Could joint purchasing be a catalyst for EHR standardization?

It recently was reported that two competing Missouri hospitals--Southeast Hospital in Cape Girardeau and Missouri Delta Medical Center in Sikeston--have banded together to jointly purchase an electronic health record system.

Such a development certainly is newsworthy in as far as the two hospitals, by joining forces, increased their purchasing leverage and reportedly are saving millions of dollars. The joint purchase also was particularly newsworthy because the hospitals no longer will view each other as competitors.

Perhaps it's more newsworthy that so few hospitals have joined forces to buy EHRs, although it's not unprecedented. Moreover, with the final rule implementing Stage 2 of Meaningful Use requiring interoperability, we may be seeing an uptick in hospitals and other providers hooking up to buy EHRs, which seems easier than trying to integrate separate systems.

After all, the two Missouri hospitals, by purchasing their EHRs together, will have an integrated suite of financial and clinical modules that includes clinical documentation, emergency department care and patient billing, according to Health Data Management.

None of those are what I consider to be the most newsworthy aspects of this joint purchase in Missouri, however. The significance of hospitals collaborating to buy EHR systems is that the hospitals are deciding which EHR systems will become dominant in the market simply by being consumers and using their buying power to prefer certain EHRs over others. It's determining which EHR standards will be used. If enough hospitals do this, it can drive many vendors out of the market and create one EHR standard.

Just look at what happened in the videotape industry. Back in the 1980s (and now I date myself) VHS and Betamax were engaged in a fierce war for dominance in that market. Betamax was seen as having better picture quality, but VHS offered a lower retail price and longer recording time. As a result, consumers gravitated toward VHS while Beta dropped out of the market.

We're now seeing the same scenario unfold between the iPhone and BlackBerry. BlackBerry, which once dominated the market, is struggling to survive.

Even if hospitals don't all band together to use one EHR system, if enough providers end up doing so, the other vendors may well adapt the same design features and other standards as the EHR system "winning" the purchasing war. No more proprietary vendor silos.

It's telling that the two Missouri hospitals didn't really care which EHR system they bought together. The article quotes Jim Limbaugh, executive vice president of business development at Southeast Health, as saying "we figured it would make sense to partner regardless of which system we use."

So the providers themselves, as consumers, may achieve the standardization of EHRs that has been so elusive to the big guns in the industry. Now that's newsworthy. - Marla

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