7th Annual Ambulatory PM & EHR Study. HIMSS Analytics

Transcription

1 7th Annual Ambulatory PM & EHR Study HIMSS Analytics October 2015

2 1 Contents Executive Summary 3 Methodology 4 Findings EHR/EMR 5 Definition 5 Market Penetration/Growth 5 Timeframe of Purchase 8 Vendor Presence 9 Vendor Market Penetration/Share 10 Market Opportunity: Purchase Intentions 12 Market Opportunity: Purchase Timeframe 13 Market Opportunity: Vendor Consideration 14 Market Factors: Purchase Motivation 16 Market Factors: Purchase Barriers 17 Findings PM 18 Definition 18 Market Penetration/Growth 18 Timeframe of Purchase 20 Vendor Presence 21 Vendor Market Penetration/Share 22 Market Opportunity: Purchase Intentions 24

3 2 Market Opportunity: Purchase Timeframe 25 Market Opportunity: Vendor Consideration 26 Market Opportunity: PM Replacement with Integrated PM/EHR 28 Market Opportunity: PM/EHR Replacement 29 Market Opportunity: Meaningful Use Stage 2 Status 30 Market Opportunity: Meaningful Use Stage 3 Confidence 31 Findings Strategy 32 Strategic Plans: Health Information Exchange 32 Strategic Plans: Accountable Care 34 Conclusion 36 Appendix 38 About HIMSS Analytics 39

4 3 Executive Summary The 7 th Annual HIMSS Analytics Ambulatory Practice Management (PM) and Electronic Health Record (EHR) Study indicates the ambulatory market is nearing universal adoption for PM and EHR solutions. Potential respondents were asked to participate in our annual online study based upon their title and ambulatory status. Those who opted in and participated in the study were asked a number of demographic questions around practice type and practice size by number of physicians. We wanted to know if these organizations had purchased an ambulatory PM and EHR solution, the year of the purchase, their current vendor and if they had any plans to upgrade, purchase new or replace their current solutions. Leveraging the insights of over 700 physicians, practice managers, administrators and executives in the hospital-owned and free standing ambulatory facility market, supplemented with data from the HIMSS Analytics Database, the findings reveal roughly 82 percent of respondents have adopted the needed ambulatory solution technologies. There are differences between the types of organizational structure however. Hospital-owned facilities have an adoption rate of over 90 percent while the free standing organizations show an adoption rate of just over 75 percent. Many across the industry feel the ambulatory market is on the cusp of becoming a replacement market. While there are some facilities that plan to make a change, the data we collected suggests a robust replacement market has yet to materialize. Only 12 percent of respondents that currently have an EHR solution are leaning to purchase new or replace their current solution. The practice management market has a high rate of adoption across the hospital-owned and free standing market segments, and mirrors the EHR market in terms of replacement plans. According to the HIMSS Analytics Database the hospital-owned market has an adoption rate of 98 percent. Respondents from the study indicated a free standing PM adoption rate of 66 percent, which is the lowest level since In terms of replacement, just over 11 percent of respondents indicated plans to purchase new or replace their current solution. In addition to adoption rates and purchase plans we wanted to get a sense of where ambulatory facilities were in terms of Meaningful Use. Over 50 percent of study respondents indicated they have attested to Stage 2 MU criteria versus 28 percent the previous year. We also wanted to know the confidence facility leaders had in their vendor for meeting Stage 3 criteria. Study respondents high level of confidence (scores 8 to 10) dropped from roughly 53 percent in 2014 to 43 percent in During the same time there has been a rise in low (scores 0 to 2) to mid-level (scores 3 to 7) confidence indicators. Lower confidence levels have moved up from 11 percent in 2014 to 15 percent in 2015, while mid-level confidence levels have moved from 35 percent in 2014 to 41 percent in The latest study data, along with a small replacement market, indicates that ambulatory practices plan to stick with their current vendor to help meet the different stages of Meaningful Use. However, overall confidence in meeting MU criteria is waning, which could potentially spark interest in solution replacements across the ambulatory market.

5 4 Methodology Methodological Approach 1: Web based survey Dates of Data Collection: August 25 th to September 24 th, 2015 Target Audience(s): Ambulatory physicians, practice/clinic administrators, directors and managers Number of Respondents: 700* Physician Practice Size Count Percent <11 physicians % physicians % 101+ physicians % Not Applicable/No Information % Total % 2015 HIMSS Analytics PM & EHR Ambulatory Study Physician Practice Type Count Percent Hospital-owned practice % Free-standing practice % Total % 2015 HIMSS Analytics PM & EHR Ambulatory Study Methodological Approach 2: HIMSS Analytics Database Date of Database: September 30, 2015 Target Audience(s): Hospital-owned physician practices Number of practices: 39,007 *Study contains a number of partial responses; 700 is the number of completed responses

