Helen Waters is EVP of Meditech of Westwood, MA.
Tell me about yourself and the company.
I’ve been with Meditech for 28 years. I previously worked in the software industry for a financial software company. I’ve held various positions in the last 28 years. I’ve spent a lot of time in the field working with customers and selling to customers. I had an operational vice president position for our legacy products of Magic and Client-Server, where I managed the development, implementation, and client services for those customers for about five years. I was promoted to executive vice president about 24 months ago. I’m an officer of the company. I’m involved today in its strategic direction and vision along with some of my peers here at that level. I’m happy to be talking with you.
With regard to Meditech, it’s a 50-year legacy in an industry that we’re very passionate and excited about, in terms of the future of what we’re doing and where the industry is headed.
How much of Expanse is newly developed and how does it differ from previous offerings?
Expanse for us represents the development over several years of an EHR that we designed for the post-Meaningful Use era. Major components of it were written from the ground up, enumerating many, many modules. In particular, the entire physician experience, in addition to introducing an ambulatory system, which prior to that time, we had not built on our own. We have spent a lot of time building out the provider experience to a different level of clinical sophistication in that tool set. Rewriting many, many modules within it so that it’s a Web-based system accessible through a browser and a completely tap-and-swipe experience as it relates to the provider encounter for any element of providers engaged in ordering, documenting, reconciling, and reviewing the record. That’s ambulatory, acute, and the emergency area.
The company was late to recognize the demand for an integrated ambulatory system in partnering with and then acquiring LSS. It also wasn’t very public-facing in just plugging away quietly, even skipping the HIMSS conference one year. What triggered the realization that the strategy that had worked so well needed to change?
Very fair comments on all fronts. We had recognized the need for an ambulatory system that would be built and driven by us in an integrated fashion. I would put it in the context of 2007 and 2008, when a brand new user experience was introduced to the world by Apple. I would say that by 2009 and 2010, we saw that gripping hold of the consumer landscape pretty extensively. The IPad came out in 2010. We saw a tremendous opportunity to start to envision where we wanted to end up at the end of MU.
The company itself was realizing all of its success factors over many decades, but also identifying the need to retool the company for this next chapter that we want to write. The technology was moving very fast in terms of that user experience. We saw that as taking hold. At the time, we realized that we had an opportunity to differentiate this next half-century for Meditech by taking that user experience that we were used to in other levels of our life in tapping and swiping and remove the hindrance of clicking, scrolling, and digging.
We saw an opportunity in 2011 and 2012 to build a brand new EHR, and in particular, emphasize the provider experience. We started with the ambulatory system. We had a lot of great choices then. I think everybody knows we owned LSS, which was successful for a period of time, but we at that time hit a pause button and said that we wanted to come out with something that was better, more integrated, and perhaps more transformational than what we saw in the market at that time. That’s when we hit the pause button to build the ambulatory system and bring that web platform out into general release in the market in 2016.
How is the hosted system market developing and how is Meditech responding?
Our entire Expanse platform is driven off of browser access. We no longer require complicated mechanisms to log on to our system. Our entire physician experience requires just a mobile device and a browser of their choice to get into the system. There’s a lot of discussion we could have about the importance of the security around that, but these systems are cloud hosted and cloud based.
In addition to that, we announced as a company in 2017 the availability of Meditech fully as a service, initially offering it to critical access facilities. We recognize the many challenges facing our customers and certainly smaller organizations in procuring systems, deploying them, and maintaining and managing them. We wanted to take an opportunity to deliver an all-encompassing solution for that market and a cloud-hosted service, soup to nuts, in a standard offering for the critical access hospitals to start. Scaling up from there now to the community hospital environment.
The company’s annual revenue and income took a steep slide from 2013 to 2016, but turned back up in 2017. What caused that trend and why is it improving now?
The market, in our opinion, is still to a degree in a state of flux. There are major established players in the EHR space. Three of them encompass over 80 percent of the market. We’re fortunate to be one of those. The market has witnessed a tremendous amount of consolidation. There continues to be heavy pressure in the form of the fiscal realities of healthcare, the changing reimbursement models, the fact that our customers or all customers are being pressured with cost containment management and the fact that the nation as a whole is still striving to see the cost of healthcare go down and that has not yet been realized.
The introduction of a platform that was designed for today’s healthcare paradigm versus the one that was in 1990 or 1980, for that matter, with Magic. Introducing a system that was built around an environment that had shifted massively because of Meaningful Use has made people sit up and take notice of Meditech. The legacy of this company and its commitment to healthcare, and more so its commitment to solving problems with this industry in the spirit of partnership, in addition to a very contemporary system and one that is still affordable. We think that that’s an important point, to underscore that the value proposition in what we’re delivering. That has caught the attention in the market. Contemporary tools, modernized for today’s user experience the way people expect and should demand. Very deep and functional capacity in terms of advanced features, but still acquired, maintained and sustained affordably. That’s critical for healthcare today and that has helped the market start to readjust itself down.
It’s long been an assessment made by the market that if you paid a ton more for software, you got a lot more. Over the last eight years, we’ve seen the industry go through massive amounts of investment, yet we wake up at the end of that investment and we have a high physician frustration factor, a high burnout factor. We have yet to see real economies of scale in terms of the consolidation in the market, truthfully, in terms of provider organizations or price points. The market is ripe for new technology, new discussion, new context. That’s why you’ve seen an upturn.
