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HIStalk Interviews Keith Figlioli, SVP Healthcare Informatics, Premier

April 19, 2013 Interviews No Comments

Keith Figlioli is senior vice president of healthcare informatics of Premier of Charlotte, NC.

4-15-2013 7-07-13 PM

Give me some background about yourself and your job.

I’m the senior vice president of healthcare informatics at Premier. Premier, as you probably know, is the largest healthcare performance improvement alliance in the country. We’re this interesting company in that we’re owned by both for-profit and non-profit providers. We’re an extension of their organization to help them with supply chain things, consulting and performance improvement things, and also data things, informatics things.

I’ve been in the technology space for about 20-plus years. I spent the last 10 exclusively in the healthcare IT space and am a veteran of the EMR space as well as the performance improvement space.

 

You’re now on the HIT Standards Committee. Give some background on what that group does, what its composition is, and what agenda items it takes on.

ONC has two different committees. You have the Policy Committee and then you have the Standards Committee.  They are two sets of committee which both report into Farzad. I have yet to join the first committee meeting, but they meet every single month.

The idea and intent is to get a broad-based set of industry stakeholders to provide input into ONC in terms not only policy changes, but also HIT standards changes. The last committee meeting, which you reported on, was talking about the CommonWell Alliance. What does that mean because to some of the work those groups are doing now when you have the private sector playing in going in with what the government is trying to do as well. it’s those types of issues, along with obviously the guidelines and the focus of Meaningful Use.

 

You said in a guest article that EHRs are too siloed and that thinking that HIT starts and stops with EHRs is a great delusion. How do you think that status should change and what role should ONC have in changing it?

That’s actually how I got started in this journey with them. I used to be with Eclipsys, now Allscripts, as you probably know. It’s interesting when you are in that environment you have this view that everything is about EMR. Then you come over to a place like Premier and you broaden your lens and you’re interacting with the C-suite at all these different large IDNs across the country. You obviously get a much broader lens.

I’ve been saying for a while now that we’ve been conditioned that EMR is the panacea. It’s an important transactional system, but it’s one of many in the provider footprint.

What we’re going to see –and you saw a little bit of this noise coming out at HIMSS — is this notion of the post-EHR era. I think you’ve mentioned it and it’s out there as well because when you start thinking about clinical groupware and other groupware and you think about the advent of mHealth and all that stuff, you are starting to see this different burgeoning of set of technologies and toolsets the various stakeholders are going to grab onto here as the industry evolves.

A lot of these core systems and really all the EMRs were architected in the late ‘70s or early ‘80s. A lot has changed. The demands — you look at usability, you look at all the different things that are coming up and bubbling up through Meaningful Use and the adoption of all these systems — maybe they are not set for the demands of the providers’ needs of the future.

 

The irony being that you came from a vendor that sold EHRs and now you serve on a committee for ONC, which basically pays providers to use only EMRs and nothing else. Clearly it’s not just vendors who are pushing EHRs. How do you reconcile all these groups that somehow end up recommending EHRs to the exclusion of everything else?

I think it’s tough. I think to your last question for me — why I wanted to get involved in this — is I could easily be a critic on the sidelines and throw bombs. When Meaningful Use started, one colleague and myself actually owned all the capacity planning for that EMR vendor. Literally we’d come into work and sit with our development group and go, “Oh my gosh, what are we going to do with Meaningful Use, and what do I do with all the other stuff that our customers wanted?”

I’ve had a bird’s eye view on that in terms of really thinking through, “My gosh, look what’s actually going to happen to our development capacity, and is this the right thing that our customers are asking us for?” Then you come over to the Premier side and I get that every day. The interesting thing about my job running the informatics group here is I literally am in a different C-suite discussion every single week, sometimes many. I was in three last week. You start to hear full-time, not only from the CIO’s point of view but the CEO’s point of view, CMIO’s point of view, the CFO’s point of view. You start getting all these different point of view of how technology is really interacting with where they are trying to go and take these systems in the future. It changes your perspective dramatically, at least it has for me.

 

People criticize that EHRs are not innovative and are monolithic, but customers will almost always, when given the choice, buy from their incumbent vendor. How will that market ever take hold if the customers would prefer to buy from the same vendors who are accused of not being innovative?

I use this analogy a lot and I’ve been criticized for using this analogy, but I will use it anyway in this discussion. Come out of healthcare. I had the luxury of doing some work in the travel industry about 15 years ago. You think about the travel industry and you think about the transactional systems in travel. They’re still in use. SABRE is one of them. The advent of the Web came along and we layered SABRE, because if you go and watch that person actually doing that travel booking for you at the gate, you look at that DOS prompt and the F: prompt that the person is doing you’re going, “I don’t even know what she’s doing or he’s doing.”

Then we created the Web. We created the Web front end and put a level of abstraction on top of that transactional system,. That was just a website, so that was USair.com if you will, but we don’t book travel that way.

So we created another level of abstraction. We created Orbitz.com and Expedia. So we aggregated the websites and then … I live in Boston and here in Cambridge they created Kayak, and so they aggregated the aggregators. Now you’re like three levels abstraction up off the transactional system, but you did that because everybody wanted a different view of the information.

I really believe — and I’ve said this many, many times — that the same analogy, because it plays out in any industry, is going to happen in healthcare. We just happen to be in that transactional mode right now. If we get to what ONC says we’re going to get to, 85 percent penetration by the end of the year, that would be great in terms of that core base level. But how do you get to that next point? You’ve got to get people to start thinking about what’s that next level of abstraction tool sets that help them take it to a different place because they have different views of information.

If you have an ADT system that’s driving to a patient list for the day or a rounding list for the day, is that the right thing to do? Or do you need to round up a set of specialists that round up a set of diabetics? That’s not really a registry. It’s really much more of a workflow-based component of how you pull that information together and try to get the outset and the outcomes that you actually want.

 

The travel industry had somewhat of a luxury in that SABRE was a monopoly for the most part, and all they had to do was layer on top of SABRE. You’ve got thousands of EMRs out there. What are you going to layer on top of?

Everyone is different and that’s the complexity here. The next 10 years are going to be the most interesting years in this space, because how this plays out I think is still anybody’s guess. You have all these payers coming in and spending all this money on HIT assets. They run the gamut. You got United that has high acuity solutions — they bought the Picis assets all the way to HIE assets. You’ve got providers standing up population health companies. You’ve got EMR guys trying to build up data warehouse businesses. I think it’s anybody’s guess still how it really plays out.

To your point, because there was no standardization, you have what we have. Another thing I say often is I think we have capitalism running amok in a system that really needs a little bit more standardization. Whether the government can do and pull us out of that is still, I think, TBD.

 

It worked without the government’s involvement for Visa, when they convinced banks it was in their self-interest to connect to a neutral network and exchange information. Is there any potential that that’s the platform that you build on top of?

Yes. I think it’s a great point. Whether it’s something like the Policy or the Standards Committee or ONC or Farzad going, “Hey, this is what we’re going to do. We are going to round everybody up to connect that.” Or it’s something like CommonWell, assuming that everybody belongs and everybody is invited to belong. That’s the thing.

There’s got to be some sort of polarizing collaboration event or set of events that starts that next level. That’s what we’re talking about. That’s really where the next step of innovation is. We’ve done some innovative things in this space, but I don’t think we really have done what we could do potentially.

When you start looking at what’s happening in the portable app area, that’s where interesting things are going on. I’m a runner, so I use one of those applications all the time. I have a Basis watch which tracks my heart rate every single second. That’s real data. I always joke with a lot of our folks “Here is my real EMR — it’s sitting on my wrist.”

 

When you look at groups that had good ideas, like the SMART group, I don’t know that they’ve done a whole lot except to announce that everything should look like an app. Do the EHR vendors need to yield to allow those app vendors to connect, or can those apps be built without EHR vendor cooperation?

That was a big part of our push at Eclipsys right before I left. If you go out into your customer base and you really look at it, if you look at all those great academics that Eclipsys had and still have some but they have lost a few, where was all the innovation coming from? The innovation was coming from people stitching on to that rich documentation and CPOE system all sorts of interesting little things. You can call them apps, you can call then whatever, but that’s where the real innovation was taking place. It wasn’t taking place in the four walls of the development shop at Eclipsys. That was running the core infrastructure. 

That’s why we moved to that Objects Plus open layer that we decided to go do at the time. Then finally as they got into Allscripts, they realized wow, that’s the platform that really we need to think about, and more importantly, compete against folks like Epic and Cerner.

That’s still TBD to play out, but I’m a big believer, as you can tell, in openness. I think whatever you call it, this space to move to the next level has to be open. Even my point about the wristwatch. It’s really interesting and I can analyze it, but unless I pull up the website in my physician’s office, we’re not going to go much farther than because no one is letting these folks in.

 

The only pressure a vendor feels is from customers or shareholders, neither of which has a lot of vested interest. The customers don’t seem to be demanding and maybe can’t even define what openness means. Has there been enough education of customers about what should they be demanding from their vendors to push from inside instead of outside?

I don’t think so. That’s part of the reason I came to Premier, which I would say was like a sideways move outside of the vendor community. When I go talk to my board at Premier, I’m talking to all my members, all my customers. We’re trying to educate them into that path, which is, “This is what you really could do with all this information because we’re such a big data company and we have so much data.” There are different things that we can do there.

As more and more people start pushing on this, the idea that this group and this industry actually start understanding what it could become is going to be very viral and very fast. I think they are going to get to such a tipping point in the next five to seven years that this thing will flip on its head and everybody would be like, “Wow! I can’t believe we got here.” All the people who thought these certain encumbered vendors were locked in for good — I think we’ll see how that plays out.

 

What things excite you in the non-EHR world that could be a vital component?

When you look at KLAS data, it that says that 60 percent of providers are either going to replace an existing data warehouse or build a new one. They might not be building your father’s Oldsmobile data warehouses. They might be building a next generation for that abstraction layer point I was making. That starts giving you an infrastructure if they do it in a certain way, to be able to have openness and to be able to use the data. It’s all about the data. 

The Eclipsys data was funny when some of the burgeoning stuff like Amalga and that stuff was coming out. It was funny to watch that all take hold, because people didn’t know how to react to that. They wanted to have everybody locked into those transactional systems. But the fact is, when you pull back on the transactional systems, you’ve got a GL, you got an MMIS system, you’ve got an EMR, you’ve got 40 other different transactional systems in a provider footprint.

How do you get the information out of that? How do you open it up? Then how do you expose it to a bunch of people to do a lot of things with? If we are going to move to population health, even the big payers don’t have enough money to keep up with the use case demand.

 

How will the EHR vendors react to being forced into a transactional system role? Are they getting blindsided by this, innovating because they have to, or just planning to buy up the competition to make sure nothing is shaken up?

A little bit of all of what you said. You already seeing the movements. You saw Cerner do the wellness move. You’ve seen Cerner start to move on the cloud-based analytics. You’ve seen Epic doing Cogito. They are all seeing this coming — it’s just how do they let it play out? They got to preserve the run rate revenue.

I think the math changes, too. The days of investing $250 million on an EMR are not that long left. There’s going to be a whole different equation for value. 

What I find fascinating about this is that some of the stuff that you’re seeing in population health right now – it’s very nascent and everybody is being dashboarded to death. But the math is so fundamentally different in terms of the dollar signs with that work compared to what the EMR transactions were.

That’s what you saw on ERP, too. If you think back to the SAP and Oracle and PeopleSoft days you had these huge dollar amounts. Then all of a sudden you got a disruptor like Workday come in, and Workday is at a difference price point. It’s an op-ex rather than a capital cost, subscription based, a cloud variant. It’s just different. I think the same thing is going to take hold here.

 

Offering the subscription model didn’t seem to help Eclipsys much. It doesn’t seem that the market cares as much about that as you would think. People are happily writing those hundreds of millions of dollars checks and can’t be dissuaded that that’s a bad idea.

[Laughs] That was a  different set of issues for another time over a drink.

 

What do you think the biggest difficulties are going to be, both for healthcare in general and healthcare IT specifically, in getting people to think in terms of public health rather than episodic care?

These CommonWell folks are onto something. This is not the first time – it just happens to have a lot of press. There were a lot of other variants. There was Intermountain, Geisinger, and a few others trying to do this underneath the covers of something else a while ago. But this idea of privacy and this idea of a national identifier … if you think about the amount of work we’re going to have to do in population health — I know it because we’re doing it right now — to just connect John Smith.

If I take pre-adjudicated claims, I take EMR data, and I take post-adjudicated claims and I want to attach all that to John Smith, we need enormous amount of fuzzy logic work. That is enormous amounts of expense. Where you look at Facebook, you look at a credit card transaction log … if you give me those two feeds, I can probably tell you your health status. But now we’re going to spend all these time arguing about health and healthcare data in a different light, when in actuality, all the other ways that people work in an online medium, they are actually exposing that same information — they just don’t know it.

This is what’s going to be the biggest issue for us to get over that hump, and it may actually delay us by five to seven years longer than what I even originally suggested. Until you get to a generational gap, which is the other side of this privacy debate… if you take a 25-year-old, take somebody from the bridge gap, and then take somebody who’s 50 or 55 — different views on privacy. This idea of data liquidity — the stuff that Todd Park talks about, the stuff that others have talked about in the past — if you want to get to that state, you got to change the public persona of healthcare data. That may be a national identifier. That may be a lot of different things that are sort of being noodled around.

 

There are thousands of times more resources being devoted to trying to comply with screwy government payment policies that are so arcane and illogical that no one can even understand what they mean. If the government is so interested in having everything be transparent and interoperable and easy to understand, shouldn’t they first trash the payment system?

Yes, absolutely, and that’s what they’re doing. If you think about all the government is doing, they’re kind of are, even though we’re all being cynical. They are pushing and pulling right now. They’re pushing you because they’re going to cut you to death. They are going to cut you with all these illogical payment approaches, which are what’s going on, all the way from SGR changes to PQRI.

 

Then they’re pulling you through CMMI in different programs. Whether that’s a test cycle of MSSP, whether that’s a test cycle of a pioneer program, whether that’s a commercial thing that’s doing on the private side, we are actually in this fight right now. The question is, is the government going to have the perseverance to continue to pull people into that mode?

I live in Massachusetts. It’s a nice place to be from a test stage standpoint because we adopted a global budget plus a CPI cap. I think the governor signed it two or three months ago. We’re already playing it out over the cap.

At Premier, we’re a big believer — and I think the members are in this position — that we’re going to be a global payment. It’s just a matter of when. It’s going to be a tough battle in that push and pull sequence until we get there.

 

What is Premier’s position on how healthcare IT is going to evolve?

We’re doubling down heavily. We’ve been in this space for 15 plus years doing informatics all the way back to the days of running tape and taking data out of transactional systems and turning it into information for providers.

Our view is that it’s a critical component of this transition. Having said that, I think the other side for us is just the pure social system changes. The social system change, what we see loud and clear — we run a pretty extensive ACO network and what we see pretty loud and clear — is just what it’s going to take for these members in these organization to transition from the business they’re in today to the business they need to be in tomorrow.

And just a stupid subtle point – it’s not that stupid, but it is subtle — how do you even think about asset allocation? How do you think about building a new cancer tower comparatively to maybe investing in nursing homes or building out your SNFs or your behavioral health footprint?

It’s a really interesting discussion going on right now at the administrative layer of providers. How do you think about this asset allocation? Then, how do you think about the differences of the people you have within that to make this transition?

The ones that we see are the typical ones. The ones that have a health plan understand how to think like a payer as much as like a provider. Kaiser is the blue chip here because they first think like a payer and then they adapt into the provider care footprint. I think a lot of what we see –we’ve got Geisinger as a big member, we’ve got SummaCare and Summa in Ohio is a big member — those folks have big health plan footprints. It’s interesting to watch them as they go into this change.

 

Do you have any concluding thoughts?

It’s interesting to finally talk to you. I think I’ve been following you since you started. I can’t believe it’s been 10 years.

It’s just going to be an interesting time for all of us. Some of the best days are ahead of us. Our ability to attach to a much more open framework and getting people still be able to make a dollar — because I don’t want to push the vendors out of the space – we’ve got to get to a place where people can  interact together and we all can do what we’re here to do, which is fundamentally transform the health of communities. That’s the game here. It’s not maximizing your shareholder.

HIStalk Interviews Farzad Mostashari, MD, National Coordinator

April 17, 2013 Interviews 7 Comments

Farzad Mostashari, MD, ScM is the National Coordinator for Health Information Technology in the US Department of Health and Human Services.

4-17-2013 7-05-05 PM

Do you think the free market works when it comes to EHR functionality, vendor development priorities, and vendor transparency?

That’s a really, really good question, and one that we think about all the time. We try to be thoughtful about where the market can work, should work, is working, and where the market needs a helping hand to work well.

Let me give you some examples. When it comes to interoperability, there is a need to get vendors to work together on consensus-based standards. Purely market driven approaches to this haven’t worked. They didn’t work for 25 years in health IT. In other industries, what it requires is that there becomes a dominant player that beats everybody else out and makes their proprietary standard the de facto standard oftentimes. Maybe that will work in health IT, but it just takes too damned long.

We think that having a convening role for government, a goal-setting function, kind of what we’re doing with our standard interoperability framework, where you get them together and say, this is a real problem, we want you to work together, and we’ll help, but let’s find a solution to this. That approach has worked to accelerate the standards.

The other part of the equation to make the market work is that the customers have to ask for it. If the customers are asking for documentation and billing machines and bells and whistles around that, then by golly that’s what the industry, listening to their biggest customers, is going to build. Meaningful Use was a way for us to say, this whole other series of functionalities that EHRs can do can enable around population health management, which wasn’t even a glimmer a few years ago.

But we could say, this is our policy. You need to be able to measure your own quality, make a list of patients, have decision support. The industry, in some cases reluctantly and in other cases enthusiastically, has now moved strongly in that direction just in time for their customers who need that functionality to flourish in accountable care. The same for patient engagement. These are all things where a coordinated policy between the payment side, the policy side, and Meaningful Use helps steer the market in a direction in anticipation and preparation.

There are other parts where the market is going to respond just fine. The issue of usability is, for example, one where I’d rather have market demand push vendors to compete fiercely on usability. Something we can help there would be around removing some of the information asymmetries. If we can develop common sense guides for how to evaluate usability, the work being done with NIST and our SHARP grantees and so forth, that will help the purchaser incorporate usability more in their purchasing decisions. But there, I think, independent competitors competing fiercely should and have been driving the market forward on usability.

I guess the answer to your question is, it depends. We have to be thoughtful about where we think the market’s going to work well and where we need to create the market context.

 

People sometimes think that all the initiatives are punitive for vendors, but in some ways they are more of an indictment of their customers for not demanding what the healthcare system should offer patients. It’s not the vendors’ fault that they gave customers exactly what they wanted.

In another way, if you don’t change the payment system, then we’ll get what we pay for, right? Everyone responds to their context. The goal here is to create a context where everybody acting in their own self-interest creates a public good.

 

It must be maddening for a man of science to have to deal with the politics of your job. For instance, the report from the Republican senators that just came out.  How hard is it to try to do what’s right for patients and do it scientifically defensibly when you’ve got politicians trying to get involved?

I actually think that when you have expenditure of public funds, we are accountable. We have to be able to respond to appropriate oversight on the part of the Congress. If there’s one lesson I think in this, it’s that we have to redouble our efforts to engage with the legislative branch and to make sure that they’re aware of all that is happening.

For people who don’t live it and breathe it every day, it helps for them to hear from us, and it also helps for them to hear from people on the front lines in their own communities who they trust to say, hey look, has there been progress on interoperability or not? Is Meaningful Use really a cakewalk designed to push money out, or is it actually pretty challenging and those achievements are a wealth of phenomenally hard work on the part of providers, hospitals, doctors, nurses, and vendors?

It comes with the territory. We have to be accountable, and we do have to engage more.

 

Is there an endgame to Meaningful Use stages?

The legislation has incentive payments for Medicaid out through 2021. There’s not an end stage, per se, in terms of the payment adjustments. I think we take it a year at a time, a stage at a time.

It’s clear to me that we’re going to need to continue to advance. History isn’t going to be when we reach nirvana in terms of advancing interoperability, for example. These systems are dynamic. I hope that there will continue to be innovation, and maybe three years from now, we’ll have completely new ways of sharing images, and the standards, requirements, and criteria for electronic health records will have to be updated.

But I think it’s a step at a time we’re focused on now, just getting from Stage 1 to Stage 2. That’s going to take a lot of hard work on everyone’s part, but it will be well worth it.

 

How would you characterize the state of innovation in healthcare IT, and do you think Meaningful Use encourages it?

I think it’s amazing. It’s unbelievable. I’m floored every day I meet with entrepreneurs, startups, innovators, big companies doing innovative things, startups doing innovative things, patients that are building on top of a digital infrastructure.

The key thing here is that when you have health records on paper and pen, the data is dead. It can’t be used for anything else. It can barely be used in the next visit. When you have digital health, that data is oxygen for innovation.

One indicator of that is the number of new companies in the field. The number of new certified products, but much beyond certified products, it’s all the things that go around it like analytics, patient engagement, population health management, vendors. The VC figures from this first quarter are stunning. While investment and venture capital in biotech or whatever is down, in digital health, it’s skyrocketing. I think the state of innovation is very strong right now.

 

Your office is requesting more money in the 2014 budget. What are your plans for the extra funds?

The plan is really to use those funds to offset the loss of the HITECH funds. Our budget now, the appropriated budget after sequester, is $3 million less than what it was in 2006 when the office first got a budget. There’s obviously something wrong with that picture.

The only reason we’ve been able to respond to the obligations of the office in coordinating has been because we’ve had the HITECH funds, $2 billion, most of which went to grant programs, but a chunk of which went to support our standards interoperability activities, privacy and security activities. What we want to do is to continue to maintain the coordination role and continue to push interoperability and exchange most of all and to maintain and improve our certification.

 

Obviously people picked out the EHR vendor fee. Do you have a feel for how that fee should be assessed fairly and how the money will be used?

A couple of points on that. If this is going to work, it’s got to add value to the software developers, more value than they would pay, obviously. Otherwise, it’s not going to work.

Why do we think that software developers would derive more value? Because if we can’t support the certification program, well, just think about … one glitch that takes one day extra for one developer day for every vendor, that adds up really quick.

The vagary and uncertainty of the budget process … I don’t have a budget now for September. I don’t know what my budget is. I don’t know when I’ll know what my budget is. The industry would be insulated from the year-to-year budget uncertainty if there were a user fee that would cover the cost of the certification program that they rely on.

 

Folks thought they would see national EHR problem reporting. There were different groups looking at different pieces of that and I’m not sure where it stands. Do you see it happening that there will be centralized reporting of patient impact from EHR problems?

Overall, obviously we believe, and the data supports, that the best thing for patient safety is for everyone to get off paper. But that having been said, we commissioned, based on concerns that we had, a report from the Institute of Medicine that said basically we don’t have good reporting of patient safety events exacerbated by or enabled by health IT. Our surveillance action plan does use existing authorities from ONC, from leveraging the patient safety organizations, and from CMS.

What we’re saying is that EHR-related patient safety is part of overall patient safety reporting surveillance and improvement. It’s not its own thing. We don’t want to set up a siloed system just for the reporting of EHR safety events. We want to use the same mechanism as a patient safety organization, the same protections under there, the same surveying and Joint Commission requirements, and strengthen them, focus them  in a way so they can be used to cover the health IT issues as well.

That will require some funds, and again one of the things we’re asking in our 2014 budget request are funds to be able to incorporate more of the safety analysis and mitigation factors.

 

When you talk to people, what are the most common complaints you get about EHR products or EHR vendors?

The biggest thing I hear about is usability issues. In particular, when we talk about making it meaningful, it’s only the providers and software developers who can make it meaningful. That’s my concern.

If you take Meaningful Use as a checklist of things you have to do to get a check, you can do it. You’ll get your check, but it would have been a waste of your time. These are functionalities that if implemented well will serve organizations very well in delivering better care to patients and also in new payment models. But if you do it the quickest line, like let’s just slam something in to get the thing certified, you’ve got to go six levels deep just to fill out the smoking score even though you already filled out smoking in other parts of the chart, that drives providers nuts, and it should.

