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The Long Tail of the EMR

HomepageIn the fall of 2008 I had the opportunity to do some research on the, then dormant, EMR marketplace. The results came as no surprise. Most physicians did not have an EMR and were not interested in adopting an EMR due to cost and usability barriers.

Much has changed in one short year. Spurred by ARRA and its HITECH portion, there is a renewed interest for technology in the physician community. Some of it came from the promise of stimulus funds and some stems from the perceived inevitability of the need to have technology in one’s office. There is no feverish anticipation of the great things an EMR will bring to a medical practice. Instead, there seems to be a somber resignation to the upcoming demise of a trusted friend: the paper chart.

On the other side of the market, vendors are gearing up for 2010. Since stimulus funds are supposed to begin flowing in 2011, the coming year is crucial to most vendors. There is a palpable sense of urgency for capturing market share before it is too late, and all physicians have made their choices. After all, once a physician buys and uses an EMR, changing vendors is not an easy proposition. Transferring clinical data from one EMR to another is practically impossible and the costs of change are high.

The HIT news is chockfull of announcements of mega deals almost every day. Mergers and acquisitions are rampant. Vendors are signing multi million dollar deals with large hospitals, medical organizations and regional healthcare groups to provide EMRs to affiliated physicians. At this point in the game, there are two vendors clearly ahead of the pack in the ambulatory market: Allscripts and eClinicalWorks.  It is likely that the next months will add a few more contenders for large chunks of market share, most likely athena, NextGen and probably GE. These large corporations, most of them public, are very well poised to capitalize on the ARRA stimulus. They have the marketing power, the infrastructure and the ability to forge business agreements with equally large distribution partners that will lead to significant sales through 2010 and 2011.

However, the ambulatory EMR market has a very Long Tail.

Granted, the EMR market is not a consumer market per se. It has a finite size of a few hundred thousand customers and once a customer buys one EMR, it is very unlikely that he/she will be buying another one for at least several years. However, certain aspects of Chris Anderson’s Long Tail theory still apply to the ambulatory EMR market.

Examining the current state of EMR adoption reveals that a handful of products are used by many physicians, while hundreds of others are used by very few, and some homegrown EMRs are only used by their creator and maybe friends and family. These hundreds of small to tiny products are the Long Tail of the EMR market and the tail has been getting longer and longer ever since HITECH became law. Unfortunately for small vendors, the tail has been also getting narrower at most points, and many existing small businesses, as well as new entrants, are hurting.

Few medium size vendors, in the thicker part of the tail, have been around for a while and are no better and no worse than the large players. Their survival will depend on finding ways to manage costs down and identify niches where they can provide unique service.

Then there are the newer web based, or internet based, EMRs. Most have price points significantly lower than the popular products. Unfortunately, the product quality in this group is not superior to the large EMRs. These vendors are most at risk of being wiped out by the bigger, better funded competition, who is also exploring the “cloud” based paradigm.

The homegrown products will likely always exist and serve the limited market they were designed to serve, with no major effect on the overall EMR market.

And then there is the exciting part of the tail, the part where innovation occurs. Tails are much better suited to breeding innovative solutions and the EMR Long Tail is no different. The tail contains several open source products that grow and innovate based on active user participation and distributed development efforts. These are worth watching. Other residents of the tail are attempting to formulate novel business models based on aggregation of smaller software packages, such as electronic prescribing, registries and patient connectivity. Some of these companies are veteran portal service providers adding new service lines to meet government regulations. DocSite, RelayHealth and Quest 360 are just a few. Others are trying to create entire platforms on which interchangeable software service providers can aggregate their wares. And then there is the entire Health 2.0 phenomena attempting to bring consumerism to health care, but that deserves its own separate analysis.

The takeaway for small vendors in the EMR space is that one can create a very profitable business in the EMR Long Tail. Physicians are not a homogeneous group of customers and it is very unlikely that that the utilitarian large EMR vendors will be able to satisfy the majority of the market. Multiple niche opportunities already exist in providing services tailored to particular medical specialties and various practice models, such as medical homes, concierge medicine, telemedicine, micro practices and more. More niche opportunities will be created by physician work-flow preferences and proliferation of non-physician providers. Tail companies that learn how to answer the needs of these niches by providing high quality solutions, while keeping costs of customization and service to a minimum, will thrive.

Since in the software world nobody stays on top for very long (except Microsoft), a disruptive enough technology breakthrough will eventually occur and the EMR market will be irrevocably changed, and the change will likely be brought on by someone from the Long Tail.

Margalit Gur-Arie was COO at GenesysMD (Purkinje), an HIT company focusing on web based EHR/PMS and billing services for physicians. Prior to GenesysMD, Margalit was Director of Product Management at Essence/Purkinje and HIT Consultant for SSM Healthcare, a large non-profit hospital organization.

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Valant Medical SolutionsEMR MedicalThe EHR Guysymptoms cancerR Watkins Recent comment authors
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Valant Medical Solutions
Guest

This is an wonderfully informative article and discussion. As a private practice-oriented EMR vendor, we can empathize with the concerns of small practice health care providers in light of the seemingly intrusive government mandates for conversion to EMRs/EHRs. However, we maintain that committed specialty vendors like ourselves will be able to remain in the marketplace without compromising quality, price, and integrity even after government incentives have passed. When choosing an EMR vendor, be sure to take into consideration the relationship that you will form with the company itself, as the decision to implement an EMR goes beyond just the new… Read more »

EMR Medical
Guest

An informative article..
Thanks for sharing this post.

