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HIStalk Interviews Glen Tullman, CEO of Allscripts, 2/5/09

The recent Allscripts survey basically asked physicians if they would accept free EHR money. Does the overwhelmingly positive answer really mean anything?

gtullman I think it does. What is interesting about the recent survey is how it breaks out. Physicians have said that they would like money – even a small amount of money would create a very substantial stimulus toward not only adoption, but utilization.

We have seen the success of utilization incentives with the recent Medicare CMS program for electronic prescribing. In fact, in our electronic prescribing unit, we are seeing increases in subscribers on the order of 30% a month, so it’s a dramatic pickup. But what the survey really said is that smaller physician groups are more in favor of an up-front stimulus and larger groups are more in favor of the longer term incentives for utilization. So, small groups want help getting over the hurdle to buy an electronic health record, and larger groups, who have in many cases already bought it, are looking forward to the incentives for utilization.

Why should the government pay for specific tools rather than results, like they pay road companies to improve highways rather than just buying them bulldozers?

Well Inga, I think you’ve captured what is the essential argument on Capitol Hill, where I was yesterday. That is, there is a lot of push-back on whether or not physician groups should be given direct incentives versus incentives on utilization.

The government and most people consider the e-Rx program — the 2% credit for utilization of electronic prescribing and then a 2% penalty, in other words, a carrot and a stick — as being very successful. That is what the bill that is currently sitting on the floor looks a lot like. That said, the current bill does give the Secretary about $5 billion to provide direct stimulus and potentially direct incentive to physicians.

So, there are two different versions: a $20 billion House bill and a $23 billion Senate bill. We’re not sure which bill will be pushed forward, but it looks like in either case, the Secretary will have immediate discretionary funds in the order of $5 billion to award to existing channels or in new programs. Those can be used for loans, for some of the existing grant programs underway in states, and lastly, direct incentives to physicians.

However, our view is that the direct physician incentives will be targeted most likely towards primary care, toward rural physicians, and toward physicians in under-served areas, as opposed to the general physician population for the reason you just suggested — that is, some people are asking why physicians need the government to buy them tools.

Allscripts offers a free e-prescribing tool, yet your own survey indicates that the majority of physicians don’t e-prescribe. What’s the guarantee they’ll use a taxpayer-subsidized EMR in ways that will benefit patients or reduce costs?

Again, what we have seen is that if you reduce the hurdle for adoption and then provide incentives for utilization, we do see an impact that’s coming. That is what we have seen with the successful CMS e-prescribing program.

I think the idea — and again, that is what gets to the debate — to the extent you can provide incentives for utilization, we believe that’s a very compelling reason why a physician would want to use an electronic health record. 

Our view is that a blended model of some incentives for adoption, especially for those groups that might otherwise have trouble paying for an electronic health record — that includes smaller groups, that may include primary care physicians or rural physicians — incentives will help that group of physicians, which comprises a very large number of physicians in this country, get on the electronic health highway. And ultimately that is a benefit to all of us in terms of quality and also in terms of cost reduction.

A recent Harvard survey showed that only 17% of Americans think more government money should be spent to increase the use of healthcare IT, ranking it last of all the spending options. With all of healthcare’s problems, why is IT the one to address first?

Our view is that you can’t address many of the problems in healthcare without information. So for example, you will hear people talk about comparative effectiveness — which treatments are more effective than others. The only way you can get to that decision is to have vibrant information that comes from electronic health records.

Similarly, we all know and we have all seen the statistics from the Institute of Medicine and other studies that there are billions of dollars wasted. Those dollars are wasted in terms of tests that shouldn’t be done, those dollars are wasted in terms of the 7,000 Americans who die each year from preventable medication errors, and the million and half Americans who are injured from medication errors. All those are enormous costs and those could be prevented by electronic health records and electronic prescribing.

I think it would be as if you were to say you want to improve the banking system and you want to reduce the lines at the old tellers windows we used to wait in, but you don’t want to use computers to do it. It’s inconceivable that you could improve the banking system without using computers that allow you to pull out money from your account when you are in a foreign country using an ATM. We have to get healthcare to the same standard that every other industry is up to in terms of information technology.

I think the public looks at the more immediate problem. It doesn’t look at the infrastructure problem. It says, “We have people without healthcare, how do we help them?” and they haven’t always made the connection between how technology can help.

How important is a national connectivity infrastructure for creating EMR demand by patients and doctors?

I think connectivity goes hand-in-hand with electronic health records. In fact, that is really why we call them electronic health records rather than electronic medical records. What we want to be careful of is replacing today’s paper silos in healthcare with electronic silos. What we need and what the current legislation requires is interoperable healthcare records. Allscripts has always been a leader in that area. That’s what we need. It’s very important.

