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Readers Write 10/5/09

October 5, 2009 Readers Write 16 Comments

Submit your article of up to 500 words in length, subject to editing for clarity and brevity (please note: I run only original articles that have not appeared on any Web site or in any publication and I can’t use anything that looks like a commercial pitch). I’ll use a phony name for you unless you tell me otherwise. Thanks for sharing!


Web Services are Changing the Industry, Slowly
By Mark Moffitt

It’s an age-old argument in healthcare IT. Which is better, the single vendor or best-of-breed approach to software?

The single vendor approach has had the advantage, namely less risk from integrating systems, for a number of years.

The best-of-breed approach offers systems with better functionality and/or ease of use, but integrating systems from different vendors is a challenge. Small and innovative vendors are often the leaders in best-of-breed systems.

HL7 has not evolved past “piping” data from one system to another. Interoperability? Not using HL7. But web services offer a way to provide interoperability between systems.

This is the same technology that brought us the World Wide Web or Internet, online banking, Google, Amazon, eBay, the dotcom bubble and bust, and online communities. It is diminishing the primary benefit of the single vendor approach — ease of integration.

I predict Web services will bring more competition into the healthcare IT space and lower costs where vendors compete on functionality, innovation, and flexibility. It will open the door to smaller, more innovative vendors.

Web services have been around since the late 1990s, yet the single vendor approach still dominates the industry. Change has been slow as the sunk costs of single vendor software present a significant barrier to change. In addition, vendors of single vendor systems do not promote Web services for interoperability for obvious reasons.

But those barriers are about to be swept away by much more powerful forces.

Change is coming to healthcare regardless of the outcome of current healthcare reform efforts, in the form of 1) higher volume as baby boomers march through old age (Chart 1); and 2) lower reimbursement as healthcare cost as a percent of GDP falls. This change will be forced on the USA as a consequence of competing in a fiercely competitive global market.

The Obama administration is increasingly signaling that the United States will not continue to be the world’s consumer and importer of last resort. The clearest statements came last month from Larry Summers, White House economics director, in a speech at the Peterson Institute for International Economics and in an interview with the Financial Times. The United States, he said, must become an export-oriented rather than a consumption-based economy and must rely on real engineering rather than financial wizardry. Tim Geithner, the US Treasury secretary, and other top officials have spoken similarly of rebalancing US growth.

Healthcare costs are like a “tax” on the economy. That tax is much higher in the US than in other countries (Chart 2). Healthcare cost as a percent of GDP cannot continue at current levels if the USA is to compete against other global economic powerhouses in the 21st century. Unrelated to this discussion is the likelihood that the dollar will continue to devalue to level the playing field for USA exporters (Chart 3).

Web services are beginning to make inroads at the grass root level as healthcare IT shops are forced to find ways to provide more and more functionality in the face of stagnant or shrinking budgets. This trend will only accelerate as healthcare confronts a new reality.

It will take time to dislodge Epic, Siemens, GE, Cerner, et al, from their perch atop the healthcare IT food chain. I predict that these vendors will fight the inevitable reordering of the industry like others before them in other industries (read the book: “The Innovator’s Dilemma”). And like those before, them these vendors will not change because they are stuck in the business model that got them to the top.

But change is coming and it is unstoppable. It will bring about a leap forward in ease of use and flexibility at a much, much lower cost. The trend for the cost of healthcare IT systems is down, not up.

The primary beneficiary of these changes will be physicians and other care providers in the form of real and tangible productivity-enhancing features and functionality. They are going to need it.

It will be fun and exciting for some in the industry. For others, it will bring job losses and stress.

Fasten your seatbelts. It is going to be a thrilling ride over the next ten years.

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Chart 1

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Chart 2

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Chart 3

Source for chart. OECD publishing. Rights and permissions. Allows websites and blogs to use excerpts of their publications with attribution and URL.

Mark Moffitt has worked in healthcare IT for 25+ years and has a BSEE, minor in computer engineering from University of Texas at Austin and an MBA from Vanderbilt. He is currently (de facto) CIO at Good Shepherd Medical Center in Longview, Texas.


