Allscripts reported record bookings for the first quarter of 2019 of $286 million, up 9% from the first quarter in 2018, and earnings during the quarter beat Wall Street estimates. But the company fell short of revenue expectations with first-quarter revenue flat at $432 million.
Allscripts reported its 2019 first-quarter results Thursday, reporting adjusted earnings per share in the first quarter of 2019 were $0.16, up 7% compared to $0.15 in the first quarter of 2018.
Allscripts executives said the company is well positioned for growth with a diversified portfolio in a competitive electronic health record (EHR) market.
The company made a number of major acquisitions in the past 18 months, purchasing McKesson’s health IT, including its Paragon EHR platform, in late 2017; Practice Fusion, another EHR vendor, in early 2018; and then Health Grid, a patient engagement platform, last May. Practice Fusion has since been rebranded as Veradigm with a focus on the payer and life sciences markets.
"We continue to maintain momentum in our provider business as we had a number of key client wins across our solution set. Our Veradigm business continues to establish itself as one of the industry leaders in the payer and life sciences end markets,” Allscripts CEO Paul Black said during the earnings call with analysts. “We remain confident in our near and long-term outlook as we expect to benefit from a number of differentiated growth opportunities in both our provider and Veradigm businesses. We will maintain a disciplined capital deployment approach as we look to drive growth with our clients and enhance shareholder returns.”
Black also responded to a recent report on the EHR market published by KLAS Research. KLAS reported that Epic and Cerner now control 54% of the hospital EHR market and are gaining share at the expense of other vendors, including Allscripts. According to KLAS, Epic’s market share stands at 28% and Cerner's at 26% while Allscripts has a 6% share of the market.
"All three of the large, private organizations that made an EHR decision in 2018 went with Epic, switching from Allscripts or Cerner," KLAS reported based on its analysis.
Black said Allscripts' revenue is a more accurate reflection of its place in the market. "We are the third-largest player in the industry by this metric. Size creates scale, which allows us to invest back into core EHR solutions and in high growth platforms," Black said during the call. "We are only one of three companies making material investments in core acute care solutions."
That size and scale enable the company to invest in innovation and new functionality to meet healthcare organizations' needs, he said.
"Scale transfers into size, which transfers into the ability to be able to afford to stay current and be able to afford to spend a substantial amount of money on" R&D and cybersecurity, he said. "Scale is going to bear a lot of weight as we look at what the next four and five years are going to look like."
Black said the company has had a number of "wins" for its Sunrise health IT platform in 2018, including new clients outside of the U.S.and inpatient facilities with cancer facilities that were not included in the KLAS report.
"Our breadth of solutions has led many of our clients to expand their relationship with us and go all-in," he said.
Among U.S. hospitals, 96% now have an EHR, according to data from the Office of the National Coordinator for Health IT. Black acknowledged that the hospital EHR replacement market is very competitive, which is driving the company to focus on solutions outside of the EHR market.
In January, Allscripts’ Veradigm business announced a partnership with NextGen Healthcare to enable data exchange between providers and health plans, insurance companies, laboratories and research organizations. The agreement created one of the largest EHR data networks in the world, with approximately 150 million unique patient records to provide "advanced analytic solutions and insights focused on improving care quality and patient outcomes," Black said.
Veradigm also announced a collaboration with Microsoft to develop a platform for clinical research.
As payment models continue to shift to value-based payment, Allscripts is well positioned for continued growth, Black said.
"We see the value-based care bundled payment models that are coming out of CMS (Centers for Medicare & Medicaid Services). I think that train left the station 10 years ago. That's something I don't see CMS retreating from," he said, adding, "These new payment models will further encourage the adoption of our solutions."
With the federal government pushing the healthcare industry to improve interoperability, Black said Allscripts also is in a position to lead this regulatory push.
"On the interoperability front, we’ve continued to invest in supporting innovation through the Allscripts Developer Program, our own DB Motion solution and through initiatives like FHIR, Argonaut and Carequality integration. We believe we have the industry’s most comprehensive interoperability solutions," he said.