The EHR Guy
Guest

Maybe some home garage software shop is currently churning what will be the next success product.
Status quo rarely survives modernization revolutions.
I don’t necessarily think open source has anything to give but deception. Open source has proven to be a mechanism to “sucker-in” free developers and then to create out of the community hard work proprietary products.
Thanks,
The EHR Guy

symptoms cancer
Guest

Excellent post, I learn many things.

R Watkins
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R Watkins

Excellent post, Osler. If EMRs were as great for the consumers (i.e., physicians, the ones who buy them) as claimed, they would sell themselves. But they aren’t, so it’s taking enormous government subsidies and the mindless cheerleading of our professional organizations to shove them down our throats.

Marshall Maglothin
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Marshall Maglothin

The first two HITECH priority grant programs, funded through the Recovery Act, support the national implementation of electronic health records (EHRs) initiative. Approximately $598 million is being made available through the Health Information Technology Extension Program (Extension Program), to ensure that comprehensive support is available to health technology users. Under the State Health Information Exchange Cooperative Agreement Program $564 million will be awarded to support efforts to achieve widespread and sustainable health information exchange (HIE) within and among States through the meaningful use of certified Electronic Health Records. State Health Information Exchange Cooperative Agreement Program The State Health Information Exchange… Read more »

Osler
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Osler

First of all, Ms. Gur-Arie thank you for inviting me to comment on your article. Unfortunately, the “Long Tail” premise unravels quickly once you realize that EMRs no longer operate under the rules of a free market. With the ARRA payments/HITECH Act flushing billions of taxpayer dollars into the gaping maws of only “certified” EMR vendors, the tail will quickly shorten, as vendors who are unable to meet those still-not-yet-announced criteria get left behind. Physicians will quickly cluster around a very small number of dominant EMRs (as is already happening) and the tail will both shorten and become asymptotic much… Read more »

Margalit Gur-Arie
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Margalit Gur-Arie

Dr. Watkins, in all honesty, some offices are able to realize these efficiencies with a lot of training and planning and commitment to be successful. Others are not and most have not been interested in trying. So there really isn’t any statistically significant data out there. The main reason, in my opinion, to move to electronic documentation is the future ability to meaningfully exchange data with other physicians and hospitals. You could argue that you’d rather wait before that data exchange is possible, and I understand that. However, somebody has to be first and collect exchangeable data in order to… Read more »

R Watkins
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R Watkins

“EMRs are going to cut healthcare costs and improve quality. Unfortunately, reality is not supporting this view.”
And this is where I get confused. It seems like all the reasons given for switching to EMRs – lower costs, higher quality, reduced staffing, higher level coding, and so on – are not supported by the reality of the experience.
So exactly WHY are we “pushing physicians into the electronic age?” My guess is it’s about serving the needs of the insurance companies and government agencies at this point.

Margalit Gur-Arie
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Margalit Gur-Arie

rbar, I totally agree with the lack of deliberation. Somehow, somewhere, somebody managed to convince the Bush administration and consequently the Obama team, that EMRs are going to cut healthcare costs and improve quality. That is the motto that every EMR salesman has been living by for the last decade. Unfortunately, reality is not supporting this view and the government hasn’t taken the time and research to validate this assumption. Maybe in the future, when interoperability is exactly what you are describing (any provider can access any patient’s complete record with one click of a button), EMRs, or more accurately,… Read more »

rbar
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rbar

John, I found the following lines cryptic: “As for the “small offices” you mentioned, the importance is underscored because that is where the doctor/patient connection is likely to be more personal than institutional. The benefits are incalculable, not trivial, because it is in that setting that the patient is most likely to be most reliably informed about his medical situation, either by the doctor or a competent assistant.” What kind of information do you mean? If there is one paper record and one provider in anoffice (or a small number of providers), EMR are of little use re. data storage… Read more »

Margalit Gur-Arie
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Margalit Gur-Arie

rbar, what are EMRs good for is not at all a simple question. Originally, the first EMRs were more of a productivity tool for a medical office. The goal was to realize efficiency by automating processes, just like other industries, such as accounting, manufacturing, etc. With that in mind, EMRs were designed to facilitate intra-office communications, aggregate all the paper into one electronic chart and make it available to multiple users simultaneously. Well, that was all fine and dandy, but the Achilles heel of this approach was that the most expensive resource in the house, the doctor, was now required… Read more »

John Ballard
Guest

►I think that EMR are very useful for large organizations (and they di improve patient care), but for small offices, their benefits don’t justify the enormous efforts necessary for ther implementation – unless there is perfect interoperability, which I don’t think anyone claims to be feasible at present.◄ I can tell you what it’s good for from a patient’s point of view: electronic tracking of individual records will place the burden of keeping up with the patient’s care on the professionals instead of the patient/layman who at this late date is still expected to coordinate medicines, tests and followups himself.… Read more »

rbar
Guest
rbar

What I miss from this and similar posts is an analysis of what EMR are good for. I have no IT background, but I have used more than 3 different EMR over a decade, in various institutions (mainly larger ones). The great advantage of EMR lies in their ability to have the information at hand for multiple people at the same time, readily and at all times. The other uses (e.g. examination of target parameters such as BP, Hba1c, medication and resource use) can be very useful, but depend entirely on the protocol/policy using them. And whether patient use of… Read more »