Annual Report

This historical report
of the U.S. Hospital

IT Market is brought
to you as an online
resource from the
Dorenfest Institute.
AN INDUSTRY REPORT PROVIDED BY
and
Data from HIMSS Analytics™ Database 2006 (derived from the Dorenfest IHDS+ Database™)
Table of Contents
A Letter from the CEOs of HIMSS Analytics and HIMSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2006 Hospital IT Industry Overview and Preview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2006 Hospital IT Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Financial Decision Support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Revenue Cycle Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Health Information Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nursing IT Applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Ancillary Department Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Operating Room (Surgery) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Ambulatory (Hospital Owned) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Radiology PACS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Cardiology PACS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Bar Code Technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Electronic Medical Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
The EMR (SEHR) Adoption Model Measuring Clinical IT Transformation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
This historical report of the U.S. Hospital IT Market is brought to you as an online resource from the Dorenfest Institute.
Managed by the HIMSS Foundation, the Dorenfest Institute provides a variety of detailed historical data, reports, and
white papers about information technology (IT) use in hospitals and integrated healthcare delivery networks at no
charge to universities, students under university license, U.S. governments (local, state and federal), and governments
of other countries that will be using the data for research purposes.
The Dorenfest Institute was formed in January 2005 to further the interest in and benefits associated with ongoing
research in health IT. This followed a generous donation of his company and its historical data assets to HIMSS
Foundation by Sheldon I. Dorenfest to further the interest in and benefits associated with ongoing research in health IT.
Sheldon I. Dorenfest is President/CEO of the Dorenfest Group in Chicago. The Dorenfest Group is a leading consultant
and source of knowledge about the healthcare information technology industry.
©2007 by HIMSS Analytics™ LLC and the Healthcare Information and Management Systems Society (HIMSS).
All rights reserved. No part of this publication may be reproduced, adapted, translated, stored in a retrieval system, or transmitted in any form
or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.
䊳 A Letter from the CEOs of HIMSS Analytics and HIMSS
Dear Healthcare Organization Executive:

We thought 2005 was a tumultuous year for the healthcare IT industry. It paled in comparison to 2006. Not only was there continued
consolidation in the healthcare IT vendor and consulting marketplace, and many more healthcare organizations experienced the
“challenges” of implementing electronic medical record systems, but there was much more publicity around healthcare IT from federal
initiatives to standardize and certify applications, regional healthcare information initiatives, and public discussion of the problems
with healthcare that could be at least partially solved with IT.
Welcome to the 2007 Annual Report of the U.S. Hospital IT Market, produced jointly by the Healthcare Information and Management
Systems Society (HIMSS) and HIMSS AnalyticsTM LLC, the wholly-owned market research arm of HIMSS.
As the healthcare IT industry’s professional society, HIMSS has a long history of providing knowledge, advocacy, leadership, and collabo-
ration and community affiliations to its members and the healthcare public at large. Consistent with that mission, we have provided the
industry with comprehensive information about healthcare IT—what’s real, what’s planned, and where the industry is headed.
This publication has been accomplished through the efforts of HIMSS Analytics, a full service resource for data services, analysis,
market research and consultation on IT-related subjects. HIMSS Analytics maintains the largest repository of HIT data in the U.S. to
provide both the vendor and provider community with data and analysis for more informed decision making.
This year’s report represents a significant expansion over the 2006 edition. Information has been gathered from 4,236 American
hospitals on over 120 applications and technologies. This year we have added categories on single sign-on and orthopedic PACS
to further extend our evaluation of financial and clinical application environments and technologies in U.S. hospitals.
We hope you find this document to be a valuable guide to help you understand the healthcare IT market, the penetration of IT
applications, and where the various sectors of applications are moving in today’s healthcare provider environment in the U.S.
Best regards
David E. Garets H. Stephen Lieber

President and CEO President and CEO
HIMSS Analytics LLC HIMSS
Source: HIMSS Analytics™ Database 2006 (derived from the Dorenfest IHDS+ Database™) ©2007 HIMSS Analytics 1
䊳 2006 Hospital IT Industry Overview and Preview
If we were to suggest a recent movie title to represent the hospital Hospital IT budgets are improving for the smaller hospital facilities
IT market it 2006 it would be “A Good Year.” Advances are being (200 beds and below), an indication that small hospitals are
made on several fronts: investing to catch up with the medium- and large-sized hospitals.
• The government is involved and focused on improving health- Integrated delivery systems have also increased their IT budgets
care delivery by promoting electronic health records. over the last year, and this may be an indication that these facilities
• Approaching HIPAA Claims Attachment, severity adjusted are spending to standardize their IT environments. We believe
DRG, and ICD-10-CM-CM regulations will increase electronic the year over year decline in IT budgets for academic/teaching
transactions and provide more accurate coding to manage and medical centers, medical/surgical, urban, and hospitals over
analyze healthcare delivery services. 200 beds reflects a current implementation focus for many of
• The government has relaxed the Stark Laws to promote hospital these hospitals that have purchased major applications for revenue
funding and support of ambulatory EMR/EHR applications. cycle management, the EMR/EHR, and supply chain manage-
• Emerging pay-for-performance/quality outcomes reimbursement ment in 2004 and 2005. Hospital budgets for healthcare IT are
schemes are driving hospitals to focus on delivery processes still woefully inadequate for most organizations in our opinion.
and the data that is generated from those processes.
A market storm is brewing for revenue cycle management (RCM).
• Forward thinking states are creating innovative approaches
Impending HIPAA claims attachment, severity adjusted DRG,
for funding healthcare for all of their citizens, and some are
and ICD-10-CM coding regulations will disrupt this market.
funding and advancing regional health information organiza-
These changes could be especially dramatic since many of the
tions (RHIOs) to improve the sharing of patient healthcare
revenue cycle management applications (e.g., patient billing,
information among all healthcare stakeholders.
encoding, ADT/registration) are legacy applications based on
• Leading Fortune 500 U.S. companies, payers, and influential
monolithic architectures that will not easily accommodate the
consumer advocacy groups are creating personal health record
modifications necessary to address these new demands. Vendors
environments for their employees and members.
with effective next generation RCM applications stand to gain
• Large retail companies are challenging the staid healthcare
significant market share over the next five years, at the expense
delivery model with new models that may provide improved
of current market leaders with predominately legacy applications.
patient access and less costly care delivery.
• Hospitals are advancing with their implementation of EMR/ Integration of financial and clinical systems, while challenging,
EHR applications – moving from foundation infrastructures to becomes a necessity. The HIPAA claims attachment regulations
more sophisticated clinician applications for orders, charting, and the emerging pay-for-performance/outcomes based reimburse-
clinical decision support, and bar coding technologies to elim- ment models provide significant demands for integrating the data
inate medical and medication errors. from financial and clinical applications within hospitals. The lack
• A certification agency (Certification Commission for Healthcare of interoperability standards provides the challenge for integrating
Information Technology – CCHIT) is emerging that verifies the the data from these application suites, but progress is being made
capabilities of EMR/EHR applications – providing a level of and demonstrated by organizations such as Integrated Healthcare
protection to providers which are needed for expensive EMR/ Enterprise. Failure to effectively plan and execute this data
EHR applications. integration could be devastating to a hospital’s viability.
• Vendor healthcare IT applications continue to mature and Consumerism is impacting healthcare IT to a much greater degree.
stabilize which is reducing the risk aversion for purchasing Patient friendly billing and pricing transparency initiatives are
new generation solutions among hospital executives. providing an insight into a world in which most hospitals are ill
prepared to participate. Hospitals must create strategic plans on
And, while it has been “A Good Year,” it has not been a great year. how to share their information with consumers in a fair, objective,
The industry still lacks appropriate funding to expedite the imple- and unbiased manner. What has been initiated by employers and
mentation of EMR/EHR applications for ambulatory environments the Leapfrog Group is just the tip of the iceberg. The shifting of
that lack the capital to acquire and install these much needed more healthcare costs by employers and payers to consumers will
applications. The government continues to cut funding for Medicare drive consumers to demand much better healthcare information
and Medicaid, and has not moved quickly enough to drive industry for them to make more informed healthcare decisions.
standards that are needed to foster “interoperability” between
healthcare IT applications. Kaiser’s struggle with implementing a This is the third edition of the Annual Report of the U.S.
system-wide EMR/EHR supports the pessimists who claim the Hospital IT Market, and we hope you find it compelling,
costs of EMR/EHRs outweigh the benefits. Demonstrating ROI for stimulating, and informative.
the EMR/EHR remains elusive, but emerging pay-for-performance The HIMSS Analytics Research Team
reimbursement models and near future HIPAA claims attachment Mike Davis, Roger Park, Jennifer Horowitz,
regulations will begin to drive real ROI metrics for the EMR/EHR. Dave Garets, and Jack Price
2 Source: HIMSS Analytics™ Database 2006 (derived from the Dorenfest IHDS+ Database™) ©2007 HIMSS Analytics
䊳 2006 Hospital IT Budgets
The average IT operating expense as a percentage of total hospital The analysis of the region/function market segments shows an
operating expense ranges from 2.23 percent to 3.34 percent for increase in the IT operating expense to total hospital expense for
the market segmented by bed size (see Table HB1), and from rural, other (non medical surgical) and integrated delivery system
2.08 percent to 3.81 percent for the market segmented by regions (IDS) only. The rural increase can be associated with the increase
and functions (see Table HB2). The mean and median metrics for in hospitals with fewer than 200 beds, since the vast majority
average IT operating expense to total hospital operating expense of all rural facilities would fall into that category. We believe
for all hospitals in 2005 were 2.96 percent and 2.82 percent respec- the increase in IT operating expenses for the other category can
tively. These respective numbers for 2006 were 2.81 percent and be associated with spending by specialty hospitals that are more
2.98 percent. focused on meeting consumer demands – and thus are spending to
increase automation that improves service and quality. We believe
TA BLE HB1
the increased IT operating expense by the IDS market segment
2005 2006
Avg. IT Operating Avg. IT Operating can be attributed to projects that are designed to standardize the
Expense/Total Expense/Total IT application environments across the IDS organization entities.
Bed Size Segments Operating Expense N Operating Expense N
0–100 beds 2.31% 95 2.50% 60 We believe the decreases in the other regional/functional market
101–200 beds 2.78% 148 3.12% 71 segments are again driven by executive management directives
201–300 beds 2.70% 110 2.23% 59
to decrease the IT operating budgets. We also believe that these
301–400 beds 2.82% 71 2.46% 45
401–500 beds 3.42% 42 2.98% 21 executive management demands will become more rational once
501–600 beds 3.16% 23 3.01% 13 organizations begin to conduct effective IT operational bench-
600+ beds 3.49% 36 3.34% 23 marking against peer organizations.
TA BLE HB2 Market Drivers/Factors

2005 2006
Hospital IT operating budgets have been and will continue to be
Avg. IT Operating Avg. IT Operating
Region/Function Expense/Total Expense/Total impacted through 2009 by:
Segments Operating Expense N Operating Expense N
• Increased IT application sophistication – especially for clinical
Academic/Teaching 3.29% 56 2.87% 37
Non-Academic 2.74% 469 2.69% 255
applications that will require support by clinicians staffed by
General Med/Surg 2.76% 445 2.48% 214 the IT department
Others 3.00% 80 3.36% 78 • Increased security support requirements
Rural 1.78% 49 3.58% 25 • Increased system recover and business continuity support
Urban 2.91% 476 2.63% 267 functions
IDS 3.22% 234 3.81% 107
• Increased device support functions driven by supporting multiple
Independent Hospital 2.47% 291 2.08% 185
physician devices (e.g., handheld devices, PDAs, Blackberries,
An evaluation of the average percentage of IT expense to total pen tablets, etc.)
hospital operating expense by bed size market segment reveals • Supporting local and regional health information organizations
that the percentages are increasing in hospitals with fewer than • Supporting the implementation of applications or application
200 beds, but declining in larger hospitals.. We believe the upgrades that support new government regulations (HIPAA
decline in hospitals with more than 200 beds is being driven claims attachment, severity adjusted DRGs, ICD10 CM, etc.)
by the constant pressure from hospital executives to drive down • Supporting the expansion of IT services to clinics and
IT operating costs. We also believe this demand is an unrealistic ambulatory centers under the new Stark law exceptions and
expectation since implementing more sophisticated EMR capa- anti-kickback safe harbors.
bilities will require more IT staff to perform support functions
as more clinicians begin using these applications. We believe
the increase in the under 200 bed market segments is due to
increased implementations of EMR applications.
䊳 Financial Management
The financial management healthcare IT application market TA BLE F M1 | Financial Management
is a saturated market with very slight growth in the enterprise 2004 2005 2006
resource planning application that is probably being realized at Accounts Payable 96.26% 96.01% 94.11%
the expense of replacing legacy general ledger, accounts payable Enterprise Resource Planning 14.70% 18.60% 20.03%
General Ledger 95.55% 95.64% 94.08%
and materials management applications (see Table FM1).
Materials Management 93.96% 91.34% 89.53%
The majority of purchasing plans for this market in 2006 indicate N=3,210
first time purchases for enterprise resource planning (ERP) systems,
TA BLE F M2 | Financial Management Purchasing Plans 2006
but replacement purchases for the legacy applications of accounts
% of hospitals % of hospitals
payable, general ledger, and materials management (see Table FM2). with installed planning to
software – purchase software
An evaluation of function/region market segments shows that replacing for the first time N
Accounts Payable 100.00% 0.00% 50
the majority exhibited extremely small growth from 2005 to
Enterprise Resource Planning 0.00% 100.00% 7
2006. All segments had very slight growth for all applications General Ledger 100.00% 0.00% 52
(see Tables FM3–FM6), except for the “other hospital” (non- Materials Management 90.36% 9.64% 83
medical surgical) market segment for enterprise resource
planning applications (see Table FM4).
TA BLE F M3 | Accounts Payable

2004 2005 2006
Segment Total Segment Total Segment Total
Count Percent Count Count Percent Count Count Percent Count
Academic/Teaching 273 99.27% 275 267 97.80% 273 265 99.25% 267
Academic
Not Academic 2,924 99.63% 2935 2,908 99.01% 2,937 2,930 99.56% 2,943
Med/Surg 2,653 99.62% 2,663 2,576 98.96% 2,603 2,266 99.60% 2,275
Med Surg
Other 544 99.45% 547 599 98.68% 607 929 99.36% 935
Rural 449 99.34% 452 454 99.56% 456 454 99.56% 456
Urban
Urban 2,748 99.64% 2,758 2,721 98.80% 2,754 2,741 99.53% 2,754
Single/Multi Multi-Hospital System 2,328 99.57% 2,338 2,157 98.90% 2,181 2,169 99.63% 2,177
Hospital Single Hospital System 869 99.66% 872 1,018 98.93% 1,029 1,026 99.32% 1,033
All 3,197 99.60% 3,210 3,175 98.91% 3,210 3,195 99.53% 3,210
TA BLE F M4 | Enterprise Resource Planning

2004 2005 2006
Academic
Not Academic 523 17.82% 2,935 613 20.87% 2,937 629 21.37% 2,943
Med/Surg 441 16.56% 2,663 512 19.67% 2603 478 21.01% 2,275
Med Surg
Other 120 21.94% 547 162 26.69% 607 222 23.74% 935
Rural 40 8.85% 452 44 9.65% 456 48 10.53% 456
Urban
Urban 521 18.89% 2,758 630 22.88% 2,754 652 23.67% 2,754
Single/Multi Multi-Hospital System 463 19.80% 2,338 575 26.36% 2,181 594 27.29% 2,177
Hospital Single Hospital System 98 11.24% 872 99 9.62% 1,029 106 10.26% 1,033
All 561 17.48% 3,210 674 21.00% 3,210 700 21.81% 3,210
TA BLE F M5 | General Ledger

2004 2005 2006
Academic
Not Academic 2,905 98.98% 2,935 2,897 98.64% 2,937 2,927 99.46% 2,943
Med/Surg 2,634 98.91% 2,663 2,564 98.50% 2,603 2,263 99.47% 2,275
Med Surg
Other 545 99.63% 547 600 98.85% 607 930 99.47% 935
Rural 444 98.23% 452 450 98.68% 456 452 99.12% 456
Urban
Urban 2,735 99.17% 2,758 2,714 98.55% 2,754 2,741 99.53% 2,754
All 3,179 99.03% 3,210 3,164 98.57% 3,210 3,193 99.47% 3,210
䊳 Financial Management (CON TINUE D)
TA BLE F M6 | Materials Management

2004 2005 2006
Academic
Not Academic 2,860 97.44% 2,935 2,817 95.91% 2,937 2,871 97.55% 2,,943
Med/Surg 2,597 97.52% 2,663 2,514 96.58% 2,603 2,246 98.73% 2,275
Med Surg
Other 537 98.17% 547 570 93.90% 607 889 95.08% 935
Rural 414 91.59% 452 411 90.13% 456 427 93.64% 456
Urban
Urban 2,720 98.62% 2,758 2,673 97.06% 2,754 2,708 98.33% 2,754
All 3,234 100.75% 3,210 3,084 96.07% 3,210 3,135 97.66% 3,210
A review of the financial management market by bed-size (see Tables FM7–FM10). ERP application systems show very
segments provides additional insight into the saturation of limited growth from 2005 to 2006, and have the most growth
the market. Accounts payable, general ledger and materials potential. The limited growth of ERP systems is characterized
management application systems present saturation or close by historically difficult implementations and a market in turmoil
to saturation percentages for many of the bed size segments from recent vendor acquisition and merger activity.
TA BLE F M7 | Financial Management TA BLE F M10 | Financial Management

2005 2006 2005 2006
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals 600+ Beds % of 133 hospitals % of 146 hospitals
Accounts Payable 1,072 99.17% 1,077 99.17% Accounts Payable 130 97.74% 146 100.00%
Enterprise Resource Planning 188 17.39% 193 17.77% Enterprise Resource Planning 29 21.80% 40 27.40%
General Ledger 1,062 98.24% 1,075 98.99% General Ledger 131 98.50% 146 100.00%
Materials Management 996 92.14% 1,034 95.21% Materials Management 131 98.50% 146 100.00%
101–200 Beds % of 856 hospitals % of 843 hospitals
Accounts Payable 847 98.95% 840 99.64% A review of temporal contract signing for financial management
Enterprise Resource Planning 174 20.33% 169 20.05% applications depicts a market with the majority of activity in the
General Ledger 844 98.60% 840 99.64%
1995–1999 and 2000–2004 time frames. Recent contract activity
Materials Management 837 97.78% 833 98.81%
would reflect replacement contracting for older legacy general
TA BLE F M8 | Financial Management ledger, accounts payable, and materials management systems,
2005 2006 and new system contracting for ERP systems.
Accounts Payable 503 99.21% 497 99.60%
TA BLE F M11 | Financial Management
Enterprise Resource Planning 132 26.04% 130 26.05% Enterprise
Accounts Resource Materials
General Ledger 503 99.21% 497 99.60% Payable Planning General Ledger Management
Materials Management 493 97.24% 490 98.20% Prior to 1989 6.38% 0.29% 7.24% 4.32%
301–400 Beds % of 357 hospitals % of 363 hospitals 1990 to 1994 14.23% 1.15% 14.15% 13.93%
Accounts Payable 353 98.88% 362 99.72% 1995 to 1999 35.48% 46.13% 35.25% 33.56%
Enterprise Resource Planning 85 23.81% 91 25.07% 2000 to 2004 35.67% 46.42% 35.59% 37.96%
General Ledger 353 98.88% 363 100.00% 2005 to 2006 8.24% 6.02% 7.77% 10.23%
Materials Management 353 98.88% 360 99.17%
Market Drivers/Factors
TA BLE F M9 | Financial Management
The financial management IT application market has been and
2005 2006
will continue to be impacted through 2009 by:
Accounts Payable 157 98.13% 167 100.00% • Replacement of legacy general ledger, accounts payable, and
Enterprise Resource Planning 39 24.38% 47 28.14% materials management application systems that have reached
General Ledger 157 98.13% 166 99.40% the end of their life cycles and require non-integrated spread-
Materials Management 159 99.38% 166 99.40% sheet functions to support accounting processes
• The need to improve supply chain management processes
Accounts Payable 113 97.41% 106 100.00%
Enterprise Resource Planning 27 23.28% 30 28.30%
and lower supply costs
General Ledger 114 98.28% 106 100.00% • Accurate and flexible accounting needs for mergers, acquisi-
Materials Management 115 99.14% 106 100.00% tions, and divestitures among hospital systems
• Improved accounting capabilities to compete in a market
where pricing is becoming transparent, and reimbursements
will be based on outcomes.
䊳 Financial Decision Support
The financial decision support environment includes the budget- systems as having a higher percentage of installed or contracted
ing, cost accounting, financial data warehousing and executive systems when compared to other types of hospitals, with two
information system applications. The use of budgeting software exceptions. In the Data Warehousing – Financial segment,
is approaching market saturation, while the cost accounting and
TA BLE F DS1 | Financial Decision Support
executive information systems still have good growth capacity.
2004 2005 2006
Data Warehousing – Financial applications are still an emerging Budgeting 83.18% 87.69% 87.94%
market (see Table FDS1). Cost Accounting 109.22% 82.83% 76.79%
Data Warehousing – Financial NT 18.35% 24.49%
Except for the Data Warehousing – Financial application, most Executive Information System 63.80% 64.55% 63.55%
of the purchases in the financial decision support market will N=3,210
be replacement purchases (see Table FDS2). The budgeting and
cost accounting replacement purchases indicate that many of TA BLE F DS2 | Financial Decision Support
these products are nearing the end of their product life cycle for % of hospitals % of hospitals
with installed planning to
their current versions and installed bases. software – purchase software
replacing for the first time N
Evaluation of function/region market segments for the financial Budgeting 85.29% 14.71% 34
decision support applications depicts academic medical centers, Cost Accounting 82.05% 17.95% 39
Data Warehousing – Financial 18.18% 81.82% 22
medical surgical facilities, urban hospitals, and multi-hospital
Executive Information System 68.97% 31.03% 29
TA BLE F DS 3 | Budgeting
2004 2005 2006
Academic
Not Academic 2,429 82.76% 2,935 2,576 87.71% 2,937 2,585 87.84% 2,943
Med/Surg 2,261 84.90% 2,663 2,290 87.98% 2,603 2,007 88.22% 2,275
Med Surg
Other 409 74.77% 547 525 86.49% 607 816 87.27% 935
Rural 342 75.66% 452 378 82.89% 456 390 85.53% 456
Urban
Urban 2,328 84.41% 2,758 2,437 88.49% 2,754 2,433 88.34% 2,754
All 2,670 83.18% 3,210 2,815 87.69% 3,210 2,823 87.94% 3,210
TA BLE F DS 4 | Cost Accounting

