Let's assume sales stay flat or decrease and that companies will not be able to get loans.
Would be not see any changes at all? Could there be layoffs and stalling of feature development? Will hospitals be less likely to help purchase systems for their docs?
What's your take guys?
Lowell Kleinman, MD www.drkleinman.com www.old-fashionedhousecalls.com
Credit is tightening and there is uncertainty.
It will be tougher to get that EMR loan, particularly for the doc opening a new office....already burdened with med school debt. These are the docs who staved off marriage and kids while pursuing their education, have never owned a house or new car, are finally married and looking for the American Dream. They have the degree, their residency completed, and educational loans due. They have income to replace that broken down car they drove during residency, but also want to buy a house (now requiring 20% down.....not like % down of a year ago), setup an office (or buy into a group), and so much more. Credit is very tight.
Hospitals purchasing systems-- that is rapidly going down the tubes with so many hospitals are broke and systems so costly.
None.
The economy effects us all. We have been busier then ever, especially given the need to become more efficient.
However, we are not a EMR. We are a EMR on top of a EDMS and Transcription System.
Many of our customers are fully electronic as far as having there charts on-line.
Charts, Chart pulls and just creating the record is expensive. Computers if used correctly can really help a practice.
I am currently thinking of just working mostly here in Florida. I think that this Vertical is less dependent on the economy.
At the end of the day everyone will need to tighten the belt.
I also believe bad times are not always bad. In current economy many people are going to scooters. GM is reintroducing its Electric Car, much demanded now. Its original introduction was in low demand, giving way to Escalade and Hummer. After all a 7 mile to the gallon automobile makes sence to go to the grocery store and pick up your two kids at soccer practice.
I also think that we as a world have to care more about our resources and manage them well.
Most of all I believe:
"Tough Times Never Last, only Tough People Do."
This is my motto, I read it once and live by it. It is great that all these business that are week will crash. It is sad that many good business will alos crash. Well established, with good customer base and good service.
Doctors will continue to be over worked. Have way to many patients and way to little time. Therefore, this industry if done right should only go to benefit the physicians, therefore, they will move to technology.
My 2 cents.
DrK: Let's assume sales stay flat or decrease and that companies will not be able to get loans. Would be not see any changes at all? Could there be layoffs and stalling of feature development? Will hospitals be less likely to help purchase systems for their docs? What's your take guys?
In my most recent interview with Mark Anderson, we talked about "the state of the EMR economy". I'm sure you will all find it interesting, will be published soon with transcription, one of our lengthiest interviews so far!
Robert Gleeman, Medical Journalist for EMR Update.com Email: robert@emrupdate.com Tel: 1-650-968-6359 Skype and ooVoo user name: robertgleeman EMR progress is a matter of fact. EMR Update supports your right to know.
Healthcare is one area of the economy that is fairly resilient when it comes to economic downturns. I spoke to a VP at Bank of America and his opinion is that physicians are largely shielded from the credit crisis and should still be able to get loans without any problem. My concern is that doctors will see their 401Ks cut by 25%+ and will take a 'wait and see' attitude before making any major purchase. Our large deals are moving right along as if nothing has happened. It might be that the small offices are more likely to be nervous about this.
Disclaimer: I am the founder of e-MDs. Highest rated by doctors. All posts are opinion only
We are actually seeing a pick up in business. While the overall EHR market may shrink for a while, I think vendors with the most reasonable pricing and those that allow the customer to opt out at low or no cost (if they decide EHR or your system is not for them) will see an increase through a shift to them away from the very expensive, high-risk systems. I would expect the expensive systems will get hit very hard by a poor economy,
C Huddle VP, Market Development www.Sevocity.com
I agree with both David and C. Huddle. Your mid-priced EMRs should be poised to do well in the long-term, which is the edge of the "sweet spot" for most docs.
The smaller practices, especially those that are in primary care and in some specialist practices (oncology, urology, psychiatry, GI, pulmonary) which have been hit hard by cutbacks will be looking at less expensive EMRs, if any EMR at all.
Currently 2008 has been a good year for the "enterprise" EHR vendors, most likely associated with the EHRA/HIMSS generated increased talk and perception inside Congress about how EHRs will fix healthcare. The recently passed e-prescribing law has brought on some speculative stock increases and overall sales of the "enterprise" CCHIT-certified EHR stocks. Many analysts feel that this will now force docs to cow-tow into buying into the CCHIT marketplace. Once the reality sets in that docs will not be doing the expected, the overall IT market could be hit hard.
Sure, some large group practices will be somewhat resilient to the market pressures, but even they will need to do cutbacks.
