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EMR 2012

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March 2012

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Table of Contents
ii

T A B L E O F C O N T E N T S

CHAPTER ONE: EXECUTIVE SUMMARY ..........................................................1


Industry at a Glance ............................................................................................................ 1
Physician Use of EMR ......................................................................................................... 2
Hospital Use of EMR ........................................................................................................... 8
Size and Growth of the Market .......................................................................................... 9
Key Issues and Trends Affecting the Market ................................................................. 14
Leading Market Participants ........................................................................................... 15
Conclusions ........................................................................................................................ 18
Scope and Methodology .................................................................................................... 19

CHAPTER TWO: INDUSTRY OVERVIEW ........................................................21


Introduction ....................................................................................................................... 21
The Medical Record .......................................................................................................... 22
The Electronic Medical Record ........................................................................................ 24
Industry Terminology ....................................................................................................... 25
Industry Structure ............................................................................................................. 29
Advantages ......................................................................................................................... 36
Increased Access and Efficiency ..................................................................................... 36
Improved Documentation................................................................................................ 37
Quality of Care ................................................................................................................ 37
Increased Resources ........................................................................................................ 37
Quality Assurance ........................................................................................................... 37
Eliminates Costs .............................................................................................................. 37
Disadvantages .................................................................................................................... 38
Reliability ........................................................................................................................ 38
Accountability ................................................................................................................. 38
Patient Privacy ................................................................................................................ 39
EMR Software ................................................................................................................. 39
Hardware Requirements .................................................................................................. 43
Components of an EMR .................................................................................................. 45
Administrative System Components ............................................................................... 46
Laboratory System Components ..................................................................................... 47
Radiology System Components ...................................................................................... 47
Pharmacy System Components ....................................................................................... 47
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Computerized Physician Order Entry ............................................................................. 48
Clinical Documentation................................................................................................... 48
Flow of Patient Data across Various Components .......................................................... 49
Pricing of EMRs ................................................................................................................ 50
US EMR Adoption Model............................................................................................... 56
EMR Adoption Rates ...................................................................................................... 59

CHAPTER THREE: EMERGING TRENDS .........................................................61


Meaningful Use .................................................................................................................. 61
Economic Stimulus Package ............................................................................................. 65
Stimulus Guarantee ........................................................................................................... 67
Challenges to Healthcare Reform .................................................................................... 68
Virtualization Technology ................................................................................................ 69
Storage Area Networks ..................................................................................................... 69
Cloud Computing .............................................................................................................. 70
Dashboard modules ........................................................................................................... 72
Mergers and Acquisitions ................................................................................................. 73
Stark Law ........................................................................................................................... 76
Discreet Recordable Transcription .................................................................................. 77
Health Information Exchange Update............................................................................. 78
Regional Extension Centers .............................................................................................. 78
Personnel Issues ................................................................................................................. 79
Security Breaches/Portable Devices ................................................................................. 80
Tablet Adoption ................................................................................................................. 81
New Network for Doctors ................................................................................................. 82
National Physician Education Program .......................................................................... 82
ICD-10 controversy ........................................................................................................... 84
Physician Position and Usability ...................................................................................... 85
Accountable Care Organizations ..................................................................................... 86
The Personal Health Record System ............................................................................... 87
Doctors Surveys AAFP, ACP, Medscape ..................................................................... 89
Interoperability .................................................................................................................. 92
Dimensions of Interoperability........................................................................................ 92
Benefits ........................................................................................................................... 93
Smart Cards Technology .................................................................................................. 94
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Wireless Technologies ....................................................................................................... 96
Open Source EMR Applications ...................................................................................... 98
Benefits of Open Source EMR Applications .................................................................. 99
Adoption Issues .................................................................................................................. 99
Usability And Adoption .................................................................................................. 102
Physician Group Practices And the Recession.............................................................. 103
Quality of Care/Malpractice/Security ........................................................................... 104
Cost-Benefit Analysis ...................................................................................................... 104
ROI for a Typical Physician Practice ............................................................................ 105
EHR Incentive Program ................................................................................................ 107
Implementation Costs and ROI for Hospitals ............................................................... 108
Summary ....................................................................................................................... 108
Privacy Issues ................................................................................................................... 109
Technology Limitations................................................................................................... 109
Social and Organizational Barriers ............................................................................... 110
E-Prescribing ................................................................................................................... 110
CCHIT .............................................................................................................................. 111
NHIN................................................................................................................................. 126
Results of Wal-Mart and DELL Launches ................................................................... 129
Direct PPC Offerings ...................................................................................................... 130
Healthcare Spending US and International .................................................................. 131
Europe Asia, and Other EMR Markets ......................................................................... 131
The US Market .............................................................................................................. 132

