Tag Archives: Epic

SPI Digital Health: Western Australia and Tasmania Begin their State-Wide EMR Journeys

Following in the footsteps of other Australian states, Tasmania and Western Australia (WA) recently provided details of their plans to implement state-wide electronic medical records (EMRs) for the first time. 

Earlier this month, the WA government said an A$100M (US$65M), first phase state-wide hospital EMR rollout would include a digital medical record with single sign-on technology and virtual desktop infrastructure at around 80 public hospitals.  

This first phase is part of an A$1.2B (US$782M) digital infrastructure and public hospital capacity upgrade programme in Western Australia. There is, at this stage, no indication of when the first phase contract will go out to tender or be awarded. 

WA’s announcement comes weeks after Tasmania issued a request for proposals (RFPs) for its first state-wide EMR and ambulance electronic patient record. The A$150M (US$97.8M) first phase will, the state government said, be rolled out over four years. It is part of an A$475M ($309.6M), decade-long digital health programme on the island. 

The Signify View 

It was only a matter of time before WA and Tasmania embarked on their journeys towards state-wide EMRs. Signify Research described in this recent Insight how the move to state-wide contracts was shaping the Australian EHR market in 2023, and confirmation that these states are now moving forward reinforces our view. 

The seeds of WA’s EMR plans were sown in 2019 when the state government published its digital strategy vision. A state-wide EMR lay at the heart of this vision, and the state government has set a July 2029 target to have a ‘functional’ system in place. Implementation will take place in four phases, although it is unclear at this stage when vendors will be invited to submit requests for proposals (RFPs) for the first phase contract. 

Tasmania’s story is similar in many ways. The government in Australia’s second-smallest state published its digital health transformation strategy 18 months ago and, as in WA, a state-wide EMR is a central pillar of this. Tasmania, however, has higher aims: it sees an EMR as being the key to creating the first fully-integrated healthcare system in Australia. 

Land of Opportunity 

Tasmania’s goal to establish the country’s first fully-integrated healthcare system is bold but viable. The state’s current system is rudimentary, with most health record inputs still done manually. There is no installed EMR base on the island, although there is a basic patient database that was implemented more than a decade ago by iSOFT (which later became CSC, DXC and now Dedalus). Tasmania has just four large state hospitals, 14 regional hospitals, seven private hospitals and 144 primary care practices with fewer than 1,000 GPs in total. 

Contrast this with other, much more populous states in Australia, like New South Wales and Victoria, which have various iterations of EMR systems spanning more than a decade in some cases. In Tasmania, with a population of little more than half a million, putting in place a system that seamlessly connects hospital and primary care EMRs should therefore be relatively achievable. But, as state-wide EMR deployments in other Australian states have demonstrated, there are clear challenges. 

Inflation’s Curse 

One immediate challenge facing both WA and Tasmanian rollouts is inflation, which ran at 7% for the year to March. Although it is starting to ease, inflation will impact project budgets, scopes and vendor margins. A$100M (US$65M) in WA and A$150M (US$97.8M) in Tasmania will not stretch far in the current high inflation environment and, in other state-wide deployments elsewhere in Australia, funding top-ups have been needed.  

In WA, another challenge is its sheer geographical size. It is the country’s largest state by some distance, and so state-wide EMR implementation in often remote hospitals presents immediate logistical hurdles. Once the EMR is in place, providers in WA face the additional challenges of patient engagement, especially in remote communities that lack good communications networks. 

Muscle Flexing 

Despite their relatively modest value, the contracts in WA and Tasmania will be seen as another good opportunity for international vendors to flex their muscles and experience on state-wide programmes. In WA we’d expect to see the usual cast of contenders to include Epic, Oracle Cerner, Altera, and, InterSystems and MEDITECH, all of whom have experience (both good and bad) on Australian state-wide contracts. These names will probably also be in the frame in Tasmania, but there could also be interest from Telstra, in partnership with Alcidion, a UK-based data aggregator and Dedalus, which also has a sizeable Australian footprint. 

Any involvement by Telstra would be significant in the sense that Australia’s leading EHR vendor (by revenue) has never been involved on a state-wide contract, focusing instead on individual hospital, ambulatory and long-term care markets in Australia where it is the undisputed market leader. Given Tasmania’s goal to create Australia’s first fully-integrated system, and without the ‘baggage’ of legacy EMR systems in other states, Telstra might see this a good opportunity, particularly with its portfolio of integrated care and PHM offerings. 

