Convergence & Divergence Among the Big Three EHR Vendors
This fall, the three largest EHR vendors by revenue, Allscripts, Cerner and Epic, held their user conferences. This research note provides an overview of each vendor’s strategic intent, areas of future focus and our assessment.
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Allscripts — Stabilize, then Proceed with Innovation
At the recent Allscripts Client Experience (ACE, #ACEHHS18) conference, the company gave us a day and a half deep dive into their current strategy and initiatives. As much as Allscripts positioned themselves as the innovative leader among the leading EHR vendors, the fundamental reality was far simpler. This is a company that is seeking to stabilize its base, and that is a good thing.
As most readers know, when CEO Paul Black took over the reins at Allscripts he had quite a mess on his hands. Previous management had grown the company through a series of acquisitions, but little attention was paid to how these various acquisitions would be stitched together to provide a comprehensive and cohesive EHR that extended from hospitals (acute) to small practices (ambulatory).
Clients were not happy, and Allscripts increasingly lost ground to both Cerner and Epic.
Under Black’s leadership losses have been stemmed, costs brought into alignment, and the bottom line has improved. Today, Allscripts has an acute to ambulatory EHR solution in Sunrise, which now represents roughly half of Allscripts’ annual revenue.
The company has also continued its acquisition strategy, picking up two other EHR platforms – McKesson’s EIS business (see our original take here) and Practice Fusion. While hearing little about Practice Fusion at this event – after all it was focused on Allscripts’s acute clients – we did hear from a number of former McKesson (Paragon) clients that they were quite happy to have Allscripts as their new parent. As one Paragon customer told me:
“We have been ignored for years. McKesson failed to address known problems with their software. At least now we have a voice and Allscripts is making progress.”
In another session with two Allscripts customers, each related their thorough evaluation and due diligence research of current acute care EHR solutions. Their conclusion: The EHR has become a commodity with comparable functionality across all major aspects that were important to them. Since EHR software is no longer a key differentiator, the relationship with the vendor and the need to minimize disruption to frontline users of the software become paramount. This is likely true across the industry and why the long purported EHR replacement market never materialized.
The EHR has become a commodity with comparable functionality across all major aspects that were important to them. Since EHR software is no longer a key differentiator, the relationship with the vendor and the need to minimize disruption to frontline users of the software become paramount.
In a brief conversation with Black, he was passionate in stating that he wants this company to be seen as the true innovator of the big three EHR vendors. He pointed to their precision medicine efforts with 2bPrecise, a young company started by the founders of HIE vendor dbMotion, a company Allscripts had acquired several years ago.
2bPrecise is now embedded within EHR Sunrise workflow and the company is working with six beta customers, including the Mayo Clinic. Today, Allscripts is the only EHR company that offers the physician the ability to match medication treatment protocols with a patient’s genomic information (e.g., how well a patient can metabolize a given medication) – pretty futuristic and promising work. But there is a fly in the ointment: who pays for this second order derivative to define patient-medication matching? No clear answers yet, though the move to value-based care (capitation) may provide accelerated adoption for certain, complicated diseases (behavioral health, cancer, etc.).
Another innovation they announced at ACE was allowing clinicians from within Sunrise to directly order (prescribe) a Lyft ride for a patient (original partnership announced in March). The use cases for such are numerous, from setting up an appointment (25% of low-income patients cite transportation as a leading cause of missed appointments) to taking a patient home upon discharge. Nice feature for both clinicians and patients.
The company has also been quite progressive on the patient engagement front, first with its vendor agnostic patient portal – FollowMyHealth and its recent acquisition of HealthGrid, a patient engagement tool based on texting.
Lastly, the company is in the process to move its core portfolio of products to a common client user interface (UI) based on progressive web architecture. This effort is in conjunction with their move to hosting their solutions on Microsoft’s Azure platform. Note: the move to hosted cloud services has taken the healthcare IT sector by storm. Three years ago, few CIOs were willing to go “off-prem.” Today, there is literally a tsunami of interest among CIOs looking to off-load the care and feeding of their EHRs and other applications.
The EHR market is dead in the U.S. To grow, one must either acquire other EHR vendors and leverage their maintenance revenues aggressively while cutting SG&A costs or look to the next generation of solutions and services the client base will need.