6 5 Findings Q: Has your facility/organization purchased an ambulatory EHR solution? Definition An application which provides all of the functions of an EHR clinical documentation, order entry, clinical data repository, provider order entry, physician clinical documentation, etc. Market Penetration/Growth Hospital-owned Ambulatory Market Organizational structure is significant in analyzing the ambulatory EHR market. o Given the difference in market penetration between the hospital-owned and free standing ambulatory organizations, this report will separate the findings by hospitalowned or free standing organizational structure. The hospital-owned ambulatory EHR market presents as a near saturated market. o Data from the September 30 th HIMSS Analytics Database reveals 90 percent of hospital-owned ambulatory facilities have a live and operational EMR. o The findings from the Ambulatory PM & EHR Study are consistent with the HIMSS Analytics Database findings, as 92 percent of respondents representing a hospital-owned ambulatory facility reported having an EHR. Chart 1: Hospital-owned Facilities with an Ambulatory EHR 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 54.5% 59.0% 66.0% 76.7% 84.9% NOTE: Total number of hospital-owned ambulatories in HIMSS Analytics Database on September 30, 2015 = 39,007 Source: HIMSS Analytics Database 90.0%

7 6 Table 1: Ambulatory Organizations with an Ambulatory EHR Overall Free Standing Hospital-owned Yes 81.4% 75.2% 92.0% No 18.6% 24.8% 8.0% TOTAL 100.0% 100.0% 100.0% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=781; Free Standing N=492; Hospital-owned N=289) The hospital-owned Ambulatory EHR market is near universal adoption. o The HIMSS Analytics Database and the 2015 study indicate strong growth between 20 and 30 percent from 2011 to 2015 in the implementation of ambulatory EHRs. o The continued growth and high adoption rates suggest the hospital-owned ambulatory market has neared universal adoption. Chart 2: Hospital-owned Ambulatory Facilities with an Ambulatory EHR 100% 87.8% 90% 83.5% 80% 75.0% 90.0% 92.0% 70% 60% 50% 40% 30% 20% 10% 48.0% 60.0% 0% 2009 Study 2010 Study 2011 Study 2012 Study 2013 Study 2014 Study 2015 Study Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=289)

8 7 Free-Standing Ambulatory Market The free standing ambulatory market continues to gain ground. o The study reveals 75 percent of respondents representing a free standing ambulatory facility report having an EHR (Table 1). o Adoption of the EHR in the free standing ambulatory market has increased roughly 30 percent over the last five years. The free standing ambulatory market is also nearing universal adoption. o With some physicians on the verge of retirement and choosing not to invest in EHR technology and others who do not feel they need it, the opportunity for adoption in the free standing market is somewhat limited. This indicates near universal adoption across this segment of the market. The free standing ambulatory EHR market has positive growth over the last five years. o However, growth has been slowing at a higher rate since Chart 3: Free Standing Ambulatory Facilities with an Ambulatory EHR 100% 90% 80% 70% 60% 59.2% 67.3% 70.0% 75.2% 50% 48.0% 40% 30% 29.0% 20% 10% 0% 2010 Study 2011 Study 2012 Study 2013 Study 2014 Study 2015 Study Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=492)

9 8 Timeframe of Purchase Q: What year did you purchase an ambulatory EHR solution? Net new purchases have been declining since the 2012 tipping point o Hospital-owned and free standing ambulatory EHR purchases accelerated around the time the market had greater clarity surrounding the Meaningful Use incentive program ( ). o After 2012, net new purchases across both ambulatory segments have been on the decline. Additionally, the level of replacement purchases has remained small indicating a robust replacement market has not yet been established. Chart 4: Hospital-owned and Free Standing Ambulatory Facilities - Year of EHR Acquisition 18% 16% 15.9% 14% 12% 10% 8% 6% 7.8% 6.4% 12.0% 10.1% 10.1% 13.4% 12.0% 11.7% 8.9% 8.9% 8.4% 7.8% 6.1% 4% 2% 0% Hospital-owned Free standing Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free standing: Prior to N=358; Hospital-owned: Prior to 2006 to 2015 N=258) **Methodology note: 2015 numbers do not represent a full year 2015 as the study was in the field during the month of September 2015

10 9 Vendor Presence Hospital-owned Ambulatory Market The number of vendors in the hospital-owned ambulatory EHR market has steadily increased over the last five years. o According to the HIMSS Analytics database, there are 132 different vendors in 2015 with at least one system installed (or contracted to install) at a hospital-owned ambulatory facility. o The number of ambulatory EHR vendors entering the hospital-owned ambulatory market grew quite rapidly between 2010 and 2013, and has surged again between 2014 and Chart 5: Number of Ambulatory EHR Vendors in the Hospital-owned Ambulatory Market NOTE: Total number of hospital-owned ambulatory facilities in HIMSS Analytics Database on September 30, 2015 = 39,007 Source: HIMSS Analytics Database Free Standing Ambulatory Market No similar vendor presence data is available for the free standing ambulatory market.

