Tag Archives: primary care

SPI Digital Health: EHR Vendor Financials Q1 2023

Although high inflation continues to cast its shadow over health systems, hospitals and primary care practices in the US and Europe, Middle East and Africa (EMEA) markets, Q1 2023 financial results provide evidence that major hospital IT initiatives are positively impacting vendors.  

The latest figures also offer two further takeaways: one, that lacklustre growth among the three listed vendors we track belies an otherwise healthy US inpatient EHR market; and that the revenue gap between tier-1 and tier-2/tier-3 primary care vendors in the US continues to widen, likely irreversibly. 

Revenue Performance for Select Public EHR Business Lines/Vendors

Source: Signify Research

Inpatient US: Revenues Modest, but Don’t Tell Wider Story 

Of the three companies we track in terms of public financials, revenues fell on average 3% over 12 months, and there was zero year-on-year (y-oy) growth in the last quarter.  

Altera, which generates 95% of its revenues from the US inpatient market, saw its Q1 2023 revenue drop 5% from the from the same quarter in 2022, and 9% over a rolling 12-month period.  

Oracle Cerner’s Q1 2023 revenues were up 3% on Q1 2022, but down from Q2 2022, the quarter when it broke the $1.5B revenue barrier for the first time with a sudden spike after many quarters of near-zero growth. We attributed that to the ‘Oracle effect’ following its acquisition of Cerner in 2021, but the ongoing saga of its $10B Millennium EHR solution contract for the US Department of Veterans Affairs (VA) weighs on its financial performance. 

What should have been a flagship project has instead descended into a catalogue of delays, frustrations, technical problems and statements. In February this year, and in response to calls to shelve the project, Oracle Cerner issued a statement arguing that the VA should push ahead with it, and in the same month signed a contract with Accenture to provide extra EHR training for VA clinicians. However, the project took a dramatic turn for the worse last month when the VA suspended the rollout, insisting it would take as much time as necessary to fix the problems. This will be a drag on Oracle Cerner’s revenues going forward. 

The rather muted quarterly revenue performance of the public companies tells only part of the story. The US inpatient EHR market is otherwise in good shape, with no shortage of fresh investment in US hospital EHRs. Larger hospital networks continue to subsume smaller facilities, playing into the hands of larger vendors who are better equipped to serve larger systems and IDNs. Epic and MEDITECH, which are private companies and do not appear in this analysis, are both gaining market share at the expense of the likes of Altera and Oracle Cerner. 

In this environment, one must fear for CPSI’s long-term prospects.  Its customer base is almost exclusively small hospitals. While it reported 2% y-o-y revenue growth in Q1 2023 compared to Q1 2022, it was down 2% y-o-y for the 12-month rolling total, and there must be questions over its ability to compete in the long-term.  

Another emerging story in US impatient EHR is the impact of the 21st Century Cures Act. This legislation requires healthcare providers to upgrade their EHRs to be FHIR-compliant so that data can be shared with other EHRs. This will inject growth in the inpatient market, leading to a general trend of EHR solution upgrades. However, at this point, Epic and MEDITECH are the only two vendors to capitalise on this. 

Primary Care US: The Good Times Roll On  

It was another solid quarter for primary care vendors in the US. As with  inpatient US, size is becoming increasingly important here too, and there is a growing ‘revenue rift’ between the ‘big 7’ (Epic, Oracle Cerner, NextGen, Veradigm, eClinical Works, Athena and Altera) and the long tail of tier-2 and tier-3 vendors. 

The 21st Century Cures Act could be the final blow for very small players who lack the resources to develop EHR solutions that adhere to the Act’s requirements. Increasingly, providers are also looking to consolidate their IT for practice management, revenue cycle management, patient engagement, booking management and patient records into one solution, and again this presents challenges for the smaller vendors. At the same time, small primary care practices are being bought by larger networks bringing different settings under one roof, and who need a single EHR that can serve these different settings. Again, this conspires against the small vendors. 