Allscripts has done a little of both but what concerns me most is their lack of a clear and compelling solution suite to support the migration to value-based care. Their messaging around population health (CareInMotion) was generic and this solution suite to support value-based care modalities still lags competing solutions. They are working to rectify these shortcomings, but they are slow in coming.
Their analytics story, quite surprisingly, was nowhere in evidence – little discussion during the sessions I attended nor highlighted in their product pavilion. Contrasting this with what I experienced this past week at Cerner’s own user conference, CHC, or at Epic’s UGM in late August, was striking.
The innovative efforts at Allscripts are heartening, especially those regarding patient engagement. Yet these efforts will not keep the lights on for most healthcare organizations as we migrate to data-driven care delivery models. The industry migration of clinical care from an art (little to no data) to a science (data-driven) is readily apparent – Allscripts’ own story on this, however, is currently not quite as clear.
Epic Looks to the Cosmos
At Epic’s recent UGM conference in Verona, WI, CEO Judy Faulkner painted a very big vision of the future – “One Virtual System Worldwide.” She was speaking to the Epic faithful on where Epic and its customers would travel next, a place in the cosmos leading to dramatic breakthroughs in clinical science by phenotyping the de-identified EHR data of all Epic clients.
A foundational element to that virtual system is a new platform, Cosmos. Cosmos is a hosted data warehouse built on Caboodle stack and will include a hosted version of Epic’s analytics toolset, Slicer-Dicer that researchers can use to explore the data. That would be incredibly cool as today there are about 200 million patients with health data in an Epic EHR.
But there may be a tear in the Cosmos. While this is a new release, today Epic has only convinced a small handful of customers to participate. Healthcare providers, particularly large academic medical centers, may be wary of submitting their data for others to use, even for research.
Just how open that virtual system Judy speaks of is to other, competing healthcare solutions is unclear. To Epic’s credit, over the last few years, they have opened up to a significant degree – at least relative to their past walled garden approach to the market. Today, over 100 third-party apps are now available within their App Orchard and a couple of hundred more are in the wings (for more on exactly what App Orchard can and cannot do, Chilmark recently profiled it in our report on health care app stores). The company is also aggressively looking to create a store for new ML/AI models. Today, over 200 clients have developed some 500+ models that work within Epic and that number grows daily.
The company has also made pretty strong headway on the interoperability front, exchanging some 3.5 million records daily – over a third from non-Epic EHRs. Saw numerous examples in presentations by Epic clients of their use of CareEverywhere to enable care coordination across a heterogeneous EHR network, commonly found among today’s Accountable Care Organizations (ACOs).
Epic C.O.O., Carl Dvorak’s keynote was far more pragmatic focusing on how organizations can derive greater ROI from their Epic EHR through benchmarking. Claiming to have over 700 benchmarks developed to date to measure anything from clinical workflows to an analyst’s use of Epic’s analytics tools, Carl provided some good examples of how an organization can improve workforce performance. With ever tightening margins for most healthcare organizations, this message was well-received.
One of the more curious aspects of UGM this year was the near total lack of discussion on the migration to value-based care. Listening to the Epic presentations, visiting the booths of their various modules, looking over the program guide, one was struck by the sheer dearth of attention to this increasing challenge for provider organizations. A provider CEO did confide to me that during the concurrent CEO forum, this topic was discussed at length. But one has to wonder why Epic chose to seemingly ignore this issue, especially for the rank and file users of Epic.
And despite Epic’s growing openness, it did not sit well with me some of the comments Epic executives made regarding patient access to their data via APIs from third-party apps e.g., Apple’s Health app. Epic’s position is that patients don’t necessarily understand the full ramifications of their data being used by others, via various apps, which may end up in nefarious hands.
Epic – let me make that call. Who has access to my health data is my decision, not yours. Your stance harkens back to old, paternalistic modalities in healthcare that are thankfully fading.
No enterprise software vendor is perfect, Epic is no exception, but at UGM one is always struck by the devotion of its users. This comes down to culture – Epic is a company that really does want to do the right thing, though competitors and others may bristle at what that right thing may be. This is best summed up in a conversation I had with an elderly gentleman from Denmark who is the CIO of one of its regional health systems. He stated quite simply:
“I’ve spent my whole life working in enterprise software. Epic is the first company I have ever worked with that truly wants to do the right thing for the customer – they really listen to our input(s).”
That alone is testament enough as to the continuing success of Epic. Will that sense of mission to do the right thing to improve clients’ success and in turn improve healthcare delivery extend beyond Judy’s tenure? Only time will tell, but I sure hope so.
