The Health IT Vendor Market: A Shifting Landscape

June 12, 2017
Bob Cash, vice president of provider relations at Orem, Utah-based KLAS Research, and Colin Buckley, director of research strategy, clinical IT at KLAS Research, share their perspectives about trends impacting the healthcare IT vendor market.

Two weeks ago, beginning May 22, Healthcare Informatics released the newest edition of its unique industry offering: the Healthcare Informatics 100 (THE 100), a compilation of the top health IT companies based on HIT revenues from the most recent fiscal year. The Healthcare Informatics 100 provides a complete listing of the top 100 revenue-earning companies in the industry. Any company that can identify its U.S.-based HIT-based revenues is eligible to submit its figures. 

Complimenting The 100, Healthcare Informatics editors, and contributing writers, have provided further analysis of this year’s list, including ST Advisors’ Ben Rooks and Michelle Mattson-Hamilton’s examination of the list as it relates to investments and M&A activity and Healthcare Informatics Managing Editor Rajiv Leventhal’s analysis of the top takeaways from The 100 this year. In addition, Healthcare Informatics Most Interesting Vendors 2017 coverage includes Editor-in-Chief Mark Hagland’s in-depth profile of Epic, and Leventhal’s profile of Optum, ranked No. 1 on The 100 this year.

To continue our examination of the vendor market, Healthcare Informatics Associate Editor Heather Landi interviewed Bob Cash, vice president of provider relations at Orem, Utah-based KLAS Research, and Colin Buckley, director of research strategy, clinical IT at KLAS Research, about the trends they are seeing in the healthcare IT vendor market, including progress towards interoperability. In October 2016, KLAS published a report examining the interoperability landscape and the study revealed something that most clinicians know today: between-organization sharing of medical records is happening only in pockets and is often frustrating for clinicians.

As healthcare IT leaders at patient care organizations attempt to keep pace with rapid changes in policy, technology and reimbursement models, Cash and Buckley also share their perspectives about how health IT solutions vendors also are adapting to the ongoing and rapidly accelerating transformations occurring in healthcare. Below are excerpts from that interview.

What are the biggest trends that you are seeing in the health IT vendor market?

Bob Cash: Certainly, we’ve heard a lot in the population health arena, an area that people are exploring and trying to find new opportunities and ways to do things better. And, you could broaden that to the value-based care conversation, so that includes both the product vendors as well as consulting groups that are helping people establish a strategy for that. Cybersecurity is certainly an area of deep interest, and we’re seeing some progress in that arena and a lot of decisions being made.

Bob Cash

Colin and I are quite involved in interoperability studies for the past three years, and certainly that remains a topic that people are grappling way, trying to find the best way to address that, both on the vendor and on the provider side of things. From just a product issue, there are challenges all the way from resources within the organization that try to implement a strategy to standards across the country, so all kinds of challenges in that arena.

Are you seeing the mark of value-based care and value-based payment on the health IT vendor market right now?

Colin Buckley: Absolutely, it’s an undercurrent for almost everything.

Cash: It’s the motivation for a lot of what is being done, and that doesn’t suggest that everything that is being done is working, but it is the driver of the strategy.

As many healthcare provider organizations shift from fee-for-service to value-based care and payment models, how are healthcare IT solutions vendors shifting and adapting?

Cash: We’re moving from the world where the electronic medical record (EMR) was the primary deciding factor, as we got through MU (Meaningful Use). We’ve got a lot of healthcare organizations that have made long-term decisions on their vendors and that shows in terms of what we refer to as the enterprise vendors, the Cerners, Epics, and Allscripts, and the greatest success being with those that provide an integrated foundation, in terms of reaching across the continuum of care. Those vendors have been particularly successful, with Epic and Cerner, especially, but they still have gaps that they are seeking to close in the continuum, so the post-acute care, and building out their population health solutions, analytics capabilities, and so forth, so they are not resting on their laurels.

Buckley: To me, one image that comes to mind is a rubber band. So, we had a lot of best-of-breed technology in areas like ER and pathology and other areas, and they had a good niche while the electronic health records (EHRs) were just providing the medical record part of things. The EHR vendors then jumped into that area and became stronger in that arena, while other new products were developed, whether that was a population health platform or some of the high-end services related to genomics and things that were really not as broad-based as an EHR can be. Those are showing up as best-of-breed now in the other arenas, such as patient engagement. That’s not to say that the major EHR players aren’t considering all of those things and trying to become better in those areas as well. So, the market expands and shrinks, expands and shrinks, based on new services. You’ve got wearables and all those things that are happening, and people are innovating on and around that, and creating new best-of-breeds, in different arenas, so it’s interesting to watch. The EMRs expand their realm of products to meet the needs of customers, but they can’t meet every niche need, and so there continue to be new innovations that show up.

Colin Buckley

Cash: And in just the realm of population health management tools are a good example, where, in the last few years, there have been potentially hundreds of vendors popping up and saying ‘We’re a population health solution vendor’ and some of them are going through consolidation now. As we are doing our research, we see the field is narrowing in terms of which vendors have the intention and many of those are best-of-breed vendors. But again, the EHR vendors are in there and looking to absorb as much of that as they can, so that’s a point of interest to providers who, generally speaking and all else being equal, would like to have fewer vendors than more.

How would you characterize the progress being made towards interoperability?

Buckley: One thing that is interesting is that, in our research, there are often grumblings about how the EMR vendors don’t want to play, they don’t want to interoperate, they’re closed off, and so forth, and in our discussions, with providers and customers, they don’t feel that way. Generally speaking, and this is almost across the board, the EMR vendors are seen by their own customers as anxious to solve this problem. And there is a lot to be done in terms of implementing standards and improving standards, but from a provider perspective, the providers are still just trying to catch up with the options that are available to them today. And so, what they [the providers] do is driven by the business strategy and the resources that they have to focus. And the reasons that they must focus is that they are affiliating with other providers in their area and they have a business strategy and that is what drives provider adoption of interoperability.

Cash: There are efforts out there that both providers and vendors promote as a way to improve this process—they are everything from very technical approaches like around FHIR applications, and then to conversations around collaborations or collaboratives, like health information exchange (HIE) connections between HIEs. There are initiatives like CommonWell and Carequality that are now at least reporting that they are working together and it seems that there is some momentum there. I think there is energy around ways to improve the ease of interoperating through methods like FHIR or collaborations like Carequality and CommonWell. In our research, providers reported optimism about the potential of these initiatives to dramatically improve nationwide interoperability.

Buckley: Another spin on interoperability is that we’re measuring year-to-year progress, in terms of providers implementing tools and establishing connections and having access to outside data, outside of their organization, but one of the big questions is, how impactful is that data? And, sometimes the problems that we have are not technology problems necessarily; we can move data back and forth pretty well these days, there’s improvements to be made there, but even when the technology works the way it’s supposed to do, there are other problems to be solved. In term of when somebody, for example, receives a CCD from outside the organization, for a patient, and they have that data, it’s in their workflow and it seems like everything is working great, but the data itself is unwieldy, they can’t navigate it, there’s a lot of other challenges in terms of making technology more impactful, just with the technology that we have today.