Market Study of Electronic Medical Record (EMR) Systems in Europe
MARKET STUDY OF ELECTRONIC MEDICALRECORD SYSTEMS IN EUROPE Involve to evolve Results from a survey conducted by Logica and Nordic Healthcare Group January 2012
3This white paper shows insights of the EuropeanElectronic Medical Record (EMR) systems marketin context of the broader Clinical InformationSystems (CIS) market. The paper is based on anindependent study commissioned by Logica.The initial study was carried out by Nordic Healthcare Group from October 2011 to January 2012.All published material available was utilised and interviews were carried out in 19 countries: Finland,Denmark, Sweden, Netherlands, UK, France, Portugal, Austria, Belgium, Bulgaria, Croatia, Greece,Hungary, Ireland, Italy, Latvia, Lithuania, Romania and Slovenia. Findings from the study werereleased in January 2012.
4 Why e ehealth? It’s no surprise that healthcare is in the spotlight. It is one of the biggest industry sectors in all European economies, and gets allocated a high percentage of gross domestic product (GDP) in every country. The share is expected to increase because population is getting older and medical technology is developing fast, leading to health expenditure growing faster than GDP. Demographic change will have a dual impact on healthcare. On the one hand, baby boomers of healthcare professionals will retire leading to a reduction in workforce (supply side) since not enough people can be trained as doctors and nurses. On the other hand, baby boomers of all populations will grow the number of people in need of healthcare (services demand side). Therefore demand is growing at the same time when the supply is reducing. Eventually, there will not be enough healthcare professionals to deliver services ‘in the old way’. It means that healthcare providers must radically change the way they take care of patients. This change offers new opportunities for growth of businesses and economies in general. An inability to change processes and utilise technology to its maximum potential does not lead to skyrocketing expenditures, as some have feared. But it does result in services which do not address quality or demand. It means people will be left untreated - and that is surely something nobody wants. In a PricewaterhouseCoopers study 60% of healthcare leaders rated new technology as the number one way to raise productivity (Figure 1). 60% 60% 50% 54% 53% 40% 40% 30% 30% 20% 10% 0% Implementation Comparative Cost Competition Competition of technology eﬀectiveness control (provider) (payer) programmes Figure 1. The methods healthcare leaders say they trust to gain efficiency. Source: PricewaterhouseCoopers. You Get What You Pay For. A Global Look at Balancing Demand, Quality and Efficiency in Healthcare Payment Reform. Health Research Institute Survey, 2008. Electronic Medical Records have been used for over ten years in some pioneer countries such as Finland, Denmark and Sweden. These countries have had 100% penetration in both primary and secondary care and have been evaluated the best in various reports by the European Commission, Information Technology and Innovation Foundation (ITIF) and Accenture. These countries have extensive experience of the benefits IT can create in healthcare, as well as the hurdles that have to be overcome to succeed. Logica is the number one healthcare IT provider in Finland and Sweden.