11 10 Vendor Market Penetration/Share Q: Who is your primary Ambulatory EHR vendor? Hospital-owned Ambulatory Market The array of vendors serving the hospital-owned ambulatory sector is fairly concentrated. o With 132 vendors servicing the hospital-owned ambulatory market, over three-quarters of the facilities are served by the top six vendors. o There has not been a dramatic shift in the top vendor. Epic continues to be the dominant vendor serving the hospital-owned ambulatory market. Table 2: Vendor Market Share of Hospital-owned Ambulatory Facilities by Practice Size Vendor Total Less than 11 Physicians Physicians 101+ Physicians Epic 38.5% 36.8% 55.8% 66.9% Cerner 11.2% 10.9% 13.5% 14.9% Allscripts 10.8% 11.0% 9.3% 5.0% eclinicalworks 6.2% 6.4% 3.6% 5.0% NextGen 5.7% 6.0% 3.0% 1.7% MEDITECH 5.4% 5.6% 2.9% 1.7% All Others 21.6% 22.6% 10.7% 3.3% Self-Developed 0.3% 0.3% 0.8% 1.7% Not Reported 0.2% 0.2% 0.5% 0.0% NOTE: Total number of hospital-owned ambulatories in HIMSS Analytics Database on September 30, 2015 = 39,007 Source: HIMSS Analytics Database

12 11 Free Standing Ambulatory Market The free standing ambulatory market presents as a much more competitive landscape than the hospital-owned ambulatory market. o While Epic has much of the hospital-owned ambulatory space and the large physician practices over 101 physicians, Allscripts, eclinicalworks, Greenway, Cerner and NextGen still have a strong foothold in offices with 100 physicians or less. o Over 60 percent of the free standing ambulatory market is serviced by the top eight vendors. Table 3: Vendor Market Share of Free Standing Ambulatory Facilities by Practice Size Vendor Total Less than 11 Physicians Physicians 101+ Physicians Epic 15.6% 2.3% 8.3% 67.6% Allscripts 8.9% 8.8% 15.2% 3.0% eclinicalworks 8.0% 11.1% 4.1% 3.0% Greenway 8.3% 10.6% 9.7% 0.0% Cerner 7.6% 8.8% 8.3% 3.1% NextGen 7.5% 3.7% 23.6% 0.0% GE 4.1% 3.2% 5.5% 6.1% athenahealth 3.6% 2.7% 4.1% 4.6% Other 36.4% 48.8% 21.2% 12.6% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=359; >11 Physicians N=216; Physicians N=72; 101+ Physicians N=65)

13 12 Market Opportunity: Purchase Intentions Q: Do you plan to purchase net new, replace or upgrade your current Ambulatory EHR solution within the next two years? Many respondents indicated they are remaining with their current vendor rather than purchasing a net new or replacement solution o Respondents with no investment plans dropped from 66 percent in 2014 to 61 percent in 2015 o However, EHR investment plans have risen slightly from 6.6 percent purchasing new and 6.4 replacing in 2014 to 8.6 purchasing new and 7.6 replacing in 2015 Chart 6: Ambulatory EHR Investment Plans Yes Replacing our current solution 7.6% 6.4% Yes Purchasing a new solution 8.6% 6.6% Yes Upgrading current solution 22.7% 20.8% No 61.0% 66.2% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=765) 0% 10% 20% 30% 40% 50% 60% 70% Table 4: Ambulatory EHR Investment Plan Free Standing Hospital-owned Yes 38.1% 40.3% Yes Upgrading current solution 22.0% 23.8% Yes Purchasing new solution 8.5% 8.7% Yes Replacing current solution 7.5% 7.7% No 61.8% 59.6% TOTAL 100.0% 100.0% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free Standing N=480; Hospital-owned N=285)

14 13 Market Opportunity: Purchase Timeframe Q: What timeframe? Over half of respondents with EHR investment plans, roughly 52 percent, are looking to make an investment in the next 12 months o There has been an increase of respondents with investment plans occurring within 13 to 24 months, from 24 percent in 2014 to roughly 38 percent in o While there does not seem to be a robust replacement market currently, the indication of increased future investment plans could potentially be the start of the replacement market the industry has anticipated. Chart 7: Timeframe for Ambulatory EHR Purchase/Upgrade/Replacement Longer than 24 months 9.2% 8.6% Within the next months Within the next 7-12 months 24.0% 25.6% 21.7% 37.9% Within the next 4-6 months 11.6% 16.6% Within the next 3 months 15.7% 29.1% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=293) 0% 5% 10% 15% 20% 25% 30% 35% 40%

15 14 Market Opportunity: Vendor Consideration Q: Which vendor(s) are you likely to consider when purchasing a new, replacing or upgrading your current Ambulatory EHR solution? Hospital-owned Ambulatory Market Epic presents as the leading vendor for future ambulatory EHR purchases in the hospital-owned ambulatory market. o Epic was cited as a vendor for consideration by roughly 35 percent of hospital-owned ambulatory respondents, up from 28 percent in o Cerner remained the second most considered vendor with roughly 11 percent of respondents in 2014 and Chart 8: Considered Vendors for Hospital-owned Ambulatory EHR Investment McKesson 3.1% NextGen 3.1% eclinicalworks 3.8% athenahealth 6.9% Other 17.5% Meditech 10.0% Allscripts 10.0% Cerner 11.3% Epic 34.4% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=105)

