I’m here at the big JP Morgan conference in San Francisco where CMS administrator, Andy Slavitt dropped the bomb that the Meaningful Use (MU) program will discontinue in 2016. John Lynn did a nice summary of what Slavitt actually said, or at least tweeted out.
This really comes as no surprise, at least not to this analyst (we called for this in a post in mid-2014).
Meaningful Use had accomplished its primary goal of getting providers to adopt EHRs and begin digitizing patient information. While we have not seen a tremendous amount of value out of this digitization effort yet, I am confident that it will come.
But MU went astray in becoming far too prescriptive and innovation, at least in the EHR space, came to a standstill. Nearly all development resources at EHR vendors went to meeting the MU certification criteria. On the provider side, frustration arose in having to meet attestation requirements that had no apparent relevance in the delivery of quality care.
Now it is time to move on and in moving on, the death of the MU program will have three big implications to the market.
- We will see rapid consolidation in the ambulatory EHR market. The HITECH Act, which spawned MU created a false market and countless EHR vendors entered. No Ambulatory EHR vendor has more than 10% of the market. The market has also by and large plateaued in the US, which will put a strain on most EHR vendors. A company with deep pockets will begin rolling up the best of the bunch. Look to what Infor did in the ERP market to understand the overarching strategy – same will occur here in the healthcare sector.
- Financially healthy EHR vendors will invest more on innovation. Now that EHR certification requirements are no more, or at least no more Stage 3, companies will have the extra resources to get back to providing true innovation in the market. Expect more innovative models for capturing and sharing PHI going forward and vendors doubling down on their PHM initiatives. P.S., certification organizations will fade into history.
- The move to MIPS creates some big opportunities for new solutions. Provider cheering of the demise of MU will be short-lived as CMS still has a big ask of providers tucked into MIPS. The upside and potential penalties folded into MIPS represent a 14% swing in potential CMS reimbursement. Providers big and small will seek-out solutions that mitigate the risk and optimize the upside. A lot of details tucked into MIPS that solution vendors will need to tease out and solve to serve their respective market(s).
A lot to digest here and while Slavitt’s comments were telling, they were also thin on the details. Chilmark Research will be digging deeper into this issue in the upcoming weeks. Stay tuned.