Fewer than half of physician practices have made the switch to EHRs – but that should change very soon

Hard to believe, but it's been more than two and a half years since <a href="/directory/health-information-technology-economic-and-clinical-health-hitech-act" target="_blank" class="directory-item-link">the HITECH Act first laid the lucrative incentives on the table to stimulate physician uptake of electronic health record adoption.

So how's that been going so far? "I'd definitely characterize it as rapid adoption," says IDC Health Insights analyst Judy Hanover. "Providers have really taken the opportunities created under HITECH to heart. They've really seen this as a unique and limited opportunity to adopt EHRs, particularly in the ambulatory market."

Given the huge and expensive undertakings such implementations represent, especially for small practices, the numbers are good, says Hanover – if not quite where we initially thought they'd be by this point.

"We do expect to see about 80 percent adoption by 2016, so that's still about five years out," says Hanover. "We did see a delay in the Stage 2 requirement a couple months ago, and that provided some leeway. Providers have another year to demonstrate Phase 1 and then move on to Phase 2, but that slowed down implementations a bit."

Not everyone is happy about that. "The extra time is appreciated by some," she says, "but others, who have been ahead-of-the-curve early adopters" are miffed "because they won't be eligible to get Phase 2 incentives for a bit longer. There are consequences. If you demonstrated this year, you gave up the opportunity to receive e-prescribing incentives, so there was a revenue opportunity that was foregone and now it's an extra year to wait to qualify for Phase 2."

That said, for those who have adopted, satisfaction has so far been pretty high. "It's going really well," says Hanover. "I think a lot of providers have heard the connection between ambulatory EHRs and return on investment has always been weak – it's always been tied more to the payer benefit of the EHR than the provider."

But, she says, "it's been encouraging to talk to providers and find that they're starting to see a positive ROI, and that some of the more user-friendly EHRs can be implemented rather quickly.  Providers aren't seeing that much foregone revenue during the implementation period if they're aggressive about it. Many have been able leverage the improved documentation that results from using the EHR into more appropriate, less conservative coding, and are actually seeing a bit of revenue uplift."

And on the vendor side? "There is a spectacular effort on the part of vendors to grab market share now, to capture those providers who are adopting," says Hanover. "We have seen them devote more attention to some of the new customers than their existing customers." As a result, "We've seen some service levels for some vendors decline."

The good news for trepidatious providers who've yet to enter the fray is that there are plenty of affordable options available out there that will help them meet meaningful use – more than they might think.

"More and more providers are adopting software-as-a-service for ambulatory EHR," says Hanover. "We're seeing numbers going up on the SaaS implementations.”

iPad-native EHRs have been getting a lot of attention lately, too, and she says they represent "a very attractive option" for some practices. "It does make data entry a little bit sexier. We see different levels of support for the iPad functionality, with different EHR applications for it."

There's so much out there for docs that Hanover says there "does need to be some more education" for those still on the sidelines. And mergers and acquisitions are always a wild card, of course, and she expects to see more consolidation in the ambulatory EHR space going forward.

"Providers need to do their homework in selecting financially-stable vendors with up-to-date architecture that's going to support their EHR needs now and going forward, moving into the regulatory reform environment.”