5 95% The Nordics (92%) 85% Spain (83%) Australia (78%) 75% UK (73%) 65% US (62%) Canada (58%) 55% 45% Japan (44%) Germany (38%) 35% France (33%) 25% 15% 5% 2009 2010E 2011E 2012E 2013EFigure 2. Estimated hospital-based EMR adoption rate projections by countrySource: Accenture. Overview of International EMR/EHR Markets. Results from a Survey of Leading HealthcareCompanies. August 2010.There is emerging scientific data showing how IT can leverage both clinical quality and efficiency.One must always bear in mind that IT is only a tool, it doesn’t make anything better by itself. Butindustry leaders in other sectors have been able to use technology to improve quality and efficiency.As expectations for improved healthcare continue to evolve, older IT systems increasingly struggleto deliver a truly integrated flow of information, and healthcare professionals increasingly experiencehealthcare technology that is below expectation. Newer EMR systems have become available whichhave sophisticated user-friendly cloud based infrastructure (like the iPad), which can easily integrateto the current clinical IT systems used by hospitals, and which can streamline and automate certainprocesses.Gartner calls them fourth generation EMR systems (or using Gartner language, CPR) that will replacesystems that pioneer organisations have used for over ten years. In addition to these pioneers thereare plenty of organisations still using paper that are thinking about going electronic - and there areplenty of reasons for them to do so!Digital records can hold the full details of an individual’s medical history in a secure and easyto use interface, accessible everywhere by anybody (qualified), which ultimately helps to directdiagnostic and therapeutic decisions when a patient enters the healthcare system. New generationsystems provide decision support capabilities, which combine dynamic patient information (suchas diagnoses, allergies, current treatment, etc.) to static medical knowledge. These help cliniciansmake the right decisions on how to treat certain conditions (such as pregnant women with epilepsy,diabetics with a raised risk of lactic acidosis, acutely sick children with genetic predispositions, etc.).In addition to this, these new generation systems may automate some processes such as referralqualification, laboratory scheduling and other pre-diagnostic studies and so on. These functionsimprove the quality of care delivery, free up time for clinicians to see more patients, and directlycontribute to improved patient safety.
6 Even greater benefits will be realised when patients are supported and encouraged to take better care of themselves using eServices. Patients can see their information, add information they measure (or have automatically measured for them), and even consult their doctors online. A good example of this is type 1 diabetes; most type 1 diabetics control their insulin dosages by themselves, and have an immense level of knowledge of their disease. With the help of IT similar levels of expertise can be supported for other chronic conditions. The benefits that IT offers in helping both healthcare professionals and patients would justify its use in itself, but there is a third category of consequences which may revolutionise healthcare as we know it now. When all information is in electronic form, when we can - as we now do - combine patient history into genomic data it will bring options no one could even imagine earlier. We can research how diseases develop, analyse causalities between risks and results, evaluate how medications work in real life, who benefits and who does not. All this leads into better understanding of how diseases are developed, how they can be fought, and how medicine can be personalised. When it comes to the healthcare industry, Logica really has its finger on the pulse. We understand healthcare and its processes. We work locally across Europe and know the landscape and recent trends intimately. We are happy to share this knowledge with you in this study and welcome your thoughts and ideas in future discussions.
7Overall European EMR marketThere is a well-defined demand for new EMR systems in many European countries. Many providers invarious countries are stuck with old legacy systems, and users generally are not very happy with theircurrent EMR systems. Many people interviewed expressed a need for new, well-functioning solutions.Most EMR systems used in Europe now are local design or from neighboring countries. CurrentR&D efforts for large EMR systems are being mainly conducted in the US. Europe is lacking a pan-European player. However, due to the differences in how healthcare is financed and provided inEurope compared to the US there are many reasons to believe that strong localisation is needed byintegrators who have an intimate knowledge of European healthcare organisations, legislation andprocesses.The overall market for Clinical Information Systems (CIS) and Electric Medical Records (EMR) inEurope is estimated to be €2.9 to €3.4 billion (not covering hardware). The largest markets are in UK,Germany and France, followed by Netherlands, Italy and Spain. This estimate is based on macro-leveldata on total healthcare spend and IT expenditure. Lower bound Upper bound50004000300020001000 0 Denmark Finland France Portugal Sweden Netherlands United Kingdom Czech Republic Estonia Germany Norway Poland Slovakia Spain Switzerland Austria Belgium Bulgaria Cyprus Greece Hungary Iceland Ireland Italy Latvia Lithuania Luxembourg Romania SloveniaFigure 3. Estimated EMR market in European countries (in million euros)There is a large variation in adoption and penetration rates of clinical information systems. In generalNordic countries have the highest penetration rates, while Eastern Europe is more undeveloped.Market growth differs, with highest growth in unsaturated markets (where EMR/CIS penetration hasnot reached 100%). In saturated markets, growth results from upgraded functionality and upgradedusability in the form of new-generation systems.
