Cerner and Epic are the industry’s revenue leaders, though smaller vendors remain popular with physician groups
Sales of electronic health record (EHR) systems and related hardware and services reached $31.5 billion in 2018. And those sales will increase, according to a 2019 market analysis from Kalorama Information. This is important information for clinical laboratories and anatomic pathology groups that must interface with the EHRs of their physician clients to enable electronic transmission of lab orders and test results between doctor and lab.
Kalorama’s ranking includes familiar big EHR manufacturer names—Cerner (NASDAQ:CERN) and Epic—and includes a new name, Change Healthcare, which was born out of Change Healthcare Holding’s merger with McKesson. However, smaller EHR vendors remain popular with many independent physicians.
“We estimate that 40% of the market is not in the top 15 [in total revenue rankings],” said Bruce Carlson, Kalorama’s publisher, in an exclusive interview with Dark Daily. “There’s a lot of room. There are small vendors out there—Amazing Charts, e-MDs, Greenway, NextGen, Athena Health—that show up on a lot of physician surveys.”
“The EHR is really important,” noted Bruce Carlson (above), Publisher at Kalorama. “Since there are a variety of systems—sometimes different from the LIS [laboratory information management system]—you want to make sure you know the vendors and the space.” Carlson says opportunities remain for new entrants in the 700-plus competitor space, which is expected to see continued mergers and acquisitions that will affect clinical laboratories and their client physicians. (Photo copyright: Twitter.)
Interoperability a Key Challenge, as Most Medical
Laboratories Know
Interoperability—or the lack thereof—remains one of the
industry’s biggest challenges. For pathologists, that means seamless electronic
communication between medical laboratories and provider hospitals can be
elusive and can create a backlash against EHR vendors.
Kalorama notes a joint investigation by Fortune and Kaiser Health News (KHN), titled, “Death by a Thousand Clicks: Where Electronic Health Records Went Wrong.” The report details the growing number of medical errors tied to EHRs. One instance involved a California lawyer with herpes encephalitis who allegedly suffered irreversible brain damage due to a treatment delay caused by the failure of a critical lab test order to reach the hospital laboratory. The order was typed into the EHR, but the hospital’s software did not fully interface with the clinical laboratory’s software, so the lab did not receive the order.
“Many software vendors and LIS systems were in use prior to
the real launching of EHRs—the [federal government] stimulus programs,” Carlson
told Dark Daily. “There are a lot of legacy systems that aren’t
compatible and don’t feed right into the EHR. It’s a work in progress.”
Though true interoperability isn’t on the immediate horizon, Carlson expects its arrival within the next five years as the U.S. Department of Health and Human Services ramps up pressure on vendors.
“I think it is going to be a simple matter eventually,” he
said. “There’s going to be much more pressure from the federal government on
this. They want patients to have access to their medical records. They want one
record. That’s not going to happen without interoperability.”
Other common criticisms of EHRs include:
Wasted provider time: a recent study published in JAMA Internal Medicine notes providers now spend more time in indirect patient care than interacting with patients.
Physician burnout: EHRs have been shown to increase physician stress and burnout.
Not worth the trouble: The debate continues over whether EHRs are improving the quality of care.
Negative patient outcomes: Fortune’s investigation outlines patient safety risks tied to software glitches, user errors, or other flaws.
There’s No Going Back
Regardless of the challenges—and potential dangers—it appears EHRs are here to stay. “Any vendor resistance of a spirited nature is gone. Everyone is part of the CommonWell Health Alliance now,” noted Carlson.
Clinical laboratories and pathology groups should expect
hospitals and health networks to continue moving forward with expansion of
their EHRs and LIS integrations.
“Despite the intensity of attacks on EHRs, very few health systems are going back to paper,” Carlson said in a news release. “Hospital EHR systems are largely in place, and upgrades, consulting, and vendor switches will fuel the market.”
Thus, it behooves clinical laboratory managers and
stakeholders to anticipate increased demand for interfaces to hospital-based
healthcare providers, and even off-site medical settings, such as urgent care
centers and retail health clinics.
While approaches differ between the three companies, heavy investment in EMR/EHR and other HIT solutions could signal significant changes ahead for a market currently dominated by only a few major developers
If healthcare big data is truly a disruptive force in healthcare’s transformation, then a big battle looms for control of that data. Some experts say that the companies now dominating the electronic health record (EHR) market will soon face tough competition from the world’s biggest tech companies.
