EMR Spending Surge Forecasted

HCI: Many providers are implementing their first CPOE and eMAR systems; in that context, perhaps 11-12 percent might not even be that much?

Hanover: Well, there’s definitely additional spending going on, on the hardware side as well; so there’s a lot of investment in many areas.

HCI: What proportion of all this investment might end up being for replacement EMR systems?

Hanover: For certain application vendors like Meditech, when providers are looking to upgrade, they’re looking at spending 80 to 90 percent of what they would spend to completely replace their existing system—so it’s significant. And most hospitals have done significant customization along the way.

HCI: Are you seeing any particular patterns among types of hospitals, medical groups and health systems?

Hanover: We’re seeing some general patterns here. Your large academic medical center generally already has some type of EMR or CPOE [computerized physician order entry] system in place; now they need to upgrade that system and fine-tune it, and make sure it can be used by all their clinicians. We are seeing some replacements going on among the larger hospitals as well. Among the smaller hospitals, some may have had some level of CPOE or electronic medication administration record (eMAR) systems, but most don’t have clinical documentation systems, and are adding that type of EMR functionality, and they’re turning mostly to their existing vendors for that.

In the ambulatory space, we’ve seen 70-percent-plus spending growth among physician groups. And the software-as-a-service option and managed application hosting option are really becoming popular among the smaller groups.

HCI: Are there any things you’re seeing that are concerning or surprising?

Hanover: Not really. I guess there are still some providers that are concerned or not quite sure what to do. The fact that the final rule of Stage 1 of meaningful use scaled back a bit made things more in reach, and that helped somewhat. And the first checks are now going to physician groups, and that’s very encouraging. I saw a picture attached to an article in which people in scrubs were smiling and holding checks; so there’s more of a drive to do the work now, that’s encouraging.

HCI: Based on all this, do you have any particular advice for healthcare CIOs?

Hanover: I would say that the deadlines are approaching; and if they’re bothering to read your magazine, they’re probably a bit ahead of the game. They should be doing assessments, beginning to put things into place; and really doing 360-degree assessments and looking at opportunities, such as data center modernization and application virtualization; those will be important. They’ll see problems if they’re not able to deliver services remotely.

But it’s really a positive time. I think services are a little hard to come by in certain situations; so, it will be important for CIOs to look to their EMR providers for service level commitments. Also, start dates and time and staff commitments in terms of implementation are very important, so CIOs need to make sure those resources are available from the vendor. So they should move forward in those areas, because it doesn’t make a lot of sense to do it late and get paid less.