Washington can encourage physicians to buy electronic medical record systems, but it is the vendors and hospitals that affiliate with physicians that will ultimately determine if they go electronic, according to a new report from healthcare market research firm Kalorama Information.

The report, EMR 2010 (Market Analysis, ARRA Incentives, Key Players, and Important Trends), represents the second time this year that Kalorama has surveyed EMR markets and is a reforecast of its predictions from earlier in the year, made before the U.S. government announced HITECH Act incentives for physicians who use EMR.

"There's a lot of focus right now on the HITECH incentives, but we think what vendors and health systems who piggyback off these incentives is even more important," said Bruce Carlson, publisher of Kalorama Information.
According to the report, the EMR market will come in at $13.8 billion for 2009, which is not up to its full potential. Solo practicing or small group practice-based physicians have fewer savings to reap than large healthcare systems, but the change in their workflow will likely reduce short-term productivity when they make the switch.
 
The announcement of government incentives of up to $18,000 in increased Medicare payments to doctors for the meaningful use of EMR has created interest. But these incentives represent future payouts for EMR systems that physicians have to pay for today, at a time when patients are paying bills slower, expenses are up and some physicians are laying off staff. Most surveys indicate low usage of EMR among U.S. physicians.

 "A body at rest stays at rest unless acted upon by an outside force," said Carlson. "We think that hospitals and large health systems will need to have parallel incentives in order for the EMR concept to happen in a meaningful way."

North Shore Long Island Jewish Health System in New York is offering subsidies of up to $40,000 over five years to its affiliated (not employed) physicians who implement EMR systems. This does not stop any physician from collecting funds from CMS as well. Tufts Medical Center and Beth Israel Deaconess in Boston also have their own EMR incentive programs.
 
These are likely to  be emulated by other health systems, Carlson says.
The report also notes that vendor actions have piggybacked on the government incentives, enhancing their effect. So far, offering 'stimulus guarantees,' where the vendor assures the customer that the system will earn stimulus incentives from CMS, has garnered interest.
 
Athenahealth Inc, ChartLogic, e-MDs Inc. and GE Healthcare, are among vendors who have adopted some form of this strategy. Given the precarious state of some physician practices, Kalorama Information expects vendors to go further, offering aggressive financing and/or installment of the capital outlay to attract small group practices.

 Kalorama's report, "EMR 2010 (Market Analysis, ARRA Incentives, Key Players, and Important Trends)," has market projections, pricing comparisons, and profiles of major competitors.