Among the other vendors who will be competing in both WA and Tasmania, Oracle Cerner may feel it has a point to prove, having lost out last November to arch-rival Epic on a massive triple-digit-million dollar contract in New South Wales. This 220-hospital contract includes the replacement of nine legacy Cerner and Orion Health EMRs and six Cerner and Dedalus (legacy DXC) patient administration systems. Oracle also lost out to Altera in Victoria on a large health information exchange (HIE) project. 

Signify Research stated last month how Altera would need to leverage its position in both Victoria and South Australia (where it is rolling out its Sunrise EMR and PAS solutions) to grow its business elsewhere in the country. WA and Tasmania could be a route forward, 12 long years after winning its Sunrise EMR deal in South Australia. 

InterSystems, which is delivering the first phase of its A$259M Acacia EHR system state-wide in the Northern Territories is also competitively placed on the two new state contracts up for grabs. 

The principal challenge for all vendors in Australia is how to compete with Epic, which continues to gain share in the country at others’ expense. While winning the big New South Wales contract from Oracle Cerner is arguably Epic’s most audacious move in Australia, there are also parallels between Tasmania and its state-wide contract in the Australian Capital Territory (ACT). Like Tasmania, ACT is relatively small in size and population, and at A$151M the contract size is similar to Tasmania. It is reasonable to assume Epic will be in the running both here and in WA. 

Death Knell? 

Although there has been no state-wide EMR procurement in WA or Tasmania until now, there has been intense competition to win new EHR contracts in both states, particularly as hospitals build on the functionality of legacy PAS solutions. EMRs have been procured via individual contracts with hospitals and local health networks. A different set of vendors tend to compete for these smaller acute contracts. For example, Telstra Health, Altera (specifically via its Australian-acquired operation Core Medical Solutions), InterSystems, InfoMedix and Alcidion. In the move to state-wide EMRs in WA and Tasmania, smaller vendors could be left out in the cold unless they partner up (e g like Telstra and Alcidion), particularly in the public hospital market (there will still be opportunity in the private market). 

Greenfield Opportunities 

By global standards, Australia is a relatively small, yet mature EHR market, where administrative and operational EHR implementations are advanced, and a transition to clinical systems and data integration and information sharing is now driving growth. 

The fact that WA and Tasmania are only now moving to state-wide contracts is a bit of a throwback to several years ago when the first state-wide EMRs were being established in other states. International vendors have not found state-wide implementations easy given integration and localisation challenges, but these experiences will be valuable now. Telstra, too, may feel it is time to flex its muscles and local knowledge for the first time on state-wide implementations, with Tasmania the obvious option.

SPI Digital Health: Epic Eyes German Debut at University Hospital, but Outcome Anything but Academic

The rumour mill was in full flow at DMEA 2023 in Berlin this week as talk revolved around Epic’s ‘imminent’ debut at a prestigious academic hospital in the German capital.  

There is plenty of substance behind the rumours. German Health Minister Dr Karl Lauterbach has, in recent weeks (including at DMEA), publicly stated his view that German hospital IT is much inferior to US hospital IT. And Dr Peter Gocke, Chief Digital Officer at Charite – Universitatsmedizin Berlin, the hospital in question, recently referred to ‘upcoming Epic upheavals in the German HIS landscape’, talking glowingly of the ability of highly integrated systems such as that offered by Epic to contribute significantly to digitisation. These words will resonate strongly in a country in the midst of a multi-billion dollar hospital digitisation programme. 

If rumours of Epic’s impending entry – which would see it replace Oracle Cerner at the Berlin hospital – are true, what will it mean for incumbent vendors in the country? And what are Epic‘s chances of success? 

The Signify View 

That one of global EHR’s biggest names is allegedly poised to debut in one of Europe’s larger hospital IT markets would always attract attention. But Epic will not suddenly start rampaging through the 2,000-plus German hospitals in the market. There are many forces at play in German hospital IT, few of them in Epic’s favour at present.  

With vendor attention trained on the German Hospital Futures Act (KHZG), the more interesting angle here is not Epic, but rather Oracle Cerner’s increasingly precarious position in Germany, and the threat it faces from vendors ready to exploit any chinks in its armour. 

