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Cranfield, UK, 8th August 2024, Written by Arun Gill –
The DACH (Germany, Austria, Switzerland) EHR market in acute and ambulatory settings was valued at EUR 1.2bn (USD 1.3bn) in 2023, representing annual growth of 9% in local currency. Whilst growth is anticipated over the forecast period (+2% CAGR 2023-2028), the mid-term expectation is for a slight drop in market revenues, before recovering in the longer-term. This insight dives into some of the key drivers, barriers and trends from Signify Research’s recently published market report on the DACH EMR/EHR market.
Germany
Hospital Future Act (KHZG) Fuelling Long-term IT Spend in Germany
KHZG (Hospital Futures Act) was a post-COVID government stimulus package that was intended to rapidly upgrade digital hospital infrastructure across Germany. EUR4.3B of funding was allocated by the German government to the KHZG starting in 2021.
The funding was organised into 11 pillars covering topics such as Emergency Room IT, Decision Support Systems, Digital Care and Treatment Documentation and Patient Portals to support Admission, Discharge and transfer (ADT).
The specifications in terms of the sophistication of IT around each pillar were relatively stringent and demanding, meaning that few vendors could address all elements of individual pillars, let alone the demands across all 11. This resulted in a slew of partnerships being formed and acquisitions being made to support winning the IT contracts associated with the funding.
German hospitals started to implement IT funded from the awarding of KHZG, with contracts kicking in during 2023, and the expectation is for contract award activity to peak through 2024. However, the initiative has been plagued by its ambition outstripping the industry’s implementation capacity in terms of raw manpower. Some revenue attributed to KHZG that had been expected in 2024 has shifted to 2025. Whilst the core funding has peaked, the KHZG will contribute towards a longer-term general increase in hospital IT spend.
CompuGroup Medical Faces Uphill Challenge
CompuGroup Medical (CGM) has enjoyed several years of solid organic growth, fuelled by government-driven IT projects in Germany, initially the Telematics Infrastructure (TI) and more recently the KHZG. CGM and fellow European heavyweight, Dedalus, were the two major beneficiaries of this funding. Both had the scale to support the tenders and the sophisticated nature of the IT requirements. However, even here acquisitions still had to be made to bring additional solutions in-house (for example, m.Doc in the case of CGM, Dosing in the case of Dedalus).
Organic growth for CGM’s Hospital Information Systems (HIS) business line outstripped its Ambulatory Information Systems (AIS), particularly during the core period when IT contracts were ultimately signed for KHZG (1Q-4Q23).
A combination of factors has resulted in this organic growth coming to a sudden halt and reversing, impacting overall business performance. Its German revenues were up by 9% y-o-y in 2023, although the impact of KZHG has started to dwindle; organic growth in the first two quarters of 2024 was 6% and 4%, respectively. CGM reported that some revenue attributed to KHZG that had been expected in 2024, had shifted to 2025. Whilst there is some argument that delays in contracts will provide a boost in 2025, it will be short-lived if and when it comes. Once the core KHZG funding ultimately ends, vendors such as CGM need to be planning for this time.
Read more in this Digital Health SPI insight, which explores why the success CGM has enjoyed over recent years has suddenly turned sour, and whether the actions it is putting in place to address its challenges have the potential to succeed.
Acute Care EHR Competitive Market Disruption
With the discontinuation of i.s.h.med solution and SAP’s decision to stop maintenance support for its customers by end-2027, Oracle Health’s footprint has been eroded in its i.s.h.med customer base in Western Europe. Existing hospital customers may choose to adopt SAP’s cost-intensive extended maintenance until 2030, however the most likely outcome is for hospitals to prioritise the introduction of a new EHR/HIS vendor.
The above transition presents an opportunity for several EHR vendors, with 200-300 hospitals anticipated to change their EHR solution within the next six years. The leading German inpatient vendors – the likes of CGM, Dedalus, Meierhofer, Mesalvo and Nexus – will feel confident of increasing their share of the inpatient market.
Dedalus and Nexus are examples of vendors already winning contracts to replace IS-H hospital customers. For example, Nexus is currently replacing hospitals in Landau – Südliche Weinstraße clinic, and ten other clinics have decided to switch from IS-H to Nexus/ KIS. In anticipation of the SAP decision, the Nuremberg municipal hospital opted for a HIS replacement with Dedalus’ Orbis HIS two years ago. The go-live is anticipated for October 2025.