2004 2005 2006
Academic
Not Academic 2,375 80.92% 2,935 2,421 82.43% 2,937 2,229 75.74% 2,943
Med/Surg 2,149 80.70% 2,663 2,153 82.71% 2,603 1,781 78.29% 2,275
Med Surg
Other 471 86.11% 547 506 83.36% 607 684 73.16% 935
Rural 315 69.69% 452 328 71.93% 456 301 66.01% 456
Urban
Urban 2,305 83.58% 2,758 2,331 84.64% 2,754 2,164 78.58% 2,754
All 2,506 78.07% 3,210 2,659 82.83% 3,210 2,465 76.79% 3,210
TA BLE F DS5 | Data Warehousing – Financial

2004 2005 2006
Academic/Teaching NT NT 275 70 25.64% 273 84 31.46% 267
Academic
Not Academic NT NT 2,935 519 17.67% 2,937 702 23.85% 2,943
Med/Surg NT NT 2,663 425 16.33% 2,603 530 23.30% 2,275
Med Surg
Other NT NT 547 164 27.02% 607 256 27.38% 935
Rural NT NT 452 43 9.43% 456 64 14.04% 456
Urban
Urban NT NT 2,758 546 19.83% 2,754 722 26.22% 2,754
Single/Multi Multi-Hospital System NT NT 2,338 439 20.13% 2,181 591 27.15% 2,177
Hospital Single Hospital System NT NT 872 150 14.58% 1,029 195 18.88% 1,033
All 0 0.00% 3,210 589 18.35% 3,210 786 24.49% 3,210
6 Source: HIMSS Analytics™ Database 2006 (derived from the Dorenfest IHDS+ Database™) ©2007 HIMSS Analytics NT: Not tracked
䊳 Financial Decision Support (CON TINUE D)
TA BLE F DS6 | Executive Information Systems

2004 2005 2006
Academic
Not Academic 1,879 64.02% 2,935 1,904 64.83% 2,937 1,876 63.74% 2,943
Med/Surg 1,765 66.28% 2,663 1,757 67.50% 2,603 1,491 65.54% 2,275
Med Surg
Other 283 51.74% 547 315 51.89% 607 549 58.72% 935
Rural 241 53.32% 452 251 55.04% 456 241 52.85% 456
Urban
Urban 1,807 65.52% 2,758 1,821 66.12% 2,754 1,799 65.32% 2,754
All 2,048 63.80% 3,210 2,072 64.55% 3,210 2,040 63.55% 3,210
“other” hospitals are more likely to have an installed or con- An analysis of the financial decision support market by bed-size
tracted solution than are medical surgical hospitals, which may segment reflects slight growth for the budgeting, cost accounting,
indicate a focus of specialty hospitals on strategic market data and executive information system applications. The Data
to support their business plan execution. Non-academic medical Warehousing – Financial market shows moderate growth year
centers have a higher percentage of executive information system over year in hospitals with fewer than 300 beds and good growth
installations than academic medical centers. This is probably in hospitals with more than 300 beds (see Table FDS7).
because non-academic hospitals, many with smaller revenues
An evaluation of when hospitals signed contracts for financial
and budgets, need to focus more acutely on operational business
decision support applications demonstrates that most of the
metrics to improve their operating margins.
applications have been acquired prior to 2000 for budgeting, cost
TA BLE F DS7 | Financial Decision Support accounting, and executive information systems (see Table FDS8).
2005 2006 The majority of Data Warehousing – Financial systems have
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals been acquired after 2000. The majority of all of the financial
Budgeting 913 84.46% 948 87.29% decision support application systems were purchased between
Cost Accounting 836 77.34% 739 68.05%
Data Warehousing – Financial 173 16.00% 232 21.36%
1995 and 2004.
Executive Information System 623 57.63% 643 59.21% TA BLE F DS 8 | Financial Decision Support
Data Executive
Budgeting 751 87.73% 725 86.00% Cost Warehousing – Information
Cost Accounting 711 83.06% 637 75.56% Budgeting Accounting Financial System
Data Warehousing – Financial 148 17.29% 180 21.35% Prior to 1989 6.07% 6.09% 1.95% 5.16%
Executive Information System 590 68.93% 549 65.12% 1990 to 1994 14.55% 18.31% 4.88% 17.22%
201–300 Beds % of 507 hospitals % of 499 hospitals 1995 to 1999 29.30% 31.85% 22.68% 36.66%
Budgeting 452 89.15% 435 87.17% 2000 to 2004 41.29% 35.36% 53.17% 31.78%
Cost Accounting 436 86.00% 406 81.36% 2005 to 2006 8.78% 8.39% 17.32% 9.18%
Executive Information System 347 68.44% 329 65.93% Market Drivers/Factors
301–400 Beds % of 357 hospitals % of 363 hospitals The financial decision support IT application market has been
Budgeting 324 90.76% 327 90.08%
(and will continue to be) impacted through 2009 by:
Cost Accounting 309 86.55% 310 85.40%
• Pay for performance reimbursement models from private
Executive Information System 243 68.07% 239 65.84% insurers and the government
401–500 Beds % of 160 hospitals % of 167 hospitals • Continued focus on quality outcomes measures
Budgeting 149 93.13% 155 92.81% • Continued decrease in government reimbursements for
Cost Accounting 141 88.13% 141 84.43%
Medicare and Medicaid
Executive Information System 101 63.13% 106 63.47%
• Continued movement of patient treatment services from the
501–600 Beds % of 116 hospitals % of 106 hospitals acute care environment to ambulatory settings
Budgeting 103 88.79% 101 95.28% • Adoption of severity adjusted DRGs and ICD-10-CM and
Cost Accounting 102 87.93% 97 91.51% ICD-10-PCS coding
• Hospital acquisition/divestiture and merger activities.
600+ Beds % of 133 hospitals % of 146 hospitals
Budgeting 123 92.48% 132 90.41%
Cost Accounting 124 93.23% 135 92.47%
䊳 Human Resources
The human resources IT environment in 2006 shows basically intentions to purchase this application in the next year. For all
flat growth and almost complete market saturation compared to of the other human resource applications, the buying is heavily
2004 and 2005 (see Table HR1). This is to be expected since skewed toward replacement buying.
many of the human resource applications have reached product
TA BLE HR1 | Human Resources
maturity and most hospitals have the majority of them installed.
2004 2005 2006
Human resources IT applications support key staff management Benefits Administration 90.59% 94.95% 95.39%
Payroll 94.74% 98.85% 99.03%
operations and are considered mission critical applications in
Personnel Management 90.59% 95.48% 95.67%
today’s healthcare environment where staffing shortages exist for Time and Attendance 84.49% 89.07% 90.81%
most clinical professionals. N=3,210
Due to the saturation of this market for key applications, the vast TA BLE HR 2 | Human Resources 2006
majority of purchases are replacement sales versus new sales to % of hospitals % of hospitals
hospitals that have not automated the human resources environ- with installed planning to
ment (see Table HR2). replacing for the first time N
Benefits Administration 89.80% 10.20% 49
The time and attendance application market represents one mar- Payroll 97.06% 2.94% 68
ket segment where replacement buying and new sales purchases Personnel Management 92.73% 7.27% 55
are almost evenly split for the 41 hospitals identified as having Time and Attendance 53.66% 46.34% 41
TA BLE HR3 | Benefits Administration

2004 2005 2006
Academic
Not Academic 2,651 90.32% 2,935 2,679 91.22% 2,937 2,620 89.02% 2,943
Med/Surg 2,401 90.16% 2,663 2,375 91.24% 2,603 2,050 90.11% 2,275
Med Surg
Other 507 92.69% 547 561 92.42% 607 827 88.45% 935
Rural 387 85.62% 452 394 86.40% 456 392 85.96% 456
Urban
Urban 2,521 91.41% 2,758 2,542 92.30% 2,754 2,485 90.23% 2,754
All 2,908 90.59% 3,210 2,936 91.46% 3,210 2,877 89.63% 3,210
TA BLE HR4 | Payroll

2004 2005 2006
Academic
Not Academic 2,776 94.58% 2,935 2,789 94.96% 2,937 2,731 92.80% 2,943
Med/Surg 2,517 94.52% 2,663 2,467 94.78% 2,603 2,108 92.66% 2,275
Med Surg
Other 524 95.80% 547 579 95.39% 607 882 94.33% 935
Rural 431 95.35% 452 434 95.18% 456 430 94.30% 456
Urban
Urban 2,610 94.63% 2,758 2,612 94.84% 2,754 2,560 92.96% 2,754
All 3,041 94.74% 3,210 3,046 94.89% 3,210 2,990 93.15% 3,210
TA BLE HR5 | Personnel Management

2004 2005 2006
Academic
Not Academic 2,683 91.41% 2,935 2,699 91.90% 2,937 2,627 89.26% 2,943
Med/Surg 2,434 91.40% 2,663 2,392 91.89% 2,603 2,055 90.33% 2,275
Med Surg
Other 511 93.42% 547 563 92.75% 607 830 88.77% 935
Rural 388 85.84% 452 394 86.40% 456 391 85.75% 456
Urban
Urban 2,557 92.71% 2,758 2,561 92.99% 2,754 2,494 90.56% 2,754
Single/Multi Multi-Hospital System 2,183 94.30% 2,315 2,047 94.46% 2167 1,995 92.15% 2,165
Hospital Single Hospital System 762 85.14% 895 908 87.06% 1043 890 85.17% 1,045
All 2,908 90.59% 3,210 2,955 92.06% 3,210 2,855 88.94% 3,210
䊳 Human Resources (CON TINUE D)
TA BLE HR6 | Time and Attendance

2004 2005 2006
Academic
Not Academic 2,469 84.12% 2,935 2,547 86.72% 2,937 2,592 88.07% 2,943
Med/Surg 2,241 84.15% 2,663 2,265 87.01% 2,603 2,052 90.20% 2,275
Med Surg
Other 471 86.11% 547 521 85.83% 607 780 83.42% 935
Rural 341 75.44% 452 361 79.17% 456 372 81.58% 456
Urban
Urban 2,371 85.97% 2,758 2,425 88.05% 2,754 2,460 89.32% 2,754
All 2,712 84.49% 3,210 2,786 86.79% 3,210 2,832 88.22% 3,210
When evaluating the market by bed size segments, again we TA BLE HR10 | Human Resources
find no substantial changes in application implementations for 2005 2006
human resource applications from 2005 to 2006 (see Tables 600+ Beds % of 133 hospitals % of 146 hospitals
HR7–HR10). This would prove the application maturity and Benefits Administration 128 96.24% 142 97.26%
Payroll 129 96.99% 144 98.63%
saturation for this market.
Personnel Management 129 96.99% 143 97.95%
TA BLE HR7 | Human Resources Time and Attendance 124 93.23% 133 91.10%
2005 2006
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals The analysis of purchase years for human resource applications
Benefits Administration 993 91.86% 1,001 92.17% provides some indication for when segments of the market may
Payroll 1,067 98.70% 1,070 98.53% be looking to replace their applications due to issues with func-
tional or technological obsolescence (Table HR11).
Time and Attendance 921 85.20% 946 87.11%
101–200 Beds % of 856 hospitals % of 843 hospitals TA BLE HR11 | Human Resources
Benefits Administration 816 95.33% 812 96.32% Benefits Personnel Time and
Payroll 850 99.30% 837 99.29% Administration Payroll Management Attendance
Personnel Management 823 96.14% 816 96.80% Prior to 1989 6.02% 6.48% 6.12% 3.60%
Time and Attendance 766 89.49% 769 91.22% 1990 to 1994 11.88% 12.57% 12.21% 7.04%
1995 to 1999 37.43% 37.63% 38.39% 45.32%
TA BLE HR8 | Human Resources 2000 to 2004 36.05% 35.28% 35.31% 36.54%
2005 2006 2005 to 2006 8.62% 8.04% 7.97% 7.50%
Benefits Administration 488 96.25% 483 96.79% Most human resources applications were contracted between
Payroll 499 98.42% 494 99.00% 1995 and 1999, and the time span of 2000–2004 provided the
second highest contract rates. Human resources applications
contracted prior to 1994 are probably reaching product maturity
Benefits Administration 353 98.88% 357 98.35% in their life cycle, and may become increasingly obsolete over
Payroll 355 99.44% 362 99.72% the next few years. This would be reflected in increased replace-
Personnel Management 354 99.16% 359 98.90% ment purchases from 2007 to 2009.
TA BLE HR9 | Human Resources
2005 2006
The human resource IT application market has been and will
401–500 Beds % of 160 hospitals % of 167 hospitals continue to be impacted through 2009 by:
Benefits Administration 157 98.13% 163 97.60% • Acquisitions and mergers of market vendors
Payroll 158 98.75% 166 99.40% • Outsourcing services for the human resources application suite
• Application solutions provider (ASP) products
• Intense competition between enterprise resource planning
Benefits Administration 113 97.41% 104 98.11% system vendors (e.g., Lawson, Oracle, SAP)
Payroll 115 99.14% 106 100.00% • Potential government regulations (e.g., nurse staffing, health-
Personnel Management 114 98.28% 106 100.00% care savings accounts)
• Continued shortages of clinicians, especially nurses.
䊳 Revenue Cycle Management
The revenue cycle management (RCM) market for 2005–2006 claims attachment, severity adjusted DRGs, ICD10-CM coding
shows saturated application segments of legacy systems (ADT/ adoption, and adoption of pay-for-performance/quality outcomes
registration, credit/collections, and patient billing), and applica- based reimbursement models).
tion segments with growing market penetration (electronic data
An evaluation of function/region market segments for RCM
interchange – clearing house vendor, eligibility, and enterprise
applications for 2005–2006 shows:
master person index (EMPI)). The contract management applica-
• The ADT/registration market is saturated and shows no
tion market shows stagnant growth, while the patient scheduling
additional significant market opportunity for any function/
application market depicts moderate growth year over year
region (see Table RCM3).
(see Table RCM1).
• The contract management market exhibits slight growth for
TA BLE RCM1 | Revenue Cycle Management the majority of function/region segments, but “other” hospitals
2004 2005 2006 (non-medical/surgical facilities) show a moderate decline in
ADT/Registration 99.94% 99.31% 99.69% market penetration, while rural hospitals demonstrated a
Contract Management 61.59% 67.66% 68.60%
moderate increase in contract management application market
Credit/Collections 93.24% 93.40% 94.14%
Electronic Data Interchange (EDI) – penetration (see Table RCM4).
Clearing House Vendor NT 29.66% 42.93% • The credit and collections application market displayed slight
Eligibility 31.50% 42.31% 52.31%
growth across all function/region segments (see Table RCM5).
Enterprise Master Person Index (EMPI) NT 26.26% 37.38%
Patient Billing 99.25% 98.54% 98.97%
• The electronic data interchange – clearinghouse vendor market
Patient Scheduling 72.68% 74.17% 78.44% shows moderate to good growth across all function/region
N=3,210 segments (see Table RCM6). This market will continue to
show growth with the new transactions that are required for
TA BLE RCM2 | Revenue Cycle Management
the HIPAA claims attachment regulations.
with installed planning to • The eligibility transaction market shows moderate to good
software – purchase software growth for all function/region segments (see Table RCM7).
ADT/Registration 100.00% 0.00% 50 We expect to see this growth continue through 2009 as U.S.
Contract Management 73.68% 26.32% 38 hospitals upgrade their RCM processes to focus more intently
Credit/Collections 100.00% 0.00% 48 on RCM front-end processes.
Electronic Data Interchange (EDI) – • The EMPI market demonstrates good growth for all function/
Clearing House Vendor 95.45% 4.55% 22
Eligibility 46.15% 53.85% 26 region segments, except for the rural segment which shows
Enterprise Master Person Index (EMPI) 65.00% 35.00% 20 moderate growth (see Table RCM8).
Patient Billing 100.00% 0.00% 61 • The patient billing market shows virtual saturation with
Patient Scheduling 77.78% 22.22% 54
minimal changes in 2005 and 2006 (see Table RCM9). This
market, while saturated, will become much more active as a
The majority of purchasing plans for RCM applications in 2006
replacement market through 2009 driven by new government
were replacement purchases except for the eligibility application
regulations that were discussed in the ADT/registration section.
market (see Table RCM2). High replacement purchases signal that
• The patient scheduling application market shows growth
many of the RCM applications are legacy applications reaching
increases for all function/region segments. Academic facilities
the end of their product life cycles (see Table RCM2). We expect
show good growth increases while medical/surgical, “other”
that replacement purchasing will grow significantly for RCM
hospital, urban, and multi-hospital facilities show moderate
applications through 2009 due to impending regulations that will
growth (see Table RCM10).
require significant changes for many RCM applications (HIPAA
TA BLE RCM3 | ADT/Registration

2004 2005 2006
Academic
Not Academic 2,933 99.93% 2,935 2,920 99.42% 2,937 2,935 99.73% 2,943
Med/Surg 2,661 99.92% 2,663 2,588 99.42% 2,603 2,270 99.78% 2,275
Med Surg
Other 547 100.00% 547 600 98.85% 607 930 99.47% 935
Rural 451 99.78% 452 454 99.56% 456 454 99.56% 456
Urban
Urban 2,757 99.96% 2,758 2,734 99.27% 2,754 2,746 99.71% 2,754
All 3,208 99.94% 3,210 3,188 99.31% 3,210 3,200 99.69% 3,210
䊳 Revenue Cycle Management (CON TINUE D)
TA BLE RCM4 | Contract Management

2004 2005 2006
Academic
Not Academic 1,778 60.58% 2,935 1,965 66.91% 2,937 1,999 67.92% 2,943
Med/Surg 1,681 63.12% 2,663 1,761 67.65% 2,603 1,619 71.16% 2,275
Med Surg
Other 296 54.11% 547 411 67.71% 607 583 62.35% 935
Rural 176 38.94% 452 210 46.05% 456 231 50.66% 456
Urban
Urban 1,801 65.30% 2,758 1,962 71.24% 2,754 1,971 71.57% 2,754
All 1,977 61.59% 3,210 2,172 67.66% 3,210 2,202 68.60% 3,210
TA BLE RCM5 | Credit/Collections

2004 2005 2006
Academic
Not Academic 2,744 93.49% 2,935 2,757 93.87% 2,937 2,777 94.36% 2,943
Med/Surg 2,510 94.25% 2,663 2,467 94.78% 2,603 2,169 95.34% 2,275
Med Surg
Other 483 88.30% 547 531 87.48% 607 853 91.23% 935
Rural 418 92.48% 452 426 93.42% 456 427 93.64% 456
Urban
Urban 2,575 93.36% 2,758 2,572 93.39% 2,754 2,595 94.23% 2,754
All 2,993 93.24% 3,210 2,998 93.40% 3,210 3,022 94.14% 3,210
TA BLE RCM6 | Electronic Data Interchange (EDI) – Clearing House Vendor

2004 2005 2006
Academic/Teaching NT 0.00% 275 86 31.50% 273 115 43.07% 267
Academic
Not Academic NT 0.00% 2,935 866 29.49% 2,937 1,263 42.92% 2,943
Med/Surg NT 0.00% 2,663 738 28.35% 2,603 989 43.47% 2,275
Med Surg
Other NT 0.00% 547 214 35.26% 607 389 41.60% 935
Rural NT 0.00% 452 120 26.32% 456 164 35.96% 456
Urban
Urban NT 0.00% 2,758 832 30.21% 2,754 1,214 44.08% 2,754
Single/Multi Multi-Hospital System NT 0.00% 2,338 657 30.12% 2,181 976 44.83% 2,177
Hospital Single Hospital System NT 0.00% 872 295 28.67% 1,029 402 38.92% 1,033
All 0 0.00% 3,210 952 29.66% 3,210 1,378 42.93% 3,210
TA BLE RCM7 | Eligibility

2004 2005 2006
Academic
Not Academic 902 30.73% 2,935 1,224 41.68% 2,937 1,513 51.41% 2,943
Med/Surg 857 32.18% 2,663 1,143 43.91% 2603 1,259 55.34% 2,275
Med Surg
Other 154 28.15% 547 215 35.42% 607 420 44.92% 935
Rural 91 20.13% 452 153 33.55% 456 182 39.91% 456
Urban
Urban 920 33.36% 2,758 1,205 43.75% 2,754 1,497 54.36% 2,754
Single/Multi Multi-Hospital System 704 30.11% 2,338 952 43.65% 2,181 1,192 54.75% 2,177
All 1,011 31.50% 3,210 1,358 42.31% 3,210 1,679 52.31% 3,210
NT: Not tracked Source: HIMSS Analytics™ Database 2006 (derived from the Dorenfest IHDS+ Database™) ©2007 HIMSS Analytics 11
TA BLE RCM8 | Enterprise Master Person Index (EMPI)

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 763 25.98% 2,937 1,092 37.10% 2,943
Med/Surg NT 0.00% 2,663 682 26.20% 2,603 878 38.59% 2,275
Med Surg
Other NT 0.00% 547 161 26.52% 607 322 34.44% 935
Rural NT 0.00% 452 97 21.27% 456 124 27.19% 456
Urban
Urban NT 0.00% 2,758 746 27.09% 2,754 1,076 39.07% 2,754
All 0 0.00% 3,210 843 26.26% 3,210 1,200 37.38% 3,210
TA BLE RCM9 | Patient Billing

2004 2005 2006
Academic
Not Academic 2,911 99.18% 2,935 2,897 98.64% 2,937 2,911 98.91% 2,943
Med/Surg 2,660 99.89% 2,663 2,586 99.35% 2,603 2,269 99.74% 2,275
Med Surg
Other 526 96.16% 547 577 95.06% 607 908 97.11% 935
Rural 450 99.56% 452 454 99.56% 456 451 98.90% 456
Urban
Urban 2,736 99.20% 2,758 2,709 98.37% 2,754 2,726 98.98% 2,754
All 3,186 99.25% 3,210 3,163 98.54% 3,210 3,177 98.97% 3,210
TA BLE RCM10 | Patient Scheduling