There are signs that the HIT market will weaken. Take a look at the QSII stock, which over the past year has had one of the best performances of any EHR vendor that I've seen (see http://finance.yahoo.com/echarts?s=QSII#chart1:symbol=qsii;range=6m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined for a chart which shows a growth from 28 in mid-July to 45 now). If you look at the "analyst opinion", you will see of the various opinions since 5/2008 of where QSII will be heading, there are 4 initiated (on 5/08 and 6/08, usually buy or outperform), one upgrade (to buy), but 5 downgrades, 4 of which were placed in August/September showing a sentiment that the party may be over. (URL- http://finance.yahoo.com/q/ao?s=QSII)
BTW, there is a similar, and massive thread discussin this issue here: http://histalk2.com/2008/09/28/the-financial-crisis-lets-hear-your-thoughts-on-how-it-will-affect-healthcare/ Several posters discussed the layoffs, with one recently joining the unemployment lines. One poster in particular, noted that the IT consulting firms (aka Margalit!) may do well:
"Public company vendors (GE ,Siemens, Cerner particularly) will make things good for IT consulting firms as they will not be able to carry sufficient staff to complete installs or manage support due to the need to keep P/E ratios looking good."
Title: The Financial Crisis - Let’s Hear Your Thoughts on How It Will Affect Healthcare, URL: http://histalk2.com/2008/09/28/the-financial-crisis-lets-hear-your-thoughts-on-how-it-will-affect-healthcare/
Al
Al Borges, M.D.
● Oncologist in a Small Group Practice in Virginia
● My website URL: http://msofficeemrproject.com/
alborg: One poster in particular, noted that the IT consulting firms (aka Margalit!) may do well:
One poster in particular, noted that the IT consulting firms (aka Margalit!) may do well:
Alas, we don't do IT consulting Al. We build and sell EMRs (and PMS and billing services), the CCHIT certified kind.... That thread you quoted doesn't bode well for our kind...
Seriously now, just like other posters here noted, sales look pretty good right now. However, I am seeing something rather new. Physicians are very price aware now and every little detail and charge is discussed and negotiated. I think it's a sign of the times.....
Margalit
Margalit Gur-Arie
Purkinje
www.purkinje.com
On the finance and cost side of things, might not be a bad idea to buddy up with Microsoft Finance, also in the news was the 400 million buy back/line of credit last week on the part of Microsoft. Purchase one MS item and if the customer qualifies let MS be the bank. From their side of the coin, later down the road if the customer let's say wanted to purchase a couple more copies of MS office, that too can go on the tab, but as a software vendor one would not have to carry the financing and get paid after the installation is complete. Depending on what agreement is struck, they can finance the hardware, EHR software, and their one product purchase, like a server for example. They gain market share with the financing part to add more software later as needed.
This is another way to help finance Healthcare IT purchases. Microsoft Partners can help advise on how to qualify and get started for a simple example. Also in the news today, Dell computer, backed by Intel financing may offer some alternatives. BD
“Microsoft Financing enables customers to have one financing resource for their end-to-end IT solutions needs—including software, hardware, and consulting services. Now organizations of any size can identify the best IT solution to meet their business needs, select the licensing and financing solution they want, and manage the costs in a predictable and affordable way.”
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This happens to be one of my hobbies... I've been watching the coming economic downturn for a year now, staring right around when Ben Bernanke said that Subprime might cause 50-100 billion dollars in losses to banks. It's been a slow-motion train wreck the whole time, I still can hardly turn my head away.
My opinion is that the contagion will spread to doctors mostly in the form of rising unemployment, as people lose their benefits and can't pay. So they're going to be looking to cut costs by any means necessary, and they may opt to punt instead of purchasing new systems like you said. They may also see difficulty gaining credit to purchase systems, though I think that will be less of a concern. Look at the cost of an MRI machine vs. the cost of an EMR. The money will be there for doctors.
Sage is pushing pretty hard to come up with solutions that reduce the costs to our customers by eliminating setup costs. I think we'll be selling a lot more of our hosted ASP solution, Intergy by Sage On Demand (IOD), because it has a monthly fee, with very little in the way of initial costs. Coming soon is also a new "hybrid" ASP solution that will allow customers to install the solution on a server running at their own practice. This way they aren't at the mercy of the local ISP, and there's no monthly fee either.
I agree with some of the other commenters that it'll affect big vs. little offices differently. I bet we start to see larger customers buy in to capture the pay for performance bonuses.
Finally, if unemployment spikes like we think it will, that will probably result in some more funding for community health centers. The first go-live for Intergy's new Community Health system is in less than two weeks, so hopefully we're tracking macro fundamentals with product offerings.
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