CHAPTER FOUR: LEADING MARKET PARTICIPANTS.............................137


Allscripts Healthcare Solutions ...................................................................................... 141
Aprima Medical Software, Inc ....................................................................................... 145
Cerner Corporation......................................................................................................... 148
Computer Programs and Systems, Inc. ......................................................................... 153
eClinicalworks ................................................................................................................. 157
Epic Systems, Inc. ............................................................................................................ 160
GE Healthcare ................................................................................................................. 164
Medical Information Technology, Inc. (MEDITECH, Inc.) ....................................... 169
MedPlus, Inc. ................................................................................................................... 173
McKesson Corporation ................................................................................................... 177
NextGen Healthcare Information Systems/QSI............................................................ 182
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Practice fusion.................................................................................................................. 186
Quadramed Corporation ................................................................................................ 188
Siemens Medical Solutions.............................................................................................. 191

CHAPTER FIVE: COMPANIES IN BRIEF ........................................................195


Abraxas Medical Solutions ............................................................................................. 195
ADP AdvancedMD .......................................................................................................... 197
Amazing Charts ............................................................................................................... 198
Athenahealth .................................................................................................................... 199
BizMatics .......................................................................................................................... 200
ChartLogic ....................................................................................................................... 201
CureMD ............................................................................................................................ 202
e-MDs ................................................................................................................................ 203
Dr First/Rcop ................................................................................................................... 204
Greenway Medical Technologies.................................................................................... 205
Healthland ........................................................................................................................ 206
Health Management Systems ......................................................................................... 207
Henry Schein .................................................................................................................... 208
Keane ................................................................................................................................ 209
LLS Data Systems ........................................................................................................... 210
Medsphere Systems ......................................................................................................... 211
MeridianEMR, Inc .......................................................................................................... 212
Nightingale Infomatix ..................................................................................................... 213
Sequel Systems, Inc ......................................................................................................... 214
SoapWare, Inc ................................................................................................................. 215
StreamLine MD .............................................................................................................. 216
SuiteMed........................................................................................................................... 217
Vitera Healthcare Solutions.......................................................................................... 218
Waiting Room Solutions ................................................................................................. 219
Web PT ............................................................................................................................. 221

CHAPTER SIX: MARKET ANALYSIS ...............................................................223


Market Overview ............................................................................................................. 223
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Market by Segment ......................................................................................................... 226
Competitive Analysis .................................................................................................... 235
Hospital Market Leaders ............................................................................................... 249
Physician Office EMR Market Leaders ........................................................................ 249

CHAPTER SEVEN: CONCLUSIONS ..................................................................251


Overview........................................................................................................................... 251
One: Physician Practices Still High Growth Area ........................................................ 251
Two: Meaningful Use Confusion Still A Factor For industry ..................................... 252
Three: No Clear Leader Still, Opportunity For New Players .................................... 252
Four: Expect More Mergers and Acquisitions ............................................................. 254
Five: Interoperability A Major Hurdle ......................................................................... 254
Six: PR Effect of Breaches Downside for Industry ...................................................... 254
Seven: Usability and Data Entry an Under the Radar Issue. ...................................... 255
Eight: Opportunity for Telecoms ................................................................................... 256
Nine: Stick Will Be More Effective Than Carrot in Doctor Conversion ............ 256
TEN: CPOE and Other Features Sell EMR Systems ................................................... 257
Eleven: Hospital EMR Incentives Factor in Growing Market .................................... 257
Twelve: Technology Moving Faster than EMR
Technology Providers ...................................................................................................... 259
Thirteen: Data Storage Concerns- Top Focus ............................................................. 259

APPENDIX I: DEFINITION OF INDUSTRY PRODUCTS .............................261


APPENDIX II: LIST OF SELECT MAJOR COMPANIES ...............................265

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Table of Contents
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CHAPTER ONE: EXECUTIVE SUMMARY