On the other hand, CompuGroup Medical (CGM), NextGen and Veradigm all posted good growth (although Veradigm’s numbers will potentially be revised). CGM reported 16% y-o-y growth for its North American operations in 2022 (this business largely comprises eMDs, its December 2020 primary care EHR acquisition). NextGen is 10% up on the rolling 12 months metric and Veradigm 5%. These, and the privately-owned larger vendors, continue to mop up the long tail of independents.   

CareCloud is the clear outlier. A tier-2 vendor, it focuses exclusively on primary care. Its business picked up well in 2019 and 2020, peaked in 2021 and fell away in 2022. Its Q1 2023 revenues were down 15% on the previous quarter, and 8% over 12 months, symptomatic of the difficulties smaller vendors have in a market where resources and scale matter more than ever. 

Inpatient EMEA: Trickle Down Effect Begins  

The latest figures indicate that contracts serving the 3B Germany Hospital Futures Act (KHZG) initiative are finally finding their way to vendor spreadsheets. Signify Research reported from last month’s DMEA show in Berlin (read the Insight here) how vendors were waiting for revenues to flow, and this is now happening.  

CGM reported 10% y-o-y growth for its inpatient HIS business in Q1 2023, but vendor performance is healthy across the board as a strong pipeline of state healthcare IT projects are implemented across EMEA. Comarch recorded 16% growth of the rolling 12 months metric, although its Medicine segment was down 15% over the same period; Nexus (focused on Germany/Austria/Switzerland and the Netherlands) was 11% up on the quarter and 13% over the rolling 12 months; and the TietoEVRY Care business line 11% on the quarter and 6% over the rolling 12 months (achieved despite losing big contracts to Epic and Oracle Cerner in the Nordics). 

In upcoming quarters vendors serving KHZG contracts can expect to see further revenue spikes. A similar, albeit less well funded, scheme in Italy will also deliver revenues later this year. 

Primary Care EMEA: A Mixed Bag 

As in previous quarters, primary care EMEA markets are evolving on a country-by-country basis. The most striking developments are in France, where in Q1 2023 Cegedim Sante and Equasens posted 40% and 14% y-o-y growth over the same quarters in 2022 respectively. This is a direct impact from the Ma Sante 2022 investment programme. 

In contrast, CGM-AIS and Cegedim-International both reported 4% quarterly growth over the same period in 2022. EMIS has not posted investor updates since the news broke that Optum was looking to acquire the business. However, its latest financial report also illustrates that its EHR focused business has struggled recently. This is explained by both Cegedim-International and EMIS Health working predominantly in the UK and the low levels of growth in primary care spending there at present. 

CGM-AIS’s modest growth also reflects the relatively low levels of primary care spending growth in Germany, one of its focus markets (along with Italy, France and Eastern Europe). 

Brighter Outlook 

In our last analysis of EHR vendor financials in March, Signify Research stated that many saw 2023 as being tougher than, or at best similar to, 2022. While the economic outlook remains challenging and inflation is still running high, there are grounds for heightened optimism in 2023, for larger vendors at least.  

The fact that the funding for post-Covid recovery and resilience projects across EMEA, and new legislation in the US spearheading EHR upgrades, are not only in place but also translating into revenues, will be welcome news. 

Click here to view full public vendor financial data. 

SPI Premium Insight: Doctolib’s €92M Mission to Disrupt

French health IT developer Doctolib has unveiled plans to invest 92M this year on ‘innovation’. It is another statement of intent from a company which has, in just a few years, become a household name to hundreds of thousands of GPs, and millions of patients, in its home country. 

According to the company, the investment will focus on developing solutions and strategies around seven key themes. This includes a tool to help tackle the problem of missed appointments for patients with chronic conditions, and new software allowing it to serve new healthcare specialisms.  

The Signify View 

Given Doctolib’s accomplishments over the last few years – making the transition from start-up to unicorn in less than a decade – it would be hard to bet against its 2023 plans paying handsome dividends. 

Doctolib has a solid business model predicated on a deep (and loyal) customer base, and the skills to keep developing solutions which meet the evolving needs of that customer base. Selling new solutions to a converted audience should be relatively straightforward. 

