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How healthcare mergers and acquisitions affect EHR interoperability

How healthcare mergers and acquisitions affect EHR interoperability

The healthcare industry is undergoing a wave of consolidation, with mergers and acquisitions (M&A) driving expansion for health systems, hospitals, and integrated delivery networks (IDNs). While these transactions offer potential benefits such as increased market power, they also present a unique challenge: EHR interoperability. As hospitals merge or get acquired, combining two different EHR systems can be a complicated process. Here are some takeaways on how to approach M&A to achieve EHR interoperability.

Benefits of EHR interoperability

Interoperability is the ability of different health information systems, applications, and devices to exchange, interpret, and use data securely. It ensures that patient health information can be accessed and shared across disparate systems, regardless of the vendor or platform. Achieving interoperability is crucial for several reasons:

  • Care continuity: Seamless data exchange facilitates continuity in patient care and care coordination, allowing healthcare providers to access medical records regardless of where the patient received treatment.
  • Efficiency: Interoperable EHR systems can streamline administrative processes, reduce duplication of efforts, and minimize errors, ultimately enhancing operational efficiency.
  • Patient safety: Access to complete and accurate patient information can support clinical decision-making, reducing the likelihood of medical errors and improving patient safety.

What are some challenges to EHR interoperability and standardization?

EHR interoperability, essential for coordinated healthcare delivery, faces several challenges, from lack of standardization to high costs. Below are some of these challenges:

  • Standardization: The absence of a universally adopted data language makes it challenging for different EHR systems to "speak the same language" and understand each other's data.
  • Vendor fragmentation: The diverse vendor landscape, with numerous proprietary solutions, creates compatibility issues between systems from different vendors, making seamless data exchange across the healthcare ecosystem difficult.
  • ]Data security and privacy: Sharing sensitive patient data across systems raises concerns about potential data breaches and unauthorized access. Healthcare organizations must navigate regulations like HIPAA carefully to ensure patient data confidentiality and security throughout the data exchange process.
  • Financial burden: Implementing interoperable EHR systems requires significant financial investment in technology, infrastructure, and ongoing support. This can pose a challenge for smaller healthcare organizations with limited resources.
  • Legacy systems: Some healthcare facilities still rely on outdated EHR systems not designed with interoperability in mind. Integrating these legacy systems with modern platforms can be complex, time-consuming, and expensive.
  • Workflow disruption: Integrating disparate systems can disrupt established workflows for healthcare staff. New interfaces and processes might require additional training, potentially leading to resistance and impacting efficiency in the short term.
  • Patient record matching: Inconsistent data entry, variations in patient demographics, and duplicate records can all complicate efforts to link patient information accurately.

The impact of mergers and acquisitions on EHR interoperability

While mergers and acquisitions can offer numerous benefits, they also introduce complexities that can impede EHR interoperability. Here's how:

System integration challenges

Healthcare organizations often operate on different EHR platforms, leading to the need for system integration. However, integrating disparate EHR systems can be a daunting task, demanding substantial time, money, and resources. Accurately migrating vast amounts of patient data from one system to another requires careful planning and thorough testing to ensure data integrity, and costs can total hundreds of millions of dollars and continue with each upgrade. Mismatched data formats, coding standards, and data governance policies further exacerbate the challenge.

Vendor consolidation

M&A activity within the healthcare technology sector can result in vendor consolidation. A study by the American Hospital Association found that 35% of acquired hospitals switched to the dominant vendor of their acquiring system after a merger, suggesting that hospital consolidation may be contributing to EHR vendor consolidation. While consolidation can lead to efficiencies, it may also limit choices for healthcare organizations, potentially restricting options and increasing dependence on a single vendor.

Regulatory compliance

The healthcare industry is subject to regulatory requirements concerning data privacy, security, and interoperability. M&As can complicate compliance efforts, as organizations must navigate varying regulatory frameworks and ensure alignment with standards such as HIPAA. New vulnerabilities may emerge following a merger, necessitating investments in robust security solutions and ongoing vigilance to ensure patient data protection. Failure to comply with these regulations can result in penalties and reputational damage.

Strategies for enhancing EHR interoperability

Despite the challenges posed by mergers and acquisitions, healthcare organizations can take proactive steps to promote EHR interoperability. Here’s how:

Prioritize interoperability in M&A strategy

From the outset, organizations should prioritize interoperability in their M&A strategy. Involving IT leaders from the beginning of the M&A process empowers them to identify potential issues early, paving the way for smoother integration. Conducting thorough due diligence, assessing the compatibility of existing systems, and developing a clear roadmap for integration can help mitigate challenges down the line.

Invest in the right infrastructure

Disparate EHR systems often struggle to share patient data. Investing in technology infrastructure like interoperability platforms and APIs can help bridge this gap. Interoperability platforms serve as a centralized hub where data from various sources can be seamlessly exchanged, ensuring that patient information flows smoothly across different settings. APIs also play a crucial role in supporting this data exchange by providing a standardized interface for communication between different software applications. Moreover, leveraging cloud-based solutions allows healthcare providers to access information securely from anywhere, anytime. Overall, strategic investments in technology infrastructure can enhance interoperability.

Tap into experts to guide technology integration

Collaboration is also key when it comes to integrating disparate technologies. Partnering with an IT advisor who understands the unique challenges of this process can make all the difference. Their expertise goes beyond general IT, encompassing a deep understanding of healthcare M&A complexities, like integrating thousands of clinical endpoints. This specialized partner can also help organizations scale their systems to handle the increased data flow and broader scale that come with mergers.

Learn more

As the industry continues to consolidate, and healthcare mergers and acquisitions become more common, hospitals and health systems will have to consider whether they have competing or cooperative technology vendors. This will become even more prevalent as tools like telehealth become more commonplace at hospitals and other care facilities.

Want to keep track of mergers and acquisitions, technology installations, and the EHR vendor landscape? Start a free trial to see how Definitive Healthcare can help you:

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Nicole Witowski

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Nicole Witowski

Nicole Witowski is a Senior Content Writer at Definitive Healthcare. She brings more than 10 years of experience writing about the healthcare industry. Her work has been…

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