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Study: EHR Revenue to Double by 2012

Photo, NIH
Photo: NIH

The U.S. market for ambulatory electronic health records will double from $1.3 billion in 2009 to an estimated $2.6 billion in 2012, according to a study published this month by Frost & Sullivan.

The report said the American Recovery and Reinvestment Act of 2009 and the Medicare and Medicaid EHR incentive programs encourage healthcare providers to invest in EHR. Efficiency concerns, outdated practice management systems, and safety improvements are also leading to interest in the systems. In addition, as more private practices align with hospitals for cost reasons, they will begin to adapt the hospital’s electronic health systems as well.

“I think the No. 1 driver is the change in reimbursement, the fact that it is becoming so complicated to document the process of care to get paid by the government as well as commercial payers,” said Nancy Fabozzi, a senior industry analyst at Frost & Sullivan and author of the report. “Everybody thinks that fee-for-service is doomed and we have to have a new system of reimbursing physicians for the quality of care instead of the quantity of care because costs are exploding.”

She added that although the market for EHR has been slow over the past few years, interest is picking up due in large part to federal funding.

“If you’re pumping $40 billion into a marketplace, it’s going to have some impact,” Fabozzi said.

The report predicted that profits will reach a peak by 2013 at $3 billion, after which the market will become saturated.

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