US healthcare reform: An opportunity for digitization
In 2008, healthcare spend in the United States was estimated at $3.2 trillion, higher than the spend in “Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia combined.” In response, the Obama administration launched a healthcare reform with two main goals: Increase access to and quality of care, and reduce healthcare cost. One component of the reform was improving information-sharing across providers. This is where Electronic Health Records (EHRs)– a digitized version of a patient’s paper chart – came into play. The government invested $40 Billion in IT and provided financial incentives as well as penalized for failing to move to electronic records by 2016 (see Exhibit 1 for roll-out volumes).
Exhibit 1: EHR adoption rates 
However, EHRs required new IT platforms, which is where Allscripts saw its opportunity. Prior to 2007, Allscripts provided practice management tools to healthcare providers. When the government mandated EHRs, Allscripts made a strategic move into the digital space to support providers in a timely implementation of the government mandate. Since then, Allscripts has become a major player in the digital world of healthcare, providing an entire suite of digital services (e.g., EHRs, financial management), ranking amongst the top providers of EHR software and engaging 7.2 million patients on their EHR platform.
The situation outlined above presents a unique example of the dynamics of digitization at play: The government mandated providers to move to EHRs as part of the healthcare reform. Yet, providers lacked the necessary IT infrastructure to do so. This created an opportunity for private companies in the field to focus on EHR platforms, and thus partner with healthcare providers in this process of digitization.
At this point, it is worth examining how the digitization of health records adds value across the healthcare value chain:
- Increased transparency across points of care by allowing doctors insight into previous tests and diagnostics findings
- Reduced cost due to less duplication of diagnostics, effective prescription of drugs (especially generics) and tailored treatment. These savings are significant: One study estimates that a Canadian hospital generated approximately $100,000 savings per hospital bed annually due to improved efficiency in care after adopting EHRs3, and US-wide savings across providers may amount to as much as $40 billion annually 
- Improved operations by linking EHRs to other digital systems such as bed-management and equipment scheduling software 
- Higher quality of care as providers can better communicate across points of care and and tailor treatment accordingly
- Increased insight into personal health history for patients through access to EHRs 
This may sound like a win-win situation…yet, challenges are looming:
- Implementation is costly: Providers require costly IT infrastructure as well as staff training to ensure proper use of EHRs. Furthermore, government subsidies and incentives leave a significant cost to the provider (Exhibit 2).
- Proper use of EHRs is time consuming: Nurses and doctors are spending a significant amount of time each day filling out EHRs, instead of spending time with patients, leading to increased frustration and less complete data entry 
- Lack of standardization: In 2014, the New York Times reported that only “14 percent of physicians can exchange patient data with outside hospitals and providers” This defeats the purpose of EHRs, and must be addresses in order to achieve intended goals of digitized health records.
Allscripts to the rescue: How can Allscripts –in its market leader position –improve the experience?
- Standardization across platforms is key to improve ease of use and effectiveness of EHRs. Allscripts should collaborate with other EHR providers to increase the degree of standardization across IT platforms.
- Sharing rates remain low, even for providers with the same EHR system. Allscripts services a wide network of healthcare providers, and could thus play a more active role in encouraging the sharing and active use of EHRs across points of care.
- Administrative burden is time consuming and frustrating: Allscripts could find ways to alleviate the administrative burden placed on providers. This could be done by providing dedicated support staff to help record patient conditions into the EHRs and to free up time of nurses and doctors.
US healthcare- A long road to more efficiency
The healthcare industry is faced with significant challenges and is undergoing major transformation. Technology and digitization will play a critical role in improving efficiencies. EHRs are one example of technology impacting healthcare, and it remains to be seen how the industry will leverage technology to transform over the next few years.
Exhibit 2: Implementation cost of EHRs 
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 Website: http://obamacarefacts.com/healthcare-facts/
 “The US Stimulus Program is Taking Medical Records Online”, McKinsey Quarterly, July 2009. McKinsey& Company.
 “Reforming hospitals with IT investments”. Laflamme, F., Pietraszek, W., Rajadhyax, N.McKinsey and Company.
 Website source: http://www.healthit.gov/buzz-blog/electronic-health-and-medical-records/emr-vs-ehr-difference/
 “Doctors Find Barriers to Sharing Digital Medical Records”, Creswell, J., New York Times, 09/30/2014
 Website source: http://dashboard.healthit.gov/evaluations/data-briefs/non-federal-acute-care-hospital-ehr-adoption-2008-2015.php