That’s the part that I really call on everybody to work on. Not to just meet the minimum of the Meaningful Use requirements, but use it as a springboard and go above that and really incorporate it into workflows and make it meaningful.

 

It’s hard to be against usability, but there isn’t a lot of progress that I’ve seen in vendors that are willing to rewrite their products. Do you see that as an area in which the market is responding effectively or does there need to be more than suggestions of how it should look?

I think when it comes to user issues that have an impact on patient safety, we have a particular obligation to make sure there’s a minimum floor. That’s why we took the eight medication-related certification criteria in Meaningful Use and required that vendors undergo a user-centered design process for those. I’ve heard from a lot of usability consultants and vendors that said for the first time, they’re actually implementing user-centered design processes for those medication events. I guess we needed to do that, right?

There are other aspects of usability. Many providers say to me, I can’t deal with three different user interfaces. Why don’t you just mandate one user interface? Why didn’t you just buy one EHR for the country? Why don’t you just use VistA?

I guess I have to disagree. Innovation around usability is something I do see the market stepping up to, that it should, and that I’m actually seeing in evidence. If you walk the floors at HIMSS, you still see some user interfaces that look like Access, but for the most part, the vocabulary is more that of Amazon than of Microsoft Access. The iPad, for example, coming into healthcare. What vendor can’t and doesn’t have to redesign the user interface to work with mobile and tablets?

The other thing that’s driving this is that the market is moving to a segment that is less forgiving. It used to be that if you were a software developer, it’s almost like your early adopters were building the product with you, and they didn’t mind that they had to rebuild the registry kind of thing. Nowadays, we’re not talking about the early adopters or even the early majority. We’re talking about the late adopters that are now being reached in new implementations. You really have to make the systems a lot more usable to get their satisfaction.

It’s also becoming increasingly possible to switch products. Those who bring pressures on vendors to make their products more usable, their products are more usable today than they were when I did product selection for New York City seven years ago.  They’re more usable than they were three years ago. I hope they’re going to be a lot more usable three years from now based on the market pressures.

 

One of the things that’s frustrating to technology people is the inference that healthcare should work like banking or online commerce, but we can’t even get agreement on the equivalent of an account number in a national patient identifier. Is that issue dead or alive?

I think the analogy to banking is flawed. In banking, it all boils down to one quantity – money, dollars, cents. The fundamental object you’re dealing with is one thing. If all we had to communicate was people’s weight or height, we’d be all set. We’d be all set – there would be no problem. We could do that if we only had to worry about hemoglobin levels. Solved, right?

But we don’t. We have 500,000 clinical concepts in SNOMED. We have all the medications, all the observations, the social history. It’s the order of complexity. If you screw something up, it’s people’s lives. It’s just so overly simplistic to say, oh, why can’t healthcare be like banking?

And here’s the other thing. How long did it take those ATMs to work with each other? You know? It took like 15 years. I think people need to be a little more patient and cut healthcare some slack here. We’re actually making good progress on interoperability and interchange.

 

The one part of the banking analogy that is true that the Visa network was formed and banks agreed to share their information for their individual as well as collective good and things started to move electronically. Do you see either the government’s programs or CommonWell or any of those as being that watershed moment where everyone agrees it’s in everyone’s interest to share data?

I think it is happening. One other thing that is scrambling the equation in a positive way are patients and their family members, caregivers taking a more active role in their own health and healthcare. I see the industry responding to interoperability demands that are, I believe in large part, pushed by customers saying I need to interoperate. It’s the top of mind issue for providers and hospitals and IDNs and a top of mind issue for vendors who are responding to that.

I think patients are going to have an important role and will be able to get their data and share it with whoever they want to share it with, kind of an HIE of one. I think the pieces are coming together.

 

When you look at the future of HIEs and Regional Extension Centers, do you think they will successfully wean off government grants and survive independently?

I think some will and some won’t. The ones that are adding value will do well. People who are getting value will pay for the services at a price point that’s competitive. If they’re not adding value, we always knew this was a one-time funding, that they’re going to have to have a sustainability path moving forward.

On the Regional Extension Center side, one of the things that I think is just a pity is that we have built up an unprecedented workforce, an army of relationships and data flows and infrastructure for Meaningful Use across the country, that could be leveraged to meet the real coming series of demands around practice redesign and reengineering and quality improvement using the health IT. If we think about on the health IT side, we may be 50 percent of the way done in terms of just getting EHRs in place. We’re about 5 percent done in terms of changing workflows to really take advantage of that.

The redesign of care processes to meet the demands of new payment models – pay for performance, patient centered medical home, value-based purchasing, ACOs, CCOs, bundled payment. That’s not easy, and just as docs didn’t go to medical school to be IT project managers, they didn’t go to medical school to learn anything about practice reengineering either. That’s the one piece that I sure wish there were the national resources to enable that practice redesign on a large scale.

 

Do you have any concluding thoughts?

You have to be optimistic to be in technology. It helps to see every day the new stuff. It’s what gets us through the real-world difficulties of transitioning to a new paradigm. It’s hard. I know how hard it is. I helped 230 practices go through go-live. It’s hard. You’re not done after you go live, you’ve just started.

We just have to remember and look back sometimes. My goodness, how far we’ve come in how short a time period. A lot of problems we’re seeing right now are blessings. We should have such problems. When people are describing the problems they’re actually having making interoperability work, it’s so far and more advanced than earlier discussions where it was just a buzzword. Now it’s real, and people are talking about certificate management instead of “we want to do information exchange.”

I think we’re in a really exciting period. Healthcare is changing really rapidly. Technology is improving really rapidly. The consumer technology space and our understanding of human behavior is growing by leaps and bounds and marketing and behavior changes. It’s a really, really exciting time to be at the confluence of all of that.

One last thing I want to talk about is, we talked about safety issues, I think we should also always have on top of mind is around security of patient information. I think healthcare really needs to wake up to the need for them to meet their patients’ expectations that healthcare providers really do everything they need to do to keep that patient information private and secure. So many of the breaches we see, the failure to encrypt laptops and give data to business associates without having the assurances in terms of how they’re going to treat it … it just shows a lack of attention.

I think that’s changing. I think there’s a lot of education that can be done. I think there’s more we can do with the vendors to make them default settings and strengthen and harden our systems. More than anything, we have to always keep the security of patient information at top of mind and not relegate it to an also-ran, or after all the other issues are taken care of then we’ll see if we can do something about security. We really can’t. We’ve got to build it in.

Chatting with John Gomez 4/10/13

April 10, 2013 Interviews 25 Comments

John Gomez is CEO of JGo Labs.


What’s the big news these days?

It’s over. Epic wins. Not sure that is big news, more like the Emperor’s New Clothes from childhood. Everyone kind of knows they won, but no one wants to point it out.

Why do you think Epic has won?

As the data rolls in, some qualified and some conjecture, the one thing that seems to remain consistent is that Epic is the big winner when it comes to the EMR market. This may seem rather obvious, but for some reason we keep hearing how there is still tremendous opportunity in the EMR market.

I am not sure where that huge opportunity lies or what market is being referenced by the Epic competitors, but from what I see, if we are discussing the hospital market, then Epic has won the lion’s share. Congratulations go to Judy and team. Job well done.

I am often asked by analysts if Epic is the big winner, who is the runner up? My vote would be Cerner. I actually am rather impressed by the company’s turnaround, KLAS scores, and general ability to deliver a quality product at a competitive price point with solid periphery services.

That brings us to the rest of the pack — Allscripts, GE, McKesson, and the niche players trying to carve out a place among the smaller hospitals that haven’t made an EMR partner choice. Mind you that even in the small hospital market of 50 to 150 beds, Epic is making inroads, with CPSI doing a great job of gaining ground. There are some other players, but in my eyes, these are the companies to watch.

What happens now?

Mind you I am often wrong about these things, but there are basically two things that will happen. The first is that we will see continued focus by hospitals to optimize their financials for the new world order. Secondly, we will see a resetting of the landscape.

 

Where do you think the market is in terms of our maturity?

If we went back to the 80s and 90s, we would find ourselves surrounded by plethora of word processing and spreadsheet offerings. Anyone remember WordPerfect, Multimate, Wang, and Write? How about Quattro Pro and QuickCalc? Today the office productivity market is owned by Microsoft, with some pressure from Google and Open Office, but nothing even remotely close to threatening Microsoft Office’s market share. We have seen the same thing occur with databases (Access, dBase, Clipper, Sybase, IBM-DBM, Gupta) and even accounting packages (JD Edwards, AccPac, etc.) I suspect we are in the early stages of consolidation where we will see some of the EMR market begin to shift and clients moving over time to the market leaders.

 

Why don’t you think that hospitals will move now instead of saying with their incumbent EHR vendor?

The thing to understand about this market is that for all intents and purposes, it is a very conservative market. I suspect that hospitals don’t just jump ship overnight because there is vast fear of the unknown. By that, I mean there is just enough FUD — fear, uncertainty and doubt — that hospitals stay put. 

I do believe that if there was a very prescriptive means of migrating, hospitals would move, but today there is no clear methodology that shows a hospital exactly how to move, the risks, the plan. and how to be successful in that migration. If someone brought to market a clear migration methodology that was highly prescriptive, I suspect they would be very successful and hospitals would certainly make the move.

 

We hear a lot about cloud computing, open platforms, and SaaS. Will they allow new companies to emerge and challenge the current market leaders?

I hear that a lot. I have investors who try to convince me that an EMR that is cloud based or has a great new user interface or some new single platform solution is going to make everyone suddenly abandon their EMR of choice and jump ship. I just don’t see that happening.

This market is very loyal and is not enticed by the great new shiny object. Clients in this market move because a vendor just cannot keep its promises and does not follow through. This market is not driven by small savings in costs or the promises of being open. I do think being open is important, but I don’t know of any hospital that is going to move because there is suddenly a new platform.

 

Many people say Epic is closed.

That is pretty funny. Since leaving Allscripts, I have had the chance to really get to know Epic. I have found that Epic is actually very open and has a flexible platform. They have programs to work with third parties and there are many, many third parties that integrate with Epic.

Much of what you hear about Epic is myth. Much of it is created by their competitors, which is rather telling if your only way to combat Epic is to spread myth.

 

Give me an example of Epic’s openness.

Actually I can give a bunch of them. For one, they were one of the first vendors to integrate with the DoD and VA seamlessly. That is significant because most of the HIE standards in the country are based on the DoD/VA work. Epic is the leader in this space and what’s more, they use this to help all of their clients exchange data. I don’t know if they did this by design or by accident, but either way the outcome is brilliant.

In terms of third-party integration, they seem to be very open to that in my eyes. A good friend of mine, Matt Sappern the CEO of Perigen, reached out to Epic and asked about how they might be able to integrate. Epic was responsive, and in a few short weeks they had an agreement in place. Perigen, to the best of my knowledge, is now extremely excited and an Epic supporter.

Contrast that to some of the other vendors, even ones with app stores, and you find that it is extremely difficult to put a deal in place and takes weeks and weeks if not months. Epic suddenly starts looking like the nicest company on the planet to work with.

 

How will the market change?

Over the past several years, what we have seen is inorganic growth in the market. Companies, especially the EMR vendors, really needed to just do what the government required, deliver on their promises, and follow through to be assured of growth. Not to minimize it, but that is what Epic did and does and what Cerner did and does. The companies that had failed leadership, lost their way, or focused on financials rather then quality … well, they kind of didn’t enjoy that growth.

As things settle down, we are going to see a shift from inorganic growth to organic growth. Organic growth is where you must rely on your own innovation and understanding of the market to gain share or preserve share. You need to figure it out and no one, not the Government or anyone else, is going to provide you a checklist, like Meaningful Use.

That shift from inorganic to organic will reset the market. It means everyone — Epic, Cerner, McKesson, Allscripts — all have a chance now to either win or lose. The key will be figuring out what they need to do to take advantage of this reset. It will be easiest for those who own the most market share, but it is not guaranteed. Just because you won the EMR battle doesn’t mean you won the war.

 

Where do you see the opportunities?

I think that in terms of opportunity there are two categories. The first being add-on opportunities and the second being apple seed opportunities. Add-on are those opportunities where a vendor can bring to market new offerings that they bolt on or integrate with their EMR. The second and most critical to long-term success are apple seed opportunities. These are new offerings that provide new market growth, for example, entering adjacent markets or inventing entirely new products.

 

Simplify that statement.

I would steal a line from my friend Matt that I mentioned earlier. The go-forward victors will be “those companies that can help hospitals make money or avoid penalties.” I think that regardless of whether we are talking about add-on or apple seed opportunities, the net net is that the clients in this market are going to need to really to focus on optimizing operations. That will drive much of the investment they make in the coming three to five years.

 

What does Allscripts have to do fix itself?

That answer would make an interview in and of itself. In hopes of not boring your readers, I will keep it short.

The bottom line is that they need to decide what they are. Are they a software company or sales company? To date, they have operated as a sales company. Even when I was there I fought that persona and always felt it was one of the biggest issues we had. They have a long way to go to become a software company.

I also think they need to figure out who is really conducting the orchestra. They have lots of people suited up for opening night, but in my eyes it seems there is no conductor. I am sure they are working hard to get things right, but just seems like they need to get one person who can articulate end to end how it all works, when and how it is all going to come together, and where it is going in the future. In a manner that is clear, market relevant, and based on facts.

I still have a huge soft spot for my former team members and feel bad for them. They have been working day-in and day-out on something they truly believe in, yet time and time again the leadership of the company has let them down.

When I talk to analysts, they focus on 5-10 percent growth models. All they care about is how the company just grows 5-10 percent. This is one case where Wall Street is just as guilty in holding this company back by forcing them to focus on financials rather then building a great set of solutions. 

Going private isn’t the answer. That is just leadership weakness looking for a scapegoat. Cerner turned themselves around a few years ago, as did many other public companies.

The market is going to reset. It is all a matter of if this company takes advantage of that. So far I just don’t see much difference today than anything the previous seven or eight CEOs have done or tried.

 

What are the biggest market fallacies or myths?

I covered one, that Epic isn’t open. Some of the others are related to what I consider emerging trends. I think there are a lot of buzzwords being thrown around that, as they often do sound great but aren’t actually more than buzz.

Things like population management, clinical trials integration, and outcomes management are catchy, but when you get past all the buzz, they seem to be solutions looking for problems. I would really caution vendors and providers to think very carefully before investing in these areas. I would especially advise providers to see if they can’t solve these issues with the tools they have, inexpensively, before they pull the trigger and buy more technology.

Lastly, I am thinking mobility. Provider mobility, except in some limited areas like wound care for instance, just isn’t there yet and is not going to be the big paradigm shift. It will happen, but probably not as fast as the buzz indicates. I do think on the patient side mobility is huge and growing rapidly with great returns.

 

What would be some strategies you would recommend hospitals consider over the next few years?

I think that first and foremost, forego best of breed for tight integration. Features can be evolved and hospitals can easily push a vendor to fix the gaps.

On the other hand, integration — regardless of Meaningful Use 3 — is really really hard to get right. Despite vendor best intentions, it’s not going to happen overnight. In the future, I suspect you can live with a small feature gap, but as you need to rely more and more on a holistic view of the patient, you will find that integration is mission critical.

I would also tell hospitals that they need to stop paying premiums for software. This industry is one of the few left where you have pricing models that really make no sense. How does bed count or total caregivers change the value of the software? It doesn’t.

If you want to find an easy means to optimize costs, push vendors to realign their prices and charge intelligently. I think it is cool that market economics allow for $20M software deals, but going forward, clients need to set ceilings and really question the pricing.

Hospitals also need to truly examine the value of the shiny object. Do they need that population management thing? Are they really going to need to integrate with clinical trials? Do they need a huge data warehouse? Maybe, but chances are most hospitals do not. Question the shiny object and invest in practical solutions that drive real revenue and reduce exposure to penalties.

I would tell them to reconsider their departmental systems. I think there are really great new offerings out there that can help drive down costs, improve throughput, and make a difference to the bottom line of the hospital. I also would tell them to look into outsourcing things like their pharmacy and ICU. For smaller hospitals, this can be a serious way to reduce costs, improve quality of service, and drive margin improvement.

I would suggest they consider embracing self-care systems and introduce more case management that is subsidized by their majority payor. That is a little harder to explain here, but basically it is about reducing admissions for non-critical patients and still generating revenue.

Lastly, I would tell them to work really hard at being a business. I know that isn’t politically correct, but I think that focusing on being a business actually would improve revenue, which is ultimately required to make investments in improving patient care.

HIStalk Interviews Phil Kamp, CEO, Valence Health

April 10, 2013 Interviews 1 Comment

Philip H. Kamp is CEO of Valence Health of Chicago, IL.

Tell me about yourself and the company.

The company started in 1996 focused on helping providers manage risk. We do three things. We do consulting to help them figure out how to get into the risk game. We provide a bunch of analytic tools to help them succeed under risk. We provide operational support.

That could be anywhere from a risk contract to being their own health plan. We’ve got several clients that are provider-sponsored health plans and we pay claims, member services, medical management, all the functions you would do to run a health plan. It’s the full gamut of providers taking control of how healthcare is delivered. For them to do that, they have to be at financial risk, and we help them through that process.

 

Do you have to convince them that they need to take that step or are they ready? That’s a pretty big jump from the model we’ve had.

It depends on the client. Some are ready to leap and they know that it’s the right strategy. Others that want to phase it in – a crawl/walk/run kind of process. It depends on the type of client and if they’ve had experiences with what’s going on in their marketplace, relationship with physicians … it’s a whole bunch of different things. Some are ready to jump, some are much slower.

 

Everybody’s talking about what it takes to take on these risk arrangements. Will there be a point where the discussion will be how to get out of some of the arrangements that have been made?

Obviously back in the 1990s that’s what happened. A bunch of groups got into risk and failed under the risk arrangements. They certainly got out of them.

What will happen now, it’s interesting. I’m hoping that most of them get into risk and stay in risk. I think it’s the only way that we can really manage our healthcare costs. If you continue to pay providers fee for service, you’ve got an incentive to do more stuff while we’re trying to control costs. The incentives just don’t work. But I agree, certainly some will fail and some will get out of it. I’m hoping now with improved technology and understanding how to do this that this time it will work.

 

If I’m a provider and have never done anything with risk, what steps need to happen between the idea and the execution?

The first step I would normally do would be to do what we would call a feasibility study to understand the market and what type of risk to assume. In certain situations, it would make sense for a provider go all the way to becoming its own health plan in certain aspects of the market, certain products. It may not be commercial — it may be Medicaid or Medicare. There are certain providers that it will make sense for them to pursue one, not all of them. They may pursue risk in different formats. They may become a health plan on Medicaid and do a different type of risk contracting with payers on the commercial side, for example.

To me, that first step is that feasibility study as to what makes sense relative to the market. Understand the gaps for them to succeed under risk and then build a plan as to the strategy around how I’m going to get there, what types of risk, and how do I actually implement it and manage it is going to be key to the process.  

The hardest piece to build is typically the provider network. It’s really around the primary care physicians, so you’ve got a lot of hospitals that have focused extensively on the specialist side. When you’re getting into population health, the biggest piece that you need to drive is primary care. 

Then the question is, how do you relate primary care physicians to a network? Do you need to buy them? Can you put them on the same EMR? There are other approaches to getting them to tied electronically, where you’re pulling data from different sources and you’re clinically integrating the group. It’s around network build and it’s around the strategy and understanding our gaps and how you fill those gaps.

 

Are there potential land mines of strained relations either with the physicians that hospitals decide to partner with or those that they don’t?

If you decide you’re going to put together a network to assume risk or build a health plan, the physicians or the health systems that you choose to not do that with — you’re obviously drawing a line in the sand relative to those. If those physicians are providing referrals or support to the organization in some format, you’ve got to address those kinds of things. Certainly there are group situations like that that you need to address.

On the payer side, certainly if your strategy is to contract with payers on a risk basis, it’s a fairly neutral process. You can do it with all the payers. If you decide to become a payer, you’re obviously putting a line in the sand also relative to competing with those payers.

 

Most of the activity is being driven by hospitals and health systems. When they look at their physicians and decide who they want to partner with, I’m assuming they look at more than just their admitting and referral patterns. How is a physician graded on their desirability as a potential risk partner?

Part of the problem right now is any information relative to a physician that doesn’t necessarily practice at hospital a lot is going to be anecdotal. You’re not going to have real analytics behind how they perform. Typically what you’ll see – and I’m thinking of primary care now – it’s physicians with a strong base in a product lines that matter to you, whether it’s Medicaid, Medicare, or commercial.

Usually what happens, at least on the primary care side, it’s around selecting or bringing as many of those players to the table that you can in your network. Then over time, as you get data, you’re maybe weeding out over time based on performance. At the beginning it’s hard to make selections based on any analytics. It’s usually going to be word of mouth or perceptions relative to who you bring in or you don’t bring in.

 

Are most of these agreements written so that either party has an option to exit?

Yes, absolutely. Then you get into questions like exclusivity and other kinds of things that become critical the success of whether these organizations are going to work, so that plays into it. But usually there is a term agreement. Usually it’s 90 to 120 days, so it’s fairly short term.

 

Describe how clinical integration is different from a legal standpoint from non-competitive behavior or price-setting in a given market.

I’m not an attorney, but what the Federal Trade Commission has done with clinical integration, they’ve said is if a group of physicians that are independent physicians come together to focus on the management of care, improve quality, and improve utilization of services, that they can work together as an organization and negotiate contracts together. 

What the Federal Trade Commission looks for is several things. One is that you’ve established how care will be delivered – call it protocols. Two is you have data that you can collect and manage how well those protocols are being complied with. Third, you actually are measuring compliance. Fourth, you have processes and procedures in place to address those that are non-compliant. 

The concept is that if you do those things, that you will manage care as a village – call it a village of providers – that you will do a better job, because everybody will have information on the patients and you will improve the care of those patients by working as a group. Then the thought is that you can negotiate and contract together.

Usually what you should be doing is focused on the incentive piece of that program, so if you develop a relationship with a payer, it may not be around increased fees, although you certainly can do some of that, but it may be around significant incentives relative to the performance of the network on quality issues that you agree upon.

 

At least on the IT side, the emphasis is on the tools that vendors say are all you need to move to an ACO-type model. Do you think that providers are thinking through all aspects of whatever relationships they embark upon and not just, “If I get some tools and I get some data, I’ll figure it out as I go along?”

There’s different approaches. One is going to be a company will have a shrink-wrapped software product that they give to you, and then you’ve got to figure out actually how to do it. Another approach is to provide the software, but work with the group on a consulting basis to become clinically integrated. You’re identifying the things you need to measure, making sure you’re pulling that data, you’re analyzing on a fairly frequent basis, and you’ve got the processes and the organization in place to manage the care.

It’s certainly more than just getting the data. There are a lot of other elements of it to actually work. Those four that I described earlier really drive it. You need an organization that’s providing the support relative to collecting, managing the data, providing support, and it may be care management support on how to help physicians make sure compliance is reached for a majority of their patients on some of these things. It’s more than just a software tool.

 

How many different ways are there for insurance companies to get involved?

An insurance company could be the back office. Most of the functions that we’re talking about are classically done by the insurance companies, so they can certainly be the back office or administrative support for these types of organizations.

The problem with doing that piece, in my opinion, is around their lack of neutrality. If you have an organization of providers that want to do risk contracting with, say, all the health plans in its marketplace, if it has one of those health plans as providing the back office, how do those other health plans – the competing health plans — react to a back office of one of their competitors? For example, if United or Optum is the back office and Blue Cross is a group looking to contract with that provider group that has United or Optum as that back office, how does Blue Cross feel about an Optum getting access to their data?

To me that’s an issue, but it’s certainly happening out there. Payers can also be the impetus for the contracting. They could certainly pursue providers in getting into those risk arrangements and help them get there. To me it’s typically going to be better if that payer works with or identifies a neutral third party to help the providers manage that care. 

Payers can either be the back office or they can be an impetus for the providers to get into the risk arrangements. Other ways they can be helpful is if they’re getting into risk, re-insurance can be helpful. There are different aspects that payers can ease providers into risk. You can start with something like a shared savings program, move into a risk sharing that moves further into risk. Allowing providers to do this crawl/walk/run and learn as they go through it can be very helpful.

