HIStalk Interviews Bob Watson, President and CEO, Streamline Health

Robert E. Watson is president and CEO of Streamline Health of Atlanta, GA.

Tell me about yourself and the company.

Streamline was founded in 1989 and went public in 1996. The fundamentals of the business are really about capturing the unstructured data around the patient care experience, integrating that information with the record, providing a series of workflow solutions around coding, clinical documentation improvement, and analytics to improve financial outcomes. 

I’ve been in healthcare for 30 years, originally as an investment banker, unfortunately. It seems like I have to apologize for that. I’d been the founder and CFO of a company in the ambulatory surgical center business that we took public in the 1980s and sold that business to HCA. I’ve spent the last 13 years in the healthcare technology space.

Speaking about unstructured data in general, what’s new in that area, and how is the co-existence with EMRs going?

What people find when they deploy a record — and we hear this all the time — is that there’s an abundance of information that’s outside of the core record. Most of it’s unstructured. Historically, it had been paper.

Today, if we look at our own business, the percentage of that unstructured data that’s paper is dropping into the mid-80s. You’re seeing things like images that don’t for some reason interface with the RIS or PACS, .WAV transcription files, and other pieces of information that are important for the quality of patient care. Also important, frankly, to the financial outcomes. You have to get that information in order.

Are hospitals, even those that claim to be paperless, still getting a lot of external information from places that aren’t?

Yes. There is tremendous amounts of information that comes in externally. We have a client in metropolitan New York that 95 percent of the inbound physician order referrals for surgical events come in via fax. I don’t foresee that changing in the near term.

There was some enthusiasm for the hybrid EMR, which made the best use of paper records moved to an electronic form such as scanned images. What can people do with information in your system that they can’t do with paper?

It depends on the construct on how you get that information and unstructured data into the EMR. At the very basic, you can view that information inside the EMR. For example, if you’re in an Epic facility and there are prior visits, those prior visits may have been outside of the electronic version of Epic that’s in place. You can click on a tab and look at the PDF of those versions.

Where we’re seeing the market got today is a much broader use of OCR technologies and other ways to make that unstructured data actually actionable inside the record. We see it as taking unstructured data and turning it into knowledge to help not only clinicians, also but the financial side of the provider to make better decisions.

The criticism of scanned text documents is that nobody’s ever going to look through a bunch of PDF files. Is the OCR technology and your ability to build that into the workflow changing the usefulness of that data that previously nobody would have even looked at?

We’d like to think so. It has to. There are pieces of information that exist outside that core record that are important to the quality of the care of that patient. 

I realized clinicians are pressed for time, but there’s information that’s critical. You want to make sure they have it in a form that’s actionable. If you can search it and deliver that information to them at the point of care, you’ve made a big advancement over simply viewing a PDF where you’ve got to read it and look for the pieces of information.

Much of the agenda of both providers and vendors has involved chasing after the Meaningful Use requirements. Are those having an effect on your business?

It has. Less so in Stage 1 than as we start looking in Stage 2. There are parts of the Stage 2 process that the things that we happen to do at Streamline would give them proof points to get their payments along those lines. For example, release of information, a very critical part. Historically, as you and most of your readers probably know, a lot of the release of information processes have been outsourced. Some of the vendors like ourselves have built that release of information process into the technology that we sell.

The acquisition you did in 2011 of Interpoint Partners to create the OpportunityAnyWare product changed the company’s footprint drastically, along with the Meta Health acquisition. How do you think the analytics market looks and who do you compete with most often?

That acquisition of Interpoint was transformational for Streamline. We would not be where we are today had we not been fortunate enough to be able to complete that transaction, and for a variety of reasons.

But fundamentally, if we think about the analytics space today, if you were at HFMA a few weeks ago at the ANI meeting in Orlando, every other booth had big data or analytics, probably every booth actually. It’s a realization in the marketplace that there is an abundance of information that’s generally available — in EMR systems, in the claims systems, in the billing systems, in the coding systems — that has not historically been used to the best advantage of the payers, the providers, or frankly even the patients. I think that gets lost in this, by the way.

