The Shape of the Electronic Medical Record Market

War-gaming analyst picks the drug distributor over Microsoft, Allscripts and other EMR players

Now in its fifth year as organized by Fuld & Co. (Cambridge MA), a type of competitive analysis known as war-gaming identified McKesson as a potential winner when the business environment for EMRs becomes established. Fuld & Co. sets up teams from leading business schools (this year, MIT [Sloan], UPenn [Wharton], Columbia, and Northwestern [Kellogg]), each representing one candidate EMR player: Microsoft, McKesson, Kaiser-Permanente and Allscripts. Fuld & Co. scripts likely scenarios and—in real time—the b-school students develop strategies and make presentations to a board of judges, who choose the ultimate winner.

“McKesson will work to vastly expand its healthcare IT niche through its dominance in logistics and understanding of the health value chain, data creation and data utility—with an emphasis on physician, payor and healthcare delivery applications” concluded the Fuld report of the exercise.

“Clearly, EMR is in its infancy,” says Leon Fuld, president, “but the eventual impact of the technology on the bipharma industry is broad and inevitable. Players in the healthcare arena will gain total transparency on issues like evidence-based medicine and comparative effectiveness. This will impact both drugs on the market and clinical research.”
And the fact that the No. 1 drug wholesaler could become the No. 1 EMR system vendor generates many potential implications of its own.


The Shape of the Electronic Medical Record Market

McKesson is a heavy hitter in the category, says Kalorama Information

Electronic medical record (EMR) systems are of peripheral interest to the commercial practices of the biopharma industry. Except for clinical investigations, most of the data flow going back to these manufacturers starts from the pharmacy; whereas that is an end point for compiling medical records from the hospital administrator perspective. But in the coming era of healthcare information technology (HIT), there will be numerous overlapping points between EMRs and commercial pharma data; electronic prescribing is one that readily comes to mind. Moreover, as can be seen in examples like product serialization (see p. 23), the IT standards and practices of EMR systems will have an effect on pharma IT protocols.

In a new report, “US EMR Technology Markets,” Kalorama Information (New York) surveys the current state of the industry. It’s worth noting that this is a survey of the information systems to gather and store EMRs, not the value of the information itself. Also, the just-beginning stages of personal EMR storage, using anything from Google Health to newly organized, consumer-oriented businesses like Revolution Health are not yet in the picture.

Clinical vs. administrative
Under HIT, Kalorama distinguishes between the administrative IT systems of hospitals, medical or diagnostic centers and general physician practices, and clinical IT systems, which generate EMRs. The EMR part itself then divides into five categories:

  • Pharmacy information systems (PISs)
  • Radiology Information systems (RISs)
  • Laboratory information systems (LISs)
  • Other information systems
  • Wireless systems for provider operations and surgical management.

Some specific solutions, such as computerized practitioner order entry (CPOE) cross most or all of these five categories; others, such as picture archiving and communications are specific to one (RIS, in this case).

The overall market for these systems was worth $10.8 billion in 2008, estimates Kalorama, and is growing at a compound rate of 14.1%. It will reach $18.5 billion in 2012 (and this estimate was made prior to the inauguration of the Obama Administration).

The leading players include:

  • Cerner
  • Computer Programs & Systems
  • Eclipsys
  • Epic
  • GE Healthcare
  • McKesson
  • Medtech
  • MedPlus
  • QuadraMed Corp.
  • Siemens

And the top four are McKesson (30% of the market); Cerner and Siemens (each with 17%), and GE Healthcare (15%). McKesson’s role as the No. 1 EMR provider, and the No. 1 drug wholesaler, puts it in a unique cross-industry position. PC