By Chris Barnum, Managing Director, Custom Development and Integrations, Tegria

History moves in cycles, so the knowledge of where we’ve been can help us understand where we are and where we might be going. In today’s dynamic healthcare IT landscape, that’s good news. As the industry recovers from COVID-era uncertainty, adapts to new federal regulations, and assimilates ever-expanding amounts of data, knowledge of past trends offers important context for today’s healthcare leaders.

Understanding the cyclical nature of healthcare software trends helps organizations embrace a more strategic, long-term approach to IT planning and development. Read on for a brief overview of software trends that continue to shape the future of healthcare IT.

Late 1990s–Early 2000s: Consolidation

The Landscape:

When I started at Epic in 2000, many of our customers were converting from homegrown EHRs or best-of-breed healthcare software to enterprise EHRs. Comprehensive EHRs were still in the process of forming into the more modern incarnations we’re familiar with today, so it made sense for healthcare organizations (HCOs) to create their own or buy point solutions and string them together into something that felt comprehensive to users.

This ad-hoc approach led software vendors like Epic, Cerner, and MEDITECH to create broad platforms that met or exceeded the features of the homegrown/point software their prospective customers were using across clinical and billing functions. Yet the eventual dominance of consolidated EHRs didn’t seem like a foregone conclusion at the time.

I still remember how wedded some organizations were to the motley assortment of software they had pieced together. Often, it took a fair bit of convincing and consensus-building for organizations to agree to move away from it. Eventually, however, the EHR market consolidated into the large off-the-shelf enterprise vendors we see today.

Key Lessons:

  • Healthcare organizations cannot wait for software to catch up to the needs of their users. When HCOs have software needs that aren’t well-served by comprehensive off-the-shelf solutions, creating custom-developed software can make at least as much sense as purchasing narrow point solutions or doing without the automation and efficiency software provides.
  • Some HCOs find that existing software meets some, but not all, of their needs. For these organizations, best-of-breed point solutions, combined with interfaces or other technical integration, can be a good way to meet user software needs and approximate more comprehensive solutions until they exist.

Mid-2000s–2015: Regulation

The Landscape:

In the years following Y2K, top EHR vendors onboarded healthcare organizations and helped them transition their patient interface, workflows, and billing to an enterprise system. Government money that paid HCOs to make the switch to EHRs accelerated the process. By around 2015, it was rare to find a large healthcare organization without an EHR system in place, often from a top-three vendor.

In addition to incentivizing HCOs to move to EHRs, the government added rules for HCOs and EHR vendors to follow. Beginning in 2011, HCOs were required to demonstrate “meaningful use” of an EHR system in order to qualify for payments through the CMS EHR Incentive Programs. This regulation continues today, in different forms, using different acronyms—once the government starts regulating something, they don’t stop.

During this era, regulations tended to focus on transitioning HCOs to EHRs to improve patient outcomes. Accordingly, EHR vendors provided off-the-shelf systems that enabled HCOs to meet CMS requirements while delivering safe, effective care. As more HCOs moved to commercial EHR systems and EHR vendors built more robust, comprehensive platforms, interoperability was an implicit assumption.

But without explicit regulations around data exchange, interoperability was not high on the priority list of HCOs or software vendors. The resulting EHRs met their objectives within an individual health system but presented significant barriers to communication outside of the system. This profoundly impacted collaboration across healthcare specialties and systems, frustrated patients and providers, and added significant complexity, time, and cost to healthcare mergers and acquisitions, setting the stage for increased government regulation in the years ahead.

Key Lessons:

  • Thanks to the lessons of this era, the government isn’t likely to let the healthcare software industry self-regulate in the future. Going forward, HCOs can expect to need to continue enhancing their current software to meet new regulatory requirements.
  • The government and HCOs are now acutely aware of the importance of healthcare software interoperability, and it’s likely to remain an area of focus for some time.
  • When it comes to healthcare software, EHR platforms aren’t enough to meet the all the needs of HCOs.

2015–2020: Acceleration 

The Landscape:

As HCOs optimized their EHRs, they realized that while EHRs hold tremendous value for improving operations and patient outcomes, their legacy EHR system could not meet all their evolving needs. This created opportunities for startups to help address those unmet needs, and during the last five years the market has seen a boom in healthcare software startups. Many are focused on areas that traditional EHR vendors haven’t fully addressed, including tools to enable direct patient engagement, new models for healthcare delivery, and an emerging transition to value-based care.

This boom in new healthcare software vendors and solutions has been further accelerated by COVID-19, which enabled entrants in newer healthcare software spaces like telehealth to develop much more quickly. By 2020, when new government interoperability rules required EHR vendors and HCOs to support data exchange, software startups were ready to obtain and make use of increasingly available healthcare data outside the walls of legacy EHRs.

Key Lessons:

  • Thanks to the proliferation of software startups during this era, healthcare leaders have myriad options for customizing and optimizing their EHR.
  • The proliferation of software used by HCOs has increased the need for HCOs to build more connections between that software and integration with EHRs and other key systems.
  • Even if an EHR is performing well, HCOs must be prepared to evolve and improve their IT to adapt to emerging regulations, conditions, and trends, increasing the need for targeted custom development.

2021 and Beyond: Customization

The Landscape:

In 2021, the market looks much like it did back in 2000: HCOs are seeking solutions to needs that aren’t fully met by comprehensive off-the-shelf software. History demonstrates that HCOs can’t wait for software to catch up to their patients’ unrelenting needs. Increasingly, HCOs are looking to custom software development and integration to fill gaps in their legacy EHR, in order to continue serving their patients, providers, and communities with timely, high-quality care.

In the future, non-EHR platforms may emerge to consolidate those needs over time. Until that happens, HCOs now have new software choices to make beyond their EHRs.

What to Consider:

  • What new use cases can HCOs meet using their existing EHR?
  • What new use cases are best met via a non-EHR software platform, even if that platform is new and not fully mature? In what spaces do best-of-breed solutions again make sense?
  • What new use cases are well suited to custom development? In what spaces do homegrown solution make sense?
  • Which new integration and interoperability needs require non-EHR solutions to meet? How can adding new integration help make best-of-breed and point solutions work better?

Examining healthcare software development through the decades underscores a critical point—as the healthcare software market continues to evolve, organizations have a widening menu of solutions to consider. Right now, much of the innovation in healthcare software is happening outside the boundaries of the EHR, and organizations are considering software options that are much more involved than licensing a new EHR module and dropping it in place.

Making the right choice in an increasingly crowded market requires technological expertise and a nuanced understanding of the healthcare software marketplace. With world-class healthcare software experience, our custom development and integration experts can help you evaluate and deploy software solutions that position your organization for success, now and for years to come.

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