Cloud-Based EHR for Acute Space Could Be Game Changer for athenahealth, Inc (ATHN)

May 15, 2015

Stifel Nicolaus & Co. Analyst Steve Rubis says the game-changing opportunity for athenahealth, Inc (ATHN) will be in its efforts around developing a cloud-based EHR for the acute space. Rubis says the replacement cycle is not underway in a robust way because core vendors like Allscripts, Epic and Cerner continue to go to market with the value proposition that led the HITECH/ARRA-driven adoption super-cycle.

“The EHR adoption super-cycle was based on the idea that there are government dollars, so vendors can charge high installation fees and significant maintenance as well, and at the end of the day vendors wanted to sell as many EHRs as possible,” Rubis says. “The problem with that environment is that there is no incentive to change even if your EHR is broken, because you have to pay a significant sum of money to switch on top of your sunk costs.”

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By contrast, Rubis says athenahealth is building a better, cheaper and faster solution that could lead to a robust replacement cycle. In addition, he says athenahealth is developing a physician-focused EHR, which will also create an opportunity for the company.

“In our view, athenahealth’s physician-focused development strategy makes the acquisition of webOMR and RazorInsights insightful and forward thinking,” Rubis says. “We believe the acquisitions are likely transformative for athenahealth’s business because in webOMR they have purchased the Rosetta Stone for building an acute-focused EHR that physicians are going to want to use.”