vendors. What ONC has done instead is create, through its EHR certification criteria, a vision of a future (and better) state for health care IT, and cleared away as many barriers to the innovators in the sector as they could.

3) So if you are a doctor that wants to begin using an EHR, how do you protect yourself? First, understand that the vendor landscape will appear differently in 5 years than it does now. Some familiar names will be gone. When stock prices of the publicly traded companies settle down, their support and development budgets will likely go down as well. So their service levels and release schedules are as good as they’re going to get right now.

In future posts, we’ll make thorough recommendations about how you might carry out due diligence on EHR vendors before you buy one. But for today, we leave one additional thought:

When you shop for an EHR, ask the vendors if you can get your patient medical records back for any reason, any time you want them. Ask them how soon you’ll get them back, and in what format. And ask if you can get your money back if you are unsatisfied with the EHR for any reason. A company that hasn’t worked these issues out to your satisfaction isn’t doing enough to protect you in this volatile market.

Note: Practice Fusion will provide the entire patient record for every patient in your practice, as either a comma delimited file or an excel spreadsheet, within 24 hours upon request, for free, for any reason, no questions asked. All additional documents like pdfs will be provided in secure format and made accessible to you in secure fashion, for free.

As for the money back part, Practice Fusion is free to begin with.

Glenn Laffel, MD, PhD
Sr. VP Clinical Affairs Practice Fusion