Impact Insights

Week in Review 8/15/2014

25.5% of hospitals had a “comprehensive” EHR in 2013, while 33.4% had a “basic” EHR, according to a great, and very detailed, report published by the Robert Wood Johnson Foundation.  The total of hospitals with at least a basic EHR (58.9%) has actually quadrupled since 2010 (see chart below).  One of the biggest areas of concern found by the study was around HIE – particularly between nonaffiliated organizations. For example, among hospitals with at least a “basic” EHR, only 32% shared medication history with external ambulatory providers, while only 26% did so with unaffiliated hospitals.

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Impact Advisors’ Thoughts:  The full report (or even just the executive summary) contains a ton of great information and is highly recommended reading.  Here are two thoughts that initially jump out at us about the high level findings on EHR adoption:

  • The growth is certainly encouraging, but there is a significant difference between the two categories of adoption.  Hospitals with a basic EHR only had to have 10 basic functions “implemented in at least one clinical unit.”  A hospital with a comprehensive EHR had to have all basic EHR functions, plus 14 additional functions, “implemented in all major clinical units.”
  • While the pressure to earn Meaningful Use incentive payments undoubtedly drove much of the rapid increase in adoption in the last few years, we can’t help but wonder if implementations actually happened too fast at some organizations.  Implementing too fast leaves these hospitals in need of potentially significant EHR optimization services in the coming years, especially as EHRs increasingly need to be used as a key tool to drive tangible cost savings and improvements in quality.

Hospital Mergers and Acquisitions (M&A) activity in the first half of 2014 was down 7% compared to the first half of 2013, according to a new report from Kaufman Hall.  There were 43 transactions announced in the first half of this year (versus 46 in the first half of last year).  40 of the transactions in the first half of 2014 were acquisitions of not-for-profit organizations.  Overall, the operating revenue for the hospitals acquired in the first half of the year totaled $10 Billion.

Impact Advisors’ Thoughts:  M&A might be down slightly from this time last year, but overall, the number of transactions is still roughly on pace with 2012, and is still quite high compared to a few years ago.  For reference, there were a total of 98 hospital / health system mergers or acquisitions during all of 2013, a 3% increase from 2012 and a 51% increase from 2010.

 

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