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Time Capsule: All Government Agencies Agree – You’re Free to Buy EMRs for Physicians, Even When it Doesn’t Make Sense

May 12, 2012 Time Capsule No Comments

I wrote weekly editorials for a boutique industry newsletter for several years, anxious for both audience and income. I learned a lot about coming up with ideas for the weekly grind, trying to be simultaneously opinionated and entertaining in a few hundred words, and not sleeping much because I was working all the time. They’re fun to read as a look back at what was important then (and often still important now).

I wrote this piece in May 2007.

All Government Agencies Agree – You’re Free to Buy EMRs for Physicians, Even When it Doesn’t Make Sense
By Mr. HIStalk


The Internal Revenue Service clarified its position this week on hospitals donating technology and related services to physicians. The bottom line is that non- profits can do so without fear of losing their non-profit status.

Lots of folks (most of them vendors) were excited about loosened up Stark laws, so this announcement removed what appears to be the last barrier before the EMR spending orgy gets officially underway.

Vendors love it. Docs weren’t buying their wares when their own money was involved, so creating a misaligned incentive is the best possible outcome. If someone else is paying for dinner, I’m having both the steak and the lobster, even if I’m not likely to finish them.

I’m not sure that getting the green light to give away expensive products is great news, but I’ll try not to rain on the parade of those who do.

I’ve worked for big IDNs that provided practice management systems to affiliated physician groups. Our doctors were fairly willing to use the software we chose on their behalf because it got them paid. Even then, we heard plenty of gripes about product design, reliability, and most of all, cost (this was a simple, character-based scheduling and billing system that only the office staff used anyway.)

As little of a picnic as that was, I don’t envy bright-eyed hospital IT types who think they want to be in the physician EMR business.

One problem we had was allocating ongoing costs. Being a bureaucratic IDN, we were known for high overhead and low performance, especially compared to the doctor’s A+ certified, college dropout nephew who was willing to design networks and develop software for $15 an hour after his grocery bagging shift was over. He was cheaper, so that made us thieves, our doctor customers assumed (doctors always assume that hospitals are getting rich, underestimating the profit-sapping effects of inefficiency and inertia.)

We thought we could cover our relatively fixed cost with the number of physicians who signed on. A few bailed out, though, because of cost (or maybe value.) That forced the pie slices of those remaining to get larger, which caused a few more to reconsider — well, you get the idea. Allocation is hard, especially when the user base is shrinking.

If you’ll be charging ongoing fees, you’ll be competing solely on cost and willingness to rush over to the office (or even the doctor’s house) any time something’s not working. It’s your fault, even when the doctor’s wife/office manager brings down the network by unplugging your router to make a space for her curling iron.

The worst scenario is if the stuff you’re paying for isn’t used. Remember, your doctors weren’t buying when it was their money. Try to structure a vendor deal where they get paid only if the system gets used, otherwise, it’s just you trying to strong-arm doctors and we know how well that works (cough*CPOE*cough.)

CCHIT has certified 81 ambulatory EMR products, so cast a wider net than that handful of old-line, CIO- friendly vendors with correspondingly high price tags and old technologies. That was the whole point of certification, after all. While you can’t trust a doctor who swears he or she will use a product, you can definitely trust one who swears they won’t.

Don’t whip out the checkbook until you’ve developed an integration strategy. If you just want to give away free software, that’s fine, but otherwise, what information do you want to send and receive from your new doctor buddies? Doctors don’t want a portal, they want your information dropped into their EMR – can you do that?

Lastly, don’t be swayed by what seems to be an unstoppable trend of hospitals paying for physician systems. Magazines, consultants, vendors, and member organizations love to encourage the bandwagon effect, detaching your wallet from your brain to their benefit. If return on investment is shaky, surely you have other IT projects you can fund instead.

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