We see analytics as the cornerstone of everything we’re going to do at Streamline. But more importantly, the market itself in general has realized that there is great information that sits in these systems. We need to get it out and we need to get it in form that is actionable. It’s one thing to present a KPI dashboard. It’s another thing to give someone actionable information. We think that’s a key part of what we’re trying to do.

Competitively, it’s the usual cast of characters you’d expect us to be competing against – The Advisory Board, MedAssets, MedeAnalytics.

I think I heard you say that the benefit to patients is often lost and the marketing is aimed at hospitals trying to get control of their physicians. Is there enough emphasis on what the individual patient can immediately get out from all that data?

Do I think there’s enough emphasis on the patient side of it? No, absolutely not. I think it’s going to take a long time to get there. 

The financial challenges and operational challenges that providers face today are staggering and they’re only going to get worse. The first step in the lifecycle of analytics is to address the financial and operational components of the enterprises. Along the way, what comes out of that is an understanding that there is an enormous amount of rich clinical data that can have an impact on the patient either at the point of care or post-care. If you’re able to provide a patient with positive information that’s going to help them once they’re discharged — that prevents readmissions, for example — that’s a piece of information that we should get in the patient’s hand. Or just helping the hospitals understand their patients better.

For example, if you have 70-year-old patient taking 12 different medications, lives in a third-floor walk-up in the Bronx, and has mobility issues, do you think that patient is going to actually get those scripts filled? Pulling that kind of patient information out and being able to present that in format that the care management team can say, this patient is likely to be readmitted because they’re not going to fill their medications — what do we do as part of the care management plan to make sure that he or she gets those medications? That’s the patient part I’m talking about.

It sounds like what you’re saying in terms of who is looking at analytics is that there may be some desperation involved. Hospitals are trying to save the ship financially and desperately trying to find tools that can help do that. Do you sense that hospitals need a solution that they can’t necessarily define because they are facing the uncertainty and aren’t really sure how to react to it?

Yes. They can’t define what it is that they want when it comes to analytics. That’s why you see so many vendors saying, “We’re the next generation in analytics vendors. We can help solve all your financial problems.”

The reality is I don’t think anybody has cracked the crystal ball of what’s the right amount of information and how to deliver and how to make it actionable for our clients. None of the vendors have. But I think we all have the right intention in mind, which is to ensure that our clients are getting meaningful, positive return on investment that’s ultimately going to translate into that provider IDN’s ability to provide quality care in the community. We have to keep the hospitals alive.

I was looking at the STRM stock chart today and noticed that the share price has gone from in the $1.50 range in early 2012 around to $7 today. Do you think that the industry, in all its excitement about the bigger and better-known companies, has missed a pretty big success story?

Streamline flew under the radar for a long time. Over the last couple of years — really starting last May – the investor marketplace started to pay attention to what we were trying to assemble here, I think. A lot of investment dollars chased the big EMR vendors. Look at Cerner’s stock charts or anybody else – they’ve all done fairly well in this period, for the most part.

At $1.50 per share, our market cap was about $16 million. It’s hard to find institutional investors, but lot of retail people want to own that kind of stock where we trade by appointment. I think in 2010 we were trading 5,000 or 6,000 shares a day.

We’ve invested a considerable amount of effort in telling our story to the marketplace and it has responded favorably. Frankly, our team here has performed very well. Our sales organization delivered, our operational teams delivered, the technology folks delivered. We’re getting a little better recognition in the marketplace at the moment.

My first reaction to the market cap was the value of being publicly traded is marginal compared to the expense and headaches involved, but it was a lot worse when the market cap was smaller. Will you be able to grow better at this point because you’re publicly traded? 

I don’t think there’s a person on the face of the earth that wakes up one day and says, you know, I want to be CEO of a microcap public company, so I can assure you I did not.

That being said, our current position being public offers us some advantages. The obvious one, you have better access to capital and the capital markets, but beyond that, the cost of being public is still quite burdensome. It was clearly excessively burdensome when we were a $50 million market cap company.

You used the term a couple of minutes ago that investors were responding to what you are trying to assemble. The two acquisitions made the company a lot more attractive in different ways. Do you see that the company’s growth will be based on further diversification or acquisition?

