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Researcher Puts Epic In Third Place For EMR Market Share

Posted on May 16, 2017 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

A new research report tracking market share held by EMR vendors puts Epic in third place, behind Cerner and McKesson, a conclusion which is likely to spark debate among industry watchers.

The analyst firm behind the report, Rockville, MD-based Kalorama Information, starts by pointing out that despite the hegemony maintained by larger EMR vendors, the competition for business is still quite lively. With customers still dissatisfied with their systems, the hundreds of vendors still in the market have a shot at thriving, it notes.

Kalorama publisher Bruce Carlson argues that until the larger firms get their act together, there will still be plenty of opportunity for these scrappy smaller players: “It’s still true to say no company, not even the largest healthcare IT firms, have even a fifth of this market,” Carlson said in a published statement. “We think that is because there’s still usability, vendor-switching, lack of mindshare in the market and customers are aching for better.”

In calculating how much each vendor has of the EMR market, the analyst firm estimated each vendors’ hardware, software and services revenue flowing directly from EMRs, breaking out the percentage each category represented for each vendor. All projects were based on 2016 data.

Among the giants, Kalorama ranks Cerner as having the biggest market share, McKesson as second in place and Epic as third. The report’s observations include:

  • That Cerner is picking up new business, in part, due to the addition of its CernerITWorks suite, which works with hospital IT departments, and Cerner RevWorks, which supports revenue cycle management functions. Kalorama also attributes Cerner’s success to the acquisition of Siemens IT and its having won the Department of Defense EMR contract.
  • That McKesson is building on its overall success as a health IT vendor, which puts it in a good position to build on its existing technology. For example, it has solutions addressing medication safety, information access, revenue cycle management, resource use and physician adoption of EMRs, including Paragon, Horizon, EHRM, Star and Series for hospitals, along with Practice Partners, Practice Point Plus and Fusion for ambulatory care.
  • That Epic serves giant customers like Kaiser Permanente, as well as holding a major share of new business in the EMR market. Kalorama is predicting that Epic will pick up more ambulatory customers, which it has focused on more closely of late.

The report also lists Allscripts Healthcare Solution, which came in fourth. Meanwhile, it tosses in GE Healthcare, Athenahealth’s Intersystems, QSI/NextGen, MEDITECH, Greenway and eClinicalWorks in with a bundle of at least 600 companies active in the EMR market.

The report summary we editors got didn’t include some details on how the market components broke down. I would like to know more about the niches in which these vendors play.

For example, having seen a prediction earlier this year that the physician practice market would hit $17.6 billion worldwide within seven years, it would be interesting to see that dot connected with the rest of the market share information. Specifically, I’d like to know how much of the ambulatory EMR market included integrated practice management software. That would tell me something about where overall solutions for physicians were headed.

However, I still got something out of the information Kalorama shared.  As our esteemed publisher John Lynn often notes, all market share measurements are a bit, um, idiosyncratic at best, and some are not even that reliable. But as I see it the estimates are worth considering nonetheless, as they challenge us to look at the key moving parts in the EMR market. Hey, and it gives us something to talk about at tradeshow parties!

Where Do Doctors Turn for the Latest Innovations?

Posted on May 11, 2017 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

At last month’s Health IT Marketing and PR Conference, I hosted a panel of customers to talk about what type of marketing tactics work for them. We had a broad range of people on the panel, so there was a wide variety of perspectives on how they discovered new innovations for their organization.

However, one thing stood out to me for one of the doctors that practiced in a relatively small 5 person group practice. He honestly didn’t have any great places to turn when he had a problem he needed to be solved. You got the feeling that he went to Google as much as he did anything else. Although, bewilderment was really his first response.

After some time he did come out with some common answers such as when he attends his association conferences and when he talks to his peers. No doubt doctors largely trust the opinions of their peers. However, there’s not nearly as much peer sharing as you might think. I remember another doctor I know in this physician’s practice which bought season tickets to the local college team’s basketball games. His idea was that he could go to the games with his peers. He couldn’t get any of them to go with him.

With these thoughts in mind, we’re chewing on how we at Healthcare Scene can help these practices out. One idea we have is to essentially create knowledge centers that will list all of the various companies and products that could help a small practice be more effective and efficient. We did this with EMR and EHR vendors in the past as many were looking for that type of list. We’re asking ourselves if we can do the same for other categories of software and services that could help doctors be more effective at what they do.