16 15 Free Standing Ambulatory Market There are more vendors with offerings focused on the free standing facilities than the hospital-owned ambulatory market. o Epic has become the most highly considered vendor in the free standing space as well. o However, there is greater dispersion across multiple vendors to meet the free standing organization s needs. Chart 9: Considered Vendors for Free Standing Ambulatory EHR Investment Other 21.4% Epic 22.4% McKesson 3.1% Meditech 4.1% GE 4.1% Greenway 5.5% Cerner 6.8% athenahealth 6.9% eclinicalworks 10.0% NextGen 8.3% Allscripts 7.9% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=177)

17 16 Market Factors: Purchase Motivation Q: What is the most important driver for your EHR purchase? Organizations with defined EHR purchase plans are driven to acquire an ambulatory EHR because of the potential efficiencies to be gained. o While efficiencies are top of mind, more ambulatory organizations are looking to increase the quality of care delivered and make it easier to share patient data with other facilities. o Sharing patient data between facilities rose from nearly 16 percent in 2014 to roughly 21 percent in Chart 10: Ambulatory EHR Drivers for Investment Make our practice more efficient Make it easier to share patient data between facilities Increase quality we deliver at our practice Reduce medical errors ARRA, get the Stimulus funding Other 4.5% 4.7% 3.8% 6.4% 21.7% 15.7% 21.7% 19.2% 11.2% 15.7% 37.1% 38.4% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=286) 0% 10% 20% 30% 40% 50% Table 5: Ambulatory EHR Drivers for Investment Free Standing Hospital-owned Make our practice more efficient 38.5% 34.5% Increase quality we deliver at our practice 20.1% 24.3% Make it easier to share patient data between facilities 18.9% 26.7% ARRA get stimulus funding 3.9% 3.7% Reduce medical errors 4.4% 4.6% Other 13.9% 6.5% TOTAL 100.0% 100.0% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free Standing N=179; Hospital-owned N=107)

18 17 Market Factors: Purchase Barriers Q: What is the primary reason for not purchasing an Ambulatory EHR? The barriers to purchasing an EHR shifted dramatically after the MU program initiated (after 2010) and remained relatively consistent since then. o Ambulatory organizations have made the investments they believe will work for them o Solution cost as a barrier dropped after 2010 but has seen a gradual uptick since 2012 Chart 11: Primary Reason for Not Making Ambulatory EHR Investment % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Already purchased EHR that will be certified for MU Cost is prohibitive Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=459) Retirement is right around the corner Other

19 18 Findings: Practice Management (PM) Definition The application that provides the registration, scheduling, and billing functions for a physician office or clinic. Market Penetration/Growth Q: Do you currently utilize a Practice Management (PM) solution? Hospital-owned Ambulatory Market The hospital-owned ambulatory PM market presents as a highly saturated market. o Data from the September 30, 2015 HIMSS Analytics Database reveals 98 percent of hospital-owned ambulatory facilities have a live and operational PM application. Chart 12: Hospital-owned Ambulatory Facilities with a Practice Management Solution 100.0% 96.7% 96.9% 97.0% 97.3% 97.4% 98.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% NOTE: Total number of hospital-owned ambulatories in HIMSS Analytics Database on September 30, 2015 = 39,007 Source: HIMSS Analytics Database

20 19 Free Standing Ambulatory Market Table 13: Free Standing Ambulatory Facilities with a Practice Management Solution 100% 90% 80% 80.0% 86.0% 87.0% 90.0% 86.0% 70% 60% 50% 40% 30% 20% 10% 0% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=474) The majority of free standing ambulatory facilities operate a PM solution. o Study respondents indicated a slight drop in PM adoption in However much like the hospital-owned market adoption rates remain high.

21 20 Timeframe of Purchase Q: What year did you purchase your Practice Management solution? Many organizations have utilized PM solutions as a part of their practice well before the HITECH Act and Meaningful Use o According to the study data and HIMSS Analytics Database information, many hospitalowned (24.8 percent) and free standing (17.5 percent) organizations purchased a PM solution prior to 2006 Chart 14: Year of PM Purchase Prior to % 2.9% 5.6% 2.2% 4.2% 10.9% 3.9% 8.0% 10.5% 8.8% 11.8% 12.4% 11.8% 11.7% 11.1% 6.6% 8.8% 8.8% 4.6% 10.2% 17.5% 24.8% 0% 5% 10% 15% 20% 25% 30% Free Standing Hospital Owned Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free standing N=306; Hospital-owned N=137)

22 21 Vendor Presence Hospital-owned Ambulatory Market The PM market is a crowded market. o With over 160 vendors with at least one PM system installed (or contracted to install) in a hospital-owned ambulatory facility, ambulatory leaders have many vendors to choice from in satisfying their practice management needs. o Interestingly, the number of vendors in the hospital-owned market peaked in 2013 and has decreased since then. Chart 15: Number of Ambulatory PM Vendors in the Hospital-owned Ambulatory Market NOTE: Total number of hospital-owned ambulatory facilities in HIMSS Analytics Database on September 30, 2015 = 39,007 Source: HIMSS Analytics Database Free Standing Ambulatory Market No similar vendor presence data is available for the free standing ambulatory market.

