Summary
1. For the most part, physicians have not been the ones clamoring for electronic medical records. The value of electronic medical records is greater outside the practice than it is to the physician who can grab for a chart. 2. Physicians see risks in EMRs as well as certain benefits. The risks include documentation that could damage them in malpractice cases, a potential "trade secret" or knowledge of their patient loss making it easier for patients to swtich medical providers, and having other see the details of how they practice medicine. 3. Selling EMR systems has been difficult to begin with, this only eliminates or reduces one aspect of the sales process.
Analysis
The EMR industry has struggled for years to get physicians to adopt electronic medical records. The initial problems of cost and ease of use have somewhat been reduced, but Wal-Mart's entry into the market does not address many of the issues.
First, physician adoption of EMR has been slow because of the limited value and risks to the practice. Physicians see risks in EMRs as well as certain benefits. The risks include documentation that could damage them in malpractice cases, a potential "trade secret" or knowledge of their patient loss making it easier for patients to swtich medical providers, and having other see the details of how they practice medicine. The question of value is always been one of the effort required to enter data versus the ability to chart by hand. The costs and benefits have not yet been compelling to the provider community. Only when these systems are able to interoperate and get information from PBMs, labs, specialists, other prodviders and automatically update the patient's record will the value proposition hold.
If the value proposition for EMRs over the last 15 years was compelling, the government would not have to offer incentives for practices to automate their medical records.
Wal Mart's entry should serve to reduce costs of ownership (not paying sales commissions to other vendors' marketing forces) but whether a physician will trust his or her patient records to something they bought at Wal*Mart is an open question. However, government subsidies should help, and this probably enters into Wal Mart's thinking.
What remains to be seen is if there is a second order strategy to complement Wal Mart' walk-in clinic business and pharmacy business. Wal Mart is the largest dispenser of prescriptions in the country and an electronic prescribing module can drive prescriptions to WalMart. "E-prescribing" has value in reducing errors and increasing efficiency and has been mandated in many areas.
The companies most affected by this are EMR companies such as Allscripts (NASD:MDRX) who sells EMR and e-prescribing systems, ZixCorp, who markets an e-prescribing module, and others who sell systems into the physician market.
If there is a derivative strategy to assist the walk-in and pharmacy business by assisting physicians, the pharmacy chains (Rite Aid, CVS, Walgreen) all of whom have some sort of wlak-in strategy, would also be affected.