Fee-Based Clearinghouses Defy 80/20 Rule
By Jim Denny

Mr. Revak raises an interesting premise about the costs associated with use of clearinghouses, based on the 80/20 principle. However, I’d like to offer some additional perspective on the value of using a Web-based clearinghouse.

I would agree that it is hard to justify paying for transactions if all you are getting is a dumb pipe to the payers. To justify the fees that clearinghouses would charge, they must deliver meaningful value beyond transaction processing. You should expect to receive some form of SLAs (Service Level Agreements) around performance, reliability, service levels and response times, first pass rates, etc.

It is also importation to remember that not all clearinghouses make money on a “per transaction” basis. Some, Navicure included, charge a flat monthly fee unrelated to claim volume — much like Internet service providers and cable television companies do. Indeed, any of these would prove to be prohibitively expensive if users were charged each and every time they used the service.

And, as noted above, Web-based clearinghouses can provide added value that goes well beyond simple claims processing. These services deliver business intelligence that can greatly enhance a practice’s business operations, such as real-time claim tracking; analysis of paid vs. contracted fees; coding and data entry error patterns; rejection and denial trends; and staff productivity reporting.

In addition, users benefit from the ever-widening scope of information available from Web-based clearinghouses. The claims engine employed by these firms get bigger and smarter with each claim processed because the “claim brain” benefits from the broader community of practices. In effect, thousands of practices could be making the same mistakes with given payers, resulting in repeated rejected claims. With online functionality, the error can be corrected automatically without each practice needing to fix its own system. And when new payer edits are applied, practices can rely upon their clearinghouse to integrate the policy change, so they don’t have to invest staff resources in keeping up with countless payers making endless modifications.

Certainly, in these difficult economic times, it makes sense for practices to take a critical look at how they invest their resources. But they must ensure they are looking not only at the price tag for any given solution, but that they also consider the overarching value they may receive.

Jim Denny is president, CEO, and director of Navicure of Duluth, GA.


Let Us Rise to the Occasion: It’s Not About the Technology We Offer; Our Value is in Changing the Way a Medical Practice Works
By Lindy Benton

lindybenton

Since February’s announcement of the federal stimulus package including electronic medical record incentives, the healthcare industry’s attention has focused mostly on the money: how physicians can get paid to implement an electronic medical record (EMR) — and how much vendors can make in the process.

I fear that we are neglecting one of our most unique — and critical — duties as vendors of healthcare technology, which is to align ourselves to the needs of physicians.

Let’s not forget why the federal government decided to pay for our industry to embrace automation. It wasn’t to install our technology; it was to change the way medical practices operate. Our nation needs — truly deserves — more value for what it spends on healthcare. As President Obama so bluntly put it, we’re even missing the basics:

Healthcare is the only area where you still have to fill out five different forms – when you go into a bank you don’t have to do that. You’ve got an ATM. …Sometimes you see their [healthcare] files and it’s all stuffed with papers, and nurses can’t read the doctor’s handwriting. AARP tele-town hall Tuesday July 28, 2009

The real issue at hand is changing the way a medical practice functions from the moment the patient walks into the door. Today, patients groan when they see a sign-in list teetering on a shallow window sill below a hand-written sign that declares, “Tap if you need help”. In the future, we need patients to be comforted by the precision and security of the technology and corresponding workflow that supports their physician.

There’s good evidence that the time is right for change. In these turbulent economic times, patients are anxious because money is tight, preventive care has been neglected, and long wait times for appointments just add to the frustration. Physicians are just as apprehensive. Reimbursement is down, expenses are up, and for many, the work is less and less professionally satisfying. Yet, faced with these challenges, most physicians don’t see technology as a savior. In fact, many see the stimulus package as just adding to the frustrations of the current economic environment.

