What’s in Store for 2014?

That time of year once again where we collectively look into our crystal ball, or throw the sticks or maybe even look at the coffee grinds dripping down the sides on our coffee cup to see what may be in the year to come. Making these predictions for the coming year is almost a rite of passage for any self-respecting analyst firm and what the heck, from our vantage point, we may have a slightly better view into the future than most.

So in keeping with some sense of tradition here at Chilmark Research, the following are our ten predictions for 2014, plus one (think of it like a baker’s dozen).

Meaningful Use (MU) stage two delay provides little relief to IT departments. Many breathed a sigh of relief when HHS announced that stage two timeline would be extended. Yet despite that extension, IT departments will remain overwhelmed in 2014 coping with a host of other initiatives, from ICD-10 to HIPAA compliance to preparing the organization for changing models of reimbursement and of course MU 2.

Best-of-breed solutions proliferate. Despite the desire to have as few as possible IT vendors and their solutions within an organization, department heads take it upon themselves to adopt new solutions as IT departments are not able to meet all the needs of the organization at this time, nor are EHR vendors capable of delivering new offerings in a timely manner. We anticipate analytics and care coordination to be high among list of adopted best-of-breed solutions. This will create its own host of problems several years hence.

Consolidation continues unabated in mid-market. Much to the concern of payers, large provider organizations will continue to purchase their smaller brethren to extend their reach and improve care coordination. Payers will fight back with lawsuits (monopolistic tendencies of providers) and by making their own acquisitions. Payers will be particularly attracted to the dual eligible market.

Bloom is off the rose as physician dissatisfaction with chosen EHR rises. OK, yes this is a no-brainer as we have been seeing discontent rise throughout 2013. But this discontent will escalate as smaller organizations increasingly realize that their EHR is ill-suited to address the needs of tomorrow in a value-based reimbursement world.

Limitations of deployed HIE becomes increasingly apparent. It’s one thing to put in an HIE infrastructure, quite another to embed HIE capabilities into clinician workflow, especially across a heterogeneous EHR community. Couple that with a growing realization among leading HCOs that to truly support clinicians at point of care, far more data is required to flow through the network and you end up with a lot of future head scratching as to where the real value realization will be derived from the HIE now in use.

Re-prioritization moves patient engagement to back burner. Despite the strong efforts of ONC/HHS to promote the concept of patient engagement, providers, no longer having the stage two gun to their head, will reset priorities on other, more pressing matters.

One third of stage one, MU-certified EHRs do not or choose not to certify for stage two. The HITECH Act created a false market for EHRs that led to the proliferation of vendors and their solutions. Unfortunately for many an ambulatory practice, their chosen EHR vendor will not have the resources to refine their product for stage two certification leaving smaller practices with the unenviable task of having to find a new vendor. Thankfully, a price war is anticipated as vendors look to build customer bases and subsequently valuations before inevitable acquisition.

Clinical analytics remains a hot, yet immature market. Leading HCOs are all clamoring for analytics to help run their operations and improve care delivery processes. But despite the high demand for such solutions, EHR vendors are still behind the curve in delivering such capabilities, the buyers still are not quite sure exactly what they want and rarely have the resources to begin asking the right questions. The best of breed vendors themselves struggle to keep up with market demand, leading to longer then anticipated deployment times.

Cloud-based EHRs become de facto standard for small, ambulatory practices. Pricing pressure will grow fierce in the ambulatory market and in an effort to lower cost of sales, shorten product lifecycles and improve customer service, ambulatory EHR vendors will move to cloud-based services for their solutions. Some push-back will occur over concerns of data governance and privacy. Physicians taking this path will need to review terms and conditions of such contracts carefully.

Payers increasingly become part of HIE fabric. In mid-2013, payers became increasingly involved in the HIE market partnering with leading providers in some communities to share data and improve care coordination. While providers have instinctively been reluctant to partner up with payers, the move to value-based contracts and the strong skills and critical data that payers can provide is forcing providers to re-evaluate their previous stance.

Healthcare.gov falls short – payers wring their hands. Healthcare.gov has far more sign-ups than detractors anticipated but falls short of administration goals, especially for the young and healthy. This leads to payers to continue wringing their hands over adverse selection of new enrollees and the likely higher risk profile as a result.

There you have it folks. Now let’s see how the year plays out and just how close these predictions are to reality come early 2015. Either way, never a dull moment in this market for the foreseeable future.