Like the dot-com bubble, the EHR bubble—nurtured by the government incentives—will not last. As I look at what’s happening in the market, it becomes apparent that at some point in the not-too-distant future, the EHR bubble will pop and many vendors will face financial challenges that will lead to their demise.
Several market factors will come into play, including:
Physician dissatisfaction with their choice of EHR, which likely was selected in haste to meet the government’s incentive timetable and was delivered by an overwhelmed vendor;
Physician disenchantment with the EHR Incentives Program, as financial rewards decrease while requirements intensify;
To understand how these factors will affect EHR vendors, it is important to understand how such companies typically raise money and what kind of “hockey-stick” growth projections they made to attract investors.
Missed growth projections; continued expenses for implementation, support, and ongoing upgrades; and diminishing government incentives will leave many companies unable to find investors willing to fund their future growth.
There will be market consolidation, and financially strong companies will acquire distressed companies for pennies on the dollar.
In the aftermath of Dr. Blumenthal’s departure announcement, he has received abundant praise for his accomplishments, his leadership, and his commitment to EHR adoption. There is a general consensus that the groundwork has been laid and that sufficient organizational structures are in place to move the EHR adoption program forward smoothly, despite the upcoming change in command at ONC.
Most writers have attributed Blumenthal’s departure to his need to return to Harvard—which had granted him its standard two-year leave of absence—since his option to retain a tenured position expires at the end of that period. According to Secretary Sebelius, this schedule was incorporated in the HHS plan from the outset.
Some people are more cynical regarding Blumenthal’s reasons for departing, like one of the commenters on last week’s EMR Straight Talk post, who suggested that he is getting out “before the roof collapses.” They cite recent studies that question the link between EHRs and quality of care, the loss of confidence among some providers regarding their ability to meet the meaningful use requirements, and the recent (albeit unsuccessful) attempt by House Republicans to repeal unspent funding that would have included the EHR incentive program. These commenters express doubt as to whether the momentum toward health IT adoption will continue.
Others say new leadership will be a good thing. John Moore of Chilmark Research posits that the EHR program is at a turning point—and that as it transitions from the development phase into the operational phase, it should be led by someone with operational experience rather than by an academician.
No doubt, top PR people were involved in the orchestration of the Blumenthal announcement. What still concerns me is why it was not accompanied by the naming of his replacement—a sentiment that has been echoed by many industry pundits, (Ken Terry, for example). This begs the question: What does it really mean? Time will tell.
I’ve written before about the economic challenges facing physicians—in particular, the problem of stagnant or declining reimbursement rates. With no permanent fix to the SGR formula in sight, physicians are concerned about overhead, productivity, and patient mix. To maximize the value of their time and to increase—or at least maintain—their income if reimbursement rates fall to an unacceptable level, some physicians are considering dropping out of Medicare or limiting the number of Medicare patients they see.
As another means of increasing their income, many physicians are now also re-evaluating their participation in the EHR incentives program. Specialists, many of whom who had previously dismissed participation because they thought it would require adding primary-care workflows to their practice, are now giving the program a second look—in light of Dr. Blumenthal’s encouraging comments about the applicability and excludability of meaningful use requirements for specialists. (See “Just What the Doctor Ordered.”)
However, demonstrating meaningful use will still demand additional work, and certified—or to-be-certified—EMRs are not alike in how they facilitate doing this. It is critical for physicians to understand and evaluate the differences among EMRs in terms of how they deliver meaningful use capability and the impact on the time it takes to meet the requirements with each. Here are a few suggestions of what to look for in assessing the value of different solutions:
How easy is it to enter the required data? (This is particularly important as requirements become more demanding in future stages of the program.)
What changes will you have to make to the way you see patients?
How will you document the care you provide?
Does the system effectively allow delegation of tasks to staff members to minimize the time physicians must spend doing data entry?
Does the vendor’s software platform enable keeping up with evolving requirements?
The most valuable resource a physician has is his/her time. The software physicians select will have a significant impact on how they use that time.