2004 2005 2006
Academic
Not Academic 2,115 72.06% 2,935 2,163 73.65% 2,937 2,281 77.51% 2,943
Med/Surg 1,963 73.71% 2,663 1,970 75.68% 2,603 1,826 80.26% 2,275
Med Surg
Other 370 67.64% 547 411 67.71% 607 692 74.01% 935
Rural 286 63.27% 452 294 64.47% 456 309 67.76% 456
Urban
Urban 2,047 74.22% 2,758 2,087 75.78% 2,754 2,209 80.21% 2,754
All 2,333 72.68% 3,210 2,381 74.17% 3,210 2,518 78.44% 3,210
The analysis of this market by bed size reveals the following: • The electronic data interchange – claims clearinghouse
vendor market shows good to strong growth across all bed
• The ADT/registration market is virtually saturated across all
size segments (see Tables RCM11–RCM14). New government
bed size market segments (see Tables RCM11–RCM14).
regulations will continue to drive growth in this market across
• The contract management market demonstrates slight growth
all bed size segments (e.g., HIPAA claims attachment, severity
for all segments but the 201–300 and greater than 600 bed
adjusted DRGs, ICD-10-CM, etc.).
segments, which show a slight decline (see Tables RCM12
• The eligibility transaction market also shows good to strong
and RCM14). We believe growth has been inhibited by a
growth across all bed size segments (see Tables RCM11–
lack of tight integration of these products with patient billing
RCM14). We expect this growth to continue across all bed size
and the general financial systems.
segments as organizations transform their RCM processes to
• The credit and collections market exhibits slight growth for
focus more on front end tasks.
all bed segments, except for the greater than 600 bed segment,
• The EMPI application market shows good to strong growth
which shows a slight decrease in market penetration
across all bed size segments (see Tables RCM11–RCM14).
(see Table RCM14).
We believe this growth is being driven by increased merger
and acquisition activities between hospitals and ambulatory
systems. Regional health information organizations will also
drive this market growth for hospitals.
• The patient billing application system market is saturated and TA BLE RCM13 | Revenue Cycle Management
shows no significant market penetration growth (see Tables 2005 2006
RCM11–RCM14). While saturated, we believe this market will 401–500 Beds % of 160 hospitals % of 167 hospitals
show strong replacement of legacy applications through 2009 with ADT/Registration 159 99.38% 167 100.00%
Contract Management 123 76.88% 131 78.44%
impending government regulations that will impact this market.
Credit/Collections 151 94.38% 160 95.81%
• The patient scheduling application system market shows Electronic Data Interchange (EDI) –
moderate growth for all bed size market segments (see Tables Clearing House Vendor 45 28.13% 70 41.92%
RCM11–RCM14). Patient scheduling growth will continue at a Eligibility 80 50.00% 102 61.08%
Enterprise Master Person Index (EMPI) 42 26.25% 70 41.92%
moderate pace as organizations continue to focus on improv- Patient Billing 157 98.13% 167 100.00%
ing customer satisfaction and the judicious use of medical Patient Scheduling 131 81.88% 145 86.83%
resources to render their patient care services. 501–600 Beds % of 116 hospitals % of 106 hospitals
ADT/Registration 114 98.28% 105 99.06%
TA BLE RCM11 | Revenue Cycle Management Contract Management 91 78.45% 88 83.02%
2005 2006 Credit/Collections 106 91.38% 99 93.40%
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals Electronic Data Interchange (EDI) –
ADT/Registration 1,073 99.26% 1,081 99.54% Clearing House Vendor 27 23.28% 45 42.45%
Contract Management 599 55.41% 636 58.56% Eligibility 55 47.41% 73 68.87%
Credit/Collections 1,001 92.60% 1,014 93.37% Enterprise Master Person Index (EMPI) 36 31.03% 44 41.51%
Electronic Data Interchange (EDI) – Patient Billing 114 98.28% 106 100.00%
Clearing House Vendor 337 31.17% 445 40.98% Patient Scheduling 100 86.21% 97 91.51%
Eligibility 373 34.51% 469 43.19%
Enterprise Master Person Index (EMPI) 274 25.35% 343 31.58% TA BLE RCM14 | Revenue Cycle Management
Patient Billing 1,052 97.32% 1,058 97.42% 2005 2006
Patient Scheduling 719 66.51% 764 70.35% 600+ Beds % of 133 hospitals % of 146 hospitals
101–200 Beds % of 856 hospitals % of 843 hospitals ADT/Registration 132 99.25% 146 100.00%
ADT/Registration 851 99.42% 841 99.76% Contract Management 104 78.20% 111 76.03%
Contract Management 597 69.74% 584 69.28% Credit/Collections 124 93.23% 135 92.47%
Credit/Collections 808 94.39% 803 95.26% Electronic Data Interchange (EDI) –
Electronic Data Interchange (EDI) – Clearing House Vendor 49 36.84% 70 47.95%
Clearing House Vendor 257 30.02% 367 43.53% Eligibility 68 51.13% 87 59.59%
Eligibility 369 43.11% 448 53.14% Enterprise Master Person Index (EMPI) 44 33.08% 68 46.58%
Enterprise Master Person Index (EMPI) 205 23.95% 308 36.54% Patient Billing 132 99.25% 146 100.00%
Patient Billing 851 99.42% 841 99.76% Patient Scheduling 108 81.20% 132 90.41%
Patient Scheduling 638 74.53% 661 78.41%
Evaluating the contract purchasing time frames for these applica-

TA BLE RCM12 | Revenue Cycle Management
2005 2006
tions shows that most of the contracting was completed in the
201–300 Beds % of 507 hospitals % of 499 hospitals 1995–1999 period for ADT/registration, credit-collections, and
ADT/Registration 504 99.41% 497 99.60% patient billing applications. Contracting for contract management,
Contract Management 391 77.12% 373 74.75% EDI – claims clearing house vendor, eligibility, EMPI, and
Credit/Collections 473 93.29% 469 93.99% patient scheduling was mostly concluded in the 2000–2004 time
Electronic Data Interchange (EDI) –
Clearing House Vendor 130 25.64% 211 42.28% period (see Tables RCM15 and RCM16). RCM applications that
Eligibility 237 46.75% 290 58.12% were contracted prior to 1995 are most likely subject to replace-
Enterprise Master Person Index (EMPI) 140 27.61% 210 42.08% ment over the next three to five years.
Patient Billing 502 99.01% 496 99.40%
Patient Scheduling 404 79.68% 420 84.17% TA BLE RCM15 | Revenue Cycle Management
301–400 Beds % of 357 hospitals % of 363 hospitals ADT- Contract Credit- EDI – Clearing
ADT/Registration 355 99.44% 363 100.00% Registration Management Collections House Vendor
Contract Management 267 74.79% 279 76.86% Prior to 1989 8.09% 2.52% 7.68% 3.23%
Credit/Collections 335 93.84% 342 94.21% 1990 to 1994 18.89% 13.03% 20.08% 8.48%
Electronic Data Interchange (EDI) – 1995 to 1999 36.03% 31.58% 32.65% 25.25%
Clearing House Vendor 107 29.97% 170 46.83% 2000 to 2004 28.58% 43.42% 30.16% 36.97%
Eligibility 176 49.30% 210 57.85% 2005 to 2006 8.41% 9.45% 9.44% 26.06%
Enterprise Master Person Index (EMPI) 102 28.57% 157 43.25%
Patient Billing 355 99.44% 363 100.00%
Patient Scheduling 281 78.71% 299 82.37%
TA BLE RCM16 | Revenue Cycle Management Market Drivers/Factors

Enterprise The RCM IT application market has been and will continue to
Master Person Patient Patient be impacted through 2010 by:
Eligibility Index (EMPI) Billing Scheduling
Prior to 1989 2.44% 3.51% 9.75% 3.42% • The impending HIPAA claims attachment regulations
1990 to 1994 10.67% 6.32% 19.23% 11.83% • The impending severity adjusted DRG regulations
1995 to 1999 23.90% 25.00% 32.53% 35.93% • The conversion to ICD-10-CM and ICD-10-PCS coding
2000 to 2004 44.08% 43.12% 29.45% 37.75% • The emergence of outcomes based reimbursement models
2005 to 2006 18.91% 22.05% 9.04% 11.07%
• The focus on consumer/patient satisfaction (e.g., pricing
transparency, consumer friendly billing formats)
• The CMS regulation regarding recovery audit contractors.
䊳 Health Information Management

The health information and management (HIM) IT environment TA BLE HIM1 | Health Information Management
has reached a saturated stage for abstracting, chart deficiency, 2004 2005 2006
chart tracking/locator, and encoder application systems (see Abstracting 98.04% 97.94% 98.16%
Table HIM1). While there is still opportunity for growth for case Case Mix Management 89.00% 90.87% 88.60%
Chart Deficiency 93.68% 94.52% 95.30%
mix management, dictation, and outcomes and quality manage-
Chart Tracking/Locator 92.71% 93.96% 94.80%
ment, the best growth potential for this market segment will be Data Warehousing/Mining - Clinical 0.00% 13.05% 18.57%
found in data warehousing/mining-clinical, dictation with speech Dictation 79.03% 86.29% 89.19%
recognition, and outcomes and quality management. In-house Dictation with Speech Recognition 0.00% 9.88% 13.49%
transcription will continue to show a steady decline initially Encoder 97.35% 97.26% 97.13%
Outcomes and Quality Management 59.91% 67.07% 68.04%
shown in 2006, as outsourced solutions for this application
In-House Transcription 84.39% 87.57% 82.62%
become more competitive. N=3,210
The purchasing plans for HIM applications are predominately TA BLE HIM2 | HIM Planned Purchases
replacement purchases for legacy application environments. % of hospitals % of hospitals
The legacy applications for this market are abstracting, case mix with installed planning to
management, chart deficiency, chart tracking/locator, dictation, replacing for the first time N
encoder, and in-house transcription. Applications that reflect Abstracting 94.74% 5.26% 38
predominately new purchases represent first generation products Case Mix Management 100.00% 0.00% 34
Chart Deficiency 95.00% 5.00% 40
that are achieving increased stability. These applications are
Chart Tracking/Locator 97.14% 2.86% 35
data warehousing/mining-clinical, and dictation with speech Data Warehousing/Mining - Clinical 16.67% 83.33% 18
recognition (see Table HIM2). Dictation 87.23% 12.77% 47
Dictation with Speech Recognition 10.59% 89.41% 85
An evaluation of function/region market segments for growth Encoder 93.64% 6.36% 110
from 2005–2006 shows the following: Outcomes and Quality Management 77.78% 22.22% 27
• Abstracting has very slight growth for all segments but “other” In-House Transcription 91.67% 8.33% 36
hospitals (non-medical/surgical facilities) and single hospitals,
which showed very slight declines in growth (see Table HIM3). • Dictation showed a slight growth increase for all function/
• Case mix showed a slight decline in growth for all function/ region segments (see Table HIM8).
region segments (see Table HIM4). • Dictation with speech recognition showed slight growth for all
• Chart deficiency showed a slight growth for all function/region segments except academic facilities which showed moderate
segments (see Table HIM5). growth (see Table HIM9).
• Chart tracking showed a slight increase for all function/region • Encoder applications showed very slight growth or declines
segments except for “other” hospital which showed a slight for the period analyzed, but this is not substantial due to the
decline (see Table HIM6). market saturation for these applications (see Table HIM10).
• Data warehousing/mining-clinical showed growth for all • Outcomes and quality management showed slight growth
segments, but demonstrated moderate growth for not academic, increases for all segments by “other” hospitals, which showed
urban, and multi-hospital facilities. “Other” hospitals exhibited a slight decrease (see Table HIM11).
good growth from 2005–2006 (see Table HIM7). • In-house transcription showed a slight market decline for all
segments, attributed to increased outsourcing.
䊳 Health Information Management (CON TINUE D)
TA BLE HIM3 | Abstracting

2004 2005 2006
Academic
Not Academic 2,876 97.99% 2,935 2,879 98.03% 2,937 2,889 98.17% 2,943
Med/Surg 2,614 98.16% 2,663 2,558 98.27% 2,603 2,250 98.90% 2,275
Med Surg
Other 533 97.44% 547 586 96.54% 607 901 96.36% 935
Rural 420 92.92% 452 432 94.74% 456 438 96.05% 456
Urban
Urban 2,727 98.88% 2,758 2,712 98.47% 2,754 2,713 98.51% 2,754
All 3,147 98.04% 3,210 3,144 97.94% 3,210 3,151 98.16% 3,210
TA BLE HIM4 | Case Mix Management

2004 2005 2006
Academic
Not Academic 2,591 88.28% 2,935 2,659 90.53% 2,937 2,595 88.18% 2,943
Med/Surg 2,442 91.70% 2,663 2,399 92.16% 2,603 2,049 90.07% 2,275
Med Surg
Other 415 75.87% 547 518 85.34% 607 795 85.03% 935
Rural 377 83.41% 452 394 86.40% 456 386 84.65% 456
Urban
Urban 2,480 89.92% 2,758 2,523 91.61% 2,754 2,458 89.25% 2,754
All 2,857 89.00% 3,210 2,917 90.87% 3,210 2,844 88.60% 3,210
TA BLE HIM5 | Chart Deficiency

2004 2005 2006
Academic
Not Academic 2,740 93.36% 2,935 2,770 94.31% 2,937 2,800 95.14% 2,943
Med/Surg 2,490 93.50% 2,663 2,467 94.78% 2,603 2,214 97.32% 2,275
Med Surg
Other 517 94.52% 547 567 93.41% 607 845 90.37% 935
Rural 372 82.30% 452 384 84.21% 456 391 85.75% 456
Urban
Urban 2,635 95.54% 2,758 2,650 96.22% 2,754 2,668 96.88% 2,754
All 3,007 93.68% 3,210 3,034 94.52% 3,210 3,059 95.30% 3,210
TA BLE HIM6 | Chart Tracking/Locator

2004 2005 2006
Academic
Not Academic 2,715 92.50% 2,935 2,756 93.84% 2,937 2,784 94.60% 2,943
Med/Surg 2,463 92.49% 2,663 2,453 94.24% 2,603 2,201 96.75% 2,275
Med Surg
Other 513 93.78% 547 563 92.75% 607 842 90.05% 935
Rural 367 81.19% 452 384 84.21% 456 389 85.31% 456
Urban
Urban 2,609 94.60% 2,758 2,632 95.57% 2,754 2,654 96.37% 2,754
All 2,976 92.71% 3,210 3,016 93.96% 3,210 3,043 94.80% 3,210
TA BLE HIM7 | Data Warehousing-Mining – Clinical

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 360 12.26% 2,937 530 18.01% 2,943
Med/Surg NT 0.00% 2,663 331 12.72% 2,603 374 16.44% 2,275
Med Surg
Other NT 0.00% 547 88 14.50% 607 222 23.74% 935
Rural NT 0.00% 452 47 10.31% 456 63 13.82% 456
Urban
Urban NT 0.00% 2,758 372 13.51% 2,754 533 19.35% 2,754
All 0 0.00% 3,210 419 13.05% 3210 596 18.57% 3,210
TA BLE HIM8 | Dictation

2004 2005 2006
Academic
Not Academic 2,318 78.98% 2,935 2,536 86.35% 2,937 2,625 89.19% 2,943
Med/Surg 2,168 81.41% 2,663 2,260 86.82% 2,603 2,049 90.07% 2,275
Med Surg
Other 369 67.46% 547 510 84.02% 607 814 87.06% 935
Rural 328 72.57% 452 364 79.82% 456 388 85.09% 456
Urban
Urban 2,209 80.09% 2,758 2,406 87.36% 2,754 2,475 89.87% 2,754
All 2,537 79.03% 3,210 2,770 86.29% 3,210 2,863 89.19% 3,210
TA BLE HIM9 | Dictation with Speech Recognition

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 268 9.12% 2,937 365 12.40% 2,943
Med/Surg NT 0.00% 2,663 244 9.37% 2,603 288 12.66% 2,275
Med Surg
Other NT 0.00% 547 73 12.03% 607 145 15.51% 935
Rural NT 0.00% 452 25 5.48% 456 33 7.24% 456
Urban
Urban NT 0.00% 2,758 292 10.60% 2,754 400 14.52% 2,754
All 0 0.00% 3,210 317 9.88% 3,210 433 13.49% 3,210
TA BLE HIM10 | Encoder

2004 2005 2006
Academic
Not Academic 2,854 97.24% 2,935 2,859 97.34% 2,937 2,857 97.08% 2,943
Med/Surg 2,593 97.37% 2,663 2,540 97.58% 2,603 2,240 98.46% 2,275
Med Surg
Other 532 97.26% 547 582 95.88% 607 878 93.90% 935
Rural 410 90.71% 452 419 91.89% 456 420 92.11% 456
Urban
Urban 2,715 98.44% 2,758 2,703 98.15% 2,754 2,698 97.97% 2,754
All 3,125 97.35% 3,210 3,122 97.26% 3,210 3,118 97.13% 3,210
TA BLE HIM11 | Outcomes and Quality Management

2004 2005 2006
Academic
Not Academic 1,739 59.25% 2,935 1,953 66.50% 2,937 1,978 67.21% 2,943
Med/Surg 1,628 61.13% 2,663 1,736 66.69% 2,603 1,586 69.71% 2,275
Med Surg
Other 295 53.93% 547 417 68.70% 607 598 63.96% 935
Rural 190 42.04% 452 220 48.25% 456 234 51.32% 456
Urban
Urban 1,733 62.84% 2,758 1,933 70.19% 2,754 1,950 70.81% 2,754
All 1,923 59.91% 3,210 2,153 67.07% 3,210 2,184 68.04% 3,210
TA BLE HIM12 | In-House Transcription

2004 2005 2006
Academic
Not Academic 2,470 84.16% 2,935 2,575 87.67% 2,937 2,440 82.91% 2,943
Med/Surg 2,316 86.97% 2,663 2,313 88.86% 2,603 1,897 83.38% 2,275
Med Surg
Other 393 71.85% 547 498 82.04% 607 755 80.75% 935
Rural 361 79.87% 452 375 82.24% 456 372 81.58% 456
Urban
Urban 2,348 85.13% 2,758 2,436 88.45% 2,754 2,280 82.79% 2,754
All 2,709 84.39% 3,210 2,811 87.57% 3,210 2,652 82.62% 3,210
The analysis of this market by bed size for the 2005–2006 period moderate growth for the greater than 600 bed segment
showed the following market activity: (see Tables HIM14, HIM15, and HIM16).
• Abstracting showed slight growth for all segments except • Transcription showed declines for all market segments but
for the 101–200 bed segment, which showed a slight decline specifically, large market declines year over year for the 201–
(see Table HIM13). 300, 401-500, and greater than 600 bed segments. Moderate
• Case mix showed slight growth increases for only the greater declines were demonstrated in the 301–400 and 501–600 bed
than 600 bed segments (see Table HIM16). markets (see Tables HIM14, HIM15, and HIM16).
• Chart deficiency showed slight increases for all segments
TA BLE HIM13 | Health Information Management
but the 501–600 bed segment with showed a slight decline
2005 2006
(see Table HIM15). 0–100 Beds % of 1,081 hospitals % of 1,086 hospitals
• Chart tracking and locator showed slight growth for all bed Abstracting 1,041 96.30% 1,051 96.78%
size segments except for the 401–500 bed segment, which Case Mix Management 924 85.48% 918 84.53%
demonstrated a slight decline (see Table HIM15). Chart Deficiency 960 88.81% 978 90.06%
Chart Tracking/Locator 962 88.99% 972 89.50%
• Data warehousing/mining-clinical showed slight growth for
Data Warehousing/Mining – Clinical 97 8.97% 187 17.22%
the 401–500 bed segment, good growth for the 0–100 and Dictation 901 83.35% 951 87.57%
greater than 600 bed segments, and moderate growth for all Dictation with Speech Recognition 82 7.59% 98 9.02%
other bed segments (see Tables HIM13–HIM16). Encoder 1,028 95.10% 1,027 94.57%
• Dictation showed slight to moderate growth for all segments Outcomes and Quality Management 630 58.28% 647 59.58%
Transcription 910 84.18% 897 82.60%
but the 301–400 bed segment, which showed a slight decline
(see Tables HIM13–HIM16). Abstracting 848 99.07% 833 98.81%
• Dictation with speech recognition showed slight to moderate Case Mix Management 796 92.99% 757 89.80%
growth for all segments except for the greater than 600 bed Chart Deficiency 824 96.26% 819 97.15%
segment which showed good growth (see Table HIM16). Chart Tracking/Locator 820 95.79% 817 96.92%
• Encoder applications show no substantial change year over year Dictation 747 87.27% 768 91.10%
from 2005–2006, which is to be expected for a saturated market. Dictation with Speech Recognition 79 9.23% 111 13.17%
• Outcomes and quality management shows a slight decline Encoder 845 98.71% 832 98.70%
in year over year growth for the 300–401 and 401–500 bed Outcomes and Quality Management 588 68.69% 583 69.16%
segments, good growth for the 501–600 bed segment, and Transcription 766 89.49% 722 85.65%
TA BLE HIM14 | Health Information Management TA BLE HIM16 | Health Information Management
2005 2006 2005 2006
201–300 Beds % of 507 hospitals % of 499 hospitals 600+ Beds % of 133 hospitals % of 146 hospitals
Abstracting 501 98.82% 494 99.00% Abstracting 129 96.99% 143 97.95%
Case Mix Management 480 94.67% 450 90.18% Case Mix Management 126 94.74% 139 95.21%
Chart Deficiency 496 97.83% 491 98.40% Chart Deficiency 128 96.24% 142 97.26%
Chart Tracking/Locator 487 96.06% 486 97.39% Chart Tracking/Locator 128 96.24% 142 97.26%
Data Warehousing/Mining – Clinical 73 14.40% 85 17.03% Data Warehousing/Mining – Clinical 29 21.80% 44 30.14%
Dictation 446 87.97% 444 88.98% Dictation 113 84.96% 131 89.73%
Dictation with Speech Recognition 57 11.24% 85 17.03% Dictation with Speech Recognition 22 16.54% 36 24.66%
Encoder 497 98.03% 486 97.39% Encoder 129 96.99% 144 98.63%
Outcomes and Quality Management 375 73.96% 369 73.95% Outcomes and Quality Management 99 74.44% 117 80.14%
Transcription 445 87.77% 387 77.56% Transcription 113 84.96% 117 80.14%
Abstracting 354 99.16% 361 99.45% Most of the buying occurred in the 1995–1999 period for
Case Mix Management 336 94.12% 334 92.01%
abstracting, case mix, chart deficiency, chart tracking/locator,
Chart Deficiency 352 98.60% 359 98.90%
encoder and in-house transcription. The 2000–2004 period
Data Warehousing/Mining – Clinical 70 19.61% 83 22.87% demonstrated the highest contracting rates for data warehousing/
Dictation 319 89.36% 320 88.15% mining-clinical, dictation, and dictation with speech recognition.
Dictation with Speech Recognition 33 9.24% 51 14.05% Outcomes and quality management had equally high contracting
Encoder 355 99.44% 361 99.45%
periods in both 1995–1999 and 2000–2004 (see Tables HIM17
Outcomes and Quality Management 265 74.23% 264 72.73%
Transcription 328 91.88% 305 84.02%
and HIM18).
TA BLE HIM17 | HIM Contracting
TA BLE HIM15 | Health Information Management Data Ware-
2005 2006 Case Mix Chart housing-
401–500 Beds % of 160 hospitals % of 167 hospitals Manage- Chart Tracking- Mining –
Abstracting ment Deficiency Locator Clinical
Abstracting 158 98.75% 165 98.80%
Prior to 1989 8.44% 8.24% 6.81% 6.72% 0.96%
Case Mix Management 151 94.38% 152 91.02%
1990 to 1994 15.98% 17.60% 16.00% 15.26% 24.20%
Chart Deficiency 159 99.38% 166 99.40%
1995 to 1999 37.63% 37.47% 36.92% 38.32% 19.11%
2000 to 2004 31.34% 30.68% 32.85% 32.23% 37.90%
2005 to 2006 6.60% 6.01% 7.42% 7.47% 17.83%
Dictation 142 88.75% 152 91.02%
Dictation with Speech Recognition 25 15.63% 29 17.37%
Encoder 157 98.13% 165 98.80%
TA BLE HIM18 | HIM Contracting
Outcomes and Quality Management 121 75.63% 125 74.85% Dictation Outcomes
with In-House and Quality
Transcription 145 90.63% 135 80.84% Speech Transcrip- Manage-
501–600 Beds % of 116 hospitals % of 106 hospitals Dictation Recognition Encoder tion ment
Abstracting 113 97.41% 104 98.11% Prior to 1989 2.93% 0.00% 13.10% 2.68% 2.82%
Case Mix Management 104 89.66% 94 88.68% 1990 to 1994 8.34% 3.86% 19.45% 19.60% 11.49%
Chart Deficiency 115 99.14% 104 98.11% 1995 to 1999 32.33% 5.15% 36.72% 38.01% 39.11%
Chart Tracking/Locator 113 97.41% 104 98.11% 2000 to 2004 48.43% 57.94% 23.67% 33.71% 39.11%
Data Warehousing/Mining – Clinical 21 18.10% 27 25.47% 2005 to 2006 7.97% 33.05% 7.05% 5.99% 7.47%
Dictation 102 87.93% 97 91.51%
Dictation with Speech Recognition 19 16.38% 23 21.70% Market Drivers/Factors
Encoder 111 95.69% 103 97.17% The healthcare information management IT application market
Outcomes and Quality Management 75 64.66% 79 74.53%
Transcription 104 89.66% 89 83.96%
has been and will continue to be impacted through 2009 by:
• HIPAA claims attachment regulations
• Severity adjusted DRG regulations
• ICD-10-CM and ICD-10-PCS conversions
• Outsourcing services for transcription
• Increased conversion of the medical record from paper to a digital
format; the mixed format providing some special challenges
• Increase focus on quality outcomes for participating in outcomes
based reimbursement models.
䊳 Nursing IT Applications
The nursing IT application market shows good growth for all The segments that did not show growth year over year for 2005
products except RFID – patient tracking, an emerging technology and 2006 were “other” hospitals (non-medical surgical facilities)
for which vendors have produced only rudimentary, first genera- for nursing acuity, and “other” hospitals and rural hospitals for
tion products. The electronic medication administration record RFID – patient tracking (see Tables NA4 and NA7).
(eMAR), nursing acuity, and nursing documentation applications
TA BLE N A1 | Nursing Applications
show good growth year over year from 2005 to 2006 (and from 2004 2005 2006
2004–2006 for eMAR) (see Table NA1). The continued pursuit EMAR 13.89% 46.57% 56.76%
by hospitals to lower medication errors will continue to drive Nurse Acuity NT 17.35% 24.45%
the growth in the eMAR, nursing documentation, and RFID – Nurse Staffing/Scheduling NT 69.07% 79.63%
patient tracking applications. Nursing Documentation NT 38.38% 51.03%
RFID – Patient Tracking NT 2.62% 3.61%
The majority of 2006 purchasing plans for this market indicate N=3,210
hospital first time purchases for eMAR, nursing acuity, nursing
TA BLE N A 2 | Nursing Applications – Purchasing Plans
documentation, and RFID – patient tracking (see Table NA2).
Nurse staffing/scheduling applications are more likely to be with installed planning to
replacement purchases because of the age and product life cycle software – purchase software
status of some of these offerings in the market today. EMAR 6.39% 93.61% 219
Nurse Acuity 13.89% 86.11% 36
An evaluation of function/region market segments shows that
Nurse Staffing/Scheduling 59.21% 40.79% 76
the majority exhibited good growth from 2005 to 2006 for all Nursing Documentation 8.33% 91.67% 120
but the RFID – patient tracking market (see Tables NA3–NA7). RFID – Patient Tracking 0.00% 100.00% 36
TA BLE N A 3 | eMAR
2004 2005 2006
Academic
Not Academic 407 13.87% 2,935 1,335 45.45% 2,937 1,643 55.83% 2,943
Med/Surg 377 14.16% 2,663 1,170 44.95% 2,603 1,303 57.27% 2,275
Med Surg
Other 69 12.61% 547 325 53.54% 607 519 55.51% 935
Rural 30 6.64% 452 145 31.80% 456 184 40.35% 456
Urban
Urban 416 15.08% 2,758 1,350 49.02% 2,754 1,638 59.48% 2,754
Single/Multi Multi-Hospital System 327 14.13% 2,315 1,111 51.27% 2,167 1,353 62.49% 2,165
All 446 13.89% 3,210 1,495 46.57% 3,210 1,822 56.76% 3,210
TA BLE N A 4 | Nurse Acuity