Chickens Come Home  

Oracle Cerner’s German predicament goes back to SAP’s decision last year to withdraw support for i.s.h.med in 2030. We wrote in this Insight in late 2022 how the decision would cause widespread concern among Oracle Cerner’s i.s.h.med customers about the future of the solution. We also stated how, unless Oracle Cerner moved quickly to reassure its customers that it had a contingency plan for i.s.h.med, then other vendors would swoop to fill the vacuum.  

Remarkably, Oracle Cerner has still not publicly stated (and DMEA would have been an ideal opportunity to do so) its intentions for i.s.h.med (although awkward private conversations will be happening with customers on possible long-term visions that would provide a solution). And, in light of this, and as Signify Research predicted, vendors are now moving in on some of Oracle Cerner’s 250-strong hospital customer base.  

But Epic, Oracle Cerner’s nemesis in the US and so many international markets, will not be a big player in this.  

Epic Extravagance 

There are a number of reasons for this. Firstly, despite being held up by German healthcare leaders as something of a ‘poster child’ of hospital IT, Epic is expensive. A survey conducted by DigitalRadar shows German hospitals allocate just 2.4% of their annual operating costs for IT spending, compared with around 8% in the US.  

Epic is therefore an extravagance afforded by a select few in Germany – prestige facilities like Charite – Universitatsmedizin Berlin for example – and very large hospitals and associations. In time, market leaders like Dedalus and Oracle Cerner might lose the occasional bigger, better-resourced academic hospital to Epic, and likely must also begrudgingly accept losing sites that make up the long-tail of their customer bases.

The Health Minister’s recent comments about German hospital IT infrastructure did not go down well among vendors in the country, however. They argue that they would love to be able to sell more sophisticated solutions like Epic’s into German hospitals if only the hospitals had the budgets of their American counterparts. 

Another reason why Epic will struggle to make headway in Germany is the fact that KHZG has been such a strong focus of German hospital IT development and investment over the past few years. Vendors have spent years aligning with the various technical criteria needed to fulfil the 11 IT pillars around which KHZG funding is allocated. Much KHZG money will be spent in the next two years, and Epic has missed the boat. 

Commentators often also refer to the fact that Epic already has one, and soon to be two, German-language customers via contracts in Switzerland, and that it would therefore be a relatively quick step to localise EpicCare for Germany. However, the regulatory environment in Germany is vastly different to that in Switzerland and the localisation effort to achieve a workable solution should not be underestimated. Epic will be cognisant of this, having rushed localisation in other European countries (e g Denmark and the UK) over the last 10 years, and subsequently faced significant backlash from those local customers.    

Exploiting Weaknesses 

As stated, the incumbent vendors (see Figure below) will be concerned less about Epic and will be more interested in how they can capture some of the 250 i.s.h.med contracts from Oracle Cerner. Some are manoeuvering into position. CompuGroup Medical (CGM), which acquired parts of Cerner’s (pre-Oracle acquisition) healthcare IT business in early 2020, has some 550 hospitals across its Clinical and Medico (ex-Cerner) product lines. At DMEA this week it launched the third-generation iteration of its Clinical product line. One component specifically targets workforce management and billing (the SAP element of i.s.h.med) and will be targeted at existing i.s.h.med customers.  

Dedalus (the market’s dominant player), Meierhofer, Telekom and others also offer competitively-priced EHR solutions that will interest a customer base rapidly losing faith in i.s.h.med. 

Cerner Clock Ticking  

Oracle Cerner’s response has been two-fold. One, it promises that the clinical elements of i.s.h.med will be able to operate with third-party elements that could replace the functionality offered via SAP. Two, it has also a longer-term vision for its i.s.h.med, Soarian and Millennium EHR products under the broader Oracle Cloud Infrastructure (OCI) umbrella.  

According to the company, OCI is ‘a set of complementary cloud services that can run a range of applications and services in a highly available hosted environment’. But it is unclear when this more modular solution will launch. Elements of this solution will start to be available over the next 12 months, but at what point a solution that could be leveraged by its i.s.h.med customers becomes available is still unclear. And time is not on Oracle Cerner’s side in this market – its i.s.h.med customers are looking for clear guidance now.  

