August 31, 2020

The Epic Failure of EHRs Creates Opportunities for Third Parties

A decade after the introduction of meaningful use requirements, EHR systems are a near universal disappointment.  They are painful for clinicians to use, expensive to deploy and maintain, difficult to integrate, and provide a fraction of the analytics and insights that many once believed would be enabled by universal adoption of EHR systems.  It’s reasonable, in my view, for providers to express some frustration. If you invest billions of dollars into IT infrastructure, it’s fair to expect a system that does more than meet regulatory requirements.  Providers were promised workflow and productivity improvements, value-based care enablement, and the holy grail – improved outcomes.  But studies have shown that despite widespread adoption of EHRs – and the meaningful use of those systems – most physicians and administrators believe EHRs have actually negatively impacted both their operations and patient care.

It’s important to understand how we got here in order to understand where the market is going next, and to that end we’ve identified the most influential issues with EHR adoption over the past decade:

1. Technology

At the time that meaningful use requirements began influencing hospital investments, leading EHR platforms were, at their core, glorified billing systems. And sure, EHRs need to be billing-friendly – but of all the potential functionality one would want from an EHR, billing is not the most difficult or complex to execute. Clinical and practice management use cases require complex and interoperable databases, far more software sophistication, and greater computing and analytical horsepower than was designed into EHRs in the first half of the 2010s. But instead of designing a system from the ground up – with practice management, clinical workflows, or even analytics in mind – many vendors tried to build functionality on top of systems that simply can’t support it well.  The result is deep and persistent inefficiencies in many of the leading platforms.

2. Artificial Deadlines

Providers rushed to buy the best available systems in order to avoid financial penalties, and had to choose from the aforementioned underdeveloped solutions. The concept was well-intentioned, but the technology ecosystem simply wasn’t there.

3. Stickiness

Once you make a multibillion dollar investment in infrastructure, it’s pretty unattractive to walk away from that investment. Things need to get very ugly. Leadership would need to acknowledge a massive mistake. Additional funds would need to be found. These circumstances are so improbable that they rarely occur, which has resulted in a market with high stickiness and low satisfaction.

These circumstances have hamstrung healthcare innovation over the past decade.  EHR data has been cumbersome to extract and share, limiting opportunities to derive insights or deliver real time monitoring solutions for chronic disease management for hypertension, diabetes, and heart failure (among other conditions).  Vendors creating new monitoring devices have faced huge roadblocks in bringing them to market, given the cost of integrating a single device with an EHR platform is essentially prohibitive. Start ups are rising to address these challenges, and could unlock tremendous value for both the medial industry and society at large.

One specific area of innovation worth following is healthcare middleware. These players come in many flavors, but database and integration middleware are among the most important, as they are positioned to topple barriers to integration of novel monitoring devices, data input and extraction, and data sharing between systems. While it’s not an ideal solution (there’s no going back in time or blowing up the current EHR infrastructure), middleware solutions can enable these databases to be infinitely more useful. There’s plenty of investment in this space already, but you can expect that activity to grow as the market quickly heats up.

Related team members

Richard Crumb
Managing Partner & Co-Founder Menlo Park
Jaime Batista
Principal Yarmouth
Walt Shepard
Principal Boston
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    Boston, MA 02110
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    Yarmouth, ME 04096
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    London, UK

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