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Recession Creates Opportunities for Niche Healthcare IT Vendors
By Alan Portela, COO, CliniComp Intl.
Admittedly, I’m typically a “glass half empty” person, but even I have to acknowledge that the economic recession has produced much-needed changes in the power balance between healthcare IT vendors and healthcare providers. With plummeting healthcare IT budgets, providers can now demand that vendors put some “skin in the game” to ensure that tangible performance goals and promised savings are obtained.
The evidence of scalped healthcare IT budgets is widespread. In a November 2008 survey from The College of Healthcare Information Management Executives, National Alliance for Health Information Technology and AHA Solutions, Inc., results indicated that 57 percent of the CFOs are delaying IT purchases. Even existing initiatives have been impacted, with 52 percent of CFOs deferring or extending those project implementation time frames.
Is there any light at the end of the economic doom and gloom tunnel? Yes, with niche technologies. Even as healthcare networks cancel their plans to replace EMRs, they are maintaining their original time frames for automating niche areas, such as high acuity, due to the immense impact that area has on IT budgets, patient safety, and quality care. The irony of our current situation is that we were at this exact point just prior to the Y2K disaster that set the industry back ten years when companies re-installed core systems that lacked strong clinical modules. It appears that the recession has kept us from making the same mistake all over again.
In reaction to the decreasing sales of EMRs, many large HIT vendors are evaluating partnerships with niche vendors rather than investing the time and financial resources to build the niche applications in-house. Thus, the traditional competition between the Samsons and Goliaths of healthcare IT is starting to morph into a mutually beneficial relationship. But the true winners in this battle are healthcare providers, who are now empowered to improve specific areas or functions within their existing infrastructure without having to replace (once again) their main HIT vendors. In essence, the HIT vendor solutions have become the platform that interoperates with new niche technologies in areas such as intensive care, labor and delivery, ED, etc.
Niche vendors will also have to adapt to these turbulent times by improving their ability to integrate seamlessly with HIT vendors, as well as changing their pricing models to reflect a risk-sharing, transaction-based model. This new model ties payment to performance on metrics such as decreased average length of stay, improved staff efficiency and retention, reduced costs, and other clinical improvements.
Aligning stakeholder objectives is a best practice throughout all major industries. It’s about time that healthcare got on the Machiavellian self-interest bandwagon.
Comments on the HIStalk Practice Interview with Garrison Bliss, MD
I can understand why Dr. Bliss is pleased with his practice model — he can see less patients and make more money. But please, let’s not sugarcoat this. He is doing a VIP/Concierge model of care that helps him and a few patients, but hurts the healthcare system as a whole.
You are not doing "the right thing." You are doing "the easy thing," and some would say "the greedy thing" — taking advantage of your loyal patients who are being told they can’t see you anymore unless they pay an extra fee. They still need their regular insurance for any test you order, any specialist they see, or if they go to the ER or get admitted.
With that said, your costs for "easy access to your docs" are a bit less than other VIP services (you charge $600-1500 a year, where the national average is closer often $2000 a year), but it is not cheap for a lot of people. And indeed, part of your plan is to cut the patient volume you have, likely from around 2500 patients to 500 (which would net you almost $500K a year before you even saw a patient!)
In other words, you will have more time for those 500 patients, but you have screwed those other 2000 patients, who now have to go find another doctor. And guess what — there are not that many around!
So, in one fell swoop, you have both increased the demand for PCP care and cut the supply. How can you feel good about that? Also, when you start seeing a lot less patients, you will find that your skills are in decline, not exactly what your patients are paying you for.
With that said, I agree there is a reimbursement problem, but we docs have other options. You could have charged just $50 or $100 a year per patient. Even if only half your patients paid that, you still make a nice little profit that can help pay for EMRs and extra services like medical home. You can get an NP or similar to help with patient overload, etc. But please, figure out a way to take care of ALL your patients, not a way to only take care of the wealthy ones (and don’t pretend that giving discounts to a few makes up for it).
And by the way, the more docs that do this, the more commoditized it will become and the prices will go down. So the VIP docs in your area are likely now nervous that you have already cut the price. The Seattle docs used to charge $2500 to $15,000. You cut price, someone else cuts price, and eventually you are going to be sitting there with 500 patients paying $200 a year and you will be begging your old patients to come back. But, they will have found someone who only charges $50 a year and you will have lost what it means to be a doctor — the trust and respect of your patients.
