As healthcare providers strive to qualify for federal funding under the HITECH Act, it is that new market dynamic which is most strongly affecting perceptions and evaluations of IS products being offered by commercial vendors, say executives at the Orem, Utah-based KLAS.
In fact, say KLAS executives, ARRA-HITECH has been by far the most intensive topic of conservations they've had with hospital and health system CIOs. “The obvious change in our discussions from a year ago has been everything around ARRA-HITECH and meaningful use, and the impact that the stimulus legislation has had on the industry,” says Jason Hess, general manager of clinical research at KLAS. “Let me give you an example: we recently did a study on real-time location system technology. And if you go to HIMSS, there are many booths demonstrating this technology.” But, Hess says, CIOs simply aren't talking about that type of technology. “The focus is very strongly on clinical IS right now, especially anything related to CPOE, clinical documentation, bar coding at the bedside, any pieces having to do with meaningful use,” he says.
Scott Grier, a principal at Preferred Healthcare Consulting Inc., a Sarasota, Fla.-based firm, agrees that the focus right now is strongly on federal funds and on meaningful use, though he adds, “People are befuddled over the terminology on meaningful use, and over the fact that it's taking so long for the political types to firm up these definitions.”
Grier says what he's hearing is that CIOs and other IT executives are working to strategize and budget for considerable core clinical (EMR, CPOE, etc.) IS spending, but that the actual spending burst won't occur until at least next year.
In the meantime, the ratings of the largest EMR vendors in KLAS' semi-annual reports have been holding steady for some time now, as documented in the “KLAS 2009 Mid-Term Performance Review: Software & Professional Services” report, which was released in June. The report provides a comprehensive view of major vendors' product lines, and the performance of those product lines over time. Those major vendors include Meditech, McKesson, Siemens, Cerner, Epic, Eclipsys and GE.
Epic's (see Figure 1) core inpatient EMR offering continues, as in the recent past, to sit far above the segment average (73.41 out of 100), with a score of 87.11, up 2 percentage points over the last six months. Significantly under that average is GE's (see Figure 2) Centricity Enterprise Clinicals at 58.54. But the GE score actually represents a dramatic 11-point rise in that product's evaluation over its year-end KLAS score. By contrast, all other major vendors experienced only modest fluctuations in their EMR score, ranging from a 1 percent decrese to a 2 percent increase.
What's more, the overall ranking of the acute-care EMR product sector remains largely stable, being given a rating of 72.94 a year ago (and still ranked in the bottom three of market segments, just one segment ahead of a year ago, and still within a few points of the lowest-rated segment; see Figures 3 and 4).
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In fact, the very stability of rankings among the largest core EMR vendors, says Grier, is an indication that there is opportunity for smaller vendors with innovative service and payment models (he cites in particular the Watertown, Mass.-based athenahealth) to make inroads.
In the meantime, Hess says, “One of the big questions will be which clinical IS vendors can demonstrate integration between the inpatient and ambulatory sides of care, because integration could be a piece of meaningful use. Cerner and Epic are the two vendors that can demonstrate integration today; Meditech (Figure 5) can show integration, but can't show strong CPOE adoption, while Eclipsys, which is the leader in terms of physician adoption of their CPOE product, can't yet demonstrate heavy integration, though they're getting there. The difference between Epic and Cerner, though, is that Epic generally delivers on their promises, while Cerner does some of the time. Their scores for implementation are very different.”
KLAS Chart Legend
Put in perspective, “The main reason that all the other HIS vendors fall below the average is that Epic is so far above average,” says George Bowers, principal with Health Care Information Consultants, a Baltimore-based firm. To what does Bowers attribute the gap? “I think basically that the whole Epic philosophy is much different from that of the other guys,” he says. “They basically tell it like it is, they don't make promises they can't keep, and they deliver on their promises; and that's not always true of other guys.”
PACS: a very mature market?
Echoing the stability of the core EMR products segment, the PACS segment largely continues to pull consistent ratings. In fact, none of the largest PACS vendors have seen their ratings shift significantly in the past six months, with the exception of Siemens' syngo imaging product, which has risen 8 percent. Even most of the niche vendors in the PACS space that are large enough in sales volume to be rated by KLAS have remained stable. One very strong exception is the AccessNET product by Aspyra, which has risen 17 percent in the past six months.
KLAS Chart Legend
Breaking it down
What does all this mean? Ben Brown, general manager, imaging informatics at KLAS, says, “We're clearly in a replacement market in the larger, acute-care space. There are still a lot of high performers. The great thing about the PACS space is that there are a lot of vendors, and that makes it very competitive. And since it is a replacement market and there aren't as many deals as there were a few years ago, it's causing vendors to innovate, add value, and make their products stickier so that they don't end up on a chopping block.”
Regarding the standouts in this market segment, Brown notes, “The Dynamic Imaging product that GE acquired continues to be a high performer; Fuji continues to be a high performer, really consistent. And Philips continues to be pretty consistently a high performer.”
Brown also singles out, as particularly interesting, the situation of Amicas. “They don't have either a clinical EMR or modalities, but they've acquired Emageon, with its enterprise content manager piece, as well as a cardiology piece,” which makes that company one to watch for future developments. The relative stability in the PACS market isn't at all surprising, according to Bowers, an expert on vendors in that space. So what should CIOs do in this vendor market, which is torn between the split screen of a deep recession, and the potential for obtaining recession-busting federal funding for clinical IT development?
“My advice is, move fast,” Bowers says. “If you see something, get it. The fact of the matter is that for the very first time in history, there is a guaranteed, tangible return on investment. The money is sitting there waiting to be picked up. You don't even have to do an ROI analysis. It's there, it's real. And even if a hospital has to find some way of borrowing the money or doing really creative financing, it makes a lot of sense to position yourself for those stimulus dollars.”