This document summarizes the annual revenue of the top 12 healthcare information systems (HIS) vendors based on published reports. It finds that in 2014, Cerner surpassed McKesson to become the #1 vendor by revenue for the first time. Overall revenue growth for the top vendors was only 5% compared to higher growth in previous years, possibly due to incentives from the HITECH Act slowing new sales as hospitals focused on meeting meaningful use criteria. The document indicates it will provide more detail on vendor performance in the next 3 episodes, broken down by market segment.

1. 2014 HIS Vendor Revenue
© 2014 by H.I.S. Professionals, LLC, all rights reserved.
By Vince Ciotti, Principal
HIS Professionals, LLC
1980 1990 2000 2010 2015

2. HIS-tory of Vendor Revenue
• If you’ve been reading print magazines in our industry along with
getting far more unvarnished insights from HIStalk, you’ve
probably followed our annual rankings of the leading HIS
vendors in order of their annual revenue for many years:
– Original credit for the idea must go to Bill Childs who created
this whole media when he started his Computers in Hospitals
magazine in 1980 with a whopping 52 page first issue.
• Bill’s magazines morphed & were renamed
many times over the years, and subsequent
rags expanded the vendor review from 25 to
100 vendors in issues running 200+ pages.
• Last year, the magazine we wrote our vendor
review for had shrunk so small (≈30 pages)
they only ran our article on their web site, so
this year we’re only running it on HIS-talk!

3. Definitions
• It’s important to define what one means by an “H.I.S.” vendor
since some of the rag’s rankings include billion-dollar firms in
their top 10 like Dell, Phillips, CareFusion and Cognizant, that
don’t really offer an HIS, which we specifically define as:
- Hospital – acute care facilities are the primary
market, not “just” physician practices, managed
care, long term care, home health, PACS, etc.
- Information – the full suite of software needed to
automate a hospital: both financial and clinical
systems. Thus, specialty vendor like SCC (Soft) &
Sunquest for LIS and Oracle for ERP are excluded.
- Systems - the complete package of hardware,
software and implementation. This excludes
giants like Dell, CSC, IBM, Leidos, HP, etc, who
only offer hardware and/or consulting.

4. 2014 HIS Vendors Revenue
• We obtained the figures from published earnings reports and
SEC filings (K-10s). Estimates had to be made for companies that
are privately held (e.g.: Medhost), or are a part of giants whose
“healthcare” revenue includes many non-IT products (e.g.: GE).

5. 2014 HIS Vendors Revenue
• This bar chart illustrates the enormous difference in size
between the large-hospital giants to small-hospital vendors:

6. 2014 Shockers
• There are some surprises in this table that deserve highlighting:
- Cerner – jumped ahead of McKesson to be the
#1 vendor in the HIS industry by revenue for the
first time in the firm’s 35-year history. And that’s
before the ≈$1.2B they will gain from Siemen’s
client base (which closed in Feb of this year)!
- Meditech – actually declined in revenue by 11%
from 2013. Their annual report last year was
delayed for many months due to some “booking”
issues, so maybe it’s an accounting anomaly, but
this is their 2nd straight drop in revenue in 2 years.
- Slow Growth – many vendors showed small growth
compared to previous years, including McKesson
(5%), Epic (4%), Allscripts (1%), and CPSI (2%).

7. Whassup?
• Overall, the revenue total for the top 12 HIS vendors only went
up by 5%, compared to previous years (eg: 2011) when the total
revenue increased as much as 17% as illustrated below:

8. Meaningful Abuse!?
• The reason for this relatively flat market can be found in the
HITECH Act – our consulting firm’s experience sums it up well:
- One of our major product lines is system
selections; we’ve done over 165 over the past 28
years. In the boom years of 2009 to 2011 when
hospitals were buying EHRs to first earn MU $s ,
we did 10-12 searches per year, and I bought
(too) many of these rare collector motorcycles:
- From 2012 to 2014, we shrunk down to 2-3 searches per
year as hospitals stayed with their current vendor’s EHR
(no matter how poor) struggling to attest for Stage 1 & 2
MU criteria. Our business has been so slow I am now
selling my most valuable bike to try to make ends meet!
- HIS vendors have seen this slowdown in new sales too, as I’ve
heard many sales executives lament over the past few years...

9. Next 3 Weeks
• We’ll delve into the details of the 12 vendors’ performance over
then next 3 episodes of this review, broken down by the three
major HIS market segments (in terms of beds and revenue):
– Large – those vendors whose derive the majority of their
revenue from large hospitals over 300 beds in size, including
many AMCs & Multi-IDNS: Cerner, Epic, Allscripts & GE.
– Mid-Size – vendors whose target market includes mainly mid-
size hospitals of 100 to 300 beds in size, including Meditech
(all 3), McKesson’s Paragon, NTT Data and QuadraMed.
– Small – vendors whose client base consists of mostly under
100 bed facilities, including CAH (Critical Access Hospitals) of
under 25 beds: CPSI, Medhost, Healthland and NextGen.
• Any questions, comments, or offers on my Honda, please contact:
Vince Ciotti, vciotti@hispros.com, 505.466.4958