Healthcare App Stores Moving to Mainstream
Update, 9/4/2018: This post was based on research conducted for the report, Healthcare App Stores: Status and Outlook, which is now available.
Apple’s early and fantastic success with its app store spawned imitators. App stores are a relatively new wrinkle in healthcare IT vendor’s approach to relationships aimed at better serving existing customers or finding new ones. Most major IT vendors to payers and providers have partnerships with other companies that provide complementary technology or services. These arrangements allow the partners to reach markets, users, or use cases that either vendor would find challenging on its own.
In the wider economy, successful app stores rely on a widely-accepted set of Web technologies. Chief among these are REST-style APIs offering programmers simple and uniform access to data and functionality across organizations and systems. REST APIs provide the data fuel that transformed consumer and enterprise apps. Most API programs are open in that documentation is available to anyone. Programmers can often use the APIs without any interaction with the API publisher. In other cases, they can use them after getting an API key, usually a simple online process while many API program sponsors monetize access at certain call volume thresholds. Health Level 7, the standards organization, created Fast Healthcare Interoperability Resources (FHIR) to enable modern, REST-style APIs that will be far less unwieldy for programmers than traditional HL7, IHE, or C-CDA APIs. The advent of FHIR-standard APIs and SMART’s use of OAuth supplies the crucial building blocks for effective app stores in healthcare.
While the challenges are daunting, the opportunity to improve healthcare is vast. Healthcare users are eager to discuss their unmet needs. Small and independent developers are eager to address these needs.
App stores facilitate the distribution of applications that add value to some base platform or brand. On the strength of the large volume and variety of data these companies collect for their HCO customers, the EHR is that platform. EHRs also have strong brand recognition among clinicians. The vast majority of HCOs lack the resources to develop their own applications, relying mostly on their EHR vendor for new and better functionality. Ironically, most EHR vendors recognize that they lack the resources or bandwidth to be the sole source for new and better functionality.
Other categories of companies could be the platform that establishes and hosts an app store. Payers and providers have the strongest brand name recognition with patients and their caregivers. Medical equipment vendors have large data volumes and established brands among healthcare workers that could provide visibility and attention from users. Companies that provide healthcare transaction or data services have amassed stupendous data volumes but remain mostly unknown to patients and are not top-of-mind for healthcare workers. In theory, any entity that holds large inventories of patient data or has a strong brand could sponsor an app store.
The technical potential already exists to access data or services from any combination of provider, payer, data aggregator, or another source. For now, the willingness to make such capabilities a reality is lacking, given that healthcare’s financial incentives almost demand that organizations hoard, monetize, or closely control the use of their data. While the challenges are daunting, the opportunity to improve healthcare is vast. Healthcare users are eager to discuss their unmet needs. Small and independent developers are eager to address these needs.
While better applications for clinicians and patients are a priority, the demand for more effective use of IT in healthcare is not limited by user category or use case. Some specific examples include:
The recent and widespread adoption of EHRs highlights the need to supplement or enhance the EHR itself. EHRs are not the only opportunity, since only a minority of the healthcare workforce uses an EHR regularly. The need to activate and engage patients with more effective applications is also important for most healthcare stakeholders. Patients have only ever known a disjointed “customer experience” with healthcare. Ideas such as convenience, price transparency, or predictability would never enter into the average patient’s expectations of interacting with any aspect of the healthcare system. But patients are beginning to expect a more conventional “consumer” experience with healthcare. The proliferation of high-deductible plans and rapidly increasing out-of-pocket costs could eventually produce a market or regulatory response that could impose a different approach and processes for consumers.
In theory, an app could discover patient data at multiple organizations using a network-based record location service’s APIs. It could access that data directly from as many organizations as the application and use case demand. It could match pertinent records using an API-accessible master patient index service. It could access workflow from yet another network-based service to support part or all of a patient encounter. This kind of orchestrated functionality using distributed data is increasingly commonplace in consumer and some enterprise apps where the application uses REST-based access to data and functionality from multiple organizations. Healthcare is years away from being able to deploy such a scenario, but many in HIT would like to see it become a reality.