It’s no surprise that physicians are fearful: EMRs haven’t had a stellar track record. In 2005, then-Arizona Governor Janet Napolitano issued an executive order for all healthcare providers to install EMRs by 2010. A May 2009 report found that as many as 20 percent of medical practices in Phoenix have or are canceling their EMR contracts as a result of training, functionality or affordability issues. Cancellations were especially prevalent among smaller medical practices, according to the HealthLeaders-InterStudy report.

As vendors, our challenge is to stop focusing exclusively on the EMR — getting physicians implemented as quickly as possible and then moving on to the next client. An EMR is a wonderful tool, but the national healthcare reform debate isn’t about tools. It’s not even about technology.

In order for physicians to not only implement an EMR, but to automate their workflow, they need us. Instead of worrying about how they are going to afford the staff training, maintenance, and continual upgrades of an EMR, physicians should be assured that the vendor they choose has the intellectual resources to be consultative to their needs so they can deliver efficient, affordable and high quality care to patients. They need vendors who can be partners — who can be experts, trainers and consultants on how to integrate technology into day-to-day operations. Physicians want a partner who can guarantee qualified information technology and be the professionals who help them navigate the complexities of an EMR.

As healthcare technology experts and as fellow Americans, it’s our calling — our responsibility — to make sure physicians get a positive return on their investment. In turn, patients will experience the value of the technology we offer.

The healthcare information technology industry should be proud of delivering on its past promises to produce cost savings, efficiencies, and even better patient outcomes. If we stay focused on truly creating value for medical practices, we’ll ensure that the stimulus package’s HITECH Act doesn’t become another Cash for Clunkers — a short-term stimulus that doesn’t get to the core problems. Instead, let it become our legacy.

Lindy Benton is chief operating officer of Sage Software Healthcare Division of Tampa, FL.

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Currently there are "16 comments" on this Article:

  1. Both articles are very well written, and I’ve stashed them away to refer to them in the future. Ms. Benton- thank you for the 20% deinstallation figure from the Phoenix article. I’ve read and reread dozens of newsreals about it and since I can’t download the original article (I’m just a lowly physician that doesn’t qualify, and I can’t even buy it), I couldn’t read it in more depth. I’ve got 5 articles that quote a 50% installation failure rate with the “EHR” and only 1 well written CBO article that quoted an 8% deinstallation rate. Putting both of these numbers together and one gets the picture that with the current crop of expensive, bloated, hard to use, poorly designed set of CCHIT certified EHR systems HITECH will fail. BTW, do you have the breakdown of the deinstallation rate for small offices?

    If other vendors follow your call to “make sure physicians get a positive return on their investment” then there is hope for HIT in the USA. If the focus remains on hitting the perceived deep pockets of physicians, then EHR uptake will not occur or stall early.

    Mr. Denny’s article likewise gets an A+. I’m currently in the process of finding a clearinghouse, so it hits close to home. It seems that paper filers like myself are getting the shaft with insurance companies claiming that they never receive about 30% of our claims. Which clearinghouses do you recommend?

    Al

  2. Here are few highlights, where Mark was right on about the healthcare lay of the land dominated by heavyweights like GE, Epic, Siemens, Cerner, McKesson, Meditech etc.,

    1. Sunk costs of single vendor poses a significant barrier to change for providers who follow a single vendor approach in their IT strategy.

    2. That tax is much higher in the US than in other countries (Chart 2). Healthcare cost as a percent of GDP cannot continue at current levels if the USA is to compete against other global economic powerhouses in the 21st century.

    3. Agreed, webservices is better integration approach compared to point to point integration provided by HL7 (V2.X)

    All other sections, I have a different opinion and here are my comments below.

    1. The article claims that there is not enough competition between healthcare IT vendors. When are major 8 vendors like GE, Epic, Siemens, Meditech, McKesson, Cerner, Eclipsys, Healthland controlling the market share to the tunes of around 80%, I think the competition is healthy.

    2. Though best of breed might be a better approach to healthcare, significant integration costs and numerous failed approach to integrations makes single vendor approach attractive from a Total cost of Ownership

    3. The big vendors are taking step towards web services in their own product portfolio or through partnerships. GE recently partnerd with InterComponentWare(ICW), a really niche eHealth vendor who has all componets in their eHealth framework to enable interoperability at all levels from with in a provider’s infrastructure to across providers in a jurisdiction.