 

I assume that no parties would get involved in an arrangement like this if they didn’t think it would be financially beneficial for them to do so, either immediately or eventually through market share. Do you sense that the people involved in the ACOs will end up fighting for a smaller piece of the healthcare dollar pie?

The way the Medicare arrangements are mostly set up right now, the shared savings model, is an issue that you’re bringing up. The idea is there is theoretically a budget, and then to the extent that there is an expense lower than the budget, there’s shared savings. Then you reestablish your budget, and then you’re continuing to pull money out of the system. Eventually there’s no money to pull out of the system. That approach creates a problem, although it theoretically works towards driving down the expenses.

The biggest problem I see in the shared savings model is the amount of dollars that you make doing the fee — it’s still a fee-for-service environment with shared savings – you will never save enough money to make up for doing the actual service. The incentives are really not aligned in my opinion. It’s a start, but it really doesn’t align the incentives for the providers to spend less. If they do less, they get a percentage of the savings, but if they keep doing more, they’re getting 100 percent of the dollars that they’re charging for. 
I don’t think it’s sustainable in that regard at this point.

You’ve got to come up with other risk type arrangements that make more sense. The sooner you get into full risk arrangements in which the provider has the opportunity to benefit from the reduction in utilization, the better off you’ll be in that process. Then just allow that budget to establish based on that baseline. I think it can work. The problem is shared savings.

 

Is there potential to at least redirect some of that administrative cost to something that benefits patients more directly?

Sure, and that’s an interesting question relative to when payers and providers negotiate their deals. The payers are used to getting whatever it is — 12 to 15 percent of the premium, and those aren’t exact numbers — but generally it’s in that sort of range of dollars for administration. If the provider group assumes risk, do they then get some of the dollars being spent on administration for the production of those services? If for example a group takes on full risk and they’re going to do all the medical management work, does the percentage of dollars in the premium that’s utilized for medical management shift from the payer to the provider organization? 

But you’re bringing up another good point, which is there are economies of scale associated with large payers in providing these services. As more provider groups decentralize some of those functions, there’s potential for those dollars to actually increase, where it will make sense for some of these provider groups to outsource some of the services to groups that can provide them more economically.

 

What are your priorities for the company?

The priority for us is around helping providers succeed in the new world. We believe strongly providers should assume risk. We want to help them provide the highest quality, most efficient care possible. 

That’s our goal — to reduce healthcare dollars, but reduce it in a way that makes sense so that the incentives are tied to providers as the reason to do it instead of fighting it. Align incentives, provide them the right tools, and switch the paradigm right now of insurers in charge and put providers in charge.

 

If you look down the road five years, what do you see most being changed?

I spend a lot of time with physicians in hospitals right now. I see them mostly focused on what happens in their four walls. I understand that because that’s what they do. The physicians are focused on what happens when the patient sees me.

What I’d like to see happen is that the medical community – hospitals and physicians – come together to manage the population and focus on that rather than managing that patient who comes into my hospital. Focus on reducing the kinds of utilization that they today are incented for. I’d like to see them change their mindset.

HIStalk Interviews Mitch Morris, MD, Principal, Deloitte Consulting LLP

April 1, 2013 Interviews No Comments

Mitchell Morris, MD is a principal with Deloitte Consulting LLP.

3-31-2013 11-21-45 AM

Tell me about yourself and the company.

I am a partner at Deloitte. I lead our health information technology practice.

My background is a little unusual. l started as a physician and was in academic practice for nearly two decades at MD Anderson Cancer Center. I  got very interested around problems of quality and efficiency in healthcare, as so many of us do, and what technology tools can be brought to bear to solve those problems.

I complained a lot, got put on a committee, kept complaining, and I was chairing the committee. Eventually they said, “Well, if you think you’re so smart, here’s a budget, you do it.” Over a period of years, I ended up being the chief information officer at MD Anderson, a post I held for about six years. I left for consulting in 2001. I have been with Deloitte for going on seven years now.

 

Most of us in hospitals think about Deloitte working with providers, but you have responsibility over pharma and medical devices as well. Do you a lot of issues that overlap with what we traditionally think of as healthcare IT?

Yes. It’s a fascinating time. One of the things about being at Deloitte, the nature of our company gives us exposure to some of the areas of convergence that are happening.

Some great examples are large health plans acquiring medical practices and even hospitals with an eye towards payment reform and accountable care. We’re seeing tremendous convergence there. We’re seeing a great level of interest in life sciences companies – pharma, biotech, devices — in better understanding and integrating with what goes on in the provider world. Their business models are driving them towards closer integration and accountable care is even a part of that. 

An interesting phenomenon to watch is academic clients — academic health centers and universities, who in a sense can be viewed as small biotech companies on their own as they have a research agenda — are also linking up the combination of genomic and phenotypic information from electronic health records with what goes on in the laboratory. 

It’s a pretty exciting time when you look at all of the different pieces that are in the mix. The driver of health reform making everyone go into a frenzy has created a lot of activity. It’s fun to get creative and innovative around it, but then it’s all sometimes a little frightening as to where we’re all headed and how much control we have over it. But it’s been a good time from that point of view to be a healthcare consultant.

 

Every kind of company is positioning themselves for whatever they think the healthcare system will look like. The roles are becoming blurred about who’s the provider and who’s the payer. Do you think all this is going to benefit patients?

That’s a great question and I don’t think there’s an easy answer. Certainly the current healthcare system is too fragmented, broken, and too expensive, so we needed to change. What I wonder about is how much pain we’re going to go through during the change process and how quickly we will get to something that actually does help patients.

I think at the end it will help patients and consumers. Part of it also is your perspective. In the US, we tend to have a perspective of healthcare from the point of view of the individual. What’s going to happen to me or my loved one and what can I access for them? Most other countries have the perspective of the population. I’ve got a bucket of money. I have a population I need to serve. How can I do the most good with the bucket of money I have? 

As we transition as a country from a very individual view of healthcare — that we do everything for everyone — to a more population-based view of population health management, another common term along with accountable care, there’s definitely some pain that we will go through and some careful examination of our values as consumers and providers of healthcare as to what we think is most important. I’s a not easy decision ahead of us on that score, I don’t think.

 

Most of the science of public health was developed in this country, yet most of it gets exported to other countries whose citizens accept that concept better than ours. Is there a movement that suggests we will begin to behave more like a public health organization?

There are signs that Health and Human Services is directing funding to that end. I think the different iterations of value-based care, whether it’s accountable care organizations or other forms of value-based payment systems, are a step in that direction. The formation of the PCORI and their funding and pushing clinical effectiveness studies and the regulatory pieces that are coming out for pharma and for healthcare providers around clinical effectiveness are pushing us in the right direction. We make decisions and consumers make decisions not based on what they saw on the television commercial for that new drug, but rather let’s look at some data and see not just from a Phase III clinical trial but actually out in the market, what’s the most effective way to spend our healthcare dollar to be most helpful?

The pace sometimes seems fast to us, but I think it’s proceeding fairly slowly. I think an open question is this. We get to 2014 and as the health insurance exchanges kick in and more people have access to care, there will be further pressure on reimbursement. The whole sequestration issue in Washington right now is having a big impact on that as well with a 2 percent Medicare cut.

I think those things are going to be drivers in the marketplace to accelerate the adoption of some these other approaches to reimbursement and care in general. It has a potential to move faster than it is, but one thing I’ve been guilty of in the past is thinking things will happen faster than they will. I wouldn’t be surprised if change continues to be at a relatively slow pace and maybe that’s a good thing.

 

Are we putting too much faith in both the motivation and the ability of providers to use business intelligence and analytics to improve outcomes and reduce costs?

You probably went to HIMSS and a lot of your readers did. I think at least half the industrial exhibits there had the word “analytics” on the booth somewhere. There’s certainly a great deal of interest, but also a fair amount of hype.

The question will be when provider organizations in particular have to continue their march towards Meaningful Use, they have to deal with ICD-10, they have to deal with shrinking reimbursements and their cost-reduction initiatives –are they going to be willing to spend on things that are not required to do? If they do spend something, will it be a minimalist approach or a more comprehensive approach towards analytics?

Trying to run a healthcare organization today without good at analytics is like flying a plane blind. But I haven’t seen a huge change in organizations’ willingness to significantly invest in this.

The good news is with all the competition that’s out there creating solutions, that’s driving prices of solutions around analytics down. You don’t have to spend millions of dollars. There are out-of-the-box things that can help you, for example, analyze your revenue cycle or analyze readmissions or fill in the blank of what your current problem is. 

To  do a comprehensive approach to solve the analytics problem at an organizational level requires some investment, careful thought, and careful adjustments of governance and organizational structure to make it work. I think we’re ways away, but as measured by the interest at HIMSS, it seems like a lot of people are talking about it, that’s for sure.

 

Do you expect to see any new government involvement with healthcare IT issues, for example usability or FDA regulation?

As we take each federal agency, I think FDA has a strategy that they are enacting at a careful pace that will include a greater degree of regulation and oversight and a broadening of what they provide oversight for. I think in terms of what comes out of ONC and the rest of Health and Human Services, it’s hard to guess what kinds of things will come out from them. I think they pretty much have a full plate right now, but I wouldn’t want to speak for what their intentions are. Deloitte does a lot of work for those organizations, so I feel it will be improper for me to speculate.

 

What’s your overall thought on Meaningful Use as a program?

It certainly stimulated a lot of spending and a lot of progress. It’s far from being perfect, but I think overall it has driven a lot of benefit and organizations that had been taking a wait-and-see or very slow approach to the adoption of electronic health records –and certainly in the case of medical practices — it’s really accelerating things. 

The challenge that we have as an industry is not just getting in a system and checking the boxes on the Meaningful Use attestation document, but being able to really say as a group medical practice or as a hospital system, we’re driving benefits around quality and efficiency by using a system that we didn’t we have before.

While there are examples of electronic health records achieving benefits, there are also examples where it didn’t work out so well. It’s frustrating for me personally that as an industry, we haven’t done a better job of showing a broad and widespread benefit. We shouldn’t even be asking this question, and debating is kind of shameful in a way. 

The good news is most organizations I’m working with and our teams at Deloitte are working with are showing really great progress. It’s happening at a much faster pace because of the federal funding compared to prior to that. The maturity of the software also has a lot to do with it today, too.

 

Other than the minimal requirements for Meaningful Use, are providers showing an interest in technologies that engage and motivate consumers or patients directly?

I think that’s emerging. In terms of working directly with consumers, some of the healthcare organizations — and I’ll include health plans in this — that are a little more on innovator side are really looking at solutions that involve mobile technologies that go into the home or to the workplace and help with wellness and chronic disease management. There’s plenty of examples of where those things have been successfully implemented. 

As we get towards more mature versions of accountable care, linking together all the providers in a consumer’s ecosystem that they deal with and allowing things to happen at home or retail settings is a tremendous advance. A lot of that is technology enabled. You can’t do it without technology.

We’re still at the early stages of developing transactional systems that advance the agenda around population health management. We’ve got some pretty good back-end analytics stuff that we’re capable of doing today. We still have a way to go on on the transactional side. 

Part of it is that interoperability is still off in the future somewhere. Every community has a bunch of different systems that they have to put together, so that that makes it challenging. But there are some interesting emerging technologies from several software vendors that, as they mature, are going to bear some fruit.

 

What healthcare IT changes do you predict over a three- to five-year timeline?

It’s always difficult to predict disruptive things that might come along. Barring that, I look at what our clients are really challenged with. Managing and reducing cost is a huge issue, not just of IT, but overall. Being able to manage IT spend, looking and doing that through selective sourcing, making sure the organization is firing on all cylinders, being able to support analytics for your organization to reduce cost, making sure the revenue cycle systems are firing on all cylinders. Those things are going to be tremendously important.

We see the healthcare industry consolidating. At Deloitte, we have very large merger and acquisition practice. They’re tremendously busy, and we are doing a lot of post-merger integration. When all of the consolidation occurred in the 1990s, very often there wasn’t consolidation of IT and supply chain and HR, etc. Now because of the cost drivers, as we are seeing medical groups consolidate, hospitals consolidate, health plans consolidate, they are all trying to figure out, how do we get IT to be a key enabler of the efficiencies that we expect to gain from the merger or the acquisition? We’ll see a lot of that.

Preparing for value-based payments through accountable care and all the analytics need to support that we’ve already touched on. Convergence with the health plans and life sciences will be another significant driver. What’s going to wind down a little bit as this big round of primary implementations gets finished for Meaningful Use around clinical systems, that work will diminish, although there’s still a lot of optimization work that can be done out there. “I installed Epic, Cerner, fill-in-the-blank system, but to really get the benefit I expected, I need to spend more time looking at workflow and efficiency and quality and decision support. I think that’s work that I will spend time on.”

ICD-10 is going to wind down. I think mobility is going to crank up. The whole layer of coordinating care at the population level rather than at the facility level will create some opportunities for existing software companies, there will probably be some new entrants into the market who are able to beyond what an HIE does, really coordinate the care and the workflow beyond the walls of an organization. There’s multiple pieces of the provider supply chain taking care of people out there.That will be a really interesting one to watch.

At the Deloitte Center for Health Solutions, we recently released some work by Dr. Harry Greenspun that interviewed some CIOs of large systems and what they’re thinking. Some of the things I’m saying are reflected in that, and as well as some of challenge, which is juggling so many different priorities. I think one of the challenges our CIOs and healthcare today face, if you ask them what’s their number one priority, they’ll list 10 things because they’ve got so many things they have to do. That competing set of priorities that are all number one gets reflected in everything that we’re doing in the industry, and everybody who works in it is a reflection of all those things that are going on in healthcare. Those things are fun, but also a headache at the same time.

An HIT Moment with … Belinda Hayes, VP/GM Mobile Products, Imprivata

March 13, 2013 Interviews No Comments

Belinda Hayes is vice president and general manager, mobile products, of Imprivata of Lexington, MA.

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What are the biggest opportunities and challenges with mobile technology in healthcare?

Mobile technologies improve the way care providers communicate and collaborate on patient information and how they provide patient care. Almost every provider is armed with a smartphone that they use to communicate patient information, so we enable them to do that securely and for free.

However, it’s not just about the providers and how they access and share information. It’s about the entire ecosystem of healthcare professionals, like technicians, hospice workers, EMTs, etc. Mobile technologies have the potential to transform healthcare communication across boundaries that traditional communication could not.

These opportunities are not without challenges. Information is always at risk of becoming stove-piped or siloed. How do you take patient information from all these independent clinical systems and create a holistic view of a patient record? How do you decide what goes into the EMR? At what point does a medical record leave the EMR? Who has access to it and how is that tracked? How can that information be viewed across devices and clinical workflows?

Many hospitals restrict who can use smartphones today. Nurses may not have access to smartphones, for example, so mobile solution providers may need to support other forms of access, such as browsers. You’ve got to not only cover all relevant new devices, but give options for information access to the right people wherever its need.

 

The end of hospital pagers seems near. What will differentiate the products that are competing to replace them?

We hear this consistent theme from our customers. Smartphones will replace pagers. Providers are consumers just like you and me. They want the same experience communicating with their clinical team as they do with their kids. They want to use the latest technology. It complements our work and personal lives – we do our banking, schedule meetings, text our family, and communicate socially from our smartphones.

Providers want to similarly communicate with patients using their device. But it’s more than analog communication. It’s about collaboration. For example when a physician wants to communicate a patient’s status to a colleague, they first need to find a call list, then a phone, send a page to a different device, and wait around for a callback. This is terribly inefficient. Why is healthcare still relying on technology created over half a century ago?

Care providers want and deserve a better experience and pagers are limited. Pagers can’t provide you with a list of all your colleagues synced from the organizations directory. Pagers can’t see your colleagues’ status or send them a picture. Pagers can’t send group messages with conversation history and bridge communication across affiliated hospitals. Mobile phones and applications can. This experience, availability, and costs are driving providers to replace pagers with smartphones today.

 

What’s the business case for Imprivata Cortext?

Imprivata is fortunate to have a customer base of over 1,300 hospitals for our access management products. We frequently speak with our customers’ CIOs and clinical leadership about the next big thing. What problems are they facing? What is their long-term strategy and how does technology support it?

About a year ago, we heard an overwhelming need for secure texting from many of these customers. We ran our own survey across our base and found that over 81 percent of physicians have smartphones and 40 percent of physicians are already texting. CIOs told us this was a big risk that needed to be addressed. We launched our solution, called Imprivata Cortext, in October of this past year, and the response has been overwhelming. The application is completely free, including basic support, but we offer paid premium support options. We’re adding over 100 healthcare organizations a month and ended 2012 with over 400 enrolled in just three months.

We’ve learned a lot over the last 10 years in healthcare. It’s like no other industry. You have to nail the experience. We invest a lot of time talking to customers. Listening to what they need and collaborating with them early in and throughout the product design process. Care providers love Imprivata Cortext because it lets them communicate more efficiently. There is much more to secure texting than just a text message. A good solution will meet the basic requirements. But a great solution is actually built by clinicians, for clinicians. Its value will be self-evident to them.

For example, we found that a simple task such as locating a clinician on a phone wasn’t so simple. It needed to be easy and seamlessly incorporate the hospital’s corporate directory so providers can find one another with as few clicks as possible. It also must support group communication so that care teams can collaborate efficiently. And most importantly, it needs to enable providers to communicate across all of the healthcare organizations at which they work – all from a single application.

CIOs tell us they love Imprivata Cortext because it’s not only technically secure, but we back it up with a business associate agreement. There are many vendors in the space that call themselves “HIPAA compliant” but won’t back that up with a BAA. Our customers also care about where we are taking Imprivata Cortext. Texting solutions must provide a robust platform so that providers can support the evolving needs in healthcare such as the patient engagement requirements in Meaningful Use. Interoperability with clinical systems is critical.

 

What lessons about physician usage and preferences have been learned by their use of mobile devices that could be applied to other IT systems?

Physicians no longer work at one location. In fact we just did a study that shows over 50 percent of providers state they work at more than one location. Providers travel between their affiliated hospitals and practices, from nursing homes to even a patient’s home. So the power of mobile devices is the personal nature of the device. The power of mobile applications is that they enable you to be fully connected at all times. Now the only issue is how you bridge the desktop and the mobile device.

Let’s pretend a physician is treating a patient at the bedside and is viewing their current patient history. They need to get a consult from the patient’s specialist, which means they need to communicate directly with that clinician, sometimes in the form or an e-mail or text message. How do they compose that information? How do they transmit it securely? What if they want to add a photo, or video or audio of the patient’s heartbeat?

Smartphones have the potential to complement workflows that are today done from a workstation. This is what we’ve learned over the last 10 years from experience and a deep understanding of healthcare workflows. IT systems must bridge this gap. They must provide care providers with the ability to share and add to information from wherever they are. And do it securely.

We incorporated this thinking into the latest release of Cortext, which we announced last week at HIMSS. We designed a new capability that enables care providers to communicate across multiple organizations while still viewing a unified inbox of all their conversations. We heard loud and clear that IT wants to manage their own user policies and archives, but we had to balance that with a streamlined experience for the care providers. Early customer feedback is very positive.

 

Clinicians have embraced mobile technology, but hospital and medical practice systems don’t necessarily support those platforms very well. What’s the future for mobile-enabling enterprise applications?

There is a perfect storm happening in healthcare IT. On one front, you’ve got an industry that has been a slow adopter of technology, but HITECH and Meaningful Use have changed the game. Meaningful Use incentives have funded CIOs with investments to refresh their infrastructure. Not only are they deploying better EHRs and other clinical applications but the computing infrastructure is going virtual. Virtual desktops offer unique benefits to clinical workflows. You also have care providers and patients demanding and adopting technologies that they use in their everyday lives, like iPhones and iPads. Doctors and nurses are driving the BYOD revolution in healthcare.

Clinical applications have to incorporate mobile technology or their solutions won’t be complete and compete long-term. This idea that the EMR is the single-source of all information clinical is starting to change now that mobile applications are processing PHI. This needs to be part of the patient record. This provides a great opportunity for innovation. Take Imprivata Cortext. The concern around secure texting didn’t just happen. IT knew that their providers were already texting. Why? Because the convenience of communicating with their colleagues from their personal device greatly outweighed whether it was secure or not. Care will always trump security. Less than 24 months later, we are in a tornado of a market with over 30 vendors trying to solve the secure texting problem in healthcare. And in two years this number will be three or less. We like our odds with Imprivata Cortext.

HIStalk Interviews Rich Helppie, CEO, Santa Rosa Consulting

February 27, 2013 Interviews 5 Comments

Richard Helppie is chairman and CEO of Santa Rosa Consulting.

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Tell me about yourself and the company.

I’ve been in IT since 1974. I’ve been exclusively in healthcare since 1981. I founded Superior Consultant in 1984 and took that through the entire life cycle from a one-person startup through a fast-growth private company to a public company, where we did pretty well there. Then I sold it to a Fortune 500 company.

I’ve done some other things along the way. Lately I’ve been investing in driving Software-as-a-Service companies outside of healthcare. And then of course where my passion lies, with Santa Rosa Consulting.

A little about Santa Rosa. We are a consulting firm with a full range of services — strategic advisory services, implementation, and integration. We have a staffing arm in recognition of the commodity basis of some of the things that used to be high differentiation. We have a solutions arm, and in our solutions arm today, we have Sandlot Solutions.

 

How would you differentiate Santa Rosa from your competition?

Santa Rosa is that trusted advisor and the strategic partner to get the work done.

The driver for starting the company was that I’d sold the company, Superior, in 2005. I had attempted retirement. I was terrible at retirement, by the way — I was just not good at it that all. I started growing other companies, again mostly in cloud-based computing.

But I kept hearing from my clients that, “Hey, I don’t have that trusted advisor, that go-to partner anymore. If you ever get back in this, call me.” Similarly, I heard from many of the colleagues that I’d had the pleasure working with over that Superior run and they said, “You know, I’m working but I’m really not inspired. If you ever get back into this, call me.”

Then we saw that there was a bifurcation in the market. In those acquisitions in the early part of the decade — with Superior going to ACS, now Xerox, and First Consulting going to CSC — you had this barbell. You had some very, very large firms on one end – Dell, IBM, Xerox, Deloitte, Accenture. All good firms, but firms that also need very, very large engagements to feed that engine. On the other end, you had a lot of very good firms that were maybe $5 to $40 million in revenue. Good at what they did, but not really big enough to move the needle for a client. 

Where Santa Rosa comes is that we’re in that sweet spot in the middle, where we are large enough to move the needle, yet we don’t need the $80 million engagements in order to run a good business.

 

The lifecycles of both consulting firms and also the people who started them is fascinating, where someone starts a firm, sells it to someone bigger, sits out a bit, then comes back and does it again, sometimes more than once. It happened with three of the best companies back in the day — Healthlink, Superior, and FCG. What’s the message when people want to follow the founder of the firm rather than the acquired firm itself?

I think people are going to response differently to that. My experience has been that people like the passion. They like the commitment. They like the institutional knowledge and the comfort of working with somebody that’s been around a few decades. I had 3,000 clients at Superior and I think I could go back to 2,999 of them and they would be happy to see me coming. 

Superior was a breakthrough company in its time. When I formed that company, the consulting business was set up like the CPA model. You had offices. The Tampa office didn’t talk to the Washington, DC office and so forth. I remember going to the shootouts early on in that business. The question would be planted by my competitors, you know, “How many offices do you have?” and I’d say, “I don’t have any.” That was considered breakthrough thinking at that time, that we had literally built that company from the computers to be connected electronically. E-mail was a competitive advantage.

We also did a number of other things that were considered breakthrough. The consulting business at that time was all about advising and writing papers. When I founded Superior, I said, “Anything that we advise on, we’re going to be able to implement.” That “advise and do” model was a breakthrough. I wish I had saved them, but I had editorials written against me at that time, and the established consultants criticizing me from the podium because consultants shouldn’t actually be doing work. 

Why do people turn to us? Trust factor. Competency. Longitudinal view. Those would be some of the answers.

 

Superior arguably created the independent healthcare IT advisory business back in the 1980s. Now everybody wants to move away from that to implementation and staff augmentation. Are you happy with the way consulting has transformed?