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 499 16.99% 2937 704 23.92% 2,943
Med/Surg NT 0.00% 2,663 384 14.75% 2,603 524 23.03% 2,275
Med Surg
Other NT 0.00% 547 173 28.50% 607 261 27.91% 935
Rural NT 0.00% 452 44 9.65% 456 62 13.60% 456
Urban
Urban NT 0.00% 2,758 513 18.63% 2,754 723 26.25% 2,754
Single/Multi Multi-Hospital System NT 0.00% 2,315 376 17.35% 2167 547 25.27% 2,165
All 0 0.00% 3,210 557 17.35% 3,210 785 24.45% 3,210
䊳 Nursing IT Applications (CON TINUE D)
TA BLE N A5 | Nurse Staffing/Scheduling

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 1,984 67.55% 2,937 2,310 78.49% 2,943
Med/Surg NT 0.00% 2,663 1,823 70.03% 2,603 1,917 84.26% 2,275
Med Surg
Other NT 0.00% 547 394 64.91% 607 639 68.34% 935
Rural NT 0.00% 452 207 45.39% 456 232 50.88% 456
Urban
Urban NT 0.00% 2,758 2,010 72.98% 2,754 2,324 84.39% 2,754
Single/Multi Multi-Hospital System NT 0.00% 2,315 1,577 72.77% 2,167 1,855 85.68% 2,165
All 0 0.00% 3,210 2,217 69.07% 3,210 2,556 79.63% 3,210
TA BLE N A6 | Nursing Documentation

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 1,105 37.62% 2,937 1,489 50.59% 2,943
Med/Surg NT 0.00% 2,663 955 36.69% 2,603 1,198 52.66% 2,275
Med Surg
Other NT 0.00% 547 277 45.63% 607 440 47.06% 935
Rural NT 0.00% 452 110 24.12% 456 144 31.58% 456
Urban
Urban NT 0.00% 2,758 1,122 40.74% 2,754 1,494 54.25% 2,754
Single/Multi Multi-Hospital System NT 0.00% 2,315 862 39.78% 2,167 1,167 53.90% 2,165
All 0 0.00% 3,210 1,232 38.38% 3,210 1,638 51.03% 3,210
TA BLE N A7 | RFID – Patient Tracking

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 70 2.38% 2,937 98 3.33% 2,943
Med/Surg NT 0.00% 2,663 65 2.50% 2,603 87 3.82% 2,275
Med Surg
Other NT 0.00% 547 19 3.13% 607 29 3.10% 935
Rural NT 0.00% 452 11 2.41% 456 8 1.75% 456
Urban
Urban NT 0.00% 2,758 73 2.65% 2,754 108 3.92% 2,754
All 0 0.00% 3,210 84 2.62% 3,210 116 3.61% 3,210
The analysis of this market by bed size shows good market TA BLE N A9 | Nursing Applications
growth for all applications but the emerging RFID – patient 2005 2006
tracking product from 2005–2006 (see Tables NA8–NA11). 201–300 Beds % of 507 hospitals % of 499 hospitals
eMAR 254 50.10% 302 60.52%
TA BLE N A 8 | Nursing Applications Nurse Acuity 107 21.10% 146 29.26%
2005 2006 Nurse Staffing/Scheduling 409 80.67% 422 84.57%
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals Nursing Documentation 214 42.21% 290 58.12%
eMAR 450 41.63% 537 49.45% RFID – Patient Tracking 14 2.76% 16 3.21%
Nurse Acuity 176 16.28% 228 20.99% 301–400 Beds % of 357 hospitals % of 363 hospitals
Nurse Staffing/Scheduling 578 53.47% 614 56.54% eMAR 190 53.22% 244 67.22%
Nursing Documentation 362 33.49% 459 42.27% Nurse Acuity 68 19.05% 105 28.93%
RFID – Patient Tracking 18 1.67% 26 2.39% Nurse Staffing/Scheduling 291 81.51% 310 85.40%
101–200 Beds % of 856 hospitals % of 843 hospitals Nursing Documentation 150 42.02% 210 57.85%
eMAR 368 42.99% 445 52.79% RFID – Patient Tracking 13 3.64% 16 4.41%
Nurse Acuity 132 15.42% 177 21.00%
Nurse Staffing/Scheduling 583 68.11% 614 72.84%
Nursing Documentation 313 36.57% 430 51.01%
RFID – Patient Tracking 22 2.57% 29 3.44%
䊳 Nursing IT Applications (CON TINUE D)
TA BLE N A10 | Nursing Applications An evaluation of the contract purchasing time frames for these
2005 2006 nursing applications shows the highest buying in the 2000–2004
401–500 Beds % of 160 hospitals % of 167 hospitals time periods, with the exception of RFID – patient tracking which
eMAR 85 53.13% 114 68.26% has had the highest contracting activity in the past two years.
Nurse Acuity 27 16.88% 45 26.95%
Nurse Staffing/Scheduling 141 88.13% 154 92.22% TA BLE N A12 | Nursing Applications
Nursing Documentation 72 45.00% 96 57.49% Nurse RFID –
RFID – Patient Tracking 6 3.75% 10 5.99% Nurse Staffing- Nursing Patient
eMAR Acuity Scheduling Documentation Tracking
Prior to 1989 0.89% 4.09% 12.27% 1.69% 0.00%
eMAR 74 63.79% 82 77.36%
1990 to 1994 7.21% 5.77% 15.57% 9.79% 2.38%
Nurse Acuity 20 17.24% 33 31.13%
1995 to 1999 6.40% 14.42% 22.23% 19.40% 2.38%
2000 to 2004 62.67% 58.41% 35.90% 44.16% 50.00%
Nursing Documentation 64 55.17% 72 67.92%
2005 to 2006 22.83% 17.31% 14.03% 24.95% 45.24%
RFID – Patient Tracking 4 3.45% 10 9.43%
TA BLE N A11 | Nursing Applications Market Drivers/Factors

2005 2006 The nursing application IT application market has been and
600+ Beds % of 133 hospitals % of 146 hospitals will continue to be impacted through 2009 by:
eMAR 74 55.64% 98 67.12% • The need to decrease medication errors
Nurse Acuity 27 20.30% 51 34.93%
• The need to improve quality outcomes
Nursing Documentation 57 42.86% 81 55.48% • The need to create an effective support foundation for
RFID – Patient Tracking 7 5.26% 9 6.16% computerized practitioner order entry (CPOE)
• The need to effectively staff nurses to help reduce the
impact of the nursing shortage.
䊳 Ancillary Department Systems

The ancillary department application system environment is TA BLE A D1 | Ancillary Department Systems
showing good growth for cardiology, emergency department (ED), 2004 2005 2006
intensive care/critical care, obstetrical systems, and respiratory care Cardiology Information System 24.83% 34.14% 42.68%
systems. The older legacy environments for laboratory information Emergency Department Information
System (EDIS) 51.43% 63.12% 72.02%
systems, pharmacy management systems, and radiology informa- Intensive Care/Critical Care (ICU) 31.40% 42.65% 49.84%
tion systems are approaching market saturation (see Table AD1). Laboratory Information System 95.23% 95.51% 97.26%
Obstetrical Systems (Labor and Delivery) 16.11% 31.28% 43.71%
Purchasing plans for this market in 2006 reflect the majority Pharmacy Management System 95.98% 93.71% 96.45%
of purchases for cardiology, ED, intensive care/critical care, Radiology Information System 86.98% 87.76% 91.68%
obstetrical systems and respiratory care information systems to Respiratory Care Information System NT 20.69% 30.19%
be first time purchases. The majority of laboratory, pharmacy, N=3,210
and radiology system purchases are replacement purchases
TA BLE A D2 | Ancillary Department Systems
(see Table AD2). Computerized practitioner order entry (CPOE),
the need for a tight data coupling with pharmacy systems, and with installed planning to
the integration requirements between radiology PACS and radi- software – purchase software
ology systems are driving the high levels of replacement purchases Cardiology Information System 21.88% 78.13% 64
for those ancillary department applications. We believe the Emergency Department Information
System (EDIS) 47.37% 52.63% 76
replacement purchases for laboratory systems is being driven by
Intensive Care/Critical Care (ICU) 29.03% 70.97% 62
the need for laboratories to function as both hospital laboratories Laboratory Information System 75.49% 24.51% 102
and reference laboratories for their local or regional markets. Obstetrical Systems (Labor and Delivery) 52.94% 47.06% 34
Pharmacy Management System 82.80% 17.20% 93
Radiology Information System 52.88% 47.12% 104
Respiratory Care Information System 18.18% 81.82% 33
䊳 Ancillary Department Systems (CON TINUE D)
An evaluation of function/region market segments for ancillary saturation for all segments except for the rural category
department systems from 2005 to 2006 demonstrates the following: (see Table AD6).
• Cardiology information systems are showing moderate to good • Obstetrical systems are manifesting good to strong growth
growth for market penetration for all function/region sections for all function/region segments (see Table AD7).
except “other” hospitals (non-medical/surgical facilities) which • Pharmacy management systems demonstrate slight growth
are showing a slight market decline (see Table AD3). for all function/region segments, except “other” hospitals with
• Emergency department information systems are showing mod- good growth, and all segments except rural are approaching
erate growth for all function/region segments (see Table AD4). market saturation (see Table AD8).
• Intensive care/critical care systems are showing moderate to • Radiology information systems exhibit slight growth for all
good growth for all function/region segments except for the rural function/region segments, and all but “other” hospitals and rural
segment which is depicting only slight growth (see Table AD5). hospitals are approaching market saturation (see Table AD9).
• Laboratory information systems are showing slight growth • Respiratory care information systems demonstrate moderate to
for all function/region segments, and are approaching market good growth for all function/region segments (see Table AD10).
TA BLE A D3 | Cardiology Information System

2004 2005 2006
Academic
Not Academic 682 23.24% 2,935 951 32.38% 2,937 1,202 40.84% 2,943
Med/Surg 654 24.56% 2,663 907 34.84% 2,603 1,090 47.91% 2,275
Med Surg
Other 143 26.14% 547 189 31.14% 607 280 29.95% 935
Rural 62 13.72% 452 57 12.50% 456 78 17.11% 456
Urban
Urban 735 26.65% 2,758 1039 37.73% 2,754 1,292 46.91% 2,754
All 797 24.83% 3,210 1,096 34.14% 3,210 1,370 42.68% 3,210
TA BLE A D 4 | Emergency Department Information System (EDIS)

2004 2005 2006
Academic
Not Academic 1,490 50.77% 2,935 1,824 62.10% 2,937 2,098 71.29% 2,943
Med/Surg 1,398 52.50% 2,663 1,713 65.81% 2,603 1,772 77.89% 2,275
Med Surg
Other 253 46.25% 547 313 51.57% 607 540 57.75% 935
Rural 171 37.83% 452 239 52.41% 456 265 58.11% 456
Urban
Urban 1,480 53.66% 2,758 1,787 64.89% 2,754 2,047 74.33% 2,754
All 1,651 51.43% 3,210 2,026 63.12% 3,210 2,312 72.02% 3,210
TA BLE A D5 | Intensive Care/Critical Care (ICU)

2004 2005 2006
Academic
Not Academic 885 30.15% 2,935 1,224 41.68% 2,937 1,442 49.00% 2,943
Med/Surg 823 30.90% 2,663 1,129 43.37% 2,603 1,159 50.95% 2,275
Med Surg
Other 185 33.82% 547 240 39.54% 607 441 47.17% 935
Rural 115 25.44% 452 150 32.89% 456 153 33.55% 456
Urban
Urban 893 32.38% 2,758 1,219 44.26% 2,754 1,447 52.54% 2,754
All 1,008 31.40% 3,210 1,369 42.65% 3,210 1,600 49.84% 3,210
TA BLE A D6 | Laboratory Information System

2004 2005 2006
Academic
Not Academic 2,782 94.79% 2,935 2,798 95.27% 2,937 2,856 97.04% 2,943
Med/Surg 2,544 95.53% 2,663 2,511 96.47% 2,603 2,256 99.16% 2,275
Med Surg
Other 513 93.78% 547 555 91.43% 607 866 92.62% 935
Rural 360 79.65% 452 380 83.33% 456 397 87.06% 456
Urban
Urban 2,697 97.79% 2,758 2,686 97.53% 2,754 2,725 98.95% 2,754
All 3,057 95.23% 3,210 3,066 95.51% 3,210 3,122 97.26% 3,210
TA BLE A D7 | Obstetrical Systems (Labor and Delivery)

2004 2005 2006
Academic
Not Academic 464 15.81% 2,935 894 30.44% 2,937 1,255 42.64% 2,943
Med/Surg 452 16.97% 2,663 856 32.89% 2,603 1,108 48.70% 2,275
Med Surg
Other 65 11.88% 547 148 24.38% 607 295 31.55% 935
Rural 40 8.85% 452 84 18.42% 456 124 27.19% 456
Urban
Urban 477 17.30% 2,758 920 33.41% 2,754 1,279 46.44% 2,754
All 517 16.11% 3,210 1,004 31.28% 3,210 1,403 43.71% 3,210
TA BLE A D8 | Pharmacy Management System

2004 2005 2006
Academic
Not Academic 2,807 95.64% 2,935 2,739 93.26% 2,937 2,830 96.16% 2,943
Med/Surg 2,567 96.40% 2,663 2,515 96.62% 2,603 2,253 99.03% 2,275
Med Surg
Other 514 93.97% 547 493 81.22% 607 843 90.16% 935
Rural 370 81.86% 452 377 82.68% 456 386 84.65% 456
Urban
Urban 2,711 98.30% 2,758 2,631 95.53% 2,754 2,710 98.40% 2,754
All 3,081 95.98% 3,210 3,008 93.71% 3,210 3,096 96.45% 3,210
TA BLE A D9 | Radiology Information System

2004 2005 2006
Academic
Not Academic 2,523 85.96% 2,935 2,551 86.86% 2,937 2,681 91.10% 2,943
Med/Surg 2,377 89.26% 2,663 2,360 90.66% 2,603 2,164 95.12% 2,275
Med Surg
Other 415 75.87% 547 457 75.29% 607 779 83.32% 935
Rural 307 67.92% 452 323 70.83% 456 347 76.10% 456
Urban
Urban 2,485 90.10% 2,758 2494 90.56% 2,754 2,596 94.26% 2,754
All 2,792 86.98% 3,210 2,817 87.76% 3,210 2,943 91.68% 3,210
TA BLE A D10 | Respiratory Care Information System

