Are there red flags? What does the past tell us?
In the last year, several EHRs have notified their customers that they are going out of business, including Soapware. In addition, other EHRs have sold out to other companies that have sought to shut down one or more of the EHR products they have purchased. Either way, if you’re the unlucky customer of one of these EHRs, you’re faced with the unpleasant task of changing EHRs on someone else’s schedule.
What are some of the factors believed to cause the demise or sale of an EHR?
- Financial instability – Practice Fusion was recently sold to Allscripts for $70 million less than the $170 million investors had put into Practice Fusion. It appears that investors may have grown weary of repeated needs for additional funding to keep the business afloat.
- Track Record of Certification – Meaningful Use and MIPS certification requirements are difficult and expensive to meet. EHR vendors that have not kept up with these requirements timely may be some of the first to shutter their doors. As evidence, according to the government’s list of certified EHRs, only 7% of vendors that achieved Stage 2/2014 certification have since achieved Stage 3/2015 certification to-date.
- Technology Platform – most older EHRs were built on a client-server platform where the customer/practice purchased servers and hosted them in their local office. Some of these EHR vendors have moved to a “private cloud” where the technology is the same, but the vendor hosts the practice’s separate server(s) in the vendor’s data center. The problem with this technology is that it is much more difficult and expensive to update when product changes are needed. This is particularly challenging when frequent updates are needed for certification programs and rapidly changing ePrescribing and other EHR related technology.
The National Law Review includes these as well as others in their latest EHR issues to watch report:
The vendors purchasing these defunct products and companies generally seek to move the customers they have purchased to their other/existing EHR and/or total service model. They may offer steeply discounted pricing, free conversions and other upfront incentives to move. However, the long-term cost may be much higher than the customer is prepared to pay.