The allure of new technology
Although Epic and Allscripts are currently the dominant names in EHR, 23% of physician practices reported that they were dissatisfied with their current EHR systems and upgrading to a new brand altogether, according to a Black Book Rankings Report. The report found that physician practices were upgrading to newer EHR systems from General Electric Company (NYSE:GE) Healthcare and athenahealth, Inc (NASDAQ:ATHN) , among others. Epic, Allscripts, and other current market leaders failed to make the list.
General Electric Company (NYSE:GE) Healthcare’s Centricity EMR is designed for larger practices and integrates with other revenue cycle, patient, and practice management software. Centricity also complements General Electric Company (NYSE:GE) Healthcare’s other medical products and services. Last quarter, GE Healthcare accounted for 12.8% of General Electric Company (NYSE:GE)’s total revenue. Although the segment’s revenue growth was flat from the previous year, it is often considered one of the company’s most promising and stable business segments.
athenahealth, Inc (NASDAQ:ATHN), on the other hand, offers billing services, an automated calling/emailing platform, and a cloud-based care coordination service. athenahealth, Inc (NASDAQ:ATHN)’s EMR service (athenaClinicals) integrates with other services. Last quarter, athenahealth, Inc (NASDAQ:ATHN) reported a 41.3% year-on-year jump in revenue, although the company reported a quarterly loss.
However, athenahealth, Inc (NASDAQ:ATHN) has two big positive catalysts that could boost the company back to profitability. First, its deal with Ascension Health Alliance expands the company’s service to 2,700 more doctors and increases the company’s size by roughly 10%. The deal, signed in July, could generate an additional $42.5 million in revenue for the company. Second, its March acquisition of Epocrates — the most popular point-of-care medical app in America — will expand its current clinician user base of 40,000 to reach the 1 million who are in Epocrates’ network. Epocrates’ wide usage by physicians on both iOS and Android makes it a critical tool in a time when 72% of physicians in America currently use tablets.
A Foolish final thought
A market that is far from saturation, physicians that crave newer technologies, and a government intent on pushing physician practices to make use of EHRs — these are the three key reasons to keep a close eye on the EHR industry. Although Allscripts is struggling in holding its margins together, General Electric Company (NYSE:GE) and athenahealth, Inc (NASDAQ:ATHN) could have a promising road ahead as physicians upgrade their systems and leave the older companies behind.
The article Understanding the Massive Market Potential of EHRs originally appeared on Fool.com is written by Leo Sun.
Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Athenahealth. The Motley Fool owns shares of General Electric Company.
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