This is a summary of the HIT Trends report for May 2011.  You can get the current issue or subscribe here.

E-prescribing scale and innovation. Surescripts reports dramatic growth for e-prescribing with a third of office-based physicians on its network and 20% of all scripts now going electronically to pharmacies and mail order.  Yet formulary and prescription history data are underutilized by practices.  This according to a study by Center for Studying Health System Change who finds that while most physicians have access to formularies and about half to medication histories, many don’t utilize it because they don’t see the value or systems are too cumbersome.  However, there continues to be innovation in this area.  CVS Caremark is piloting electronic prior authorization and Medco released a consumer pharmacy app for Verizon phones that alerts consumers to lower cost alternatives that Medco hopes will be discussed with prescribers.  This is a terrific model for supporting the provider-patient dialog around medications.  The key is the personalization to the member’s specific benefit information and the application’s ease of use.  Perhaps these innovations can help address the utilization issues.

EHR market dynamics. There is also market growth and adoption of EMRs.  According to report by Kalorama Research it’s a $15.7B U.S. market in 2010 with predicted market growth of 18%-20% per year for the next two years.  California Health Care Foundation is reporting that over half of California’s primary care physicians using an EHR, and of the largest practices, adoption is over 80%.  EHR is increasingly a global issue with new reports on the European experience highlighting that 81% of hospitals there have electronic patient records.  This is a comprehensive European study of 909 hospitals in 30 countries.   Larger public and university hospitals are more advanced than smaller private ones.  Nordic countries are leading.  Individual spider-charts give readers a summary at-a-glance.  Still all is not rosy.  England’s National Audit Office reports its National Health Service EHR project is failing.

As the market matures, EMR leaders are extending their lead.  An ONC executive is reporting that almost 9 out of 10 of the early qualifying practices use one of 17 leading EMRs.  And Health Data Management reports that analysts looking at HIT consolidation worry that inflated valuations are preventing investment in alternative solutions.  We’re in a bit of a market bubble.

Clinical analytics relationships. New partnerships and some new investment are fueling the clinical analytics market.  GE Healthcare and Thomson Reuters report they are partnering to marry deep EMR data (GE) with broader health analytics (MarketScan®).  The richness of the EMR data, on 10% of the patients, helps answer more clinical questions.  And the comprehensive set provides great context for the patients with EMR data.  Allscripts and Humedica report partnering on a clinical analytics service and Allscripts also makes a strategic investment in the company.  While not specifically reported as such, it’s likely the $20M that Humedica reported earlier this year not linked to any investor. This is a great choice by Allscripts and the strategic investment gives it weight.  Humedica has seasoned entrepreneurial management that knows the landscape and has a history of execution.  Explorys, the clinical analytics spinout from Cleveland Clinic reports it has raised $11.5M for cloud-based clinical analytics solutions.  The company also offers data services to life sciences companies.  The SaaS model with curated data and an open interface is likely the future architecture for the segment.

Provider pushback on ACO. There has been serious pushback from providers to the first look at ACO rules.  AHA, CHiME and AMGA have each written letters to HHS suggesting substantial changes in the proposed rules to participate in the federal program.  The AHA letter argues that the costs of developing an ACO are in the range of $11M-$26M, not under $2M as suggest by HHS.  The CMS Innovation Center also released some new ideas that are useful:  (1) a pioneer model for maturing ACOs that’s a faster path to incentives; (2) an advanced payment initiative to help finance new ACOs; (3) accelerated development learning sessions as executive workshops for ACO leadership. All three initiatives are useful additions to the federal reform agenda. The HIT bar is still very high and may be a barrier to participation.

Art of HIT. This month’s art is Untitled (1957-3) by Clyfford Still.  It shows a dramatic tear opening a fissure in an otherwise serene yellow foundation.  The U.S. providers have ripped a corner out of the CMS Shared Savings Plan for health reform.  We are likely back at the drawing board looking for patches.

Michael Lake has been a healthcare technology strategist for over 30 years.  He is President of Circle Square Inc., a San Francisco-based strategy, business development and market research firm, focused exclusively on the healthcare information technology market.   He publishes the HIT Trends report monthly and the CHaT Trends report quarterly.  For more information, please see www.circlesquareinc.com.

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