We’d love to hear your thoughts on this idea and any other ways we can help doctors discover new innovations. It’s a challenging idea since it isn’t like there’s one healthcare IT market for small practices. The needs vary by specialty, group size, location, etc etc etc. However, we’ll do our best. Plus, we’ll do like we always do and iteratively improve the lists over time.

One other idea I’m hoping to execute is to do as many origin stories for the products we list as possible. I think it’s extremely powerful to know the origin of a company and how they ended up with the solution they offer. Did they start this way? Did they acquire a company to get into the business? Did they start with another product and then pivot to what they’re doing today when they saw the opportunity? Knowing this information is powerful.

Hopefully in the future we can point to a vast library of knowledge centers that can better help a practice know about companies that can help them work more effectively and efficiently.

How Do You Keep Up with All the Health IT Innovation?

Posted on February 17, 2017 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

When I think about doctors, I quickly realize that there’s no easy way for them to keep up with healthcare innovation. I’m a blogger that’s devoted to Healthcare IT and even I can’t keep up with everything that’s happening. I’m always learning about new companies that I’d never heard of before. How can a doctor that’s seeing 10-15 patients a day suppose to keep up?

This really hit home when I saw this graphic shared on Twitter (yes, it’s a bit old, but in this case it’s lucky that Healthcare doesn’t move that fast):

Add this to the fact that there are probably ~1300 vendors exhibiting at the HIMSS Annual Conference next week and it’s no wonders that a lot of doctors just throw up their hands. It’s overwhelming to say the least. Plus, it’s not like there are going to be that many practicing doctors at HIMSS anyway.

How then do doctors keep up with all the innovation that’s happening? Unfortunately, they don’t. Certainly blogs like this one help. Certainly there’s a lot of word of mouth that happens between doctors. However, it’s a challenge without a simple solution. Plus, let’s face the facts. Many aren’t that interested in the next innovation. They’re happy just doing what they’ve been doing for years. That’s what makes doing a tech startup company in healthcare so challenging.

What do you do to keep up with innovation? I’d love to hear in the comments.

Point Of Care Testing Expansion Poses Data Management Challenges

Posted on November 3, 2016 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

With the advent of remote monitoring and other mHealth tools, the treatment process is again moving out towards the perimeter, perhaps not with a full return to house calls, but certainly a far greater emphasis on providing care in the field. And that will pose some new data collection and management challenges with their own unique character.

Collecting results from these devices won’t be difficult in and of itself. But we should think about how testing results vary from other types of physician-generated and patient-generated data before we pour it into existing oceans of clinical data.

A revolution in the wings
While you may not be familiar with the point of care diagnostics market, it’s definitely worth a look. The POC diagnostics industry, which includes both professional point of care testing and consumer options, should be worth almost $40 billion within five years, according to research firm Markets and Markets.

Over the next five years, a wide range of new POC options are likely to emerge, in categories that include ultrasound and other imaging, blood tests, cardiovascular imaging and more, Markets and Markets reports. And the devices that fuel this revolution are far more capable than a testing strip in a box; they’re emerging in a world where health advances are almost always found somewhere along the digital spectrum.

Want an example? Consider Scanadu Urine, a urine test kit designed to help monitor maternal and women’s health. The product package does include an old-fashioned paddle to dip in a urine sample, but it doesn’t stop there. Once the user dips the disposable paddle into the sample, they use the Scanadu app and their smartphone to read and interpret color changes on the paddle. Then, they can display, store or share the results via the app. Like many of its competitors, parent company Scanadu hasn’t gotten FDA approval for this or its other health monitoring devices, but that’s in the works.

Other niches already have multiple FDA-approved entrants, such as the mobile ultrasound category, but also emerging smartphone-based competitors such as Clarius Mobile Health. Like Scanadu Urine, Clarius isn’t FDA-approved yet, but the company reports that approval is pending.

As long as these devices remain unapproved by the FDA, they’ll stay in the background. But once devices like these get approved and start hitting the market, they should shake up the healthcare industry. After all, they don’t just empower consumers doing routine tests, they should also make it possible for patients to share important, reliable testing results to telemedicine doctors more or less in real time.

Managing POC data

Eventually, POC diagnostics data – even devices aimed almost exclusively at consumers — will become a completely standard part of the clinical diagnostic process. This much seems obvious. After all, if we want patients to engage with their health, putting powerful, reliable urine testing devices in their hands makes as much sense as giving them a connected glucose monitor, doesn’t it?