We gave our guidance to the analysts earlier this year. Our growth guidance in terms of revenue and Adjusted EBIDTA were entirely based upon organic growth. We think we’ve assembled a set of assets today where there’s inherent meaningful organic growth in an orderly fashion and have really focused our teams on that.

That said, when I get asked the acquisition question in every earnings call, I try to give the same answer. One of the things we’ve tried to create culturally here is building deep, meaningful relationships with our clients. Those relationships give us ideas and point us in directions of where our clients think there are either weaknesses in other vendors or challenges they don’t see being met by their current set of vendors, where they come to us and said, hey, can you do anything along these lines? Have you thought about being in this business? So when we think about the potential to do additional inorganic growth opportunities, that thought process is really frankly driven by our relationships with our clients.

What’s your plan for the company over the next five years?

When we came here in early 2011, we had a vastly different plan than the plan we have today. Plans are iterative, as you’d expect. The original plan was, let’s try to stop the cash losses and grow the business modestly. 

In early to mid-2011, we went back to the board of directors and said, we think there’s an opportunity for a mercurial growth here. We want to set out a plan where we put forth a five-year strategic plan, which we redesigned again this year to take another look at the next rolling five years now that we’ve been here but little over two years. We think we have meaningful runway in front of us, an opportunity to build something that’s exciting. We’ve been able to culturally create an environment where our clients understand our commitments.

One of the things we use internally culturally is something called the three Rs, which is respect, responsibility, and results. The cornerstone of those three R’s is building those relationships with those clients. We think those client relationships put us in a position to grow a meaningful business over the next four to five years.

Our current five-year plan starts every morning when I get up. It’s the first day of that five-year plan.

Do you have any concluding thoughts?

First, thank you very much for thinking of Streamline. We’ve flown under the radar for 20-plus years, so I appreciate the opportunity to tell a little bit of our story.

Secondly — and I think this is an important generic comment about this space — as we all know, we’re entering another series of challenges for the whole healthcare ecosystem. The one question that we all need to ask ourselves is, what can we do to ensure that we have a healthy healthcare system for the generations that follow us?

I think that’s really an important question. Every day we challenge our associates to think about what can we do to make sure that the health system survives all the challenges that are in front. 

Thanks again for thinking of us and our team here at Streamline.

An HIT Moment with … Devin Gross

An HIT Moment with ... is a quick interview with someone we find interesting. Devin Gross is CEO of Emmi Solutions of Chicago, IL.

What are the problems and opportunities involved with patients forgetting or not understanding what their doctor tells them?

Research shows that by the time patients get to the car, they forget about 80 percent of what their doctors have told them. Frankly, the time you’re in front of the doctor is the worst time to learn, whether it’s in an ambulatory or inpatient environment. We need to empower people to learn at a time when it’s most convenient for them on the terms that they want, whether that’s on a desktop computer, laptop, tablet, or smartphone.

If they don’t remember what their providers have told them, they won’t understand, they can’t become an engaged patient, and their circle of care may feel even more in the dark. That means they won’t follow pre-op or post-op instructions and they won’t know what to expect.

When you can engage patients and their circle of care when and where they are ready to learn and on the devices they already own, they are more compliant and prepared before they come in and are more compliant after the procedure. Their expectations are effectively set, so they’re more satisfied with their experience.

How many patients are really willing and able to participate in their own care and outcomes?

Look at any other industry – banking, airline travel, retail – and you’ll see a growing consumer base that wants more control. Healthcare is no different.

We track and document everything, so this is a very easy question for us to answer. What we know is if we ask someone to participate in one of our programs, somewhere between 40 and 50 percent of people are going to engage. That may be higher depending on geography or conditions. For example, an acute episodic patient might be more likely to engage than a chronic condition patient.

When they activate, our data, which is based on over five million of these encounters, shows that roughly 80 to 90 percent of those patients are going to complete the encounters. We continue to work with our clients around better messaging, around incentives, and around other levels of activation to increase that number. Patients are hungry for this information across all demographics and our data and our platforms support that.

How do your offerings improve patient satisfaction with hospitals?

This goes back to what we discussed before about convenience and empowerment. When you look at what patients want, they want to be communicated with, they want to be engaged on their terms, and they want to understand what is going to happen during their experience. Emmi does that. We extend the conversation. We extend the relationship for both the hospital and the clinician to better communicate, empower, and engage patients. When you do that, patients are going to be more satisfied.

