While some industry research firms have forecast a slowdown in the electronic health records market after 2013, a new report from Toronto-based Millennium Research Group predicts the EHR software market will grow at an annual rate of more than 12 percent through 2016, hitting $8.3 billion that year. Medicare reimbursement penalties for non-compliance with meaningful use requirements starting in 2015 will continue to support EHR demand as stragglers race to automate, according to the Toronto-based firm.

But with a hot market comes new vendor entrants that may not have long-term viability, according to MRG Analyst Mickel Phung. "More than 750 companies offering some kind of EMR solution have entered in the span of two years," he notes. "The long-term viability of these newer entrants is questionable. Customers want to make sure their systems meet complex and changing requirements. The best way to do that is to go with a larger company with long experience in the market. Most new purchasers rely on advice from a colleague who has extensive experience with a system in making a purchase decision, which also will favor companies with an established presence."

The report, "US Markets for Electronic Medical Records 2012," includes average selling prices and revenue information, and discusses market drivers, limitations and the competitive landscape for acute care and ambulatory vendors.