A range of systemic changes in the healthcare industry are substantially increasing demand for HCIT solutions across the ambulatory / office-based physician market. As the industry positions itself for greater levels of accountability in the new value-based paradigm, physician practices are struggling to keep pace with a range of compounding and interrelated clinical quality, compliance, and reimbursement challenges:
- Transition to Meaningful Use Stage 2 (and Beyond): As the industry transitions from the basic requirements of Meaningful Use Stage 1 to the much more complex and stringent requirements of Stage 2, physicians will need solutions that enable them to coordinate care, drive patient engagement via portals, and comply with clinical reporting requirements.
- Quality Reporting and Regulatory Initiatives: A growing number of regulatory and quality-driven initiatives require increasing levels of clinical granularity and performance reporting in order to lay the groundwork for value-based care models. A few examples of these initiatives include The Physician Quality Reporting System (PQRS), Value-Based Payment Modifiers, and the transition to the ICD-10 code set.
- Emergence of Value-Based Care: The healthcare industry is quickly moving toward a more holistic, integrated, patient-centric care system capable of reducing costs and improving outcomes. A variety of new, value-based programs (e.g., patient-centered medical homes, bundled payments, ACOs, etc.) are being established and shifting risk toward providers. This dynamic is placing substantial pressure on physician practices that are overwhelmingly ill-equipped to measure, monitor, and improve upon care quality, much less to effectively benchmark clinical outcomes against other providers, negotiate contracts with payers, and in an auditable manner, link outcomes to reimbursement.
A common misperception in the market is that EHR adoption driven by Meaningful Use Stage 1 and the HITECH stimulus has provided physicians with the IT infrastructure and functionality required to be successful as Meaningful Use Stage 2+ and value-based care initiatives roll out. However, TripleTree’s research suggests that the majority of physician practices have yet to implement a system with the necessary capabilities to avoid future penalties and deliver quality care.
As depicted in Figure 1, 22% of the physician market has not implemented an EHR while 78% of the physician market utilizes ‘Any’ EHR. Our research suggests that a tremendous amount of vendor consolidation and churn will occur within the 78% of the market that has “Any” EHR solution as many of these solutions are woefully ill-prepared to address the challenges outlined above. This is supported by a recent KLAS report on physician EHRs that found across 15 vendors, 30% of customers on average were either ‘Leaving’ the product or were ‘Stuck’ (see Figure 2).
As this vendor disruption takes place and competitive separation sets in, there are several technological and business attributes that define the vendors that will ultimately capitalize on this opportunity:
- Fully-Integrated Cloud-Based Platform: A fully-integrated clearinghouse, PM, EHR, and patient portal provides a “single source of truth” for physician practices that improves practice efficiency, care quality, compliance, and performance. Deployment via the Cloud is imperative as physician practices lack the staff, time, and money to deploy client server solutions. Without this foundation intact it is difficult to stay on the cutting edge of next generation technologies.
- Advanced Functionality to Support Near-Term Challenges: Solutions must have advanced features and functionality to add immediate value to the physician practice. Examples include but aren’t limited to:
- Real-time alerts at the point of care
- Device-agnostic mobility
- Meaningful Use certification
- Clinical and operational reporting and analytics
- Patient engagement
- Innovation / Flexibility to Stay Ahead of Long-Term Market Drivers: Ongoing innovation to adapt to the changing needs of the physician market is critical, particularly as providers take on risk and participate in value-based care initiatives. Key areas for innovation include:
- Operational excellence (e.g., financial and clinical goal setting, progress tracking, and performance comparison, physician quality transparency and reporting, etc.)
- Clinical intelligence
- Patient surveillance, education, and outreach
- Additionally, market leaders are developing adjacent capabilities such as telehealth / remote patient visits and HCC code optimization built directly into the physician’s workflow.
- Size, Scalability, and Distribution: Size and operational scalability are critical as only those vendors with the ability to make continued investments in innovation will be able to advance and keep up with the market’s demands. Additionally, given the sheer number and geographic dispersion of office-based physicians, vendors possessing low-cost lead generation and sales models with rapid lead-to-close and implementation timelines will have a competitive edge.
We will continue to monitor the physician market and expect to see significant investment, consolidation, and disruption as constituents across the healthcare landscape seek to capitalize on the market opportunity.
Until then, let us know what you think.