HIMSS12 Annual Conference and HIMSS12 Annual Conference and Exhibition: Exhibition:

Top Takeaways and Health IT Focus for 2012Top Takeaways and Health IT Focus for 2012

Excerpts from Frost & Sullivan Market Insight ReportExcerpts from Frost & Sullivan Market Insight Report

May 2012May 2012

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Contents (Full Report)

Section Slide Numbers

Executive Summary 3

Conference Overview and Highlights 6

Excerpts from the HIMSS 2012 Leadership Survey 12

Top Ten Industry Trends 21

Top Ten Featured Companies 32

Top Takeaways and Health IT Focus for 2012 43

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Appendix 49

The Frost & Sullivan Story 51

Conference Overview and Highlights

Summary Statistics

The HIMSS12 conference was the best-attended ever, attracting 37,032 attendees, an 18 percent increase

from last year, as well as 1,100 exhibitors who offered a broad spectrum of health IT products and related

services. The conference also provided a robust selection of educational content, with more than 300

sessions spanning 23 topic categories selected by a peer-review panel.

Notable Speeches

Farzad Mostashari, M.D., the head of the Office of the National Coordinator for Health Information

Technology (ONC), gave an upbeat keynote address that focused strongly on the impressive uptick in the

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Technology (ONC), gave an upbeat keynote address that focused strongly on the impressive uptick in the

adoption of EHRs among hospitals and physician practices seen in the past few years and also provided

perspectives on ONC’s future plans to build on the momentum around health IT, including what to look for

in Stage 2 Meaningful Use. Mostashari described interest in Meaningful Use as “sky high” among providers

and hospitals.

Biz Stone, co-founder of the wildly popular social media platform Twitter, provided perspectives on how

social media will come to significantly influence healthcare by re-defining how providers and others share

information.

Carolyn Clancy, M.D., director of the Agency for Healthcare Research & Quality, spoke of how the use of

health IT has now reached critical mass across the provider landscape, thus continuously enabling quality

improvements for a wide range of patients.Source: Frost & Sullivan analysis.

Conference Overview and Highlights (continued)

Special Exhibitions

The Interoperability Showcase—offered in collaboration with Integrating the Healthcare Enterprise (IHE),

the exhibit featured vendors, solutions, and educational sessions focused on enabling connectivity.

The Intelligent Hospital Pavilion—offered in collaboration with the RFID in Healthcare Consortium. The

exhibit provided simulated inpatient settings (ICU, step down, ED, etc.) featuring various technologies used

in improving patient care, safety, and operating efficiencies, including auto-ID/Bar code scanning systems,

RFID/RTLS, and sensors and wireless solutions.

Knowledge Centers—a first at HIMSS, these were six subject-specific exhibits designed to bring together

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Knowledge Centers—a first at HIMSS, these were six subject-specific exhibits designed to bring together

educational sessions, vendor case studies, exhibition booths, and various HIMSS resources in one

convenient location. Subject areas reflected some of the most critical focus areas in the health IT industry

and consisted of Accountable Care Organizations, value-based purchasing, mobile health, medical devices

integration, business and clinical analytics/intelligence, cloud computing, and ICD-10.

HIMSS Social Media Center—designed to provide various types of activities including educational sessions

and networking with experts around how best to leverage social media in healthcare, including advice on

strategies and tactics for branding, business development, mobility, and driving consumer engagement.

Source: Frost & Sullivan analysis.

Conference Overview and Highlights (continued)

Major Announcements

Proposed Rules for Stage 2 Meaningful Use—The proposed rules were announced toward the end of the

conference. Although there was little time for review or discussion, the initial general consensus seemed to

be positive, as the rules seemed to a logical continuation of Stage 1. Although the total number of required

core and menu items has been reduced from Stage 1, the measures associated with these requirements

have been strengthened, particularly around CDS, CPOE, HIE, reporting clinical quality measures, and

patient engagement. The proposed Stage 2 rules stipulate that physicians need to meet at least 17 core

objectives in addition to three of five menu objectives while hospitals are expected to meet 16 core

objectives in addition to two of four menu objectives. The final Stage 2 rules are due out around June 2012.