Aside from the benefits to its customers and their patients, the 92M investment will have two main impacts on Doctolib: fuel its inroads into French primary care EHR, and reignite plans for overseas expansion, one strategy where the company has yet to truly excel. 

Doctolib Diaries: From Start Up to Unicorn 

Doctolib embarks on its 2023 plans in very good shape. Having established itself as a GP booking management system platform in France (where GPs pay a ‘subscription’ to be listed on the app), it acquired chief competitor, Mon Docteur, in 2018, and Doctolib became the undisputed market leader.  

Twenty nineteen proved even more momentous. With a $150M cash injection, and using its booking management system as a springboard, it launched a new telehealth service, offering patients the option to book and hold virtual appointments with a GP for the first time. Doctors paid a premium (over and above the regular booking management system subscription) to accept virtual consultations. 

The launch was timed to take advantage of new French government rules enabling GPs to be reimbursed for video consultations for the first time. The move proved popular among Doctolib’s customer base, and then became essential just months later as France entered Covid lockdowns. For many GPs and patients, Doctolib became a major logistical tool during the pandemic (including booking Covid vaccinations). 

As of the end of 2022, Doctolib held more than half of the French booking management system market, with a solid, if unspectacular, presence in Germany and Italy. Overall, 320,000 healthcare workers were using Doctolib solutions by year-end, the app receiving 70 million patient visits every month. 

$92M Shopping Spree 

Doctolib unveiled its headline spending plans in the media announcement at the beginning of February. A key focus will be developing tools to help providers reduce the number of missed appointments for chronic care patients, and plug any care gaps. This will involve AI automating reminders and giving providers intelligence on how, and when, to reach patients. As the concept of value-based care and more proactive healthcare gains traction in France, such innovation will come into its own. 

There is an opportunity here for Doctolib to also support wider population health management programmes in France. These are receiving significant investment at present in the form of government funding for schemes such as Ma Santé 2022 (€3.4B in funding), and the CPTSs (territorial professional health communities) organisations being set up would benefit from a sophisticated patient outreach solution.  

The media announcement also revealed that Doctolib will expand its software portfolio to serve new specialities. The company has cornered the GP space, and is gaining share in primary care EHR (more on that later), but there are many other areas where it is still absent, including CPTSs, which offer preventative care. The company launched a solution for physiotherapists last year, but there are myriad other specialities in France, some with high numbers of practitioners, that remain relatively untapped.  

Potential to Disrupt 

One of the by-products of Doctolib’s investment plans will be market disruption in primary care EHR, in which Doctolib currently holds a 4% share, and is making steady progress (3% share in November 2022). Shrewd investment could see Doctolib start to challenge the leading vendors, CGM and Cegedim. The 2021 launch of Doctolib Medecin, its primary care EHR, supports its ambitions here, throwing down the gauntlet to a rather moribund French EHR ecosystem which typically lacks investment, ideas, functionality and sophistication. Doctolib’s large and loyal customer base of GPs would presumably welcome a new, SaaS-based, competitively-priced EHR to use for billing, its main use in fee-for-service France. 

Neither CGM nor Cegedim (or the others in the long list of French primary care EHR vendors) will relinquish their positions to Doctolib easily. Both are large companies (CGM is a €1BN a year company, and Cegedim +€500M) with deep pockets to invest in companies, platforms and technology to ward off challenges. 

Growing Pains 

Geographical expansion is another area where Doctolib harbours ambitions, but has yet to find the key to properly unlock them (unlike European rival Livi). Beyond France, it has business only in Germany and Italy, where unseating established booking management system and telehealth vendors is hard. In EHR too, Doctolib is up against CGM (Germany) and Dedalus (Italy) should it decide to launch a primary care EHR solution in these countries. In any case, Doctolib’s EHR journey has only just begun in France, and it might want to focus on growing that business before spreading its wings. 

