After EHR Frenzy: Health IT's Next PrioritiesAfter EHR Frenzy: Health IT's Next Priorities

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Although most healthcare organizations are now focused on getting their electronic health records (EHR) systems running properly, many are also setting their sights on the technology needed to meet ICD-10 compliance, support accountable care organizations (ACOs), and maintain systems that will reduce hospital readmissions, according to Glen Tullman, CEO of Allscripts.

Giving his assessment of the healthcare IT market during Allscripts' Nov. 3 third-quarter financials conference call, Tullman said technology has taken center stage as an important tool that can address challenges facing the healthcare sector.

"While Meaningful Use is on everyone's mind today, attention is beginning to shift to the required adoption of ICD-10 in 2013," Tullman said. "Another influential factor is the significant revision to reimbursement underway at the federal level fostering the move to a value-based system of care."

Noting that the final rule for ACOs requires a shift in emphasis from fee-for-service to a fee-for-value model, Tullman emphasized that "you can't get paid for quality outcomes unless you can capture, communicate, measure, and share patient-centric information."

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Giving another example of a federal mandate that is affecting health IT purchasing, Tullman cited the readmission rule that takes effect January 1, 2012. "The rule requires hospitals to cover the cost of care provided to discharged patients who are readmitted to the hospital for the same problem within 30 days."

Reflecting the growing demand for technology in the healthcare market, Allscripts reported revenue of $368.8 million in the third quarter, a 13% increase compared to the same period last year.

While momentum is building at larger hospitals to adopt Allscripts' technology, Tullman said many new deals also came from smaller medical practices. He said among these smaller practices, three-quarters of the deals consisted of buying digitized medical record systems for the first time, while the rest of the deals involved small practices that were replacing existing technology.

Tullman also sees a growing interest among health insurance companies to assist smaller practices adopt health IT, and Allscripts has taken advantage of that trend by collaborating with insurers to help smaller medical practices adopt the company's technology.

In August, health insurer Highmark announced plans to provide physicians at West Penn Allegheny Health System with Allscripts' EHR and practice management tools. One month later, Blue Cross and Blue Shield of North Carolina (BCBSNC) announced that it will join forces with Allscripts in a $23 million initiative to provide 750 N.C. physicians, including 150 in 39 free clinics, with Allscripts' MyWay EHR.