Yes, I am. I think that we’re going to a new business model. I’ve done due diligence on companies. I’ve looked at it from the bonus structures and those types of things and I say, gosh, I wrote this thing. I remember one fellow looked at me and said, “Oh, it’s an industry standard,” but it was all the stuff that we had to create back at the time.

I think all businesses are going to be a mix of service and solutions. The client wants a job done. They want a result. They want to be able to say, we’ve partnered with or delegated responsibility for a particular result, and we are looking for a group to do it. I think you’re going to see further blurring. 

All the traditional independent software providers have big service arms. When you look at the first wave that we’re seeing finally of cloud computing, there’s a heavy service component around that. I think it’s going to be more and more blurred as we go to this next wave of consulting.

 

When I think of Superior, I think of really sharp thought leader type people who would help you with the vision and then let you decide what to do with it. Does that still have value, or are you sorry if it doesn’t?

I believe that model has value. I always believe that you give the client the choice. 

We only get hired as a consultant for one of three reasons. One reason is as you described — help me with an analysis, an objective opinion, help frame a decision for me. The second reason you get hired is the client says, “Hey, I’ve got the expertise, but I don’t have the workforce to pull this off. My people are busy.” Then the reverse of that is the third reason, “I’ve got the workforce, but I don’t have the expertise. I need some experts to come in, work side by side with my people, do knowledge transfer, and get me to a quality endpoint.” 

I believe you do the work for the client, you deliver the value to the client, and you don’t try to take a canned approach and cram it down a client’s throat. Some clients just want advice and that’s what you do. If some of them want you to go shoulder to shoulder with them, that’s what you do.

 

It seemed in the old days that only the largest hospitals were paying for shoulder to shoulder work, at least the ones I worked for weren’t doing that. Now it’s almost a given that if you’re doing a big implementation, you bring in a bunch of bodies from one or more consulting firms to cover the hump of work needed to go live. I assume people realize it’s valid to pay a premium for that expertise knowing you’ll need it only for a limited time.

Exactly. Our clients are considerably more sophisticated and considerably more capable.

I hate to keep going back to the early days of the pioneering in this industry, but when I formed Superior, one of the drivers was that I saw independent software products being sold and I knew that the body of work that the software supplier was going to do and what the health system could do was going to leave a big gap. I went and marketed to folks who would look at me kind of quizzically and say, “Well, why would I even need a firm like yours?” They turned out, of course, to be some of my biggest clients.

Another thing that we had pioneered was actually going to the software suppliers and saying that, look, you’re going to need us as a partner. We’re going to be objective. The way we’re going to make sure we’re objective is going to work with everybody. You guys don’t want to get tied up doing the intricate work it takes to blend your product into the workflow of every one of those individual clients. 

Back then, we had to evangelize that. Today, people expect that they’re going to use a consulting firm. Therefore, some of what we do is frankly quite commoditized. People know how to buy it today. There’s lot of folks who know how to build a company to deliver it. It’s always going to be about price and delivery, and oftentimes it’s about price.

 

What work are you doing most of these days at Santa Rosa?

A lot of it’s in the strategic advisory services. If you would have asked me that 18 months ago, it was absolutely heads-down for Meaningful Use 1. It was get Epic implemented, get Meditech implemented. That was the lion’s share of the work.

Today, it’s more of what’s coming on the next horizon. It’s ICD-10. It’s what you’re going to do about HIE. How are you going to be an accountable delivery system? How are you going to be able to manage risk?

I think there’s two megatrends that are running through the industry right now that I think bode well for consultants. By the way, I’ve read the whole Obamacare bill, the Patient Protection and Affordable Care Act officially. You’ve got providers that now need to manage risk, and whether they know it or not, fee-for-service is drilled deep into the DNA of their organization. They might employ 10,000 people and everybody is operating like it’s a fee-per-service world. All their technology support is designed around a fee-per-service world, yet they’re going to have to now manage risk and manage a population.

Coming  around the other side, the health plans — which much of their value has been obviated by the Act — they’re now seeing their future. They have to be good at helping the providers manage clinical flow. And guess what? They don’t have that in their DNA, either. They’re good at claims management after the fact, saying, “This care shouldn’t have been delivered,” or, “This medication should have been prescribed.” But they aren’t very good at managing that clinical flow. 

That’s where I think their huge opportunity is over this next immediate horizon.

 

If you look out five to 10 years, what industry changes do you expect to see?

I expect to see our health system much more like every other phase of our lives. I carry a smartphone. More and more and my life is inside that device, yet very little of my interaction with the healthcare system is there. I think the combination of the ubiquitous Internet, generations getting comfortable operating in the cloud, the cost pressures … I think you’re going to see healthcare look more and more like any other industry, and I think that will be a good thing.

HIStalk Interviews Chris Belmont, SVP/CIO, Ochsner Health System

February 26, 2013 Interviews 3 Comments

Chris Belmont is system vice president and CIO of Ochsner Health System of New Orleans, LA.

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Tell me about yourself and the organization.

I joined Ochsner about six years ago as an employee. Prior to that, I worked with them in the vendor world. Ochsner is 10 hospitals and 38 clinics located in southeast Louisiana. I joined Ochsner following Katrina, when we went through our growth. We acquired several hospitals that were abandoned after Katrina and that’s when I came on board.

 

Can you give me a brief history of what has happened since Katrina in the hospital industry in Louisiana?

Obviously it was devastated. When New Orleans was hit by Katrina, most of the city was under water. Ochsner continued to operate even through the flood and the recovery process. 

Several hospitals, mainly in the Tenet organization — we elected to purchase them and help them recover. We purchased originally three hospitals in 2006. Then we ended up purchasing another hospital that wasn’t Tenet, it was another organization in Baton Rouge. Then we purchased our final Tenet facility over in the Slidell area. which was also devastated by Katrina, in 2010. 

Ochsner used to be just one hospital with a large physician group practice. Following Katrina, we became more of a health system. As you can imagine, we went through a lot of growing pains with the city recovering and at the same time we were trying to grow. It’s been an interesting ride.

 

The last time HIMSS was in New Orleans, it wasn’t long after Katrina, and while there was recovery in the obvious areas like the French Quarter, a lot of hotels and restaurants didn’t have enough labor and there was still plenty of devastation not far off the beaten track. How would you characterize the state of the recovery in general?

You will see a drastically different New Orleans. It’s much improved. A lot of the infrastructure was repaired following Katrina. Other than the light outage in the Super Bowl, the city’s going strong. A lot of people are moving in. A lot of young folks are deciding to settle in here and start up their professional lives. Things are coming back.

The other interesting thing – and most people don’t know this –is since Katrina, we’ve had two other significant hurricane events. One of which was last summer, in which we also had a great deal of flooding. Not in the New Orleans area, but in some of the outlying areas. We’re still in the bullseye.

 

Maybe the only good thing to come out of Katrina was that people started pushing for electronic records when they saw manila charts floating down the street. It seemed like that was the point where people started to realize that paper records were vulnerable to any kind of natural disaster.

Yes. And not only the paper charts, but the fact that following Katrina, we couldn’t even get clerical help to locate the charts even if we wanted to on our own file room. Luckily we had our own electronic medical record that was built here by Dr. Witherspoon over the last 20 years. When I talk about EMR adoption, I tell them all you have to do is throw a Category 5 hurricane in your city. It’s amazing how EMR adoption ramps up.

I would say prior to Katrina – I wasn’t here, but I hear our adoption was probably a little bit less than 50 percent. Obviously post-Katrina it shot way up and it stayed there, which put us in a good spot to  tackle the new EMR that we’re implementing now.

 

Tell me about where you are with Epic.

We started our Epic journey in 2010. Late 2010, we went to the board. We stepped back and said, will the tools we have today support us going forward as we continue to grow and expand and potentially go global? Will they allow us to do some of the things we want to do, like offer EMRs to our community physicians, offer additional services, get into the ACO world? And then some of the bells and whistles around kiosks and portals and so on? 

We just realized the platform we had wasn’t going to make it. So in 2010, we made a decision and moved to Epic, hired about 120 folks, and went live with our first site in December 2011. We’re about 80 percent done. We have five hospitals left, two of which will go live the weekend after HIMSS. Our last site will be going live in July. We’re moving along quite briskly. 

We’re doing the whole thing – revenue cycle, clinicals, everything. It’s been tough, but it’s going really well. It’s just been a lot of change and a lot of healthy disruption to the point where 100 percent of our eligible physicians achieved Meaningful Use in their first year. That’s been a big win for us. We’re very pleased where we are, but we still have a little ways to go, and then the optimization is obviously beginning as well.

 

What benefits and results have you seen so far?

When we went live, we started monitoring our Meaningful Use metrics — literally on Day One — just because of the way we implemented the system. We hit the vast majority – I think all but one of our metrics – on Day One in the hospital. That was a huge win for us because some of that funding and some of those incentives we were going to use to back our project. That’s been a big win for us.

We have much better visibility of what’s going on in the organization now. We talk about it a lot that Epic sheds a lot of daylight on our processes. That’s been good and bad. We discovered some processes that let’s just say were less than optimal that we’ve had an opportunity to improve. 

We improved a lot of the things in the safety space, too, as far as barcoded med administration. Some of the things we’ve wanted to do, but we just didn’t have the tools to do it. We’re seeing some real strong benefits there. Rev cycle as well — we’re starting to see our gross charges are going up and our ability to manage the rev cycle is in a much better shape than it was under the legacy environment.

 

It’s an advantage that a homegrown system reflects your processes exactly, but also a bad thing that you aren’t getting challenged by the knowledge a vendor brings to the table having seen how things work in many other hospitals. Did you find that Epic brought a lot of ideas to the table?

Yes. The other problem with the homegrown system is you tend to miss a lot of the little things that are very important, like reports, like analytics. You focus on the feature functionality of the system and you don’t think about all of the surrounding things you need — upgrade utilities, system monitoring tools. Things like that’s not on the top of mind when you’re developing software from the ground up. Bringing that stability has been a huge win for us. 

Then like you said, a lot of the model functionality and a lot of the expertise that’s built into the tool allowed us to address certain areas that we just didn’t get to with our homegrown EMR, like ophthalmology, transplant, dermatology – some of the specialty areas. Ochsner, with an 850-physician group practice, has a lot of those specialties that we just didn’t service well with our Legacy platform. Epic has allowed us to get there.

 

What kind of data conversion were you able to accomplish from your legacy system to Epic?

Informatica was critical in getting us there. We learned on the first site. We thought it was a good idea to go in there with an empty slate and say, let’s just build it all from scratch and start with a clean slate. Let’s make sure the record’s in good shape. We quickly realized that was a bad idea. Not just in the clinical areas, but in the registration area. 

Then we had to more or less scramble prior to go live and say, OK, let’s move more of that data in. We used Informatica to write a lot of the extracts and then loads. Then we used a lot of the tools that Epic has available. Mainly their HIE tools, interestingly enough, to more or less treat our legacy platforms as a foreign system. 

We applied a lot of the health information exchange technology built into Epic to move the data from one system to the other. That’s actually still working out well today because we still have our legacy platform running and physicians are still practicing over there while we’re finishing the rollout. Informatica was huge in helping us quickly move that data once we discovered we had missed some things.

 

Will you be using the Informatica platform going forward?

Oh, yes. We use it daily. One of the things that we’ve done is not just move data into Epic, but we have a very large data warehousing initiative that’s been going on for about four years. Luckily it started before Epic. Our plan is that we’ll move all of our legacy platforms in there. 

We use the Informatica tools to do a lot of those ETL — those extract, transform, and load — functions to move that legacy data into our warehouse, with the plan of retiring about 38 different systems sometime around the end of the year when we fully have Epic up and running. 

That’s going to be a big win for us. In fact, we’re targeting about $13 million in operational benefit when we turn off those legacy platforms. Informatica is going to allow us to get there. Most recently, we just purchased Informatica’s Master Data Management tool, which will allow us to do a much better job in managing our master data across the organization. Not just patients, but employees and physicians.

 

Are you using Epic’s Cogito or are you bypassing that completely and working directly from your own data warehouse?

We’re watching it, but frankly it will be a while – and I would argue never – that we’ll be 100 percent Epic. A lot of the data that we have that Informatica allows us to get our hands on and load into our warehouse is non-Epic data.

For example, we use data directly out of our phone switch. By consolidating our phone switch data along with our Cadence patient scheduling data – again, you’re going to say, “Oh wow, that’s not a revelation” — but we were able to show the operators that when you don’t answer the phone, patients don’t book appointments. You’re going to say, “Uh, of course, duh,” but the reality is we weren’t watching it that closely. Now we’re watching it on a daily basis and we’re monitoring and making adjustments along the way. 

We’re correlating a lot of data, not just from Epic, but I think right now we have like 25 different systems that we’re running through Informatica and into our warehouse. The gold nuggets that are coming out of that data are just tremendous.

 

Tell me more about that. Everybody’s interested or talking at least about analytics and business intelligence, and Epic itself throws out a ton of information. What are some of the things that you think you’ll be able do on the basis of what you learn from your data warehouse?

We do a lot of things. Provider productivity. We’re looking at kind of RVU activity in real time, watching physician productivity but balancing that against the scheduling. We’re looking at labor, so we probably improved our labor performance several million dollars a year just by watching – almost like an acuity model if you think about it. We flex our labor based on patient volumes. We load our productivity data, we load our time and attendance data so we know who actually punched in yesterday. Then we load our patient volume data.

We consolidate that and have that in front of the operators by ten o’clock every morning. Then they adjust their schedules for the rest of the week to get back onto their labor target. That’s been a huge success for us. We’ve all but eliminated our agency because of those kind of initiatives. Then we have several others, quality and other dashboarding things as well.

 

What are you seeing for the future as far as population health management or accountable care arrangements?

We’re using it for our HCCs, for our Hierarchical Condition Categories. We’ve been using the data warehouse and using the tools within Epic to do a much better job, and that’s showing huge success. 

With ACOs, we’ve worked it out with two of our biggest payers that they provide all of the claims data for us. Now that we’re one of the ACOs that was approved for this year, we’re getting outside information on the population that we’re watching. I think we’re monitoring about 28,000 lives. By taking that payer information and then using the Informatica tools to get it into our warehouse, we’re able to look at our population much better. We started that last year and we didn’t even get approved to start our ACO until January of this year. We’re hitting the ground running with it.

 

That’s pretty cool to be able to get claims data and then merge it with your own internal data. How will you use the information you’re getting and some examples of how you’ll manage those patients based on all of this information you have?

We’re going to manage readmissions. If one of our members that we’re responsible for is admitted, even at another hospital, we won’t know that. But if they’re in our claims files, we’ll know that they were readmitted, so we can watch those readmissions.

The other thing that is a direct impact is managing outside provider expense. Our physicians may write an order, but the patient may elect to go somewhere else — a non-Ochsner clinic or a non-Ochsner facility — and have the services rendered. We have a little bit better visibility of those patients if they go elsewhere. That’s been a huge win for us. There’s a lot of cost that leaves the organization for not only our covered patients, our capitated patients, but even some of our employees.

 

What are the biggest challenges and opportunities that you see both within the health system as a whole and in your department?

I think it’s going to be, how do we do more with the data we have? I think the EMR and the implementation days — we are assuming all of those are going to go well and they are going well. I think that ability to predict the future is going to be important as we try to drive down costs, drive up quality, manage patient safety, manage more of a population. 

Having that data in a format that’s easily, quickly, and very accessible is going to be key. Gone are the days where you can throw an army of analysts in a room and say, “Give me this report” and you wait three weeks and they give you something that’s less than optimal. I think the days of, “Tell me what I need to know before I even know that I need to know it” — I think those are the days that we’re looking forward to. With the tools we have with partners like Informatica with their tools, I think we can achieve it.

There’s no lack of data. We’re approaching two billion rows of data, which in some industries is small, but for us, that’s a pretty significant amount of data. We really think we can move the needle on a lot of metrics just by supporting it and monitoring it through the data we have.

HIStalk Interviews Robert Lorsch, CEO, MMRGlobal

February 25, 2013 Interviews 24 Comments

Robert H. “Bob” Lorsch is president, CEO, and chairman of MMRGlobal of  Los Angeles, CA.

2-24-2013 4-21-10 PM

Tell me about yourself and the company.

I sold my business in 1998 for several hundred million dollars to AT&T. After the company was sold, I have spent many years focused on philanthropic activities – California Science Center, Cedars-Sinai Medical Center, St. John’s Hospital, and a variety of other organizations.

In 2000, I myself was diagnosed with a rare form of thyroid cancer. Despite the fact that I was extremely connected to doctors, hospitals — both as someone who’s been in the Los Angeles community for many, many years and as somebody who had supported these organizations — I was personally subjected to the task of selecting the guy that was going to be the surgeon who was going to go into my neck and deal with my cancer.

In the course of that, I quickly realized that having the disease was only one aspect of what I had to deal with. But the real aspect of what I had to deal with was the emotional trauma of what goes with being diagnosed with the disease and the challenges that are placed in front of a patient in terms of collecting and getting information so they can get competent physicians to give them knowledgeable and informed information to deal with their situation.

I must tell you that I’m not sure that dealing with the cancer — which was a six-hour operation where I was completely out of it — was probably easier in the long run than the months of agony and emotional torture of trying to figure out if I picked the right doctor, how was I going to get copies of my medical records, what the diseases meant, etc.

In 2005, someone showed up at my house and said, “I think you should go in the electronic medical records business” because Bush had signed an executive order in 2004 suggesting — or ordering — that everybody in America have an electronic health record within 10 years. I took a look at that and I said, “You know, interesting concept. I’m not interested, though, in competing with GE, Cerner, Allscripts, McKesson, and all the giant companies in the industry.”

But nobody had focused on the personal health records side of the house. I decided that that would be something I was interested in and we formed MyMedicalRecords.

 

Everybody assumed that that would be a really hot sector because people were Googling medical issues, symptoms, and drug side effects, yet for the most part personal health records didn’t do very well. Google shut theirs down, presumably because patients don’t really want to enter that information themselves manually. How have you found that to be with your personal health record?

Our personal health record doesn’t really require the patient to enter anything manually. We have a completely different perspective on what goes into a personal health record and the ease of utilizing a personal health record. 

We give a patient what we call a lifeline number, which is a 10-digit telephone number. We basically have a personal health record that is completely connected, completely interoperable with not only any hospital, physician, or medical professional in the United States, but any hospital, physician, or medical professional in the world based, on the backbone of the telecommunication system.

If you go to a doctor, you have a right to get your medical records in the United States. All you have to do is tell them how you want them. You give him or her your lifeline telephone number, and when you leave the office, they fax your record or e-mail the record to you so you can upload the record and it goes right into your account.

As a patient, when I look in my account, I’m seeing medical records from my physician. I’m seeing medical records from Cedars-Sinai. I’m seeing medical records from St. John’s. I’m seeing medical records from Long Beach Memorial. I’m seeing medical records from private practices. I’m seeing medical records from my orthopedic guys. I’m seeing medical records from my father. All consolidated into one place that requires me to actually input nothing but look at the document and select the file folder I want to insert it into.

It doesn’t require somebody to sit down and start typing in stats and results and information that in all likelihood will be plagued with typographic errors, wrong and not reliable. When somebody goes into my emergency view, they see my most recent laboratory tests on Cedars-Sinai or Quest lab forms with the phone number, the physician, and the lab that ran the tests. Exactly as they would see it in their office, regardless of where it was originated.

 

That’s a pretty fascinating approach. Other organizations advocated that health records be exchanged as PDFs, but nobody really ever bought into that concept too much. By doing that, you eliminate the concerns about what data you can accept and the standard interchange formats and all that. You just take everything that looks like a fax or an e-mail and it’s just stored in that exact form. Is that correct?

Part of that’s correct. We also have in the site a patient history. Assuming the patient actually wants to go in and enter data, there’s a form with simple drop-downs where they can say, “I want to input my maternal grandparent’s health history.” You just hit the button that says “grandparents.” It drops down and says is it a condition, an allergy, or a surgery, and gives them some categories. You click on that, write what it is, write the doctor and any information that you want, and save it. Then you can go in and put in your mother, your father, yourself, or your children.

Basically what’s happening is you are building through data entry your personal health record, but all you’re really building is that form that you’re going to fill out in the doctor’s office anyway. When you go to the doctor, you hit a button that says “print my record.” You just bring it in and pretty much everything you’re going to need for that form is with you on the spot and can go right into the doctor’s file. If it’s a medical record or chart note or handwritten note, or in my case, my eyeglass prescription … 

Each account works for 10 family members. In my case, I have my son, my father ­– may he rest in peace – my dog, my wife. Everybody’s in this kind of system. Depending on the emergency password that a physician or a paramedic or emergency room representative would put in there, it brings up the medical records, photo, insurance information, and prescription and labs for that individual. From any Internet-connected computer anywhere in the world, no questions asked for the quality of the form, because the person looking at it can basically reach out to the lab and confirm it’s accurate.

One of the problems of personal health record is you may get a patient that’s embarrassed about something. They may kind of redact something from data. We do not give the patient the ability to do that, because there is no data in the actual record. There is data in the health history.

 

I believe I understand right that it’s priced for families at somewhere around $100 per family per year.

There are multiple pricing programs. Direct online, somebody can go and pay $9.95 a month or $99.95 a year and set up and have their account. They can also pay for what we call personal touch — $80 more — and we find a nurse practitioner to go to collect forms for them. We contact all the physicians from throughout their life and we update the medical records in the account for them.

And then there’s the employer programs, where an employer with 1,000 employees can pay us less then $2 a month per employee and every employee in a company would have access to an account. And then there are associations, much larger groups, where they would pay an annual fee for every member in the association and it becomes an affinity benefit, much like a LifeLock or other similar service — whether it be lost baggage, a personal health record, insurance services — that are embedded into the benefits of that organization.

 

I don’t want you to tell me anything that’s proprietary, but can you give me a feel for how many active users the service has?

We define users in two different ways. We have members and we have users. For example, if you’re part of a company that has 5,000 employees, every one of those employees is a member. The actual user, depending on the type of company, can range anywhere from 5 percent to as much as 28 percent, and so we define members from users separately.

At last count, we had I think 750,000 members, although that does fluctuate up and down. We had from those members approximately 8 or 9 percent what I would call heavy, heavy users. But it doesn’t really matter, because if you work for that company, you have the ability to go in and set up your account at any time.

You might take some medications. You might have something going on in your life. But you take somebody who’s 30 years old. They get a personal health record, they don’t even think about it. They’re not as aware of it. Until one day they go to the doctor and he says, “You know, you need to have appendicitis operation or your cholesterol is too high or for some reason we’ve got a little spot that we want to deal with or some type of MRI.” All of sudden then, the person is, “Oh my gosh, I’d better start collecting my information and building my medical record.” We find that as people have their record over time, more and more people will come in and start adding things into the record.

The other thing that we find is attrition. Since we’ve been in business — which is almost eight years now and with the product out there a little more than six — attrition is less than 2 percent. The real-world attrition, we think, is less than 1 percent. The difference is that is people who have passed away or for whatever reason aren’t getting the benefit any more. It’s not really the attrition in the account, because once somebody gets their information in the account, they don’t want to give up the account.

In the account are 16 file folders. You have complete control over what those file folders are called. Four of those file folders are actually password protected. You can call them an e-safe deposit box. You can call them a real estate file. You can call them advance directives. If somebody gets into your medical record on emergency basis, they won’t see those files, because they are password protected through the administrative side of the site.

I could be anywhere in the world and I would have passport, driver’s license, advance directives, emergency documentation, inventories of all the furniture, fixtures, and materials in my home, etc. It’s not only a personal health record, but it’s an emergency disaster preparedness medical record. You’re in a community, a tornado comes in, you’re wiped out, you need your medical records. You also need your driver’s license, your banking information, your advance directives, the articles that were in your home, your insurance policies. They are all in password-protected files that are embedded into the account.

The other reason we do the password-protected files is when a child becomes 16 years old, they are entitled to have privacy to their personal health information. This way, a family can have a MyMedicalRecords account and they can allow a one file folder to be assigned to each of the teenage members of the family so that the parents can’t have access to what’s in that account. If you have a daughter that, for example, decides they want to take birth control pills, their medical record could be separate from the family’s medical record and password protected so the parents cannot get into that account.