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 596 20.29% 2,937 870 29.56% 2,943
Med/Surg NT 0.00% 2,663 496 19.05% 2,603 676 29.71% 2,275
Med Surg
Other NT 0.00% 547 168 27.68% 607 293 31.34% 935
Rural NT 0.00% 452 67 14.69% 456 98 21.49% 456
Urban
Urban NT 0.00% 2,758 597 21.68% 2,754 871 31.63% 2,754
Single/Multi Multi-Hospital System NT 0.00% 2338 443 20.31% 2,181 646 29.67% 2,177
All 0 0.00% 3,210 664 20.69% 3,210 969 30.19% 3,210
The analysis of the ancillary market by bed size from 2005–2006 • The obstetrical systems market shows strong growth for all
is exhibited in Tables AD11–AD14 and depicts the following: bed size segments.
• Cardiology information systems provide a good to strong • The pharmacy management systems market shows slight
market growth showing for all bed size segments except the growth for all bed size segments except for the 0–100 bed
0–100 bed segment, which shows only slight growth for segment which demonstrates moderate growth. All of the
market penetration. pharmacy bed size segments, except the 0–100 bed segment,
• Emergency department information systems manifest are approaching market saturation.
moderate to strong growth for all bed size segments except • The radiology information systems market shows slight
the 401–500 and greater than 600 bed segments, which growth for all bed segments except for the 0–100 segment
show slight growth. which is exhibiting moderate growth. All of the bed size
• The intensive care/critical care system market demonstrates segments for this market, except the 0–100 segment, which
moderate to good growth for all segments except the 401–500 is approaching market saturation.
bed segment, which portrays slight growth. • The respiratory care information system market is demonstrat-
• The laboratory information system market manifests slight ing good to strong growth for all bed size segments.
growth for all bed size segments except for the 501–600
market which shows a very slight decline.
TA BLE A D11 | Ancillary Department Systems TA BLE A D12 | Ancillary Department Systems
2005 2006 2005 2006
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals 201–300 Beds % of 507 hospitals % of 499 hospitals
Cardiology Information System 194 17.95% 226 20.81% Cardiology Information System 225 44.38% 284 56.91%
Emergency Department Emergency Department
Information System (EDIS) 552 51.06% 630 58.01% Information System (EDIS) 354 69.82% 408 81.76%
Intensive Care/Critical Care (ICU) 386 35.71% 466 42.91% Intensive Care/Critical Care (ICU) 247 48.72% 279 55.91%
Laboratory Information System 970 89.73% 1,008 92.82% Laboratory Information System 503 99.21% 498 99.80%
Obstetrical Systems Obstetrical Systems
(Labor and Delivery) 224 20.72% 310 28.55% (Labor and Delivery) 189 37.28% 248 49.70%
Pharmacy Management System 912 84.37% 986 90.79% Pharmacy Management System 499 98.42% 495 99.20%
Radiology Information System 790 73.08% 885 81.49% Radiology Information System 487 96.06% 489 98.00%
Respiratory Care Information System 217 20.07% 280 25.78% Respiratory Care Information System 116 22.88% 163 32.67%
101–200 Beds % of 856 hospitals % of 843 hospitals 301–400 Beds % of 357 hospitals % of 363 hospitals
Cardiology Information System 279 32.59% 353 41.87% Cardiology Information System 171 47.90% 204 56.20%
Emergency Department Emergency Department
Information System (EDIS) 567 66.24% 655 77.70% Information System (EDIS) 245 68.63% 277 76.31%
Intensive Care/Critical Care (ICU) 342 39.95% 408 48.40% Intensive Care/Critical Care (ICU) 170 47.62% 200 55.10%
Laboratory Information System 842 98.36% 839 99.53% Laboratory Information System 348 97.48% 362 99.72%
Obstetrical Systems Obstetrical Systems
(Labor and Delivery) 262 30.61% 384 45.55% (Labor and Delivery) 157 43.98% 213 58.68%
Pharmacy Management System 836 97.66% 835 99.05% Pharmacy Management System 355 99.44% 362 99.72%
Radiology Information System 792 92.52% 799 94.78% Radiology Information System 349 97.76% 357 98.35%
Respiratory Care Information System 168 19.63% 263 31.20% Respiratory Care Information System 76 21.29% 112 30.85%
TA BLE A D13 | Ancillary Department Systems TA BLE A D15 | Ancillary Department Systems
2005 2006 Emergency
401–500 Beds % of 160 hospitals % of 167 hospitals Cardiology Department Intensive Laboratory
Information Information Care-Critical Information
Cardiology Information System 85 53.13% 122 73.05% System System (EDIS) Care (ICU) System
Emergency Department Prior to 1989 1.31% 1.85% 2.38% 7.87%
Information System (EDIS) 121 75.63% 133 79.64%
1990 to 1994 4.43% 6.65% 15.54% 14.69%
Intensive Care/Critical Care (ICU) 91 56.88% 95 56.89%
1995 to 1999 16.39% 25.81% 23.86% 33.20%
Laboratory Information System 158 98.75% 166 99.40%
2000 to 2004 59.51% 48.63% 48.63% 33.93%
Obstetrical Systems
(Labor and Delivery) 67 41.88% 97 58.08% 2005 to 2006 18.36% 17.06% 9.60% 10.31%
Pharmacy Management System 157 98.13% 166 99.40%
Radiology Information System 155 96.88% 165 98.80% TA BLE A D16 | Ancillary Department Systems
Respiratory Care Information System 33 20.63% 60 35.93% Obstetrical Respiratory
501–600 Beds % of 116 hospitals % of 106 hospitals Systems Pharmacy Radiology Care
(Labor and Management Information Information
Cardiology Information System 67 57.76% 79 74.53% Delivery) System System System
Emergency Department Prior to 1989 1.69% 3.94% 4.24% 3.39%
Information System (EDIS) 81 69.83% 89 83.96%
1990 to 1994 7.37% 13.37% 11.10% 21.25%
1995 to 1999 20.43% 27.21% 29.55% 26.43%
2000 to 2004 54.07% 43.59% 41.15% 37.68%
Obstetrical Systems
(Labor and Delivery) 45 38.79% 64 60.38% 2005 to 2006 16.44% 11.89% 13.97% 11.25%
Radiology Information System 114 98.28% 105 99.06% Market Drivers/Factors
Respiratory Care Information System 20 17.24% 39 36.79% The ancillary department IT application market has been and
will continue to be impacted through 2009 by:
TA BLE A D14 | Ancillary Department Systems • The continued hospital focus on gathering data related to
2005 2006
quality of care
Cardiology Information System 75 56.39% 102 69.86% • The need to reduce or eliminate medical and medication
Emergency Department errors
Information System (EDIS) 106 79.70% 120 82.19% • The need to create improved data sharing/integration between
clinical and financial systems to support HIPAA claims
Obstetrical Systems attachment regulations
(Labor and Delivery) 60 45.11% 87 59.59% • The need to capture more clinical data electronically to sup-
port regional health information organizations (RHIOs) and
Radiology Information System 130 97.74% 143 97.95%
Respiratory Care Information System 34 25.56% 52 35.62%
personal health record (PHR) initiatives
• The push by the government to improve the capture, manage-
An evaluation of the contract purchasing time frames for ment, and sharing of electronic health information between
ancillary department applications shows the heaviest buying all healthcare stakeholders
of all applications during the 2000–2004 period. Laboratory, • The push by the government for pay-for-performance and the
pharmacy, and radiology information systems also had sub- need of hospitals to have discrete data with which to report.
stantial contract activity in the 1995–1999 timeframe. Ancillary
department systems contracted before 1995 will have the
highest probability for replacement purchases through 2009.
䊳 Operating Room (Surgery)
The operating room (OR – surgery) IT application market for TA BLE OR1 | Operating Room (Surgery)
U.S. hospitals shows good growth for peri-operative and post- 2004 2005 2006
operative documentation applications, and substantial growth for Peri-Operative NT 50.81% 62.27%
OR scheduling systems (see Table OR1). Pre-operative applica- Post-Operative NT 49.10% 60.00%
Pre-Operative NT 76.42% 77.26%
tions had little growth from 2005–2006, but show the highest
OR Scheduling NT 23.89% 62.18%
market penetration for all OR applications. N=3,210
Purchasing plans for this market in 2006 reflect peri-operative
TA BLE OR 2 | Operating Room (Surgery)
and post-operative purchases as being mostly first time
purchases, while pre-operative and OR scheduling purchases are with installed planning to
more often replacement purchases (see Table OR2). This is to replacing for the first time N
be expected as, in some cases, pre-operative and OR scheduling Peri-Operative 39.02% 60.98% 82
applications are more mature applications in their second and Post-Operative 43.04% 56.96% 79
third generations. Pre-Operative 57.65% 42.35% 85
OR Scheduling 56.72% 43.28% 67
An evaluation of function/region market segments indicates
that peri-operative and post-operative applications show moderate pre-operative systems, while other facilities showed a slight
to good growth from 2005 to 2006 for all function/region decline. Urban and rural facilities both showed a slight increase
segments (see Table OR3 and OR4). The pre-operative market in the market penetration of pre-operative applications, while
showed the most variability by function/region (see Table OR5). multi-hospital systems showed a slight increase and single
Academic facilities showed a slight decline in market penetration hospital organizations showed a slight decrease. OR scheduling
while non-academic medical centers showed a slight increase. showed significant growth across all function/region market
Medical/surgical facilities showed moderate growth for segments (see Table OR6).
TA BLE OR3 | Operating Room (Surgery) – Peri-Operative

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 1,455 49.54% 2,937 1,796 61.03% 2,943
Med/Surg NT 0.00% 2,663 1,354 52.02% 2,603 1,507 66.24% 2,275
Med Surg
Other NT 0.00% 547 277 45.63% 607 492 52.62% 935
Rural NT 0.00% 452 148 32.46% 456 184 40.35% 456
Urban
Urban NT 0.00% 2,758 1,483 53.85% 2,754 1,815 65.90% 2,754
All 0 0.00% 3,210 1,631 50.81% 3,210 1,999 62.27% 3,210
TA BLE OR4 | Operating Room (Surgery) – Post-Operative

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 1,415 48.18% 2,937 1,735 58.95% 2,943
Med/Surg NT 0.00% 2,663 1,318 50.63% 2,603 1,452 63.82% 2,275
Med Surg
Other NT 0.00% 547 258 42.50% 607 474 50.70% 935
Rural NT 0.00% 452 140 30.70% 456 179 39.25% 456
Urban
Urban NT 0.00% 2,758 1,436 52.14% 2,754 1,747 63.44% 2,754
All 0 0.00% 3,210 1,576 49.10% 3,210 1,926 60.00% 3,210
䊳 Operating Room (Surgery) (CON TINUE D)
TA BLE OR5 | Operating Room (Surgery) – Pre-Operative

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 2,196 74.77% 2,937 2,235 75.94% 2,943
Med/Surg NT 0.00% 2,663 2,041 78.41% 2,603 1,889 83.03% 2,275
Med Surg
Other NT 0.00% 547 412 67.87% 607 591 63.21% 935
Rural NT 0.00% 452 231 50.66% 456 236 51.75% 456
Urban
Urban NT 0.00% 2,758 2,222 80.68% 2,754 2,244 81.48% 2,754
All 0 0.00% 3,210 2,453 76.42% 3,210 2,480 77.26% 3,210
TA BLE OR6 | OR Scheduling

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 672 22.88% 2,937 1,794 60.96% 2943
Med/Surg NT 0.00% 2,663 633 24.32% 2,603 1,557 68.44% 2,275
Med Surg
Other NT 0.00% 547 134 22.08% 607 439 46.95% 935
Rural NT 0.00% 452 51 11.18% 456 150 32.89% 456
Urban
Urban NT 0.00% 2,758 716 26.00% 2,754 1,846 67.03% 2,754
Single/Multi Multi-Hospital System NT 0.00% 2,338 546 25.03% 2,181 1,440 66.15% 2,177
All 0 0.00% 3,210 767 23.89% 3,210 1,996 62.18% 3,210
The analysis of this market by bed size shows good growth for TA BLE OR8 | Operating Room (Surgery)
peri-operative and post-operative application systems for all bed 2005 2006
sizes, and strong growth for OR scheduling for all bed sizes 201–300 Beds % of 507 hospitals % of 499 hospitals
(see Tables OR7–OR10). Pre-operative systems show slight growth Peri-Operative 313 61.74% 361 72.34%
Post-Operative 301 59.37% 353 70.74%
to slight declines in market penetration for all bed size segments,
Pre-Operative 446 87.97% 448 89.78%
and are more likely to be implemented in the larger bed segments OR Scheduling 163 32.15% 372 74.55%
than the smaller bed segments. Pre-operative systems are still 301–400 Beds % of 357 hospitals % of 363 hospitals
far from reaching saturation in the 0–100 bed segment. Peri-Operative 218 61.06% 266 73.28%
Post-Operative 207 57.98% 255 70.25%
TA BLE OR7 | Operating Room (Surgery) Pre-Operative 332 93.00% 327 90.08%
2005 2006 OR Scheduling 100 28.01% 276 76.03%
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals
Peri-Operative 422 39.04% 520 47.88% TA BLE OR9 | Operating Room (Surgery)
Post-Operative 413 38.21% 507 46.69% 2005 2006
Pre-Operative 618 57.17% 638 58.75% 401–500 Beds % of 160 hospitals % of 167 hospitals
OR Scheduling 166 15.36% 449 41.34% Peri-Operative 103 64.38% 128 76.65%
101–200 Beds % of 856 hospitals % of 843 hospitals Post-Operative 104 65.00% 122 73.05%
Peri-Operative 424 49.53% 526 62.40% Pre-Operative 150 93.75% 157 94.01%
Post-Operative 415 48.48% 505 59.91% OR Scheduling 47 29.38% 139 83.23%
Pre-Operative 674 78.74% 674 79.95% 501–600 Beds % of 116 hospitals % of 106 hospitals
OR Scheduling 202 23.60% 562 66.67% Peri-Operative 70 60.34% 83 78.30%
Post-Operative 63 54.31% 75 70.75%
Pre-Operative 110 94.83% 99 93.40%
OR Scheduling 43 37.07% 89 83.96%
䊳 Operating Room (Surgery) (CON TINUE D)
TA BLE OR10 | Operating Room (Surgery) Market Drivers/Factors

2005 2006 The OR IT application market for U.S. hospitals has been and
600+ Beds % of 133 hospitals % of 146 hospitals will continue to be impacted through 2009 by:
Peri-Operative 81 60.90% 115 78.77% • An increased need to track and report quality outcomes
Post-Operative 73 54.89% 109 74.66%
• A continuing focus on reducing medical and medication errors
Pre-Operative 123 92.48% 137 93.84%
OR Scheduling 46 34.59% 109 74.66%
at point of care
• An increased need to capture, share, manage, and analyze OR
An evaluation of the contract purchasing time frames for OR data to improve processes, control perpetual inventories and
applications shows the majority of purchasing took place in the drive down costs
2000–2004 period. But, if the growth shown for the 2005–2006 • The increased focus of the federal government to improve data
time period can be sustained, the majority of purchases in this sharing across modalities of care and among all care providers
market may take place between 2005 and 2009. • An increased consumer demand to see and evaluate hospital
service performance indicators.
TA BLE OR11 | OR (Surgery)
Peri-Operative Post-Operative Pre-Operative OR Scheduling
Prior to 1989 1.49% 1.71% 3.78% 3.03%
1990 to 1994 10.87% 10.05% 13.09% 9.26%
1995 to 1999 19.92% 19.75% 28.26% 20.30%
2000 to 2004 47.72% 48.74% 41.18% 47.20%
2005 to 2006 20.00% 19.75% 13.69% 20.21%
䊳 Ambulatory (Hospital Owned)

The hospital-owned ambulatory IT market shows good growth TA BLE A H1 | Ambulatory Market (Hospital Owned)
for the electronic medical record (EMR) applications, and almost 2005 2006
full saturation for the practice management applications. The Ambulatory EMR 25.28% 34.62%
laboratory, pharmacy, and radiology application systems show Ambulatory Laboratory NT 11.03%
Ambulatory Pharmacy NT 4.49%
little market penetration at this time (see Table AH1).
Ambulatory Radiology NT 8.86%
Practice Management 97.96% 98.32%
Purchasing plans for the hospital owned ambulatory market in
N=15,617
2006 reflect the majority of purchases as replacement purchases
for practice management applications, and first time acquisitions TA BLE A H2 | Ambulatory (Hospital Owned) 2006
for EMR, laboratory, pharmacy, and radiology (see Table AH2). % of hospitals % of hospitals
with installed planning to
This is to be expected since many ambulatory facilities and clinics software – purchase software
are just now beginning to feel the industry and governmental replacing for the first time N
Ambulatory EMR 26.36% 73.45% 550
pressures to automate their clinical services.
Ambulatory Laboratory 28.89% 71.11% 45
Ambulatory Pharmacy 21.88% 78.13% 32
An evaluation of hospital market segments shows that the EMR
Ambulatory Radiology 32.56% 67.44% 43
applications achieved good growth for all segments from 2005 Practice Management 98.96% 1.04% 384
to 2006 (see Table AH3); laboratory applications are showing
higher penetration for ambulatory facilities that are affiliated market penetration in the multi-hospital and urban segments
with a multi-hospital delivery system, while those facilities in (see Tables AH5 and AH6); and, practice management applica-
urban and rural locations are almost equal in penetration (see tions are demonstrating almost complete saturation for all
Table AH4); pharmacy and radiology applications have higher segments (see Table AH7).
䊳 Ambulatory (Hospital Owned) (CON TINUE D)
TA BLE A H3 | Ambulatory EMR TA BLE A H7 | Practice Management

2005 2006 2005 2006
Segment Total Segment Total Segment Total Segment Total
Count Percent Count Count Percent Count Count Percent Count Count Percent Count
Urban Urban
Rural 297 25.58% 1161 392 33.73% 1162 Rural 1,121 96.55% 1,161 1,140 98.11% 1,162
Urban 3651 25.26% 14456 5015 34.69% 14455 Urban 14,177 98.07% 14,456 14,214 98.33% 14,455
Single/Multi Hospital Single/Multi Hospital
Multi-Hospital System 2605 29.04% 8969 3520 39.33% 8949 Multi-Hospital System 8,744 97.49% 8,969 8,758 97.87% 8,949
Single Hospital System 1343 20.20% 6648 1887 28.30% 6668 Single Hospital System 6,554 98.59% 6,648 6,596 98.92% 6,668
All 3948 25.28% 15617 5407 34.62% 15617 All 15,298 97.96% 15,617 15,354 98.32% 15,617
TA BLE A H4 | Ambulatory Laboratory An evaluation of the contract purchasing time frames for these
2005 2006 applications shows that the majority of contracting took place
Segment Total Segment Total
Count Percent Count Count Percent Count from 2000 to 2004, except for pharmacy which had the highest
Urban contracting rates in the 1995–1999 period (see Table AH8).
Rural NT 0.00% 1161 128 11.02% 1162 Contracting rates for the EMR, laboratory and pharmacy appli-
Urban NT 0.00% 14456 1595 11.03% 14455 cations (probably related to replacement purchases for pharmacy)
Single/Multi Hospital
were very strong in the 2005–2006 period.
Multi-Hospital System NT 0.00% 8969 1081 12.08% 8949
Single Hospital System NT 0.00% 6648 642 9.63% 6668 TA BLE A H8 | Ambulatory (Hospital Owned) 2006
All 0 0.00% 15617 1723 11.03% 15617 Ambulatory Ambulatory Ambulatory Ambulatory Practice
EMR Laboratory Pharmacy Radiology Management
TA BLE A H5 | Ambulatory Pharmacy Prior to 1989 1.27% 2.08% 0.00% 1.33% 4.02%
2005 2006 1990 to 1994 2.30% 12.22% 12.40% 12.31% 9.83%
Segment Total Segment Total 1995 to 1999 11.86% 25.67% 33.20% 27.29% 33.85%
Count Percent Count Count Percent Count 2000 to 2004 55.40% 33.86% 28.40% 44.26% 46.60%
Urban 2005 to 2006 29.17% 26.16% 26.00% 14.81% 5.70%
Rural NT 0.00% 1,161 24 2.07% 1,162
Urban NT 0.00% 14,456 677 4.68% 14,455 Market Drivers/Factors
The hospital-owned ambulatory IT application market has been
Multi-Hospital System NT 0.00% 8,969 469 5.24% 8,949
Single Hospital System NT 0.00% 6,648 232 3.48% 6,668 and will continue to be impacted through 2009 by:
All 0 0.00% 15,617 701 4.49% 15,617 • Relaxation of the Stark Laws
• Government pressure to increase EMR implementation in the
TA BLE A H6 | Ambulatory Radiology ambulatory market
2005 2006 • Regional health information organization (RHIO) projects
Count Percent Count Count Percent Count • Consumer demands for personal health records derived from
Urban the information in an ambulatory EMR
Rural NT 0.00% 1,161 73 6.28% 1,162 • The need to better track episodes of care for quality outcomes
Urban NT 0.00% 14,456 1,311 9.07% 14,455 and pay for performance reimbursement models.
Multi-Hospital System NT 0.00% 8,969 904 10.10% 8,949
Single Hospital System NT 0.00% 6,648 480 7.20% 6,668
All 0 0.00% 15,617 1,384 8.86% 15,617
䊳 Radiology PACS
The radiology picture archive and communications system TA BLE RP 2 | R-PACS Purchasing Plans
(R-PACS) environment is showing good growth for all % of hospitals % of hospitals
modalities except digital mammography which is demonstrating with installed planning to
moderate growth (see Table RP1). Digital mammography is replacing for the first time N
also lagging the market compared to other R-PACS modalities Angiography 10.59% 89.41% 236
CR (Computed Radiography) 11.29% 88.71% 248
in total market penetration.
CT (Computerized Tomography) 11.31% 88.69% 248
TA BLE RP1 | Radiology PACS (R-PACS) DF (Digital Fluoroscopy) 11.11% 88.89% 234
2004 2005 2006 Digital Mammography 6.20% 93.80% 129
Angiography 33.24% 46.32% 56.95% DR (Digital Radiography) 10.26% 89.74% 234
CR (Computed Radiography) 36.48% 49.72% 63.18% MRI (Magnetic Resonance Imaging) 11.84% 88.16% 245
CT (Computerized Tomography) 41.84% 53.71% 64.05% Nuclear Medicine 10.55% 89.45% 237
DF (Digital Fluoroscopy) 34.14% 46.95% 57.73% US (Ultrasound) 12.15% 87.85% 247
Digital Mammography Not Coll. 14.24% 18.66% An evaluation of function/region market segments shows that
DR (Digital Radiography) 33.93% 46.92% 57.35%
all have exhibited growth over the years that have been tracked
MRI (Magnetic Resonance Imaging) 39.84% 51.43% 62.27%
Nuclear Medicine 35.89% 48.88% 59.13% for all modalities (see Table RP3). The only two market seg-
US (Ultrasound) 39.88% 52.21% 62.40% ments that showed a very slight decline in market penetration
N=3,210 were for “other” hospitals (non-medical surgical facilities) for
The majority of 2006 R-PACS purchasing plans were for first time the modalities of angiography and digital fluoroscopy
purchases (see Table RP2). This is expected in a fast growing (see Tables RP4 and RP7).
market like R-PACS. Over the next few years the replacement
purchases for R-PACS will increase due to the consolidation of
the market vendors and products.
TA BLE RP 3 | Radiology PACS All Applications Combined

2004 2005 2006
Academic
Not Academic 1,156 39.39% 2,935 1,523 51.86% 2,937 1,903 64.66% 2,943
Med/Surg 1,088 40.86% 2,663 1,410 54.17% 2,603 1,548 68.04% 2,275
Med Surg
Other 284 51.92% 547 347 57.17% 607 594 63.53% 935
Rural 107 23.67% 452 161 35.31% 456 224 49.12% 456
Urban
Urban 1,265 45.87% 2,758 1,596 57.95% 2,754 1,918 69.64% 2,754
All 1,372 42.74% 3,210 1,757 54.74% 3,210 2,142 66.73% 3,210
TA BLE RP4 | R-PACS – Angiography

2004 2005 2006
Academic
Not Academic 880 29.98% 2,935 1,271 43.28% 2,937 1,602 54.43% 2,943
Med/Surg 836 31.39% 2,663 1,194 45.87% 2,603 1,388 61.01% 2,275
Med Surg
Other 231 42.23% 547 293 48.27% 607 440 47.06% 935
Rural 58 12.83% 452 104 22.81% 456 158 34.65% 456
Urban
Urban 1,009 36.58% 2,758 1,383 50.22% 2,754 1,670 60.64% 2,754
All 1,067 33.24% 3,210 1,487 46.32% 3,210 1,828 56.95% 3,210
䊳 Radiology PACS (CON TINUE D)
TA BLE RP5 | R-PACS – CR (Computed Radiography)

2004 2005 2006
Academic
Not Academic 971 33.08% 2,935 1,371 46.68% 2,937 1,796 61.03% 2,943
Med/Surg 915 34.36% 2,663 1,276 49.02% 2,603 1,467 64.48% 2,275
Med Surg
Other 256 46.80% 547 320 52.72% 607 561 60.00% 935
Rural 81 17.92% 452 133 29.17% 456 200 43.86% 456
Urban
Urban 1,090 39.52% 2,758 1,463 53.12% 2,754 1,828 66.38% 2,754
All 1,171 36.48% 3,210 1,596 49.72% 3,210 2,028 63.18% 3,210
TA BLE RP6 | R-PACS – CT (Computerized Tomography)

2004 2005 2006
Academic
Not Academic 1,132 38.57% 2,935 1,492 50.80% 2,937 1,819 61.81% 2,943
Med/Surg 1,067 40.07% 2,663 1,385 53.21% 2,603 1,533 67.38% 2,275
Med Surg
Other 276 50.46% 547 339 55.85% 607 523 55.94% 935
Rural 102 22.57% 452 154 33.77% 456 220 48.25% 456
Urban
Urban 1,241 45.00% 2,758 1,570 57.01% 2,754 1,836 66.67% 2,754
All 1,343 41.84% 3,210 1,724 53.71% 3,210 2,056 64.05% 3,210
TA BLE RP7 | R-PACS – DF (Digital Fluoroscopy)

2004 2005 2006
Academic
Not Academic 907 30.90% 2,935 1,291 43.96% 2,937 1,625 55.22% 2,943
Med/Surg 857 32.18% 2,663 1,208 46.41% 2,603 1,398 61.45% 2,275
Med Surg
Other 239 43.69% 547 299 49.26% 607 455 48.66% 935
Rural 68 15.04% 452 116 25.44% 456 169 37.06% 456
Urban
Urban 1,028 37.27% 2,758 1,391 50.51% 2,754 1,684 61.15% 2,754
All 1,096 34.14% 3,210 1,507 46.95% 3,210 1,853 57.73% 3,210
TA BLE RP 8 | R-PACS – Digital Mammography

2004 2005 2006
Academic/Teaching NT NT 275 76 27.84% 273 81 30.34% 267
Academic
Not Academic NT NT 2,935 381 12.97% 2,937 518 17.60% 2,943
Med/Surg NT NT 2,663 357 13.71% 2,603 441 19.38% 2,275
Med Surg
Other NT NT 547 100 16.47% 607 158 16.90% 935
Rural NT NT 452 22 4.82% 456 45 9.87% 456
Urban
Urban NT NT 2,758 435 15.80% 2,754 554 20.12% 2,754
Single/Multi Multi-Hospital System NT NT 2338 309 14.17% 2,181 389 17.87% 2,177
Hospital Single Hospital System NT NT 872 148 14.38% 1,029 210 20.33% 1,033
All 0 0.00% 3,210 457 14.24% 3,210 599 18.66% 3,210
TA BLE RP 9 | R-PACS – DR (Digital Radiography)