That being said, managing and integrating this data into patient data warehouses poses some unique challenges.

For example, how do providers weight the importance of various data streams when integrating them into databases?  After all, some devices are FDA-approved and some are not; some tests are administered by consumers and some by mobile professionals; some data comes from hospital- or clinic-provided remote monitoring devices and some from consumer-grade wearables or sensors.

Another question is how we’ll integrate these results. Even if we were to treat all data as equal (consumer- and professional-grade testing devices alike) do we have to integrate it in real time? Do we only do analysis and data dumps POC data into a big pool, do we pair it with other relevant data as needed or ignore it unless it seems immediately relevant?  We need to figure this out.

Bottom line, it’s probably smart to handle these data streams differently, but figuring out how to do so will be a challenge. We’ll have to develop algorithms for sorting this data soon, or risk being overwhelmed.

A Circular Chat On Healthcare Interoperability

Posted on September 6, 2016 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

About a week ago, a press release on health data interoperability came into my inbox. I read it over and shook my head. Then I pinged a health tech buddy for some help. This guy has seen it all, and I felt pretty confident that he would know whether there was any real news there.

And this is how our chat went.

—-

“So you got another interoperability pitch from one of those groups. Is this the one that Cerner kicked off to spite Epic?” he asked me.

“No, this is the one that Epic and its buddies kicked off to spite Cerner,” I told him. “You know, health data exchange that can work for anyone that gets involved.”

“Do you mean a set of technical specs? Maybe that one that everyone seems to think is the next big hope for application-based data sharing? The one ONC seems to like.” he observed. “Or at least it did during the DeSalvo administration.”

“No, I mean the group working on a common technical approach to sharing health data securely,” I said. “You know, the one that lets doctors send data straight to another provider without digging into an EMR.”

“You mean that technology that supports underground currency trading? That one seems a little bit too raw to support health data trading,” he said.

“Maybe so. But I was talking about data-sharing standards adopted by an industry group trying to get everyone together under one roof,” I said. “It’s led by vendors but it claims to be serving the entire health IT world. Like a charity, though not very much.”

“Oh, I get it. You must be talking about the industry group that throws that humungous trade show each year.” he told me. “A friend wore through two pairs of wingtips on the trade show floor last year. And he hardly left his booth!”

“Actually, I was talking about a different industry group. You know, one that a few top vendors have created to promote their approach to interoperability.” I said. “Big footprint. Big hopes. Big claims about the future.”

“Oh yeah. You’re talking about that group Epic created to steal a move from Cerner.” he said.

“Um, sure. That must have been it,” I told him. “I’m sure that’s what I meant.”

—-

OK, I made most of this up. You’ve got me. But it is a pretty accurate representation of how most conversations go when I try to figure out who has a chance of actually making interoperability happen. (Of course, I added some snark for laughs, but not much, believe it or not.)

Does this exchange sound familiar to anyone else?

And if it does, is it any wonder we don’t have interoperability in healthcare?

When Will Doctors Teach Patients to Not Come In for a Visit?

Posted on July 8, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I’ve been thinking and writing a lot about the shifting medical reimbursement world. Technology is going to be an enabler for much of this shift and so understanding the changes are going to be key to understanding what technology will be needed to facilitate these changes.

As part of this thinking, I recently wondered when a doctor will start teaching patients when they shouldn’t come for a visit. I realize this is a bit of a tricky space since our current liability laws scare doctors from providing this kind of information. Dealing with these liability laws will be key to this shift, but if we want to lower the cost of healthcare and improve the patient experience, we need to make this change.

Turns out, we already do this in healthcare, but it’s not so formal. Plus, it’s usually the older, more experienced doctors that do it (from my experience). I think the older doctors do this for a couple unique reasons. First, hey’ve had years of experience and so the patterns of when someone should go to a doctor or not are very clear to them since they’ve seen it over and over for 30 years. Second, they aren’t as worried about patients returning in the future, so they’re not afraid to educate the patient on when they shouldn’t come for a visit. Third, these older doctors are likely tired of seeing patients for something that’s totally unnecessary.