 

I want to ask you a question about patent licensing. You’ve made some statements that licensing is the future of the company’s growth and a lot of the press releases involve that. Is it fair to say that a long term plan is that the licensing fees will be the majority of the company’s income?

If I may push back a little bit, I’m not sure that I’ve said licensing is the future of the company anywhere. I don’t think that’s actually a quote that I made. What I have said is that as a result of Meaningful Use Stage 2, hospitals, healthcare professionals are obligated if they sign on the dotted line and tell the federal government that they are requesting reimbursement under Meaningful Use Stage 2, there are certain things they have to attest to. One of them is to provide a certain percentage to their audience with a personal health record. Under Stage 3, it will be more severe, because under Stage 2, they have more time. They’re talking about bringing that down to less than a day in Stage 3. Those records are required.

If somebody complies with that Stage 2 Meaningful Use, we believe that they will infringe on one of seven patents that we have issued in the US Patent Office an additional patents that we have issued in 12 additional countries around the world. What we have done is we’ve gone to the hospitals, providers, vendors, laboratories, and we’ve said, “Look, if you’re going to comply with Stage 2 Meaningful Use or you’re going to offer products and services that enable healthcare professionals to meet Stage 2 Meaningful Use, they’re probably going to infringe on one of our patents.”

We’re suggesting that they license those patents at very reasonable license fees, such that whatever they decide to do to comply with Stage 2, Stage 3 Meaningful Use, they have a license – a safe harbor — that they’re grandfathered in, where they never have to be concerned about infringement on any of our patents or other intellectual property. If those same hospitals say, “Are there any other ways to address this?” they could also use our products — our MyMedicalRecords products, our professional products — which are embedded with licenses for the technology.

What we’re essentially saying is if a hospital wants to comply with Stage 2 Meaningful Use … and I want to be very, very clear, I’m not saying they’re definitely infringing, but we believe with nearly 400 claims, that there is a high degree of likelihood that they will infringe on our patents and other intellectual property — we will, as cooperative a way possible, reach out to them to offer them licenses, the ability to utilize their product, prior to bringing any form of legal action if we believe the infringement is direct and on point.

 

Have you ever taken someone to court for infringement?

We currently have four matters that are of interest. Approximately two or three weeks ago, we filed a lawsuit against Walgreens. Last week, we filed a lawsuit against WebMD. We currently have identified in Australia that the Australian government actually built a $1.1 billion personal health record system that blatantly, we believe – and I would appreciate it if you would always qualify it with “we believe” – infringes on our patents almost totally. The irony of the whole thing is that the government actually appears – and I want to say “appears” – to have used our attorneys who got us the patents in Australia to review and give them an opinion on the intellectual property.

We have found the same thing in Singapore, where the health department in Singapore and other companies — including a very, very large company out of China — are infringing on our patents there. 

We have begun the process of pursuing Australia. We would hope to settle it very, very quickly, because they have a billion-dollar system that is basically given away to everybody who lives in Australia, which completely, completely destroys the ability for us to sell our product.  We would hope that they will be objective in entering to some type of licensing agreement with us. Our patents go far back before they ever actually looked at the system that they built subsequent to the issuance of the patents, which we believe they were aware of.

 

I forgot to ask that earlier. What years were your patents granted?

The patents have been granted throughout the last seven years. I mean, originally they were filed … I think originally the first filings were in 2005. The US patents mostly were issued at the very, very end of 2011 and throughout 2012. We continue to have numerous applications on file, both pending applications and continuation applications on existing patents.

 

Your patents were filed in 2011. What was new in 2011 in your patents that hadn’t already been marketed by someone prior to that?

It has to do with what we originally invented in 2005. The patent is like three legs of a stool. You plant the first leg and the stool is going to be a bit wobbly. Then you plant the second leg and the stool is going to be solid. Then you plant the third leg and the fourth leg and you build on intellectual property. The original inventions were true inventions at the time they were filed in the patent office. They’re all based on the original art. Then over time, you amend those applications to bring in different features and functionality that rely upon the original prior art.

But the original prior art when we file these patents or the amendments to these patents or additional patents or continuation patents on,  the Patent Office is very, very thorough. I mean, very, very thorough. It took us close to seven years to issue the first patent. It took us, I think, five or six years to issue the first patent internationally. It took almost eight years to issue patents in Mexico. It’s not a simple process. They look at everything. It costs this company millions of dollars in fees, expenses, and attorneys on a global basis in order to prosecute this portfolio.

 

Most patents are written to be as broad as the patent office will accept. Can you just describe in general what the patents cover? Maybe the top one or two that are in question now with other people infringing.

There is a valuation that was done which I can send you the link to. It was actually covered in a news release by the company when it came out about a month, a month and half ago. That valuation identifies every one of the patents around the world by its name, description, and number. I don’t want to answer a question that really has the potential of narrowing the scope just by the fact that I can’t properly answer it in an article like this. What I would do is I would refer people to that valuation summary and they would be able to go to the patent office and look up everything.

There’s claims that deal with how the patients get personal health records. There’s claims that deal with telemedicine. There’s a broad spectrum of claims. Like I said close, to 400 in stage, with more patents and additional claims pending and a lot of claims around the world. It wouldn’t be fair to you, me, or the reader to just say, “The basics of it is this.”

They are a method and system for providing personal health records, electronic health records, and other forms of electronic documents. They run the gamut of e-safe deposit box, which could mean personal information like we discussed with advance directives and maybe a copy of your passport all the way to your medical records.

 

Some of the recipients of the potential infringement letters have been hospitals, most of which are non-profit. I don’t want to ask you a proprietary question, but when you say the fees are reasonable, what kind of terms would you offer them to license?

Every one of the agreements and licenses that we’ve entered into is confidential. If you look at me or you Google me, I spent the last 13-14 years of my life dedicating it to giving away money to charity. Prior to that, I probably have raised more money for organizations using what was called cause-related marketing, where a portion of a dollar that a company like Procter & Gamble would get would go to Special Olympics or the Heart Association or D.A.R.E. America. So when it comes to non-profit charity and giving, it’s in my DNA.

When I say reasonable, I mean in a way that protects the hospital, gives them a benefit so that they can provide a broader service to their patients. It’s not the kind of dollars that you’re looking at from all these lawsuits with Samsung and BlackBerry and Apple. It’s not that kind of a thing.

We look for a win-win situation with the hospital. The best way I can  explain it is our primary business is personal health records. A lot of people have tried to paint the letters we’ve sent to the hospital as if we’re patent trolling. A troll is somebody who has rights to a patent, but basically goes around suing people and demanding royalties. A troll is not the original inventor of the patents, of which I am on every patent that’s been filed anywhere in the world.

We invented those patents so that we would have the opportunity to go into the market and compete and create a barrier to entry for our competition. By ignoring our rights under those patents, we are essentially being denied the ability to compete in that marketplace, because other people will just go in and sell their product at the expense of infringing on our patents. 

What’s fair and reasonable in our mind is something analogous to the amount of money that we would have made had we were providing those products and services. But if somebody is going to say we’re going to preclude you from providing those products and services, then they should pay us something reasonable for infringing on our intellectual property.

In our case, we don’t care if somebody licenses or somebody buys. They win and we win either way. The objective here is to not do something that makes it impossible to make a deal, but also do something that is fair to our shareholders in the sense that we’re not denied access to the marketplace just because somebody said, “The heck with them. We don’t care about their patents,” which is what is happening in Australia. I mean the Australian government in a macro example — macro being huge, but one country — they basically said, “We’re going to make a personal health record. We’re going to give it away to 20 million people free and we’re going to infringe on IP and we don’t care.”

I had a meeting with a group of Congressmen last week in Washington, DC. Ironically, we focused on stimulus, and some of the things were covered in the Page 1 article in The New York Times. These Congressional representatives who are on the oversight committees have said that intellectual property –the right to own property, the right to own a home, the right to own what you create, eat what you sow — is a fundamental right of every American, and it’s probably a fundamental right of everybody wherever they are anywhere in the world.

These are rights that we built products for, we created things for. When somebody takes away your right to compete in the open marketplace, they pay a royalty or a license fee. In those rare cases where you unfortunately have to go to litigation, maybe they’ll pay more. But the objective here is to create reasonable relationships with hospitals.

I have said to our shareholders, there’s 5,000 hospitals out there. It doesn’t take a lot to figure if every hospital gave you some reasonable amount of money for every 250 beds, the hospital would win based on the quality of our product and we would win for our shareholders.

 

There was a rumor that there was some interest by the National Coordinator or some part of HHS about what was going on with the patents and the letters that were being received by hospitals, and possibly by somebody in California, maybe the Attorney General, as well. Has there been any official interest or discussion about what you’re doing from any government or oversight-type body?

When we originally sent out the letters, some of the hospitals apparently forwarded them to the California Hospital Association and the AMA. I received a copy of a letter that was sent by the California Hospital Association legal counsel Jana Du Bois to every hospital general counsel saying, “If you get a letter from a company called MyMedicalRecords, we think they’re some kind of patent troll. Let us know.”

When I got a copy of that, we contacted her, and we explained to her that, “Hey, it’s our primary business. We invented it. We did not buy these patents. We are not trolling with these patents, and by the way, we are very, very anxious to enter into reasonable business relationships with the hospitals to license the patents or utilize our products and services.”

She turned around and basically sent out what I would – I’m not going to say it was an apology letter — but she definitely sent a letter out to everybody to set the record straight. To the point that I just found out last week in one state on the East Coast, meeting with their association, actually discussing the possibility of saying, any hospitals in the state, we will negotiate through the association one license agreement so that the hospitals can get the benefit of the lowest possible rate, and as long as the hospital is a member of that association, they would get the license agreement.

In addition to that, we — meaning MMR — would take 30 percent of those license fees, put them into a non-profit managed by that association to provide healthcare and philanthropic services to underprivileged in their communities through their hospital network. So in essence, we would say, State XYZ is kind of like a safe harbor for,  I think it’s 10 months. We would negotiate a license agreement with that association. The license agreement would be based on the beds in the hospital. They would offer it to everybody in that state.

If they accepted it, they got that rate. We would take 30 percent of the money, give it back to the community to provide healthcare and other services to the community through those hospitals. If the hospital did not sign on, then we would see what happens after that period of time. That is as recently as last week. It was very well received. We are already in the process of signing agreements to facilitate those conversations.

The associations are very aware. The associations hopefully will understand that we’re trying to be reasonable about the whole thing.  As for the AMA, I know they’re aware of it. We’ve not communicated with them.

As to the National Coordinator, my days with the National Coordinator go back to Dr. Brailer, when Mike Leavitt was Secretary of Health. Mike Leavitt knew about MyMedicalRecords and our intellectual property in the early, early days. Dr. Brailer knew about MMR and our IP in the early, early days. The Small Business Administration acknowledged what we were doing after Katrina, because we had the ability to not only provision personal health records, but emergency safe deposit boxes for victims of natural disasters – they presented us an award. Subsequently, I meet with Dr. Blumenthal and William Yu, when he was in the office, went through the products, service, patents, the intellectual property. There could be no surprises to anybody about what we have been doing.

 

I think I read that you’re sending – maybe it’s not the right figure — 250 letters a week. I’m just curious how much response you’re getting from those letters or what hospitals are doing when they receive those letters?

We’ve sent out somewhere between 600 and 750 letters. Many of them respond. Some of them don’t respond. When they don’t respond, we reach out and try to communicate with them.

There are maybe additional letters, but at this particular point in time, we’ve had a lot of success with everything from the association I described to numerous hospitals in California that have opened the door for meaningful negotiations. If somebody opens the door for meaningful negotiations, we’re basically going to take the time that’s necessary to make them comfortable that they’re making the right decision.

Meaningful Use Stage 2 really starts in February 2014, I think. And so, if the hospital wants to understand this, vet the product, vet the service to understand the IP, we’re anxious to work with them in a businesslike manner.

 

Any final thoughts?

We’re looking forward to HIMSS. There are a lot of people that have gotten letters from us. We’re looking forward to more patents being issued. There are a lot of people that have contacted us and arranged to meet with us at HIMSS to discuss a variety of business opportunities from strategic partners, licensing. We’re going to be previewing wellness applications connected to our personal health records. We’re going to be focused on integrating our personal health record with the output from all the apps that are coming in on iPhones and Android phones.

We’re looking forward to meeting people in the booth who may have the wrong perception of the company. If the perception they have is it’s some guy sending out letters trying to get royalties who is not entitled to them, we’re not those people. There may be some of those people out there. We’re not those people.

We have a real product that we invented that we would prefer to sell people. But if people are not going to buy it and they’re just going to work around it or they’re going to ignore us … the most reasonable thing to do is to license, because that way everybody wins. Should they decide that, you know, it’s really not such a dumb idea to attach a 10-digit telephone number to every one of our patients’ personal health records so that they can go anywhere in the world, and if they’re on vacation in Israel – where, by the way, we own the patents — they can literally get a lab test, have it put in their account, and seen by their physician at New York Pres in three minutes.

I’m a big believer in supporting hospitals so that if, God forbid, I go into the emergency room and I need something, the little green light goes on and says, “He’s a good guy." But hundreds and millions of dollars have recently been spent in this community by Cedars-Sinai Medical Center and UCLA. They both have Epic systems. They can’t talk to each other. Here I’ve got a health savings plan. I’m in the emergency room at Cedars-Sinai, but next time because I’m closer to UCLA or the Cedars emergency room is full, all the tests that I had at Cedars now have to be redone at UCLA. Why?

Kaiser is  a classic example. The rumor is more than $6 billion has been spent on EMR and PHR. Right now, I’m not a Kaiser member. If I get sick anywhere and I need my medical records, yeah, I have some kind of a patient view. But that emergency physician in Sheboygan, Wisconsin or in Deer Valley, Utah, where I just came off at a ski slope with a pain in my arm or my chest or broken bone — they can’t get that data. They’ve got to completely rework me up before I go into surgery. If I’m unconscious, these people don’t know today that I’m a thyroid patient. I don’t have a thyroid. I have to take certain medications. If I’m unconscious, I can’t tell them that. 

If you start asking around about how much money has been spent on a state-by-state basis trying to create a regional health information system — I’m going to be kind — It’s probably $20 to $50 million a year, and I don’t think you can find a working model. If you do find a working model, I don’t think you can find a handful of hospitals that talk to it, because they’ve all got their own EMRs. There’s no interoperability, despite the fact that this whole effort from Bush was designed to empower the patient and create interoperability. So basically we’re at $11 billion and counting — maybe 12 now, I don’t even know, it goes so fast — and the original selling proposition of why we needed this has not been met.

HIStalk Interviews Keith Ryan, President, Cornerstone Advisors

February 20, 2013 Interviews 2 Comments

Keith Ryan is president and founder of Cornerstone Advisors Group, LLC of Georgetown, CT.

2-17-2013 8-39-12 AM

Tell me about yourself and the company.

I’ve been in healthcare IT for over 20 years now. I’ve played on both sides of the desk, so to speak. I spent over a decade of my career early on as a provider of professional services, both in Andersen Consulting and subsequently at First Consulting Group. Later in my career, I spent about half a dozen years consuming professional services as an executive-level CIO in a large teaching medical center on the East Coast, and then again at a relatively progressive community hospital outside of Chicago.

What I’ve learned as a result of those first 16 or 17 years is perspective and empathy for the CIO. The role of the CIO is without question the most challenging in healthcare today. It’s a big job. Partnerships are critically important. Having an organization – a consulting firm, if you will — you can trust and rely on and know is committed to your success is necessary. We strive at Cornerstone every day to be that firm for our clients.

Our services are largely focused in two areas — advisory and planning. In this capacity, we help our clients and their organizations elevate their decision-making process regarding IT. From an implementation perspective, which is the second area, helping lead, manage, and staff those implementation or transformational initiatives for them.

We’d like to think that these two service competencies enable us to be holistic, offer thought leadership, and evaluate our ability to effectively enhance the relationship with our clients. We focus on solutions and the effective execution of those solutions and try and work in that space rather than focus on the task of implementing systems.

 

What kind of engagements are clients calling you about most these days?

We probably spend about 30 percent of our time in the advisory and planning space, and then let’s say 60 to to 65 percent in the implementation space. Implementation obviously is the fastest-growing component of our business. It’s not unique to us. The remaining five percent, we do what we would call interim staffing engagements. It’s a bad label because people often mistake it as a staffing service, but truly interim leadership. We’ll do interim CIO or interim CMIO type work.

On the advisory and planning side, It’s largely Meaningful Use and compliance planning and road mapping. We do a fair amount of systems selection work and we’ve been recently getting engaged in a number of turnaround efforts. Organizations obviously now are elevating IT or the contribution of IT and that’s finding itself on the radars of CEOs and CFOs and COOs. As a result, they’re recognizing they need more out of their IT organization. We often play a role in helping them define what that looks like.

 

It seems that more consultants are being used for implementation work, where previously much of the work was planning and system selection. Do you get the feeling that almost everybody uses consultants now?

There were always downstream opportunities. It was really bringing more of a process and discipline to the table, whereas now I think the agendas for IT are so significant, largely driven obviously by Meaningful Use, that many of them are just looking for help.

It is largely focused right now on implementation. It’s about building infrastructure and getting some of the foundational elements in place. Organizations are largely consumed by that, and as a result, they’re reaching out more to consulting firms.

As a component of that, everybody’s now in the consulting business. What we traditionally referred to as staff augmentation firms are often calling themselves consultants. There are many more buyers, and a lot of those buyers are blurring the lines between traditional consulting firms — or what I would call solution-based firms — and more contemporary consulting firms, which often look like staff augmentation firms. 

I think it’s fair to say that now there is a lot more activity and it’s largely built around implementation. But I think there’s a question of sustainability for some of these firms who have built themselves around this model of supporting clients strictly from an implementation perspective.

 

CIOs used to choose consulting firms based on on how likely they were to transfer knowledge to their IT department instead of just selling it to them indefinitely. Has years of that knowledge transfer raised the level of expertise in hospital IT departments?

We as an industry are becoming smarter about our trade. CIOs have elevated themselves within their organizations over the course of the last two decades and hopefully will continue to do so. I’m not sure that that’s a result of them getting intelligence from consulting firms. It’s them just growing with the expectation of the organization.

Organizations now more than ever before, certainly in healthcare, are starting to recognize that IT has the ability to add value and contribute it to the success of the organization, Historically for many — not all, but for many – organizations, IT was always recognized as a cost of doing business and a necessary evil.

With that evolution, so has grown the contribution that the individual is making to the organization. I’m not sure I would draw a parallel that that’s a result of CIOs relying on consulting organization. I think it’s more as result of them responding to the demands of their organization in light of where the industry is going.

 

Are there a lot of people like you who get experience on the provider side, then go into consulting, and then come back?

No, I don’t think it is. It’s one of the things that differentiates us as an organization and our philosophy and our approach to our clients. I’ve mentioned earlier that we value more than anything our partnership with our clients. I don’t think that we’re bringing a higher degree of intelligence to the engagement. What we’re bringing to the engagement is a broader degree of exposure to what works and what doesn’t work within the industry, because we’re engaged with multiple organizations and we’re going through similar efforts on multiple fronts.

That’s what I consider to be thought leadership — the value of experience. In addition to that, CIOs are recognizing that the job is just so big they need to rely on partners that they can trust and they know will have their best interest at heart and bring to whatever effort that they’re working on some of the best resources that might be available to them in the industry. That’s what we’re trying to do for our clients and that’s what we try and focus on. To suggest that we bring more than that seems to be perhaps arrogant.

 

I assume that the range of engagements has narrowed, with a bunch of organizations doing projects like Epic implementations, analytics, Meaningful Use, or ICD-10 all at the same time. Do you think the breadth of consulting engagements has narrowed?

Yes, I think it has. When you look at advisory services as an example, most of that is built around system selection, ambulatory integration, and compliance planning. It used to be strategy.

Strategy now is, “How do I meet the regulatory requirements of Meaningful Use, for not just Stage 1, but Stage 2 and Stage 3?” That now has becomes the two- to three-year agenda for just about every organization in the industry right now. So I do agree. I think it has narrowed the scope of services.

But some things that fundamentally remain the same is the fact that organizations want partners who can be holistic, who can help them understand how to focus on the solutions rather than tactics. They want someone who is going to be committed to them to work in their best interest.

 

When prospects choose a consulting organization, what are their most common criteria and why do they choose Cornerstone?

Every organization is different. We’re perhaps unique in that if you look at our client portfolio, you would see organizations with a range in size from 25-bed critical access facilities to 500-plus-bed teaching medical centers. Each of them are looking for something different in a partner.

Organizations that traditionally have not had the resources or the sponsorship within their organization to think strategically about IT are now starting to ask themselves those questions, and are wanting help and finding those answers. They’re looking for a partner who can bring that to the table and can also offer them resources to help execute whatever that solution is.

Organizations on the larger side of the spectrum probably feel for the most part that they have a lot of the blocking and tackling issues under control. They’re looking two or three years out and they’re focusing on other things. They’re focusing on how do we drive our competitive advantage within our organization through the use of IT? How do we drive physician engagement? How do we support ACO efforts and the like?

Our KLAS ratings were a proud moment for us last year. It was validation of who we are and the type of firm that we’re striving to become. Obviously we were touched by our clients’ commitment to us in return for the services that we’ve offered them. Client satisfaction is obviously the hallmark of success in this business. Our goal which, we try and strive for every day, is to exceed the expectations of every client, every time. KLAS was helpful in objectively validating that we’re doing that on a regular basis.

 

It’s tough to wring a high “money’s worth” score out of anybody’s customers. What did you do to get a nine on a 10-point scale?

Part of this is our evolution and part of this is where the industry is going, which is frightening perhaps at times. There’s tremendous amount of pressure to commoditize these services. The lines between traditional consulting firms and modern-day staffing firms are blurring, at least from the perspective of many buyers. Probably not from our perspective, but that’s not the one that always matters.

For us, recognizing that we’re a smaller organization and in many cases less-familiar player, we often find ourselves competing across the broader spectrum. In some cases, we’re competing with staff augmentation firm rates while delivering a higher value. That’s being recognized by our clients. Not only are we helping them get the job done, we’re bringing a broader focus to the table and helping them execute on a solution rather than just the tactics of installing a system. That probably has a lot to do with it. Our challenge obviously is going to be continuing to sustain that.

 

Are hospitals still interested in return on investment?

Without question, probably more so today than ever before because the amount of investment is far greater than it’s ever been. We often find that many organizations anticipate that Meaningful Use will provide them the return on investment. We spend a lot of time educating organizations on what the true total cost of ownership is and what it takes to deliver good IT services to the organization.

When they look at those numbers and realize that it represents now more than ever before, it is obviously an increasing number as a percent of operations, but hovering in the four to five percent range now, which represents a significant investment. They are looking to make sure that they can get a return on that.

 

Meaningful Use made it easy to measure at least some aspects of return on investment because you know what it costs to get a one-time check for a specific dollar amount. But are organizations paying enough attention to their operating expenses relate to the capital expense?

It’s still difficult to measure, but having those metrics in place — whether they’re qualitative or quantitative — are important. It drives a degree of alignment and a degree of sponsorship, which is important within the organization. Oftentimes when these projects don’t bear the results that organizational leaders are looking for, it’s often as a result of governance or the lack thereof. 

What I mean by that is making sure that you have all the right members and all the stakeholders within the organization understanding the purpose and the objective of the project, aligning incentives so that people recognize that their contribution to this is important and critical, and making sure that the entire organization is rowing in the same direction. Nine out of ten times, the reason for projects not meeting their objectives is because you don’t have that kind of alignment established within the organization. 

We spend a lot of time working on this. We have developed a methodology we call e-Methods. It has five components to it – evaluate, educate, engage, execute, and exchange. Three-fifths of the methodology, as you can imagine, is focused on building alignment, making sure that the organization is fully bought into the exercise and that they understand the objectives and that they’re committed to it. If you can accomplish that, half the battle has been won.

 

Big IT projects other than infrastructure are really big change management projects. How do you assess a client’s capabilities to manage change on a large scale?

It’s change management, or culture management as we often like to refer to it. Most would recognize that culture eats strategy every time. That’s an important key that you need to focus on. It’s built into our methodology. We address it that way and we spend a lot of time upfront evaluating culture, trying to understand the barriers to adoption and what might get in the way of success. 