Nor is Epic’s timing necessarily good in Germany should the Berlin contract come to pass. Given vendors’ positioning around KHZG, Epic will not be able to disrupt such an established ecosystem. It could be years before it can.  

Despite relative success on large regional contracts in various geographies, Epic’s track record on one-off deployments isn’t great either. There are several examples of Epic deployments that have run into dead ends as the firm struggled to localise workflows. 

Charite – Universitatsmedizin Berlin is not yet a done deal – no formal tender has been issued – but the signs are that Epic is in the box seat. According to insiders, preliminary documents (where vendors register interest in tendering) include specifications weighted in Epic’s favour, and exclude specification that would rule Epic out 

Any Berlin contract, then, would be quite valuable for Epic financially, as well as being good PR. While the optics are far less positive for Oracle Cerner, at least KHZG funding rules dictate that providers cannot use the money to strip out and replace legacy EHR systems, and so i.s.h.med at least has a stay of execution.  

But over the next 12 to 24 months the potential move away from i.s.h.med will be watched closely, and it remains to be seen the extent to which OCI will be Oracle Cerner’s saviour in German IT. 

SPI Digital Health: Epic and the Art of Keeping things Simple

And so, the Epic juggernaut rolls on. This time, by securing a ‘next generation’ EHR contract at Northwell Health, a sizable health system in New York state. Behind the headline confirming Epic’s relentless march across US health systems is an arguably more pertinent narrative: how, when or indeed if other vendors will ever compete. It will take something special, or wholly unexpected, to tilt the power balance. 

The Signify View 

As much as the Northwell Health deal is another feather in Epic’s well-adorned cap, it is another blow for the slew of vendors clinging to its coat tails. 

None more so than Altera Digital Health (formerly part of Allscripts), whose legacy system Epic will replace on the Northwell Health deal. The contract, whose value is undisclosed, will see Epic create a single patient record across ambulatory, emergency, inpatient and post-acute care in 21 hospitals and roughly 900 outpatient facilities across New York state in a phased rollout. Norwell expects the first go-live in 2025.  

Losing out to Epic (and there is no great surprise in that given recent trends) nonetheless represents a setback for Altera in the US. At least it is not alone in this: aside from Epic, only MEDITECH is growing its share in the acute hospital market. Given the yawning gulf between them and Epic, the chasing pack might do well to focus on MEDITECH’s methods.  

Box of Tricks 

The acute/health system hospital market in the US, for both Integrated Delivery Networks (IDNs) and standalone hospitals, is a tough place for most vendors right now given Epic’s continued dominance.  In 2021, Epic gained 72 hospitals and 12,000 beds, a trend that has continued in 2022. Success for other vendors is a rare commodity: Oracle Cerner lost hospitals and thousands of beds in 2021 and 2022, as did Altera and CPSI. Medhost has managed to just about keep its head above water.  

MEDITECH is the only vendor bucking the trend, and is the only vendor offering Epic ‘serious’ competition at present. 

Could peering into MEDITECH’s box of tricks offer hope for other vendors? Possibly. Only four years ago, MEDITECH was also treading water, its revenues flatlining. Around the same time it launched its Expanse EHR solution. That proved well received by its customers, many of whom migrated to the new solution. Expanse has subsequently established an excellent reputation in the market, and steadily gaining market share.  

Unlike Epic, MEDITECH’s sweet spot is smaller health systems and individual hospital. Partnerships are key too: great examples being those with Innovaccer for value-based care (VBC) which we explore in this Insight; and with Google to improve search capabilities within its EHR. Having a strong product and partnerships that import innovation go a long way.  

Altera’s Challenge  

MEDITECH’s relatively simple model and sharp product focus contrasts starkly to that of Allscripts. The latter has two EHR products: Sunrise (for large hospital IDNs) and Paragon (for independent community hospitals), with a roughly 50:50 split in terms of business across the two.  

Allscripts acquired Paragon (as well as two revenue cycle management solutions (Star and HealthQuest), a lab information system and a content management system) in 2017 from McKesson. Allscripts (which then became Altera) then had to devote time (and money) giving Paragon some much-needed TLC. Furthermore, Paragon’s focus on independent hospitals is a challenge – as IDNs snap up smaller facilities, this is an ever-diminishing market, while Sunrise, which is aimed at IDNs and larger hospitals, has struggled to compete. 