We’ve had an older pediatrician that did this for us and our children and we loved the experience. In some ways, I think he just liked to hear himself talk and we loved it as parents. There’s no handbook you get as a parent and so we wanted to learn as much as possible about how to take care of our child. Since we had 4 children, we were able to use that knowledge pretty regularly, but even so, it was hard to remember 6 months or a year later what the doctor had told us. It was all very clear when he explained it in the exam room, but remember when to take them to the doctor and when to wait it out was often forgotten 6 months later.

The decision of when to go to the doctor and when not to go to the doctor is always a challenge and I always forget when I should and when I shouldn’t. Far too often my wife and I error on the side of caution and take our kids in for needless visits. We don’t want to be irresponsible parents and not take them. With my own personal health, I likely wait too long to go to the doctor because I’m busy or I can just tough it out when a quick visit to the doctor would make my life better and avoid something worse.

I guess this is why we see so many health decision tree apps out there. They try and take the collective knowledge and help you as a potential patient know if you should go in for the doctor visit or not. However, most of them are really afraid to make a hard conclusion that you shouldn’t go to the doctor. Instead, they all end with some sort of disclaimer about not providing medical advice and that you should consult a healthcare professional for medical advice. I’m not sure how we overcome the liability of really offering a recommendation that doesn’t need the disclaimer. Although, this is exactly what many of us need.

What do you see as the pathway forward? Will the consumer health apps be our guide as patients? Will doctors start spending time educating us on when to come for an office visit and when not to come? Will they want to do this thanks to ACOs and other value based reimbursement? Will doctors leverage the consumer health apps or a PHR tool to help their patients with retention of the concepts they teach them about when to come in for a visit?

No, The Market Can’t Solve Health Data Interoperability Problems

Posted on July 6, 2016 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

I seldom disagree with John Halamka, whose commentary on HIT generally strikes me as measured, sensible and well-grounded. But this time, Dr. Halamka, I’m afraid we’ll have to agree to disagree.

Dr. Halamka, chief information officer of Beth Israel Deaconess Medical Center and co-chair of the ONC’s Health IT Standards Committee, recently told Healthcare IT News that it’s time for ONC and other federal regulators to stop trying to regulate health data interoperability into existence.

“It’s time to return the agenda to the private sector in the clinician’s guide vendors reduce the products and services they want,” Halamka said. “We’re on the cusp of real breakthroughs in EHR usability and interoperability based on the new incentives for outcomes suggested by MACRA and MIPS. {T}he worst thing we could do it this time is to co-opt the private sector agenda more prescriptive regulations but EHR functionality, usability and quality measurement.”

Government regs could backfire

Don’t get me wrong — I certainly appreciate the sentiment. Government regulation of a dynamic goal like interoperability could certainly backfire spectacularly, if for no other reason than that technology evolves far more quickly than policy. Regulations could easily set approaches to interoperability in stone that become outmoded far too quickly.

Not only that, I sympathize with Halamka’s desire to let independent clinical organizations come together to figure out what their priorities are for health data sharing. Even if regulators hire the best, most insightful clinicians on the planet, they still won’t have quite the same perspective as those still working on the front lines every day. Hospitals and medical professionals are in a much better position to identify what data should be shared, how it should be shared and most importantly what they can accomplish with this data.

Nonetheless, it’s worth asking what the “private sector agenda” that Halamka cites is, actually. Is he referring to the goals of health IT vendors? Hospitals? Medical practices? Health plans? The dozens of standards and interoperability organization that exist, ranging from HL7 and FHIR to the CommonWell Health Alliance? CHIME? HIMSS? HIEs? To me, it looks like the private sector agenda is to avoid having one. At best, we might achieve the United Nations version of unity as an industry, but like that body it would be interesting but toothless.

Patients ready to snap

After many years of thought, I have come to believe that healthcare interoperability is far too important to leave to the undisciplined forces of the market. As things stand, patients like me are deeply affected by the inefficiencies and mistakes bred by the healthcare industry’ lack of interoperability — and we’re getting pretty tired of it. And readers, I guarantee that anyone who taps the healthcare system as frequently as I do feels the same way. We are on the verge of rebellion. Every time someone tells me they can’t get my records from a sister facility, we’re ready to snap.

So do I believe that government regulation is a wonderful thing? Certainly not. But after watching the HIT industry for about 20 years on health data sharing, I think it’s time for some central body to impose order on this chaos. And in such a fractured market as ours, no voluntary organization is going to have the clout to do so.