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objectives in addition to two of four menu objectives. The final Stage 2 rules are due out around June 2012.

ICD-10 Delay*—Although announced just prior to HIMSS12 rather than at the conference, the potential

delay in implementing ICD-10, originally due to go into effect in October 2013, was much discussed and

there was some grumbling. It is unclear how much leeway will be given on the original deadline, but most

industry insiders thought that HHS would propose a nine- to 12-month delay; some even speculated that

ICD-10 might be delayed indefinitely and passed over until ICD-11 is ready. General comments at HIMSS

indicated that while some vendors and providers are unhappy about this disruption given the considerable

time and expense they have already invested in changeover to ICD-10, a potential delay will provide many

hospitals and physician practices much-needed time to focus on getting their core EHR projects in line for

Meaningful Use.

Source: Frost & Sullivan analysis.*On April 9, 2012 HHS announced a proposed rule to postpone the compliance date for ICD-10 to Oct. 1, 2014

Conference Overview and Highlights (continued)

Key Themes

Meaningful Use and EHR Adoption Trends—the most important them for HIMSS12. As noted by

Mostashari in his keynote speech, EHR adoption has been quite robust since the passing of the HITECH Act

three years ago. Statistics supporting this trend were repeatedly noted in various conference speeches and

educational sessions. According to CMS, $3.9 billion in Stage 1 EHR incentive funds had been paid out

through the end of February 2012, consisting of almost $1.2 billion to 84,000 physicians and $2.7 billion to

2,355 hospitalsaround 10 to 15 percent of providers (both physicians and hospitals). In addition, recent

figures from the National Center for Health Statistics (NCHS) show that 35 percent of U.S. physicians in

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ambulatory practices now are using either a basic or comprehensive EHR, the same percent of EHR

adoption by U.S. hospitals according to a recent announcement by HHS secretary Kathleen Sebelius.*

Connectivity and Interoperability—The concept of connecting systems and people for coordinated care

was ubiquitous, and many vendors are incorporating this concept into their marketing messages: Connected

HealthWorking Better Together (Cisco); Connecting People to Connect Care (Siemens); Health

Connections Brought to Life (RelayHealth); A Connected Community of Health (Allscripts); Enlightened

Action. Connected Care (InterSystems); Connected and Cool (Epic).

Source: CMS, NCHS, and Frost & Sullivan analysis.

*Data on the CMS Medicare and Medicaid EHR Incentive Program can be found at data.gov. The data set merges information about the CMS EHR Incentive

Programs attestations with the ONC Certified Health IT Products List, enabling systematic analysis of the distribution of certified EHR vendors and products among

those providers that have attested to meaningful use within the CMS EHR Incentive Programs. The data set can be analyzed by state, provider type, provider

specialty, and practice setting.

Conference Overview and Highlights (continued)

Payment Reform—Payment reform, namely moving away from fee-for-service to reimbursement based on

value and outcomes, was strongly evident in the messages that many vendors were using to promote their

“next-generation” revenue cycle management solutions. The notion of “accountable care” continues as a

key focus, although diminished somewhat from the enthusiasm seen at HIMSS11, where Accountable Care

Organizations as defined by the Medicare Shared Savings Program generated substantial buzz.

Health Insurance Transformation—Another topic of interest related to payment reform was the idea that

health insurers need to brace for a completely new way of doing business, as dramatically noted by Aetna

president Mark Bertolini in a speech where he talked about “the end of insurance companies.” This attitude is

mostly brought on by changes due to PPACA, like the new rule around the minimum medical loss ratio,

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mostly brought on by changes due to PPACA, like the new rule around the minimum medical loss ratio,

which requires insurers to spend 80 to 85 percent of all premiums received on claims.

Mobility—Once again, mobility was a prominent theme, with almost every vendor featuring an iPhone or

iPad app and hospital chief information officers (CIOs) talking about the need to manage the “BYOD” (bring

your own device) trend.

Population Health—Many vendors promoted new solutions around the growing need to manage

populations. Web or “cloud”-based solutions that aggregate patient data in electronic data repositories and

warehouses and use predictive analytics to improve quality and efficiency were featured. Solutions demo’d

by vendors like eClinicalWorks, Optum, and others were specifically designed to appeal to emerging

coordinated care models like Accountable Care Organizations and Patient-Centered Medical Homes.