Allscripts’ insatiable appetite for acquisitions from several years ago has come back to haunt it, and remains saddled with a disconnected portfolio, and solutions with very different DNA. Very different to Epic, whose principle remains to build its portfolios exclusively in-house rather than acquire. 

Even the mid-2022 sale of Allscripts’ inpatient business to Harris (and subsequent rebranding to Altera Digital Health) has failed materially to address legacy problems with a fragmented portfolio. On paper, Altera has some great solutions. Its TouchWorks ambulatory EHR for larger practices is a case in point, and Sunrise has both inpatient and primary/ambulatory care functionality. Alongside its value-based care offerings built around dbMotion it ticks the boxes in terms of the general building blocks that IDNs are looking for from a network-wide EHR vendor.  But the fragmented portfolio continues to hamper the vendor, especially when bidding for larger IDN contracts. 

There is another strategic complication for Altera. Its owner, Harris Computer Corporation, does not integrate at a business or strategic level the many (good) vendors it acquires. Some of these companies compete with each other, and Harris has an inpatient EHR solution directly up against Altera. Harris owns iMDsoft that has lots of well respected, departmental IT solutions for ICU and anaesthesia, and owns many small, ambulatory EHR vendors, such as Amazing Charts. Harris’ stable may be large, its solutions prized and its global footprint wide, but it is a disparate and disconnected business. And that is a problem when competing with Epic. 

Side-Tracked Cerner 

For different reasons to Altera, Oracle Cerner’s strategic and product woes are well documented. Globally, it has many issues on its plate that suck up considerable money and brainpower. Rarely a week goes by without reference to its painful, long-delayed, much-blighted multi-billion dollar Millennium EHR contract for the US Veteran’s Association. We have also written (see the Insight here) about long-term doubts over the future of its i.s.h.med solution in Europe. And, like Altera, Oracle Cerner’s portfolio is also fragmented, having bought in much of the technology over the years. Unlike Altera, the big hope for Oracle Cerner is that it has Oracle’s financial heft to bring its solutions (Millennium being the obvious example) up to scratch. However, although there are signs that the benefits of the acquisition are kicking in in some areas, the gap with Epic continues to widen. 

Smart Branding  

In plotting a viable path forward, vendors will do well to consider that IDNs increasingly seek those with a strong VBC IT portfolio element. Epic, Oracle Cerner (HealtheIntent) and Allscripts (dbMotion) all score well on that front, but HealtheIntent and dbMotion are positioned as standalone ‘brand’ solutions divorced from the EHR offering. On the other hand, Epic’s VBC product is simply positioned as an extension of epicCare, making it far easier for customers to engage with. 

MEDITECH, which was quite late to the game in terms of VBC solutions, is again well positioned in this respect. Its tie-up with Innovaccer, a best-of-breed VBC vendor, is a prime example of the power of partnerships for MEDITECH. 

When Less is More 

In many respects, Epic’s rampant success is a salutary lesson to other vendors of the power of keeping things simple. Where others have chosen to acquire technology and expertise, Epic’s single-minded philosophy of developing in-house is clearly paying dividends, such that much of its growth is self-perpetuating. This is especially true as health systems gradually consolidate IT procurement through one vendor. That vendor is increasingly Epic. 

This is very attractive to hospitals and IDNs, and those that Signify Research talks to – many of whom have migrated out from the likes of Oracle Cerner – acknowledge that Epic is now the safest (and simplest) pair of hands in the market. 

SPI Premium Insight: Connecting the Dots on Epic’s App Store Strategy

With minimal fanfare, Epic pulled the shutters down on its app store in December. At the time, the EHR giant provided little in the way of rationale for the move, but the subsequent launch of its replacement Connection Hub store this month offered more of a glimpse into its reasoning. 

The Signify View 

By all accounts, App Orchard was successful, with 550-plus third-party apps listed offering Epic’s customers access to an array of healthcare IT functionality beyond that provided by its EHR solution. But, with new regulations in the US demanding greater software interoperability, App Orchard’s days were always numbered. Epic has not always been the most accommodating partner for third-party app developers, its relatively ‘closed book’ approach to integration contrasting with the more open path taken by some rival EHR vendors. Partly cajoled into this new spirit of openness (rather than purely off its own back), Epic nonetheless says Connection Hub is ‘an easy way for developers to let the world know that they connect to Epic software’.  

