In response to a question from a reader, Mr. HIStalk recently suggested that Epic was unbeatable in the large-hospital EMR market. He provides five reasons for his assertion (see: Monday Morning Update 9/17/12):
...I don’t think that Allscripts (or any other vendor, at the moment) can compete with Epic in the large-hospital inpatient clinical systems market. Reasons: (a) incomplete integration; (b) narrower product line; (c) lower customer satisfaction; (d) lack of momentum; (e) hospital consolidations favoring existing Epic customers; and (f) trying to disrupt the status quo with one hand firmly planted in Wall Street’s lap. It’s not the end of the world for Allscripts – 80% hospitals aren’t candidates for Epic but need a lower-priced, pre-packaged, hosted product, meaning the biggest companies to beat are Meditech, McKesson, Cerner, and Siemens. Struggling to compete against Epic in big-hospital accounts hasn’t hurt Cerner, which doesn’t bag a lot of fresh Millennium wins over Epic but still has turned its assets into a $12 billion company. If you want to score Epic vs. Allscripts without emotion or subjectivity, it’s easy – just watch the number of new sales, the total number of beds and EPs covered, and KLAS scores.
Let's examine the idea that Meditech, McKesson, Cerner, and Siemens are the "companies to beat" in the 80% of the hospitals that aren't currently a slam-dunk for Epic. By this is meant the mid-size, non-academic hospitals. I can easily argue both sides of this question. On the one hand, these hospitals tend to be quite independent and wary of IT initiatives that would draw them closer to the neighboring, larger facilities that may be running Epic. They often view these larger hospitals as competitors. I have previously speculated that Cerner was moving into this mid-tier market because of an inability to compete with Epic for the EMR business of larger hospitals. From this perspective, these companies would be favored by these hospitals.
On the other hand, the federal government is trying mightily to encourage collaboration and interoperability in our healthcare system. Epic is seeking to establish its proprietary, walled-garden EMR software as the de facto standard for the exchange of clinical information (see: More on Epic's (Non)-Interoperability and the Recent NYT Puff Piece; Judith Faulkner, EMR Interoperability, and Washington IT Politics; Connectivity and Hospital-Based EMRs; The EMR as an Operating System?). Epic is also promoting a strategy whereby larger Epic hospital clients can host smaller hospitals with its EMR software (see: Epic Helps Convert Its Large Hospital Customers into Epic Hosting Sites/Consultants). This may make it easier, and perhaps less expensive, for the mid-size hospitals to run the same Epic software as the neighboring larger hospitals.
However, there will be a new chapter in this narrative. What happens when the larger and academic hospital market converts almost totally to Epic? Where does Epic then turn in order to continue growing? Two options would appear to be to (1) sell its product to hospitals abroad which has proven to be a lucrative market for Cerner; (2) target those U.S. midsize hospitals which may have been encountering Epic sticker-shock. My hunch is that Epic will turn its gaze on the large number of mid-size facilities for its continuing growth. This is where Cerner has been driven by the Epic competition (see: Is Cerner Modifying Its EMR Business Model?).