8 Key trends Market maturity The wide disparity in sophistication of healthcare IT across markets in Europe has resulted in a number of problems for healthcare providers. Systems are in desperate need of modernisation to overcome the challenges that have arisen over the years - disparate mix of software systems that struggle to share information, infrastructure that hinders rather than helps expansion or growth, and software that is not optimally aligned with clinical workflows. The market is growing fastest in unsaturated markets where not everyone uses EMR/CIS systems. Some markets have a number of competitors while others have only one or few national providers. States of infrastructure Although Europe has similarities in the way healthcare is evolving and developing, there are differences among almost every country’s organisational structures, along with the way their healthcare is financed and provision of services administered. There is also wide variance and disparity in levels of adoption of advanced IT solutions that have the potential to improve clinical processes. Legislation The impact of regulations on the healthcare IT markets in Europe makes it complicated to ensure a holistic approach to the technology. The market will be driven by governments’ financial incentives and regulations requiring automation in healthcare practices. The market growth is also expected to be driven by increasing need for hospitals to attain cost efficiencies and growing evidence of use of IT in healthcare practices. Buying patterns Investment in healthcare IT purchases is shifting towards a more coordinated, joint model where hospital chains within a region or doctors’ associations identify a set of ‘preferred suppliers’. In some countries hospitals are relatively independent whereas in others decisions are made at the level of the nation or region. The future might see the private provider hospital market, which is currently not very large in most European countries, but is growing. Over the past ten years there has also been a strong move towards closing down unprofitable and unnecessary hospitals and shifting the focus on improving the profitability of existing hospitals.
9FundingIn most European countries, public bodies still provide the biggest part of funding. However, theindividual hospital structures differ greatly across Europe. It’s interesting that the number and sizeof buyers of IT depends not necessarily on the size of the country, but rather the structure of thehealthcare system.Common standardsIn an ever-evolving technology landscape, it is key to set proper standards to define the rulesof engagement between systems - for example, how medical information should be storedand communicated in the network. As these standards are defined, the benefits are becomingincreasingly tangible. One dramatic benefit which is of fundamental importance to integratedhealthcare networks is the ability to scale IT across facilities. There is a slow but consistent move todevelop common standards for healthcare services across Europe. Although many countries havetried to design frameworks, there are no functioning examples.Medical innovationWestern Europe is already moving towards fourth generation EMRs (according to Gartner) andadoption of advanced technological tools and capabilities are accelerating. In the Baltic countrieshowever, the overall infrastructure is still being set up with very low penetration rates. All Swisshospitals have EMR in place, but less than 50% physicians actually use them, both within the publicand private sectors. Latvia has quite a different problem. They have not been able to attract foreignplayers cost-effectively.Language barriersDisparate languages have retarded companies’ efforts towards uniform systems adoption.Overcoming the language barrier has often been a challenge in international healthcareengagement strategies. So it is that countries that speak English see the most entrants from theUS; German and French speaking countries share competitors, and competitors in Spain restrictthemselves to Latin America and Mexico rather than compete in Europe. Other countries havespecialised local players.
