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Providers are Ditching Their EHR Vendor, Report Finds

July 17, 2013
by Gabriel Perna
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EHR brand loyalty is non-existent, according to a new survey from the New York-based Black Book Market Research. Authors of the report say that 70 percent of all EHR purchases are replacement systems, and they predict that 20 percent of providers will defect from their current vendor within the next 12 months.

Black Book surveyed nearly 900 EHR industry insiders, including vendor staff, managers, implementation consultants, advisers, analysts, affiliates and contractors, for the survey. Healthcare IT vendors lose 12 percent of their clients annually, the report revealed. Furthermore, the average electronic health record (EHR) vendor can lose as much as 38 percent of their client base, Black Book says.

"It is customary to calculate opportunity costs in business, but the same expressly applies to losing customers and profits in this replacement market environment," Doug Brown, managing partner of Black Book, said in a statement. Most of this is due to lack of usability and client service. “Only 12 percent are being lured into switching because of breakthroughs in innovation and better product offerings despite what EHR marketers would make you believe”

The providers are departing so fast that the research reveals many of the vendors are losing profitability on those clients. New physician clients, Black Book found, do not become profitable to the EHR firm until their 21st month of doing business. Roughly four-out-of-ten providers ditch the EHR before the vendor makes it to profitability, Black Book says. In contrast, medical and surgical specialists are finding the cost of switching EHRs too much to bear (91 percent).

The report found that most vendors are targeting replacement sales to five typical prospects: hospitals and IDNs acquiring independent practices; large multispecialty clinics and groups acquiring practices, meaningful use underachievers; independent physicians with implementation issues (not hospital or clinic affiliated); and late adopters and laggards (never adopted an EHR).

For hospitals, Black Book’s research found that most CIOs want fewer vendors and are avoiding huge swap outs. Also, 20 percent of independent physician practices with unaddressed IT issues are considering getting acquired to avoid having to go through EHR and HIE implementations without support.

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