2004 2005 2006
Academic
Not Academic 906 30.87% 2,935 1,295 44.09% 2,937 1,622 55.11% 2,943
Med/Surg 858 32.22% 2,663 1,208 46.41% 2,603 1,396 61.36% 2,275
Med Surg
Other 231 42.23% 547 298 49.09% 607 445 47.59% 935
Rural 67 14.82% 452 118 25.88% 456 171 37.50% 456
Urban
Urban 1,022 37.06% 2,758 1,388 50.40% 2,754 1,670 60.64% 2,754
All 1,089 33.93% 3,210 1,506 46.92% 3,210 1,841 57.35% 3,210
TA BLE RP10 | R-PACS – MRI (Magnetic Resonance Imaging)

2004 2005 2006
Academic
Not Academic 1,078 36.73% 2,935 1,424 48.48% 2,937 1,765 59.97% 2,943
Med/Surg 1,020 38.30% 2,663 1,327 50.98% 2,603 1,507 66.24% 2,275
Med Surg
Other 259 47.35% 547 324 53.38% 607 492 52.62% 935
Rural 84 18.58% 452 132 28.95% 456 194 42.54% 456
Urban
Urban 1,195 43.33% 2,758 1,519 55.16% 2,754 1,805 65.54% 2,754
All 1,279 39.84% 3,210 1,651 51.43% 3,210 1,999 62.27% 3,210
TA BLE RP11 | R-PACS – Nuclear Medicine

2004 2005 2006
Academic
Not Academic 966 32.91% 2,935 1,355 46.14% 2,937 1,679 57.05% 2,943
Med/Surg 913 34.28% 2,663 1,269 48.75% 2,603 1,456 64.00% 2,275
Med Surg
Other 239 43.69% 547 300 49.42% 607 442 47.27% 935
Rural 71 15.71% 452 116 25.44% 456 175 38.38% 456
Urban
Urban 1,081 39.20% 2,758 1,453 52.76% 2,754 1,723 62.56% 2,754
All 1,152 35.89% 3,210 1,569 48.88% 3,210 1,898 59.13% 3,210
TA BLE RP12 | R-PACS – US (Ultrasound)

2004 2005 2006
Academic
Not Academic 1,078 36.73% 2,935 1,455 49.54% 2,937 1,776 60.35% 2,943
Med/Surg 1,019 38.27% 2,663 1,353 51.98% 2,603 1,504 66.11% 2,275
Med Surg
Other 261 47.71% 547 323 53.21% 607 499 53.37% 935
Rural 90 19.91% 452 142 31.14% 456 210 46.05% 456
Urban
Urban 1,190 43.15% 2,758 1,534 55.70% 2,754 1,793 65.11% 2,754
All 1,280 39.88% 3,210 1,676 52.21% 3,210 2,003 62.40% 3,210
The analysis of this market by bed size demonstrates slight TA BLE RP15 | R-PACS
growth or decline for the 0–100 bed segment (see Table RP13); 2005 2006
good growth (in many cases double digit growth) for the 101– 401–500 Beds % of 160 hospitals % of 167 hospitals
200, the 201–300, and 301–400 bed segments (see Tables RP13 Angiography 108 67.50% 128 76.65%
CR (Computed Radiography) 112 70.00% 130 77.84%
and RP14); moderate growth in the 401–500 bed segment
CT (Computerized Tomography) 123 76.88% 138 82.63%
(see Table RP15); good growth in the 501–600 bed market and DF (Digital Fluoroscopy) 109 68.13% 128 76.65%
approaching market saturation for all, but the digital mammography Digital Mammography 39 24.38% 42 25.15%
modality(see Table RP15); and slight growth with approaching DR (Digital Radiography) 107 66.88% 125 74.85%
market saturation for all modalities, but digital fluoroscopy, in MRI (Magnetic Resonance Imaging) 120 75.00% 137 82.04%
Nuclear Medicine 112 70.00% 129 77.25%
the over 600 bed segment (see Table RP16). Digital fluoroscopy
US (Ultrasound) 119 74.38% 134 80.24%
provides the greatest growth opportunity for R-PACS, but shows 501–600 Beds % of 116 hospitals % of 106 hospitals
only moderate growth from 2005–2006. Angiography 82 70.69% 93 87.74%
TA BLE RP13 | R-PACS CT (Computerized Tomography) 93 80.17% 98 92.45%
2005 2006 DF (Digital Fluoroscopy) 80 68.97% 93 87.74%
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals Digital Mammography 27 23.28% 35 33.02%
Angiography 285 37.37% 404 37.20% DR (Digital Radiography) 84 72.41% 93 87.74%
CR (Computed Radiography) 328 48.66% 526 48.43% MRI (Magnetic Resonance Imaging) 92 79.31% 98 92.45%
CT (Computerized Tomography) 372 47.46% 513 47.24% Nuclear Medicine 86 74.14% 93 87.74%
DF (Digital Fluoroscopy) 301 39.32% 425 39.13% US (Ultrasound) 88 75.86% 95 89.62%
Digital Mammography 82 11.01% 119 10.96%
DR (Digital Radiography) 302 39.13% 423 38.95% TA BLE RP16 | R-PACS
MRI (Magnetic Resonance Imaging) 341 44.22% 478 44.01%
2005 2006
US (Ultrasound) 355 45.61% 493 45.40%
Angiography 110 82.71% 128 87.67%
Angiography 388 45.33% 468 55.52%
DF (Digital Fluoroscopy) 111 83.46% 128 87.67%
DF (Digital Fluoroscopy) 393 45.91% 471 55.87%
DR (Digital Radiography) 109 81.95% 124 84.93%
DR (Digital Radiography) 391 45.68% 471 55.87%
US (Ultrasound) 113 84.96% 127 86.99%
US (Ultrasound) 443 51.75% 516 61.21%
An evaluation of the contract purchasing time frames for these
TA BLE RP14 | R-PACS applications shows that most of the R-PACS contracting took
2005 2006 place in the 2000–2004 time frame, but contracting in the 2005–
201–300 Beds % of 507 hospitals % of 499 hospitals 2006 time frame indicates activity that may equal or exceed the
Angiography 285 56.21% 338 67.74% 2004–2005 time frame by 2009 (see Table RP17).
CT (Computerized Tomography) 320 63.12% 366 73.35% TA BLE RP17 | R-PACS Contract Signings
DF (Digital Fluoroscopy) 285 56.21% 339 67.94% All Modalities
Digital Mammography 84 16.57% 113 22.65% Prior to 1989 0.89%
DR (Digital Radiography) 288 56.80% 336 67.33% 1990 to 1994 7.21%
MRI (Magnetic Resonance Imaging) 312 61.54% 366 73.35% 1995 to 1999 6.40%
Nuclear Medicine 301 59.37% 349 69.94% 2000 to 2004 62.67%
US (Ultrasound) 317 62.52% 360 72.14% 2005 to 2006 22.83%
Angiography 229 64.15% 269 74.10% Market Drivers/Factors
The R-PACS IT application market has been and will continue
DF (Digital Fluoroscopy) 228 63.87% 269 74.10% to be impacted through 2009 by:
Digital Mammography 75 21.01% 81 22.31% • Ongoing demand to drive down radiology service costs
DR (Digital Radiography) 225 63.03% 269 74.10% • Increased demand to share medical images between care pro-
MRI (Magnetic Resonance Imaging) 242 67.79% 278 76.58% viders in regional health information organizations (RHIOs)
• Ongoing market consolidation that will impact vendors and
US (Ultrasound) 241 67.51% 278 76.58%
products
• Increased demand by the government to share patient medical
information and images.
䊳 Cardiology PACS
The cardiology picture archive and communications system TA BLE CP4 | Cardiology – CT (ComputedTomography)
(C-PACS) environment is showing good growth, but not as 2005 2006
rapidly as the radiology PACS (R-PACS) market. The biggest Segment Total Segment Total
Count Percent Count Count Percent Count
growth for C-PACS increases appear to be in the catheter lab
Academic
and the echocardiology lab environments (see Table CP1). The Academic/Teaching 52 19.05% 273 69 25.84% 267
slower growth compared to the R-PACS environment can be Not Academic 241 8.21% 2,937 339 11.52% 2,943
attributed to a lack of significant cost reduction from the replace- Med Surg
ment of film, which is insignificant in the C-PACS environment. Med/Surg 227 8.72% 2,603 308 13.54% 2,275
Other 66 10.87% 607 100 10.70% 935
TA BLE CP1 | Cardiology PACS Market Growth Urban
2004 2005 2006 Rural 10 2.19% 456 11 2.41% 456
Cardiology – Cath Lab NT 12.46% 19.07% Urban 283 10.28% 2,754 397 14.42% 2,754
Cardiology – CT (Computerized Tomography) NT 9.13% 12.71% Single/Multi Hospital
Cardiology – Echocardiology NT 12.43% 18.16% Multi-Hospital System 205 9.40% 2,181 295 13.55% 2,177
Cardiology – Intravascular Ultrasound NT 8.94% 11.78% Single Hospital System 88 8.55% 1,029 113 10.94% 1,033
Cardiology – Nuclear Cardiology NT 8.29% 10.93% All 293 9.13% 3,210 408 12.71% 3,210
N=3,210
TA BLE CP5 | Cardiology – Echocardiology
The majority of 2006 C-PACS purchasing plans are first time 2005 2006
purchases (see Table CP2). This is expected in an emerging Segment Total Segment Total
healthcare IT market like C-PACS. Count Percent Count Count Percent Count
Academic
TA BLE CP 2 | C-PACS 2006 Purchasing Plans Academic/Teaching 72 26.37% 273 91 34.08% 267
% of hospitals % of hospitals Not Academic 327 11.13% 2,937 492 16.72% 2,943
with installed planning to Med Surg
replacing for the first time N Med/Surg 308 11.83% 2603 443 19.47% 2,275
Cardiology – Cath Lab 2.46% 97.54% 122 Other 91 14.99% 607 140 14.97% 935
Cardiology – CT (Computerized Tomography) 0% 100% 95 Urban
Cardiology – Echocardiology 1.68% 98.32% 119 Rural 15 3.29% 456 20 4.39% 456
Cardiology – Intravascular Ultrasound 1.03% 98.97% 97 Urban 384 13.94% 2,754 563 20.44% 2,754
Cardiology – Nuclear Cardiology 0% 100% 92 Single/Multi Hospital
Multi-Hospital System 274 12.56% 2,181 410 18.83% 2,177
An evaluation of function/region market segments shows that Single Hospital System 125 12.15% 1,029 173 16.75% 1,033
All 399 12.43% 3,210 583 18.16% 3,210
the majority exhibited growth from 2005 to 2006. The segments
that did not show growth year after year were “other” hospitals TA BLE CP6 | Cardiology – Intravascular Ultrasound
(non-medical surgical facilities for computed tomography, 2005 2006
echocardiology, intravascular ultrasound, and nuclear cardiology Segment Total Segment Total
Count Percent Count Count Percent Count
application systems (see Tables CP3–CP7). Rural hospitals did
Academic
not show growth for nuclear cardiology application systems Academic/Teaching 51 18.68% 273 67 25.09% 267
from 2005 to 2006 (see Table CP7). Not Academic 236 8.04% 2,937 311 10.57% 2,943
Med Surg
TA BLE CP 3 | Cardiology – Cath Lab
Med/Surg 223 8.57% 2,603 284 12.48% 2,275
2005 2006
Other 64 10.54% 607 94 10.05% 935
Count Percent Count Count Percent Count Urban
Rural 9 1.97% 456 10 2.19% 456
Academic
Urban 278 10.09% 2,754 368 13.36% 2,754
Academic/Teaching 78 28.57% 273 103 38.58% 267
Not Academic 322 10.96% 2,937 509 17.30% 2,943 Single/Multi Hospital
Med Surg
Single Hospital System 88 8.55% 1,029 112 10.84% 1,033
Med/Surg 305 11.72% 2,603 465 20.44% 2,275
Other 95 15.65% 607 147 15.72% 935 All 287 8.94% 3,210 378 11.78% 3,210
Urban
Rural 11 2.41% 456 13 2.85% 456
Urban 389 14.12% 2,754 599 21.75% 2,754
Single Hospital System 139 13.51% 1,029 194 18.78% 1,033
All 400 12.46% 3,210 612 19.07% 3,210
䊳 Cardiology PACS (CON TINUE D)
TA BLE CP7 | Cardiology – Nuclear Cardiology TA BLE CP10 | C-PACS By Bed Size
2005 2006 2005 2006
Segment Total Segment Total 401–500 Beds % of 160 hospitals % of 167 hospitals
Count Percent Count Count Percent Count Cardiology – Cath Lab 37 23.13% 70 41.92%
Academic Cardiology – CT (Computerized
Academic/Teaching 45 16.48% 273 57 21.35% 267 Tomography) 29 18.13% 47 28.14%
Not Academic 221 7.52% 2,937 294 9.99% 2,943 Cardiology – Echocardiology 39 24.38% 65 38.92%
Med Surg Cardiology – Intravascular
Med/Surg 208 7.99% 2,603 265 11.65% 2,275 Ultrasound 28 17.50% 43 25.75%
Other 58 9.56% 607 86 9.20% 935 Cardiology – Nuclear Cardiology 27 16.88% 42 25.15%
Urban 501–600 Beds % of 116 hospitals % of 106 hospitals
Rural 14 3.07% 456 13 2.85% 456 Cardiology – Cath Lab 44 37.93% 59 55.66%
Urban 252 9.15% 2,754 338 12.27% 2,754 Cardiology – CT (Computerized
Tomography) 29 25.00% 42 39.62%
Cardiology – Echocardiology 39 33.62% 52 49.06%
Cardiology – Intravascular
Single Hospital System 85 8.26% 1,029 107 10.36% 1,033 Ultrasound 26 22.41% 36 33.96%
All 266 8.29% 3,210 351 10.93% 3,210 Cardiology – Nuclear Cardiology 25 21.55% 38 35.85%
The evaluation of the C-PACS market by bed size manifests TA BLE CP11 | C-PACS By Bed Size
growth across all bed size segments (see Tables CP8–CP11). 2005 2006
TA BLE CP 8 | C-PACS By Bed Size Cardiology – Cath Lab 34 25.56% 58 39.73%
2005 2006 Cardiology – CT (Computerized
0–100 Beds % of 1,081 hospitals % of 1,086 hospitals Tomography) 23 17.29% 33 22.60%
Cardiology – Cath Lab 38 3.52% 47 4.33% Cardiology – Echocardiology 31 23.31% 47 32.19%
Cardiology – CT (Computerized Cardiology – Intravascular
Tomography) 35 3.24% 38 3.50% Ultrasound 23 17.29% 31 21.23%
Cardiology – Echocardiology 48 4.44% 63 5.80% Cardiology – Nuclear Cardiology 18 13.53% 25 17.12%
Ultrasound 32 2.96% 34 3.13%
An analysis of temporal contracting activity demonstrates that
Cardiology – Nuclear Cardiology 36 3.33% 37 3.41% the majority of purchases for currently contracted products took
101–200 Beds % of 856 hospitals % of 843 hospitals place in the 2000–2004 time frame, but the 2005 to 2006 time
Cardiology – Cath Lab 101 11.80% 139 16.49% frame is demonstrating strong growth that will surpass earlier
Cardiology – CT (Computerized
Tomography) 64 7.48% 99 11.74% temporal growth contracting periods by year end 2007 (see
Cardiology – Echocardiology 94 10.98% 134 15.90% Table CP12).
Ultrasound 70 8.18% 95 11.27% TA BLE CP12 | C-PACS Temporal Contracting
Cardiology – Nuclear Cardiology 64 7.48% 89 10.56% Cardiology –
CT (Com- Cardiology – Cardiology – Cardiology –
Cardiology – puterized Echo- Intravascular Nuclear
TA BLE CP 9 | C-PACS By Bed Size Cath Lab Tomography) cardiology Ultrasound Cardiology
2005 2006 Prior to 1989 0.00% 0.00% 0.00% 0.00% 0.00%
201–300 Beds % of 507 hospitals % of 499 hospitals 1990 to 1994 0.68% 0.00% 0.38% 0.00% 0.57%
Cardiology – Cath Lab 83 16.37% 126 25.25% 1995 to 1999 3.39% 4.21% 3.44% 4.37% 3.45%
Cardiology – CT (Computerized 2000 to 2004 55.93% 52.11% 54.96% 53.55% 54.02%
Tomography) 68 13.41% 81 16.23% 2005 to 2006 40.00% 43.68% 41.22% 42.08% 41.95%
Cardiology – Echocardiology 91 17.95% 124 24.85%
Ultrasound 71 14.00% 80 16.03% Market Drivers/Factors
Cardiology – Nuclear Cardiology 59 11.64% 63 12.63% The C-PACS IT application market has been and will continue
301–400 Beds % of 357 hospitals % of 363 hospitals to be impacted through 2009 by:
Cardiology – Cath Lab 63 17.65% 113 31.13% • The demand to increase medical image sharing among providers
Cardiology – CT (Computerized
Tomography) 45 12.61% 68 18.73% • The demand to share medical images within emerging
Cardiology – Echocardiology 57 15.97% 98 27.00% regional health information organizations (RHIOs)
Cardiology – Intravascular • The demand to decrease costs for medical imaging services
Ultrasound 37 10.36% 59 16.25%
Cardiology – Nuclear Cardiology 37 10.36% 57 15.70% • Increased compliance for the capture, rendering, and trans-
mission of medical images among vendors.
䊳 The Bar Code Technologies
Bar code technologies are integral for improving patient safety Materials management also demonstrates some good growth
and for improving operational efficiency in U.S. hospitals. The for planned purchases. Materials management represents an
current market shows that bar coding technology is most fre- environment that can show a very quick return on investment
quently used in laboratories, followed closely by radiology, phar- from implementing bar coding technology along with process
macy, and materials management (see Table BC1). reengineering to improve the inventory turnover and flow of
materials throughout the hospital.
TA BLE BC1 | Bar Code Technologies 2006 (Current)
Percent of hospitals Percent of TA BLE BC 2 | Bar Code Technologies 2006 (Planned)
using bar codes all hospitals
Count (N=2,528) (N=3,210) Percent of hospitals Percent of
using bar codes all hospitals
Laboratory 1,816 71.84% 56.57% Count (N=2,528) (N=3,210)
Radiology 1,146 45.33% 35.70% Pharmacy Administration 1,430 56.57% 44.55%
Pharmacy Administration 1,137 44.98% 35.42% Materials Management 239 9.45% 7.45%
Materials Management 975 38.57% 30.37% Laboratory 120 4.75% 3.74%
Cardiology 263 10.40% 8.19% Radiology 116 4.59% 3.61%
Cardiology 74 2.93% 2.31%
Purchasing plans for the bar code technology market in 2006
indicate that the majority of purchases were made for pharmacy
administration (see Table BC2). This is expected as hospitals
The bar code technology market has been and will continue
move to implement the “five rights” of medication administration
to be impacted through 2009 by:
driven by the strategies for clinician adoption of computerized
• The drive for hospitals to implement the five rights of
practitioner order entry (CPOE) in hospitals. This level of IT
medication administration and to improve patient safety
sophistication is identified as stage 5 in the HIMSS Analytics
• The desire to improve supply chain management functions
EMR (SEHR – the International Organization for Standard’s
throughout the hospital to reduce inventory costs and
Shared Electronic Health Record) Adoption Model. This is the
management
most complex and demanding level of hospital IT transformation
• The lack of consistent standards for the technology of
as it requires the tight coupling of data between the CPOE,
materials packaging and medication packaging
pharmacy, and nursing documentation applications, along with
• The integration overhead of integrating bar code technology
integrated bar code processing of medication transactions.
with healthcare IT applications.
䊳 Electronic Medical Records

The electronic medical record (EMR) application suite shows The majority of purchasing plans for EMRs in 2006 were first
good growth for many of the newer more sophisticated applica- time purchases for all but the older legacy applications or order
tions such as computerized practitioner order entry (CPOE) and entry (OE) (see Table EMR2). Older OE applications are being
physician documentation that impact medication errors and qual- replaced as newer interdisciplinary clinical documentation and
ity outcomes (see Table EMR1). The nursing applications are also CPOE products are being acquired. This is expected as the
part of the EMR suite, but we have broken them out for separate majority of U.S. hospitals move to best of suite purchases for
analysis. Foundation EMR applications such as the clinical data EMR applications.
repository (CDR), clinical decision support (CDS), and order entry TA BLE E MR 2 | EMR Applications
showed slower growth from 2004–2006. CPOE and physician % of hospitals % of hospitals
documentation showed the strongest growth from 2005–2006. with installed planning to
| EMR Applications replacing for the first time N
TA BLE E MR1
Clinical Data Repository 21.82% 78.78% 110
2004 2005 2006
Clinical Decision Support 33.75% 66.25% 80
Clinical Data Repository 66.04% 73.30% 75.92%
Computerized Practitioner
Clinical Decision Support 61.03% 64.52% 63.89% Order Entry (CPOE) 3.87% 96.13% 284
CPOE 23.33% 37.91% 43.24% Enterprise EMR 15.49% 84.51% 142
Enterprise EMR 55.86% 56.14% 58.82% Medical Terminology/Controlled
Medical Terminology NT 8.63% 13.71% Medical Vocabulary 0.00% 100% 14
Order Entry 91.21% 92.80% 93.18% Order Entry (Includes Order
Physician Documentation NT 23.96% 32.59% Communications) 50.48% 49.52% 105
N=3,210 Physician Documentation 2.27% 97.73% 88
䊳 Electronic Medical Records (CON TINUE D)
An evaluation of function/region market segments shows EMR4, EMR5, and EMR8). Enterprise EMR applications
that the majority exhibited growth from 2005 to 2006 (see (where the EMR is supplied from the same vendor for
Tables EMR3–EMR9). The segments that did not show growth both the hospital and ambulatory environments) showed a
year after year were “other” hospitals (non-medical surgical slight increase for single hospital systems from 2005–2006
facilities) for CDR, CDS, CPOE, and OE (see Tables EMR3, (see Table EMR6).
TA BLE E MR3 | Clinical Data Repository

2004 2005 2006
Academic
Not Academic 1,901 64.77% 2,935 2,124 72.32% 2,937 2,201 74.79% 2,943
Med/Surg 1,778 66.77% 2,663 1,903 73.11% 2,603 1,755 77.14% 2,275
Med Surg
Other 342 62.52% 547 450 74.14% 607 682 72.94% 935
Rural 223 49.34% 452 254 55.70% 456 275 60.31% 456
Urban
Urban 1,897 68.78% 2,758 2,099 76.22% 2,754 2,162 78.50% 2,754
All 2,120 66.04% 3,210 2,353 73.30% 3,210 2,437 75.92% 3,210
TA BLE E MR4 | Clinical Decision Support