We build that into our model. We spend a lot of time educating the organization and helping them understand what we foresee as cultural barriers. We’ll educate the executive team. In many cases, we’ll even include the board in some of those discussions. You can push this change from the top down throughout the organization so that you have the right kind of sponsorship and leadership from the get-go.

 

What if you find that their culture really isn’t amenable to change management for a project of that level? Do you tell them to not sign that deal or tell them what they need to change?

We try and bring a level of awareness to the issue. We often rely on them to help us understand what we can do to contribute to that. First and foremost, we want them to understand that the issue exists and that it’s a potential risk to the project if we don’t address it. We will sit down. We will collaborate on ways to do that.

 

What should CIOs be doing right now to prepare for the future five years down the road?

It’s always interesting when you think about the timeline of three to five years, because that’s what we often look to as the future. In probably three to five years, we’re going to be on the tail end of us implementing all these infrastructure that’s being acquired right now. The focus is going to be, now that we’ve put all these technologies and tools in place and we’re capturing data, how do we use it to drive improvements and outcome? 

Data analytics is largely going to be the focus probably five years from now. It’s going to take us a decade as an industry to really figure that out and get it right.

 

Any concluding thoughts?

In other interviews, you often ask what differentiates once consulting firm from another. My reaction to that is simple. It has everything to do with relationships ­ – the relationship we have with our clients, the relationship we have with our associates.

We have two philosophies that we live by. First is clients for life. Second is associates for life. Although these are simple in words, these two things shape our actions almost daily. They impact our hiring process. They impact our retention and associate development commitment, our culture, how we approach engagements, how we support clients, and how we develop and maintain those relationships with our associates and our clients.

We believe, perhaps maybe even naively, that if we focus on these two simple principles rather than success metrics themselves, success often becomes the by-product.

I think it’s an exciting time to be in healthcare. It’s good to be here. There is a commitment to revolutionize the industry like never before. It’s going to take time.

Information technology will play a vital role. Right now we seem to be largely focused on elevating the IT agenda while also implementing basic infrastructure elements. I look forward to these tools and technologies helping our clients drive value, improve outcomes, and empower patients. I think the future is bright and I’m excited to be a part of it.

HIStalk Interviews Margaret Laub, CEO, Intelligent InSites

February 18, 2013 Interviews No Comments

Margaret Laub is president and CEO of Intelligent InSites of Fargo, ND.

2-15-2013 5-44-50 PM


Tell me about yourself and the company.

Intelligent InSites is 10 years old. I think about us as being the operational intelligence platform that essentially leverages real-time data from both EMRs and other HIT systems as well as sensory tags. Our goal is to increase the efficiency of health systems while improving care.

I joined Intelligent InSites in August. I have a background in healthcare services and technology for the last 15 or so years. I spent some time at McKesson, where I ran the “not the distribution business” and “not the hospital technology systems”, but what I call the “all other businesses.” Everything there has a technology component to it and a services component to it.

I’ve been in technology and services in healthcare for a long time. I grew up in the accounting field. I was an accountant back in the day with Coopers & Lybrand, which is partly what really interests me in Intelligent InSites and operational intelligence.

One of the reasons I’m here is to see the value of knowing what’s going on within your hospitals. Really seeing what’s going on and being able to make immediate decisions about those activities that can provide value from the standpoint of improving satisfaction, saving money, meeting compliance regulations, or improving quality. Back in the day when I was growing up, I did things like activity-based costing, which is essentially looking up what’s going on in your business, applying inputs and outputs to those things, and being able to make decisions about how better to improve your processes.

When I saw Intelligent InSites and the fact that we were a platform that was looking to accumulate data from a number of different data sources — sensory tags and/or HIT systems — and actually apply it at the point of service as well as being able to look at data providers over a period of time, I got very excited. I said, “Wow, that’s a great thing for me to do.” I’m here and very excited about helping us create this market.

 

It doesn’t seem that long ago that an RFID project involved expensive door frame sensors and passive tags. You got just enough software to turn out a primitive tracking log and maybe saved some money by tracking equipment instead of renting it. What’s the current state and how did we get here?

Many things coalesced. They all came together at one time. The population and customers probably started demanding more service. I don’t want to be treated like the old days, where I had to go to an old hospital and have things done to me. I would like to know what’s going to be done. I would like to be part of that process. I would like to comment on the value of the service I got. There is the whole consumer quality driving aspect to the environment that we didn’t have 10 years ago.

New reimbursement models are coming down, both from the standpoint of the regulatory environment as well as just the fact that populations are growing and everybody needs to use their resources in a much more efficient way. There are fewer physicians. There are fewer nurses. There are fewer dollars to be spent on things. All of these things are coalescing all at the same time, which is going to cause folks to say, “Wait a second. I really, really, really have to look at how I’m operating the business.” 

More importantly, as the volumes of patients or services are being provided, every single thing has to be done for an individual. Healthcare is individual. Each one of us is going to be treated a bit differently, and yet we’re going to have to find ways to treat people consistently and in a standardized way just because we’re going to have to do it from a financial standpoint.

That’s what’s changed. People need to get insight and visibility into how to do that. It’s not just about the hard dollars any more. It’s not just about finding pieces of equipment. It’s how are we using an equipment, to whom are we applying that equipment, why are we doing it, for how long are we doing it, is there a different way to do it? All of those things need to be looked at, because all these influences are coming together at once.

Certainly accountable care has even moved that far up. Meaningful Use, accountable care, all of those things are just driving it. Hospitals and IDNs really do need to start thinking of themselves in a bit of a different way. I think it’s the larger IDNs, the ones who are leading, who have done the EMRs, and who have taken big steps in looking at the clinical side of the business. Now we’re going to start looking at, how do I take the clinical piece and how do I integrate that into my operation so it’s not only clinical delivery that’s efficient and effective and valuable and satisfactory, but it’s also how I actually deliver it?

 

Many times people find creative uses for a technology once the infrastructure investment has been made. Do you have some examples of some high reward type customer projects?

One of our customers has used our technology to do their workflows in a very different way. In clinics generally and in hospitals, the patient goes to where the services are. One of our clients has changed the way they deliver the service. They take the services to the patients. The workflow has changed. It gets more efficient. It gets more effective. 

What they’ve been able to do with our enterprise platform as well as one of our workflow apps that we’ve worked with them on is change the way that that service is delivered. Instead of the serial nature of it, essentially the services are going to the patient. That’s very, very different. I think they’re one of the folks that won an award or will be winning an award at HIMSS in the near future.

The other I think that’s very innovative is what we’ve done with the VA. We recently — along with our partner HP — were awarded the VA national contract. They will be doing a couple of things. They will be using our enterprise software, a platform across all of their hospitals. They will have one unique view across the 152 sites that they have, as well as have that unified view at the hospital level. It’s a very innovative use. It’s not just a point solution. It’s not just being used in one department or for one hospital. It’s being used across the whole entire enterprise.

 

The VA’s announcement was, in my mind, a turning point for RTLS. It suddenly was not only validated, but being deployed in a widespread implementation by an organization that’s been good at changing around their technology. What did the VA have in mind when they decided that RTLS was the way to go?

The VA’s ultimate objective, and they very clearly stated it, is better care for the veterans. They looked at it as yes, there is value as that relates to tracking hardware and patients and where they are, but ultimately what they’re looking at is how do we deliver better care to the veterans?. Their decision, at least from our understanding, was based across a couple of things. How can I see that across everything that I’m doing, and more importantly, how do I plan for the future when there are many things that I don’t even know that I’m going to use down the road? What kind of platform do I need that will grow with me, that I know is not going to be something that I’m going to be replacing in five years? What kind of platform can I get that can integrate with the systems that I currently have, including VistA, which they’ve talked about and we will be integrating with them. How can I use all of those things? 

They are really forward thinking in terms of not just thinking of it as RTLS software, but as  software that allows them to collect data from a number of sources, apply some contextual information to it that will come out of their VistA system, and be able to translate that into better care at the point of service.

 

Some of the more promising projects in the early days involved tracking employees, which got a lot of pushback. Are those projects still off the table?

I haven’t run into that in my tenure here at this point. In fact, one of those other examples that I didn’t give you before was that we have a client who is a family medical clinic. They are using badges to track translators at the clinic that supports a customer base of 25 or 26 different languages that are spoken. When someone comes into the door, rather than wasting time in searching for that person, they can use the badge to track down the appropriate translator and get that translator right to that patient and as soon as they walk in the door.

In the VA, it’s not even a question at this point to my knowledge. It’s something that they’re a bit concerned about, but I don’t think it’s something that’s causing them major issues right now. They do have unions and they’re going to be working through that, but we haven’t heard that being a major problem. The customer that I referred to before that’s using a new process in the clinic, I do think they are badging some their folks. They’re just saying, “Hey, when can I get badged?” because it actually helps them in their processes. I’m not saying that that is not an issue that is going to be dealt with, but I don’t believe that’s going to be a bigger issue as it might have been even 10 years ago.

Even some simple things where you take pieces of information out of an EMR. If a patient has an allergy and if you can give that information real time to a nurse when they are in the room and they can make sure that there is not something that they might be inadvertently doing that would cause a problem in allergy, all of a sudden what you’re doing is you’re actually helping that nurse do their job rather than worrying about, “Gee, was she in the room for a period of time?” I think most caregivers are in the business for care giving, and if we can show them both kinds of values rather than “Hey, we’re trying to figure out if you went out and had a cigarette and went to the ladies’ room or whatever you did, you didn’t punch in or punch out” or whatever it is — I think that that’s going to change the acceptance of it.

 

Some of that information has to come from a traditional EMR. Do you find a happy coexistence with EMR vendors?

EMRs are a great source of the contextual information that we need to leverage. Over time, they’re going to be willing to share pieces of information. Are they going to open up their whole entire databases to folks like us? No, but I do believe over time, as we say, “Hey, can we just have pieces of information? Can we get that from you?” they’re going to be willing to do that.

Probably more importantly, what we can do is give them back automatically collected information. Instead of a physician or a nurse keying in when something happened — it happened at this point in time, the person went from this process to that process — if we can, use tags and locating information to automatically update the EMR, that makes the EMR itself much more useful and valuable. Again, this is not something that’s happening right now,  but I think over time as these pressures are applied from all angles, from the client, from external sources, to maybe make some of that information available.

 

Who are your main competitors and how do you differentiate yourself from them?

We are purely an enterprise software and services company. We are focused exclusively in healthcare. Because we’re only focused on providing real-time operational information and we can take it from a number of sources, we’re neutral. We can take it from all the different tag providers, we can take it from databases, we can take it from anywhere. It’s really hard to say who a traditional competitor might be. I don’t know that there’s anybody that does exactly what we’re doing right now.

That being said, we do tend to be to get grouped with the other RTLS vendors even though RTLS is only a component of what we do. If they are looking for somebody, they probably find us more through the RTLS. But if we do get grouped in with the RTLS, it’s probably Stanley at this point in time from their acquisition of AeroScout. Even then I’m not sure that is a fair comparison because we have an open platform. We’re totally focused in healthcare and again, we are neutral as it relates to any not only RTLS or sensory system, but also any other kinds of databases.

 

Where does the company go from here?

I hope that maybe five years from now we are no different than a CRM system, than a lab system, than a scheduling system. We’re just a component of what every IDN does. We are their operational intelligence platform. We’re the folks that notify when things go not as planned. Healthcare is individual. Every person is unique. Everybody wants to be treated appropriately, yet we have to have a consistency of how we deliver.

Hopefully we’re the ones at that point in time who are giving the alerts at the point of care that something different needs to be done here. An action needs to be taken. We’re the value provider in that sense. We will continue to be in healthcare. We will not be external to healthcare. We will always be a healthcare-focused company.

HIStalk Interviews Adem Arslani, Director of IS/Clinical Informatics, Advocate Good Shepherd Hospital

February 15, 2013 Interviews 4 Comments

Adem Arslani is director of information systems and clinical informatics at Advocate Good Shepherd Hospital of Oak Brook, IL.

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Tell me about yourself and the hospital.

I’m the director of information systems and clinical informatics at Advocate Good Shepherd Hospital. I recently transitioned here from another Advocate hospital. For four and half years, I served at Advocate Illinois Masonic Hospital in Chicago as a director of IS and informatics.

Advocate Good Shepherd is a community based-hospital. It’s smaller, licensed for about 169 beds,. The real challenge is that 80 percent of our physicians are private physicians, whereas Advocate Illinois Masonic Medical Center was an academic environment and actually a little easier to work with the EMRs and adoption.

 

Not many people in IT leadership roles have nurse credentials as well as being a veteran. How has your background made you more effective?

Understanding the clinician stakeholders and having that experience of working out on floors and understanding first hand has had a profound impact on my ability to do the work.

In the military, I served under the Signal Corps. That’s where I was introduced to mobile subscriber equipment and worked with technology. Our mission was to deploy anywhere and essentially set up communications within 24 hours in a total mobile environment. That was just an incredible experience.

Back in my days as a nursing student in University of Michigan, I was in the National Guard Signal Corps and ROTC. I was at the right place at the right time. At University of Michigan, we had a ubiquitous interactive TV system that was developed by a professor of engineering and the School of Nursing. They couldn’t get the equipment running. One of my instructors knew I had a military background. They invested some money and time and in six months they couldn’t operationalize this videoconferencing system.

I took a look at it and then had it up and running in a couple of days. The professor of engineering wanted to meet with me. She offered me a job over at the School of Computer Engineering, where I became a teaching assistant for a graduate-level topic course, Visual Communications. My work at the University of Michigan was, “How can we leverage technology to advance the practice of medicine?” That’s when I really became interested and intrigued in the role of informatics.

In a project that I implemented — and this was back in 1997 — I worked to design alternative nursing therapy for an 11-year-old bone marrow transplant patient. She was very sad, very emotional and on kind of a roller coaster ride. Having a nursing experience and empathizing with that patient and having some technology experience, the alternative therapy that I elected was PC-based videoconferencing over the Internet to help her deal with the coping and isolation. CU-SeeMe was one of the first videoconferencing applications. it was developed at Cornell University from a physician that wanted to share images. This was a free application. I contacted the school, they had it. They were an Apple environment, the University of Michigan was a PC environment, but that was the beauty of this application — it didn’t matter what platform you were on.

We established Internet videoconferencing out of a patient room. Bone marrow transplant patients are high risk of infection and she expressed that she missed her friends. She was isolated for six months and it was just sad. When we did this, her school friends in support of her, shaved their heads. They mailed her a T-shirt that she wore. They were able to see this. She was interacting via a modem connection and the video was very effective. That’s what gave me the recognition into the world of informatics. The American Journal of Nursing found out about the project. It was published through Sigma Beta Tau in quite a number of countries and I presented it at an American Journal of Nursing conference. From there, I landed my first informatics position at Mercy Health System in Laredo, Texas.

The military does an excellent job in leadership development and they have standardized methodologies around risk management, problem solving, and the Military Decision Making Process, MDMP. These processes and methodologies are second nature and are used with every problem or challenge leaders face. I have found that this approach has served me well when implementing IT and informatics solutions or leading teams. These methodologies and skill sets are atypical in information technology structures.

Nursing curriculum stresses utilizing critical thinking skills and problem solving. In addition, we understand how to operationalize technology, and often IT is removed from the day-to-day operations of a nursing unit, for example, failing to understand the kinds of impact certain decisions can have.

 

You’ve worked for several years with EMR speech recognition. What experience do you have from the work? How do you see speech recognition involving clinicians changing?

One of the imperatives — especially with the government mandates with Meaningful Use and HITECH – is that everybody is on the march to improve the EMR adaption for clinicians. That was the whole emphasis of why speech really intrigued me. When you take a look at the consumer market out there, it’s being introduced in the TVs we buy today. With my children, they’re experiencing gesture technology and speech with Wii consoles and with Microsoft XBox 360. This is the generation that’s going to expect this technology in the future. They’re already familiar with it. 

When you take a look at the healthcare setting, we’re always behind in the implementation and adoption of a lot of technologies that could make us more efficient and improve the workflow, patient safety, and all of those good outcomes that we’re striving for. When I came to Masonic, we were doing pretty good with physician order entry, but we weren’t doing so well with adoption of the structured physician documentation system from Cerner’s PowerNote, for example. We were just starting down that path.

The complaint from physicians were that there are a lot of clicks. You have to navigate a lot, and it just doesn’t lend itself really well to physician documentation of how they like to write physician notes. We embarked on a pilot, just for a proof of concept, with Nuance to see how physicians reacted to it. We targeted seven hospitalists and they went very well. Our chief of surgery and some other folks that had never utilized the EMR found out that we were piloting Dragon. Right away, the message to myself and CEO and finance was, “I don’t use the EMR, but you guys are piloting Dragon and I would love to use Dragon. I will try to use the EMR if I have access to Dragon.” 

That was very powerful and sent a very loud and clear message to our leadership. I got great support to target the Department of Surgery. We executed a license for that department. A short time after trialing this, it became clear in my mind that the only way you can really make an impact is through a site license. We wanted to give everybody access to this technology. The haves and have-nots limited our ability to leverage the full capabilities of Dragon. I have plenty of data to prove my point. When we have a site license, anybody can use Dragon. That gives a lot more flexibility from how we deploy a technology and how we can support it.

Oftentimes these products get implemented 50 licenses at a time. Who’s going to get that license? From a training perspective, if you have all these different work flows as part of 50, you’re really spending the same amount of time and resources as you would have implementing a site license. From my perspective, I did not want to go down that road — it was either a site license or we’re not going to do it.

We were paying about $45,000 a month in dictation and transcription costs, which was outsourced. We had about 6.5 FTEs internally that managed some of the dictation and transcription as well. Within 12-18 months as we implemented by service, we were able to reduce that cost to $5,000 to $8,000 per month. It was going so well that the organization eventually mandated the EMR. At Illinois Masonic, we had 100 percent EMR adoption by our physicians. We didn’t have physicians walk away. They didn’t leave. The strategy was we wanted to give our physicians options of how they document and make it as efficient as possible. 

As part of our license, we had 800 PowerMics. The PowerMic is very key if you want really good accuracy. In addition, we had Dragon installed just about everywhere in hospital. It was very conducive to the work flow. You didn’t have to compete for a PC with Dragon on it. For those reasons, it was adopted very well. Not everybody used Dragon and it was not our intent to force everybody to use Dragon. In an academic environment, we had a lot of residents who were fine with typing. The attendings absorb most of the dictation and transcription. That’s what we were really targeting. We wanted to identify who are high utilizers of dictation and transcription were.

We had about two services we went live with every month. We analyzed our work flow, we built templates, we tested those templates and commands. At our fifth week, we went live with that service. That’s how we were able to make an incredible impact on physician documentation and adoption.

I have never seen a physician get so excited about a technology. You don’t see physicians get excited about an EMR or physician documentation, but they did get excited about Dragon and the ability to have access to that. Some of the true benefits of speech is that it allows you to standardize all of the documentation through template creation right within Dragon that you can easily call up. On the EMR side of things, when you take a look at the physician documentation systems, there’s a pretty cumbersome change control process to make any changes to that physician documentation. Then you have reach some kind of consensus throughout the organization, and especially with a large healthcare system like Advocate, that takes a very long time to see any of those changes. That’s where you get a lot of frustration from physicians. 

With Dragon, it takes it out of the mix. We can create templates specifically to how they work at a service level, then you can drill down to that individual level. You can call up your H&P or any document type you wish and then dictate and then integrate that right into the EMR.

What’s interesting with the other healthcare organizations here within Advocate that have had that approach with buying bundles of licenses, over time, they had wound up spending more money than what I’ve invested in a site license. They did not realize the same impact that I have in such a short period of time. Within 12-18 months, to have that kind of impact and to get all of the physicians to be able to adopt the EMR is pretty incredible.

Dragon is not a competitor of the EMR. It’s another input device to make them much more efficient. When you take a look at just the keyboard and mouse, that itself is a barrier to the adoption of the EMR. When you watch a physician get in front of a computer with a mouse and keyboard, you can see that it hampers their work flow. It takes a long time for them just to get in the system and to navigate through the application. All these things are barriers.

 

Looking back at your responsibility for both IT and informatics, when you look at all of the opportunities for technology to improve patient outcomes, which ones do you see as the most promising?

I am definitely excited about speech and gesture technology. Anything you can do remove these barriers for adoption, that’s the key. My intent here is to integrate speech and gesture technology to at least minimize or eliminate the use of the keyboard and mouse.

One product that has captured my interest is a product from Leap Motion. I’ve already pre-ordered their device, which is slated to come out here pretty soon. The whole idea is to use a combination of single sign-on to tap in and  tap out, which we’re getting implemented here for the physician. Once they log into the system, they use gesture technology to navigate to wherever they have to navigate. When they navigate to the physician documentation piece, they turn over to speech and dictate directly into the EMR. I’m most interested in specialty areas that are most challenging anywhere you go, in surgery and with anesthesiology. A sterile environment doesn’t lend itself very well to the work flow.

We are one of the first healthcare sites to pilot Dragon in the cloud, Dragon 360 Direct, Nuance’s new offering. We are excited about this, as it will give us the ability to provide speech recognition to physicians anywhere, to be used with any EMR. In large integrated healthcare organizations, it is not uncommon to find more than one EMR that is being utilized.  For example, at Advocate, we have Cerner on the inpatient side, and depending what physician group you are a part of, they might be using Allscripts or eClinicalWorks.  An independent physician may use even another EMR. 

The challenge is that the different physician groups and the hospital are on different physical computer networks. The traditional Dragon implementation does not lend itself well to this type of environment. The real value proposition Dragon 360 Direct is that it allows the physician to use a common tool across a variety of EMRs, significantly enhancing and accelerating adoption. For example, a physician can easily access the same history and physical template from the cloud and use it with whatever EMR they happen to be using at that time. 

I am looking forward to utilizing gesture and speech recognition and leveraging Nuance’s Speech Anywhere SDK to allow the physician to interact with the EMR via voice. For example, with this technology, the physician could say, “Show me my patient list” and the EMR will respond and display the patient list without the physician having to use the mouse or  keyboard. 

HIStalk Interviews Jon Phillips, Partner, Healthcare Growth Partners

February 13, 2013 Interviews No Comments

Jon Phillips is founder, managing director, and partner with Healthcare Growth Partners of Elmhurst, IL.

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It’s been a couple of years since we’ve talked officially. Your predictions back then were strong M&A through 2011 then falling off significantly in 2012, multiple billion-dollar deals by the end of 2011, and HITECH payouts that would be a fraction of the potential amount. Want to revisit those?

I certainly missed it in terms of the projection related to 2012 M&A activity. When we tallied up the transaction activity for 2012, it was at a record level for the space. I think we’re continuing to see a lot of activity related to a number of different macro trends that are impacting healthcare overall. Transaction activity has continued to follow along with the growth in healthcare spending and then also the increasing need and understanding of the need for healthcare information technology to solve the other challenges and healthcare more broadly. I definitely missed on that one.

On the Meaningful Use side of things, as you look at the stimulus payouts and look at the distribution of those payouts, we were somewhat on the mark. You still have a fairly hefty proportion of the physician market that has not yet been able to become eligible. You’ll see those physicians falling into a couple of different categories. You’re still going to see more people trying to get systems in place so that they can capture some of the Meaningful Use incentives. But I think you’re having some other physicians who are looking at the impact that the systems are going to have on their practice productivity and are saying that a one-time stimulus incentive may not be enough to get them over the hump in terms of deploying systems.

There’s a little bit of a battle there, especially in the physician practices. In smaller practices, the adoption curve is probably a little slower than many people would have said going back several years. Just like we’ve always seen in healthcare IT it just takes a long time to adapt technology. It doesn’t mean that we’re not going to see adoption rates for EHRs in any provider heading up into the 80 to 90 percent range at some point. It just seems to be taking a little longer than some of the cheerleaders expected.

 

Everybody wanted to buy HER-related vendors and consulting firms a couple of years ago. Now it seems like everybody’s chasing analytics and population health technology vendors. Do you think that latter group is going to be as successful as acquirers seem to think they will be?

