Two reports from two separate research firms – Kalorama and Black Book Rankings – indicate the market for EMRs is still healthy, even as incentives for meaningful use dwindle and a large shift in vendor market share occurs.

The 490-page Kalorama Information report, EMR 2015: The Market for Electronic Medical Records, focuses on the U.S. as the largest healthcare market and the most incentivized for EMR conversion.

The U.S. EMR market is competitive, they find, with over 400 providers; however, increasing mergers and acquisitions in the industry will result in the reduction in the number of competitors, Kalorama expects. Companies remain competitive by offering high-quality platform packages to private practices and hospitals, according to Kalorama. However, there is still ample opportunity for other companies and new entrants. There is still not a single system that is complete with true interoperability. The main drawback for smaller companies is the cost to enter the market with a certified product.

Kalorama reports that between 2012 and 2014, sales grew 10 percent, largely due to physicians and hospitals acquiring new systems and hospitals and physician groups moving to upgrade their existing systems. The report also notes that the revenue is coming from services, hardware and software.

[See also: Hospitals in EMR buying frenzy.]

Market growth

Kalorama predicts the market will rise to $35.2 billion by 2019 under the assumption that the adoption trend continues to move forward as it has, with some expected slowing. It expects to see hospital EMR adoption to outweigh doctor adoption and that Stage 3 meaningful use will move forward in stages. Kalorama also predict owners of current systems will upgrade and train on their systems and at the same time will upgrade under the threat of penalties.

"Expect growth this year and next at 7 to 8 percent and stable growth until 2019," said Bruce Carlson, publisher of Kalorama Information, in a statement.
"Eventually, there will be market saturation but this is a bit of a way off, especially in emerging markets."

Physician adoption is listed as a major driver of the market, with it showing major gains since the last report in early 2014. While growth has been rapid, adoption has been uneven.

A recent Centers for Medicare & Medicaid Services survey shows that more than 80 percent of U.S. physicians have used EMRs. Kalorama notes the drastic improvement since 2006 and attributes it to the American Recovery and Reinvestment Act of 2009 in which almost $20 billion was set aside as incentives for hospitals and physician practices to adopt EMRs. The first incentives were based on 2010 performance and paid in 2011.

Since then, more than $30 billion in MU incentive payments have been made to 448,000 eligible hospitals and healthcare professionals as of March 2015.

Black Book poll show preference for cloud

Then, there's the Clearwater, Fla.-based Black Book Rankings report, which is based on  a four-month user poll to determine the highest ranked electronic health and medical record software systems for 2015. The poll revealed that docs are partial to cloud-based EMRs. That's according to 83 percent of the 5,700 small and solo medical practices surveyed by Black Book in 2015.

Improvements in Web-based EMRs including implementations, updates, usability and customization have reversed overall EMR satisfaction in small practices from some 13 percent meeting or exceeding expectations in 2012, to 81 percent overall contented small practice EMR users in Q2 2015.

The adoption rate of cloud-based EMRs in small practices in urban settings has also increased from 60 percent in 2013, to 82 percent today. The adoption by rural practices remains about the same as it was in 2013, around 20 percent. Also, 91 percent of non-urban physicians in solo practices state that fear of internet outages prevent them from changing to a cloud-based EMR, despite the benefits.

[See also: 3 big trends for the EHR cloud.]

"The focus of healthcare technology vendors needs to be on mobile, cloud, and data integration to successfully meet the future demands of the changing healthcare landscape," said Doug Brown, managing partner of Black Book, in a statement. "The bigger issues of interoperability and population health outcomes, quality of care reporting and ICD-10 have framed the third-generation EMR vendor, and the majority (69 percent) of small practices plan to increase their investment in the advancements made by their current cloud-based vendor."

Pricing is the main factor in purchasing a cloud EMR, according to 79 percent of small medical practices.

Thirty-eight percent of solo/small practice physicians have moderate to serious concerns about the security and privacy of cloud-based electronic health record systems even though 90 percent recognize that the cloud EMR platform and infrastructure models have matured into being a top safeguard to protect health information.

Conversely, 81 percent of physicians employing server-based EMR software claim they are concerned that their system, device, server or files may be stolen or breached. And 92 percent of small practice EMR users that switched to a cloud based EMR from a server in the last six months feel their chances of a major patient record data breach are lowered, but 52 percent report their fears of system downtime have increased since the switchover.

Sixty-nine percent of small practice physicians agree that first generation EMRs have not lived up to expectations, particularly dissatisfied with cost add-ons, affected workflows, and lost time with patients.

"An increasing number (79 percent in 2015 up from 64 percent in 2014) of new conversions are using software-as-a-service type implementations, driving the growing number of physician practices to cloud-based products," said Brown.

Black Book forecasts the healthcare cloud market in the U.S. and Europe to grow nearly 24 percent by 2020, and the U.S. alone will reach $3.8 billion. The global healthcare cloud IT market is on track to leap above $7 billion worldwide in three years, up from $2.4 billion in 2014, including EMRs, population health, clinical coordination, patient engagement, telemedicine, mobile health applications and information exchange.