App Store Concept 

All large EHR vendors in the US have app stores of varying levels of sophistication (see graphic below). Through these stores, an EHR vendor’s customers can buy a supplemental IT solution from the developer to plug any functionality gaps, the EHR vendor (typically via a revenue share model) taking a cut of the sale/subscription. This is not necessarily a big revenue earner for the vendor, but is still a useful alternative income stream. 

US EHR app stores (March 2022) 

A vibrant app store ecosystem is also valuable to an EHR vendor because it offers excellent potential insight into its own required product development. Through the store, a vendor can track (by monitoring the number of API [Application Programming Interface] calls that each third-party developer has on its system) which apps have the highest take-up.  

Sometimes the software is a significant upgrade on the one already provided on the vendor’s EHR solution, or often delivers completely new functionality. In both cases, the vendor might think it is worth building as a native function into their EHR. This is a risk to the developer, but in many cases the EHR vendor will buy the software company if its solution is good. Athenahealth is a good example of a vendor taking this approach, and NextGen Health’s acquisition of Otto Health and its telehealth functionality is another. Population Health Management is an additional area where EHR vendors historically acquired to bring the technology in house. Epic, on the other hand, is renowned for its reluctance to acquire under any circumstances, and software acquisition is no different. 

New Spirit of Openness 

While some EHR vendors – for example Altera (formerly Allscripts) and Athenahealth – have tended to take a more liberal approach to listing third-party vendors on their app stores, others, like Epic, have been more conservative. With App Orchard, Epic effectively controlled third-party listings, and was responsible for vetting, validating and authorising which ones would appear. 

With a more ‘open’ Connection Hub, Epic is largely a bystander in this process. The onus now lies on the developer automatically self-listing by simply demonstrating that it has sold a commercial solution to a customer that is using it, and is integrated with it.  

This more open protocol is a direct result of a concerted regulatory push in the US towards more open interoperability standards across healthcare IT, including for EHR vendors. This, rather than any real volition on Epic’s part, is what is behind Connection Hub. FHIR (Fast Healthcare Interoperability Resources) and SMART (Substitutable Medical Applications, Reusable Technologies) are the two big interoperability standards now used in healthcare. These allow marketplaces to flourish, with myriad sophisticated applications serving diverse functionality in an open market environment. App developers building solutions based on FHIR interfaces can, in theory, easily talk to EHRs through APIs.  

Against this background, Epic may not be alone in re-modelling its app store strategy. While the likes of Altera and Athenahealth – with their more liberal approach to third-party developers – will not feel compelled to change, those with more complicated relationships or less evolved stores might. Oracle Cerner, whose App Gallery has been through several different iterations, and which has only recently settled on a more successful formula, is a case in point. 

Relationships: They’re Sometimes Complicated 

As Connection Hub beds in, it is useful to view the new spirit of openness in the context of wider vendor-developer relationship models. Historically (with a few notable exceptions) Epic had passive relationships with third-party apps on App Orchard. Epic neither marketed nor sold the solutions. The developer did the legwork, selling hospital-by-hospital, practice-by-practice. There is no suggestion (again, with the few notable exceptions) that Epic will change this approach with Connection Hub. 

There are, however, different vendor-developer partnership types in this ecosystem with two distinct ends of the spectrum: at one end, zero interaction (beyond integration) between host (in this case EHR vendor) and software developer. Where any support is provided, it is done exclusively by the developer, with the host merely taking a cut of any sale. 

At the other end, tight vendor-developer partnerships. Here, the developer is a core part of the EHR offering, marketing and sales activities are conducted jointly, and app functionality is tightly integrated with the EHR. This is where Epic’s notable exception sits, the Hey Epic functionality offered on its EHR using the most evolved voice dictation solution from Nuance. MEDITECH is another case of a deeply integrated partnership, with Innovaccer and now Google as examples. There are several other close partnerships between EHR and point-solution vendors in clinical documentation, where the partner solution is fully integrated and marketed by the EHR vendor (drug clinical decision support being a good example). 

Epic’s tight partnership with Nuance will likely remain one of the few notable exceptions for the firm. If anything, Connection Hub is more about Epic distancing itself from any perception that it is co-marketing the apps as it attempts to show it is loosening control. 