We’ve conducted a number of studies over time that demonstrate when patients are engaged with Emmi, they’re going to be more satisfied.

Will it become common for physicians to prescribe learning material and patient engagement activities?

Yes, it’s already becoming common. We’ve been at this for 11 years, and back then, few physicians and hospitals understood the value of engagement. Today, we’re in hundreds of hospitals around the country and our pipeline is stronger than ever before. Hospitals are looking for this kind of integrated program. It’s not enough to just put a video on the web site and hope they come. It’s important for this to be a prescriptive experience where they can measure the impact and what’s happening out there. Prescribing engagement activities is happening today, and it’s going to happen more and more quickly.

Patient engagement isn’t a fad. It’s here to stay. As new models of care — both around reimbursement and delivery — continue to evolve, the ability to engage and empower people in their care is going to be critical. The ability to engage and empower with a vendor that has been doing it for a long time and has a proven, documented track record is going to be critical. The more we measure, the more we prove, and the more readily we’re seeing provider adoption.

How do your programs integrate with EHRs?

Our solutions are integrated into the leading HIS and EHR systems. Providers, mid-levels, and admin staff alike can order and track Emmi programs for patients right inside their EHR. Many of our integrated clients employ best practices like alerts, order sets, and bulk ordering to streamline Emmi into the standard clinical workflow. In addition, Emmi programs are integrated directly into the patient portal.

As the healthcare market begins the transition from volume to value, Emmi is increasingly being integrated into tools that manage large populations of patients, including registries, population health platforms, and data analytics vendors. Our technology platform and the way that we facilitate integration and analysis are well positioned to take advantage of these trends.

HIStalk Interviews Sunny Sanyal, CEO, T-System

Sunny Sanyal is CEO at T-System of Dallas, TX.

Tell me about yourself and about T-System.

T-System was formed in the early 1990s by a couple of ED physicians who essentially wanted to get through the day. They would work all day and then stay back for hours after work trying to figure out what they did all day so they could document all that and get paid correctly.

These  two ED docs said, “Can we just take all the stuff that we do in the ED and organize that with some taxonomy in a way that all all this clinical content can be streamlined? So that we can document while we’re with the patient and very quickly get it all done in not more than two to three minutes and be able to support optimal coding and billing, be able to stand up to scrutiny in case of a lawsuit, be clinically accurate, and support all of our performance and quality and regulatory needs? 

That’s how it started. One sheet of paper, front and back. By the way, Dr. Rick Weinhaus did a really good job on this article about why T-Sheets work. I owe him some thanks. We couldn’t have said it better. 

The company all along has had a combination of both clinical and financial orientation. We’ve kept that alive in our products and services throughout.

I joined the company three years ago when the company was going through a transition and was acquired by a private equity firm. It was an opportunity for me to be a CEO. I had an appreciation for T-System, having seen it as a competitor in my past life. I jumped in because I saw a tremendous opportunity to do some great things in this space.

What are the most pressing issues that EDs are facing?

We call this the unscheduled care space. That’s a combination of emergency care, freestanding ED, hospital-based EDs, freestanding EDs, and urgent care centers. The macro demographic systemic issues are hitting all of these in the same way, but perhaps they’re feeling them differently.

I will clarify that. Largely speaking, they are all seeing an increase in volumes, rising volumes in the ED. At the same time, while volumes are growing, they are also seeing an increase in self-pay. Historically, we associated self-pay as people that didn’t have insurance. You’d have a hard time collecting from them. But more and more self-pays are coming from people on high-deductible plans and HSAs that we call insured self-pay. That’s making collections very, very difficult.

Add to that that reimbursement levels aren’t going up. They are just getting tougher. Productivity demands from people staffing the ED are going on. 

This space is under a tremendous amount of pressure. Doctors are struggling, frankly, to keep up with being able to provide the right services, the right quality of the clinical services, while they’re getting paid less to do more and having to deal with more and more regulatory pressures. The whole system is under a lot of pressure.