The US, however, will always be an option for Doctolib. With the largest EHR, virtual care and booking management system market globally, it would offer a disruptive company like Doctolib new opportunities. However, competition is intense, with large, innovative vendors such as AmWell, Teladoc Health, Epic and Oracle Cerner dominating. In all three of these applications all providers and insurers already have a solution in place and replacement of entrenched vendors (particularly in relation to EHR) would be a major challenge. An acquisition or tight partnership would be the only route.  

Big Picture 

The company’s 2023 plans offer little insight into the company’s longer-term aims. It has historically attracted a lot of investment, so could an IPO be on the cards? Could it be a take-over target? 

Doctolib would be attractive to a big US international health IT vendor with eyes on Europe. Teladoc has form here, buying large French telehealth company, MédecinDirect in 2018. AmWell has also been acquisitive in terms of international expansion over recent years. Both companies also acquired (InTouch Health and Avizia respectively) to move into higher acuity settings, something Doctolib has yet to do.  

Consolidation of the highly fragmented European virtual care market is also forecast over the coming years. Growth for leading vendors in each country is likely to come from acquisition. However, on that front Doctolib is more likely the acquirer rather than target for acquisition. That said the European EHR market is slowly consolidating, and Dedalus and CGM have both acquired rapidly over recent years to expand their international footprint and cement their position in their core markets. Doctolib would be a potentially attractive acquisition, removing a competitor and enhancing their local market shares simultaneously.   

Higher acuity might be a way to go for Doctolib, and its plans to expand into more specialisations in 2023 is one way. It may also want to carve a position in remote patient monitoring and chronic condition management, given that France is planning to implement an RPM reimbursement structure (it was supposed to happen last year). 


Whatever its path, Doctolib has proved nimble and adept at driving growth. The company will now pour resources into building a competitive position in primary care EHR, and with new solutions in its portfolio, it may finally be able to crack the code of success beyond France.

Signify Premium Insight: athenahealth Floats Flotation Idea, Again

This Insight is part of the Signify Premium Insights (SPI)-Digital Health service, which will launch on 9 January 2023. From that date, this and all SPI-Digital Health Insights will be available only by paid subscription. Click here for a free one month trial of this service. 

Roughly four years after being delisted from the stock market, athenahealth is reportedly once again looking at an IPO. CEO Bob Segert floated the idea in an interview with the Boston Globe newspaper last month, but the cloud health IT vendor has since given no indication on timelines. 

The Signify View 

athenahealth is a primary and ambulatory EHR heavyweight, and partners with more than 140,000 ambulatory care providers across the US with more than 120 specialities.  

But it faces a number of challenges which could influence the timing of any return to market. In the Boston Globe interview, Segert insisted the company has created a ‘ton of value’ since 2019. Private equity firms Bain Capital and Hellman & Friedman, who paid $17B for athenahealth just over a year ago, will want to ensure the ‘ton of value’ created will offer an agreeable return on their investment before any IPO is set in motion. The company had been acquired by private equity firms Veritas Capital and Evergreen Coast Capital in 2019 for $5.7B. It then merged with Veritas-owned Virence Health, the former value-based care (VBC) division of GE Healthcare. Ex-Virence/GE executive Segert was appointed athenahealth CEO at this time.  

Positive Prospecting 

An athenahealth pre-IPO prospectus will show a company in decent overall shape, in terms of market position at least. Having profited initially from the US primary and ambulatory EHR boom (when it was achieving double digit revenue growth), the company was running around $1.2B in annual revenues before it was privatised. As well as being the leading US primary and ambulatory care EHR vendor in the US (in terms of revenues), it sits behind only Epic and Cerner in the wider EHR vendor league table. It occupies an enviable position. 

Strong Foundations 

athenahealth has built an impressive primary and ambulatory EHR portfolio. Its billing/revenue cycle management software is used by around 120,000 doctors in the US. As well as selling the billing software, athenahealth also provides billing-related services, for which it takes a commission. The company has also been successful in selling patient management and patient record solutions to many of its revenue cycle management customers. All three primary care solutions are bundled in the athenaOne product. 