2004 2005 2006
Academic
Not Academic 1,767 60.20% 2,935 1,871 63.70% 2,937 1,845 62.69% 2,943
Med/Surg 1,650 61.96% 2,663 1,716 65.92% 2,603 1,523 66.95% 2,275
Med Surg
Other 309 56.49% 547 355 58.48% 607 528 56.47% 935
Rural 220 48.67% 452 236 51.75% 456 230 50.44% 456
Urban
Urban 1,739 63.05% 2,758 1,835 66.63% 2,754 1,821 66.12% 2,754
All 1,959 61.03% 3,210 2,071 64.52% 3,210 2,051 63.89% 3,210
TA BLE E MR5 | CPOE

2004 2005 2006
Academic
Not Academic 622 21.19% 2,935 1,046 35.61% 2,937 1,200 40.77% 2,943
Med/Surg 552 20.73% 2,663 882 33.88% 2,603 914 40.18% 2,275
Med Surg
Other 197 36.01% 547 335 55.19% 607 474 50.70% 935
Rural 48 10.62% 452 99 21.71% 456 121 26.54% 456
Urban
Urban 701 25.42% 2,758 1,118 40.60% 2,754 1,267 46.01% 2,754
All 749 23.33% 3,210 1,217 37.91% 3,210 1,388 43.24% 3,210
TA BLE E MR6 | Enterprise EMR

2004 2005 2006
Academic
Not Academic 1,606 54.72% 2,935 1,600 54.48% 2,937 1,687 57.32% 2,943
Med/Surg 1,491 55.99% 2,663 1,465 56.28% 2,603 1,316 57.85% 2,275
Med Surg
Other 302 55.21% 547 337 55.52% 607 572 61.18% 935
Rural 197 43.58% 452 184 40.35% 456 186 40.79% 456
Urban
Urban 1,596 57.87% 2,758 1,618 58.75% 2,754 1,702 61.80% 2,754
All 1,793 55.86% 3,210 1,802 56.14% 3,210 1,888 58.82% 3,210
䊳 Electronic Medical Records (CON TINUE D)
TA BLE E MR7 | Medical Terminology

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 242 8.24% 2,937 386 13.12% 2,943
Med/Surg NT 0.00% 2,663 202 7.76% 2,603 282 12.40% 2,275
Med Surg
Other NT 0.00% 547 75 12.36% 607 158 16.90% 935
Rural NT 0.00% 452 31 6.80% 456 55 12.06% 456
Urban
Urban NT 0.00% 2,758 246 8.93% 2,754 385 13.98% 2,754
All 0 0.00% 3,210 277 8.63% 3,210 440 13.71% 3,210
TA BLE E MR8 | Order Entry

2004 2005 2006
Academic
Not Academic 2,666 90.83% 2,935 2,719 92.58% 2,937 2,735 92.93% 2,943
Med/Surg 2,436 91.48% 2,663 2,446 93.97% 2,603 2,194 96.44% 2,275
Med Surg
Other 492 89.95% 547 533 87.81% 607 797 85.24% 935
Rural 332 73.45% 452 353 77.41% 456 364 79.82% 456
Urban
Urban 2,596 94.13% 2,758 2,626 95.35% 2,754 2,627 95.39% 2,754
All 2,928 91.21% 3,210 2,979 92.80% 3,210 2,991 93.18% 3,210
TA BLE E MR9 | Order Entry

2004 2005 2006
Academic
Not Academic NT 0.00% 2,935 657 22.37% 2,937 929 31.57% 2,943
Med/Surg NT 0.00% 2,663 589 22.63% 2,603 698 30.68% 2,275
Med Surg
Other NT 0.00% 547 180 29.65% 607 348 37.22% 935
Rural NT 0.00% 452 57 12.50% 456 90 19.74% 456
Urban
Urban NT 0.00% 2,758 712 25.85% 2,754 956 34.71% 2,754
All 0 0.00% 3,210 769 23.96% 3,210 1,046 32.59% 3,210
The analysis of the EMR market by bed size shows very slight TA BLE E MR10 | EMR Applications
to slight growth for most EMR applications and moderate 2005 2006
growth for CPOE and physician documentation – especially 0–100 Beds % of 1,081 hospitals % of 1,086 hospitals
Clinical Data Repository 689 63.74% 729 67.13%
among larger hospitals (see Tables EMR10–EMR13). The appli-
Clinical Decision Support 572 52.91% 560 51.57%
cations that show a very slight decline from 2005 to 2006 are Computerized Practitioner
CDS in the 0–100 and 101–200 bed segments (see Table EMR10), Order Entry (CPOE) 371 34.32% 413 38.03%
enterprise EMR in the 101–200 and 301–400 bed segments Enterprise EMR 505 46.72% 573 52.76%
Medical Terminology/Controlled
(see Tables EMR10 and EMR11), CDR in the 301–400 bed seg- Medical Vocabulary 98 9.07% 143 13.17%
ment (see Table EMR11), and OE in the 301–400 and 401–500 Order Entry (Includes Order
Communications) 922 85.29% 936 86.19%
bed segments (see Tables EMR11 and EMR12).
Physician Documentation 203 18.78% 317 29.19%
䊳 Electronic Medical Record (CON TINUE D)
TA BLE E MR10 | EMR Applications (continued) TA BLE E MR12 | EMR Applications

2005 2006 2005 2006
101–200 Beds % of 856 hospitals % of 843 hospitals 401–500 Beds % of 160 hospitals % of 167 hospitals
Clinical Data Repository 655 76.52% 659 78.17% Clinical Data Repository 126 78.75% 140 83.83%
Clinical Decision Support 567 66.24% 545 64.65% Clinical Decision Support 113 70.63% 125 74.85%
Computerized Practitioner Computerized Practitioner
Order Entry (CPOE) 294 34.35% 322 38.20% Order Entry (CPOE) 75 46.88% 83 49.70%
Enterprise EMR 484 56.54% 471 55.87% Enterprise EMR 103 64.38% 109 65.27%
Medical Terminology/Controlled Medical Terminology/Controlled
Medical Vocabulary 66 7.71% 104 12.34% Medical Vocabulary 15 9.38% 27 16.17%
Order Entry (Includes Order Order Entry (Includes Order
Communications) 824 96.26% 814 96.56% Communications) 157 98.13% 163 97.60%
Physician Documentation 189 22.08% 257 30.49% Physician Documentation 55 34.38% 66 39.52%
TA BLE E MR11 | EMR Applications Clinical Data Repository 97 83.62% 97 91.51%
2005 2006 Clinical Decision Support 90 77.59% 86 81.13%
201–300 Beds % of 507 hospitals % of 499 hospitals Computerized Practitioner
Order Entry (CPOE) 60 51.72% 69 65.09%
Clinical Data Repository 384 75.74% 395 79.16%
Enterprise EMR 85 73.28% 86 81.13%
Clinical Decision Support 358 70.61% 357 71.54%
Computerized Practitioner Medical Vocabulary 11 9.48% 21 19.81%
Order Entry (CPOE) 193 38.07% 228 45.69%
Order Entry (Includes Order
Enterprise EMR 305 60.16% 313 62.73% Communications) 114 98.28% 105 99.06%
Medical Terminology/Controlled Physician Documentation 40 34.48% 51 48.11%
Medical Vocabulary 34 6.71% 59 11.82%
Order Entry (Includes Order
Communications) 486 95.86% 481 96.39% TA BLE E MR13 | EMR Applications
Physician Documentation 132 26.04% 169 33.87% 2005 2006
301–400 Beds % of 357 hospitals % of 363 hospitals 600+ Beds % of 160 hospitals % of 167 hospitals
Clinical Data Repository 282 78.99% 280 77.13% Clinical Data Repository 120 90.23% 137 93.84%
Clinical Decision Support 262 73.39% 256 70.52% Clinical Decision Support 109 81.95% 122 83.56%
Computerized Practitioner Computerized Practitioner
Order Entry (CPOE) 144 40.34% 178 49.04% Order Entry (CPOE) 80 60.15% 95 65.07%
Enterprise EMR 225 63.03% 222 61.16% Enterprise EMR 95 71.43% 114 78.08%
Medical Terminology/Controlled Medical Terminology/Controlled
Medical Vocabulary 33 9.24% 54 14.88% Medical Vocabulary 20 15.04% 32 21.92%
Order Entry (Includes Order Order Entry (Includes Order
Communications) 346 96.92% 347 95.59% Communications) 130 97.74% 145 99.32%
Physician Documentation 104 29.13% 124 34.16% Physician Documentation 46 34.59% 62 42.47%
Most of the contracting for these applications took place in the 2000–2004 time period (see Table EMR14). But, we expect the
2005–2009 time frame to equal or exceed the contracting that took place from 2000–2004.
TA BLE E MR14 | EMR Applications
Medical
Terminology/ Order Entry
Clinical Data Clinical Decision Controlled (Includes Order
Repository Support CPOE Enterprise EMR Vocabulary Comm.) Physician Doc.
Prior to 1989 1.59% 1.64% 0.20% 1.34% 3.14% 4.93% 0.86%
1990 to 1994 9.40% 12.27% 7.85% 13.18% 2.52% 16.53% 12.10%
1995 to 1999 33.35% 35.24% 6.85% 20.98% 20.75% 30.62% 12.54%
2000 to 2004 41.37% 35.42% 59.42% 49.90% 41.51% 36.44% 47.12%
2005 to 2006 14.29% 15.43% 25.68% 14.59% 32.08% 11.49% 27.38%
The EMR IT application market has been and will continue • A focus by the U.S. government to improve data sharing
to be impacted through 2009 by: of patient medical information between providers
• An increased focus on decreasing medication errors and • The failure of regional health information organizations
medical errors (RHIOs) due to a lack of clinical data sharing between or
• An increased focus on improving quality of care to compete among provider systems needed to support their business
in quality of care reimbursement models models
• A lack of interoperability standards and vendor adoption • The need to cut clinical operating costs for acquiring,
of these standards to improve clinical system integration managing, and analyzing clinical data.
and data sharing
䊳 The EMR (SEHR) Adoption Model Measuring Clinical IT Transformation
Many people in the U.S. healthcare industry, our government, Stage 0: Some clinical automation may be present, but all three
and the press use the terms electronic medical record (EMR) and of the major ancillary department systems for laboratory, phar-
electronic health record (EHR) interchangeably. However, these macy, and radiology are not implemented.
terms describe completely different concepts, both of which are Stage 1: All three of the major ancillary clinical systems (phar-
crucial to the success of local, regional, and national goals to macy, laboratory, radiology) are installed.
improve patient safety, improve the quality and efficiency of
patient care, and reduce healthcare delivery costs. In an attempt Stage 2: Major ancillary clinical systems feed data to a CDR
to bring some sanity to the misuses of the terminology in the that provides physician access for retrieving and reviewing
industry, the International Organization for Standardization results. The CDR contains a controlled medical vocabulary,
Technical Committee 215 (ISO/TC 215) has created an EHR and the clinical decision support/rules engine for rudimentary
classification document that uses two terms to differentiate these conflict checking. Information from document imaging systems
environments – shared EHR (e.g., EMR = SEHR) and integrated may be linked to the CDR at this stage.
care EHR (e.g., EHR = ICEHR)1. ICEHRs are reliant on SEHRs Stage 3: Clinical documentation (e.g., vital signs, flow sheets) is
being in place, and SEHRs will never reach their full potential required; nursing notes, care plan charting, and/or the electronic
without interoperable ICEHRs in place. It’s important to under- medication administration record (eMAR) system are scored
stand the differences, and to reduce confusion in the market. with extra points, and are implemented and integrated with the
CDR for at least one service or one unit in the hospital. The first
First, ISO defines an EHR as “a healthcare record in computer
level of clinical decision support is implemented to conduct error
processable format.” The SEHR is the legal record created in
checking with order entry (i.e., drug/drug, drug/food, drug/lab
hospitals and ambulatory environments that is the source of data
conflict checking normally found in the pharmacy). Some level
for the ICEHR. The ICEHR represents the ability to easily share
of medical image access from picture archive and communica-
medical information among stakeholders and to have a patient’s
tion systems (PACS) is available for access by physicians via the
information follow him or her through the various modalities of
organization’s intranet or other secure networks outside of the
care engaged by that individual. Stakeholders are composed of
radiology department confines.
patients/consumers, healthcare providers, employers, and/or pay-
ers/insurers, including the government. Stage 4: Computerized Practitioner/Physician Order Entry (CPOE)
for use by any clinician is added to the nursing and CDR envi-
But before we can move to effective ICEHR environments, provider ronment along with the second level of clinical decision support
organizations must implement complete SEHR solutions. At this capabilities related to evidence based medicine protocols. If one
point, few hospitals have SEHR solutions that can effectively reduce patient service area has implemented CPOE and completed the
medical errors or improve the quality and efficiency of patient care. previous stages, then this stage has been achieved.
The EMR (SEHR) Adoption Model has been developed by HIMSS
Analytics to assess the status of clinical system/SEHR implementa- Stage 5: The closed loop medication administration environment
tions in care delivery organizations, specifically hospitals. This model is fully implemented in at least one patient care service area. The
demonstrates that U.S. hospitals have a long journey ahead of them to eMAR and bar coding or other auto identification technology, such
achieve the ICEHR visions being espoused in Washington, D.C. and as radio frequency identification (RFID), are implemented and
to support the 200+ Regional Health Information Organization integrated with CPOE and pharmacy to support the five rights of
(RHIO) initiatives in various states of development across the country. medication administration, thereby maximizing point of care
patient safety processes.
EMR (SEHR) Adoption Model: A New EMR/SEHR Market Stage 6: Full physician documentation/charting (using structured
Transformation Assessment Tool templates) is implemented for at least one patient care service area.
Understanding the level of SEHR capabilities in hospitals is Level three of clinical decision support provides guidance for all
a challenge in the U.S. healthcare IT market today. HIMSS clinician activities related to protocols and outcomes in the form
Analytics has created an EMR (SEHR) Adoption Model that of variance and compliance alerts. A full complement of radiology
identifies the levels of SEHR capabilities ranging from the initial PACS systems provides medical images to physicians via an
clinical data repository (CDR) environment through a paperless intranet and displaces all film-based images.
SEHR environment. HIMSS Analytics has developed a method- Stage 7: The hospital has a paperless SEHR environment.
ology and algorithms to automatically score the approximately Clinical information can be readily shared via electronic trans-
4,300 hospitals in our database relative to their progress in actions or exchange of electronic records with all entities within
implementing the components of an SEHR and to provide peer a regional health information network (i.e., other hospitals,
comparisons for CDOs as they strategize their path to a com- ambulatory clinics, sub-acute environments, employers, payers and
plete SEHR and participation in an ICEHR. The stages of the patients). This stage allows the health care organization (HCO) to
model are as follows: support the true ICEHR as envisioned in the ideal model.
1 ISO/TR 20514, Health informatics – Electronic health record – Definition, scope, and context, 2005-01-22; pp 1-33.
䊳 The EMR (SEHR) Adoption Model Measuring Clinical IT Transformation (CON TINUE D)
Scoring Format (EMR Sophistication Correlates to Hospital Quality Data –

An EMR/SEHR score is represented by the following format – http://www.himssanalytics.org/PDFFiles/UHC25.pdf). We believe
S.nnnn, where “S” equals the current stage achieved for the that as hospitals advance to Stage 3 and beyond in the EMR/
model, and the “.nnnn” represents the weighted score representing SEHR adoption model, stronger correlations will be achieved.
the implementation of higher stage clinical applications that have
TA BLE E MR/SE HR1 | 2006 EMR/SEHR Adoption Model Scores
been implemented before the higher stage has been achieved.
Based on 4,237 Hospitals with a minimum score of 0.000 and maximum score of 6.0150
In this model all applications in previous stages and the current
Segment Mean Median Number
stage must be achieved before the current stage score is achieved.
Hospital Type Segment
The majority of U.S. hospitals are in the early stages of SEHR Academic/Teaching 2.5132 2.2540 319
NonAcademic 1.7267 2.0570 3,918
transformation. An evaluation of U.S. hospitals’ current EMR/
General Medical/Surgical 1.9543 2.0940 2,815
SEHR capabilities can be evaluated by using different market Others 1.4525 2.0000 1,422
segments to provide a more complete analysis of what types of Rural 1.1203 1.0150 924
hospitals are advancing in their pursuit of a complete EMR/ Urban 1.9715 2.1020 3,313
SEHR environment (see Table EMR/SEHR1). The hospitals that IDS 1.8153 2.0900 2,881
Independent Hospital 1.7233 2.0450 1,356
have achieved an average EMR/SEHR Adoption Model score of
Critical Access 0.9449 0.2030 817
greater than 2.000 are academic medical centers, hospitals greater Bed Segment
than 200 beds, and hospitals in the New England, South Atlantic, 0–100 Beds 1.2842 1.1010 1,663
and Puerto Rico regions. Academic/teaching medical centers 101–200 Beds 1.9384 2.0940 1,006
exhibit the highest average and median scores for U.S. hospitals 201–300 Beds 2.0815 2.1250 601
301–400 Beds 2.1324 2.1540 447
which is to be expected as these institutions have been the pioneers
401–500 Beds 2.3013 2.1770 207
and leaders for advancing healthcare IT. Many hospitals of over 501–600 Beds 2.5876 2.3160 134
200 beds have invested in EMR/SEHRs to the extent where most 600+ Beds 2.5359 2.2470 179
have robust clinical data repository environments fed by ancillary Regions (U.S. Census Defined)
department information systems – Stage 2. But, Stage 2 is con- East North Central 1.9691 2.0940 669
East South Central 1.7784 2.0710 373
sidered the foundation stage for implementing the more sophisti-
Middle Atlantic 2.0292 2.1450 461
cated EMR/SEHR applications (Stages 3–6) that will reduce Mountain 1.5973 2.0750 289
medical errors and improve clinical outcomes. The hospitals in New England 2.2166 2.1890 181
the 501–600 bed segment show the highest mean and median Pacific 1.5366 1.2630 487
scores, and including the greater than 600 bed segment which South Atlantic 2.1548 2.1610 674
West North Central 1.3423 1.1240 526
exhibits the second highest mean and median scores, represents
West South Central 1.5292 2.0150 572
the size of the majority of academic/teaching medical centers. Canada 0.2800 0.2800 1
The New England and South Atlantic regions may have achieved Puerto Rico 1.5325 2.0225 4
higher EMR/SEHR scores because hospitals in those regions All Hospitals – Total 1.6545 2.0750 4,237
may have better access to capital for acquiring and implementing
EMR/SEHRs, or they may have the more progressive academic/ F IGURE E MR/SE HR1
teaching medical centers or larger hospitals that have been used % of U.S.
Hospitals
as benchmarks for other hospitals to follow in the region. Medical record fully electronic;
STAGE 7 0.0%
CDO able to contribute to EHR as byproduct of EMR
An overall evaluation of the U.S. hospital market for the EMR/
Physician documentation (structured templates),
SEHR adoption model scores by individual stage is shown in STAGE 6
full CDSS (variance & compliance), full PACS
0.1%
Figure EMR/SEHR1. This figure clearly shows that most U.S.
STAGE 5 Closed loop medication administration 0.5%
hospitals are at Stage 2 which provides the foundation for
advancing to more advanced stages. What we have observed STAGE 4 CPOE, CDSS (clinical protocols) 3.0%
with the model scores over the last 18 months is that the percent-
Clinical documentation (flow sheets), CDSS
age of hospitals in Stages 0-2 are decreasing and the scores STAGE 3
(error checking), PACS available outside Radiology
18.0%
for Stages 3-4 are increasing. This demonstrates that U.S. hospi- CDR, CMV, CDSS inference engine,
STAGE 2 38.8%
tals are advancing their EMR/SEHR capabilities to meet new may have Document Imaging
market demands and requirements. HIMSS Analytics and the STAGE 1 Ancillaries – Lab, Rad, Pharmacy 18.9%
University Hospital Consortium recently completed and published
research that demonstrates early correlations between higher STAGE 0 All three ancillaries not installed 20.7%
EMR/SEHR adoption model scores, and higher AHRQ scores
䊳 Appendix
0-100 Beds 101-200 Beds 201-300 Beds