We are preparing a report on the status and outlook of healthcare app stores. For now, EHR vendors have shown strong interest in investing to reach new markets, users, and use cases. Most vendors recruit third-party developers and companies into their developer programs outside of their clinician user base. Third-party experiences with EHR vendors such as Epic, Allscripts, and athenahealth have varied in terms of support, costs, and allowed functionality. This report not only inventories the ways that EHR vendors are expanding functional and organizational app coverage; it also looks at the outlook for some of the other potential app store platform hosts.
HIMSS18 – A Bipolar Experience
A decade of attending the annual HIMSS conference and I leave both excited and depressed. Excited and enthused by meeting so many people who are dedicating their lives to affect positive change by improving healthcare delivery through IT. Depressed as yet again I find a lack of real leadership and vision among many who repeat the years’ worn phrases of interoperability, patient-centered care, reducing physician burden, and the like.
“Oh please, can’t we just get on with it,” I scream to myself.
In keeping with the bipolar theme that is HIMSS, following are my takeaways, in an up-down fashion.
Up: Anthem goes public on its deal with Epic r/e HealthyPlanet. This partnership is an exciting step in enabling provider-payer convergence wherein Anthem will embed IP (risk, prior authorization, claims adjudication, etc.) into HealthyPlanet and take HealthyPlanet to market with wrap-around services.
Down: Head-in-the-sand vendors who are entrenched in FFS model. These vendors told me point blank that the market will revert back to FFS, that value based care is DOA. Gotta wonder what they’re smoking.
Up: Telehealth going mainstream. Saw loads of examples/demos of telehealth with direct or near-direct integration to the EHR. Been hearing about the coming of telehealth since I started this company in 2007. I believe we are finally there.
Down: Almost zero discussions on managing the costs of care/cost containment. There was some discussion on reducing clinical variability – but beyond that, HIMSS was devoid of any deep conversations on this critical variable in the value equation.
Up: Clear demonstrable, scalable use cases for AI. I was particularly impressed with the work 3M has done with Verily, leveraging Deep Mind technology for specific measures. Though just released, 3M has already landed 17 provider clients and 2 payers.
Down: The preponderance of AI vendors with little sense of scaling their solution. Many of the AI vendors I talked to have ongoing projects with “Big Brand” healthcare systems. That’s great – but disturbingly, few have taken the next step to address how they plan to scale their solution within an organization for widespread adoption and use.
Up: New solutions leveraging FHIR to insert actionable insights directly into clinical workflows. This is near nirvana for me, as it gets beyond the Herculean task of interoperability writ-large and tackles those points where significant friction and opportunity exists.
Down: One policy pundit after another talks yet again about the need for interoperability. Frankly, this is no longer a technical issue. Interoperability is a policy issue and really does not belong at an event such as HIMSS – where we should be talking about the future, not rehashing the past ad nauseum.
Clearly, a lot of work lays ahead for us in the health IT arena, which provides us all meaningful work going forward. And frankly, we are in but the top of the third inning – there is so much to do, it really is an amazing time to be in the healthcare IT market.
Thankfully, we are at last moving beyond the prescriptive use of IT via meaningful use, transitioning to meaningful insights from the data we are collecting and placing into clinical workflows. There is a near unfathomable opportunity to begin leveraging clinical, genomic, and other data sets that will lead us to dramatic improvements in care delivery – improvements that are likely beyond our comprehension at this time.
Despite some of my downer moments at HIMSS18, I could not be more excited for what the future holds for us as an industry – and, personally, in how even I and my care team will leverage new insights to more effectively and efficiently manage my own condition.
What We’ve Been Commenting On
Lately, there have been quite a few big developments in healthcare, including Allscripts acquiring Practice Fusion, Apple’s PHR, and the mysterious Amazon-JP Morgan Chase-Berkshire Hathaway healthcare company. Not all of these developments have enough detail yet for Chilmark to analyze the impact on the future of the health IT market in-depth, but we are commenting elsewhere on the wider possibilities for the healthcare industry.
Blockbuster digital health funding to spill to 2018
Brian Eastwood in HealthcareDive
“’We think next year is when we’ll begin to see [predictive analytics] go beyond simply accounting for and noting social determinants of health and barriers to care and start to use that information to inform care plan decisions,’ Eastwood said. Vendors able to adequately take this on will emerge as key players in the care management and population health markets as the year progresses, he added.”
Health IT eyes M&A as market grows up
Ken Kleinberg in HealthcareDive
“The EHR market is saturated [and] consolidation is very clear…The movement to analytics and population care, that’s where the action is now,” Kleinberg said. “There’s a tremendous amount of innovation still possible.”
