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The world EHR market (in acute and ambulatory applications) fell by 1.5% from $24.5B in 2019 to $24.1B in 2020, largely owing to delays in new contracts and delays in older contracts being fulfilled due to the COVID-19 pandemic (Source: EMR/EHR in Acute & Ambulatory Applications – World – 2021).
However, the fortunes varied considerably by region. As illustrated below, the Americas (specifically the US) is by far the largest EHR market globally and the US acute market was one of the most negatively hit during the pandemic. The negative impact in the US ambulatory market was less, largely owing to rapid deployment of new telehealth modules from EHR vendors to support the pandemic response and the SaaS-based nature of this market, which gives it more resilience to changes in short-term market conditions.
The picture in other regions was, however, quite different. The market in EMEA is estimated to have grown by 4.4%. This is lower than the historic growth rate for the region, but notably, still very much growth. The public-funded nature of most European markets meant that to some extent government interjections as part of the COVID response aided continued health IT project rollout, although the region certainly was not immune to contract delays. The picture was more mixed in Asia, but growth was still achieved, largely driven by the market in China remaining buoyant.
The Q4 2020 financial results from some of the leading public US and European EHR vendors have been published over the last few weeks and these reinforce the above conclusions. The below figure illustrates the financial performance for eight such vendors highlighting growth over the trailing 12 months and the last reported quarter. Cambio, TietoEVRY, Nexus and CompuGroup Medical represent the European vendors, all of which announced EHR business growth in 2020, with the exception of TietoEVRY (although the data is for its Industry Software segment which is broader than just healthcare). Allscripts, Cerner, MEDITECH and NextGen Healthcare represent the US vendors, where the results were more mixed. Revenues were down for Allscripts and Cerner, but growth was still seen for MEDITECH and NextGen. Much of MEDITECH’s growth was achieved in the first quarter of the year, with negative growth reported since the outbreak of the pandemic. NextGen’s results were more positive. It only serves the more resilient US ambulatory market, and not impacted by trends in the acute market. It is also starting to see the benefits of several consumer-focused acquisitions over recent years. For Allscripts and Cerner the results were less positive, partly owing to the impact of the pandemic but also as a result of several contract losses in the US.
A summary of the Q1-4 2020 results for several leading EHR vendors is analysed below:
Cerner’s revenue suffered a 3.3% decline in 2020 (year-on-year). Its Q1 2020 revenue grew marginally (1.6%), although the outbreak of COVID-19 in mid-March resulted in a lower than expected volume of contracts. Q2 revenues were heavily affected by the pandemic (-7.0%) followed by a less severe impact in Q3 (-4.3%) and Q4 (-3.3%). Focusing on Cerner’s international revenue, this remained relatively stable as a proportion of its total business in 2020 (11.4%, down from 11.5% in 2019), whilst revenues suffered a 4.4% decline in absolute terms. The sale of parts of its European EHR business (the medico, Soarian Integrated Care and Soarian Health Archive products mainly sold in Germany and Spain) to CompuGroupMedical (CGM), which completed at the beginning of July 2020, contributed towards Cerner’s international revenues falling by 3.7% in Q4 2020 (versus Q4 2019), and -4.4% for the Q1-4 2020 period.
Allscripts’ full year 2020 revenues suffered a relatively substantial decline of 7.1% (versus its competitors Cerner and MEDITECH). However, the pace of decline has decelerated since the beginning of the pandemic (-8.8% in Q2, -9.5% in Q3 and -6.7% in Q4). It is estimated that this decline predominantly impacted North American revenues, whereas international revenues suffered to a lesser extent.
MEDITECH’s global revenue grew by 1.8% during the Q1-4 2020 period. This growth was entirely due to a strong Q1 2020 (+24%) which was boosted by a large backlog of 2019 product installations worth $16.5m falling into early 2020, and service revenues rising due to new customers going live, e.g. new Expanse EHR installations in Canada (including Ontario Mental Health Hospital). However, the effect of the pandemic and competitive trends resulted in its Q2, Q3 and Q4 2020 revenues falling by 3.4%, 5.3% and 5.7% respectively.
Despite reporting a fall in customer bookings for its revenue cycle management services, NextGen’s revenue rose by 2.9% in Q4 2020 (versus the same quarter in 2019), resulting in an overall 2020 rise of 1.9% (versus 2019). This growth was fuelled by increased customer bookings (up by 22% in Q4 2020) and subscriptions that support improvements in patient access to healthcare services, such as its recently acquired Medfusion patient portal and OTTO Health telehealth platform, which integrates with EHR systems and allows providers to have video consultations with patients. NextGen reported the milestone of enabling >1m virtual patient visits in 2020 through its telehealth solution.