    Saravana Rajan
    http://essarr.wordpress.com

  3. I cant help but look at the article you have published that was offered by Jim Denny and think it is one big advertisement for his business. I thought you would have seen through this.

  4. Rajan: “Healthcare cost as a percent of GDP cannot continue at current levels if the USA is to compete against other global economic powerhouses in the 21st century.”

    Sure it can. The problem in this country is not healthcare costs; it is mismanagement and corruption in our industries, and the outsourcing of our vital industries to countries whose culture is one of producing crap, not durable goods.

    Half the stuff I buy from China is dead or defective right out of the box, for example.

  5. My perch shows HIT as a medication, causing side effects like insidious lupus from a medication, eg hydralazine.

    The desired workflow automation is a risk for exactly the opposite.

    Programmers and those similar to the authors above seem to have trouble understanding the ambiguities and subtleties of clinical care and the speed of creative medical thought.

    It was a pleasure to observe a hospital administrator interested in billing have to cool his heels waiting for use of a chart that was in the hands of a physician who was delayed by 7 minutes (stop watch was on) because the computer was sick.

  6. Some thoughts on #2 in Saravana’s difference of Opinion

    The view presented by Sarvana in #2 above is one I hear all the time from IT shops throughout the Hospital market.
    1. Interfacing systems is difficult and costly
    Well lets observe why that is?
    — The large vendors – GE, Cerner, McKesson want the entire pie and charge outrageous amounts of money to interface data if the facility chooses to purchase a best of bread vendor in a space where they have a competing product. I understand this from a business perspective and don’t blame them one bit. No one is forcing them to communicate, so why should they.
    2. The large vendors make all kinds of excuses saying it can’t be done and scare the facility into the one vendor approach. They scream interoperability at the top of their lungs and tell the C-Suite you won’t qualify for ARRA etc. Is it really the best thing for patients or for Clinicians to use lesser products because the IT guy is concerned about an interface?
    3 The cost thing irritates me the most because the IT side doesn’t look at the big picture. A while back some brilliant CFO made IT its own cost center. This is where the disaster began and it just went down hill from here. Hospital financials all became departmentalized. The result being everyone is looking out for themselves instead of whats best for the patients and the facility as a whole – not good. The IT dept is thinking “man we will need another person to keep up with these interfaces”. What he/she is not thinking is that if they put their large system vendor (GE, Cerner, McKesson, etc) product in one of the specialty departments (ED, OB, Surgery, etc) they will need 4 extra clinicians to document care and it will take 2 to 3 times as long to build. How’s your costs look now?

    Big picture people are rare. Generally they are called CEO’s. The good ones can see these things coming and have the ability to put the CIO in check. A CIO’s first priority should be to implement the best systems available for the care and safety of the patient. Followed closely by what is best for the Cinician. NOT what is best for his departments man power budget….

    If our President wanted to really help the healthcare industry he would require all vendors to have the ability to send and receive all data critical to patient care in a standard format. I’ll let the Clinicians decide what that data is exactly. This alone would drive “Ease of Use for Clinicians” and “superior functionality related to patient care”.

    Just some thoughts

  7. Agree with Bullet. Disaster looms for the patients of America if the vendors are allowed to continue to sell this crap.

    That they have sold under false pretenses and deceptive advertising is a crime of the highest order.

    Some young aggressive attorney should have a hey day with this.

    [From Mr. HIStalk] OK, people, give me some credit here. As the king of sophomoric humor, I get the phony name the reader used and have not been “had”. Sincerely, Heywood J.

  8. A couple of responses:

    To the article concerning web services: like so many others looking to the ‘cloud’ as the future, the author is using the term ‘web services’ without really understanding what they can offer.

    Will they allow small companies to offer innovative niche products? Absolutely! Will large companies like Epic, GE, and Cerner offer web services? Absolutely. Do web services reduce the difficulty and cost of integration? Not at all.