How this will impact medical laboratories and pathology practices remains to be seen. Labs are sure to be influenced by coming events, since clinical laboratory test data represents the largest proportion of an individual patient’s permanent medical record. It’s important to note, though, that while most EHR/HIT developers have been motivated by federal incentives, Google (NASDAQ:GOOG), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) are motivated by consumer demand, which increasingly dictates the direction of health technology development.
Thus, they may be better positioned to compete moving forward, as patients, physicians, and hospitals turn to precision medicine and value-based care for improved outcomes and increased revenues.
“The EMR efforts have moved hospitals from paper to digital records,” Bruce Carlson (above), Publisher of Kalorama Information, told HIT Infrastructure. “The next step is for tech giants to glean the data and improve upon that infrastructure. We’ll be talking about EHR in different ways in the next ten years.” (Photo copyright: Twitter.)
EMR/EHR Market Poised for Disruption
According EHR Intelligence, as of 2017, 97% of all US non-federal acute care hospitals and 84% of US hospitals had adopted an EHR system. Of these hospitals, more than half (50.5%) use products from just two developers—Cerner or Epic. That’s according to Health Data Management’s coverage of the KLAS report “US Hospital EMR Market Share 2017.”
However, recent interest in HIT and EHR systems by major Silicon Valley tech companies could lead to potential disruptions in the current state of the market. According to The New York Times, in the first 11 months of 2017, 10 of the largest US technology companies were involved in healthcare equity deals worth $2.7-billion. This marks a drastic increase over the 2012 figure of $277-million.
Though each company is approaching the market differently, Google, Microsoft, and Apple are all working on projects that could influence how both consumers and healthcare professionals interact with and utilize medical record data.
Of the three, Apple is the most consumer-centric with their Apple Health personal health record (PHR) integration into Apple iOS for iPhones and iPads. Microsoft, however, is working on developing analytics tools and storage solutions aimed at healthcare providers in general. And Google, through its parent company Alphabet, is focusing on data processing and storage.
Amazon also is working on its own HIT project which it calls 1492. While details are scant, HIT Infrastructure reports that the project is focused on interoperability among disparate EHR systems to improve sharing of protected health information (PHI) between providers, patients, and other healthcare providers, such as clinical labs and pathology groups. HIT Infrastructure also reported on rumors of Amazon branching into telemedicine using their Amazon Echo and Alexa platforms.
Security Concerns and Opportunities for Clinical Laboratories
According to Computerworld’s coverage of IDC research, by 2020, 25% of patients are expected to be taking part in ‘bring your own data” healthcare scenarios. Tech-savvy medical laboratories could find opportunities to interact directly with patients and encourage follow-through on test orders or follow-up on routine testing.
However, shifting protected health information to devices carried by consumers is not without risks.
“How do I know the data won’t make its way to some cloud somewhere to be shared, sold, etc.” Jack Gold, Principal Analyst with J. Gold Associates, told Computerworld. “And if I rely on an app to tell me what to do—say, take my meds—and it somehow gets hacked, can it make me sick, or worse?”
Nevertheless, with tech giants already developing products for the consumer market and healthcare provider industry, it’s a given consumers will soon gain greater access to their own healthcare information. Whether patients will ultimately embrace it, how they will use it, and how developers will interact with the data, is still undefined. But it’s coming and clinical laboratories should be prepared.
Primary care is shifting from traditional office visits to urgent care and walk-in clinics even as large hospital groups continue to buy up independent physician practices, altering where and from whom clinical laboratories receive referrals and test orders
Medical test ordering and referrals from office-based physicians are the financial foundation of the clinical laboratory industry. Thus, recent trends reshaping how and where physicians practice medicine, and the ownership of their medical groups, could have both beneficial and adverse implications for medical laboratories and anatomic pathology groups.
Primary care doctors who own their own medical practices are disappearing from the healthcare landscape at an impressive rate, as large hospital groups expand their share of the primary care market. According to the New York Times (NYT), in 2010, large hospital groups employed 23% of the nation’s primary care physicians. By 2016, that number had increased to 43%.
However, office visits to primary care physicians fell by 18% between 2012 and 2016, according to a report by Health Care Cost Institute (HCCI). During the same period, visits to specialists rose 31%.
Walk-In and Urgent Care Clinics Replacing Traditional Office Visits
The number of retail or walk-in clinics in the United States has increased by 14 times over the past decade, according to Statista, a provider of market and consumer data. In 2008, there were only 200 retail clinics in the country. Current projections indicate there will be 2,800 walk-in clinics located throughout the country by the end of this year.
