MOUNTAIN VIEW, Calif.—The U.S. market for electronic health records is expected to reach $2.6 billion in 2012, due to the increases physician adoption and financial subsidies provided by the federal government, according to an analysis by research firm Frost & Sullivan.
"Today, many public and private stakeholders are committed to harnessing the power of information technology to improve the quality and efficiency of our healthcare system," said Frost & Sullivan Senior Industry Analyst Nancy Fabozzi. "We are finally seeing providers make the transition from siloed paper charts to interoperable electronic health records."
The EHR market earned $1.3 billion in revenues in 2009, according to Frost & Sullivan.
Growing complexities in managing the reimbursement process with both government and commercial payers who reward quality over quantity in the care provided will increase the use of EHRs and related solutions for physicians and other clinicians, according to the analysis.
The Health Information Technology for Economic and Clinical Health (HITECH) Act, which was part of the American Recovery and Reinvestment Act (ARRA) of 2009, created new incentive payment programs to help health providers as they transition from paper-based medical records to EHRs.
Incentive payments totaling as much as $27 billion may be made under the program. Individual physicians and other eligible professionals can receive up to $44,000 through Medicare and almost $64,000 through Medicaid. Hospitals can receive millions.
In addition to direct payments to physicians and hospitals for the "meaningful use" of EHRs, HITECH will indirectly stimulate the market by enticing additional stakeholders like commercial payers, professional medical societies, healthcare manufacturers, and various nonprofit organizations to help physicians and other providers successfully adopt information technology in their practices.
Revenues expect to fluctuate considerably over the next five to seven years, resulting in significant year-over-year shifts, according to Frost & Sullivan. This fluctuation will happen as the market matures and increased competition comes into play, causing a decrease in pricing.
The firm said strategic partnering with a variety of stakeholders is important for survival in this market as consolidation on both the vendor and provider side increases. Innovative, provider-focused, and patient-centric technology companies that understand how to manage this industry's unique combination of risks and rewards will achieve business progression.
"Branding and outreach must extend beyond physicians to include non-physician healthcare providers, as well as healthcare consumers," said Fabozzi. "Both should be directly engaged as advocates for the use of health information technology; patients need to understand the role EHRs play in driving quality improvements and care coordination among all of their (physician and non-physician) providers."