CompuGroup Medical (CGM) saw revenues (all business lines) grow by 4.9% in Q4 2020 (versus Q4 2019) and by 12.3% in full year 2020 compared to the same period in 2019. However, a significant portion of this was attributed to its acquisition of part of Cerner’s European business at the start of the year. Excluding inorganic growth, its business grew by 4.2%. This was in partly driven by new business relating to the gematik Telematics Infrastructure project underway in Germany. In addition, COVID-19 has driven additional business for CGM as healthcare providers continue to adopt digital networking solutions as they react to address the pandemic. Further, the recently adopted Hospital Future Act in September 2020 will provide ‚Ǩ4.3bn of national and local funding for developing the digital infrastructure of hospitals in Germany by 2023. CGM is positioned well to take advantage of this over the medium term. CGM has been able to scale its business, both in terms of size and geographic coverage via its acquisition of parts of Cerner’s EMEA business. More recently it has added to this via the acquisition of eMDs in December 2020 for USD 240m / EUR 203m, which provides its first footprint in the highly competitive US ambulatory market. Both moves signal that it sees itself as a major international player and one likely to continue to expand via acquisition.
European based Nexus has a strong foothold in the German acute market and is active within the Dutch, French and Spanish market through acquisitions. The vendor achieved positive EHR revenue growth in Q1-3 2020, up by 8.7% (versus Q1-3 2019). The German market was initially less restricted by COVID-19 measures, and subsequently its German revenues rose by c. 11%, versus approximately 6% and 7% in France and the Netherlands, respectively.
Nordic EMR market leader TietoEVRY, which merged in December 2019 to strengthen its position in the region, saw its overall Q1-Q4 2020 group revenue fall by 5.6%. In Q4 2020, TietoEVRY’s overall revenues suffered a decline of 8.5% (versus Q4 2019) due to the impact of COVID-19. Its Industry Software segment (including Healthcare, Welfare and Public Sector) suffered a relatively lower fall of 1.7% and 4.4% respectively in Q4 and Q1-4 2020. The vendor reported Q1 2020 growth of 6% in healthcare and welfare (versus Q1 2019) and >10% growth in healthcare, welfare and public sector in Q2 2020 (versus Q2 2019). In November 2020, the Stockholm region in Sweden signed a significant four-year agreement with TietoEVRY for its Lifecare Coordinated Care Plan software, worth SEK 56M, with the option to extend by another 4 years and increase the contract value to SEK 104m.
Despite the impact of COVID-19 contributing to a 9% decline in its Q4 2020 revenue, top three Nordic EHR vendor and Swedish market leader Cambio has achieved several consecutive years of double-digit annual revenue growth, including +17% most recently in 2020 (versus 2019). In June 2019, Cambio was awarded a significant regional contract in Sweden to implement its COSMIC platform within the SUSSA regions. The 10-year contract is worth SEK 2.7Bn and will ensure support for one quarter of the Swedish population, with the aim of achieving the target of regional collaboration, as set in Sweden’s E-Health Vision 2025. Cambio’s growth has also been fuelled by its strategy of M&A activity, including acquisitions of UK-based Cayder (patient flow software/patient administration provider) in 2017, Danish clinical IT solutions supplier Daintel in 2019, and Swedish vaccine supplier MittVaccin in September 2020.
Key Take-aways
Whilst mixed fortunes were seen for all regions in 2020, the market environment is forecast to improve across the board in 2021. The Americas market is projected to return to growth (albeit below pre-COVID levels) and growth is forecast to accelerate in Asia and EMEA. In particular EMEA is projected to benefit from several national projects, some based on government stimulus packages, driving a projected 6.4% increase in 2021 revenues. Expect another insight from the Signify team after Q1 2021 results with an update on these projections.
About the Report
“EHR in Acute and Ambulatory Applications – World – 2021” is a newly-published Market Report compiled by Signify Research on the global market for Electronic Health Records. The report has been compiled using data from over 135 EHR vendors to create a bottoms-up view of the market. At a country level, the data is broken down in terms of revenues by vertical, product, public/private purchaser and vendor shares.
About Signify Research
Signify Research is an independent supplier of market intelligence and consultancy to the global healthcare technology industry. Our major coverage areas are Healthcare IT, Medical Imaging and Digital Health. Our clients include technology vendors, healthcare providers and payers, management consultants and investors. Signify Research is headquartered in Cranfield, UK.
Signify Research has published several market reports on the global EMR market and the Integrated Care/PHM market. For further information please contact Arun Gill.
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