Apple debuts medical records on iPhone
Brian Eastwood in HealthcareDive
“Apple is widely accepted as understanding the user experience,” Eastwood said. “If all of the sudden, a substantial chunk of the population has the capability to tap into a patient portal in a way they haven’t before, then it could be a gamechanger.
Why AI tools are critical to enabling a Learning Health System
Ken Kleinberg in HealthcareIT News
“The Learning Health Systems continually improve by collecting data and processing it to inform better decision making. As the amount and complexity of big data continues to increase, organizations are challenged to fully take advantage of it,” said Kleinberg. “AI systems are particularly suited to analyze huge data sets to discover meaningful and actionable insights, and even to carry out actions.”
Apple steps into Epic System’s arena with medical records iPhone app
Brian Eastwood in The Capital Times
“(Health record companies) will still be building their core products,” said Eastwood. “They’ll still be maintaining the records…[Regarding rumors of Apple or Amazon creating EHRs], right now, it’s still a little bit in the realm of fantasy.”
How Amazon, JPM and Berkshire could disrupt healthcare (or not)Health IT eyes M&A as market grows up
John Moore in HealthcareDive
“‘I’m not holding my breath for big changes,’ Moore said. Instead, he expects incremental change are more likely over the next three to five years.”
Will Amazon’s push into health care impact Epic Systems’ future?
Ken Kleinberg in The Capital Times
“Software to power the applications for health care providers come predominantly from a few large players like Epic and Cerner,” Kleinberg wrote. “It’s a great question to ask to what degree they can take their provider and software application expertise and apply it to the needs of payers.”
Convergence Analyst Recap: Exciting Progress, Still Plenty to Be Done
What a whirlwind it has been – three major conferences for Chilmark Research analysts in three consecutive weeks. Sure, the Epic UGM and Cerner CHC are industry leading events, but our own humble, inaugural event, Convergence, was influential in its own right.
Attendees, speakers, and panelists from across the healthcare spectrum came together in Boston for two days of in-depth, strategic discussions on how providers and payers will converge to provide a more streamlined health service for the populations they jointly serve. To better understand what is involved in Convergence, we worked with Involution Studios to create the following graphic (feel free to download a larger version and use yourself):
Our friends at Galen Healthcare and media partner SearchHealthIT.com provide cogent summaries of the event’s insightful presentations about payer-provider convergence strategies. Following our team of analysts offers their own highlights and key takeaways from Convergence.
Brian Eastwood, Engagement:
I enjoyed hearing from the Trenton (N.J.) Health Team and Boston Medical Center. They demonstrated that successful examples of provider-payer convergence can stem from collaborations in socially and economically disadvantaged areas, where stakeholders see common vulnerabilities (such as a lack of coordinated care management) that threaten their long-term financial survival.
I also appreciated the message from employer Iron Mountain’s head of benefits planning, Scott Kirschner, about the need for employers to take value-based care (VBC) seriously. Kirschner noted that 95% of the company’s health plan costs are claims, and 80% of those claims are medical. Like it or not, employers have to find a way to get in between employees and their physicians – and to explore the widespread use of proven technology solutions that can address employees’ health and wellness needs without cutting into their billable hours.
Kirshner also reflected on the savings – the clear ROI – that Iron Mountain has seen through aggressive moves to optimize benefit design. A key contributor to ROI is the use of High Performance Networks for employees across the country – HPMs are most often based on a converged model between provider and payer. Current insurer Cigna is not expanding its HPMs fast enough for Iron Mountain, which led the company to look elsewhere and ultimately choose Aetna for 2018 due to Aetna’s aggressive moves to drive towards a converged model.
Matt Guldin, Care Management:
Convergence is underway in the form of providers becoming their own payers, as well as providers acquiring payers. Geisinger Health, for example, has moved to value-based contracts in 70% of its business and does not intend to go back to volume-based care. However, the trend is still in the early stages, just as the move to VBC is occurring slowly and, amid political turbulence, sometimes erratically.
The healthcare payer-provider alliances that are sprouting across the country, along with employer-provider deals, will require more advanced health IT systems to manage and analyze complex data undergirding value-based care: Big data and analytics, data governance, wellness platforms, and healthcare approaches like remote patient monitoring are key to the transformation.