10 EU country studies Finland In Finland, the organisation and financing of healthcare services - hospitals, primary and outpatient care - is mainly a public responsibility (75%). Healthcare expenditure in 2011 amounted to €14.8 billion. Of this 2.6% was spent on IT. Electronic Patient Records (EPR) are used virtually in every health care provider. The current EMR/CIS market size of €70-90 million is estimated to grow at an annual rate of 4-6%. Compared to the other Nordic countries the Finnish system is more decentralised. There are 21 hospital districts in the country. District level hospitals are responsible for making decisions. The 320 municipalities are responsible for arranging and taking financial responsibility for primary healthcare services. Strong local players Most of the EMR market is in the hands of Logica and Tieto. In addition there are some small domestic companies. US based system integrators have practically no role in the health IT in Finland. Ready to upgrade In the capital area of Helsinki, a new hospital district (HUS) was formed in 2000 in order to improve efficiency and eliminate overlapping of services by merging two former districts in the capital area (Helsinki and Uusimaa) as well as the Helsinki University Hospital. After using developed but independent EMR systems for years HUS region (HUS and municipalities) are looking for next generation, regional EMR. Together those providers have over 5 million outpatient visits and over 5000 beds. Most of the IT systems used now are second generation and based on paper processes. The potential for new and upgraded IT systems is high. After long history of using EMRs these organisations know the benefits that IT can provide and what is required other than IT. Denmark Healthcare in Denmark costs almost €25 billion a year. The National Health IT organisation (National Sundheds-it, NSI) is responsible for country-level initiatives and setting national standards. Denmark has a common infrastructure in the form of the National Patient Registry, which contains long-term comprehensive documentation of its 5.5 million inhabitants. It collects personal data from all hospital in-patients and Common Medicine Card (which has information on medicine purchases over the past two years and up to date drug prescriptions). Information is handled in accordance with the current legislative framework, and EPRs have to be stored for at least ten years. The 51 public hospitals belong to five regional “networks”. The regions have their own health IT organisations (Regionernes Sundheds-it, RSI), whose primary purpose is to consolidate and coordinate supply of Health-IT systems. The Danish healthcare system is publicly funded. IT investments are funded mostly from the general budget that is allocated to the regions, and by different development funds. Regions are in charge of managing their own projects and observing the framework and requirements laid down at the national level. They can decide use of the funds on IT. Private clinics choose their own systems. Consolidating healthcare The path is being paved for consolidating towards a more coherent national technical infrastructure. The whole healthcare system is under consolidation. At the primary care level 2,100 clinics with 3,400 GPs are being consolidated. IT applications in the field of health are already deeply rooted at a local or regional level and mature systems are in place not only for communication between health professionals, but also for patient access and data management.
11Yet there is disparity in sophistication of healthcare IT systems, with some public hospitals still stuckat first generation EMR not integrated with Health Information System (HIS). Also, over 2,000 Danishdoctors have put their signatures on a protest being unhappy with IT systems that don’t function wellenough. There will be new development on the National Patient Index (NPI), Denmark’s approachto the creation of a patient summary and the answer to the problem of inadequate access andoverview of patient data. Capital region of Copenhagen is also looking for a modern EMR system toreplace its current one.There are virtually only five large buyers and a few small private hospitals in the market for CIS. Theten players catering to the GP market were all originally domestic or offered domestic solutions.International firms have acquired some of these, and are also predominant in niche markets likelaboratory systems, PACS, medication and booking. The tough competition in the EMR marketdoes not leave much room for multiple players. However, opportunities arise when regions that arerunning old systems want to upgrade.SwedenHealthcare delivery and finance in Sweden is mainly a public responsibility. The percentage of privateproviders at both hospital and primary care levels is small. The Swedish market, while comparativelysmall, exhibits sophisticated use of EMR. Healthcare spend was €28 billion in 2010.As Sweden mainly has a decentralised healthcare system, the basic responsibility for financing andorganisation of health services rests with the counties. The Swedish government is not at all involvedin the market, and counties pay for their own CIS solutions. The national eHealth programme is alsomostly financed by the counties. The government supports national eHealth programme with smallbudget allocation, but does not cover adoption of solutions.Swedish residents have direct access to their own medical records, but today the information ismanually searched and put together. The carer owns patient records. Patients must give their fullconsent before healthcare professionals can access their data.There will be no large changes in the near future. Progress is expected on the regionalisation ofcounties, resulting in six to nine regions instead of 21 counties today.Moving towards modernisingNational eHealth projects are ongoing and solutions will be implemented in the next couple ofyears. One example is implementation of the national patient summary. CIS systems will have tobe integrated and share information with national care services and quality registers. There are70 quality registers for various purposes. The government recently allocated 1.5 billion SEK tomodernise, consolidate and improve these registers.Currently all of Sweden’s EMR solutions are locally developed systems, which most organisations andusers feel unhappy about. There is growing need for investments in next generation IT.NetherlandsHealthcare in the Netherlands costs €63 billion a year. Unlike Northern Europe and some othernations, the Netherlands has a private health care system for its 16.6 million inhabitants. Themajority of hospitals in the Netherlands are private and non-profit.Dutch hospitals are organised into academic and non-academic. The latter buy modules for eachdepartment that their IT department then integrate. This is not an efficient or cost effective model.