In 2010, retail clinic sales totaled $518 million. By the end of 2016, retail clinic sales were more than $1.4 billion representing an increase of 20.3% per year during that time period, according to the Kalorama report, “Retail Clinics 2017: The Game-Changer in Healthcare.”
“There is huge consolidation in the market right now,” Jeffrey D. Le Benger, MD, FACS (above), Chief Executive Officer of Summit Medical Group in New Jersey, told the NYT. “Everyone is fighting for the primary care patient.” (Photo copyright: Gannett.)
Retail or walk-in health clinics were originally intended for uninsured and underinsured individuals who sought an affordable option for medical services. These clinics are designed to treat non-emergency situations, such as burns, sprains, and minor infections or illnesses. Services at these clinics are usually administered by a nurse practitioner.
Retail walk-in clinics often are located inside larger, popular stores. Examples include:
In contrast, urgent care clinics are equipped to handle more serious, non-emergency injuries and conditions and are generally staffed by physicians. The Urgent Care Association of America states that there are more than 7,500 urgent care centers in the US with an annual revenue of $18 billion. This industry is expected to grow by 5.8% in 2018. The largest urgent care group in the country—MedExpress Urgent Care in Morgantown, W.Va.—has 252 locations in 22 states.
Another growing urgent care center—ZoomCare of Portland, Ore.—has 36 locations in Oregon and Washington State. Services offered include: urgent care, primary care, pediatrics, gynecology, orthopedics, dermatology, dental care, ear nose and throat, chiropractic, podiatry, physical therapy, mental health, immunity, imaging, internal medicine, clinical laboratory, and prescriptions. They offer convenient, extended hours and some locations are open seven days a week.
“Our customers are looking for world-class conveniences,” Albert DiPiero, MD, co-founder and Chief Medical Officer at ZoomCare, told Portland Monthly.
ZoomCare lists its menu of services/cost for both insured and self-pay patients on its website. Basic medical laboratory tests include:
Strep-$50;
Urine-$20;
Mononucleosis test-$20;
Pregnancy-$20; and,
Influenza A/B-$40.
The website states that half of ZoomCare’s medications cost less than $10, and five out of six of the medicines are less than $20.
With such low costs and easy accessibility, it’s understandable why the number of patients seeking care in non-traditional office settings is growing. Clinical laboratories must accept and support these new sites of healthcare delivery to ensure continued procurement of lab test referrals. Staying on top of these trends and adjusting to consumer demand will help labs thrive and survive in healthcare’s ever-changing landscape.
Research conducted by Kalorama suggests the popularity of retail clinics represents a trend towards newer healthcare models that challenge existing models of care, and which could severely impact hospitals, clinical laboratories, and pathology groups
In recent years, pathologists and medical laboratory managers have watched as retail clinics housed in drug and grocery stores became a go-to service for healthcare customers seeking relief from minor illnesses. However, to market research company Kalorama, retail clinics also are a “game-changer” that could pose a threat to healthcare providers if their growth remains unchecked.
At risk are health systems and office-based physicians, along with the clinical laboratories and pathology groups that serve them. This would happen if patients shy away from primary care doctors in favor of cheaper, faster, medical care. However, as retail clinics expand the services they provide, they also could become an important source of orders for certain types of medical laboratory tests.
Kalorama defines retail clinics as, “healthcare centers that provide basic and preventative care in a retail setting; excluded are crisis and acute care centers; urgent care centers; emergency facilities; and wellness centers.” According to Kalorama’s data, “in 2016, total US retail clinic sales are estimated at more than $1.4 billion, an increase of 20.3% per year from $518 million in 2010.”
This increased use of retail clinics is a mixed blessing. On one hand, easy accessibility, low-wait times, and flexibility combined with lower costs for basic care is a boon for certain patients. On the other hand, this emergent healthcare model requires that traditional healthcare facilities address the impact of retail clinics on traditional practices, patient care, and regulatory standards.
Here are five reasons why retail clinics could threaten traditional healthcare models:
Retail Clinics Disrupt the Normal Healthcare Delivery Environment
Retail clinics are designed for immediate treatment of symptoms and vaccinations, not in-depth examination or long-term healthcare relationships between physician and patient. However, because retail clinics are a convenient low-cost option for patients, they become direct competition for full-service. Why visit a primary care physician (PCP) when you can receive off-hour care at lower prices and with faster wait times?
Based on data from peer-reviewed journal Mayo Clinic Proceedings, the graph above illustrates the huge growth of retail clinics over just the past 10 years, which is expected to continue. (Image copyright: Accenture Consulting.)
