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HIStalk Interviews Charlie Enicks, VP/CIO, Georgia Regents University and Health System

September 1, 2014 Interviews 1 Comment

Charlie Enicks is VP/CIO of George Regents University and Health System of Augusta, GA.

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Can you describe the contract you just signed with Cerner?

Cerner has similar arrangements in a couple of places. At University of Missouri, they call it the Tiger Institute. They just recently did something at Children’s National in Washington called the Bear Institute.

They agreed to a long-term agreement that sets out a way of operating and allows us to, from a strategic standpoint, innovate with Cerner and with Cerner and Philips. We’ll have an innovation committee that has a membership from our research and clinical group, from Cerner, and from Philips to talk about what could be either three-way or two-way innovation. We’re very excited about that part. 

What it allows us to do from a strategy is accelerate the pace of implementations that we can get done here. With our current financial situation, we can’t really get capital at a fast enough pace to get done what we want to get done. This contract smooths the cost out over 14 years. The Year 1 rate is lower and in the out years, the operating side is about equal to what we’d expect and the capital side is lower because of the investment Cerner is willing to make.

That includes moving the Cerner software and data to Kansas City to their data center. It includes moving the service desk to Kansas City, where it will be open 24 hours day, seven days a week, whereas we’re operating 14 hours, five days a week, which is problematic in a clinical environment. Ten senior associates will relocate to Augusta and work here. Five of those employees will be focused on innovation and process improvement projects that we plan to undertake.

It improves our disaster recovery and security profile. We have started putting together plans to operate a warm site. We’re looking at an investment of five to 10 million dollars to do that, so we avoid that step.

 

Which employees will not move to Cerner?

I’m responsible for the university as well. The university applications, our audio-visual effects, our client services on the university side will stay with the university. I’ll have CMIO, a chief information security officer, my university operation, and the administrative. We’ll still be doing all the contracting for non-Cerner applications and hardware.

 

Are they taking over the entire operation?

They’re taking over the operation of it and they’ll make recommendations about different things, but we do the procurement. It could possibly pass through Cerner if Cerner can get a better deal for us, but it’s not a requirement.

 

Fourteen years is a pretty long contract to lock in. What led you to have the confidence in Cerner to be willing to do that?

We’ve worked with them for 12 years. The 14 years was picked because of our Philips arrangement — it started last year and was a 15-year deal. We wanted those to be concurrent. There are typical ways to get out of the contract should either party decide at earlier than 14 years that it really doesn’t make sense.

My personal experience with Cerner went back to Emory back in the early 1990s during the genesis of the Millennium software. But I had not worked with them for almost 20 years. In the last two and a half years, I’ve been very impressed with where they’re going with their company, the services that they’re offering, and the direction of software.

Our access to capital is limited. Our growth strategy as an academic medical institution is creating enough clinical work for our students and residents. We’ve got relationships all over the state.

For us, this represents a way to get done what we need to do. We don’t have the capital to switch to some other vendor. We’ve decided to become a strong partner with Cerner. We think that will get us where we need to go.

 

Do you think it will become common that hospitals will be looking for someone to do their hosting or move to a cloud-type environment?

I would absolutely agree this is a trend. You’ve got companies like Novant in North Carolina — they’re starting to do this in the Epic space — and other companies. You’re going to see more and more of it.

Cerner recognized that. I guess they started the remote hosting a little over 10 years ago. But their ITWorks component of this, and their new software like the population health management, which is a cloud-based solution — that’s really where they’re moving as well.

I agree, I think this is going to be more and more the case as this stuff gets very complex and expensive to manage. Even though Augusta is an attractive place to some people. It’s very hard to recruit senior-level Cerner folks to Augusta.

 

What other things are you struggling with?

Like everybody else, we’re struggling with getting Stage 2 Meaningful Use tested. We’re very close — we still have some transition of care. We need to get those numbers up a little bit. But we’ll get that done.

Our issue predominantly in the clinical space is that we’ve had the product for a long time. We need to optimize what we’ve got, but we also need to get in the oncology module, the anesthesia module, and the maternity module. That’s really what’s keeping me up. Before this opportunity, I really didn’t see a way out of being able to get all that done in a timeline that the clinicians needed to do their work.

For the other projects that I’m worried about it in the health system, Cerner will be responsible for managing those. We’re doing a total voice over IP replacement for the university and the health system. Cerner will be managing it. We’re doing a consolidation of our Active Directory. We will still be buying the software, hardware, or services. Cerner will be responsible for executing.

 

Do they have those resources or will they staff up to meet your needs?

They do have a fairly extensive number of resources. They’re not sitting on the bench somewhere not doing anything, but we would be the 17th or 18th client that utilizes their ITWorks service. They’ve got a pretty extensive group out of Kansas City doing this now.

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Currently there is "1 comment" on this Article:

  1. This sort of agreement is a structure that simply translates the organizations “cost” to the vendors “revenue” over a period of time.

    The organization benefits by getting out from under high labor costs, union contracts, expensive pensions and retirement plans. It’s especially relevant to state or other long term organizations who’ve grown fat with expensive benefits.

    For the vendor, it’s a quick win. New revenue, well beyond a product sale price. Also guaranteed for 14 years (or at least relatively locked in).

    That said, it’s “cheap revenue” and not profitable. It give Wall Street a perception of growth, but it has a serious downside in the out years.

    Also, for the organization, it is fraught with danger because of the lack of ongoing support from the vendor as the profitability wanes with the perception of revenue value.

    These are the sorts of deals that brought down the .com bubble in 2000 where internet companies bought advertising from each other on credit and both booked new revenues.

    America is slipping. It’s less about product, quality and service and more about a quick win on Wall Street.







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