A lot of it depends on the type of solution that the analytics and business intelligence and population health folks are providing and that the capabilities that they have. You’re going to see some situations where there is a sense that if an acquirer purchases an analytics vendor, that in and of itself is going to drive success, because there is a tremendous amount of data that’s being created, and so tools that can sift through the data and can drive meaningful conclusions from data can be very valuable.

That being said, part of the challenge is that a lot of the analytics solutions and BI solutions out there are much narrower in their capabilities than people may expect. There is still a lot of hype around the big data solutions that has yet to pan out. There’s a pony in there somewhere, but I don’t know that a lot of people have found the pony yet. 

It’s going to depend on continued execution rather than just buying a business or developing a business or investing in a business that has strong analytics capabilities and a strong business intelligence footprint. That’s not going to be everything that it’s going to take. You have to focus in on how those solutions are going to be used and the value that they’re going to generate.

I had a conversation with a hospital exec a little while back. He was talking about the fact that they have a clinical system that they deployed. The system is fully operational, and yet they’re still having to go through and do manual reviews of charts to pull relevant information because the system captures a lot of information, but it doesn’t necessarily make it usable. For analytics-type solutions to really be valuable, they have to close that gap from taking data that’s being captured, drawing meaningful insight from that, and then helping it to be actionable so that hospitals and physicians can actually do something with the reports that are coming out.

The trap with data is that you can fall into a situation where you say, “Just because we have a lot of data and we can run a reports on that data, that that means that we can make a difference in terms of how we’re providing care or how we’re running our hospital or physician practice.” It doesn’t necessarily mean that. Look at the proliferation of data across the economy. It’s a much smaller subset of data that actually drives decision making. In healthcare, the data sets are incredibly complex and the decision processes are incredibly complex, so it’s just going to take some time to bridge those gaps.

The other interesting thing related back to how a few years ago there’s a lot of focus on consolidation in the EHR and PM space and among consulting firms. Consulting has been kind of up and down. That sub-sector tends to be going waves, where you’ll see some significant acquisitions and then you’ll see a lot of the principal spinoffs start their on firms, build these firms up, and then you’ll see another wave of consolidation.

On the EHR and practice management side of things, there were a few deals last year in that space, but at least the rumblings that we’re hearing right now is that there are a number of other companies in the physician software space that are exploring raising capital or finding an acquirer. You’re starting to see a pickup in activity in that part of the market, which is not tremendously surprising, but it’s interesting because I think you have people trying to figure out how they position themselves for a market that as the impact winds down on the incentives associated with Meaningful Use, how do you get yourself positioned as a company to continue to have success in the physician software market? 

The winners haven’t necessarily completely emerged yet. You have companies of very different sizes who are both doing very well and who are not doing very well. I think you’re going to see some real strategic moves in that space over the next year or two as businesses try to build real strong strategic positioning to become long-term participants in that market.

 

Do you believe that Humedica really got hundreds of millions of dollars in its acquisition, and what do you think that deal means for the market?

A lot of times what you’ll hear with deals like that is the rumor will tend to be substantially higher than the actual deal. It could be that that deal was structured with a portion of the consideration paid upfront, and then some of it depending on performance going forward. I look at that transaction as being much less about the existing footprint that Humedica had than the ability for Optum to be able to take the capabilities and tools that Humedica has been developing and gain a lot of additional value out of those capabilities based on the much broader reach that Optum has.

If you look at the number that businesses that Optum has acquired, in certain situations, they’ve paid prices — and they don’t have to publish a lot of the multiples given how big they are — but that certainly seemed to be at the far end of the valuation distribution. Yet in a lot of the situations, they’ve paid big prices and then have it in turn really been able to generate a lot of value out of those businesses. It probably was a smaller deal size than is going on than the rumor might otherwise imply, but Optum is going to have a very disciplined financial model in terms of how they look at it and how they generate a payoff. That’s how they came to the value that they were willing to pay.

It does present a trap for other companies in the space. As we looked at the deal environment in 2012, we saw a little bit of a bimodal distribution in values, where you would see certain transactions happening at very high revenue and earnings multiples and then the majority of transactions happening at lower multiples. If you’re thinking about selling a company, the temptation is always going to be to say, “We’re better than anybody else, so we should deserve to get a three, four, five, six times revenue multiple.” 

If you look at the distribution, even in 2012 but especially if you look at it historically over the last five or 10 years, the multiples for deals done in the space — whether it’s a recurring model or a license model, it’s not entirely dependent on profitability although profitability impacts it, growth impacts it, the level of recurring revenue impacts it – but what you see is that most deals in the space happen at two or three times revenue.

When you see deals like that get announced and there’s a really high value, sometimes everybody says, “That means that my company is worth a lot more.” It doesn’t necessarily mean that. It means that Humedica was worth that much to Optum. It’s more of a one-off than a hallmark of the much broader trend that deal values are going to be permanently high.

 

Give me one example of each of an M&A deal that you did like and one that you didn’t like in the last couple of years.

In terms of ones that I’ve liked, I think athena has done some fairly interesting things. Epocrates is obviously very intriguing in terms of the footprint that they have and the reach that they have. But I also think that athena’s acquisition of Healthcare Data Services is pretty intriguing as well in terms of looking at different ways to look at the information that’s flowing through their customers and being able to draw lessons from that. A smaller-type transaction, but certainly presenting a significant upside.

In terms of some other ones that are pretty interesting — a caveat, we were a strategic advisor on this transaction — the Hearst acquisition of MCG was very intriguing given the footprint that Hearst already has and the ability to really generate strategic value through what MCG has already built.

The things that I tend to like are situations where you have businesses that have a strong footprint and are looking at pieces that are truly additive in terms of where they’re building and the directions that they’re going, that are going to generate growth that’s faster than either of the businesses could effectively do on their own without the bigger footprint that they’re going to have together and the better reach that they’re going to have together.

Some of the ones I don’t totally understand. Perceptive buying Acuo. The vendor-neutral archive space is certainly an intriguing space and I think there’s opportunity there, but you always get a little nervous about sectors where it feels like the technology could, in effect, be disintermediated over the long term, that there’s not necessarily a long-term presence that the technology helps you to establish. In situations like where you’re buying something that may have strong momentum today but certainly presents a fair amount of risk for there down the road in terms of replacement capabilities that could be much less expensive and more flexible — those feel like deals that are tough to make pay off over the long term.

 

Who needs to sell or find a partner?

If you’re a physician-oriented software vendor and you are under $10 million in revenue — just to draw a bright line which may or may not be fair — I think you have to be thinking about a sale. The level of investment associated with continuing on Stage 2 and then the level of investment in terms of sales and marketing to be able to continue to go after a market where the individual incremental sales are going to be smaller in terms of the deal size, and yet there are still a lot of sales and marketing investment that’s required to get there. 

Those groups are going to have to find bigger companies to take them over. In some situations, there will be scenarios where the products won’t survive. In other situations, the products will survive, but they’ll be able to have common sales and marketing and they’ll get some savings on the development side. Smaller ambulatory vendors absolutely need to look at selling.

This isn’t necessarily a 2013 trend but certainly one that will carry on over time is the question about what happens with traditional best-of-breed vendors in a hospital environment. There is certainly still a market for best-of-breed vendors in hospital environments and I think that market will continue. But the challenge is, once again, you have to have scale. When you look at a lot of the public results that have come out and then just the conservations that we’ve had with the folks who don’t publish their results, 2012 was a challenging year unless you’re selling core clinicals and you’re Epic or unless you’re selling things around ICD-10 and code migration. It was not a year where everybody had a lot of success in selling into hospitals.

If you’re a single product best-of-breed vendor in the hospital market, there’s likely going to be a lot of variability in your revenue streams over the next couple of years as the capital flows in hospital vary up and down unless hospitals react to the reimbursement pressures that they’re going to be seeing. You really do need to broaden out capabilities, which entails finding a buyer or a merger partner for a lot of new kind of single-product, best-of-breed vendors in the marketplace.

 

Give me three predictions about anything related to healthcare IT over the next one to three years.

In the next three years, there will be certain significant winners and a much larger number of significant losers in business intelligence and analytics. Some people will figure out how to draw connection to what hospitals need, whether it’s what they need for operating in an accountable care or coordinated care environment, or what they need in terms of dramatically improving their operations. You’ll have some other groups who don’t draw the connection to meaningful return on investment and those will be the ones that will fall by the wayside.

You will see ongoing consolidation in the physician software market. In 2013 and 2014 ,we’ll see a significant increase in the number of transactions among physician software vendors. 

A lot of Epic’s competitors will see resurgence in their opportunities in the marketplace. Epic has an unbelievable momentum. They’ve done a great job executing. They’ve done a great job in sales. But I also think that there are reasons why people can choose other solutions, whether Epic still has core clinicals but then there are people who are providing solutions that go around the fringes, or whether it’s groups selecting alternatives to Epic because they feel philosophically and capability-wise there are other directions that they can go. Epic is going to be a very strong player in the marketplace for a long time to come, but three years from now, they won’t look as invincible as they seem to today.

HIStalk Interviews Charlotte Wray, VP/CIO, EMH Healthcare

February 12, 2013 Interviews No Comments

Charlotte Wray, RN, MSN, MBA is VP clinical operations and information systems and chief clinical and information officer at EMH Healthcare of Elyria, OH.

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Tell me about yourself and the organization.

I’m the chief information officer and the chief clinical officer at EMH Healthcare. I’ve been in healthcare about 25 years, with probably the last 10 focused on HIT, and have been an executive at EMH for about three and a half years.

EMH is a medium-sized community hospital, about 400 beds. Like most other hospitals have a few sites, we have about 19 provider offices. We support a community of about 350,000 people.

 

How is the IT department structured?

The IT department has evolved given the investment that we’ve had to make in the clinical components. It has about 40 professionals of diverse backgrounds. We have a combination of business analysts and clinical analysts as well as your traditional technology experts. The group has evolved to become a service support area for the hospital and our target audience of end users, which are predominantly nurses, physicians, and technicians across the enterprise.

 

How has the Meaningful Use process worked? Do you think it was worth it, and would you do anything differently?

We embarked on the journey to implement a robust information system — clinical and financial systems — in late 2008. We entered the space in what I would call the sweet spot. We acquired the money to buy our solution. Meaningful Use wasn’t in the forefront of our thoughts. 

Shortly after we began implementing, Meaningful Use became something that was more measurable and had a little reward with the risks. We aligned our information system strategy so that it was tightly integrated with the Meaningful Use requirements and the timing of those various activities. We attested in 2010, fiscal year 2011.

It was a huge change project for us. It was huge. We did not have clinicians of any kind using electronic record in a meaningful way. We had some niche solutions in cardiology, radiology, and pharmacy, but the bulk of our workforce was doing their day-to-day work on paper. It was an enormous clinical transition for our providers and our nurses.

I believe it was worth it. It helped us align with the government initiatives to try to improve healthcare. We tried to make it about more than just checking the box to get the money. There was a little bit of money there. It didn’t come close to covering the costs, but it certainly helped guide us to do things in a more prioritized fashion. We wanted to make sure that we weren’t just checking the box and saying we met the requirement, that we were really meaningfully using the various applications and the workflows that we were building.

I think it was worth it, but I think like anything else, the pain of change fades as you go live and move onto other projects. If you would have asked me right in the heat of it, I might have said, “Oh my goodness!” But looking back, it was definitely worth it.

 

Academic medical centers have it easier because their physicians are employed. I assume most of yours were community-based physicians who had not previously interacted directly with systems. How did you get them to use it?

At EMH, very few of them are employed. They are independent, they are entrepreneurial, they are primary care providers, and there’s about 400 of them. We had to have a very creative approach to managing that group of users.

We did an assessment of where they were. What we found was that a significant percentage of them had no access, no exposure previously to not only EMRs, but even basic computing functions. Many of them at the time didn’t have e-mail accounts. The closest thing that they had to interacting with some sort of a system was an ATM card. We had to build a lot of the fundamental blocking and tackling skills before we could even go live with our solutions.

We had to be very, very sensitive to their workflow demands. In an academic center, physicians are equally as busy, but they tend to stay in that center. In a community model, our physicians will go to two and three hospitals as well as maybe two or three free-standing surgery centers, and then they have offices in two or three locations. We had to build our solutions in a manner that was at least appreciative of their workflow demands and the competing priorities that they have with their day-to-day between the hospital space and the office space.

 

What kind of carrot or stick did you have to use to get them to take to CPOE?

It’s interesting. We used both carrots and sticks. They do definitely respond better to carrots. 

We looked at the physicians. We profiled them, so to speak, informally, based on our knowledge of them. We knew who had a personality that was more change tolerant, we knew who was more tech savvy, we knew who would be more likely to just be engaged in activities that we would do. We focused on those first and put a number of our doctors together in a room. We had more of a critical mass of our doctors than we thought. For those guys, it was, “Hey, do you want to be one of the pioneers? You want to be one of the early adopters?” That motivated a lot of them.

Some of the carrots that we used were toys. We gave them some devices. They earned them if they were helping us build and design the actual product that we would be using. We did appropriately budget for and compensate them for their time with iPads. They could have easily asked for a check, but they were willing to do a lot of work because they would be entitled to a device if they gave us so many hours of their life. We found that to be very motivating. That helped us with about 40 physicians. That’s a lot of physicians to get working on a project with you. 

We use the stick when we have to, although the stick doesn’t work very well. Physicians revolt when they see that. That doesn’t usually motivate them. We will use our medical staff channels to try to drive compliance, but that’s probably our last and least-effective strategy.

We leveraged the relationships we had with them. Being a community-based hospital, we know the physicians. We know them personally and professionally. We could leverage that existing relationship and call in some favors to help us drive the project.

 

I assume physicians who didn’t have e-mail accounts aren’t using much technology in their practices. Are they using EMRs and are you doing any connectivity outreach with them?

There’s been a lot of change in that space over the last few years. I don’t know the percentage so I would hate to guess, but we’ve seen a dramatic increase in the number of physicians that are using EMRs in their offices. 

The challenge is a lot of them are using certified, free products. While that may be a short-term solution for them, I worry about them as we get into Stage 2 or Stage 3 and the viability of those solutions when they raise the bar for certification. A lot of them will be faced with having to migrate from one solution to the other. 

We did develop an outreach strategy with the physicians. We offer them a turnkey solution to purchase licenses and services for the ambulatory EMR that we use in our employed positions. If they’re an employed physician, we have a solution that they can use, but if they’re non-employed physician –a community based physician — we will allow them to buy from us that same solution. It’s much more economical to buy it from us than to go out on their own and try to buy it from XYZ vendor. That’s been pretty successful.

 

What systems are you using on the physician side?

Our employed physicians are using Allscripts Enterprise. One of our physician groups has been using it for many, many years over the various naming conventions of the solutions themselves. 

Allscripts Enterprise is a very robust system. It tends to be a lot of system for small practices, and sometimes I believe it’s outside of the financial reaches of the practices. We’re able to offer that to small and medium-sized groups at a very reasonable rate because we’re basically just repackaging what we’ve already built and putting it in the appropriate silo. They can do their business in the same application in a manner that’s respectful of privacy and various regulations surrounding privacy.

 

What are you using for inpatient clinicals?

We are using Siemens Soarian solutions for clinicals and for financials. We still do have a few niche solutions in some of our other areas. The emergency room uses Allscripts and we’ve got a combination of solutions for PACS. Agfa PACS was the legacy radiology system. Whenever possible, my goal is to try to migrate everybody to core solutions and get rid of those niche solutions whenever possible. It’s just a nightmare, as you noticed, to continue to support those things.

 

Do you bring in outside help?

Like a lot of hospitals, there’s been so much change in a short period of time that we have needed to bring in some expertise. Either because we didn’t have enough bodies to do some of the basic work or we didn’t have the insight and experience do some of that higher-end work. We’ve used consultants – Stoltenberg, specifically — in the ambulatory space as well as the acute care space. We have used them to help us develop some strategies. We’ve used them the help us with basic building. We’ve used them as for staff augmentation and also to expand the skill set of our workforce based on their experience in doing these implementations in other facilities. 

I find it as a very good interim solution to the resource constraints that we have. When used appropriately, I think it can be very effective.

 

The health system has achieved HIMSS EMRAM Level 6, which is impressive and unusual for a community hospital. Have you seen care improvements from that?

I believe we have. We went from Stage 2 to Stage 6 two years.

The most measurable improvement that we’ve seen is in the area of a closed-loop medication management system. We use a solution called MAK for barcode medication management. What we know is that we have dramatically reduced the adverse events surrounding medication management when it’s specific to giving the right patient the right med. Human beings in a busy environment make mistakes. Sometimes the best nurse, the best doctor can make a bad decision about which patient gets what. Barcoding the medication and the patients against the orders has eliminated almost all of those verification errors.

That closed-loop medication solution gives us a lot of insight from the near misses. We didn’t always get a good amount of detail about near misses because nurses and doctors didn’t know they almost made a mistake. When they did, they didn’t likely report it. The system tracks and captures all of that near-miss data. We can drill down into that and develop remedies to trend what we’re seeing. 

Where people are working around the solution, undermining the solution, we can develop a strategy for that. If it’s basic education about a functionality that they may not be aware, of we can drill down into that. If it’s a process issue, if we’ve got an issue with bar codes or specific workflows, we can drill down into that, which has been very, very meaningful for us. I think that’s been the biggest bang for our buck.

What we’re starting to see ROI on now are clinical decision support queues that we have built. Compliance with simple things is very complicated in a hospital. When it takes 87 steps to get a medication to a patient or to give an immunization to somebody that needs a pneumonia vaccine, it blows up for a lot of reasons. We’re trying to use decision support in a meaningful way, not to try to overwhelm the nurse and the doctor, but to try to guide them where we know that they tend to make omissions. We know we can, with great certainty, improve a process by putting some decision support and team workflow behind it to remind and nudge and nag the providers to do all of the things that they’re supposed to do.

Obviously when you see decreases in variations and care, it’s going to improve clinical outcomes. I would daresay that we are improving clinical outcomes, but the measurement of that is still rather new. It’s probably a conversation for six months from now. Using the tools to drill down with the data to make changes in care based on what you’re seeing — that’s what we’re focusing on now, because that is what I think is the cool part of having these solutions in place. You can really make changes to care delivery and improve clinical outcomes.

 

What are your biggest IT-related challenges and opportunities?

The challenges and opportunities are enormous. I think in the immediate future, it’s balancing the financial investments against all of the other competing priorities. We are a hospital. How many years in a row can you invest greater than 50 or 60 percent of your capital into IT? We have to balance it against the other needs of the health system. I think those challenges are growing, and it’s getting more difficult to continue to fund these significant investments.

I think the other challenges are, how do we really use the tools to improve care? How do we really get the right information into the hands of the providers so they can make better decisions about patient care? That is optimizing what you’ve put in and really making it as functional as possible so that the nurses and the doctors are getting what they need out of that system.

I think patient engagement and getting patients to be accountable and engaged in their healthcare management is an enormous challenge for not only EMH, but for the country. That’s going to be something that’s going to evolve dramatically over the next couple of years.

Lastly, the evolution of accountable care and the ability of health systems to work together tightly or loosely across the continuum so that we can do a better job of caring for patients across that continuum. That’s going to be an enormous challenge, especially for hospitals like EMH because we’re an independent hospital. We’re going to need to align ourselves with tertiary providers, community providers, and skilled nursing facilities. We will have to be able to do business across the lifetime of a patient, and that’s a whole new territory for everybody.

HIStalk Interviews Mike Long, Chairman and CEO, Lumeris

February 11, 2013 Interviews No Comments

Mike Long is chairman and CEO of Lumeris of St. Louis, MO.

2-8-2013 7-15-21 PM

Tell me about yourself and the company.

I’ve been in the software industry since its early beginnings, almost the beginning since when software was separated from hardware as a bundle. I worked in and around large financial services, insurance companies, healthcare organizations, and also in the geophysical science space. I’ve worked through multiple technology migrations to mainframes to client server to Internet to cloud computing.

We are a company that was – it’s somewhat an abused term – “purpose built” for accountable care. We started down this journey over seven years ago before accountable care was as obvious as it is now.

We have four entities inside the holding company called Essence Group. Lumeris is our technology platform company. We’ve invested in building a cloud computing infrastructure to integrate all the data and deliver it to the right person at the right time. The connectivity company is called NaviNet that we purchased in partnership with three large payers to make sure we got access to the market as far as delivering improved decision-making tools and content, particularly to providers.

Then we built a proof-of-concept company where we actually manage 40,000 lives of seniors. We’re responsible both clinically and financially for their healthcare, where we have proven the concepts around accountable care over the last seven years. The final component of who we are is we established in educational institute called the Accountable Delivery System Institute, where we educate industry leaders in everything that we know about accountable care.

 

You have an interesting perspective in having both the technology arm as well as actually running the accountable care organization arm.

Very odd. [laughs]

 

A lot of folks are probably interested to know what lessons you’ve learned since most of them have a long way to go to get where you are now.

The number one learning is that it’s harder than we thought than seven years ago,  probably not a surprise. But the good news is we’re seven years in and we didn’t lose faith. We’re very pleased with what we have learned and what we’re able to now translate into helping partners in the industry actually make this transformation. 

One of the biggest learnings is if you look at the fundamentals of accountable care, it’s the right tools, which are very important. It’s obviously the right information and the timeliness and quality of that information. It’s also incentives. You need all three – the right tools, the right information, and the right incentives — to incent the providers and consumers to actually use all this great information we now have. That’s a big learning.

We would have liked it to have been just, “Let’s build great technology” and that would be sufficient. It’s necessary, but not sufficient. We found that we share a huge burden of responsibility to help providers. Largely we see accountable care as — from an economic perspective — massive risk-shifting to providers, financial risk-shifting. They’ve always had clinical risk. 

We find that we have a responsibility to help them make that transition: the cultural changes, the workflow changes, make sure the incentives are aligned as well as adapting new technologies to effectively manage a much higher level of risk. That’s a big learning. We are in the transformational services business as well as in the technology business.

Being a practitioner gives us an enormous innovation laboratory to learn from, to figure out what works and what doesn’t work. We have a very good handle on what does not work. An ability to learn from that is immeasurable. And of course this gives us credibility that if we were just a technology company trying to deliver cool technologies that work really well in the software lab, but in the real world just don’t work quite as effectively. We don’t have that credibility issue as we work with providers and payers and participants in this new accountable care market segment.

 

Do you think providers are jumping in to being committed to some version of ACO without really knowing what the heck they are doing?

Yes. I admire them for taking the leap. Everybody’s got to make a choice here. Is accountable care discontinuous change and disruptive innovation, or is it another head fake by healthcare? We’re seeing, particularly both in the payer and the provider community — and we are agnostic in our model — three variations forming out there.

We see payers and providers choosing to collaborate around accountable care, taking advantage of their historical core competencies — particularly the payer’s financial risk management skills – and doing this collaboratively.

Then we’re seeing the model where the providers are saying, “I’m going to do this myself. I’m going to fully integrate all components of the supply chain.” You know, the Kaiser model, the IDN model. 

Then we’re seeing that on the payer space, where they’re saying, “Providers, for whatever reason, we’re not going to be able to collaborate with providers in their market, so we’re going to have to create a vertically integrated solution here.” Providers that are taking that route around ACOs or vertical integration, our advice to them is be aware of all the competencies that you actually have to have in place to manage both clinical and financial risk.

We’ve gone to a great deal of effort from my seven years of learning as a practitioner to break accountable care down into what we call 22 core competencies. There’s not enough time to go through all 22, but the fact that we have done that gives us credibility to be able to educate a practitioner of accountable care or a future emerging practitioner on where they need to apply technology, where they need to apply business model changes, where cultural change has to occur, where new incentives need to be put in place, where new workflows need to be put in place.

If everybody’s got their eyes wide open, all of these models will wind up working successfully. If they don’t have the necessary core competencies, there’s going to be some spectacular blowups.

 

Are organizations jumping in early because they really believe they can be successful in outcomes and margins or are they just trying to hold the position they have against others who are doing it?

We’re blessed to be able to spend a lot of time with leadership in both the provider and the payer community, particularly the organizations have taken advantage of coming to our institute. We find different motivations, so it’s not  one size fits all.

In some cases, it might be a market share battle in that particular community, where there is concern that if they don’t make this move, whoever controls – I use that word “controls” very loosely here – the membership or the patients in that community, many organizations feel they’re going to have to make this leap to be able to compete for share.

