EHRs Make Up $30B Market That No One Seems to Like

The electronic health record (EHR) market has grown at an impressive rate over the past decade. It has not, however, satisfied many of the people who use its offerings daily.

In 2010, Markets and Markets forecast that the global market for EHR technology would grow from less than $4.5 billion to a bit below $10 billion in 2015. By the time that report came out, however, its projections were likely irrelevant. Spurred in part by the Health Information Technology for Economic and Clinical Health (HITECH) Act, passed in 2009, the US market alone was worth more than $10 billion in 2015.

New projections from Kalorama, another market research firm, now put the value of the global market at $30 billion—and it’s still growing. Even though HITECH took US adoption from under 10% to near-saturation (hovering around 90% of office-based physicians in 2018), companies will continue to profit from new contracts, upgrades, and ongoing maintenance contracts, the report says.

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The soaring market growth has translated into huge revenue boosts and solidified a few dominant players. Cerner, which holds the largest slice of the market, saw its revenue triple between 2008 and 2017. Its rival Epic went from pulling in $47 million in 2000 to $1.8 billion in 2017. McKesson, which held the No. 2 spot in Kalorama’s 2017 report, has exited the market entirely, however.

Despite—or, perhaps, due to—the hyperspeed growth in adoption and market value, EHR systems are widely disdained by those in healthcare. Providers have called the platforms “crude” and criticized them for being difficult to navigate and complete in a timely manner. Some have blamed the tools for contributing to physician burnout rather than assuaging it. And interoperability remains a distant dream for many in the industry.

Allscripts, a top-5 seller in the space, bought part of McKesson’s portfolio when that company exited. Some of Allscripts’ offerings suffered recent blackouts due to malware, and those events raised complaints about inconsistent usability and poor support communication for an increasingly vital healthcare technology.

In a recent panel at HLTH, health-tech company Politdok’s cofounder Ted Tanner said the “whole idea of health records will be outdated by 2020.” He claimed that the hegemony held by dominant EHR vendors was standing in the way of other new technologies and interoperability solutions.

But those issues might not be going away anytime soon. Now that most providers have some form of EHR, the industry is turning to banking on large hospital systems that want to consolidate all of their electronic records onto a single platform. For those programs, they rely mostly on the vendors large enough to support and implement them.

Megacontracts, like Epic’s $1.5 billion go-live with Mayo Clinic or the multibillion dollar arrangements between Cerner and the Department of Defense (DoD) and Department of Veterans’ Affairs (VA), will continue to sustain the industry. Though the latter has turned to something of a nightmare: Damning reports about poor usability have emerged from the DoD, and the VA contract remains unsigned nearly a year after being announced. Still, the State Department is in the market for a new EHR system.

And even high-level officials, like former Vice President Joe Biden, have blasted the companies for a perceived unwillingness to commit to interoperability. His colleague Greg Simon, who heads up the Biden Cancer Initiative, suggested that the way out of this situation might require the same mechanism that could’ve played a part in creating it: federal pressure.

“What we need to do is say, ‘This is the timeframe and you can do it on your own, or we will bring in other people to make it happen,’” Simon said during a meeting in Philadelphia. “Silicon Valley is dying to run away with standards for electronic medical record technologies and have nothing to do with Cerner, Epic, AllScripts, etc.”

The new Kalorama report projects another $10 billion in growth between now and 2022—barring major policy interventions, of course.

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