23 22 Vendor Market Penetration/Share Q: Who is your primary PM vendor? Hospital-owned Ambulatory Market Epic holds a sizable share of the hospital-owned ambulatory market o Epic is the leading PM vendor overall and in every physician size category o Oftentimes hospital-owned physician practices, regardless of size, will adopt the technology currently being utilized at the larger hospital organization Table 6: Vendor Market Share of Hospital-owned Ambulatory Facilities by Practice Size Vendor Total Less than 11 Physicians Physicians 101+ Physicians Epic 37.6% 36.2% 52.6% 59.2% GE 8.6% 8.6% 8.9% 5.6% Cerner 8.3% 8.3% 8.3% 8.5% MEDITECH 6.8% 7.0% 4.4% 4.9% Allscripts 6.7% 6.8% 5.7% 2.8% NextGen 5.1% 5.4% 2.5% 2.1% eclinicalworks 4.7% 4.8% 2.8% 2.8% All Others 21.6% 22.3% 14.1% 12.7% Not Reported 0.4% 0.4% 0.6% 1.4% Self-Developed 0.2% 0.2% 0.1% 0% NOTE: Total number of hospital-owned ambulatory facilities in HIMSS Analytics Database on September 30, 2015 = 39,007 Source: HIMSS Analytics Database

24 23 Free Standing Ambulatory Market The free standing PM market is still highly fragmented from a vendor perspective o Cerner, Greenway, eclinicalworks, Allscripts, Epic, NextGen, athenahealth, GE and McKesson make up the bulk of vendors represented. o While Epic ranks low in utilized PM vendors overall, it does make up a large portion of the 101+ physician space. Table 7: Vendor Market Share of Free Standing Ambulatory Facilities by Practice Size Vendor Total Less than 11 Physicians Physicians 101+ Physicians Cerner 13.7% 15.9% 11.5% 0.0% Greenway 9.1% 10.0% 11.5% 0.0% eclinicalworks 8.8% 10.9% 3.8% 3.4% Allscripts 7.8% 8.6% 7.7% 3.4% Epic 7.8% 1.8% 9.6% 51.7% NextGen 6.5% 3.2% 23.0% 0.0% athenahealth 3.5% 2.2% 5.7% 6.9% GE 3.6% 2.7% 5.7% 6.9% McKesson 2.6% 2.7% 1.9% 3.4% Other 36.6% 42.0% 19.6% 24.3% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=307; >11 physicians N=219; physicians N=52; 101+ physicians N=29)

25 24 Market Opportunity: Purchase Intentions Q: Do you plan to purchase net new, replace or upgrade your current Practice Management solution within the next two years? Very few respondents indicated the intention to purchase a new PM solution. o Roughly a quarter of study respondents indicated purchasing, replacement or upgrade plans for their PM. o Purchasing a new or replacing their current solution intentions was similar for hospitalowned and free standing organizations. Chart 16: Plans to Purchase Net New, Replace or Upgrade Current PM Solution Yes Upgrading current solution 12% Yes Purchasing a new solution 6% No 76% Yes Replacing our current solution 6% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=735) Table 8: Plans to Purchase Net New, Replace or Upgrade Current PM Free Standing Hospital-owned Yes 24.9% 21.4% Yes Upgrading current solution 13.2% 9.7% Yes Purchasing new solution 5.9% 5.6% Yes Replacing current solution 5.7% 6.0% No 75.0% 78.5% TOTAL 100.0% 100.0% **Numbers may not add due to rounding Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free standing N=469; Hospital-owned N=266)

26 25 Market Opportunity: Purchase Timeframe Q: What timeframe? A majority of organizations planning a PM purchase, upgrade or replacement will do so in the next 12 to 24 months o Nearly 50 percent are in a position to make changes to their PM solution in the next 12 months. Chart 17: Timeframe for PM Net New Purchase, Upgrade or Replacement 24+ months 9.3% months 37.2% 7-12 months 29.7% 3-6 months 10.5% Within 3 months 13.4% 0% 5% 10% 15% 20% 25% 30% 35% 40% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=172)

27 26 Market Opportunity: Vendor Consideration Q: Which vendor(s) are you likely to consider when purchasing a new, replacing or upgrading your current PM solution? Hospital-owned Ambulatory Market Epic presents as the leading vendor for future ambulatory PM purchases in the hospitalowned ambulatory market. o Epic was cited as a vendor for consideration by roughly 29 percent of hospital-owned ambulatory respondents, followed by Meditech, Allscripts and Cerner. Chart 18: Considered Vendors for Hospital-owned Ambulatory PM Investment eclinicalworks 3% NextGen 5% GE 3% Other 11% McKesson 6% athenahealth 8% Cerner 11% Allscripts 11% Epic 29% Meditech 13% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=85)

