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Electronic Medical Record Legislation and the US Anaesthesia Information Technology Market

14/11/2011


Dr Kamran Zamanian and Francis Bryden of  iData Research Inc. examine how electronic medical record legislation is expected to accelerate growth in the US anaesthesia information technology market. Anaesthesia information management systems will be the fastest growing segment in the anaesthesia market growing at double-digit rates through to 2017.

The US market for anaesthesia devices is expected to see steady growth through to 2017, due to increasing surgical procedure numbers and advances to anaesthesia monitoring and delivery technology.

After rebounding from the economic recession, this market reached over $747 million in 2010, driven by the need for hospitals to replace units that had reached obsolescence. Continued growth in this market can be attributed to the rapid adoption of anaesthesia information management systems (AIMS), which hospitals have begun implementing in an effort to move the industry away from paper-based record keeping systems to more efficient electronic solutions. Despite slow initial adoption, AIMS will be the fastest growing segment in the anaesthesia market and is expected to grow at double-digit rates through to 2017. Government incentives for hospitals to collect and track patient and procedure information, both through legislation to demonstrate "meaningful use” of hospital-wide electronic medical record (EMR) systems and the establishment of several government-supported national statistical databases, are driving this market. As a result, companies such as Picis and GE Healthcare were able to gain a sizeable share of the AIMS market.

Hospitals expected to rapidly adopt AIMS technology

AIMS is a category of electronic record keeping IT solutions geared towards automating data collection in the anaesthesia department. Prior to 2010, this market displayed steady growth as clinicians, who appreciated the increased efficiency and throughput that an advanced record keeping system provides, continued to push for AIMS implementations in the hospital segment. However, the market slowed significantly during the recessionary period of 2008 and 2009 because of restricted budgets.

As part of the American Recovery and Reinvestment Act of 2009, the US Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act. Under this legislation, "meaningful use” of Electronic Health Record (EHR) or EMR systems must be demonstrated in all hospital environments by 2015. The HITECH Act is made up of three major stages of implementation occurring over five years. Upon introduction of the HITECH Act, hospitals began seeking out IT developers to automate the largest and most operationally critical hospital department, such as the ICU, ER and imaging departments.

A general trend within the industry has been to prioritise the implementation of systems in these departments over that of AIMS implementations. One reason for this is that anaesthesiologists are rarely hospital employees; the majority are employed on set contracts with a particular hospital or group of hospitals as private practitioners. As a result, the primary financial benefits of AIMS implementation go to anaesthesiologists who are able to increase workflow, maintain better records and decrease malpractice claims. Because hospitals are predominantly responsible for the initial cost of implementation, they have seen AIMS as being less beneficial comparison with other departments staffed by hospital employees. Despite the initial delay in implementation, the market for AIMS is expected to experience substantial growth in the coming years as a result of a push from anaesthesia associations and committees, as well as from hospital chief information officers (CIOs) seeking to improve overall workflow within the OR and to preemptively meet future stages of EMR legislation.

Legislation, reimbursement and desire to attract top anaesthesiologists drive the market

For the purpose of increasing the quality and efficiency of healthcare in the US, the government has begun to facilitate the implementation of numerous national databases to store information and data from surgical procedures. Although not widely adopted yet, future legislative initiatives are expected to require hospitals to track and report the anaesthesia practices in their operating rooms (ORs), which will ultimately require some variety of AIMs implementation.   

The reimbursement structure put in place by the US government rewards hospitals that show meaningful use of an EMR system by 2015. As an incentive to install these information systems, a hospital facility may receive reimbursement payments through the Centers for Medicare & Medicaid Services (CMS), providing the systems being implemented meet the organisation’s standards. This implementation provides a significant incentive for hospitals to invest in updating their informatics systems as well as upgrading their capital equipment to provide better end-user interfaces for clinicians. Hospitals who don’t comply with the requirements of the HITECH Act by this time face penalties and fees when applying for future reimbursement from Medicare and Medicaid. As the deadline approaches, hospital CIOs and managers will shift focus away from other hospital departments, which have been automated during the initial stages, to anaesthesia departments as a way of both satisfying the overall EMR requirements and improving efficiency in this area.

AIMS solutions can also attract anaesthesiologists to work in certain hospitals. For anaesthesiologists that understand the operational benefits of AIMS, a comprehensive AIMS solution in the OR may serve to attract anesthesiologists to seek employment at these particular facilities. As a result, the number of anaesthesiologists applying to work in the hospitals will increase dramatically.

Total AIMS market to surge in 2012

Despite the slow initial implementation of AIMS systems, by the end of 2011 the vast majority of hospitals covered under the legislation will have completed the first of three stages of HITECH’s requirements. Stage 2 and stage 3, which will occur between 2012 and the end of the incentive period in 2015, will further expand on Stage 1’s criteria, with a focus on comprehensiveness within the hospital and the establishment of national databases to promote better health. It is within these stages that AIMS is expected to surge in popularity as new capital funds are freed up and allocated to automating the anesthesia department. While the market for AIMS solutions will grow rapidly between 2010 and 2017, the greatest surge will occur in 2012, showing a combined average growth rate of almost 20% over this period. This substantial growth is expected to be largely driven by new business, as hospitals without automated anaesthesia departments invest in AIMS.

Chart 1: US Market for AIMS in hospital Environments 2007-2017

Picis and GE Healthcare lead US anaesthesia information management system market

By 2010, roughly 15% of all hospitals and 5% of all ambulatory surgery centres (ASC) had implemented the initial stages of AIMS. This provides a tremendous growth opportunity for vendors that are able to successfully market their product to non-automated facilities. The 2010 market leader for AIMS was Picis, controlling more than a third of the market. Picis’ primary offering is its Anaesthesia Manager, which is marketed as a standalone system and as part of the CareSuite perioperative solution.

GE Healthcare was another major competitor with its Centricity Perioperative anesthesia IT solution. Aiding in GE’s strong market share is the company’s strong brand recognition and leading position in other segments of the anesthesia market, including anaesthesia delivery units (ADU) and anesthesia monitors.

iMDsoft is another major competitor in the AIMs market. Unlike other major competitors, this company’s product portfolio is geared specifically to the operational requirements of the anesthesia department and is the clear leader among stand-alone AIMS vendors. iMDsoft’s comprehensive package is marketed under the MetaVision brand name and benefits from a strong focus on interoperability with perioperative and hospital-wide information systems.

Additional information is available

The information contained in this article is taken from a series of detailed and comprehensive reports published by iData Research (www.idataresearch.net) titled US Market for Anaesthesia, Respiratory and Sleep Management Devices 2011 and European Markets for Anesthesia, Respiratory and Sleep Management Devices 2011. For more information on the above report, please contact: anesthesia@idataresearch.net

iData Research is an international market research and consulting firm focused on providing market intelligence for the medical device, dental and pharmaceutical industries. Watch its short company movie at:Med-Tech TV


   

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