The healthcare industry has long been politicized and regulated. While it has its struggles, it also has had its times of off-the-chart growth. We saw this begin in 2009 with the American Recovery and Reinvestment Act (ARRA). Enacting new government regulations and requirements on technology vendors and incentivizing and mandating EHR technology at all levels of healthcare – hospitals, clinics, and practices – ARRA spurred the industry into growth. In the first 5 years, we saw EHR adoption rates at hospitals nearing 96% and 75% of ambulatory physicians adopting certified EHR systems. The opportunities were plentiful, and EHR vendors raced to lock-down their piece of the pie.
In 2018, we see a totally different landscape. Health IT vendors and hospital execs are getting creative in how they can continue to grow their revenue.
Many forces are at play in creating this consolidation environment, the key factors to consider are: technology pressures, cost containment, reimbursement penalties, government mandates and increased population health management initiatives. Below is a look at the sizeable activity the industry is undergoing.
With most providers and hospitals locked into contracts with EHR vendors, Health IT has started to see more than its fair share of acquisitions. According to Bank of America’s survey of 245 healthcare executives, 75% believe merger and acquisition activity will increase in 2018. Vendors are looking at acquisitions that allow them to expand service offerings thus revenue within their existing customer.
While consolidation is happening, it did dip in 2017, but it is expected to increase in 2018. Overall Health IT funding for 2017 was at $5.8B compared to $4.4B in 2016. 60% of companies funded sell directly to physicians.
The need for business growth:
The EHR market is competitive and shrinking. We see companies seek out acquisition when they are unable to create new revenue or meet revenue goals.
Now more than ever, it is important to work with a vendor you know has future-proof technology to support your hospital, practice, and clinic. Azalea Health has invested heavily into our vision of “One patient. One record.” Now offering a complete continuum of care – hospital, clinic, and home – Azalea Health is poised to support health systems achieve their business goals.
Click here to learn more about how Azalea Health can support your practice!
*Sources: Report from Kaufman Hall – https://www.kaufmanhall.com/sites/default/files/2017-in-Review_The-Year-that-Shook-Healthcare.pdf
Get info on the latest industry news and regulations, thought-provoking webinars, events and tradeshows!