    The article makes it sound like because you are not hosting the data yourself, you can magically make different web-based vendors talk to each other in the background, but it just isn’t so. Even if we had perfect interoperability standards (and we won’t), the problem isn’t just the semantics that the systems use, but the dictionary as well.

    We all hate ICD-9 and 10 coding, but at least they are standardized. And yet for so many other aspects of patient care, there are competing standards (toxicity) or none at all. Without these, the web vendors will be just as incapable of *meaningful* integration as traditional best-of-breed vendors.

    AS for Suze, the RN, your comment about the ‘stopwatch’ is precisely what is wrong with the attitude of our providers today. You never grabbed a stopwatch in the old world when you couldn’t find a paper chart that someone didn’t put back, or when a critical piece of information was left on the patient’s old floor. And just because the computer is new, you focus on the number of times it gets in your way, not the number of times it helps. Until we can embrace a culture of constant change and learning, it will be very difficult to make any meaningful improvements.

  9. RE: Fee-Based Clearinghouses Defy 80/20 Rule

    Great points Jim. I totally agree with you and would like to add that keeping up with the constant changes for even a few payers could be a burden on most hospitals and healthcare providers. Most of the “clearing houses” of the past are so much more today. Just think about the challenges hospitals would have faced implementing the NPI or that they will face implementing 5010 without their clearing house/claims management partners. IT has enough on its hands with clinical applications; they don’t need to add the EDI hassles to their plates.

  10. Mark Moffit:

    His post is really about the problems using web services in healthcare. You missed the point of the post, completely.

  11. Blah: Really?

    From Doug Diamond:
    To the article concerning web services: like so many others looking to the ‘cloud’ as the future, the author is using the term ‘web services’ without really understanding what they can offer……..The article makes it sound like because you are not hosting the data yourself, you can magically make different web-based vendors talk to each other in the background, but it just isn’t so.

  12. Web services are wonderful for people hoping to get a big check to use them. Reality is that the big vendors have web services, there just aren’t enough suckers willing to pay someone to interface using them.

  13. Interesting comment, “suckers” and “get a big check.”

    The kind of web services I’m talking about are the one’s you need to provide interoperability. An example is: 1) provide a list of radiology reports for a patient, 2) given a unique id (accession #) return a radiology report. And without the overhead of an HL-7 message.

    I have yet to find a vendor that provides this level of interoperability using web services.

    But if you know of one please post the name. I’m open to being surprised.

  14. I have worked for almost 10 years in Sales for Healthcare Technology companies and I work with both organizations that utilize ISV’s comprehensive solutions and others that utilize best of breed approach. I have also worked with CIO’s from National organizations to the rural hospitals. To the typical Rural hospital that doesn’t have the pockets of HCA, Kaiser Permanente, and others, utilizing web services and pushing the limits of technology can really pay off for you to become a high performing IT shop spending less money, while ultimately providing a higher level of service to your Hospital system. On the other spectrum, Historically there seems little motivation for some of the largest Hospital systems to challenge the ISV’s. The safe play (Job perspective), is to pay the high dollar ISV price tag on applications & technology that is somewhat dated and holds back the progression of Healthcare IT and keep our heatlhcare costs on the rise. Change is not easy, but change takes leadership in the industry and people who are willing to push the envelope, such as what Mark is providing, to improve on our current Healthcare System. The key is when you develop, discover, and implement new solutions that work is to make sure you share with the Healthcare IT community so that others too can learn and benefit. Ultimately, I would ask that when you select an application or technology partner, ask them if they are willing to bend to meet your Hospital systems needs, not the other way around. Then you truly are challenging the system and encouraging change and innovation. Just one mans thoughts.

  15. TechnologyMan:

    Bullseye. And one of the reasons I prefer to work in a smaller, rural system where tight budgets require a different approach.

    Want to see the future of healthcare IT. Go visit an innovative healthcare IT shop in a rural, not for-profit system with razor thin margins. There the options are innovate or do nothing.







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