Figure 1-: Percentage EMR Usage by Physicians , 2006-2011 ........................................ 3
Figure 1-2: Growth Rate of EMR Usage ........................................................................... 5
Figure 1-3: Fully Functional PhysicianUse of EMR vs. Basic Use, 2006-2011....... 7
Figure 1-4: Hosptials at Stage 3 or higher ......................................................................... 9
Table 1-1: EMR Market Analysis, 2009-2011 ................................................................. 11
Table 1-2: Forecasted EMR Market Analysis: 2012-2016 ............................................. 12
Figure 1-5: EMR Market Analysis: 2009-2016 ............................................................... 13
Figure 1-6: Market Share of EMR Providers, percent 2011 ......................................... 17

CHAPTER TWO: INTRODUCTION


Table 2-1: EMR Terminology .......................................................................................... 31
Table 2-2: Physician Adoption of EMRs 2006-2011 (Basic System and Fully
Functional System) ............................................................................................................31
Figure 2-1: Overall Physician Adoption of EMRs 2006-2010 ....................................... 32
Table 2-3: Percentage of Office-based Physicians Using Select
EMR Features (US, 2007) ................................................................................................. 33
Table 2-4: Percentage Installation of Various Clinical Applications
in Hospitals (US, 2009) ..................................................................................................... 35
Figure 2-5: EMR/EHR Adoption for Acute Care Hospitals 2008-2011 ....................... 36
Table 2-6: Average Total Cost for a Three-physician Practice for EMR/PMS
Installations (2011) ............................................................................................................ 52
Table 2-7: Total Cost Range for EMR/PMS Installations (2011) ................................. 53
Table 2-8: Two-year Total Cost for EMR/PMS Installations/Subscriptions
2009-2011 Selected Products (not including team costs) ............................................... 55
Table 2-9: US EMR Hospital Adoption Model ............................................................... 57
Table 2-10: Ownership vs Non-ownership Adoption Rates 2010 .................................. 59
Table 2-11: Doctors Office Adoption Rates 2011 ........................................................... 60

CHAPTER THREE: EMERGING TRENDS


Table 3-1: HITECH Act Subsidy Plan ............................................................................ 66
Table 3-2: Mergers and Acquisitions ............................................................................... 74
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Table 3-3 AAFP Most Commonly Cited EMR Companies Results 2011 ..................... 89
Table 3-4 ACP /American EHR Partners Cited Companies List ................................. 90
Table 3-5: Cost Break-up for a Typical One-Physician Practice (5-year period) ..... 106
Figure 3-1: Distribution of Cumulative Savings ........................................................... 107
Table 3-6: EHR Incentive Program Payments 2011 .................................................... 108
Table 3-7: Vendor Product Certifications 2006 ............................................................ 113
Table 3-8: CCHIT 2007 Vendor Certifications ............................................................ 116
Table 3-9: CCHIT 2008 Vendor Certifications ............................................................ 118
Table 3-10: EMR/EHR Certifications 2010 .................................................................. 121
Table 3-11: Modular System Certifications 2010 ......................................................... 122
Table 3-12: System Certification in 2011 ...................................................................... 123
Figure 3-2: By Sector Contribution to the US GDP (2009) ......................................... 133
Figure 3-3: The US Healthcare Spending (2009-2020)................................................. 135

CHAPTER FOUR: LEADING MARKET PARTICIPANTS


Table 4-1: Mergers and Acquisitions 2010-2011 .......................................................... 138
Figure 4-2: Allscripts Healthcare Solutions Revenues 2009-2011 ............................ 142
Figure 4-3: Cerner Revenues 2008-2010 .................................................................... 149
Figure 4-4: CPSI Revenues 2009-2011 ........................................................................ 154
Figure 4-5: eClinicalWorks Revenues, 2009-2011 ..................................................... 158
Figure 4-6: Epic (estimated) Revenues 2009-2011 ..................................................... 161
Figure 4-7: GE Healthcare Applications Revenues 2009-2011 ................................. 165
Figure 4-8: MEDITECH Revenues 2009-2011 ............................................................. 170
Figure 4-9: MedPlus Revenues 2009-2011 .................................................................. 174
Figure 4-10: McKesson Revenues, 2009-2011 ............................................................ 178
Figure 4-11: NextGen Revenues, 2009-2011 ............................................................... 183
Figure 4-12: Siemens Medical Solutions Revenues, 2009-2011 ................................ 192

