Despite the COVID-19 pandemic, electronic health record (EHR) purchasing was up in 2020, fueled in large part by decisions among large organizations as well as standalone community hospitals, according to a new report from KLAS Research. The report investigates the EHR buying trends “that prevailed in a year unlike any other,” the firm’s researchers contend.
The past year was not the biggest for market share growth for EHR giant Epic, which along with Cerner, has historically been the only vendor in this space to add hospital market share each year. That was 2015, when 144 hospitals went to Epic, but “the company’s growth has never so decisively outpaced the competition’s,” according to this KLAS report.
At any point in time, only one company is recognized as the contracted vendor for a hospital, KLAS explained in its report methodology. The firm’s researchers consider a change in a hospital’s most recently contracted EHR as a “win” for the new vendor and a “loss” for the vendor being replaced. The data for this study is based on acute care EHR purchasing activity—executed contracts—that occurred in the U.S. from Jan. 1 through Dec. 31, 2020. The information comes from multiple sources, including publicly available information and the thousands of conversations KLAS has with provider organizations each year. KLAS also gives vendors the opportunity to report their annual acute care hospital EHR wins, which KLAS then validates with provider organizations.
A significant number of Epic’s 2020 wins—46 hospitals and more than15,000 beds—came from large organizations, which KLAS classifies as having more than 10 hospitals. Most of these new Epic customers switched from Cerner, Meditech or Allscripts.
A single large win in Q1 for Epic included 37 hospitals and just under 7,000 beds. Over the last five years, Epic has gained an average of 90 hospitals a year, and “the solution’s stability and deep integration have made it the preferred choice among large organizations, whose smaller regional partners often follow suit in order to gain improved collaboration,” according to the report.
Three hospitals left Epic in 2020, all due to M&A activity, meaning the company had a net change of +101 in acute hospital market share last year, with 104 wins and three losses. KLAS reported last year that Epic alone accounts for just under 40 percent of the acute care beds in the U.S.
Interestingly, in 2020, a 37-hospital organization chose to move to Epic; 31 of the hospitals were using Cerner, accounting for over half of Cerner’s 2020 hospital losses, according to the report. Over the last six years, Cerner has lost a total of seven large customers—representing over 28,000 beds—due mainly to “significant, ongoing concerns with Cerner’s revenue cycle functionality. Despite their tug-of-war with Epic to retain large customers, Cerner has seen strong success competing for community hospitals. Cerner’s 2020 wins came largely from smaller organizations and hospitals who were drawn to the pricing and competitive functionality,” KLAS’ report revealed. In fact, for standalone hospitals, Cerner was chosen twice as often as the next closest competitor; smaller hospitals looking for broad functionality and continued development often select the Millennium platform, most frequently through Cerner’s CommunityWorks model, the report noted.
Overall, Cerner—typically viewed as the number-two EHR vendor to Epic in acute care hospital market share—had 59 losses in 2020 compared to 40 wins, for a net change of -19 last year.
Responding to the report’s findings, a Cerner spokesperson released information noting that KLAS included acute care market share in its study, “but doesn’t account for other key areas of Cerner’s work, including some federal business,” such as the U.S. Coast Guard, “or the company’s efforts to provide data-driven insights to advance medicine.” Indeed, in 2018, the Coast Guard announced its intent to join with the U.S. Department of Defense (DoD) in transitioning its service members’ and clinics’ health records to the MHS Genesis EHR system. Cerner, of course, is also contracted with the Department of Veterans Affairs (VA) to modernize its legacy EHR platform as well.
Other than Epic, Azalea Health—which in 2017 merged with Prognosis Innovation Healthcare, a provider of EHR technology to rural and community hospitals—was the only vendor KLAS studied that had more wins than losses in 2020 in terms of acute hospital market share, with a net change of +4.
The report concluded that contracting naturally took a back seat as COVID-19 cases ramped up and the country went into lockdown. It rebounded some in Q3 and then spiked in Q4 as organizations reinstated budgets and revived tabled health IT initiatives. Decisions by large organizations with 10 or more hospitals often take several years, and most of those that were paused in 2020 are back in full swing, with Epic, Cerner, and Meditech leading in consideration, KLAS outlined.
