Global EHR market hits $31B but faces usability, interoperability challenges

The worldwide electronic health records market faces intensifying criticism related to usability and interoperability as well as slowing growth due to market saturation.

Despite these challenges, the EHR market topped $31.5 billion in 2018, according to a report from market research firm Kalorama Information.

The market for EHRs, which includes revenues for EHR systems, computerized provider order entry systems, and directly related services, such as installation, training, servicing, and consulting, grew 6% from $29.7 billion the previous year, the report said.

The market report does not include picture archiving and communication systems or hardware.   

The market growth comes at a time when EHRs are portrayed as time wasters and stress inducers, and have been linked to patient harm, the market report said.

RELATED: Primary care doctors spend more than 50% of workday on EHR tasks, American Medical Association study finds

“Years ago, there were warning signs that usability—especially the drop-down menu problem—was an issue and that EMR systems weren’t as popular with users as with institutional buyers,” Bruce Carlson, publisher of Kalorama Information, said in a statement. “Those have accumulated, so a few drop-down menu complaints have surged to the point where now news accounts are linking it to larger issues, such as physician burnout.”

Over the last 30 years, medical institutions have encouraged the shift toward computerization to help manage patient information. A decade ago, Congress passed the landmark Health Information Technology for Economic and Clinical Health (HITECH) Act, along with a $40 billion investment in encouraging health IT implementation. Adoption surged after these government incentives encouraged hospitals and physicians to purchase and use EMR systems.   

But the EHR industry has faced mounting criticism about lack of usability, inefficiency and associations with physician burnout.

First-year residents spend 10.3 hours a day, or about 43% of their time, interacting with electronic medical records and ultimately spend more time in indirect patient care than interacting with patients, according to a recent study from researchers at Penn Medicine and Johns Hopkins University and published in JAMA Internal Medicine.

Numerous other studies, including a study published in the Annals of Internal Medicine in 2016, have identified that for every hour physicians interfaced with patients, it took two additional hours to interface with the EHR and perform desk work.

RELATED: Epic, Cerner growing EHR market share with increased hospital consolidation: KLAS

Physician burnout continues to be a significant issue facing the healthcare community and healthcare IT participants. EHRs are constantly implicated as a top burnout factor. Additionally, a study published in the Journal of the American Medical Informatics Association indicated that the stress from using EHRs is associated with physician burnout, specifically for general practitioners, primary care doctors, and pediatricians.

There are also concerns that EHRs do little to improve the quality of care, and a recent article in Fortune cited patient safety risks tied to software glitches, user errors, or other flaws.     

Paper records required lots of storage and real estate costs, labor costs in retrieving, and opportunity costs in not being available when needed for care, the report said. Paper records could be stolen, lost, ruined by leaking water, or improperly disposed of. But in most parts, it was the lack of accessibility that made them less than useful, even if they were safe.

"Hospital EMR systems are largely in place, and upgrades, consulting, and vendor switches will fuel the market," Carlson said.

The EHR market is also competitive, with over 700 providers; however, increasing mergers and acquisitions in the industry will result in reducing the number of competitors.

EHR systems need to show long-term productivity results, and vendors need to be more aware of their public image, according to the report.

RELATED: Death by 1,000 clicks: Where electronic health records went wrong

While the market for these systems continues to grow, it is at a slower rate. The market has become saturated since more physician offices and hospitals have already adopted EHRs.

Mergers and acquisitions are also impacting the industry in a big way. The number of mergers and acquisitions in this market has increased 15% over the past year with private equity firms gathering the lion’s share of deals, the report said.

As health systems and hospitals have expanded through mergers, acquisitions, and partnerships in the past several years, EHR giants Epic and Cerner have benefitted the most from this market consolidation building a combined 85% market share among large, 500-bed U.S. hospitals, according to a recent KLAS Research report.

The Kalorama report noted that Cerner has the largest share of the worldwide EHR market; however, many opportunities remain for other companies and new entrants.

"There is still not a single system that is complete with true interoperability. The main drawback for smaller companies is the cost to enter the market with a certified product," the report said.