There is a rising fear among PCPs that the quick fix of retail clinic services will translate into poorer overall health for patients who fail to establish permanent long-term healthcare connections. This fear is validated by an American Medical Association (AMA) report that states, “only 39% of retail clinic users report having an established relationship with a primary care physician, which contrasts to about 80% of the general population reporting such a relationship.”
Retail Clinics Increase Competition for Primary Care Practices
Rather than competing with emergency departments, retail clinics directly compete with primary care clinics, according to Kalorama and the AMA. Staffed primarily by nurse practitioners and physician assistants, retail clinics treat symptoms of acute and easily identifiable health issues. There is growing concern that this limits opportunity for patients to receive more comprehensive healthcare that includes identification and treatment of chronic diseases.
And though competition in the healthcare market is good, physicians worry that retail clinics may push smaller stand-alone clinics out of business. The Kalorama report explains that “ultimately, medical practices are businesses that rely upon a steady flow of [patients] for their success.” When primary care facilities close due to loss of patients, it can create immediate healthcare gaps in communities.
Retail Clinics Could Increase Strain on Medical Laboratories and Pathology Groups
Kalorama’s data shows that retail clinics could place strain on medical laboratories and pathology practices. The study notes, “retail clinics are becoming relatively large users of point-of-care (POC) tests, clinical chemistry, and immunoassay laboratory tests and vaccines.” Kalorama’s report states, “the combined sales of these three types of products to retail clinics reached $240 million” in 2015, reflecting a 26% per year growth in testing since 2010. Projections from Kalorama suggest further increases in retail clinic test ordering in years to come.
The COLA newsletter also warns that pathologists and clinical laboratory managers “should expect to see, over time, a steady increase in the menu of diagnostic testing offered by retail clinics.” COLA suggests that pathologists and laboratory scientists will experience increased demand from retail clinics for their services and expertise, but that because retail clinics often require high-volume, fast-paced testing without the benefit of full clinical laboratories (both in terms of staff and equipment) there is potential for retail clinic testing to fall short of industry standards.
Retail Clinics Fragment Health Records
According to an article in AMA Wire, the AMA House of Delegates (HOD) established guidelines for retail clinics that focus on continuity of medical records and the safeguarding of patient care. The guidelines state that retail clinics “must produce patient visit summaries that are transferred to the appropriate physicians and other healthcare providers in a meaningful format that prominently highlights salient patient information.” The fear, according to the AMA, is that the fragmenting of medical records may bring harm to patients via miscommunication that undermines patient-physician relationships and complicates oversight in treatment plans.
The Kalorama report echoes this sentiment. It states that physicians often take a negative view of retail clinics because of the lack of communication between retail clinics and primary care practices, citing a lack of cooperation or “unwillingness or inability on the part of convenience clinics to share medical information about patients with primary care providers.”
Retail Clinics Are Expanding Their Reach
Despite the fact that the AMA Council on Medical Services 2017 report on delivery reform recommends that retail clinics limit the scope of their care, expansion of retail clinic services has gone unchecked in many areas according to the Kalorama report. AMA policy states that retail clinics must have a “well-defined and limited scope of clinical services,” and the AMA’s 2017 guidelines state that “retail health clinics should neither expand their scope of services beyond minor acute illnesses … nor expand their scope of services to include infusions or injections.”
As retail clinics open around the country and expand their offerings there is a call for increased regulation of retail clinics to check that growth. COLA states that retail clinics are positioning themselves to play a major role in the delivery of primary care services. And the Kalorama report suggests that the trend towards retail clinic use will continue to rise, creating both challenges and opportunities for providers, clinical laboratories, pathologists, and healthcare policy makers who will be required to address the disruption to their businesses.
Report states IVD companies are focusing on core lab, seeking China FDA approval, and targeting urgent care
Several of the same powerful trends reshaping healthcare and clinical laboratory services are having equally significant influence on in vitro diagnostics (IVD) manufacturers. In particular, the consolidation of hospitals and physicians, as well as the emergence of new sites of service—such as urgent care centers and retail clinics—are motivating IVD companies to tailor new diagnostic systems to the unique needs of these entities.
Kalorama, a division of MarketResearch.com, has released its list of Top-Trends that will affect IVD developers in 2017. IVDs are at the heart of the medical laboratory industry. Thus, these reports are critical to keeping clinical laboratory managers and pathology groups informed on anything that could affect the production, voracity, and availability of diagnostic testing. (more…)