12 Most family physicians and other primary care professionals work in small groups. Today, almost 97% of Dutch GPs use an EMR system - a utilisation rate similar to those being achieved in Nordic countries. Dutch GPs can choose among seven suppliers offering clinical information systems. In practice, they are organised within regions, and EMR choices are made as a group rather than by individuals. The government has put a law in place mandating the use of electronic patient records, but is not directly involved in CIS. Organisations choose and pay for CIS systems themselves. There is a national network in the Netherlands covering 50% of the pharmacists and GPs. This results from a national EHR programme, which fell through because public financing was no longer available. Shifting to a new way Hospital budget based finance will give way to result-based financing. There is also a move towards more additional private insurances on top of the obligatory national insurance with basic care. There is a perceptible trend where IT spend is moving to a strategic level where IT enables healthcare processes instead of just supporting them. Empowering patients The degree of automation of national registration bodies is low. Patient data is not stored at a central point. All medical data is to remain in local repositories under responsibility of individual hospitals, but Dutch patients have the right to inspect their EHR and ask for copies. In a new law that is still not binding, healthcare providers are obliged to inform patients. Images are sometimes stored in a private cloud. Aggregated data for inspection is required by hand and collected by inspection systems. Only healthcare professionals who are directly involved in treatment are allowed to share patient data without consent. For most other purposes, informed consent is needed. Patient empowerment will change the position of the information chain and the importance of information delivery, and thus IT. It is anticipated that a more modular approach – possibly from the bed of the patient, or by the drive of mobile devices – will force infrastructures to open up to these new applications. United Kingdom Most healthcare in England is provided by the National Health Service (NHS), England’s publicly funded healthcare system, which accounts for most of the Department of Health’s budget (€120 billion). The national programme for IT (NPfIT) is currently focused on providing a set of national services like a national summary patient record, access control record (authorisation and identification of healthcare professionals), booking programme for GP’s appointments, national HR and payroll services for NHS and financial and payment systems. The UK is organised into 172 acute trusts, of which 82 are foundation trusts that enjoy more independence. There are 60 mental health trusts and 147 primary care trusts. There is a wide
13disparity in systems within the trusts. There are large segments of legacy systems, some haveadvanced systems, and only a few systems for mental health trusts. Primary healthcare serviceschoose systems from a standardised supplier list (GPSOC). New entrants will face tough competitionin the mature GP market. In the UK, legislation protects the privacy of patient information, allowingonly clinicians with a relationship to see the data. Data cannot leave the shores.Wales and Scotland are attempting to centralise framework purchases of key systems like operatingtheatres, radiology and EPR. In England the attempt to do this failed, leaving the responsibility of CISpurchases to trusts. The future will see efforts to consolidate regionally, for example in pathologysystems.Changing fund systemIT investments are funded by the trusts, who need to persuade payers to provide money forinvestments. Foundation trusts have more independence and can collect savings and increaserevenues by increasing demand.The funding system is changing. Money, other than capital spending, will be managed by GPs whocan contract trusts.Keeping an eye on costsThere is a move to reduce costs by limiting treatment options and referring patients to social care.The acute sector will try and attract private patients. In the CIS markets, there will be large reductionsin national level initiatives, which may leave more money for IT investments in trusts. Hospital IT inthe UK has large chunks of legacy systems that need immediate attention or tactical changes. Manytrusts are running outdated systems. This offers a window of opportunity to potential entrants.However it is expected that local IT spend will continue to feel the pressure to reduce costs, and isunlikely to exceed 2.5% of revenue spend. In the same vein, major enterprise HIS initiatives will belimited by cost. Providers will also need to consider the British scepticism to examples from othercountries, risk aversion and inclination to build on old systems than change completely to new ones.
