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KLAS Research: Small Hospitals’ Buying Decisions Impacting EMR Market Share

May 25, 2018
by Heather Landi
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A new KLAS Research report tracks shifts in electronic medical record (EMR) vendor market share among acute care hospitals, and finds that smaller hospitals are seeking technology solutions that meet their needs and limited budgets, and these contracts are making a mark on the EMR market.

In 2017, 216 acute care hospitals contracted for a new EMR, with 1–200 bed hospitals accounting for the vast majority (80 percent) of these decisions. The KLAS report notes that these smaller hospitals are hungry for new technology but often resource poor. “Over half that signed a new contract in 2017 chose a less expensive or less resource-intensive platform—namely, athenahealth, Meditech, and the community deployment models from Cerner and Epic,” the report states.

The report investigates hospital EMR market share and shifts that impacted buying energy in 2017. To determine EMR market share, KLAS Research analyzed the vendors in use at 5,278 acute care hospitals in the U.S. with 200 or fewer beds.

Epic and Cerner continue to maintain the largest EMR market share among small hospitals, with 26.7 percent market share and 24.8 percent, respectively. Meditech had 17 percent of the small hospital EMR market in 2017, followed by CPSI (10.3 percent), Allscripts (7.2 percent), Medhost (4 percent) and athenahealth (2 percent).

In 2017, Cerner saw the most acute care hospital wins out of all vendors, while Epic had fewer wins but sustained no losses, giving Epic the highest net market share growth, according to KLAS. Cerner lost 25 hospitals, 15 due to customer standardization. Epic’s strong integration and consistent development are major reasons that their market share remains more stable and that they are chosen by larger health systems and hospitals, KLAS researchers wrote. What’s more, Cerner’s and Epic’s alternative deployment models for smaller hospitals both saw significant wins. Overall, Cerner gained 29 acute hospitals and Epic gained 46 hospitals.

Athenahealth also saw a significant number of acute care hospital wins in 2017, gaining 28 hospitals. KLAS notes that the vendor is capitalizing on smaller hospitals’ hunger for new technology. “athenahealth’s inpatient solution continued to gain traction, garnering more contract wins among small hospitals than any other solution. The cloud-based platform is particularly attractive to the smallest hospitals, who require minimal IT footprints and up-front costs,” the report states.

Indeed, athenahealth’s 2017 wins occurred solely among hospitals with under 50 beds, the report notes. “Questions regarding the solution’s maturity are a concern for some—in 2017, 13 contracted customers backed out before going live, returning to previous vendors, primarily CPSI,” KLAS researchers wrote.

Meditech’s new cloud-based technology (Expanse) also generated buying energy among smaller hospitals, as the vendor saw its first market share increase in three years. According to KLAS, the Expanse platform has been in development for many years, with ambulatory integration and enhanced usability as key goals, and it has created increased migration activity among Meditech’s legacy customers—58 percent of those who made a go-forward decision in 2017 chose Expanse, while 42 percent went with other vendors.

“Historically, Meditech’s systems have not generated significant consideration outside of the existing Meditech base, but Expanse is changing that. Some community hospitals (1–200 beds) using other vendors’ legacy solutions chose in 2017 to switch to Expanse,” the report states.

Last August, Allscripts acquired McKesson’s Enterprise Information Solutions for a reported $185 million, a portfolio that includes Paragon (EHR); STAR and HealthQuest (revenue cycle solutions); Lab Analytics and Blood Bank; and OneContent (content management solutions). With that deal, Allscripts nearly doubled their acute care EMR customer base with the acquisition of McKesson’s Paragon and Horizon EMRs. However, KLAS notes that both solutions have been losing customers for years, and 2017 was no different.

“It should be noted that many Horizon and Paragon customers who left in 2017 had already made decisions to switch to other vendors prior to being acquired by Allscripts. These losses are no surprise given Horizon’s sunset status and McKesson’s consistent underdevelopment of Paragon, most significantly their inability to deliver an integrated ambulatory solution,” KLAS researchers wrote.

More notable, KLAS says, are the losses sustained by Sunrise Clinical Manager (SCM), Allscripts’ go-forward solution for larger organizations. SCM’s market share had been relatively stable for a number of years, but in 2017, two large multihospital organizations switched their SCM hospitals to Epic, looking to simplify their IT infrastructure and consolidate to an integrated solution.

Looking at other EMR vendors and market share, the report notes that organizations using CPSI (Healthland and Evident), Medhost, Cerner Soarian, and Meditech’s Magic, C/S, or 6.x solutions make up over one-third of all hospital contracts in the United States. Many of these traditional small-hospital platforms are seeing high rates of replacement as provider organizations consolidate and as customers switch to more attractive deployment models, the report found.

“CPSI Evident sustained the highest losses of any platform in 2017, with customers turning to other vendors in search of things like innovative technology, responsive support, and consistent upgrades. CPSI’s Healthland customers are in a similar situation,” KLAS researchers wrote.

Smaller hospitals have expressed initial interest in eClinicalWorks’ cloud-based inpatient solution (10i); to date, very few contracts have been signed.

 

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