Why the health IT industry can accommodate hundreds of EHR solutions without major differentiation

A few days ago Harvard Business Review’s Blog Network published “You Can Win Without Differentiation” and it reminded me of the many lectures I’ve given over the past few years on why the health IT industry tolerates hundreds of EHR and EMR companies that don’t really differ much from each other.

A key point made in the article was:

The trick is that when there is uncertainty about the quality of a product or service, firms do not have to rely on differentiation in order to obtain a competitive advantage. Whether you’re a law firm or a hairdresser, people will find it difficult – at least beforehand – to assess how good you really are. But customers, nonetheless, have to pick one.

Even though we have many ranking firms, analyst reports, and different evaluation criteria about EHRs and other health IT solutions, there is still quite a bit of uncertainty about the quality of those solutions. There are many reasons why our health IT industry accommodates hundreds of EHRs solutions, but the author summarizes one reason quite nicely:

Research in Organizational Sociology shows that when there is such uncertainty, buyers rely on other signals to decide whether to purchase, such as the seller’s status, its social network ties, and prior relationships.

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3 thoughts on “Why the health IT industry can accommodate hundreds of EHR solutions without major differentiation

  1. At the end of the day, when you work with a new EHR solution (or a hairdresser, or anything) you are making an educated guess and taking a calculated risk that things will work out for you. You can gather as much data on as many options as you can but sooner or later you have to pick one and see what happens. And when there is no clear front runner you just have to go with whichever one seems like the best idea.

  2. Paulo Machado - @pjmachado


    We are at the very early stage of the digitization of Healthcare. In the early phase of any industry, both the supplier & user of the product/service are unsure of what exactly to build. Expectations are often misaligned in the beginning but over time they become more closely aligned & the customers become more satisfied by the improvements that suppliers make. It is an iterative process! A big challenge that exists in the digitization of healthcare is that our expectations are SO HIGH! We have gone through the digitization of many parts of our lives (ie. Banking, shopping, travel, communication, etc) so expect that Healthcare will deliver like non-healthcare does. We need to reset our expectations… All major transformation of industries run into speed bumps. We need to be ready for a tumultuous ride & keep pressing ahead!

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