Friday, April 6, 2012

EMR Adoption: Some Are Skeptical About Adoption Gains

iHealthBeat has a good article presenting some skepticism of EMR adoption numbers. It includes Kalorama's estimate of the market from our new report EMR 2012.

Mitchell and some other observers believe that the growth in EHR acquisition will continue unabated. Research firm Kalorama Information recently reported that EHR sales were up 14.2% in 2011. Bruce Carlson, publisher of Kalorama's reports, told Healthcare IT News that sales would accelerate even further in the next two years because of Medicare penalties that will hit physicians who don't demonstrate meaningful use of EHRs, starting in 2015.

But DesRoches (Catherine DesRoches, senior scientist at Mathematica Policy Research
)is not so sure about that. She thinks that EHR adoption -- which already has leveled off for large groups -- might also plateau for small practices at some point, perhaps at a lower level than for the big groups. EHR acquisition is more difficult and financially risky for small practices than for large organizations, she pointed out. And, though cloud-based EHRs reduce some of the technical complexity, she said, EHRs as a whole are not becoming easier to use.

"Some practices may decide that the [government] incentives are not worth the cost of implementing the technology, or that the cost of implementing the technology outweighs the [Medicare] penalties," she observed.

It's a fair observation to make. Since 2007 Kalorama has noted slow uptake in adoption among confused smaller practices. Certainly the solo practices are not going to benefit as much as large group practices or health systems.

One of the things we've kept an eye on is Stark Exemptions that allow hospitals to subsidize affiliate physicians with EMR services. And the cloud services will help smaller practices adjust. Pharmacy and hospital use of EMR will make paper submission increasingly out of synch.

But in terms of our projection vs. the assessment of Mathematica's analyst may be that we are looking at 2 different factors. Adoption vs. revenue earned by vendors. There's plenty of revenue to be earned from a EMR sales, even wher adoption is slow, where even a minority of physicians are using EMR. Training and consulting on existing accounts will earn revenues for some providers, large hosptial buys represent the bulk of this market. Our reasonable growth rate assumes some continued resistance on the part of doctors. In fact a large adoption increase not resembling the growth rate we've seen so far would require a revision in revenue numbers.

That methodological difference being stated, we see a larger role for the disincentives than the article states, and we see the penalties in fact a bit more of a driver than the incentives.

Physicians are free to eschew incentive payments rather than invest, but will they tolerate a cut in Medicare/Medicaid income long term, especially where the penalty increases up to 2017, and perhaps could be increased after that point so that the government gets the paperless medicine it wants.