At the same time, what we’re finding is in order to get away from some of these pressures, some physicians are leaving the ED as a practice and going to urgent care centers, where they don’t have some of those regulatory challenges. That further exacerbates the pressures in the EDs because now all of a sudden you’ve got staffing shortages. It’s difficult to find doctors, particularly in rural areas.

ED as an environment in general is under siege and we don’t see it getting better. We see it getting worse in that regard because all of the regulatory changes that are in the horizon make it tougher for the ED. If health reform adds more patients, those patients are unlikely to have access to primary care. It’s more likely that they will show up in the ED than not. If there are further reimbursed changes and modifications in the reimbursement programs and reimbursement gets cut then it will hit the ED even harder. 

There is a tipping point here that the volume of beds is not increasing while the patient volumes are increasing. All of the changes in the horizon appear to be negative from an overall impact of the ED perspective.

I like that term “unscheduled care.” Is there any hope at all of reducing utilization of ED as a non-urgent care provider?

Absolutely. If there is a significant shift in the reimbursement models, then you will see hospitals taking steps to reduce ED utilization. Those patients fall into few different categories. Patients that are habitual ED users that don’t need to be at the ED can be redirected somewhere else or they can be educated to not seek care. That’s one option. Patients that do need urgent care but they don’t necessarily need to be at the ED can be redirected to urgent care facilities. I think there’s an opportunity to redirect the patients away from the ED.

However, the real problem is that while there may be habitual abusers, the vast majority of them will need access to care. That is why we coined the term unscheduled care. We’re seeing entire segment growing dramatically. Five years ago, you might have seen a few urgent care centers across any town or city, but today you see a lot of urgent care centers, The volume of urgent care visits today is estimated about 150 million a year. That volume is coming at the cost of other settings of care, maybe ambulatory.

That’s why this unscheduled care segment, which in some ways was nonexistent many years ago, has become this in-between segment. You have scheduled care, which is hospital and physician offices, and then this massive unscheduled care segment. Not all of it is bad. What we want is for patients not to over-utilize the ED services or something where there’s a better, cheaper setting of care. 

I do think that there will be redirection and education and other care coordination — patient navigation services that will redirect the patients to lower-cost settings — but it’s going to be more likely to be the freestanding EDs or the urgent care centers.

Everybody expected a huge influx of newly insured patients with the Affordable Care Act. With the ACA having somewhat of an uncertain future, what do you predict the ED business is going to do?

The patients that need care that don’t have access to care, if they are uninsured, they are showing up in the ED today. I think they will continue to show up. I think the difference perhaps is that with the Affordable Care Act, they were going to get some level of insurance, and that was good for hospitals because rather than receiving nothing and having all these uncollectible or very low levels of collections, they at least get some low level of insurance guarantee that they’ll get some money for it. 

I think the situation is not going to get worse than it is today. That’s my take. I think hospitals would miss an opportunity to collect from these patients. I’m not anticipating that ED volumes would change one way or another, go up or go down, if the Affordable Care Act doesn’t pass.

Hospitals complain about their ED volumes and the burden of servicing these volumes, yet they advertise their ED wait times. Are they trying to market selectively or are just confused about whether they do or don’t want the business?

That’s a great point. They don’t see the ED as a problem. They see the ED as a front door to their hospital, and more and more hospitals are using the ED to change their patient mix. 

I had a hospital CEO tell me that, look, 80 years ago when my hospital was built in this downtown location, it seemed like a good idea. Today, it’s not such a great idea. I can’t help that I’ve got this huge bricks and mortar here, but but what I can do is two things: put my urgent care clinics in the residential areas where I have a better payer mix, and I can do my advertisements on billboards in those areas. Over time, I’ll gradually shift my patient mix and attract a larger percentage of the targeted patient mix into the hospital.

That we see them doing. The person that knows how to use the iPhone to go find the right ED and get to the right wait times or the person that has a car is driving on the highway … chances are they belong to probably a better payer mix. We think this is a conscious effort at shifting the mix. I know they have a volume problem, but by getting better payer mix and with care managers and other triage mechanisms ED, I think their hope is that they can manage that volume better as long as they can get favorable payer mix.

T-System has expanded the product line beyond the core business of ED documentation. Explain why you did that and how.