You might recall that when computers first came out, people said that we would reduce the amount of paper that we used, and yet the amount of paper that we used actually grew. But once computers were connected through the Internet, all of a sudden we saw everything, from the number of letters sent by the US mail, to all kinds of transactions, even holiday cards and holiday gifts, starting to be sent electronically. Why? Because of that connectivity. A computer is a tool, just like an electronic health record is a tool.

The ultimate goal is getting our physicians in the US — who are the best physicians in the world — getting them the best information at the right time so they can make better decisions. EMR is simply a tool to make that happen. You got to get that tool connected to other tools to make it effective.

Stark provisions encouraged some hospitals to align with their physicians through technology purchases. How would the hospital-physician dynamic change if HITECH passes?

Well, you are still going to see the passage of HITECH will frankly give hospitals more money to support programs like the Stark relaxation. Today our surveys tell us that somewhere between 10 and 15 percent of docs are getting Stark-funded electronic health records and similarly, 10-15 percent of hospitals are participating in Stark.

We think that number is going to continue to grow. Hospitals understand that they need to be connected to the physicians who in many cases give them the referrals that are its lifeblood; that is their business. So they want to be connected. We think relaxing the Stark regulations was a positive move by the government, and we think that is going to continue to grow, and it’s likely actually going to accelerate based on the funding that comes from HITECH.

We should all understand that a year ago, we had an industry that was nicely growing. It has a number of very solid companies that are growing and that are competing. The level of competition is increasing. That is good for healthcare, that’s good for physician buyers, and even good for each of us like Allscripts and its competitors. That was a year ago. Today we have exactly the same dynamic, with the addition of anywhere from $5 to $23 billion. So almost wherever you put that, wherever that goes into the healthcare IT arena , it going to be very helpful to all the companies in healthcare.

People always try to make a comparison. Will this help you more than another company? We are talking about an immediate $5 billion injection. Five billion dollars is more than the entire size of the ambulatory healthcare industry, so you are saying we are not just going to get the industry grow, we are going to give it a stimulus of $5 billion, almost 2-1-/2 times the size of this industry. So it almost doesn’t really matter. Everyone in the industry is going to benefit from the HITECH bill, and the fact that the initial Secretary will have $5 billion to spend almost immediately is going to be very helpful to existing EHR users and to new adopters as well.

How do you anticipate it will help existing EHR users?

Well, first of all, the provisions as they currently stand, and having been on the Hill yesterday, I can tell you literally hour by hour some of these are changing, and being debated, and being marked-up. But the existing provisions would allow existing users of an electronic health record to upgrade that health record as part of their investment and get credits for it. And depending on which version you’re looking at, some of the versions actually give preferential treatment to organizations that have already adopted an electronic health record.

Are CCHIT-certified products a requirement to get funds?

What the current legislation says — and first of all, CCHIT requirement and having a certified system is absolutely critical, absolutely key in funding that will come through this bill. What the government has said is they are not certain that CCHIT is comprehensive enough or covers everything the government wants. So the current bill recommends that over the next 12 months that the government build upon the good work that CCHIT is doing, but continue to study and come back with guidelines that can be government recommended guidelines on what should be included in electronic health records covered by this legislation.

That said, the government also said but that, in the interim, we don’t want things to stop, so we are going to give the Secretary discretion to spend additional dollars on CCHIT-certified systems. So CCHIT certification is critical.

Every physician who buys ought to be buying a CCHIT system. There are more than over 50 of them out there. That’s a minimum standard. I think the government is saying if we are going to spend taxpayer money, we want it to go further, especially in the area of interoperability. The government is worried that they might spend any money on systems that don’t connect. They want to make sure that if they are going to spend money that it’s smart use of the government’s money; that it is going to be on systems that will connect. That’s one of the places that, as you know, Allscripts excels.

Will there need to be a privacy compromise to get HITECH passed?

Right now there are some privacy provisions that are troubling to the industry in general. We are big supporters of the current HIPAA provisions and other provisions that protect patient privacy, because at the end of the day, we are all patients and that is important.

That said, the current bill extends those privacy provisions which would increase the costs, for example, for electronic health record vendors. At the same time, there are a few provisions in there that actually impose a stricter requirement on the user of an electronic health record in terms of verbal disclosures and the like, than people on paper. We are working with folks drafting the bill to say, “Privacy is important, the standards ought to be the same whether you’re using paper or electronics.” The net-net, once again, the overall benefit to the industry of the bill outweighs any of the potential downsides of this bill.