28 27 Free Standing Ambulatory Market Free standing organizations show a greater reach in considered vendors o While Epic is also highly considered in the free standing ambulatory market, there are more vendors being considered in this segment of the market. o This could be due in part to hospital-owned organizations considering enterprise vendors at their larger, corresponding organizations. Chart 19: Considered Vendors for Free Standing Ambulatory PM Investment ADP AdvancedMD 2% Meditech 2% McKesson 2% e-mds 2% GE 5% Other 16% Epic 18% athenahealth 10% Cerner 9% eclinicalworks 8% Allscripts 6% NextGen 9% Greenway 9% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=186)

29 28 Market Factors: PM Replacement with Integrated PM/EHR Q: Would you consider replacing your current PM solution with an integrated PM/EHR solution? Roughly 13 percent of respondents indicated they plan to replace their PM solution with an integrated PM/EHR solution o There has been a relatively high level of uncertainty among respondents around replacing their current solution with an integrated solution, averaging 35 percent over the last three years (35 percent in 2013; 30 percent in 2014; 40 percent in 2015.) There is the potential to capitalize on the uncertainty for net new integrated purchases. Chart 20: Consider Replacing Current PM with Integrated PM/EHR Replacement Yes 13.7% 11.3% No, I have already purchased an integrated PM/EHR solution 39.1% 49.4% No, I plan to keep my standalone PM solution without purchasing an EHR solution 7.0% 9.3% Unsure 30.0% 40.2% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=724) 0% 10% 20% 30% 40% 50% 60% Table 9: Consider Replacing Current PM with Integrated PM/EHR Free Standing Hospital-owned Yes 15.2% 11.0% No 48.9% 41.2% No, I have already purchased an integrated PM/EHR solution 42.0% 34.0% No, I plan to keep my stand-alone PM solution without purchasing an EHR solution 6.9% 7.3% Unsure 35.9% 47.7% TOTAL 100.0% 100.0% **Numbers may not add due to rounding Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free standing N=462; Hospital-owned N=262)

30 29 Market Factors: PM/EHR Solution Replacement Q: What would cause your organization to replace your current PM/EHR solution? Meeting Meaningful Use criteria is still the primary focus of organizations and would be the largest catalyst for replacement of current PM/EHR solution o Other reasons for potential replacement would be failure of the current solution to meet practice needs, any increase in overall cost to operate, lack of necessary functionality or support, or if the current vendor or solution ceases to exist. Chart 21: Reason to Replace Current PM/EHR solution Failure to successfully attest to Stage 2 MU Criteria 14.0% Other 35.2% If our current vendor was purchased by another vendor 28.3% Potential failure of attestation to Stage 3 MU Criteria 22.6% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study Table 10: Reason to Replace Current PM/EHR Free Standing Hospital-owned Failure to successfully attest to Stage 2 MU Criteria 14.5% 13.1% Potential failure of attestation to Stage 3 MU Criteria 20.7% 25.6% If our current vendor was purchased by another vendor 25.3% 33.3% Other 39.2% 28.0% TOTAL 100.0% 100.0% **Numbers may not add due to rounding Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free standing N=372; Hospital-owned N=222)

31 30 Market Factors: Meaningful Use Stage 2 Status Q: Have you successfully attested to Stage 2 Meaningful Use (MU) criteria? Meeting Stage 2 MU criteria is still the focus for many organizations regardless of organizational type o Free standing organizations have made strides in Stage 2 attestation, going from roughly 25 percent in 2014 to 44 percent in o The hospital-owned ambulatory respondents are showing just over 62 percent attestation, up from roughly 36 percent in Chart 22: Successful Attestation to MU Stage 2 Criteria Yes 28.8% 50.8% No 28.7% 50.5% Unsure 20.4% 20.7% 0% 10% 20% 30% 40% 50% 60% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study Table 11: Successful Attestation to MU Stage 2 Criteria Free Standing Hospital-owned Yes 44.4% 62.2% No 37.0% 14.1% Unsure 18.6% 23.6% TOTAL 100.0% 100.0% **Numbers may not add due to rounding Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free Standing N=462; Hospital-owned N=262)

32 31 Market Factors: Meaningful Use Stage 3 Confidence Q: How confident are you on a scale of 0-10 that your current PM/EHR solution will be able to meet Stage 3 Meaningful Use criteria? Complete confidence in PM/EHR solutions meeting MU criteria has decreased for the third consecutive year o While many ambulatory organizations are on their way to meeting Stage 2 criteria, their outlook for meeting Stage 3 criteria could suggest slowed progress in the future. o Study respondents high level of confidence (combined percentages of scores 8 to 10) has dropped from roughly 53 percent in 2014 to 43 percent in o During the same time there has been a rise in low (scores 0 to 2) to mid-level (scores 3 to 7) confidence indicators. Lower confidence levels have moved up from 11 percent in 2014 to 15 percent in 2015, while mid-level confidence levels have moved from 35 percent in 2014 to 41 percent in Chart 23: Confidence PM/EHR Solution Will Meet Stage 3 MU Criteria 40% 35% 30% 25% 20% 15% 10% 5% % 0-No confidence Complete confidence