One major challenge to making both convergence and VBC produce better care and lower costs is the current widespread variability and lack of interoperability of health information. In addition, as healthcare transitions to value-based care, providers will increasingly be responsible for the entire continuum of care, from prevention to rehab.
Ken Kleinberg, Analytics:
First, convergence is not for everyone – yet. The speakers and attendees at the event were those who either realized that something key and important needed to happen, or was happening, or they were making it happen. Out of the many health IT events going on in the fall months, leading vendors, providers, payers, and other stakeholders choose to attend this event – and in so doing, became part of this growing movement to transform our industry.
Second, convergence affects everyone – now. The most powerful moment of the event had key leaders from the health IT community sharing their personal stories of their interaction with a dysfunctional system where each stakeholder, in its efforts to do what it thought was right for its interests, had the unwanted effects of increasing costs, decreasing quality, and increasing the friction of access. It affects the very patients, members, and employees the system is supposed to be helping – that is, all of us, even our leaders.
Third, convergence is coming – there is hope. From payers like Aetna completely rethinking interactions with their members and their goals, to employers like Iron Mountain taking healthcare as a new core competency, to providers like Beth Israel Deaconess Medical Center reaching out to share data with their payers, to vendors like Allscripts, CareEvolution, Cerner, and Epic putting their best people and increased resources on population health management, we see many reasons for not just hope, but action and progress.
Brian Murphy, Interoperability:
The challenges of adequate access to data and the need to build new and improve old applications are deeply intertwined. APIs will be a major part of the solution. As we saw in presentations from Cerner’s Dave McCallie, Boston Children’s Hospital’s Dan Nigrin, and Google’s Aashima Gupta, providers are moving deliberately to adopt APIs on many fronts.
Application programming interfaces (APIs) are being used to extend EHRs. The combination of APIs built on the Fast Healthcare Interoperability Resources (FHIR) standard and SMART today allow clinicians to augment and extend their EHRs with new or different workflows. McCallie noted examples such as better clinical decision support, clinical trial recruiting, and different visualizations. Organizations and independent developers can build such extensions in a fraction of the time it would take for the EHR vendor to spec and build new features into their base products.
APIs are being used to empower patients. Gupta used a Google Home device to show how APIs can make it much simpler for a patient to schedule an appointment at a local clinic using just a voice-activated smart home device. Google’s developer portal for healthcare helps engineers build the FHIR APIs needed to support customer-facing apps.
APIs are being used to more effectively coordinate care. They provide a more efficient and easier-to-program way for different organizations and users to contribute data. At Boston Children’s, SMART has enabled an application that tracks patients’ disease symptoms and response to therapy over time. To date, more than 5,000 patients with complex needs have used the application to provide valuable information to clinicians.
While these anecdotes attest to the progress being made, we still have a long way to go before the industry can claim that data is readily available wherever and whenever it is needed. Many eyes are now on the Office of the National Coordinator as it develops new rules stemming from the API provisions of the 21st Century Cures Act. On the one hand, there is some trepidation about how ONC will define data blocking and how fines will or won’t be levied. We know that EHR vendors must make patient data available “without special effort, through the use of APIs.” The specifics of what “special effort” means is still very much up in the air. The addition of a new requirement to provide a bulk API also raises questions.
Let’s Continue the Convergence Conversation
Convergence may be over, but there are still several opportunities for further collaboration and learning:
Annual Review: 2015 Predictions
A big fat goose egg, or worse, if you set some aspects of your strategic plan in alignment with those predictions.
The annual predictions that we and other industry followers author this time of year are honestly a pretty mixed bag. Some are completely nonsensical, others laughable, some plausible and a rare few downright prophetic. Here at Chilmark, we truly strive to not be either of the first two and more of the latter two.
For 2015, we made a baker’s dozen of predictions. Our batting average remains above .500, though we did not hit as many “out of the park” predictions as I would have liked. There’s always next year and our 2016 Predictions will be released in next week or so.
But for now, let’s focus on our “hits” and “misses” for 2015.
Hit: Hospital Alliances Shift to ‘Preserve and Extend’ vs ‘Rip and Replace’ as M&A Slows
Many an HCO are finding that it is simply too expensive to migrate everyone on to the same single EHR platform. Geisinger’s recent acquisition is a perfect example wherein Geisinger will continue its use of Epic, while AtlantiCare will remain on Cerner. Extending these two disparate platform capabilities will happen with Cerner’s relatively EHR neutral Healthe Intent PHM platform.
