How Epic and Cerner will retain control of the EHR market
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US electronic health record (EHR) vendors Cerner and Epic once again reigned victorious in the hospital EHR market in 2018,laying claim to 54% of all acute care hospitals, up slightly from under52% in 2017, according to KLAS Research reports cited in Healthcare Dive.

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Together, these giants controlled 85% of the large hospital market, with Epic alone holding onto 58%. Hospital implementation of EHRs hassoared in the last decade: Business Insider Intelligence projects that more than 80% of all doctors will be working at a facility that uses an EHR system by 2019.

Here’s what it means:Epic and Cerner gobbled up competitors’ market shares in 2018.

  • Cerner boosted its market share with a deal with the US Department of Veteran Affairs (VA). Cernerfinalized a $10 billion deal with the VA in May 2018, giving the vendor access to 147 acute care facilities. Cerneramassed 177 new hospital contracts last year, but lost a total of 77 accounts — many of which migrated over to Epic, per Healthcare Leaders.
  • Epic poached contracts from its competitors. Epic won out with a net gain of 121 accounts — and while Cerner signed 55 more contracts with hospitals than Epic in 2018, Epic only lost one. And the three large, private organizations that shifted EHR vendors dropped Cerner and Allscripts for Epic.
  • Both players clinched new customers via hospital mergers and acquisitions (M&As).Over 20% of hospitals’ shifts in EHR vendor arise from M&A activity, and there were90 M&A deals among hospitals and health systems in 2018, per healthcare consultancy Kaufman Hall. Meditech started the year with 33 hospital clients, but claimed half as many by the year’s end. And Allscripts said goodbye to 28 of its hospitals in 2018. Now, Epic’s on top with 163 large hospital clients, followed by Cerner with 77, Allscripts with 16, and Meditech with 12.

The bigger picture:Smaller-scale EHR vendors that lost customers in 2018 likely won’t fare any better this year.

  • Continued M&A activity could threaten EHR vendors that are hanging onto a dwindling number of customers. After a record high in 2018, we expect hospital deal-making will maintain at a high level in 2019 despite atame Q1. As we saw last year, consolidation doesn’t bode well for players that are up against Epic and Cerner.
  • Smaller vendors might come up against big tech companies entering the space.US hospitals are eyeing Apple Health Records — part of Apple’s Health app that consolidates medical records. Apple Health Records likely won’t upend established EHR vendors, but could eventually muscle into the market and threaten smaller players with shrinking customer bases. Apple has accumulated a growing list of hospitalpartners, like Community Health Systems — which operates 100 hospitals.

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