The results have been dramatic, of course. So far, 73% of hospitals and 48.5% of office-based physicians and “other professionals” have purchased, installed or upgraded to certified EHR systems and received initial—and their largest—payments under the programs. “The incentive payments were frontloaded,” said Arun Mathews, chief medical information officer at Medical Center Health System in Odessa, Texas. “The Stage 1 money is going to be the biggest checks anyone is going to get.”
“EHRs have peaked,” agreed Nancy Fabozzi, the principal healthcare analyst at Frost & Sullivan, but it doesn't follow that overall healthcare IT sales will be dragged down. “There are thousands of companies selling thousands of products—hardware, software and services … (with) no really solid, definitive number for this (entire) market. The pricing is very opaque. It's still very secretive. Vendors won't tell you. Providers won't tell you. … If somebody put a gun to my head, I'd say 6% per year (growth) for everything,” she said.
BCC Research is significantly more optimistic. Not only does the firm see spending on EHRs continuing to grow, but also spending on hardware, chiefly for telemedicine, will rise, too.
One factor that could put a damper on the boom is a shortage of capital at provider organizations, which will continue to be under pressure from payers in the public and private sectors to cut costs. “What's a counterweight to all this is decreasing reimbursement and hospitals and healthcare systems operating on thinner margins,” said Mitch Morris, vice chairman of Deloitte and national sector leader of the healthcare provider practice at the global consulting firm. Two years ago, Morris said, HIMSS Analytics, the data analysis arm of the Chicago-based Healthcare Information and Management Systems Society, surveyed chief information officers about their health IT priorities. “Seventy-one percent said they were going to do a major upgrade on their patient accounting system. Two years later, almost no one has replaced their patient accounting system. So, there's a disconnect between what the CIOs want and plan for and what CFOs are going to write a check for,” he said.
But that doesn't appear to be the problem at PIH Health in California, where Lee has watched the hospital computerization revolution unfold from the beginning. In 2006, the hospital began installing an EHR that eventually computerized physician-order entry, integrated the pharmacy system and included nursing and physician documentation.
After the hospital met the government's Stage 1 meaningful-use criteria and was paid under the Medicare portion of the federal EHR incentive program, it moved on to expanding the system to all of its affiliated physicians' offices. Expansion to its last 15 physician offices, which have a total of 80 providers, will be completed next year. And now, as it plans for new systems such as bar-code medication administration and data warehousing, PIH has set a loftier goal: achieving Stage 7, the highest level of the health IT certification process developed by HIMSS Analytics.
Only an elite 109 hospitals in the U.S. have achieved Stage 7, according to the HIMSS Analytics website.
For Lee, attaining Stage 7 “would further show our commitment of leveraging technology to improve quality of care and patient safety across our integrated delivery system.”
Follow Joseph Conn on Twitter: @MHJConn
(This article has been updated to reflect the AMA's stance regarding ICD-10.