2005 2006 2005 2006 2005 2006
Applications % of 1,081 hospitals % of 1,086 hospitals % of 856 hospitals % of 843 hospitals % of 507 hospitals % of 499 hospitals
Abstracting 1,041 96.30% 1,051 96.78% 848 99.07% 833 98.81% 501 98.82% 494 99.00%
Accounts Payable 1,072 99.17% 1,077 99.17% 847 98.95% 840 99.64% 503 99.21% 497 99.60%
ADT/Registration 1,073 99.26% 1,081 99.54% 851 99.42% 841 99.76% 504 99.41% 497 99.60%
Anatomical Pathology 391 36.17% 487 44.84% 483 56.43% 572 67.85% 353 69.63% 409 81.96%
Benefits Administration 993 91.86% 1,001 92.17% 816 95.33% 812 96.32% 488 96.25% 483 96.79%
Blood Bank 485 44.87% 563 51.84% 554 64.72% 659 78.17% 378 74.56% 429 85.97%
Browser NT NT 707 65.10% NT NT 552 65.48% NT NT 350 70.14%
Budgeting 913 84.46% 948 87.29% 751 87.73% 725 86.00% 452 89.15% 435 87.17%
Business Intelligence 209 19.33% 220 20.26% 198 23.13% 213 25.27% 131 25.84% 151 30.26%
Cardiology – Cath Lab 38 3.52% 47 4.33% 101 11.80% 139 16.49% 83 16.37% 126 25.25%
Cardiology – CT (Computerized Tomography) 35 3.24% 38 3.50% 64 7.48% 99 11.74% 68 13.41% 81 16.23%
Cardiology – Echocardiology 48 4.44% 63 5.80% 94 10.98% 134 15.90% 91 17.95% 124 24.85%
Cardiology – Intravascular Ultrasound 32 2.96% 34 3.13% 70 8.18% 95 11.27% 71 14.00% 80 16.03%
Cardiology – Nuclear Cardiology 36 3.33% 37 3.41% 64 7.48% 89 10.56% 59 11.64% 63 12.63%
Cardiology Information System 194 17.95% 226 20.81% 279 32.59% 353 41.87% 225 44.38% 284 56.91%
Case Mix Management 924 85.48% 918 84.53% 796 92.99% 757 89.80% 480 94.67% 450 90.18%
Chart Deficiency 960 88.81% 978 90.06% 824 96.26% 819 97.15% 496 97.83% 491 98.40%
Chart Tracking/Locator 962 88.99% 972 89.50% 820 95.79% 817 96.92% 487 96.06% 486 97.39%
Clinical Data Repository 689 63.74% 729 67.13% 655 76.52% 659 78.17% 384 75.74% 395 79.16%
Clinical Decision Support 572 52.91% 560 51.57% 567 66.24% 545 64.65% 358 70.61% 357 71.54%
Computerized Practitioner Order Entry (CPOE) 371 34.32% 413 38.03% 294 34.35% 322 38.20% 193 38.07% 228 45.69%
Contract Management 599 55.41% 636 58.56% 597 69.74% 584 69.28% 391 77.12% 373 74.75%
Cost Accounting 836 77.34% 739 68.05% 711 83.06% 637 75.56% 436 86.00% 406 81.36%
Credit/Collections 1,001 92.60% 1,014 93.37% 808 94.39% 803 95.26% 473 93.29% 469 93.99%
Data Warehousing/Mining – Clinical 97 8.97% 187 17.22% 97 11.33% 135 16.01% 73 14.40% 85 17.03%
Data Warehousing – Financial 173 16.00% 232 21.36% 148 17.29% 180 21.35% 88 17.36% 114 22.85%
DBMS NT NT 470 43.28% NT NT 423 50.18% NT NT 263 52.71%
Dictation 901 83.35% 951 87.57% 747 87.27% 768 91.10% 446 87.97% 444 88.98%
Dictation with Speech Recognition 82 7.59% 98 9.02% 79 9.23% 111 13.17% 57 11.24% 85 17.03%
Document Management – Business Office NT NT 350 32.23% NT NT 291 34.52% NT NT 193 38.68%
Document Management – HIM NT NT 431 39.69% NT NT 403 47.81% NT NT 244 48.90%
Document Management – Human Resources NT NT 225 20.72% NT NT 190 22.54% NT NT 102 20.44%
Electronic Claims – Clearing House Vendor 1,033 95.56% NT NT 828 96.73% NT NT 491 96.84% NT NT
Electronic Data Interchange (EDI) –
Clearing House Vendor 337 31.17% 445 40.98% 257 30.02% 367 43.53% 130 25.64% 211 42.28%
Electronic Forms – Business Office NT NT 253 23.30% NT NT 184 21.83% NT NT 104 20.84%
Electronic Forms – HIM NT NT 246 22.65% NT NT 197 23.37% NT NT 115 23.05%
Electronic Forms – Human Resources NT NT 172 15.84% NT NT 134 15.90% NT NT 58 11.62%
Eligibility 373 34.51% 469 43.19% 369 43.11% 448 53.14% 237 46.75% 290 58.12%
eMAR 450 41.63% 537 49.45% 368 42.99% 445 52.79% 254 50.01% 302 60.52%
Emergency Department Information System (EDIS) 552 51.06% 630 58.01% 567 66.24% 655 77.70% 354 69.82% 408 81.76%
Encoder 1,028 95.01% 1,027 94.57% 845 98.71% 832 98.70% 497 98.03% 486 97.39%
Enterprise EMR 505 46.72% 573 52.76% 484 56.54% 471 55.87% 305 60.16% 313 62.73%
Enterprise Master Person Index (EMPI) 274 25.35% 343 31.58% 205 23.95% 308 36.54% 140 27.61% 210 42.08%
Enterprise Resource Planning 188 17.39% 193 17.77% 174 20.33% 169 20.05% 132 26.04% 130 26.05%
Executive Information System 623 57.63% 643 59.21% 590 68.93% 549 65.12% 347 68.44% 329 65.93%
Financial Modeling 211 19.52% 242 22.28% 184 21.50% 219 25.98% 111 21.89% 155 31.06%
General Ledger 1,062 98.24% 1,075 98.99% 844 98.60% 840 99.64% 503 99.21% 497 99.60%
Intensive Care/ Medical Surgical NT NT 523 48.16% NT NT 474 56.23% NT NT 323 64.73%
Intensive Care/Critical Care (ICU) 386 35.71% 466 42.91% 342 39.95% 408 48.40% 247 48.72% 279 55.91%
301-400 Beds 401-500 Beds 501-600 Beds 600+ Beds
2005 2006 2005 2006 2005 2006 2005 2006
% of 357 hospitals % of 363 hospitals % of 160 hospitals % of 167 hospitals % of 116 hospitals % of 106 hospitals % of 133 hospitals % of 146 hospitals
354 99.16% 361 99.45% 158 98.75% 165 98.80% 113 97.41% 104 98.11% 129 96.99% 143 97.95%
353 98.88% 362 99.72% 157 98.12% 167 100.00% 113 97.41% 106 100.00% 130 97.74% 146 100.00%
355 99.44% 363 100.00% 159 99.38% 167 100.00% 114 98.28% 105 99.06% 132 99.25% 146 100.00%
260 72.83% 315 86.78% 120 75.00% 143 85.63% 85 73.28% 88 83.02% 102 76.69% 131 89.73%
353 98.88% 357 98.35% 157 98.12% 163 97.60% 113 97.41% 104 98.11% 128 96.24% 142 97.26%
282 78.99% 335 92.29% 126 78.75% 151 90.42% 89 76.72% 92 86.79% 100 75.19% 130 89.04%
NT NT 258 71.07% NT NT 114 68.26% NT NT 84 79.25% NT NT 104 71.23%
324 90.76% 327 90.08% 149 93.12% 155 92.81% 103 88.79% 101 95.28% 123 92.48% 132 90.41%
101 28.29% 121 33.33% 39 24.38% 55 32.93% 25 21.55% 35 33.02% 32 24.06% 36 24.66%
63 17.65% 113 31.13% 37 23.12% 70 41.92% 44 37.93% 59 55.66% 34 25.56% 58 39.73%
45 12.61% 68 18.73% 29 18.12% 47 28.14% 29 25.00% 42 39.62% 23 17.29% 33 22.60%
57 15.97% 98 27.00% 39 24.38% 65 38.92% 39 33.62% 52 49.06% 31 23.31% 47 32.19%
37 10.36% 59 16.25% 28 17.50% 43 25.75% 26 22.41% 36 33.96% 23 17.29% 31 21.23%
37 10.36% 57 15.70% 27 16.88% 42 25.15% 25 21.55% 38 35.85% 18 13.53% 25 17.12%
171 47.90% 204 56.20% 85 53.12% 122 73.05% 67 57.76% 79 74.53% 75 56.39% 102 69.86%
336 94.12% 334 92.01% 151 94.38% 152 91.02% 104 89.66% 94 88.68% 126 94.74% 139 95.21%
352 98.60% 359 98.90% 159 99.38% 166 99.40% 115 99.14% 104 98.11% 128 96.24% 142 97.26%
349 97.76% 359 98.90% 157 98.12% 163 97.60% 113 97.41% 104 98.11% 128 96.24% 142 97.26%
282 78.99% 280 77.13% 126 78.75% 140 83.83% 97 83.62% 97 91.51% 120 90.23% 137 93.84%
262 73.39% 256 70.52% 113 70.62% 125 74.85% 90 77.59% 86 81.13% 109 81.95% 122 83.56%
144 40.34% 178 49.04% 75 46.88% 83 49.70% 60 51.72% 69 65.09% 80 60.15% 95 65.07%
267 74.79% 279 76.86% 123 76.88% 131 78.44% 91 78.45% 88 83.02% 104 78.20% 111 76.03%
309 86.55% 310 85.40% 141 88.12% 141 84.43% 102 87.93% 97 91.51% 124 93.23% 135 92.47%
335 93.84% 342 94.21% 151 94.38% 160 95.81% 106 91.38% 99 93.40% 124 93.23% 135 92.47%
70 19.61% 83 22.87% 32 20.00% 35 20.96% 21 18.10% 27 25.47% 29 21.80% 44 30.14%
84 23.53% 114 31.40% 34 21.25% 51 30.54% 29 25.00% 40 37.74% 33 24.81% 55 37.67%
319 89.36% 320 88.15% 142 88.75% 152 91.02% 102 87.93% 97 91.51% 113 84.96% 131 89.73%
33 9.24% 51 14.05% 25 15.63% 29 17.37% 19 16.38% 23 21.70% 22 16.54% 36 24.66%
348 97.48% NT NT 157 98.12% NT NT 112 96.55% NT NT 130 97.74% NT NT
107 29.97% 170 46.83% 45 28.12% 70 41.92% 27 23.28% 45 42.45% 49 36.84% 70 47.95%
176 49.30% 210 57.85% 80 50.00% 102 61.08% 55 47.41% 73 68.87% 68 51.13% 87 59.59%
190 53.22% 244 67.22% 85 53.12% 114 68.26% 74 63.79% 82 77.36% 74 55.64% 98 67.12%
245 68.63% 277 76.31% 121 75.62% 133 79.64% 81 69.83% 89 83.96% 106 79.70% 120 82.19%
355 99.44% 361 99.45% 157 98.12% 165 98.80% 111 95.69% 103 97.17% 129 96.99% 144 98.63%
225 63.03% 222 61.16% 103 64.38% 109 65.27% 85 73.28% 86 81.13% 95 71.43% 114 78.08%
102 28.57% 157 43.25% 42 26.25% 70 41.92% 36 31.03% 44 41.51% 44 33.08% 68 46.58%
85 23.81% 91 25.07% 39 24.38% 47 28.14% 27 23.28% 30 28.30% 29 21.80% 40 27.40%
243 68.07% 239 65.84% 101 63.12% 106 63.47% 77 66.38% 72 67.92% 91 68.42% 102 69.86%
96 26.89% 122 33.61% 33 20.62% 53 31.74% 27 23.28% 38 35.85% 32 24.06% 42 28.77%
353 98.88% 363 100.00% 157 98.12% 166 99.40% 114 98.28% 106 100.00% 131 98.50% 146 100.00%
170 47.62% 200 55.01% 91 56.88% 95 56.89% 58 50.00% 62 58.49% 75 56.39% 90 61.64%
䊳 Appendix (CON TINUE D)
0-100 Beds 101-200 Beds 201-300 Beds

2005 2006 2005 2006 2005 2006
Applications % of 1,081 hospitals % of 1,086 hospitals % of 856 hospitals % of 843 hospitals % of 507 hospitals % of 499 hospitals
Interface Engines NT NT 363 33.43% NT NT 308 36.54% NT NT 237 47.49%
Laboratory Information System 970 89.73% 1,008 92.82% 842 98.36% 839 99.53% 503 99.21% 498 99.80%
Materials Management 996 92.14% 1,034 95.21% 837 97.78% 833 98.81% 493 97.24% 490 98.20%
Medical Staff Credentialing 363 33.58% 508 46.78% 376 43.93% 561 66.55% 239 47.14% 340 68.14%
Medical Vocabulary 98 9.07% 143 13.17% 66 7.71% 104 12.34% 34 6.71% 59 11.82%
Microbiology 574 53.01% 700 64.46% 586 68.46% 704 83.51% 371 73.18% 439 87.98%
Nurse Acuity 176 16.28% 228 20.99% 132 15.42% 177 21.00% 107 21.10% 146 29.26%
Nurse Staffing/Scheduling 578 53.47% 614 56.54% 583 68.11% 614 72.84% 409 80.67% 422 84.57%
Nursing Documentation 362 33.49% 459 42.27% 313 36.57% 430 51.01% 214 42.21% 290 58.12%
Obstetrical Systems (Labor and Delivery) 224 20.72% 310 28.55% 262 30.61% 384 45.55% 189 37.28% 248 49.70%
Operating Room (Surgery) – Peri-Operative 422 39.04% 520 47.88% 424 49.53% 526 62.40% 313 61.74% 361 72.34%
Operating Room (Surgery) – Post-Operative 413 38.21% 507 46.69% 415 48.48% 505 59.91% 301 59.37% 353 70.74%
Operating Room (Surgery) – Pre-Operative 618 57.17% 638 58.75% 674 78.74% 674 79.95% 446 87.97% 448 89.78%
OR Scheduling 166 15.36% 449 41.34% 202 23.60% 562 66.67% 163 32.15% 372 74.55%
Order Entry (Includes Order Communications) 922 85.29% 936 86.19% 824 96.26% 814 96.56% 486 95.86% 481 96.39%
Outcomes and Quality Management 630 58.28% 647 59.58% 588 68.69% 583 69.16% 375 73.96% 369 73.95%
Outsourced Transcription NT NT 57 5.25% NT NT 42 4.98% NT NT 37 7.41%
Patient Billing 1,052 97.32% 1,058 97.42% 851 99.42% 841 99.76% 502 99.01% 496 99.40%
Patient Scheduling 719 66.51% 764 70.35% 638 74.53% 661 78.41% 404 79.68% 420 84.17%
Payroll 1,067 98.70% 1,070 98.53% 850 99.30% 837 99.29% 499 98.42% 494 99.00%
Personnel Management 997 92.23% 995 91.62% 823 96.14% 816 96.80% 491 96.84% 489 98.00%
Pharmacy Management System 912 84.37% 986 90.79% 836 97.66% 835 99.05% 499 98.42% 495 99.20%
Physician Documentation 203 18.78% 317 29.19% 189 22.08% 257 30.49% 132 26.04% 169 33.87%
Radiology Information System 790 73.08% 885 81.49% 792 92.52% 799 94.78% 487 96.06% 489 98.00%
Respiratory Care Information System 217 20.07% 280 25.78% 168 19.63% 263 31.20% 116 22.88% 163 32.67%
RFID – Patient Tracking 18 1.67% 26 2.39% 22 2.57% 29 3.44% 14 2.76% 16 3.21%
Staff Scheduling 183 16.93% 280 25.78% 184 21.50% 297 35.23% 149 29.39% 210 42.08%
Telemedicine – Radiology 137 12.67% 232 21.36% 105 12.27% 186 22.06% 73 14.40% 119 23.85%
Time and Attendance 921 85.20% 946 87.11% 766 89.49% 769 91.22% 457 90.14% 461 92.38%
Transcription 910 84.18% 897 82.60% 766 89.49% 722 85.65% 445 87.77% 387 77.56%
Turnkey Portal NT NT 68 6.26% NT NT 58 6.88% NT NT 52 10.42%
Web Development Tool NT NT 273 25.14% NT NT 250 29.66% NT NT 155 31.06%
Ambulatory
2005 2006
% of 15,617 Ambulatory Facilities % of 15,617 Ambulatory Facilities
Ambulatory EMR 3,948 25.28% 5,407 34.62%
Ambulatory Laboratory NT NT 1,723 11.03%
Ambulatory Pharmacy NT NT 701 4.49%
Ambulatory Radiology NT NT 1,384 8.86%
Practice Management 15,298 97.96% 15,354 98.32%
Home Health
2005 2006
% of 1,772 Home Health Facilities % of 1,772 Home Health Facilities
Home Health Administrative 1,734 97.86% 1,755 99.04%
Home Health Clinical 1,490 84.09% 1,567 88.43%
301-400 Beds 401-500 Beds 501-600 Beds 600+ Beds
2005 2006 2005 2006 2005 2006 2005 2006
% of 357 hospitals % of 363 hospitals % of 160 hospitals % of 167 hospitals % of 116 hospitals % of 106 hospitals % of 133 hospitals % of 146 hospitals
348 97.48% 362 99.72% 158 98.75% 166 99.40% 114 98.28% 104 98.11% 131 98.50% 145 99.32%
353 98.88% 360 99.17% 159 99.38% 166 99.40% 115 99.14% 106 100.00% 131 98.50% 146 100.00%
181 50.70% 274 75.48% 86 53.75% 136 81.44% 54 46.55% 80 75.47% 68 51.13% 107 73.29%
33 9.24% 54 14.88% 15 9.38% 27 16.17% 11 9.48% 21 19.81% 20 15.04% 32 21.92%

267 74.79% 330 90.91% 122 76.25% 154 92.22% 86 74.14% 93 87.74% 98 73.68% 129 88.36%
68 19.05% 105 28.93% 27 16.88% 45 26.95% 20 17.24% 33 31.13% 27 20.30% 51 34.93%
291 81.51% 310 85.40% 141 88.12% 154 92.22% 99 85.34% 97 91.51% 116 87.22% 130 89.04%
150 42.02% 210 57.85% 72 45.00% 96 57.49% 64 55.17% 72 67.92% 57 42.86% 81 55.48%
157 43.98% 213 58.68% 67 41.88% 97 58.08% 45 38.79% 64 60.38% 60 45.11% 87 59.59%
218 61.06% 266 73.28% 103 64.38% 128 76.65% 70 60.34% 83 78.30% 81 60.90% 115 78.77%
207 57.98% 255 70.25% 104 65.00% 122 73.05% 63 54.31% 75 70.75% 73 54.89% 109 74.66%
332 93.00% 327 90.08% 150 93.75% 157 94.01% 110 94.83% 99 93.40% 123 92.48% 137 93.84%
100 28.01% 276 76.03% 47 29.38% 139 83.23% 43 37.07% 89 83.96% 46 34.59% 109 74.66%
346 96.92% 347 95.59% 157 98.12% 163 97.60% 114 98.28% 105 99.06% 130 97.74% 145 99.32%
265 74.23% 264 72.73% 121 75.62% 125 74.85% 75 64.66% 79 74.53% 99 74.44% 117 80.14%
355 99.44% 363 100.00% 157 98.12% 167 100.00% 114 98.28% 106 100.00% 132 99.25% 146 100.00%
281 78.71% 299 82.37% 131 81.88% 145 86.83% 100 86.21% 97 91.51% 108 81.20% 132 90.41%
355 99.44% 362 99.72% 158 98.75% 166 99.40% 115 99.14% 106 100.00% 129 96.99% 144 98.63%
354 99.16% 359 98.90% 157 98.12% 163 97.60% 114 98.28% 106 100.00% 129 96.99% 143 97.95%
355 99.44% 362 99.72% 157 98.12% 166 99.40% 116 100.00% 106 100.00% 133 100.00% 146 100.00%
104 29.13% 124 34.16% 55 34.38% 66 39.52% 40 34.48% 51 48.11% 46 34.59% 62 42.47%
349 97.76% 357 98.35% 155 96.88% 165 98.80% 114 98.28% 105 99.06% 130 97.74% 143 97.95%
76 21.29% 112 30.85% 33 20.62% 60 35.93% 20 17.24% 39 36.79% 34 25.56% 52 35.62%
13 3.64% 16 4.41% 6 3.75% 10 5.99% 4 3.45% 10 9.43% 7 5.26% 9 6.16%
120 33.61% 160 44.08% 51 31.87% 73 43.71% 43 37.07% 50 47.17% 37 27.82% 65 44.52%
46 12.89% 78 21.49% 24 15.00% 36 21.56% 16 13.79% 21 19.81% 15 11.28% 33 22.60%
332 93.00% 344 94.77% 150 93.75% 157 94.01% 109 93.97% 105 99.06% 124 93.23% 133 91.01%
328 91.88% 305 84.02% 145 90.62% 135 80.84% 104 89.66% 89 83.96% 113 84.96% 117 80.14%
ABOUT HIMSS
The Healthcare Information and Management Systems Society (HIMSS) is the healthcare industry’s membership organization
exclusively focused on providing global leadership for the optimal use of healthcare information technology (IT) and management
systems for the betterment of healthcare. Founded in 1961 with offices in Chicago, Washington D.C., Brussels, and other locations
across the United States and Europe, HIMSS represents more than 20,000 individual members and over 300 corporate members
that collectively represent organizations employing millions of people. HIMSS frames and leads healthcare public policy and
industry practices through its advocacy, educational and professional development initiatives designed to promote information
and management systems’ contributions to ensuring quality patient care.
ABOUT HIMSS ANALY TICS
HIMSS Analytics supports improved decision-making for healthcare organizations, healthcare IT companies and consulting
firms by delivering high quality data and analytical expertise. The company collects and analyzes healthcare organization data
relating to IT processes and environments, products, IS department composition and costs, IS department management metrics,
healthcare delivery trends and purchasing related decisions. HIMSS Analytics is a wholly-owned, not for profit subsidiary of HIMSS.
HIMSS Analytics HIMSS

230 E. Ohio St., Suite 600 230 E. Ohio St., Suite 500
Chicago, IL 60611-3270 Chicago, IL 60611-3270
www.himssanalytics.org www.himss.org
ISBN 0-9777903-4-7
Order Code: 502

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This historical report

of the U.S. Hospital

AN INDUSTRY REPORT PROVIDED BY

Dear Healthcare Organization Executive:

David E. Garets H. Stephen Lieber

TA BLE HB2 Market Drivers/Factors

TA BLE F M3 | Accounts Payable

TA BLE F M4 | Enterprise Resource Planning

TA BLE F M5 | General Ledger

TA BLE F M6 | Materials Management

TA BLE F M7 | Financial Management TA BLE F M10 | Financial Management

TA BLE F DS 4 | Cost Accounting

TA BLE F DS5 | Data Warehousing – Financial

TA BLE F DS6 | Executive Information Systems

TA BLE HR3 | Benefits Administration

TA BLE HR4 | Payroll

TA BLE HR5 | Personnel Management

TA BLE HR6 | Time and Attendance

TA BLE RCM3 | ADT/Registration

TA BLE RCM4 | Contract Management

TA BLE RCM5 | Credit/Collections

TA BLE RCM6 | Electronic Data Interchange (EDI) – Clearing House Vendor

TA BLE RCM7 | Eligibility

TA BLE RCM8 | Enterprise Master Person Index (EMPI)

TA BLE RCM9 | Patient Billing

TA BLE RCM10 | Patient Scheduling

Evaluating the contract purchasing time frames for these applica-

TA BLE RCM16 | Revenue Cycle Management Market Drivers/Factors

䊳 Health Information Management

TA BLE HIM3 | Abstracting

TA BLE HIM4 | Case Mix Management

TA BLE HIM5 | Chart Deficiency

TA BLE HIM6 | Chart Tracking/Locator

TA BLE HIM7 | Data Warehousing-Mining – Clinical

TA BLE HIM8 | Dictation

TA BLE HIM9 | Dictation with Speech Recognition

TA BLE HIM10 | Encoder

TA BLE HIM11 | Outcomes and Quality Management

TA BLE HIM12 | In-House Transcription

TA BLE N A 4 | Nurse Acuity

TA BLE N A5 | Nurse Staffing/Scheduling

TA BLE N A6 | Nursing Documentation

TA BLE N A7 | RFID – Patient Tracking

TA BLE N A11 | Nursing Applications Market Drivers/Factors

䊳 Ancillary Department Systems

TA BLE A D3 | Cardiology Information System

TA BLE A D 4 | Emergency Department Information System (EDIS)

TA BLE A D5 | Intensive Care/Critical Care (ICU)

TA BLE A D6 | Laboratory Information System

TA BLE A D7 | Obstetrical Systems (Labor and Delivery)

TA BLE A D8 | Pharmacy Management System

TA BLE A D9 | Radiology Information System

TA BLE A D10 | Respiratory Care Information System

TA BLE OR3 | Operating Room (Surgery) – Peri-Operative

TA BLE OR4 | Operating Room (Surgery) – Post-Operative

TA BLE OR5 | Operating Room (Surgery) – Pre-Operative

TA BLE OR6 | OR Scheduling

TA BLE OR10 | Operating Room (Surgery) Market Drivers/Factors

䊳 Ambulatory (Hospital Owned)

TA BLE A H3 | Ambulatory EMR TA BLE A H7 | Practice Management

TA BLE RP 3 | Radiology PACS All Applications Combined

TA BLE RP4 | R-PACS – Angiography

TA BLE RP5 | R-PACS – CR (Computed Radiography)