14 Portugal In Portugal, like the United Kingdom, there is both a public and private healthcare system. The public sector dominates service provision in the hospital sector in Portugal. Approximately 85.7% of beds belong to the public sector, the remainder are provided by private hospitals. Primary care is provided wholly by private practitioners. As part of the government’s intention to modernise and revitalise the health services it is studying the feasibility of implementing a national Electronic Health Record (EHR) system. This will have a combined portal for professionals and patients, giving them secure and smooth access to health information. There is also a move towards national databases for surgical procedures and vaccinations. An EPR is being developed for the whole primary care network. This will take care of the poor adoption of CIS by the 345 social healthcare centres and 1,180 social healthcare centres’ extensions that comprise the primary healthcare services. Portuguese law is strict on the privacy of patient information, and prohibits patients from accessing their records. There is virtually no electronic transfer of records among hospitals, but healthcare professionals have almost unlimited access to records of patients being treated in their hospital. Watching costs The government does not interfere in the market and does not sponsor programmes to support the adoption of CISs. Public hospitals receive a percentage upon production of expenditure intended to promote renewal/investment. In reality most of this finance goes to cover current expenses. Overall, budgets are being cut and efficiency and waste reduction is called for. The expectations are that investments must demonstrate proof of high returns. Most hospitals have EMR systems (some of which are very sophisticated) and are active in introducing new features. Portugal is undergoing major reforms at the moment. 25-30 hospital groups are integrating to have a unified EMR software per group. The poor adoption in the primary care network is expected to turn around with the upcoming implementation of a national EMR software. The near future sees a possibility of new entrants from Spain. Meanwhile, system development/upgrades will be delayed by financial constraints and the shortage of public funding may impede all IT investments. Acquisition is the easiest entry into this tough market. In order to compete it is important to offer visually attractive user interfaces and innovation (for example, develop mobile applications). Gaining the confidence of the hospital boards is an uphill task because doctors tend to trust the systems they have used themselves. France The French healthcare system features a mix of public and private services. With a contribution of 80% the State is the main payor in the national health system. About 68% of hospital beds in France are provided by public hospitals. Both public and private hospitals make their own buying decisions. Primary care is wholly taken care of by private services, who make their own independent decisions on purchases. Room for change France spends 1.7% of their total healthcare expenditure of €218 billion on IT. Although 80% hospitals and about 68% primary healthcare services have EMR systems, there is room for EMR/ CIS adoption, which is expected to rise by 5-6% annually (from its current market size of €700-800 million).
15ConclusionHealth is on everyone’s mind and healthcare is big news. In most European economies healthcareis among the biggest industry sectors and offers new opportunities for growth for businesses andeconomies in general. However, healthcare is not just about business, it’s about health - and health iswhat we all care for. Due to the retiring of baby boomers there is a rising need for healthcare services,while its workforce is declining. If the healthcare providers cannot change the way they provideservices, we won’t have enough of care. Fortunately there is a huge potential in IT enabling new,citizen-centric, high-quality and more effective processes. Let’s do IT!Currently, for various reasons such as language barriers or differences in healthcare systems, theEMR business is ruled by local players in most European countries. Most of the systems are old, firstto second generation products, which lack new intellectual features and support for patient-centriccare. It is most probable that in future international systems and providers will take a major share ofmarkets in healthcare IT just as they already lead business in ERP systems and most other IT.Logica has its finger on the pulse of the current healthcare industry, just as we’ve always had over allthese years. We know and understand the European healthcare market and we know what moderntechnology offers. We can be your trusted partner who will utilise smart ideas and technology todeliver real benefit to you.