After a brief lull due to capital budget freezes and uncertainty around the specifics of the HITECH Act, there appears to be real progress in the adoption of Electronic Health Records (EHRs) and Revenue Cycle Management (RCM) systems.

A combination of HITECH money, an increasing number of Pay-for-Performance programs and favorable financing options from IT vendors is driving the adoption of EHRs. And, with a clearer definition of Meaningful Use, even more deals are expected to close.

Our network reports an obvious increase in deals in Q4; activity that is expected to continue to ramp up through late Q1 and into early Q2 as pressure increases to be online by the 2011 deadline.

So, has this activity got legs or is it a one-time spike for the major players – MDRX, QSII, MCK, ATHN?  Too early to say, frankly, but of these names ATHN appears best positioned to sustain growth with a best-of-breed RCM product and a market focus that includes sectors such as large physicians’ groups that do not directly benefit from the stimulus plan.

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