Legislation Promoting Healthcare Digitalisation
Legislation has often lagged in Germany and could hinder the pace of healthcare IT developments. However, the “Digital Act” was announced in March 2024. This has fuelled better and faster provision of telehealth and e-prescriptions, for example. It’s also expected to have a positive impact on EHR usage. Since Jan 2024, it has been mandatory for practices to issue electronic prescriptions to citizens with statutory health insurance. By March 24, 84,000 medical institutions had issued >115m e-prescriptions, and this is expected to accelerate throughout the year. An opt-out procedure reverses the previous concept based on patient consent. Unless the patient objects, data will be sent to the EHR, including CPOE type data (e.g. drugs dispensed, dosage/dispenser info).
Switzerland
Acute Care Tenders
In terms of the acute EHR market, increases in the number of tenders and replacements seen across Switzerland over the last three years has helped drive market growth. Growth over the forecast period is projected to be slower than the wider DACH market, particularly due to the stronger growth in Germany associated with the KHZG and TI, but also as a slowdown in new tenders is forecast in Switzerland after the glut seen over recent years. Increasingly clinical information systems requirements are being brought into these overall EHR tenders which has also supported market growth.
National Ambulatory Care EHR
There are no firm plans to include ambulatory EHR connection to the national EHR (EPD), however, there is a strong possibility that this requirement will be added during the second half of the forecast period. This is supported by the June 2023 announcement from the Federal Council to comprehensively develop the EPR, not only in the in-patient setting but also in doctor’s surgeries, pharmacies and outpatient treatment. This is expected to drive additional growth in this market segment as solutions are upgraded to comply with integration requirements.
Austria
National EHR Development (ELGA)
Austria has deployed its own National EHR framework, ELGA (Elektronische Gesundheitsakte), which supports interoperability and secure data sharing across regional healthcare organisations in over 170 hospitals.
ELGA does not replace local EHR solutions but enables them to more effectively exchange data. The continued deployment of ELGA and the required upgrade to associated EHR/HIE solutions that need to be ELGA-compatible is projected to drive market growth over the forecast period.
It is expected that to some extent ELGA will result in some rationalisation of the supplier base.
Hospital care (including inpatient and outpatient care) is mostly under the responsibility of each Länder. This contrasts with care provided by independently practising GPs and specialists, which is under the responsibility of the SHI funds. Compliance with ELGA is also projected to drive growth in the acute market over the first half of forecast period, as systems are upgraded to allow for interoperability. However, with more than half of the inpatient settings now ELGA-enabled, its impact is projected to reduce during the second half of the forecast period resulting in slower market growth.
In terms of product types, growth is projected to be driven by demand for data integration/interoperability solutions that enable local HIS solutions to be integrated with ELGA.
Related Research
The above analysis is an extract from Signify Research’s EHR Market Intelligence Service, which provides rolling 12-month coverage of the global EHR market in both acute and ambulatory applications.
The EHR/EMR Market Intelligence Service 2024 will help you:
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- Assess the impact of government health IT funding and national eHealth initiatives and how this will shape the EHR/EMR market over the next five years
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About The Author
Arun joined Signify Research in 2019 as part of the Digital Health team focusing on EHR/EMR, integrated care technology, and high-acuity clinical information systems. He brings with him 10 years’ experience as a Senior Market Analyst.
About the Digital Health Team
Signify Research’s Digital Health team provides market intelligence and detailed insights on numerous digital health markets. Our areas of coverage include electronic medical records, telehealth & virtual care, remote patient monitoring, high-acuity clinical information systems, patient engagement IT, health information exchanges and integrated care & value-based care IT. Our reports provide a data-centric and global outlook of each market with granular country-level insights. Our research process blends primary data collected from in-depth interviews with healthcare professionals and technology vendors, to provide a balanced and objective view of the market.
About Signify Research
Signify Research provides healthtech market intelligence powered by data that you can trust. We blend insights collected from in-depth interviews with technology vendors and healthcare professionals with sales data reported to us by leading vendors to provide a complete and balanced view of the market trends. Our coverage areas are Medical Imaging, Clinical Care, Digital Health, Diagnostic and Lifesciences and Healthcare IT.
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