1. Hospital Consolidation Ran Amok, Benefiting Cerner and Epic
The big are getting bigger and more profitable among both health systems and their technology vendors. The resulting rip-and-replace projects are offsetting the first wave of post-Meaningful Use demand slack-off. That trend will continue as health systems use their favorable billing rules to acquire not only medical practices, but nursing homes. The industry marches toward a few multi-state, legally non-profit but hugely profitable operators controlling their freshly expanded markets.
The EHR vendor market has consolidated into:
- Epic and Cerner for US inpatient, as Epic announced plans to move down-market with a less-expensive basic system and Cerner held its advantage among large health systems that are contemplating merging into mega-systems.
- Epic for health system-connected private practices.
- Meditech for small health systems and those in Canada.
- CPSI for cash-strapped rural and safety net hospitals.
- Allscripts for hospitals in Australia and Europe, with newly acquired Paragon remaining an unknown.
2. Ambulatory Vendors Faced Reduced Post-MU Demand
Most practices that want an EHR already have one, and even some of those are being forced to displace their preferred system after being acquired by big health systems using Epic and Cerner. Ambulatory EHR vendors face several negative market pressures: complaints about poor usability and interoperability, technologically outdated products that still have to be maintained and enhanced, and lack of demand. The Department of Justice’s $155 million False Claims Act settlement with EClinicalWorks could portend similar charges against its competitors.
The bright spot for ambulatory EHR vendors is revenue cycle services (which they are well equipped to provide) and population health management technology (which they are not).
3. Value-Based Care Sounded Good, But Had Minimal Impact
Everybody likes the idea of paying for value instead of services performed — until they look at the work required and the potential profit lost. Heads in the beds and butts in the waiting room seats will continue to be the main driver as long as Medicare keeps paying for them.
4. The Press Exposed Questionable Business Practices
Theranos, Outcome Health, and NantHealth had their bubbles burst by dogged investigative reporting. Those exposés will likely continue as the shrinking journalism industry finds that those stories sell.
5. ONC Was Mostly Irrelevant
Much of the work around hot topics such as interoperability, EHR safety, and cybersecurity happened outside of ONC’s sphere of influence as it faced personnel changes and threatened budget cutbacks in a vastly different political environment.
6. The VA Rushed to Judgment
The VA — pushed by the White House to choose Cerner with the general thesis that running the same system as the VA will be good for veterans — announced to Congress that it will quickly sign a VistA-replacing Cerner no-bid contract despite unanswered questions around cost, DoD interoperability, and information exchange with the community-based providers that serve veterans.
The VA’s contract signing deadline of November was missed as Congress failed to move the VA’s money around to fund the deal, with the resulting extended timeline allowing Congress to pressure the VA into developing an actual plan on interoperability outside the federal government’s walls.
7. New Inpatient EHR Entrants Quickly Hit a Wall
The inpatient aspirations of EClinicalWorks and Athenahealth were dampened not only by complexity, the market’s preference for broad and mature product suites, and entrenched competition, but also by a DOJ settlement and activist investor pressure, respectively. ECW remained characteristically quiet, but the cost-cutting and executive-shedding Athenahealth was reduced to publicly sparring with CPSI over the decisions of tiny hospitals instead of with Epic over the large ones.
8. Allscripts and Greenway Announced Plans to Streamline Their Ambulatory EHR Portfolios
Both companies said they will develop a single system to replace their multiple aging ones.
9. Drug Companies Suddenly Became Interested in EHR Data That Technology Allowed Them To Obtain
Pharma needs to justify high drug prices and analyzing individual patient outcomes is one way to do that. They also found value in performing virtual clinical studies, recruiting clinical trials participants, and detecting adverse effects.
10. AI Hype Became Rampant as IBM Watson Health Turned Into a Marketing Term
Already-inflated expectations for artificial intelligence and machine learning expanded further, but the lack of results from IBM Watson Health, the paucity of transparency on exactly what Watson is doing and how, and Watson’s high-profile failure at MD Anderson encouraged moderating expectations even as Google and other technology firms look for healthcare nails to pound with their profitable hammers.
11. FHIR, APIs, and the CommonWell-Carequality Linkage Decreased Interoperability Barriers In Meeting The Minimal Market Demand For It
It predictably turned out that technology wasn’t the biggest barrier in exchanging patient information with competitors – it was that providers are fiercely protective of their business. Interoperability always works when demand exists, such as among multiple hospitals and practices within the same health system.
