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Monday Morning Update 12/3/07

December 1, 2007 News 7 Comments

Someone who should know tells me that the “Juan Garcia” rumor is true on two fronts: he served as a CIA drug interdiction guy in South America and he was approached about one or more GE leadership positions, although he’s got it pretty good at Eclip … I mean, the company at which “Juan Garcia” works.

Graham Barnes is named CEO of BidShift. Zero healthcare experience, according to the press release.

Courts may impose sanctions on Northern Westchester Hospital (NY) for destroying OR schedules. The hospital replaced its chief of anesthesiology, who of course brought in his own anesthesia group. The former group, which had served the hospital for over 25 years, accused the hospital of conspiring with the new chief to destroy their practice and is suing the hospital. They say the OR schedules would prove that the new group was given first shot at business.

A Flash video of the press conference announcing athenahealth’s purchases of a 53-acre campus in Maine features Jonathan Bush’s comments to the locals. Fast forward to 21:40 to bypass the politicians and get right to JB, who leads off with some well-delivered standup material. “Carol Woodcock’s here from Senator Collins office … thank you very much for coming and for all the help that Senator Collins has brought us. Thank you for the notes and the pictures and the grants and the cigars and Blair, waiting at the dock while I tried to find it to bring the kids because I didn’t have anyone to take care of the kids, but I wanted to get a look at the facility and, you know, I never really paid for what they did to the seats in your Suburban, Mark, and I apologize for that. I’ll make it up to you at some point … when people ask me, why Maine, and I don’t have all the witnesses, I usually … well, when people ask me anything, I use that as an opportunity to talk about myself more broadly, so why don’t I do that? We started athenahealth …” Luckily, all the politicians were sitting directly behind him, providing more convenient lip access to his posterior. Well, he is darned charismatic and politicians love job growth.

Speaking of videos, this one from a DC newscast says that the faculty practice at George Washington University is saving lots of paper after its move to Allscripts (calculated at 182,000 trees a year).

Listening: The Dictators, polished, good-natured, and influential New York proto-punk from the early 1970s. Reader tip.

Omnicell will buy mobile cart vendor Rioux Vision for $26 million in cash.

New poll to your right: should CIOs consider open source enterprise apps?

CTO John Bosco is promoted to CIO at The North Shore-LIJ Health System.

HealthcareITJobs.com drew quite a few position listings and advertiser interest at Friday’s kickoff. Check the jobs, sign up for weekly job alerts, and (if you’re an employer) post your jobs for free until January.

Vince Ciotti passes along news that Art Randall, former McAuto sales exec, has died of cancer. “Anyone who worked at McDonnell-Douglas couldn’t fail but remember Art’s great sense of humor, fiercely competitive spirit in the HIS sales world, and indomitable leadership style. In that primarily engineering-oriented aerospace firm, sales was not given as high priority as it deserved, and Art fought the good fight during his decades there, giving the ex-IBM sales crowd at rival SMS a run for their (your) money. What I remember most about Art was his incredible diverse talents: he could repair clocks, restore old cars, write articles on ANY subject in minutes, and give speeches that left audiences entertained and educated. A larger-than life, Protean charmer, Art will be sorely missed. Condolences to his many friends and family.” A scholarship fund in his memory can be reached at: USSVI, Attn: Art Randall, PO Box 3870, Silverdale, WA 98383.

Michael Malone is named president and COO of RemedyMD. Gary Kennedy remains chairman and CEO.

Health First (FL) will present at IHI next week, saying VISICU’s eICU system has saved 82 lives.

Dennis Tribble, CTO of ForHealth Technologies, is named chairman-elect of ASHP’s informatics and technology section.

Christ Hospital (OH), permitted by court order to pull out of Health Alliance, says Health Alliance threatened to cut off its information systems when the hospital started moving admissions offsite. The hospital has filed an injunction.

E-mail me.

Art Vandelay on Revenue Cycle Applications

Reader question: can you elaborate on your comments about revenue cycle product reinvigoration?

Vendors will soon re-architect aged revenue cycle platforms, such as INVISION, MedSeries4, STAR, HealthQuest, and Eclipsys SDK. These apps are older than most college graduates. Should we kick them out of the house or at least put them on notice that they need to improve? We will also need to prepare their “adopted mothers” (the staunch supporters of the app who are leery of change) for that possibility.

They do the basics pretty well. However, adding user interactive functions and meeting regulatory changes will be hard because of their aged architectures. Did any of these vendors add advanced work queues, compliance management, or contract management natively in their apps after all those years of being asked? No. They did it through Stockamp, HSS, Trego, or bolt-ons (Pathways Compliance Advisor, Contract Management). ICD-10, combined inpatient/outpatient payments, and medical error reporting are coming. They can either (a) build it in, or (b) bolt on to somebody else’s product. Old technologies encourage (b).

Many vendors have made minimal investment in revenue cycle products in the past five to 10 years. They’re collecting licensing fees and riding the hype wave to deliver new clinical systems. How many of them built those new clinical systems on their revenue cycle platform? Not a single one.

I expect that investments will shift between major clinical systems and revenue cycle systems.

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Currently there are "7 comments" on this Article:

  1. I hope I could add vendors are re-architecting for bring better value to the end users. But I shall be cautious before reaching that conclusion.

    I have been part of 2 RCM re-writes and both of them were technically oriented. Both had very few differentiating business features on offer as compared to the – as you say – existing old college grad built apps. One was based on Linux (read free, open source) and the other shied off using expensive database licenses.