Sure, I’d love to think that providers could pressure vendors into coming up with solutions to this problem, but if they haven’t been able to do so yet, after spending a small nation’s GNP on EMRs, I doubt it’s going to happen. Rather than fighting it, let’s work together with the government and regulatory agencies to create a minimal data interoperability set everyone can live with. Any other way leads to madness.

Specialty-Focused EHRs Re-Entering The Picture

Posted on June 6, 2016 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

Over time, I’ve read a great deal on whether specialist clinicians should invest in EHRs designed for their area of practice or not. One school of thought seems to be that specialists can do just fine by buying broadly-based systems and implementing practice-specific templates, a move which also offers them a longer list of EHRs from which they can choose. Another, meanwhile, is that EHRs designed for use by all clinicians can undercut practice efficiency by forcing specialist workflow into a one-size-fits-all straightjacket.

But the arguments in favor of specialized EHRs seem to be taking hold of late. According to the latest data from Black Book, specialist surgical and medical practices have been switching over to specialty-driven EHRs in overwhelming numbers during the first half of this year. Its researchers found that during the first and second quarter of 2016, 86% of the 11,300 specialty practices it surveyed were in favor of switching from generalist to specialist EHRs.

According to the research firm, 93% of specialists surveyed felt that templates available in specialty EHRs offered a substantial benefit to patients who needed individualized documentation, especially in practices that see a high volume of predictable diagnoses.

If that’s the case, why did so many specialists start out with generalized EHRs?  Eighty-nine percent of respondents said that they bought the non-specialist EHR they had because they were focused on meeting Meaningful Use deadlines, which left them too little time to vet their original EHR vendor sufficiently.

Lately, however, specialist practices have decided that generic EHRs just aren’t workable, Black Book found. Nearly all respondents (92%) said that given their workflow needs, they could not afford to spend time need to shape all-purpose systems to their needs. When they switched over to purchasing a specialty-driven EHR, on the other hand, specialists found it much easier to support ultra-specific practice needs and generate revenue, Black Book reported.

That being said, specialists also switched from generalized EHRs to practice-specific systems for reasons other than clinical efficiency. Black Book found that 29% of specialists make the change because they felt their current, generic EHR was not achieving market success, raising the possibility that the vendor would not be able to support their growth and might not even be stable enough to trust.

Specialists may also be switching over because the systems serving their clinical niche have improved. Black Book researchers note that back in 2010, 80% of specialist physicians felt that specialized EHRs were not configurable or flexible enough to meet their needs. So it’s no surprise that they chose to go to with more robust multi-use and primary care systems, argues Black Book’s Doug Brown.

Now, however, specialized EHRs perform much better, it seems. In particular, improvements in implementations, updates, usability and customization have boosted satisfaction of specialist EHRs from 13% meeting or exceeding expectations in 2012 to 84% in the second quarter of 2016.

Still, practices that buy specialty EHRs do make some significant trade-offs, researchers said. Specifically, 88% of specialists said they were concerned about a lack of interoperability with other providers, particularly inpatient facilities. Respondents reported that specialty-specific EHRs aren’t fitting well within hospital network and regional health information exchanges, imposing a considerable disadvantage over large multispecialty EHRs.

And not surprisingly, investing in a replacement specialty EHR has proven to be a financial burden for specialist practices, Black Book concluded. Forty-eight percent of all specialty practices switching EHRs between June 2014 and April 2016 said that making such investment has put the practice in an unstable financial position, the research firm found.

My general sense from reading this research is that specialist practices have good reasons to replace their generalized EHR with a specialist EHR these days, as such products appear to have matured greatly in recent years. However, these practices had better be ready to deploy their new systems quickly and effectively, or the financial problems they’ll inherit will outweigh the benefits of the switchover.

e-MDs Acquires McKesson’s Portfolio of Ambulatory EHR Software

Posted on March 10, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This post will likely be a little bit of inside baseball for many, but I think it’s a really important subject to cover since it’s going to impact so many practices and so many doctors. The news just came out that e-MDs was acquiring the suite of ambulatory EHR software owned by McKesson. For those keeping track at home, these are 6 of the assets acquired from McKesson: McKesson Practice Choice™, Medisoft®, Medisoft® Clinical, Lytec®, Lytec® MD, and Practice Partner®.

This shouldn’t be a surprise from a McKesson perspective. At HIMSS I heard multiple stories of people talking with McKesson staff who didn’t even know the names of their EHR software. Sad, but true. The only question for McKesson is will Paragon get sold off next?

