Athenahealth's planned purchase of RazorInsights could put new marketing muscle behind a Web-based EHR business model for the small-hospital sector. The deal comes just as those facilities seek alternatives to systems that don't meet their needs, health information technology market watchers say.
The deal for Kennesaw, Ga.-based RazorInsights, which provides cloud-based electronic health-record and financial systems to rural, critical-access and community hospitals, could allow Watertown, Mass.-based Athenahealth to shave two or three years off of its development curve for entering the small-hospital EHR market, said Erik Bermudez, research director for ambulatory-care systems at Orem, Utah-based KLAS Enterprises.
Publicly traded Athena sells physician's EHR and practice management systems, saying it serves 59,000 providers.
The major difference between Athena and many other EHR vendors is that Athena uses a cloud-based system, selling its software as a service without site license fees.
Athena now will try to appeal to cash-strapped small hospitals smarting from outlays they've already made for their first-generation EHRs.
Many small hospitals are frustrated with their first EHR system purchased using federal incentive payments and are seeking a replacement, said Colin Buckley, director of research strategy for clinical IT systems at KLAS. He said they may be ripe to listen to Athena's pitch.
Buckley said that working with RazorInsights “in some ways is Athena going to school. This is going to be their inpatient university.”
Athena faces lots of competition in the small-hospital market. Once dominated by niche EHR developers, the market has in recent years become a target for large-hospital EHR developers.
Westwood, Mass.-based Meditech remains the leading vendor to hospitals with 200 and fewer beds, holding roughly 19% of that market niche, according to a KLAS report in June. CPSI, Mobile, Ala., has a market-leading 22% of hospitals with up to 25 beds. But Epic and Cerner are now among the top five vendors in these smaller-hospital niches, according to KLAS.
With physician practices more tightly affiliating with or being purchased by hospitals, small hospitals may find it appealing to have an integrated health IT system for hospitals and ambulatory care, said Vinson Hudson of Jewson Enterprises, a health IT consultant.