Marc Grossman is principal with WeiserMazars of New York, NY.
Tell me about yourself and the company.
I’ve been in the healthcare IT industry for 30 years. I’ve worked on the provider side as a hospital administrator and have been doing healthcare IT consulting for about 25 years.
I work for WeiserMazars. It’s an international consulting and accounting firm. I head up the healthcare national practice within the United States. Our clients are all provider-side clients in healthcare IT.
How are hospitals selecting and implementing systems differently now than they were five or 10 years ago?
There’s really not been that much change in how they’re selecting core systems. Hospitals typically keep systems for 10 to 20 years, which is a lot longer than most people would expect. I think it’s due to financial reasons.
We’ve gone through a lot of clinical selections recently. Our emphasis was on clinical systems due to Meaningful Use. There’s a cycle that I see the industry going through in the type of system, whether it’s financial, patient accounting, clinical lab, radiology, and so forth. But the process is basically still the same. That hasn’t changed.
The pendulum always swings back. People are paying more attention to revenue cycle and even talking about customer relationship management systems. What systems do you think are poised to make a comeback?
Patient accounting is going to see a big shift. That also has a lot to do with the fact that Siemens is being purchased by Cerner. Lab systems are starting to go through a cycle again.
People have in the past three or four years started looking at systems that haven’t taken off significantly yet. Systems related to population health management, data analytics, data warehousing, business intelligence. Those types of systems will cause a shift in purchases.
What are you seeing with lab systems?
We’re seeing a push for an integrated approach, getting away from best of breed. You see it with Epic. You see it with Cerner. Those are probably the two biggest right now that I see people moving to. If they already have Epic, they’re moving to Epic’s lab. If they have Cerner, they’re moving to Cerner’s lab.
We have seen that in lab systems, there seems to be a cycle about every seven years. I’d say about half of organizations are replacing. They keep it for about 14 years, typically, and about every seven years, we seem to be doing a lot more lab system selections than we have in the past. I’m talking about replacement of whatever they have — best of breed or some kind of niche vendor system.
How do you see Cerner’s acquisition of Siemens unfolding?
A lot of it’s going to depend on where the Siemens client is. Are they live on Soarian or in the process of implementing Soarian? Cerner has been much more successful with their patient accounting system recently. They’ve changed the name because it had such a bad reputation – they no longer call it ProFit.
I believe Cerner is buying Siemens for intellectual property. On the patient accounting side, I think they’re also looking at the RCO base that Siemens has, which is a great revenue stream for them.
Given Cerner’s history and the industry’s history over the last 20-30 years, Siemens Soarian and Invision product support is going to go downhill. I think they probably won’t sunset it officially for at least 10 years, just because I know Siemens does have numerous contracts which are going out 10 years. I also hear Siemens’ sales guys are really pushing to provide great deals right now, to get people to sign up or extend their contracts for 10 years.
Like we’ve seen with many other vendors that purchased other systems, Cerner is clearly not going to put R&D money into two patient accounting systems and two clinical systems if they have an integrated system now. I just don’t see any indication that Cerner is going to continue the development of any of the Soarian or Invision products.
What are you seeing with population health management and analytics?
We’re seeing a lot of disappointment because the systems are so early in their life cycles. People are hearing a lot of promises from various vendors, both the major players like Cerner, Epic, and Allscripts and down the line. They have products in their infancy.
Then you have the niche players, which definitely have more mature systems, but there’s still a lot of disappointment even with those. Difficulty with interfacing issues and difficulty with the depth and breadth part of the applications.
Is there a mature enough process in place in hospitals that even if the systems could give them what they want, that they could follow through on the promise of either population health management or analytics?
I’ll say eventually we’ll get there. I don’t think we’re there yet.
Some of the larger academic medical centers that have large IT shops, are more sophisticated, and have a lot more money to spend have gotten their feet wet, some of them 10 years ago. But a lesson we have to learn is that vendors and consultants set false expectations. It’s a multifaceted challenge that we’re dealing with in our industry.
The biggest problem we have is that our industry is the only industry that I know of where the revenue side of the financial equation is heavily regulated, but the cost side is totally unregulated. We have a ton of regulations, a ton of incentive programs, but the money isn’t there to pay for all the wants and the needs.
We also as an industry need to accept responsibility for the fact in that we don’t have real standards when it comes to interoperability. Each hospital thinks that it’s unique. I’m not suggesting that they’re not different in some ways and some have certain specialties that others don’t. But the reality is that they’re in competition with each other, so they’re not willing to share things where they should be sharing.
The other issue is that each individual hospital’s incentives are not in sync with the government’s incentives and drive. The government can save money by having hospitals operate in a certain way. Each hospital doesn’t necessarily benefit from it. The desire of where we’re going to put our money at each hospital is not consistent.
Is the era of hospitals running applications from their own data centers fading as they move to the cloud?
We’re at least five to 10 years away from that. I’m hearing from a lot of our clients – they want to get out of the data center business. I don’t know if it’s going to necessarily be the cloud. There’s definitely a push to move more to RCO-RHO kind of approach like Siemens and Cerner have been doing for many years.
When hospitals negotiate agreements with companies to host their applications in whatever form, what’s important for them to look at contractually to protect their interest?
Service levels, to make sure that response time and downtime is going to be sufficient. Address areas related to growth and the impact on fees. Also, the whole issue of who really owns the data and how do you access that data if and when the arrangement ends. It sounds like a simple thing, but the reality is that it’s often very difficult for hospitals when they’re trying to pull out of an RCO arrangement to easily get their data.
Those are probably the biggest issues in my mind — cost, access, and availability.
What are the top issues that are challenging health system IT departments?
What I’m hearing from most of our clients are four or five big issues. CIOs expressing concern that they have too much on their plates, not just individually, but as an organization. They have too many high priorities and don’t have the necessary resources in most instances. ICD-10, Meaningful Use, the related offshoots from all of that, population health, changes in reimbursement, growth in terms of hospitals buying up physician practices or buying other hospitals or merging.
A second category is lack of strong IT governance. A lot of what relates to that unfortunately at many hospitals, especially at smaller hospitals, CIOs still do not have a full seat at the table. They’re often viewed as not being strategic. A lot of the hospital executives still view IT as a necessary evil rather than a strategic enabler. It becomes an uphill battle for CIOs.
There’s a lot of frustration and lack of trust among a lot of the executive leadership at many healthcare providers due to the history of false promises and expectations that were not met in the industry over the many years. Look at how many failures we’ve had with just EMRs alone and how organizations have had to replace systems.
Even in this day and age, I find a lot of executives don’t understand what systems are going to really give them and that systems are not going to solve all their problems. It’s just an enabler as opposed to the solution itself.
Do you have any concluding thoughts?
We’ve actually grown a lot as an industry. I think we still have a lot of growing to do.