Vendors Report Lower Earnings, Plan Changes as EHR Spending Falls

February 26, 2015 in News

As providers’ spending on electronic health record systems, health IT vendors have been reporting declines in revenue, Health Data Management reports.

Details of Falling Revenue Performances

According to a Frost Sullivan report released earlier this month, hospitals are likely to decrease their spending on EHRs in the coming years.

However, some vendors have already begun to report declines in financial performances. For example:

  • IT services provider CTG on Feb. 24 reported a 67% drop in profits in the fourth quarter of 2014, adding that its earnings are expected to fall by more than 38%; and
  • Dan Morefield — COO of Quality Systems, the parent company of NextGen Healthcare — last month said that the extension of Stage 2 and the delay of Stage 3 of the meaningful use program were hurting business because such events “tend to postpone what our clients want to do and the upgrade requirements.”

Under the 2009 economic stimulus package, providers who demonstrate meaningful use of certified electronic health records can qualify for Medicaid and Medicare incentive payments.

Plans To Offset Lower EHR Spending

According to Health Data Management, CTG plans to offset its lower earnings from EHRs by focusing more on IT consulting services, including:

  • Application management;
  • EHR performance optimization;
  • ICD-10;
  • Population health management; and
  • Revenue cycle management.

According to the Frost Sullivan report, hospitals’ investments in such services are expected to surpass electronic health record purchases over the next few years (Slabodkin, Health Data Management, 2/26).

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