EMR Market Continues to Grow

Despite slower than expected growth in electronic medical record (EMR) system sales due to confusion over vendor qualifications and US federal guidelines, the market grew in 2010 and it should see its best years ahead. These are the latest findings of Kalorama Information (New York, NY, USA), an independent market research firm.

According to the report, the growth rate of 10% in 2009 and 13.6% in 2010 was a little slower than anticipated, due to the hesitation on the part of physicians confused about "meaningful use" guidelines. However, despite the slower rate of growth, considerable growth did occur. Physician adoption has improved and incentive checks have been issued. Survey results show physician usage of EMR is near 50%, and Kalorama Information believes adoption and upgrading activities will be brisk in coming years. As new systems are sold, companies will still earn revenues from existing clients in servicing and consulting.

Revenues for EMR and computerized physician order entry (CPOE) systems, as well as directly related services such as installation, training, and consulting, are often the key profit areas for companies. EMR usage is expected to continue to increase, as hospital EMR adoption will encourage physician adoption, current EMR Stage 3 hospitals will purchase more advanced systems, and current EMR owners will upgrade. Most importantly, the threat of penalties in 2015--including reduced Medicare payments for those that do not engage in meaningful use of EMRs--will force doctors and hospitals to make upgrade decisions, and Kalorama Information expects market growth to exceed 18% to 20% during the next two years.

"We think that while progress was made in physician adoption and in vendor sales, there is still a lot more potential," said Bruce Carlson, publisher of Kalorama Information. "There are still a considerable number of physicians who need to be fully functional and hospitals that have to improve their stage ranking."

"The stick is stronger than the carrot when it comes to the ARRA incentive-penalty equation," added Mr. Carlson. "We continue to believe that and we think it's the industry's consensus as well. While the policy already picked up those oriented towards technology, the penalties will force conversion and upgrading in the future. And those decisions will happen in the next two years, before the penalties kick in."

ARRA refers to the American Recovery and Reinvestment Act, commonly referred to as the Stimulus or The Recovery Act, and is an economic stimulus package enacted by the 111th United States Congress in February 2009.


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