No Winner Takes All With Electronic Health Record Giants

Two of the largest players in the electronic health records (EHR) industry are in competing nonprofits that aim to improve the national exchange of electronic information. The irony of that fact alone may seem like proof that advances in health IT will continue to be hopelessly slow.

But as much as the rivals might seem doomed to undermine one another’s attempts to achieve the common end of EHR interoperability, analysts say these efforts aren’t as incompatible as they might seem.

This story starts with Epic and Cerner, direct competitors in the EHR space with profiles that couldn’t be more different.

Epic is far and away the industry leader. In a recent investment presentation, Greenlight Capital CEO David Einhorn called Epic Systems the “2,000 pound gorilla from Wisconsin,” even though the private Verona, Wis.-based company doesn’t attract the attention of Wall Street analysts and the company website looks like it was developed in the late 1990s.

According to Greenlight, about half the U.S. population is using Epic-based EHRs, and Epic owns the market for large integrated health systems in many major cities, with more than a quarter of a million doctors on board. Recently announced high-profile partnerships with Apple and IBM have burnished the company’s reputation as an industry leader.

On the other side is Kansas City, Mo.-based Cerner Corp., the largest publicly traded health information technology company in the nation. Cerner has a market cap of $18.5 billion, and while its client base is concentrated in small to mid-market health systems, often in less-populated regions, it still likely has a larger EHR revenue stream than Epic.

So when these two industry behemoths formed opposing alliances in the EHR gold-rush that followed the 2009 stimulus bill and the Affordable Care Act, industry analysts took notice. But experts interviewed by Morning Consult say the industry developments are far more nuanced than the, as one analyst put it, “TMZ-style sensationalism” inferred by the surface story.


Obamacare has sped up the competition to encourage the free-flow of electronic data, changing the dynamic for hospitals and vendors that once saw a competitive advantage in keeping a tight grip on patient health data.

The payment reform aspects of the law are making reimbursement for government programs more outcome-based, rather than fee-based, which has led doctors and hospitals to seek out missing bits of patient data that could lead to better results. This built on the financial incentives (and by 2015, penalites) included in the 2009 stimulus bill for providers that can show they’re using certified EHR technology to improve patient care by meeting “meaningful use” requirements.

Prior to this, hospitals and vendors rarely exchanged electronic data, so the platforms and services in place are highly compartmentalized. Now, the industry is working to make systems interoperable, so they can communicate easily with one another.

The project is massive – the Office of the National Coordinator has outlined a plan that projects the implementation to will unfold over the next 10 years. The healthcare industry quickly realized it would need to work together – competitors and all – to produce a streamlined EHR system that runs the gamut.

From this realization came the nonprofit CommonWell Health Alliance, launched in 2013 by a group of EHR vendors to focus almost exclusively on service-oriented interoperability and data access management.

Cerner was among the group of founders that, to the surprise of many, didn’t include the industry leader, Epic.

Instead, Epic became the biggest name at Carequality (pronounced Care-equality), another non-profit alliance that sprang from Healtheway, a government-based initiative, earlier this year. Carequality also has dozens of members – including some vendors – who are working on a broader multi-platform framework that could serve as a repository for patient health data.

Cerner is not a member.

That’s how the idea of battle lines being drawn between Epic and Cerner was born, and the companies did little to squelch the storyline. CommonWell says it invited Epic to join, but has been accused of floating the invitation so late in the game that it appeared to be a non-invitation.

And while Carequality says it has asked Cerner to join, an executive at Healtheway publicly diminished the scope of Commowell, saying Carequality represents “all stakeholders,” and “not just vendors.” Others involved with Carequality questioned the need for CommonWell when interoperability standards already existed under the second stage of Meaningful Use.

Officials from both companies and both nonprofits declined interview requests for this story.


While the acrimony between the groups appears tangible, experts say the two sides are, for now, merely taking different roads to the same destination, that their paths will likely merge someday, and that regardless, they’re not playing a zero-sum game, but rather, will both likely contribute in some capacity to the end goal of a more liquid EHR market.

CommonWell’s focus is narrower – it was created to focus solely on the data transmission needs of different EHR vendors. Carequality, in contrast, is working to set up one EHR framework that providers can access nationally.

In an interview with Kenneth Kleinberg, a managing director at Advisory Board Company, Kleinberg used the analogy of telephone standards to describe CommonWell’s mission: [“Vendors] need to have a certain kind of connector, accept a certain voltage, and modulate the message in a standard fashion…CommonWell seeks to become a directory service for patient identity and consent…a directory of which providers a given patient has seen.”

Carequality isn’t taking the same approach. Healthecare, from which Carequality sprung, sought to build an EHR framework, or repository, from where providers can pull patient health records, so that if a man from El Paso, Texas breaks his leg in Eugene, Oregon, all the interested parties can access the man’s health records.

Carequality is brand new and their mission is less defined. But they say they intend to build consensus on “how to accelerate seamless health information exchange” that will transmit information based on a common framework the same way that “banks came together to connect ATM networks.” To do so, the alliance has recruited more than just vendors – it extends its reach to providers, insurers, and pharmacy chains, among others.

While the missions vary greatly in scope, all of the parties will likely end up contributing to the future of EHR networks, experts say. Kleinberg mentioned a potential scenario in which Carequality’s framework uses CommonWell services. He also cited company overlap between the two nonprofits as evidence the parties are not in direct competition. (Greenway is a cofounder of both nonprofits, and CVS also belongs to both.)

“In most cases these solutions are not mutually exclusive, and some organizations will likely participate in multiple initiatives,” he said. “Eventually the market will drive some type of blended-mixed interoperability solution.”

Still, Kleinberg said if Carequality develops the industry standard framework, CommonWell will need to prove that its services and expertise “can mesh with and add value” to the initiative.

And both nonprofits are presently competing to influence industry regulations, a game which has, to date, been played on a field complicated by Obamacare delays and technical problems.

“What makes it into future standards is very much in a lot of people’s interests, and which groups have the influence on what happens in future standards is interesting,” Kleinberg said. “If the meaningful use program keeps traction, and goes through all the stages, it’s who can affect what those standards are that will have the influence, and that’s highly contested.”

Having started at the federal level, Carequality is widely viewed as having the government on its side, but CommonWell appears to have made strides. One of the reasons the group formed was because CMS didn’t include patient identity or consumer management requirements for meaningful use regulations, and basically conveyed the message “this is an issue the industry needs to work out,” according to Kleinberg.

Perhaps spurred by CommonWell’s advances, ONC has since started a Patient Matching initiative.

“These could all come together,” one analyst told Morning Consult on background. “It was the perspective that Healtheway was on the government side, and so some vendors didn’t want to be mandated by the government, or have it involved in how they built systems, so CommonWell said, let’s do it ourselves. There’s not a whole lot to make of [the competition between the two], there’s nothing sexy about the one versus other story. It will all come together eventually.”

Morning Consult