33 32 Chart 24: Confidence PM/EHR Solution Will Meet Stage 3 MU Criteria: Scores % 35% 30% 25% 20% 15% 10% 5% 0% 14.2% 34.2% 31.4% 27.2% 20.0% 14.2% 14.0% 14.8% 12.2% 12.3% 10.9% 8.4% Complete confidence Chart 25: Confidence PM/EHR Solution Will Meet Stage 3 MU Criteria: Scores % 15% 10% 5% 4.0% 3.2% 3.3% 3.8% 3.0% 2.0% 2.8% 2.0% 12.7% 13.2% 12.0% 10.0% 5.8% 4.5% 4.2% 4.5% 15.8% 11.7% 10.4% 8.9% 0% Chart 26: Confidence PM/EHR Solution Will Meet Stage 3 MU Criteria: Scores % 12% 11.6% 10.4% 10% 8.7% 8% 7.0% 6% 4% 3.0% 2.4% 1.8% 1.6% 2.0% 2% 1.3% 1.3% 0% 0-No confidence 1 2 Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study 1.3%

34 33 Findings: Strategy Strategic Plans: Health Information Exchange Q: Does your organization have plans to join a Health Information Exchange (HIE)? There seems to be a higher level of uncertainty with ambulatory organizations plans to join an HIE. o Only 32 percent of respondents claim their organization has defined plans to join an HIE, lower than the 2014 indication of 45 percent. o However, a majority of respondents in the Other category indicated they have already joined an HIE. o The level of uncertainty across all practice sizes and practice types still overshadows those with plans to join an HIE. Chart 27: Plans to Join an HIE Yes, a Hospital or Hospital System Yes, a Regional 9% Health Information Exchange (HIE) 9% Unsure 46% Yes, a State Health Information Exchange (HIE) 14% No 18% Other 4% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=716)

35 34 Hospital-owned ambulatory facilities are much more favorable towards joining HIEs than free standing ambulatory facilities. o Nearly half of respondents working for a hospital-owned ambulatory facility claimed to have plans of joining an HIE, compared to roughly 24 percent of free standing respondents with similar plans. Table 12: Plans to Join an HIE by Organization Type Overall Free Standing Hospitalowned Yes 31.5% 23.9% 44.0% Yes, a Hospital or Hospital System 8.5% 6.1% 12.8% Yes, a Regional Health Information Exchange (HIE) 8.6% 6.5% 12.5% Yes, a State Health Information Exchange (HIE) 14.0% 11.3% 18.7% No 18.4% 25.7% 5.6% Other/Unsure 50.4% 50.3% 50.6% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free standing N=459; Hospital-owned N=257) Ambulatory practices, regardless of size, tend to favor the state HIE. o Hospital or health system exchanges tend to be lower on the radar than a regional or state HIE. Table 13 Ambulatory Plans to Join an HIE by Practice Size Total Less than 11 Physicians Physicians 101+ Physicians Yes 31.2% 25.9% 44.4% 34.0% Yes, a Hospital or Hospital System 8.5% 8.3% 10.4% 8.1% Yes, a Regional Health Information Exchange (HIE) 8.7% 5.4% 14.6% 11.2% Yes, a State Health Information Exchange (HIE) 14.0% 12.2% 19.4% 14.7% No 18.4% 25.0% 9.0% 8.2% Other/Unsure 46.4% 49.1% 46.5% 57.9% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (>11 physicians N=336; physicians N=144; 101+ physicians N=197)

36 35 Strategic Plans: Accountable Care Q: As the market moves to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients, which of the following best describes your strategy around Accountable Care (ACO)? Strategies around accountable care have surged year over year, however most of the ambulatory market still does not have defined plans. o Roughly 40 percent of ambulatory respondents have a sense of how they will approach accountable care. Chart 28: Ambulatory Organization ACO Plans Yes 24.5% 40.5% Unsure 59.5% 75.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (N=698) Hospital-owned ambulatory practices tend to have greater clarity around their ACO strategy. o Even though the percentage of hospital-owned ambulatory respondents with defined ACO plans (51 percent) is greater than the percentage of free standing respondents with similar plans (35 percent), there is still a high degree of uncertainty in this market.

