Impact of Standards on Vendor Consolidation

A new report from KLAS, a market research firm that measures vendor performance based on feedback from the user community, shows while the market for hospital EHR systems nearly doubled in 2009, only two vendors, Epic and Cerner, appeared to benefit from this market growth.   According to an article summarizing major findings from the KLAS report, hospitals “want a vendor that can be a consistent and reliable partner in their efforts to reach meaningful use”.   Jason Hess, author of the KLAS report, suggests that “Changes in the CIS (clinical information system the marketplace as a result of ARRA seem to have blindsided some vendors and left them struggling to stay afloat in the hospital market”.

While the US has chosen to let the market decide the vendors with whom they prefer to work,  the introduction of “meaningful use” regulations is nonetheless having an impact on the US market.  Vendors such as Eclipsys, GE, McKesson, and Quadramed lost more hospitals than they gained, according to KLAS and are “struggling to regain lost ground”.   While Siemens and MEDITECH did not lose ground in the same as some other vendors, their growth was much more limited than either EPIC or Cerner.


2 responses to “Impact of Standards on Vendor Consolidation

  1. An interesting article Mike. What struck me was who was gaining market share and who was not. According to KLAS, historically EPIC and Cerner have had some of the highest ranked products but have also been some of the most expensive as well. I wonder if this divergence in market share have to do with the other vendors having products that are not up to snuff re: meaningful use, or if EPIC and Cerner have lowered their prices to give a better quality to cost ROI. Probably a little of both.

    As we both know Cerner, Mckesson and MEDITECH own the majority of the HIS market share in Canada. Although we do not have the same “meaningful use” issues as the States, we often catch a cold when they sneeze. It would be interesting to see if the quality to cost convergence will allow EPIC to enter the Canadian market in a significant way or perhaps offer a window for Cerner to gain market share at the expense of MEDITECH and McKesson. This is especially true of MEDITECH as customers weigh their options on the big MEDITECH 6.0 upgrade.

    I think the jury is still out, especially in the Canadian market. Will the buyers want to switch? It would need an awfully compelling business case to do so.

  2. Pingback: eHealth Musings: Impact of Standards on Vendor Consolidation « MEDI-Talk

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