Epic, Cerner, and MEDITECH were the only three electronic medical record (EMR) system vendors that won more contracts than they lost in 2013, according to a new research report from KLAS.
KLAS, the Orem, Utah-based research company, looked at the EMR trends in both large (more than 200 beds) and small (200 or less beds) acute-care hospitals. What they found was a market that is increasingly dominated by the Verona, Wisc.-based Epic Systems, which took a combined 60 percent of the “wins” in 2013. Specifically, the vendor won 62 small hospital contracts and 45 big hospital contracts, KLAS found. Epic only lost six total contracts.
Cerner had a pretty good year as well. The Kansas City-based company doubled their new wins from the previous year. They won 56 small hospital contracts and 31 large hospital contracts. They lost only eight contracts. Westwood, Mass.-based MEDITECH was the third company with a net gain, although by not as much. They won 41 and lost 29.
Epic, Cerner, and MEDITECH have a few traits that are allowing them to be more successful than the competitor. Their systems appeal to both large and small customers and are integrated. However, Epic stands alone, the report notes, because they had a larger percentage of completely new customers, whereas many of Cerner and MEDITECH’s new contracts were just add-ons to existing customers.
KLAS notes that small hospital contracts have basically fallen in half since 2010, from 392 to 219. "EMR vendors that cater to smaller facilities are feeling the pinch and saw a decrease in wins across the board," report author Colin Buckley said in a statement. "It is simply getting increasingly difficult for small-facility vendors to compete with their larger-facility counterparts."
This will likely affect small-hospital vendors like Mobile, Ala.-based CPSI, Minneapolis-based Healthland, and Plano, Texas-based MedHost. Those vendors are facing the reality of a consolidated health system market, top-tier vendors shifting their strategies to appeal to smaller hospitals, and mid-tier vendors being squeezed out and competing for the smaller pieces of the dwindling pie.
Another challenge noted in the report is that the upswing in EMR system sales caused by the meaningful use mandates is abating, Buckley says in the report. Further, the report notes how the meaningful use requirements have made it hard for smaller vendors to keep up development needs.
The biggest losses, however, came for McKesson which gained 36 contracts but lost a whopping 70. Siemens only won 12 contracts and lost 17. Companies like McKesson, MEDITECH, and Healthland have the largest percentage of legacy systems in hospitals and will likely face further contract turnover. Most hospitals with a legacy system that upgraded, switched to a new vendor in 2013, including 42 of McKesson’s Horizon customers.