The U.S. ambulatory EHR market is expected to grow by 30 percent over the next five years, according to analysis from Frost & Sullivan.

The hospital EHR market is mature, according to the firm, but the ambulatory market faces challenges such as poor interoperability standards, frequent EHR audits, low productivity and high implementation costs.

This may lead to the introduction of new EHR functionalities including:

• Automating data entry
• Enabling risk stratification
• Coordinating care
• Engaging patients 
• Benchmarking clinical performances throughout the care ecosystem

Overall, EHRs are expected to emerge as a U.S. population health management enabler by 2020.

“Revenue growth will peak during 2019 to 2020 as more ambulatory practices are expected to embrace more expensive, integrated EHRs,” said Frost & Sullivan Transformational Health Senior Research Analyst Koustav Chatterjee. “With healthcare providers’ desire to benchmark outcomes at a network, practice and patient level, their need for integrated EHRs will only grow.”

Payer consolidation will address the high degree of fragmentation among customers and ambulatory EHR vendors, according to the report. Large-size ambulatory practices are expected to continue to acquire smaller practices or collaborate with accountable care organizations to maintain operating margins and enhance market share, in turn increasing their ability to invest in EHRs.

“Vendors are focusing on software as a service (SaaS) based EHRs due to increasing cost pressures as well as the low productivity and return on investment efficiency of on-premise solutions,” noted Chatterjee. “Not only are cloud EHRs less expensive than on-premise solutions, they are also easily implemented, interoperable, auto-scalable, remotely accessible and compatible with disparate healthcare systems.”

Market leaders in this market will include disruptive, provider-oriented, specialty-specific, cost-competitive technology companies capable of balances these risks and rewards. And, those healthcare providers that optimally leverage patient data and work seamlessly with other care providers to manage population health will be leaders.

Read the complete report.