EMR sales approached $18B in 2011

More swift growth predicted for 2012

NEW YORK CITY - Propelled by government incentives, a desire to improve patient outcomes and the bottom line, sales of electronic medical records reached $17.9 billion in 2011, up 14.2 percent from the previous year, according to market research publisher Kalorama Information.

In its recent report, “EMR 2012: the Market for Electronic Medical Records,” Kalorama found the uptick in sales are being aided by increasing physician and hospital acceptance, robust competition and growth in EMR budgets.

Incentives have been a factor in the increased usage and growth of EMR systems, according to the report. As part of the ARRA legislation passed in February 2009, the federal government set aside nearly $20 billion in incentives for hospitals and physician practices to adopt electronic medical records.

Healthcare organizations are also being motivated to implement EMRs out of a fear of looming government penalties.

“After 2015, it is no longer voluntary to get EMR and to demonstrate ‘meaningful use’ if you are a physician or hospital,” said Bruce Carlson, publisher of Kalorama Information. “A penalty (will be) assessed if you continue to submit claims by paper. Medicare will actually reduce payments in reimbursement to physicians for paper submission …This won’t happen until 2015 but since that is two years from now, we see it impacting software sales a little this year and very much next year.”

Kalorama expects the pending penalties to continue to cause an uptick in sales and predicts the EMR market growth rate in 2012-2013 to be 20 percent.

Westborough, Mass.-based healthcare IT firm eClinical Works has recently experienced a 40-percent growth in EMR revenue and unit volume sales, says the company’s CEO Girish Navani.

Although Navani notes that he cannot confirm Kalorama’s figures, he says the market growth is undeniable. “We’re seeing an exponential growth curve,” he said.

Navani says word of mouth and physician acceptance are two big factors impacting eClinical Works’ thriving sales.

“Physicians are fully on board,” said Navani. “Whether they like it or not is not the question that I am commenting on, but I doubt if you will come across too many physicians who won’t have a firm answer about whether they plan to purchase one …The market will continue to accelerate because awareness is that high.”

Navani also believes some vendors will do better than others in the EMR marketplace this year.

“You will definitely have winners and losers,” he said, citing market share and price point as the two deciding factors.

“If your customer base has bought your product and used it, I think you are fine,” he said. “If your product is extremely expensive, it will be tough to justify the price.”

Harry Purcell, operations manager with Atlanta, Ga.-based Medical Management Professionals, Inc., agrees that government incentives and a fear of reductions in Medicare payments are driving forces behind the swift adoption of EMR.

Purcell also thinks improvements in the technology are making the product more attractive.

“(EMR) technology continues to improve each year,” he said. “These improvements facilitate system integration, care coordination and patient access to electronic health records.”

This improved technology translates into better revenue cycle management, according to Purcell.

“Some diagnostic tests in hospitals are ordered with unspecified conditions such as ‘motor vehicle accident,’ ‘slip and fall,’ ‘assault’ or ‘trauma,’” he said. “(EMRs) expand the information available to specialists, thereby reducing the volume of invalid clinical indications that may otherwise result in pended or rejected claims.”