Medium-Term Threat 

As the EHR vendor app stores adapt to changing regulations, app developers face a potential medium-term threat. Many large health systems and integrated delivery networks (IDNs) in the US are increasingly averse to having too many software solutions in their ecosystems, preferring instead to consolidate. This is the antithesis of an app store’s concept. As such, opportunities for third-party developers targeting app stores will be in primary care and independent practices, although, as smaller providers are gradually swallowed by IDNs and larger health systems, this market, too, will become an endangered breed. 

One potential exception relates to care management and population health management, where an abundance of solutions are offered via app stores, whether supporting risk stratification processes, patient activation, booking management or care co-ordination. While a significant segment of the health system market would prefer to procure solutions for these functions from their EHR vendor, a significant proportion prioritise sourcing the most suitable, best performing solutions. This offers a clear opportunity for app developers.      

When Less is More 

Given the above trends, app stores might become less of a pure numbers game. Simply being listed on an app store is no guarantee of success, and will be even less so in future. The real winners going forward will be third-party developers (like Nuance) who are able to embed tightly with the EHR vendor and offer solutions that the EHR vendor is not well positioned to emulate.  

Furthermore, as IDNs strive for greater consolidation around software procurement, the idea that ‘less is more’ in the app store context will become more accepted. 

Signify Premium Insight: Respite for Oracle Cerner with $365M Nova Scotia EHR Deal

Good news has been in relatively short supply for Oracle Cerner over the past year. The EHR giant continues to yield share (chiefly to Epic) in the US; it is mired in a problematic $18B EHR implementation for the US Veterans’ Association (VA); and must grapple with German multinational SAP’s decision to cease technical support for its i.s.h.med solution in 2030. 

Last week’s announcement, then, that its Canadian division has landed a $365M deal to design, build and maintain an integrated electronic care record in Nova Scotia is very welcome.  

Rollout of the One Person One Record (OPOS) project will begin within two years, and will initially focus on hospitals, mental health and addiction facilities. By the end of the 10-year contract, Oracle Cerner says more than 26,000 healthcare professionals across the province will have access to real-time patient information. 

The Signify View 

One of the largest public sector procurements in Nova Scotian history, this is also a substantial win for Oracle Cerner, and the latest in a series of high value, province-wide contracts being implemented across Canada by mostly international EHR vendors. The Nova Scotia deal will impact the country’s wider competitive vendor landscape; Oracle Cerner can wrest back some revenue share from Epic in what is its second-largest market (after the US). At the other end of the spectrum, the news is another blow for Altera (formerly Allscripts), which was the other final bidder against Oracle Cerner for Nova Scotia, as it continues to haemorrhage share in key markets, including Canada. 

Not Before Time 

The OPOR contract award has been a long time coming. Tenders were issued in 2015 and six vendors – Allscripts, (Oracle) Cerner, Epic, MEDITECH, Evident and Harris Healthcare – submitted proposals in early 2017. Epic and Harris Healthcare failed to make the cut, and then in June 2017 the field was further narrowed to Allscripts and Cerner. Covid further delayed the contract award. 

OPOR will replace the three existing hospital IT systems in Nova Scotia with a single, integrated core clinical information system. Oracle Cerner says the project will give health professionals at any Nova Scotia Health or IWK Health acute facility real-time information on patients, which will be fully shareable across the health system. It adds that the system will enable lab tests and other diagnostic results to be uploaded to the system immediately, and it will also connect paramedics, continuing care staff and mental health services. Voice recognition software will also, it says, be integrated into physician workflows. 

OPOR will also have a population health management (PHM) component. Once fully implemented, anyone in Nova Scotia will be able to access Oracle Cerner’s interoperable patient portal, which will integrate patients’ biomedical devices.  

Competitive Landscape: Winners and Losers 

At $365M, the Oracle Cerner contract is substantial in the context of Nova Scotia, which has a population of around one million. The deal also continues the company’s good run in Canada, its zenith arguably coming in 2015 when it assumed a $627M electronic health record integration project in British Columbia from IBM, which had problems integrating the system with legacy hospital IT. 