CHAPTER SIX: MARKET ANALYSIS ...............................................................223


Table 6-1: EMR Market Analysis, 2009-2011 ............................................................... 224
Table 6-2: Forecasted EMR Market Analysis: 2012-2016 ........................................... 225
Figure 6-1: EMR Market Analysis: 2009-2016 ............................................................. 226
Table 6-3: Hospital EMR Market Analysis 2009-2011 ................................................ 227
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Table 6-4: Forecasted Hospital EMR Market Analysis: 2012-2016............................ 228
Figure 6-2: Hospital EMR Market Analysis: 2009-2016.............................................. 229
Table 6-5: Physician/Web-based EMR Market Analysis 2009-2011 .......................... 230
Table 6-6: Forecasted Physician/Web-based EMR Market Analysis: 2012-2016 ..... 231
Figure 6-3: Physician/Web-based EMR Market Analysis: 2009-2016 ....................... 232
Figure 6-4: EMR Market Breakdown, Physician/Web vs. Hospital 2011 .................. 233
Figure 6-5: EMR Market Breakdown, Physician/Web vs. Hospital 2016 .................. 234
Table 6-7 Notable Companies....................................................................................... 236

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Two: Introduction
50

If the clinician can access the patient data stored in a semantic form, he or she
will be able to obtain a list of patients diagnosed with a specific condition linked to
another list of patients diagnosed with a similar condition. This is possible due to
developments in the semantic web technologies, which can link medical conditions
that are coded as synonymous terms. This type of data may be useful for research.
An integrated architecture is created to facilitate the sharing of data across
systems. The systems can store their data locally. A system (or system user) must be
accessible to another system in order to share patient information. It can also transmit
a copy of the file to the other system. As the file is identified for sharing, it can be
integrated with other files, but it depends upon the interoperability level between the
integrating systems.
Data may be entered in the following three forms:

Free text (e.g., progress notes)

Structured form via a drop-down pick list

Images or digitized signals with associated metadata (e.g.,


electrocardiograms)

Even if the system collects data via drop-down pick lists, there is no assurance
that the values in the lists will be compatible with those of other systems used at the
healthcare facility. This demands that the data coding for the system should be highly
structured. This also necessitates the provider to be more knowledgeable and
disciplined while entering data. The organization also needs to increase efforts to
manage the structure and code vocabulary or nomenclature that it uses.

PRICING OF EMRS
EMR pricing is an intangible concept, as several categories of products and
services need to be taken into account. The pricing structure is complex as it includes
prices of subscriptions, per-seat licensing, concurrent user licensing, installation of
additional modules, interfaces, consultation, etc. This explains the reason for the
difficulty in obtaining average price for an EMR. Additionally, the total cost for an
EMR includes more than the initial price of the software. The costs for hardware,
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Two: Introduction
60

Table 2-10

Doctors Office Adoption Rates 2011

Size of Practice

Adoption as of
January 2010

Adoption as of
October 2010

1 physician
2 physicians
3 -5 physicians
6-10 physicians
11-25 physicians
26 or more
physicians
Source: Physician Office Usage of EHR Software

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Adoption
as of
October
2011

Six: Market Analysis


245

Web-based Users
The companies catering to Web-based users were formed to leverage the cost
and service aspects of the Internet. Besides, the vendor offerings are estimated to be
more competitive in terms of functionality and product maturity. These offerings are
based on the one-size-fits-one philosophy and ensure better balancing of efficiency
and customer relationships. Further, these companies are in their nascent stages with
limited distribution capabilities, and hence become attractive acquisition or
collaboration targets of larger players.
Some companies in this domain are as follows:

e-ClinicalWorks

Practice Fusion

Waiting Room Solutions

ADP Advanced MD

NueMD

MediTouch

Leaders in the market of EMR providers include large and small companies.
The market leader in 2011 was again McKesson who secured XX% market share.
McKesson is a large player the healthcare market and therefore is well-positioned to
expand its offerings. The company offers a full range of solutions to meet both
clinical and business performance needs ranging from medication safety and
information access to revenue cycle management, resource utilization and physician
adoption of EMRs.
Cerner garnered the second position with XX% market share reaching
revenues of $XXX in 2011. The company is continuing to add to its services by
adding CernerITWorks, a suite of services that improve the ability of hospital IT
departments to meet their organizations needs. A second example is Cerner

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