Even though T-System started out as a clinical documentation company, the founders of the company had reimbursement in mind all along. They wanted to get paid for the work that they did. They wanted to spend as little time as possible to get through the documentation. Even though as a company we have been a clinical company all along, revenue cycle was in our DNA. 

We looked at the market landscape. We looked at what was wrong with the space or what the opportunities were. We were telling our customers if you use T-Sheets or T-System electronic EDIS, you will get reimbursed optimally. But we found that it’s easy to say but harder for hospitals to implement and sustain because over time, even though they’re using a system, chances are they’re not keeping up with training. Chances are they are not keeping up with upgrades and performance. There’s also the chance that performance would degrade and they’re not getting the outcomes that we thought they should get or they could get.

We said a better approach might be to tell our customers that if you use T-System solutions, we will get you paid better, rather than giving them the promise of that they might get reimbursed better. We say, “Use our software and services and we will get you paid better.” Talking about the outcome versus the potential for an outcome as they do it was the difference in changing our strategy. We decided to become a technology-enabled services company. Going forward, we’re applying that philosophy pretty much for every solution line we introduce.

For example, we have a care coordination offering. Rather than just offering software, we want to say, here’s our software that allows you to plan your care transition at the point of discharge well. But then, here’s a set of services where we can help you with that or we can do that for you as well. That’s the approach we’re going to take pretty much in every solution that we roll out. It will be a combination of both the technology and services.

Are you feeling any pressure as a best-of-breed vendor among the Epics and the Cerners out there to cast your net a little wider within your own specialty to make sure that you stay competitive even as their offerings become attractive because they’re fully integrated?

A couple of enterprise vendors have viable ED solutions. Several of them are very far behind. You can see in the recent KLAS study there’s a pretty big gap between the enterprise block in general and the best-of-breed block in general. There’s some natural selection that happens upfront when institutions decide whether they’re going to best-of-breed or enterprise. What we are seeing is that when someone makes a decision now to go best-of-breed, that’s a long-term decision. They’ve decided for certain reasons that that’s the path they’re going to take. It is a fairly stable decision.

We’ve seen this in other departments, where over time when all the systems have been shaken out and interoperability-related issues have been resolved,. Which by the way, each year as Meaningful Uses raises the bar on interoperability, what we find is that it’s becoming easier to have the conversation around how data will flow from the ED into the enterprise.

Given that, you look at other environments like radiology. It used to be that you needed an integrated RIS-PACS system in order to be able to run a radiology department effectively. Over time, that settled into the RIS in some ways being replaced by enterprise order entry, enterprise results supporting, and enterprise scheduling. PACS drives the physician workflow in the department. There has been a settling down where the co-existence of best-of-breed and enterprise has already occurred. You’ve seen that in several other places – cardiology, potentially oncology.

We think similar model is evolving in the ED as well. A good example for us would be Memorial Hermann. They’re a Cerner site. The ED uses Cerner for the enterprise workflow. For the physician documentation or physician workflow, they use T-System as the best-of-breed and the two co-exist in that environment. That’s how we see the space evolving between the enterprise and the best-of-breed.

How do you see the impact of Meaningful Use, especially the future stages, impacting your business?

The more there is an emphasis on interoperability, the better. That’s good for the industry, good for everyone, good for us as well. We hope that ONC will continue to drive that dimension harder. Secondly, Meaningful Use in general has accelerated the adoption of systems, which has been good.

Now what we’d like to see is that at some point, more emphasis be based placed on optimization of these systems. For example, in the ED there’s measures around documentation. Physicians don’t have to document in an electronic system. If the intent was to capture discrete data, if the intent was to get physicians to use the system, just stopping at physician order entry is not adequate.

We’d like to see the data capture portion also be included in some of the future Meaningful Use standards. That would be good for the industry to accomplish what it started out to achieve, which is to gather discrete data and have data codified to electronic format. That would be good for vendors such as for ourselves, because that’s what we do really well.

What are your priorities for the company for the next five years?

If I break that down into short-term and long-term, T-System made this transition to becoming a technology-enabled services company. We started that with revenue cycle. We acquired a few companies last year and we’re in the midst of integrating those companies and we’ve made pretty good progress there. 

Short-term priorities are to continue on with the integration work. Our vision was that technology in the front office and service in the back office … if you combine the two together, you can move the back office component to the front office and become more efficient that way.