Currently, Canada’s acute EHR market is dominated by MEDITECH (in terms of installed base of hospital customer) and Epic (in terms of revenues). The graphs below provide an overview of Canada’s EMR/EHR market from a revenue perspective. Oracle Cerner’s Nova Scotia deal gives it the potential to challenge Epic’s revenue position.

Source: Signify Research

Source: Signify Research

That said, the Epic juggernaut rolls on in Canada, with a $459M clinical information systems (CIS) installation to replace 1,300 information systems, which started in 2017, still in play; a hospital information systems (HIS) project for Hamilton Health Sciences, Ontario’s largest hospital network, which went live in June 2022; and another CIS go-live at 14 hospitals in Ontario’s Central East region. 

In the small battleground of Nova Scotia, Oracle Cerner now becomes the undisputed leading vendor. The deal does not include EHRs used by primary care physicians in Canada. Within Nova Scotia this market segment is largely dominated by Telus Health (one of the only vendors in the country to compete in both acute and primary care) and local vendor QHR.  OPOR is unlikely to have much short-term material impact on this part of Telus’ business. Telus, the former incumbent Canadian telecoms service provider, is unlike other domestic players (which serve purely primary care). It competes well against international EHR vendors on sizeable provincial contracts and other hospital contracts. In February 2021 Telus was awarded a contract to implement a province-wide electronic medical record solution for Prince Edward Island, and is joint market leader in Canada with Oracle Cerner when both ambulatory and acute care EHR revenues are considered. 

Allscripts (Altera) is clearly the big loser in the Nova Scotia announcement. It will have hoped clinching the contract would compensate for a recent erosion of share in the US and UK. That said, under its new ownership (Harris Corporation), it has the potential to regroup and enhance its position in Canada. Across the Harris portfolio (Harris Healthcare, QuadraMed and Altera brands, for example) it is well entrenched in the Canadian hospital IT market. Harris’ history of combining efforts across its various brands has been patchy, but across the organisation it has the resource and expertise to challenge Epic and Oracle Cerner, if it employs its combined strength in a more joined up, strategic manner.  

Bumps in the Road Ahead 

Oracle Cerner has ten long years to design, build and maintain a province-wide EHR for Nova Scotia. However, relatively recent history offers a salutary lesson: that replacing legacy province-wide connected care systems with second generation EHRs can be a minefield. These projects are technically demanding, have seemingly interminable rollout schedules, and often appear to fall short of objectives. IBM’s experience in British Columbia on a (technically and legally) messy EHR integration is a case in point, and so there must be concern that Oracle Cerner’s Nova Scotia project might go a similar way. The company will hope its IBM project rescue act provides valuable lessons to take into Nova Scotia. 

Nova Scotia is different in that it does not have the old integrated care platforms (known as IEHRs) which were implemented in various Canadian provinces about a decade ago. Integrating with the Orion Netcare IEHR has thrown up challenges for Epic in Alberta, which is racing against time to complete rollout by 2024. Epic’s data integration solution must also interface with many local, third-party applications, and involves developing patient- and provider-facing versions of the solution, not easy to achieve. OPOS has some similarities here too, and Oracle Cerner at least has opportunity to head off some of those challenges in advance, having seen the experience of others elsewhere.   

Furthermore, if the long-term objective of OPOR is to connect every healthcare professional in Nova Scotia, it will ultimately also need to integrate with Telus and QHR’s legacy primary care systems. Oracle Cerner does not have a primary care EHR solution for Canada, and so integration is the only option at this stage. Christy Bussey, Executive Medical Director of Nova Scotia Health, talks of how OPOR might, in future, connect further with primary care providers’ medical record systems, or might roll everything into one entity. This, again, indicates that OPOR will, initially at least, be an overlay to GPs’ Telus and QHR systems. 

New Order  

Oracle Cerner is an experienced hand in Canada, and if anyone is able to deliver a truly connected, second generation, province-wide health system to replace IEHRs, it is this company. Where Orion were once masters of the IEHR/connected EHR universe in Canada, Oracle Cerner, Epic and MEDITECH are the present incumbents, on lucrative contracts. These deals are difficult, but Oracle Cerner at least has a back catalogue of learnings on other province-wide implementations in Canada, and similar-scale endeavours elsewhere (e g ICSs in the UK, state contracts in Australia, and via large IDN contracts in the US) to take to Nova Scotia.