37 36 Table 14: Defined ACO Plans by Organization Type Free Standing Hospitalowned Overall Yes 40.5% 34.9% 50.6% Yes - We expect to join an already established ACO 15.0% 17.2% 11.2% Yes - We plan to form an ACO by ourselves 15.8% 9.0% 27.9% Yes - We have had discussions with a neighboring healthcare provider and expect to form an ACO with them 9.7% 8.7% 11.6% Unsure 59.5% 65.1% 49.4% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (Free standing N=447; Hospital-owned N=251) The free standing ambulatory practices are the most unsure as to what their ACO plans will be. o Roughly 65 percent of free standing organization respondents indicated they were unsure of their ACO plans. o The percentage of uncertainty decreased as the practice size increased, but the percentage of respondents indicating an Unsure response was still quite high. Table 15: Defined ACO Plans by Practice Size Total Less than 11 Physicians Physicians 101+ Physicians Yes 40.5% 35.2% 50.4% 45.4% Yes - We expect to join an already established ACO 15.0% 18.2% 18.0% 7.7% Yes - We plan to form an ACO by ourselves 15.8% 9.1% 14.4% 30.0% Yes - We have had discussions with a neighboring healthcare provider and expect to 9.7% 7.9% 18.0% 7.7% form an ACO with them Unsure 59.5% 64.7% 49.6% 54.5% Source: 2015 HIMSS Analytics PM & EHR Ambulatory Study (>11 physicians N=329; physicians N=139; 101+ physicians N=194)

38 37 Conclusion Electronic Health Record (EHR) and Practice Management (PM) solutions have emerged as standard business tools in the ambulatory market. The 2015 Ambulatory Study indicates that EHR and PM solutions have become near universal in their adoption. Adoption rates for hospital-owned ambulatory facilities are between 90 and 92 percent based upon the 2015 Study and the data from the HIMSS Analytics Database. The free standing ambulatory facility adoption rate is much lower at 75 percent but may be near universal adoption. Given the level of physicians about to retire, the ambulatory organizations that refuse to adopt EHR technology and those who feel they do not need it, it is very possible the free standing market has very little opportunity for additional adoption. The theory of near universal adoption is supported by the adoption rate of EHR technology. Free standing and hospital-owned facility adoption has been on the decline since 2012, which was the peak year of the adoption surge. Current year adoption rates are roughly six percent for free standing organizations and just over seven percent for hospital-owned facilities. Additionally, just over 83 percent of respondents currently have no intention of either purchasing a net new solution or replacing their current solution. The primary reason for this is the belief they have already purchased a solution they feel works well to meet their needs and will meet Meaningful Use criteria. Ambulatory facilities looking to make future investments, either a net new or a replacement purchase, would like to use the technology to make efficiencies within their practice. But what really stood out in terms of the investment driver for new or replacement purchases was respondents indication they wanted to make it easier to share information, specifically patient data, between facilities. Hospital-owned facilities increased in this area from nearly 23 percent in 2014 to 26 percent in 2015, while free standing facilities increased from 12 percent in 2014 to 18 percent in This could suggest ambulatory facilities have begun to truly embrace technology and are becoming slightly more sophisticated around determining what the EHR can do to meet their needs. While this may be true for some facilities, the HIMSS Analytics Ambulatory EMR Adoption Model (A-EMRAM) indicates that the ambulatory facilities are really just beginning to scratch the surface in terms of sophistication. The A-EMRAM is an 8 stage model (Stages 0-7) that allows ambulatory facilities to track their technology adoption, usage and sophistication against similar organizations, with the goal of reaching an environment where paper charts are no longer used. There is little new or replacement opportunity with the PM solutions in the ambulatory market. Respondents from free standing and hospital-owned facilities show little interest in purchasing net new or replacing their PM solution, with roughly five percent in both categories for each segment. However, when asked if they would replace their current PM solution with an integrated PM/EHR solution nearly 14 percent of respondents would do so.

39 38 The HITECH Act and meeting Meaningful Use criteria have been the catalyst for technology adoption, and it seems organizations are beginning to make strides in usage. Respondents were asked if they had met Stage 2 criteria in 2014 and Roughly 28 percent indicated they had met stage 2 criteria in 2014 with another 50 percent indicating they had not. Those percentages reversed in 2015 with just over 50 percent indicating they had met MU stage 2 criteria while just over 28 percent were still working to meet those parameters. As the MU stages become more complex for ambulatory facilities, it may take additional time than what is allotted to these facilities to meet the needed criteria. While the findings of this study suggest the market is near universal adoption levels for PM and EHR solutions, the evidence from the most current HIMSS Analytics A-EMRAM profile suggest the ambulatory market has a ways to go in optimizing the use of the electronic medical record.

40 39 Appendix

41 40 About HIMSS Analytics The HIMSS Analytics Advisory Solutions group provides quantitative and qualitative research solutions to guide you through your product value stream. What challenges are you facing? How can we help? Contact us at HIMSS Analytics collects, analyzes and distributes essential health IT data related to solutions, costs, metrics, trends and purchase decisions. It delivers quality data and analytical expertise to healthcare delivery organizations, IT companies, governmental entities, financial, pharmaceutical and consulting companies. Visit HIMSS Analytics is a part of HIMSS, a cause-based global enterprise that produces health IT thought leadership, education, events, market research and media services around the world. Founded in 1961, HIMSS encompasses more than 52,000 individuals, of which more than two-thirds work in healthcare provider, governmental and not-for-profit organizations across the globe, plus over 600 corporations and 250 not-for-profit partner organizations, that share the cause of transforming health and healthcare through the best use of IT. HIMSS, headquartered in Chicago, serves the global health IT community with additional offices in the United States, Europe, and Asia.