Hit: One Fifth of all Healthcare Visits will be Virtual
Over half of the state governments across the US now mandate that payers must cover telehealth visits. Employers are certainly on-board with this as well as telehealth increases employee productivity. We see nothing but continuing strong growth in this service.
Hit: Provider-driven Care Management Remains Manual and Painstaking
This situation is even worse than we thought based on our recent research for the Longitudinal Care Plans Report and our forthcoming Care Management Report. Of course, this creates a lot of opportunity for those that can solve what appears to be a nearly intractable issue. Paraphrasing that famous quote from The Graduate: Just one word: Workflow
Hit: Direct Secure Messaging Expands Greatly and Disappoints Mightily
Pretty much a no-brainer on this one. We’ve had our doubts about Direct from the moment it was first proposed as a stop-gap to the horrible performance of state HIEs despite over $500M of investment by the Feds. Thus, no surprise that if anything defined IT issues in 2015, it was interoperability, or lack thereof. Direct does not, cannot and will never address interoperability.
Hit: EHR Vendors Make Further Inroads in Analytics
Cerner released its PHM-centric EDW in late 2014 and has already far outstripped its original forecast by 300%. Epic is less forthcoming with their Cogito wins, but word has it that they are finally gaining some traction. Other EHR vendors are also getting into the game, notably athenahealth, eClinicalWorks and McKesson. But despite the gains of a few, market need far outstrips what the vast majority of other EHR vendor can provide. A lucrative market still exists for best of breed vendors such as Arcadia, Conifer, Geneia, Health Catalyst and numerous others.
Hit: Big Bang EHR Go-lives are Over, Market Slows
Cerner’s Q3 numbers caught more than a few Wall St. analysts off-guard. NextGen/QSI continues to struggle, Allscripts is not really winning much of anything of size in U.S. market. Even Wall St darling athenahealth has come under close scrutiny. The U.S. EHR market has plateaued. Future growth in the US will be at the expense of another. Expect some very competitive pricing in the acute, mid and lower market sectors that will increasingly squeeze margins.
Mixed: CommonWell Must Scale in 2015 to Survive
CommonWell gained a modicum of traction in 2015 and participating vendors by and large are offering it free to their customers. Despite this, CommonWell has not hit the accelerating curve of adoption and one has to wonder if not now, when? Similarly, the Sequoia Project has really gone nowhere.
Mixed: Forty Percent of ACOs Adopt New “Post-Portal” Tools, but Still Fail to Craft Global Engagement Strategy
Nowhere near forty percent of ACOs have adopted “post-portal” patient engagement tools at scale. Market is still in testing mode as it makes the transition to new care delivery models. Crafting a global engagement strategy is still several years out.
Miss: Low Eligible Provider (EP) Attestation for Stage 2 MU (MU2) Forces Major Program Redesign
Despite the grumblings of EPs across the country, the Feds by and large held their course on MU2 requirements and throwing providers a concession to extending timelines.
Miss: Biggest M&A News of the Year – Allscripts Goes Private
We knew this one was a stretch but still believe it is not completely out of the picture. Allscripts leadership have slowly but surely stabilized this struggling EHR vendor but its still large customer base (with lucrative maintenance contracts) makes it a ripe target for leverage buy-out.
Miss: Enrolled Lives Under ACOs Grow, Number of ACOs Does Not
Oddly, the reverse occurred wherein ACO growth was almost sixteen percent growing from 640 in 2014 to 740 by Sept 2015. Despite growth in ACOs, enrollment held steady at 24M. It appears that large ACOs are giving way to smaller, tightly focused ones.
Miss: Price Transparency Spreads to 5-7 more States and Begins to Impact all Healthcare Markets
While almost all states have some form of legislation for reporting on pricing, very few if any have gone to the lengths of what Massachusetts has tried to accomplish. Providers in Massachusetts are really struggling to meet this requirement. Other states are sitting on the sidelines.
Too Early to Tell: Rapid Market Changes Force Out 50% of Healthcare CIOs
This is still up in the air as this prediction extended out to 2020. Currently, I’m a little uneasy about this prediction as there seems to be a significant amount of calcification in the IT departments of many an HCO. Rather than replace the CIO, seems that many HCOs are simply leaving the CIO in place to address tactical issues and moving more strategic initiatives to program business owners.
Next week we will present our collective predictions for 2016, a year that promises to hold many surprises.