Is the Link Between Hospital Mergers and EHR Consolidation Overstated?

March 8, 2019
Healthcare researchers also pondered if hospital consolidation has a spillover effect on EHR vendor consolidation

There is a common belief that when two hospitals merge they will adopt a single EHR (electronic health record) platform, but newly published research has revealed that just one-third of acquired hospitals switched to the dominant vendor of their acquiring system, while 44 percent remained on a different EHR system.

In the March 7 blog post in Health Affairs, notable health IT policy researcher Julia Adler-Milstein, Ph.D., and A. Jay Holmgren, a doctoral student in Harvard Business School, examined data from 4,720 hospitals from the American Hospital Association (AHA) survey and IT Supplement from 2012 to 2016 to answer two questions. The first being, following an acquisition, do acquired hospitals switch EHR vendors to the one used by their acquiring healthcare system? And the second one: what are the EHR vendor choices of switching and non-switching hospitals?

Of the 88 hospitals (1.9 percent) in the study’s sample that were acquired between 2012 and 2014, 18 (21 percent) were already using the dominant EHR vendor of their acquiring healthcare system, 31 (35 percent) were not using the dominant vendor and switched to that vendor, and the remaining 39 (44 percent) were not using the dominant vendor and did not switch (by 2016).

What’s more, of the 31 hospitals in the sample that switched EHR vendors after an acquisition, six (19 percent) did so the same year as being acquired; 11 (36 percent) switched one year post-acquisition; 13 (42 percent) switched two years post-acquisition; and one (3 percent) switched EHR vendors three years after being acquired.

Further, the researchers found, the majority of acquired hospitals using the dominant EHR system of their acquiring healthcare system—either through switching vendors or because they were already using that vendor prior to acquisition—used one of two EHR systems: Epic or Cerner. Nearly three-quarters of hospitals that switched EHR systems post-acquisition did so to Epic or Cerner. This indicates, according to the researchers, that “hospital consolidation may be contributing to EHR vendor consolidation.”

Adler-Milstein and Holmgren concluded, “Our results suggest that one important avenue by which consolidation may result in lower-cost, higher-quality care is not routinely occurring. This should be cause for continued concern that many acquired hospitals may not deliver on their promised benefits. As policy makers and regulators consider how much additional horizontal consolidation in the hospital industry to allow, claims of EHR system integration as a method to deliver benefits should be taken with healthy skepticism.”