Assuming the government decides to subsidize EMRs and demand increases, where will vendors get the experienced staff needed to implement and support them?

I think it is incumbent on vendors to do two things. One, at Allscripts we are working very, very hard to make the implementation process, the conversion process, easier than it’s ever been before.

You mentioned our free electronic prescribing product, the National ePrescribing Patient Safety Initiative (NEPSI.) As you know, that requires no human intervention to implement, so if a physician goes onto our Web site, he or she authenticates, which is a very detailed process. Once they are authenticated and put in administrative information, within as little as 30 minutes they can be writing prescriptions. There is no separate training required. It’s completely intuitive; it’s just like Google. Everyone gets it. From that perspective you don’t need more staff.

Now electronic health records are not there yet. But we, along with some of our competitors, are working to make these more intuitive and require less training. However, as we talk about the electronic stimulus package, should this package go through and to the extent it accelerates electronic health records use, that will drive employment in the industry.

What impact will Tom Daschle’s withdrawal have on President Obama’s healthcare reform agenda?

I don’t think there is any question that Tom Daschle was respected on the Hill. With any government program, there are two things you need: you need a plan, and that plan can be well thought out or sometimes not. And then you need someone who knows how to get it done, get it passed, to get it accomplished and executed on Capitol Hill.

The Obama administration has been very clear on their plan, which makes substantial use of electronic health records. But, Daschle was seen as someone, given his experience, who could get it executed on the Hill. From that standpoint, I thought he was an experienced person; he was also a person that President Obama had a personal relationship with.

Replacing Tom Daschle is going to be a challenge, but they are there are qualified candidates and I am confident the Obama administration and the vetting team will find them. I also think President Obama has been very clear that he expects to sign this bill very quickly, based on the signing yesterday, for example. Some of these bills are getting signed in very short periods of time, with limited debates and limited amendment. I think we see the government working very quickly to execute on President Obama’s agenda and to demonstrate to the economy that things will get better.

Are you being vetted for the Secretary post and would you tell us if you were?

(Laughs.) I am not being vetted for the Secretary post. But if I was, I probably couldn’t tell you. But I am not. I am very focused on Allscripts and I think the best place I could spend my time is to help physicians in this country, the best physicians in the world, get the right tools to deliver high quality care and do that at an affordable cost.

What will the industry look like in five years if HITECH passes?

I think President Obama’s dream, his vision, and what would be best for all of us is to have physicians not just using electronic health records, but using electronic health records as part of an interconnected healthcare system that allowed them to get the right information at the right time for better care.

We talk at Allscripts not about healthcare, but about connecting to health. The real idea is to try to keep people healthy, to proactively treat them using these electronic tools, and to deliver better healthcare. In this country, we spend more than any other in the world, and yet today our healthcare isn’t number one. Almost without saying, if you assume that our physicians and nurses are the best in the world — and most people acknowledge that — then you have to start to look and ask why is we can’t deliver this. It is because of the inefficiencies in the system.

When we think about the next five years, we are excited about the prospect that physicians will be using tools that bring them into the current times. And we are excited to be a part of that.

The latest I heard is something will be signed in the next couple of weeks – is that your understanding?

Not only is that my understanding, having spent the day with staffers and the leadership of both the House and the Senate, President Obama has made it very clear that that is his expectation to sign by Presidents’ Day. Speaker Pelosi has said she would cancel that holiday if they needed the time to work on this bill. The expectation was very clear.

If you look at what happened with the bill passed yesterday, essentially there was some debate as there is now between the House and Senate version. The Senate said, “If you want this passed today, pass it with our version.” There was agreement and it was passed and signed. We expect that the healthcare bill, the HITECH bill, will go through with very little amendment and adjustment and that it will be signed very quickly.

Anything I left out that you want to share about the whole process?

I’d say two things. There is an almost surreal debate going on with some of the analysts in the industry who are saying will we get $23 billion or we might only get $20 billion. Other people are saying this may not help because you may only get $5 billion. I must remind people that 12 months ago, we weren’t getting any billions. A billion is still a lot of money in our book. This is going to be a very, very strong stimulus to this industry and that is number one. The clear message is that this is a strong stimulus to the industry.

The second message is to physicians is that being on one of these systems sooner is going to help you participate in this whole stimulus game.

And the last piece of that is that this is a very, very unique opportunity for us collectively to fix healthcare. We at Allscripts hope that the industry does take advantage of this opportunity to do just that, because we know the power of information technology. We’ve seen it in every other industry in terms of improving quality and reducing cost. Now it’s time to bring power and promise to healthcare.

The most important question here: favorite interviewer: Jim Cramer or Inga?

Actually, I think both of you are wonderful.