For those that aren’t familiar with the history of e-MDs, it was purchased by Marlin Equity Partners back in March 2015 and merged with Marlin’s MDeverywhere company. Marlin then went on to acquire AdvancedMD from ADP in August of 2015 as they started to stock pile ambulatory EHR vendors. With the acquisition of the McKesson assets, Marlin now owns a large number of ambulatory EHR vendors.

This shouldn’t really be a surprise to anyone. We all knew that 300 EHR vendors wasn’t sustainable long term and we know that the EHR market has matured now that the false market meaningful use created is over. Some consolidation was bound to happen and it’s no surprise that a private equity firm is rolling up these companies as they seek to find the benefits of scale. The press release notes that the combined company’s products and services are being used by nearly 55,000 providers nationwide after this latest acquisition. That’s quite a presence in the ambulatory space.

The unfortunate downside of this type of EHR roll up is that not all of these EHR software can survive under one roof. Some of them have got to go. The only question is which one(s) will survive. Unlike EHR vendor founders, private equity companies are disconnected from the original product and so it doesn’t hurt as much for them to shut down a weaker product line as they consolidate users on to what they consider the best software. I’d be shocked if we didn’t see this happen with a number of EHR software that are now under e-MD’s (and Marlin’s) roof.

I also won’t be surprised if Marlin and e-MDs continue with more acquisitions. There are still a few hundred other ambulatory EHR vendors out there.

Is Practice Fusion Heading for an IPO?

Posted on January 21, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

The New York Times recently reported that Practice Fusion is said to have hired JP Morgan Chase to evaluate an IPO. Here’s a look at the estimated IPO number for Practice Fusion according to the New York Times:

Practice Fusion later created a way to estimate its I.P.O. valuation if revenue came in at $155 million in 2018 instead of $181 million, according to one of the people. Using the lower revenue assumption, the company could command a valuation of $1.1 billion to $1.2 billion if it goes public. It is unclear if the lower revenue estimate was made in response to the market turmoil.

Practice Fusion itself is of course not really commenting on their plans for an IPO or not. However, since it has raised $149 million to date at a valuation of $635 million, you have to imagine that an IPO is in their future. However, many big silicon valley companies have stuck to the private market lately and avoided the IPO. I’m not sure Practice Fusion will be in a similar position to them though. A look at their revenue numbers is one indication of why they’re a bit different than other companies that have raised larger rounds in the private markets:

Practice Fusion’s revenue was $26.9 million in 2014 and was expected to increase by 71 percent to $46.1 million in 2015, with the company projecting it would pare losses by 40 percent to $25.8 million in 2015, according to the document prepared by bankers and the company.

At the time the document was prepared, the company estimated revenue would hit $70 million in 2016.

I personally think that an IPO is in Practice Fusion’s future. It’s just a question of when it will happen. Certainly the market volatility we’ve seen lately isn’t helping their case to do an IPO. However, I bet the bigger challenge is going to be creating attractive revenue numbers that make sense to the public markets. I believe public markets have a hard time valuing number of users and other metrics that make Practice Fusion look attractive.

Ever since the first venture capitalists asked me about Practice Fusion, I’ve said that the company has created value. The number of doctors they were able to sign up on their platform was impressive. That’s the power of offering something for free that other doctors pay hundreds of thousands of dollars to buy. No doubt their network of physician users is a valuable asset. I hope it is since they raised $149 million to build it.

The real question for me around Practice Fusion isn’t whether they created value. Instead, the question is how valuable is what they created? I once heard Peter Thiel suggest at their user conference that Practice Fusion was building the platform for healthcare. Building that would be worth multiple billions of dollars. However, Practice Fusion hasn’t built anything close to that since Practice Fusion is doing nothing in the hospital EHR space. It’s naive to think that Practice Fusion could compete in that piece of healthcare. Not to mention they have a very small part of the hospital owned ambulatory practice space where the trend is to go with the integrated hospital EHR solution.

Long story short, I think that Practice Fusion will do an IPO. I could even see them doing an IPO for a billion dollars. I’m sure that’s what Ryan Howard, Practice Fusion Founder and former CEO, wants so he can claim his startup unicorn status. Although, I’ll be interested to see how Practice Fusion’s revenue grows between now and an IPO. The golden age of EHR is over and we’re entering the dirty slog of EHR sales and EHR switching. I don’t think that makes for a compelling story for investors.