Providers will make interoperability happen quickly only if their profits depend on it. Perhaps the “data blocking” standard should be applied to health systems that manage to exchange information with disparate systems only within their own organization.
12. Population Health Management Presented Promise Without Many Definitive Results
Population health management and its associated technologies are an inherently good thing to patients, but the business model is marginal and slipping as the federal government steers the reimbursement ship back to fee-for-service. Implementation models vary widely, it’s early to publish definitive results, and providers whose profit comes from traditional services show reluctance to kill their golden goose. The track record of innovation whose only benefit is to patients is unfortunately poor.
13. The Federal Government’s Anti-ACA Efforts Threatened Provider Incomes
The federal government’s efforts to kill the ACA without an alternative in place will increase the number of uninsured patients who will still show up in the ED knowing they won’t be turned away, putting pressure on health system bottom lines that look great now only because their non-operational investments are killing it in a booming stock market.
The disrupted risk pool will continue to hamper insurers and the lack of political will to address exorbitant US healthcare charges guarantees that healthcare will be a mess for a long time except for deep-pockets consumers who can afford boutique care.
14. Big Companies Once Again Showed Their Health IT Short Attention Spans
McKesson sold out and GE mulled its healthcare IT exit as both companies chased the next shiny object in the face of sliding profits. Historical precedents are ample that buying health IT products from a company whose toes are dipped in other industries – especially if, as is nearly always the case, they turn out to be crappy health IT vendors — will nearly always leave customers stuck with a far-worse product turfed off hastily to a new owner at a devalued fire sale price.
15. Potential New Entrants Like CVS and Amazon Worried Health Systems As Hopeful Consumers Cheered
Health systems realized that despite the political clout that allowed them to become the default but questionably well-suited profiteer for everything from oncology practices to population health management, the market is becoming attractive to potential competitions such as CVS and Amazon that are not burdened by inefficiency and consumer indifference. The question of “who owns the patient” is valid, even if insulting to the patient who shouldn’t be “owned” by anyone.
16. Cyberattacks Mostly Spared Hospitals, But Hit For-Profit Company Bottom Lines Hard
WannaCry and NotPetya malware caused temporary disruption of the operations of a handful of US hospitals, but publicly traded Merck and Nuance took big but temporary financial hits due to crippled operations.
17. The Federal Government Chased the Tip of the Healthcare Fraud Iceberg
Medicare’s pay-and-chase practices have created a ton of fraud and a few ounces of penalties that haven’t deterred the large number of scammers who make fortunes working the system’s many holes. A few high-profile settlements and prosecutions showed the risk to criminals, but the reward remains infinitely larger and the risk of actually serving prison time is minimal.
18. HIMSS Kept Getting Bigger
Cash-flush HIMSS has to spend its vendor-provided money somewhere, with competing publications and conferences topping its acquisition list and increasingly making it the all-controlling industry voice.
19. Technology Did Little to Improve the Opioid Crisis
Doctor-shopper databases have done little to improve the opioid situation, which remains a people rather than a technology problem due to user demand, doctor willingness to supply it due to questionable prescribing practices and sometimes outright fraud, and the ever-growing and ever-cheapening illegal drug supply that is happy to take up the slack if legal prescribing declines. Continuing demand with reduced supply does little except to raise prices and encourage customers to seek out more dangerous alternatives.
20. Digital Health Had a Few Bright Spots Among Unproven Apps
Consumer health apps and platforms continue to seem like good ideas even in the absence of evidence that they positively impact outcomes, they have minimal mainstream uptake outside of the quantified selves, and providers show no interest in looking at piles of self-captured information (especially when they aren’t being paid to do so) that provides little basis for intervention.
Patient engagement technologies offer promise in improving outcomes for a narrow subset of consumers, although definitive proof is mostly lacking. Technology vendors see the market opportunity in under-diagnosis, the extent and societal health value of which is questionable.
As an uplifting New Year’s bonus for “year in review” honors, I look back at the best health IT-related video ever created. The “Hamilton”-inspired production of Mary Washington Healthcare (VA) was appropriate to its location, magnificently written and performed by its employees, and reflective of the aspirations of a hospital implementing a new EHR.