Why more conversation about Meditech in general? One of the things that I realize with a deep level of experience and passion for this company is that having a cone of silence really didn’t serve the market or our customers well. A few years ago, we decided to be comfortable in our own space of putting our company into context, making a determination that we were here with a purpose and a passion for what we do. Unequivocally, we do it as well if not better than most. We had a very strong intention to continue to play a significant role in this market, so we made a decision to be more comfortable in those conversations, to be more open about them. At one point in time, I don’t know that we spent a lot of energy and investment there. We’ve identified the need for that. This is a whole different world. This is a very different company.
Most people will recognize us without question in terms of the core value structure and the emphasis and principles that we still maintain. But this is a company that has clearly evolved both inside and externally to the market, and that’s been well received. We’ve been humble enough to realize that the success factors that made this company great over the last 50 years will continue to need to be retooled and evolved for the market that we’re in today and for the customer that we’re trying to satisfy the needs of today. Very different.
How are non-profit hospitals looking at the role of cost and value when they make EHR decisions? Their for-profit counterparts mostly aren’t buying Cerner and Epic with contracts worth hundreds of millions of dollars.
I’d like to say that I hope that they stop, pause, and think about it more than they have been. I like to say that this an industry where there is a me-too movement that because someone else bought it, it has to be good. We’ve been busy debunking that theory. As we sought to identify where our future was headed and what we wanted for ourselves, we studied a lot of data. We looked at CMS data. We looked at cost data. We did some comparisons of our customers to others. There was a great realization, an epiphany, that came to us. For an industry that was pretty well established and automated, including hospitals, what has caused the escalation of cost in this automation? It doesn’t make any sense to us.
We’re trying to get people to wake up to the fact that they should be educated consumers. That software, in particular, is abstract. It’s not a car. It’s not a house. They need to look at data that is generated by unbiased sources, CMS being one. At the end of these eight years, does any one vendor stand out in terms of key categorizations of readmission penalties, hospital-acquired conditions, or value-based purchasing adjustments? Our research says that there’s very little distinguishing characteristic associated with the EHR that’s driving that.
We’re out to have an honest discussion with the market about being an educated consumer. Recognizing that these dollars that they’re spending on EHRs are important to other decisions that they’ll have to make, to other investments that they’ll want to carry forth, on capital resource, human resource, and otherwise. That they need to look at the results.
People have been responsive to that. You can’t open a digital media source without seeing some pretty difficult stories out there on the challenges of sustainability of these EHRs, the cost infrastructure, the staffing ramp-up, which is causing a lot of burden and in some cases, real heartache to organizations who’ve had bond degradings, layoffs, and other things happen as a result. We’re proud of our track record in maintaining the value discussion and partnering with the industry on taking the cost down, not driving it up.
How is Meditech’s market changing with hospital consolidation and the release of down-market offerings from Cerner and Epic that hit your sweet spot of smaller hospitals?
One thing I’d point out is that we do have a number of sizable IDNs in this country and globally. There are a collection of urban hospitals in the 200- to 400-bed range that also own and operate other facilities.
There’s no doubt that the urban academic medical center expansion and consolidation has been a challenge at times for us. I’m interested to see where this goes. The watchdog of our industry is starting to ask questions that we’re happy about in terms of, has the consolidation netted better higher quality for patients? More convenience, better pricing, and lower costs? There seems to be a lot of controversy out there right now, as to, does bigger necessarily dictate better?
Banking is a great analogy to that. The banking industry was consolidated. There were major players and the world was going to be better. It was going to be more affordable. Customers would be happier. There would be more convenience. A decade later, we see a lot of challenge in that industry. It didn’t necessarily prove to be better.
We’re watching the consolidation. We’ve built a robust interoperability strategy. I’ve seen less rip-and-replace in these last two to three years than we had seen previously. I’ve seen in some cases national not-for-profits and for-profits making decisions to consider two-vendor strategies. If you take the top 10 health systems in the country that might be listed as having a single EHR, I would comfortably tell you that we’re still present in all of those systems.
It’s an evolving conversation. The fiscal realities of making those decisions is causing people to pause. The market as a whole is looking at the impact of maybe too much consolidation and what that has done to healthcare, particularly in rural communities. There’s some really interesting lawsuits here and there where services were siphoned off over time. The facility may have been purchased and then people are driving another 50 to 100 miles to get basic services. There’s a lot of general controversy as to where this all goes in the future.
The interoperability messaging has been critical for us. We’ve seen it slowing down. We’ve seen more pragmatic thinking around that concept that rip-and-replace doesn’t always make sense. Interoperability, consolidation, a care management platform, and the ability to have a strong analytics platform that can be consolidated is more important. There’s a lot of innovation in those areas.
Do you have any final thoughts?
Healthcare is one of those unique industries that binds us together because we consume it. The combination of a highly agile technology sector with an evolving vertical market that’s moving with a company history and resume that’s pretty deep in experience is positioning us with renewed energy for the job that we have ahead of us. That is, to continue to participate in solving problems for customers and assisting on a national level with something that still has to happen, which is the reduction overall of healthcare spending as a percentage of GDP.
We’re enthusiastic about the next 50 years and beyond. We have purpose. We have mission. We have enthusiasm for the fact that this is a changing market and we’ve embraced the change as a company. We certainly have embraced the change in the platform. When you look at new concepts such as population health, reimbursement models evolving, artificial intelligence, and genomics, there’s a whole host of things that are going to continue to keep us very challenged and engaged. We are excited about that. I know that sounds corny, but we are. That fuels us every day.