Some organizations are making the leap because they know the burden of their cost structure is too high. Their cost structure might be 40 percent too heavy and they’re jumping into ACOs to train their organizations on how to become more efficient and to make this a soft landing on the other side, assuming the momentum towards accountable care is going to continue. We actually believe it will, because the government is determined for it to continue. Without the government incentives around government programs, I don’t think the market would be moving as quickly as it is.

Then we see organizations that see accountable care as an opportunity to retool their business model, and rather than defend their current position, to actually take share and leverage the core competencies they already have as well as new ones. They’re taking a very aggressive offensive move. We see both defensive and offensive moves.

 

You’ve said that you tried to bend off the healthcare cost care with Healtheon/WebMD and failed. Do you think you can do it now?

I hope so. We can’t do it by ourselves. The lessons learned is that is it’s a big collaborative effort to get this done. I’m more optimistic than I ever have been in the industry. Twelve years ago, I certainly held the belief, among others, that just the existence of the Internet, which yields data transparency,  was enough to restructure an industry and to lead the restructuring. Actually that’s largely been true in almost every industry except for healthcare. We underestimated the resistance to data transparency that healthcare as an industry had. It was just not in their DNA. 

That has broken down over the last decade. The tools, the technologies, the ubiquitous connectivity makes this technically fairly low cost and easier to do, but fundamentally, the willingness of leadership — key leaders, not every leader in healthcare – but key leaders to step out and say, “OK, I’m going to share my data and my information, but I expect everyone else to share with me and we’ve got to focus on the health of our population.”

When we got started down this path seven years ago, we thought there was special sauce around population health management. This was before Mr. Obama was elected President, before the Affordable Care Act. The population health management resonated with us and was driving a lot of our innovation, particularly providers who wanted to assume financial risk. Now we see leaders of health systems, hospital-centric systems as well as payer systems, saying, “You know, I’m a community-based healthcare delivery system. I’ve got to find out a way to manage this population more effectively.”

We’re excited about that, because that means they need better tools. They’ve got to have better information. They’ve got to be willing to share. Our world with accountable care requires a multi-payer, multi-provider environment in a local community to actually achieve the benefits of accountable care. It cannot be a closed proprietary business model or solution. It just can’t.

 

Every vendor says they have analytics, tools with vague descriptions that make it hard to understand how the client will use them. How are providers going to sort out what exactly they need and who they should buy it from?

I think providers have got to make a clear choice here. Do they look for solutions that are broad enough and tested enough and to actually manage the target environment where they want to go longer term, knowing that everything evolves — requirements change, technology changes? In other words, being a true population health manager? Or are they going to take incremental steps to get there from the fee-for-service world?

There are steps some organizations have decided to take rather than going all the way. You start with, say, pay-per-performance around quality measures. That requires good analytics, so you’ve got to have an analytics solution to do that. Kind of the next step up the ring is gain-sharing. It’s upside gain-sharing, no downside risk. That requires a lot of process tools, particularly around care management. Then the next logical step is, do I want to manage both upside and downside financial and clinical risk? That requires a lot of data aggregation — financial data, claims data, clinical data that’s in various EMR systems, and the like.

Finally, you get to what we used to call global capitation. You’ve got the whole risk. That requires a comprehensive population health management solution.

What have providers got to decide to do? Am I going to be a systems integrator? In other words, am I going to go out and buy all these packages? This is a viable strategy. I’m going to systems integrate those packages and hope at the end of the day it adds up into a population health management solution, and I’m also going to have to develop competencies around data aggregation. Or do I go and put in place a solution now from a population health management perspective that can manage my destination solution? That’s the choice that they have to make.

There’s lots of point solutions out there that are really of high quality — good analytics packages, good care management packages, there’s good data integration solutions you can buy out there. But who’s going to have the responsibility of integrating all that into a coherent, cohesive, efficient platform? Platform is a word I’m sure you’re tired of hearing, that word platform. Nobody wants to do a product any more – we’re all platforms. But I can assure you that population health requires a platform approach — in our case, these 22 core competencies are our definition of a platform — effectively integrating all the solutions for each one of those core competencies in an integrated, flexible architecture.

Those are viable strategies. We feel that we should plan long term make investments now to your destination, as opposed to taking incremental steps in what may prove to be expedient, short-term solutions that exacerbate the problem.

 

Where do EMRs including the one you offer, fit into the vision?

We have chosen not to compete as an EMR vendor in the market in any meaningful way. It’s a part of our laboratory of understanding of how you implement functionalities – “functionalities” is not even a word, the software people invented that word — that tend to be resident inside of an EMR can be part of the destination of an EMR. We tend to operate at the population health level.

The way we see the market is that there are three fairly distinctive workflows that are emerging around accountable care. One of them is a clinical workflow that is built around the EMR. The industry is making huge investments in installing EMRs. The beautiful thing about that is we’re finally — certainly on the provider side — getting rid of a lot of the silos of information, and certainly we’re eliminating paper-based systems completely, finally. Once information is digitized inside these EMRs, that’s a wonderful thing, because once data is in digital form, you can do a lot more with it. That’s one workflow.

There’s a business workflow that tends to be influenced and controlled by hospital administration systems in the case of hospitals, or practice management systems in case of physicians. 

What we found is that there is a third workflow, the population health workflow, that needs to tightly integrate with the clinical workflow of the EMR and the business workflow of the hospital administration and practice management systems. The EMR is a critical component of this. I admire the EMR companies that have helped digitize certainly the clinical side of healthcare over the last three or four years. But population health is different.

 

I’m sure you get asked this a lot, but describe your philosophy of missionary versus mercenary.

Everybody makes a choice when they’re building a business. It’s not one is better than the other, it’s just that they produce different outcomes.

The mercenary approach, which is a very valid approach, says, “I want to make a lot of money or I want to build a successful company. What problem do I need to solve to make a lot of money and build a company?” That’s the mercenary approach. It’s not that mercenaries are bad people. As a matter of fact, in this country, it has provided enormous incentive for innovation.

Then there are missionaries. The missionary says, “I want to solve a really important problem. I’m going to focus on solving that problem because I believe in the country, I believe in the economic system in this country, that if I solve a really important problem, the economics will  work out.”

In both cases, the goal is to build a sustainable company, because if you don’t build a sustainable company, you can’t commit to service your partners and customers long term. It’s just a different philosophy.

We’re very much a missionary company focused on solving the problem as opposed to maximizing the economic outcomes for us in the short term. We’re not a charity, but we are willing to defer economic gratification to some distance into the future. As a matter of fact, we never discuss what that might be. There’s never been a discussion of exit strategies with our board. There’s a lot of those discussions, particularly around healthcare IT companies, and that’s just not who we are.

We are focused on trying to be reliable, significant company to help the US healthcare system make this transition to accountable care. We can’t do it by ourselves. That’s our mission. That’s what gets us up in the morning and as we go to bed at night thinking about it.  A lot of passion, and hopefully we control that passion so we don’t create unrealistic expectations.

HIStalk Interviews Reed Liggin, CEO, RazorInsights

February 8, 2013 Interviews 2 Comments

Reed Liggin is president and CEO of RazorInsights of Kennesaw, GA. 

2-8-2013 6-53-15 PM

Tell me about yourself and the company.

RazorInsights was formed in December of 2010. We are an enterprise hospital information system company.

We named our company from the principle of Occam’s Razor, which says the best explanation is usually the simplest one. Our tag line is “Simplified Healthcare Technology.” Our goal was to build an electronic health record initially that was easy to use, simple to learn, and something that you would purchase from the company that would be easy to do business with and simple to do business with.

We offer the solution on cloud technology. It’s software as a service. It’s a single integrated database on a multi-tenant cloud. We call our solution One simply because it’s on a single database.

As for my background, I’m a pharmacist by trade and have been in health IT since around 1997. I formed the company with two colleagues that I worked with in the past, Edward Nall and Michael McKenzie.

 

I don’t even remember the last time somebody wrote a new full-hospital system from scratch. Why haven’t they done that, and why is RazorInsights doing that now?

[laughs] Well, I think we’re just crazy enough to give it a try. It’s really a big challenge and a daunting task.

Our initial roadmap was the EHR Meaningful use criteria that were released in 2010 along with the pharmacy system. We felt that medication management was the core of a good clinical system. We started there, and we’ve evolved into a full enterprise HIS as a response to market conditions and the opportunity that’s been presented to us.

 

Do you think your product is competitive with systems like Meditech and CPSI that have been around for decades?

We do. I think I would be disingenuous to say that we have every single bell and whistle and the breadth of functionality that companies have been the space for a really long time do. But I think we do a really good job of focusing on the really critical 30 or 40 percent of things that hospitals need the most and make sure we do those really well.

Then we are on a long-term mission to, every day, expand our functionality to cover all the pieces of functionality that hospitals need out of an enterprise hospital information system. But I will say that I think we are very competitive across the board as far as feature functionality goes. The depth of our functionality in quite a few areas like CPOE and pharmacy is very strong, but obviously we still are a work in progress.

 

Is it difficult to convince a customer that it’s in their best interest to have a limited but deep set of features?

We have to find the right customer that shares our vision. As we started the company two years ago, we have taken a deliberate pace to not try to sell every single deal we could possibly sell. We had to be sure that our product was ready to go to the market on a large scale. 

We try to be fairly selective in choosing the right hospitals who share our vision and understand that there’s an evolution here and the end result will occur in a very short amount of time. The end result will also be that they’ll have a solution that can be achieved from going with a different company.

 

I assume that your primary customers are going to be smaller hospitals. Is that a limiting factor because that’s as big as an enterprise you can serve or just because they’re easiest to sell to at this point?

It’s a little of both. Certainly you want to start where there’s an opportunity. We saw an opportunity in the smaller hospitals — under 100 beds — because those hospitals typically had older technology for the most part. As we started to serve those hospitals, we have had opportunities to sell to larger hospitals, but most of the time they’re not ready to go into a situation where they’re going to have to do without certain functionality for a period of time.

You start with the opportunity that’s the biggest where you can serve the needs. We expect to evolve to be able to serve larger hospitals, but one of the things we wanted to do as a company was not try to do too much too fast. We want to be careful, because the worst thing you can do is try to outsell your capabilities, whether that’s to too many hospitals too fast or whether that’s to larger hospitals that you can’t accommodate. We want to be sure we got this right as we go along.

 

A lot of folks would say that part of Epic’s success is because they qualified their customers as much as their customers qualified them. Is it difficult as a small company to not pursue sales that you probably could make?

I don’t know if we’ve been as selective as Epic. We had an opportunity that was presented to us with the stimulus to get in the game, so to speak. We didn’t really get that selective, but we targeted hospitals that we knew would be a good fit for what we’re trying to do and found hospitals that had management teams or executives who shared the vision we were creating. 

The challenge for us has been, if you grow at a more deliberate pace, obviously there’s market pressures based on the window of opportunity you see that there’s always pressure to move faster, to get bigger faster, to move to bigger hospitals faster, to sign more hospitals faster. We always have that pressure to move faster because the window of opportunity won’t be there forever. We want to be sure that we capitalize on the opportunity that’s before us, but at the same time not put ourselves in a position where we can’t deliver.

 

My sense is the market wants competition instead of just Epic, Cerner, or Meditech and some of your competitors in the smaller hospital market. Do you feel the pressure to be something that you’d rather not be in serving those larger hospitals that don’t have a lot of choices?

I think there’s a tremendous amount of pressure from larger hospitals and medium-sized hospitals that are looking for another choice. They want us to get there faster than is probably possible. We just try to get up and get better every day. That’s our motto — every day we just try to improve upon what we’re doing and grow as fast as we can. 

That being said, we built our ONC-certified Complete Inpatient EHR from the day we started coding it to the day we were certified in about 100 days. We built a full, enterprise HIS within two years. We have some breadth of functionality still to cover in that product, but for the most part, we can service a small hospital very well. We’ve done it faster than most other companies have done it. I think that works in our favor.

 

What’s the secret? Nobody else has been able to figure out how to do that.

What we know needs to be done, a lot of people know. I’m a little surprised sometimes not more people have tried it. I think probably because it’s a capital-intensive effort that’s held a lot of people back.

We were just a group of people who had worked in the trenches at various health IT companies, at hospitals as healthcare workers, and really had a clear vision of exactly what we wanted the product to do and what we wanted it to be. We wanted it to be something that was easy to use, easy to learn, a modern look and feel.

We use a rich Internet application called Adobe Flex for our graphic user interface. We were looking for that new modern user experience in a system that would be easy to adapt.

On the services side, we also wanted to focus on being transparent with our customers, keeping our pricing simple. We have a bundled pricing model that’s all inclusive. You don’t get a contract with two pages of line items of different third-party software that’s included in the product. We try to be very straightforward. 

Also, we actually do the build for our clients. When we go into a hospital to do an implementation, we’re gathering information from the hospital, and then we do the build process and then bring the product back and train the client on it. 

It’s a different approach, and I think there’s other companies that have done different elements of that. I don’t know if there’s a lot of secrets there. There are a few. One is the way we develop. We have a pretty unique development process which takes a lot of industry subject matter expertise combined with some very fast coding talent to develop the product almost around the clock. We’re able to produce new code pretty quickly.

 

Are those technical resources employees or are they  contracted?

Some of both.

 

It seems like it would have taken a lot of cash for some guys who used to work for vendors to put together.

[laughs] We bootstrapped it pretty much to date. We are in the final stages of completing a private equity deal. We’ll be announcing that within the next couple of weeks. That will give us the capital to take the company to a whole other level and put our foot on the accelerator when it comes to building out this enterprise vision.

 

What can you share in terms of company size?

We’re still pretty small. We have 55 team members. That’s the team that services, develops the product, and everything. We have clients mostly in the Southeast, but we’ve expanded to some states west of the Mississippi and in the Midwest also.

 

What’s your pitch when you get in front of these small hospitals and maybe they’ve never heard of you? How do you sell them on the idea of doing business with you?

First and foremost, we’re all about being a single database, integrated product. Today we bring a single database integrated financial and clinical system to the market. By spring, we’ll be releasing our ambulatory product, which will include an electronic health record and practice management system for physician practices on that same single database.

The other thing that we’ve done, as we started to develop the system, we looked at hospital systems and how they evolved. They evolved departmentally, where there were pharmacy systems and lab systems and nursing systems and CPOE systems, etc. What we looked at was, how can we really make this a more efficient, improved approach? 

We decided to knock the walls down between the departments in the hospital. We’ve created what we call a non-modular solution. Each user has access to the system based on the privileges they have according to their role, but every user has the same access into the system and a similar look and feel and view.

We call that view of the patient record our holistic patient record. If I’m a pharmacist, in a lot of systems, I can only see what’s going on with the patient’s medications and maybe some lab results. I can’t necessarily see the surgical procedures or radiology tests they’ve had unless I go to a different module in the system. In our system, in the holistic patient record, I’m able to see all of that information and have a complete picture of what’s going on with the patient right there in one view no matter what role I have, as long as I’m supposed to have access to that information.

 

Are your revenue components fully developed even though your emphasis seems to be on clinicals?

We started out as an inpatient electronic health record vendor. We began building out the entire clinical suite. As we got into the market, hospitals were rapidly adopting EHRs for the stimulus opportunity.

About a year into it, hospitals started to pretty much demand that they would select a new vendor based upon them having an entire HIS. The market really changed a lot more quickly than we expected. We did expect a system replacement market to occur, where old technology would be replaced by newer cloud technology in the next few years, but the shift happened a lot more quickly than we expected. 

We either had to acquire or partner within a revenue cycle system or we had to build it. We opted to build it. There’s still work to do and we’ve got most of the pieces built. We can operate a hospital. There’s a few things we still will build out, but in a couple of instances we used partners to help supplement what we don’t have at this point.

 

Since you and your colleagues  worked for a variety of vendors, what mistakes do you think you’ll be able to avoid having that experience?

I think staying true to the vision as a single integrated database is important. While you may not necessarily want to build every piece of software that a hospital would ever use, you need to have a clear vision as to what’s a core component of that single integrated database solution and stay true to that.

Additionally, I think reliability is a big factor – becoming a company that is known for reliable installs, reliable support, somebody that is a partner the hospital can count on. Obviously our friends at the big ship in Wisconsin have done a great job of that.

 

You mentioned your VC investment that’s upcoming. A lot of companies stumble at that point because the VC wants to take it in a different direction, at a faster speed, or with different people running the show. Do you see that vision holding true with the influence of the outside money you’re going to take in?

Yes, we do. It’s an interesting process and the first time I‘ve been through this process to seek capital for a company. I spent about a year looking for the right partner. I went from Silicon Valley to New York and everywhere in between meeting with venture capital and private equity firms. Usually within the first 10 minutes, you could tell in the conversation if they understood what you were trying to do and understood your vision.

We were just absolutely committed to the fact that we were going to find a partner who understood what we were trying to do and understood our vision. We turned a few offers down and finally found what we think is the ideal partner. They share the vision, they understand exactly what we’re trying to do, they have a really in-depth knowledge of the space. We think we’ve pretty much found our dream partner.

 

How do you see the next five years playing out for the company and for the industry?

Wow, that’s a big question. The next five years for the company, we’ll continue to grow our market share in the small hospital space. I think we’ll evaluate whether we want to move upstream to bigger hospitals and how quickly. At some point, we’ll start to execute on moving into that space, where we think there’s potentially a lot of opportunity in addition to the small hospitals.

Additionally, we may look at some international opportunities. We’ve been investigating a few recently. If they make sense and are not outside of our core focus, we may pursue some of those. I think we’re in the beginning of a real shift for a lot of HIS system replacements to take place over the next few years. We just want to make sure that we capitalize on being a part of that opportunity.

For the industry in general, I think you’ll see obviously a lot of smaller hospitals moving to cloud or hosted solutions as that becomes a more practical way for them to manage a system without a lot of IT resources on staff.

You’ll see IDNs continue to consolidate smaller hospitals into their organizations. We’ll continue to see the trend of physician practices becoming part of hospitals and IDNs and becoming employees. It will be interesting to see what happens in our space with some of the larger ambulatory EHR vendors as hospitals acquire those physician practices. They may start to encroach on their market share by pushing hospital systems out to those physicians, so I think there’s an interesting dynamic that will come along with the consolidation. And then, finally, I think it’s still to be determined what impact ACOs will have in our industry, but there will be some impact. It’s going to be interesting to see how that plays with what’s going on in HIT.

HIStalk Interviews Lorre Wisham, CEO, Health Technology Training Solutions

February 6, 2013 Interviews No Comments

Lorre Wisham is president and CEO of Health Technology Training Solutions of Tucson, AZ.

2-6-2013 7-34-53 PM

Tell me about yourself and the company.

I’ve spent almost two decades in a wide variety of operations leadership roles in healthcare IT. I am a problem solver and a process person. Years in a customer-facing role taught me to look for solutions.

HTTS was the vision of my late husband, Josh Wisham, who had a long and successful career in healthcare IT. Three years ago, he did some research into the most successful HIT solutions and found that training is always a key element. He partnered with McKinnon-Mulherin, a Salt Lake City-based company that focuses on instructional design and training development. Liddy West, a long-time friend and colleague, signed on to lead sales and marketing. HTTS then started to deliver solutions to the challenges of customers — inadequate resources or skills, short deadlines, and customer demands. Those customers loved the result.

After Josh passed away last summer, I stepped in as CEO. We’ve updated our website, added a catalog of services, and sponsored the coolest blog in the industry. [laughs]

 

What’s have you seen, good and bad, with vendor-developed training?

There is a broad spectrum here. I think some vendors do a great job with their training and others don’t. Generally, I would say the greatest positive is that the person creating the training is a subject matter expert and knows the product inside and out.

At the same time, that very thing can also be the greatest negative. Someone who knows something so well often assumes a level of understanding that customers may not have. And in many cases, vendor training people don’t have instructional design skills or understand how adults learn best.

I’ve said it before and I will say it again. Training is typically not well planned and is often an afterthought or a rush in the eleventh hour before a new release or product has to go out. When that happens, the outcome is somewhat negative because training is just a checkbox or a line-item cost for the client and vendor.

When training is done right, it delivers positive outcomes in many areas, from adoption to satisfaction to reduced call center costs. We know that.

 

Give me a few examples of how you’ve worked with customers.

HTTS has delivered effective training solutions to a number of healthcare IT companies. We have done everything from evaluating training programs and resources to designing and developing of e-learning modules for a retail pharmacy company.

I think what allows us to create the right solutions is our approach. We do an assessment first to understand the current state and the needs. We can suggest where we can help the most. We want to fill the gap. We don’t want to take over and do what the existing training department is there to do. 

We mentor or supplement or we do it all. It varies so much from one company to the next. Every one of us at HTTS has been on the customer’s end of the conversation in our careers, and we work to make it as easy and impactful as possible.

 

How would instructional designers with expertise in training technology and adult learning principles approach new version user training differently?

It seems to me that no matter what company you are looking at, training is something that gets put off until the last minute. When product management is thinking about a roadmap for a new release, they might mention training, but it usually isn’t really an active part of the project until the product is almost ready for GA. Everyone on the vendor side is sighing with relief because they’re done and ready to move on to the next thing.

Training is often rushed and incomplete. Because the people creating the training know the content so well, they assume everyone knows as much as they know, so training can miss some of the fundamentals. Or worse, the training is organized according to the way developers designed the product rather than how customers will use it.

When instructional designers look at the product, they don’t assume anything. They aren’t subject matter experts. Instructional designers create the training for people who are seeing the product for the first time. Considering how much staff turnover and system replacements we’re seeing on the client side, the odds are pretty good that they are working with new applications and devices regularly.

Beyond that, instructional designers know how different people learn and how their work and learning environments can impact that. Think about how training needs to be different for a physician in the office versus a nurse in a busy emergency department. IDs are trained to think about those differences and to go beyond a lecture or demo. The result is training that is more engaging, more applicable, and longer lasting.

 

What metrics can be used to measure the effectiveness of a training program?

Interesting you should ask me that because it is something we are spending a lot of time on so we can quantify ROI. Most learning professionals are fully aware of the steps we need to take to evaluate training effectiveness, but getting the metrics can be a little tough. 

How do you measure customer adoption of software? That is a critical aspect of what we are talking about here. If a customer knows how to use the product and takes full advantage of it, how do you measure the value of that compared with another customer who doesn’t? Satisfaction, probably, but how can you be sure it can be attributed to training? 

The one obvious metric we discovered when working with an imaging company was the reduction in support calls. Luckily, they were already capturing the “How do I?” questions in their CRM. They told us those training-related calls were reduced by 35 percent after HTTS delivered the new version training. For them, that was huge. 

Not all clients are able or willing to provide benchmarks. There is risk in measuring ROI and some benefit in not knowing. It lets you keep doing things the way you’ve always done them. One of our goals is to encourage clients to capture and share benchmark data on adoption, sales, customer satisfaction, and support calls and then compare it to post-training numbers. That way, we can measure not only the effectiveness of training, but also the value that good training delivers.

 

Can training programs be a competitive differentiator for vendors?

Absolutely. But the trickier question is, does anyone think of it that way? I’m sure many of your readers follow the KLAS reports. Most vendors read the comments their customers wrote about their products. But who focuses on the training comments? Often the implementation manager reads them, but it is probably not his or her area of responsibility.

I can’t think of a customer I have encountered in my career who has said, “Wow, the training was amazing, and I feel so much more prepared to use your software.” Epic customers come the closest to that because Epic forces them to become certified in using and administering their system. It is brilliant. They are happier users and good references because they are able to integrate the system more naturally into their workflows.

 

How do you see software training evolving over the next few years and how will the company address those changes?

The biggest changes will come in delivery methods. While many in healthcare are just barely getting their minds around Web-based e-learning modules, other industries are already delivering their training on mobile devices. They are taking advantage of social networking to create learning communities where knowledge is shared in faster and more dynamic ways, right when and where the user needs it.

Our job is to help healthcare bridge the gap between where providers and vendors are today and where they can be tomorrow. We know what’s possible with today’s rapidly evolving learning methods and technologies, but we also know the unique needs of the healthcare IT environment. We are going to keep nudging vendors and providers forward so they can benefit from these changes while not losing sight of the real-world complexities they face right now.

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