Ahead of the Game 

The market will also look favourably at athenahealth’s forward-thinking approach over the last few years. For example, it was implementing EHRs in an SaaS/cloud-based environment at a time when many other EHR vendors (such as GE) were still favouring on-premise solutions. This provided first-mover advantage which reflects a nimble response to market conditions. 

athenahealth also has a well-developed marketplace where third-party software developers pre-integrate their solutions and offer them to athenahealth’s customers. This is common among ambulatory EHR vendors, and athenahealth has a leadership position in this. This is a captive market, reducing the likelihood of customers migrating to another product.  

Any IPO prospectus will also demonstrate athenahealth’s successful recent, proactive product launches. In 2020, in rapid response to the fast-unfolding Covid situation, it launched athenaTelehealth, a telehealth tool integrating video conferencing into the athenaOne EHR platform. This enables practitioners to conduct HIPAA-compliant telehealth visits within practice workflows. It also released a reworked PHM/VBC solution in 2022, expanding the company’s care management services and IT portfolio. 

A Question of Time 

Despite the above, athenahealth faces several structural and market challenges which could influence its valuation and, ultimately, the timing of an IPO. 

Firstly, it may be the market leader in terms of ambulatory revenues, but athenahealth is the leader in a saturated primary and ambulatory care EHR market with a shrinking total available market (TAM) (we discussed this recently in this Insight). The largest share of the company’s customer base is independent practices (approximately 60%), whose numbers are falling. Forty percent of its customers are IDNs, but athenahealth will inevitably lose some of these contracts to Epic, Cerner and even MEDITECH, who all offer EHR solutions in a wider cross-section of settings. The fact that athenahealth has no footprint outside primary and ambulatory care is a major constraint, especially given the trend for buyers at IDNs and big health systems consolidating on one EHR vendor across all settings.  

Getting any more mileage out of a shrinking market will require athenahealth to displace rival tier 2, tier 3 and other primary care EHR vendors. These include eClinical Works, NextGen Healthcare and Allscripts (post-Altera split), as well as a long tail of small tier 2 and 3 speciality vendors in areas such as podiatry, women’s health, optometry, dermatology, etc. athenahealth has a speciality EHR portfolio, but continued investment in these specialty solutions will be needed if it is to take share off these smaller vendors. 

athenahealth will also need to ensure the re-engineered VBC products it brought to market in 2022 are successful and can drive up average revenue per practice. 

Achieving the above will demonstrate a viable strategy for long-term growth for athenahealth. Any traction gained in this area should only improve the company’s valuation. 

Competitive Threat 

athenahealth also faces another competitive threat from Epic and MEDITECH in particular. These dominant vendors have historically only sold to large health systems, not independents, and (in the case of Epic) allowed the large health systems to resell their EHR to the independents. For example, some independents run a version of Epic’s Community Connect, leased to them by the health system, not Epic. This strategy has proved highly successful for Epic with more than 40,000 providers now accessing Epic via this solution. 

In March 2022, both vendors announced they were launching primary care solutions (Garden Plot in the case of Epic and a version of Expanse in the case of MEDITECH) that independent practices could buy themselves, outside of any relationship with a health system/IDN. This was a direct encroachment on athenahealth’s territory. Both Garden Plot and Expanse are offered as SaaS solutions enabling independent practices to implement without significant IT investment, a barrier with previous Epic and Meditech solutions.  

What Now for the IPO? 

It is against this background that Bain Capital, Hellman & Friedman, Segert and his management team must now consider when (the ‘if’ seems to be a foregone conclusion) to push ahead with the IPO. With a reliance on business with independent practices (a shrinking market segment), and a narrow focus on primary and ambulatory care products, athenahealth’s growth options look quite limited. $17B already looks like a lot of money paid out. 

But the company has put behind it a turbulent history, which included a scandal involving a former CEO and having to lay off of almost a tenth of its workforce. In 2022, it is on solid footing in primary and ambulatory care and fighting its corner against its larger EHR competitors, albeit with challenges to address. 

Athena was the Greek goddess of wisdom. Conventional wisdom suggests that an IPO for a primary care vendor in her name would represent something of a risk at this time. By all accounts, it looks like a risk the company is willing to take – but it might not happen soon if it wants a gain on $17B.