Why EHR is Weathering the Storm in Digital Health
In a challenging year for digital health, PitchBook notes that "Digital health & healthcare IT stocks have broadly underperformed major indexes this year...As the exception that proves the rule, electronic health records (EHRs) & clinical information companies have performed relatively well as a group." This outperformance reflects the unique value EHRs and clinical information systems offer, especially in times when other digital health sectors like virtual care and digital therapeutics have struggled.
EHR systems serve as critical infrastructure in healthcare, enabling providers to manage vast amounts of patient data securely and efficiently. Their functionality goes far beyond data storage; they play an essential role in facilitating clinical workflows, supporting treatment decisions, and improving patient outcomes. This makes them indispensable for healthcare facilities aiming to meet regulatory standards and deliver quality care, even when other technologies may fluctuate in popularity.
One significant factor contributing to EHR companies’ resilience is the high switching costs associated with these systems. Once implemented, EHRs become deeply embedded in clinical operations, with integration spanning various departments and workflows. Replacing them is often prohibitively expensive and disruptive, making healthcare organizations unlikely to abandon these systems for alternatives. This “stickiness” translates to a steady revenue stream for EHR vendors, even amid broader market volatility.
Additionally, EHRs have evolved into modular, adaptable platforms, allowing healthcare providers to expand functionality by integrating telehealth, population health management, and analytics. This adaptability positions EHRs as more than just record-keeping tools; they become comprehensive solutions that support healthcare’s digital transformation over the long term.
In contrast, virtual care and digital therapeutics companies have faced challenges related to patient adoption, regulatory hurdles, and competition, causing their market performance to lag. As healthcare continues its digital evolution, EHRs and clinical information systems remain essential, resilient pillars of this shift.