KLAS says small hospitals to drive EHR market demand in 2022

New research from the KLAS Arch Collaborative shows that physician satisfaction, interoperability and revenue cycle stability were among the big drivers for the decision to switch to electronic health record systems in US hospitals last year.

why it matters

KLAS’ annual US Hospital EMR Market Share 2023 report looked at small and large organizations with multiple hospitals, stand-alone hospitals of all sizes, academic medical centers, children’s hospitals and specialty hospitals.

The researchers looked at market trends for the overall hospital industry based on the winners and losers of EHR vendors from January to December 2022, including Epic, Meditech, CPSI, Oracle Health, Azalea Health, MedHost and Altera Digital Health (formerly Allscripts).

They asked hospital customers about their overall experiences with these vendors and their EHR platforms, gauging hospital loyalty toward a platform. They gained insight into how these customers rate their vendors’ operations, and the value of EHR to their organizations.

Of note, Oracle Health, which was created last year by Oracle’s $28 billion acquisition of Cerner, saw its first double-digit net profit at hospitals since 2018.

KLAS researchers said larger hospitals fueled previous growth, but in 2022 smaller hospitals and integrated delivery networks chose the company’s CommunityWorks platform.

Nearly all of Oracle’s wins in the acute care space last year were hospitals with less than 200 beds, according to the report. However, Oracle Health saw “a significant overall decline in beds” as a result of the loss of large hospitals frustrated by revenue cycle challenges, it said, “the most of any vendor in this report.”

CPSI and Altera also had a substantial share of losses in EHR contracts last year.

Among small standalone hospitals, Epic and Meditech saw market gains and earned the highest small hospital overall performance scores of 86% and 83%, respectively. Meditech bags most wins in legacy migration in 2022.

The researchers said the performance resulted in Meditech seeing its highest retention rate over the six-year period studied, “highlighting the strong customer confidence in the extension”.

But KLAS noted that one contract resulted in a significant contribution to the company’s success in this category.

“About one-quarter of hospitals in the US are currently using legacy (EHR) solutions, with most still being supported,” the researchers said.

“The large number of hospitals still using a legacy solution speaks to the financial challenges facing these hospitals as well as the significant burden of migrating to a different (EHR),” he added.

Like Oracle, Meditech also experienced losses in total beds and total hospitalizations, in large part due to hospital mergers and acquisitions and the resulting standardization of medical records.

According to KLAS, eleven of the company’s losses were old customers migrated to Epic’s Community Connect model.

Epic was clearly the market leader, as it is the only vendor the researchers found a positive net change in both hospital market share and number of beds. The Wisconsin-based company had the most wins in all two categories.

“They continue to win customers from all (EHR) vendors, including those not highlighted in this report,” the researchers said.

“Epic’s footprint is the largest in the country – they cover nearly half of all acute care beds in the US, and their customers include some of America’s largest, well-resourced academic medical centers”

The researchers said KLAS views the change to the hospital’s most recently contracted EHR as a “win” for the new vendor and a “loss” for the replacement vendor. He said they get data from a number of sources, including vendors who self-report their acute care hospital EHR wins annually.

The 29-page report also looks at hospital EHR market share by region and includes an expanded vendor insights section.

big trend

The KLAS researchers found that the overall EHR market was driven by the energy of small hospitals changing their EHRs, which is consistent with the Small Hospital Patient Accounting Report released in March.

According to earlier reports, which focused primarily on Epic, Meditech, CPSI and Oracle Health, all vendors have struggled to provide training that meets the needs of smaller hospitals.

“While many vendors offer viable diagnostic systems, there are significant differences in customer experience with patient accounting that should not be overlooked by smaller hospitals,” the researchers said.

Prior to its 2022 purchase by Oracle Health, Cerner focused on signing community hospitals of varying sizes onto its CommunityWorks platform.

On the record

“Epic maintained its position as the top choice for large organizations and continues to widen the distance between itself and the rest of the market,” KLAS researchers said in the 2023 report.

Andrea Fox is a senior editor for Healthcare IT News.
Email: afox@himss.org
Healthcare IT News is a HIMSS Media publication.