    Both these approaches, had promises of delivering cheaper apps, but I am afraid the result has been far from what was envisioned.

    As far as I can see, the existing apps are doing well. All of them mostly have a web interface and they all do meet regulatory changes, have work queues and have preliminary contract management/revenue modeling functionality. The core engine that’s runs out of college grad software still bills more than 80% of the claims as efficiently as it possible in the current ever changing , payer driven markets. 20% of the rest is serviced by in-house, custom app. HCA and its 300 facilities being a prime example. http://www.himss.org/DorenfestInstitute/docs/FinancialSystemsHospitalMarket.pdf

    Somehow the re-architecting/re-write approach loses value over the years that it takes to actually re-architect the solution. The combinations of business architects, Technical architects, PMOs, technical teams, operations team (read offshore-onshore relationship management) and the rest are not able to pull off the show and show results. Maybe a case of too many cooks spoiling the broth.

    In spite of these challenges, I still would be curious to know the DIFFERENTIATING business features that the re-writes/re-architecture exercises can possibly provide.

    As and when ICD-10 , major APC revisions take place I am confident both from business and technical perspectives that the existing apps can deliver. Is there any specific reason why you say that the existing product cannot deliver on ICD-10 and the expected APC revisions?

    Investments will be done I agree, but will the investments bear fruit ? I think you shall get, not a very +ve answer from the top HCIT vendors.
    But then these are conglomerates and we might just see a an exception from smaller vendors who can spend more time in trying to get business values for the clients rather than spend time working with large teams spread all over the planet.

  2. Great jump for Juan Garcia. From CxO to direct CEO that too of a much larger company. Wow CEO!!! Makes me view him in a totally different light.
    hehe your name selection is a dead give away. He is quite well known for his background.

    Wonder if the move is in any way related to th e exit of his current company’s long term , major stake holder , who now have exited but for a v v v small portion.
    The two seemed almost like a partners.

  3. Re: RCMs.
    I had an article published in Healthcare Informatics in 2002, and did a HIMSS presentation on it that year. In summary I stated that vendors have not & will not (or very reluctantly) invest in new rev cycle systems for the following reasons:
    1. It is a 100% replacement market, and the revenue and ROI on a new rev system is far less than on clinical systems. To design, develop, and test a new re cycle system is a minimum $20 mill project. I know I’ve done several in my career.
    2. The maze of billing regulations across states is a software maintenance nightmare and nobody really wants to pay very high maintenance fees.
    3. CFO’s are a conservative bunch and do not want to risk increasing receivables that ALWAYS happen in conversion. (Note Epic’s requirement that there is no conversion of AR, just keep the old one running even if it costs you double!)
    4) Most hospitals have around 50 days in AR, so they think the old system is OK. But they will not acknowledge they have hundreds of extra back room staff filling holes in old systems.
    5) The easier route for most CFO’s is bolt on and more bolt-ons.

    Nothing much has changed in 5 years. My suggestion to a CFO in a larger facility that really wants a state of the art RCM System to reduce staff and not have to wait another 5 years for a vendor to deliver is:…hold on…your not going to believe this…WRITE YOUR OWN for your local billing requirements. Then use a bunch of vendor bolt-ons for everything outside of the business logic of generating and printing a bill. With the tools available today for system development, such as rules engines, writing your own bill generator is not that difficult. Anyone interested?

  4. 20 mil..+ maintainance
    That is where the business case is..They are thinking to install , implement and maintain the systems in future under 15 mil. So even as prices of all increase, the price of these apps will not go up.
    That is the basic business premise. It works well for vendors too. Imagine hiring and maintaining mumps and cache programmers in 2016. Thats not much ROI for the vendor at all.

  5. Martin – actually, I read your post a few years ago and found it very accurate. In interest of being succint, I didn’t post all aspects. Rules engines combining clinical and financial data will be critical. The challenge is understanding the “rules” as determined and sometimes published by the payers.

    Regarding ICD10 – the sheer number of codes and the nature in which codes can be combined can cause issues for user interface designers. A character based screen is not likely going to be able to deal with this well. A pure web GUI still calling traditional transactions (CICS) will likely have some issues.

  6. “The challenge is understanding the “rules” as determined and sometimes published by the payers.”

    Yeah, that’s one of the principle things my little design addressed. But trying to sell it got so tiresome and time-consuming: In order to protect your IP, you have to gain an audience with the vendor without really telling them too much of what it’s about, then you have to go through signing NDA’s, etc, just to get a chance to present it. Then they might take awhile to decide whether it’s of any interest. You still haven’t talked about money, and that whole thing consumes lawyer bills and more months go by.

    We subsequently had a similar experience with an NPI tool. A few lookers, no takers, months went by, and the indstry proceeded in its dysfunctional way without our help.

    We’ve discussed a business model we describe as “open source think tank,” whereby we would simply conjure such designs and commit them to the public domain: “This idea is free; but if you want our help making it work, it’s gonna cost you.” We’ve compromised by putting some of our best ideas into bite-sized packages (webinars, white papers) and selling them for a tiny fraction of what it would cost someone to “own” them. We’d rather the ideas themselves grow in lots of gardens anyway.

    We’re not really looking to make a fortune. That may put us in a position to be exploited, or it may put us in a position of power.

    Art — you are really a treasure. Your broad experience and incisive analysis is like plant food. Please keep publishing; we promise to keep reading.

    Marty







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