I don't think that the ambulatory EHR business will prosper in the near term even though there are many companies in the market (see: More EMRs/EHRs for Sale in the Market Than One Could Imagine). The reason for my prediction is that hospitals are buying up private physician practices (see: The Increasing Tempo of Physician Practice Purchases by Hospitals) and will try to integrate them into their existing hospital EMR systems. John Lynn who blogs over at EMR and ERH agrees with this (see: Will Hospital Ownership of Small Practices Kill Ambulatory EHR Vendors?). Below is an excerpt from his note about this topic:
There are a lot of interesting trends in the EHR and healthcare industry right now. One trend that everyone is seeing and talking about is the trend of hospitals buying up ambulatory practices. There are a number of reasons that we see this happening. Not the least of which is the move to Accountable Care Organizations. While I still think that this trend is cyclical, there’s some possibility that the small ambulatory practice might be in long term danger. If the small ambulatory practice is in danger, what does that mean for EHR software vendors? One of the first projects that hospital acquired practices experience is the move to the hospital owned EHR....I have yet to see a hospital system use anything but a large EHR vendor. In many ways it makes sense. The hospital system is buying practices across dozens of specialties. Many of the smaller EHR vendors focus on a few different specialties and so they just aren’t an option for a big multi specialty environment.Then, there’s the issues of scale and control. Can a smaller EHR vendor support such a large implementation? Can a smaller EHR vendor provide the hospital system the control they want of their EHR environment? The first one is an interesting challenge since I’ve seen some hospital owned ambulatory environments having scaling issues with some of the largest EHR vendors. The problem as I saw it from the outside was that the hospital system couldn’t get the attention of the right people at the large EHR vendor. This wouldn’t have been an issue at a small EHR vendor.With that said, I do think that small EHR vendors will have a huge challenge getting into the large hospital owned clinical practices. Will enough small practices remain for ambulatory EHR vendors to survive? ....[I]n the short term there could be some shrinking of that market.
Hospital and health system executives are on a quest for IT integration including support for the various departmental and ancillary units such as the labs, radiology, and pharmacy. That's one of the major reasons behind the great success of Epic and Cerner that offer enterprise-wide (IT) solutions. At any rate, this quest won't stop at the front door of the hospital. It will surely include deploying the hospital's EMR into its purchased ambulatory practices. This could potentially lead to a number of problems such a the scaling problems that John refers to above as well as what I will call functionality/efficiency issues. A smaller ambulatory physician practice may not function efficiently with the same software that has been designed to support a larger inpatient unit embedded within a large hospital.
In this same regard, John also refers to the need to control the purchased practices. I think that this term is totally relevant but I am sure that hospital executives would rather use the terms efficiency and patient convenience as drivers for the need to deploy the software in the these office practices. In the final analysis, I think that the answer may lie in the development of software by the EMR vendors designed for both smaller and larger ambulatory care practices. In the short term, the purchased practices may just need to adapt to software that is not perfectly matched to their patient workflow and office routines.