Sorry to be so tough on you, but I take a macro view of the healthcare system. These VIP practices are simply taking advantage of the system and indeed hurting it at a macro level, so at least be honest about that. No one has shown that they improve care, even for the small number of patients who can afford them. Even if they did, is it worth the cost and failure to the other patients you have abandoned?
The 10th Anniversary of a Windows PACS
By The PACS Designer
TPD designed a PACS in the mid-90s with input from Hewlett Packard and learned a lot from that experience to move on to designing a next generation PACS. In the late 90s, the need arose for a high speed PACS that could handle 500MB or larger image files, so TPD decided to put some trust in Bill Gates’s Microsoft Windows NT and Michael Dell’s high power workstation offerings to meet this challenge. In 1999, the first Windows-based PACS was introduced to the marketplace.
It was a daunting task to confront the requirement to move 500MB files with minimal to no latency over long distances. First, we had to define the right network topology, and because Ethernet was the predominant network architecture, we decided to stay with that solution since it was deployed everywhere. Also, a major upgrade in the mid-nineties for Ethernet to 100Base-T from 10Base-T was making Ethernet more attractive for high speed communication.
Another widely used standard for external communications is Transport Control Protocol over Internet Protocol (TCP/IP) so we wanted to stick with that method of communications.
After reviewing the various storage solutions, we decided to use Fibre Channel. Two conflicting fiber communications methods had been combined to remove uncertainty and the American National Standards Institute put out one standard called ANSI X3.230-1994. Fibre Channel could meet the need by the institution for one common communications method for high speed transmission of image files, data strings, and any other information from legacy systems.
Using Fibre Channel with existing Ethernet networks also would present minimal problems provided that an upgrade to 100Base-T was installed prior to a high speed PACS was being deployed in the institution. The communications to outside facilities was left to the phone system’s SONET ring technology to enhance the ability to send image files the a central archive.
Also of concern to TPD was the different DICOM flavors that existed due to each vendor’s adding private attributes to their product offerings. Since it was going to be a PACS design that would be sold around the world, TPD decided to prevent the addition of private attributes to the new design, thus the design was setup to be "native DICOM" (no private attributes).
As of 2008, there are more than 3,000 of these high speed PACS installed around the world, and TPD is not aware of there ever being a system crash!
So today, if you are contemplating upgrading your current PACS, be aware that systems that make use of Fibre Channel and/or Gigabit Ethernet (1000Base-TX) or better will provide your institution with the most reliable PACS communications and also bring maximum efficiency to the care process.
In conclusion, the Windows PACS wouldn’t have been possible without the help of others, so TPD owes a debt of gratitude to a work colleague, Duke University for help with DICOM configurations, the Cleveland Clinic for supplying their expertise on a suitable storage solution, and Washington Hospital Center for their environmental design work for a PACS equipment room configuration without which TPD wouldn’t be commenting ten years later on a successful PACS design.
Comment on 1/23 Posting – Are Physician Portals Obsolete?
By Bud Leight
In response to the portals discussion, I believe many hospitals are overlooking a golden opportunity to improve operations and save labor costs. To date, most portal efforts have focused on access to hospital EMR data. While this is a good first step, why not move forward and improve workflow and patient satisfaction by implementing more self-service tools found in every other service industry?
By this, I mean provide a customer-based model that focuses on choice, improved workflow, and cost reduction. For example, physicians (one category of customer, the other obviously being the patient) should be provided convenient access (i.e. using the Internet) to self-schedule appointments, send orders, and take care of their tasks visa vie the revenue cycle for hospital based services.
In doing so, portals offer the means to reduce labor costs and minimize office disruptions (i.e. make them more productive) on both sides (for the physician office and the hospital). For example, one 570-bed hospital serving the Virginia tidewater area, using centralized scheduling with a portal for physician offices, was able to double scheduling productivity from 5,000 to 10,000 appointments per FTE per year (since 2000).
A large part of this success comes from the hospital offering their providers (whether owned or not) the choice to either call and schedule or bypass the phone and go online and book the appointment (which also fulfills the order requirements and completes medical necessity checking). This hospital portal provides EMR (data) access, but also a customer-centric approach that has driven 20% of their appointment bookings to come from the Internet. The patient benefits by avoiding telephone tag regarding appointment times, having the ability to review procedure directions (i.e.NPO) and not having any financial surprises if the procedure doesn’t pass medical necessity.
Improving workflow through self-service is a big win financially for all concerned and goes a long way toward building brand loyalty with physicians and patients.