A Digital Shift on Health Data Swells Profits in an Industry

It was a tantalizing pitch: come get a piece of a $19 billion government “giveaway.” The approach came in 2009, in a presentation to doctors by Allscripts Healthcare Solutions of Chicago, a well-connected player in the lucrative business of digital medical records. That February, after years of behind-the-scenes lobbying by Allscripts and others, legislation to promote the use of electronic records was signed into law as part of President Obama’s economic stimulus bill. The rewards, Allscripts suggested, were at hand.

But today, as doctors and hospitals struggle to make new records systems work, the clear winners are big companies like Allscripts that lobbied for that legislation and pushed aside smaller competitors. While proponents say new record-keeping technologies will one day reduce costs and improve care, profits and sales are soaring now across the records industry...Current and former industry executives say that big digital records companies like Cerner, Allscripts and Epic Systems of Verona, Wis., have reaped enormous rewards because of the legislation they pushed for.

But these systems also have many critics, who contend that they can be difficult to use, cannot share patient information with other systems and are sometimes adding hours to the time physicians spend documenting patient care. “On a really good day, you might be able to call the system mediocre, but most of the time, it’s lousy,” said Michael Callaham, the chairman of the department of emergency medicine at the University of California, San Francisco Medical Center, which eight months ago turned on its $160 million digital records system from Epic...