The hospital electronic health record (EHR) market is mature, but there is still potential growth for the ambulatory EHR market, particularly as ambulatory providers increasing adopt health IT due to meaningful use (MU) incentives and in response to ongoing healthcare reform, according to a report from Frost & Sullivan.
The report forecasts that the ambulatory EHR market will expand by 30 percent by 2020, increasing at a compound annual growth rate of 5.3 percent in the next five years.
According to the report, the rapid advancement of technology and healthcare reform triggered by the Affordable Care Act (ACA), particularly the move to value-based reimbursement, has led to the formation of accountable care organizations (ACOs) and patient-centered medical homes (PCMHs), which require a high degree of clinical integration across care settings.
Provider challenges with existing ambulatory EHRs may lead to the introduction of new EHR functionalities, such as automating data entry, enabling risk stratification, coordinating care, engaging patients and benchmarking clinical performances throughout the care ecosystem, the report authors wrote.
Overall, EHRs are expected to emerge as a U.S. population health management enabler by 2020.
“Revenue growth will peak during 2019 to 2020 as more ambulatory practices are expected to embrace more expensive, integrated EHRs,” Koustav Chatterjee, Frost & Sullivan transformational health senior research analyst said. “With healthcare providers’ desire to benchmark outcomes at a network, practice and patient level, their need for integrated EHRs will only grow.”
EHR replacement growth also is accelerating as many EHRs in place fail to improve practice efficiency and coordinate care, the report stated.
According to the report, increasing cost pressures have compelled providers to switch to subscription-based cloud EHRs that propose integrated interoperability, which is ideal for small to medium ambulatory practices. Currently, almost 90 percent of new EHR purchases are cloud-based and Frost & Sullivan estimates that by 2020 nearly 80 to 90 percent of ambulatory EHRs in operation will be cloud-based.
“Vendors are focusing on software as a service (SaaS) based EHRs due to increasing cost pressures as well as the low productivity and return on investment efficiency of on-premise solutions,” Chatterjee said. “Not only are cloud EHRs less expensive than on-premise solutions, they are also easily implemented, interoperable, auto-scalable, remotely accessible and compatible with disparate healthcare systems.”
Overall, according to the report, winners in the U.S. ambulatory EHR market will include disruptive, provider-oriented, specialty-specific, cost-competitive technology companies. Additionally, companies providing products and services supporting clinical decisions and better streamline delivery of care will have an edge. As for healthcare providers, companies optimally leveraging patient data and working seamlessly with other care providers to manage population health will be the clear leaders, the report authors stated.