Source: HIMSS and Frost & Sullivan analysis.

Top Takeaways

Dynamic Health IT Market Presents Opportunities and Threats

As of early 2012, we find the status of the U.S. health IT market to be in a dynamic, transformative period,

presenting a high degree of opportunities and threats for both legacy market participants and new market

entrants. One of the most compelling issues to consider at this juncture is the degree of near-term

displacement opportunities in the EHR market as providers seek advanced integrated solutions to meet

Meaningful Use requirements as stipulated by the CMS EHR Incentive Program and/or to prepare for

coming changes related to the growing complexities of value-based reimbursement, coordinated care, and,

eventually, personalized medicine.

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Source: Frost & Sullivan analysis.

EHRs Continue to Dominate the Health IT Market

The key health IT focus continues to be on implementing EHRs and related applications. Even those

providers who do not intend to attest for Meaningful Use (e.g., ambulatory providers who do not participate

in Medicare or Medicaid or who do not find the government incentives compelling) increasingly understand

that EHRs are inevitable and that eventually all healthcare providers will be using them - and all payers will

require them. Over the next couple of years, we foresee a robust but highly competitive EHR market.

Ambulatory EHR adoption will continue at a brisk pace through 2014, especially in small practices. However,

small niche ambulatory EHR vendors will increasingly exit the market due to increasing provider

consolidation and increasing costs associated with Meaningful Use certification.

Top Takeaways (continued)

Stage 1 Meaningful Use is Still the Primary Focus

While EHR sales have been robust and adoption continues at a steady pace, the market is still at the

formative stages and will remain so for the next 18−24 months. We see that the majority of the market is not

yet ready to move beyond Stage 1 Meaningful Use. The timing of overlapping initiatives like Meaningful Use,

ACOs, ICD-10, and PPACA-related changes have been too aggressive for most providers. Predictably,

physicians and small hospitals are bearing the brunt of the burden, as witnessed by increasing realignment

and changes in ownership among these market segments, as well as the calls to push back on ICD-10 and

HIPAA 5010 timelines. As Meaningful Use and EHR deadlines have been pushed back, we think most

providers and vendors will benefit. Vendors have more time to design, develop, and test new functionality,

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Source: Frost & Sullivan analysis.

providers and vendors will benefit. Vendors have more time to design, develop, and test new functionality,

and providers have more time to implement their EHR systems.

Most Providers Will Upgrade Financial IT Systems but Uncertainty Prevails

For non-clinical IT systems, vendor focus on payment reform and next-generation RCM as demonstrated at

HIMSS12 may be ahead of strong market demand given political uncertainty, the pushback on ICD-10

timing, and the ultimate fate of PPACA and payment reform. Once these issues are clarified, we expect to

see RCM gaining speed across the market.

Health IT Focus for 2012

Opportunities/Product FocusMarket Needs

Electronic Health RecordsElectronic Health Records

Health Information

Exchange/Data Integration

Health Information

Exchange/Data Integration

Potential displacement

opportunities as providers look to

Stage 2 Meaningful Use

Potential displacement

opportunities as providers look to

Stage 2 Meaningful Use

Exchange and integration of

disparate data sources to enable

single view of patient information

Exchange and integration of

disparate data sources to enable

single view of patient information

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Clinical Decision SupportClinical Decision Support

Patient EngagementPatient Engagement

Population HealthPopulation Health

Comprehensive, evidence-based

solutions seamlessly integrated

with clinician workflow

Comprehensive, evidence-based

solutions seamlessly integrated

with clinician workflow

Innovative, web-based solutions

designed for ease of use and

sustained engagement

Innovative, web-based solutions

designed for ease of use and

sustained engagement

Real-time analytics at the point of

care; robust reporting capabilities

for bundled payments

Real-time analytics at the point of

care; robust reporting capabilities

for bundled payments

Source: Frost & Sullivan analysis.

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In addition to the above, our robust in-house forecast and benchmarking models, along with the Frost & Sullivan Decision Support Databases, have been instrumental in the completion and publishing of this research service.

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We also certify that no part of our analyst compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this service.

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