Wednesday, March 14, 2012

Will the Real EMR Market Please Stand Up?

In what must be good news for the healthcare IT industry: EMR is growing.  Incentives, better patient outcomes, cost-savings EMR revenues grew 14.2%.  It doesn't mean the U.S. will have paperless medicine overnight, but the healthcare system is getting there, and some of the companies who help it along are making money.   How large is the market now?  That might vary according to what account you read. 

Each year since 2007, Kalorama Information has looked at the EMR market. Kalorama's latest study of the electronic medical records market estimates a market of over 17 billion dollars. We get a few questions from time to time about that number, because there are highly respected research firms with numbers in the single billions.  We can assure on this report that we have run the numbers by industry executives and they confirm or if anything say they are conservative.  Two things one should keep in mind.  a) We include 'Big EMR' if you will; the companies like McKesson, Cerner, GE Healthcare and the like as well as the smaller EMR companies.  b) we include ALL revenues related to the sale of an EMR: service fees, software, installation, training, CPOE.  Not including these would not reflect the real money that is being made in EMR.   Other estimates one sees in the press may only include software, or may exclude large companies who entered EMR by virtue of their strength in Patient Management IT. 

The revenue growth mirrors increased physician and institutional usage. Statistics from the National Ambulatory Medical Care Survey (NAMCS) indicate that 56.9 percent of the office-based physicians used partial or full EMR systems in 2011, an increase from the percent reported in 2010.  The first incentives were paid in 2011 based on 2010 performance. More than $1.3 billion in Medicare EHR Incentive Program payments have been made between May 2011 and the end of December 2011 and more than $1.1 billion in Medicaid EHR Incentive Program payments have been made between January 2011 and the end of December 2011.  We expect sales to grow further when the penalties are threatened , when Medicare and Medicaid could penalize providers who are not using certified EHRs by 2015.

The report can be found at Kalorama's website.