Our vision is that a locked ED chart ought to be a coded chart. Our investments are going in that direction. We’re making investments in products and technologies to move our products and services towards that vision. 

Secondly,making investments in the businesses that we’ve acquired to add in new platforms. You might have seen the announcement that T-System is putting in NextGen system as our enterprise practice management system across our entire company. We’re introducing new technologies for point-of-service collections. That’s a real big problem in the ED. Patients leave without paying anything and there’s really no good approaches. We’re going to deploy some POS technologies to improve collections. We’re continuing to make technology investments in automating as much of the coding and billing process, as well as then integrating the coding platforms into the core EDIS.

I’d say in the next two-year, three-year timeframe longer term, we will continue to evolve the company into other service areas. For example today, patients are discharged from the ED. It’s a handshake at curbside. We think that’s wrong. It ought to be a warm handoff to that next caregiver and the transition should be coordinated. We have solutions to do to care transition. 

We believe that where the industry is headed, care coordination, care transition, and helping patients navigate through the system is going to be important. As a company, we will make products and services available in that area. There are other areas within the ED where T-System, with the software systems that we used in the ED and the access to data that we have, we think we can make an impact in areas such as utilization management. We will continue to evolve our capabilities in that direction.

HIStalk Interviews Bobbie Byrne, MD, VP/CIO, Edward Hospital

Bobbie Byrne, MD, MBA is VP/CIO of Edward Hospital of Naperville, IL.

Tell me how your Epic project is going.

It’s going really well. I’m really very happy to be on this end of the project 10 weeks after go-live. That period of time is little nerve-wracking. It’s like being very, very pregnant and just wanting to give birth.

But even though it’s going really well, it’s really hard. Expectations of what a good go-live means … it’s important to keep resetting that within the organization, that even though we’re having challenges, even though we’re not quite sure how this workflow is supposed to work, and even though we are making a lot of system changes, that’s expected from a good go-live.

I liken it to the patient who wants to know why they can’t run a marathon 10 weeks after having open heart surgery. Well, you just had open heart surgery. We’re not up to marathon speed yet. I think that’s probably typical.

Has anything been a disappointment so far?

I don’t think there’s anything I’m disappointed in. There’s a lot of things I wish I had done differently. If I get the chance to do this again, I will definitely do certain things differently. There are some things that I thought would work out well that worked out beyond my expectations, and then other things that I thought were going to be really great that have faltered a little bit, but nothing that’s been disappointing.

How much of the Epic decision and the Epic satisfaction going forward is based on the personality of the company rather than the product?

I knew from the beginning and in that period before we went live that I felt 100 percent confident that Epic was going to be there with whatever resources or whoever resources were required in order to get us live safely and effectively. I felt this huge confidence of having the company behind us. I knew they would circle the wagons if we needed it.

In certain areas, we did ask for that. “Hey, you know, we really need some help in this area. We didn’t expect that it was going to be this complicated.” Even after we went live we said, “Please come down and help us with this” and they absolutely did. That was no problem.

But you know, I’m kind of an old development junkie. I really believe that the product is super important. Where we have elegant workflows based on sophisticated and intelligent design, things go really well. Where we have workarounds because the product doesn’t quite reflect the nature of the care that we’re giving here, we have a lot more issues.

So it’s the product and it’s the company. I’m going to say it’s half and half.

What is the biggest differentiator that Epic offers that the competitors don’t?

It’s that 100 percent confidence that they’re going to get us to a successful implementation and they will do whatever it takes to get us there. But they also have all the breadth of products that we needed in order to do a complete rip-and-replace of a hospital. They really do have a very robust surgery system and a very robust medical record system as well as clinical systems and revenue cycle.

Nobody in my organization, no department feels like they got the shaft, like they had to take the immature product or they had to take the worst part in order to give up for the rest of the organization. The product suite is mature across the board. Those two things really made me happy that we chose Epic.

One of the discussions that always seems to come up is that CIOs get fired over Epic for whatever reason. Do you think that …

[laughs] It seems seems to be happening even more lately.

Do you think it’s a problem with Epic? What would it take from your viewpoint as a CIO to get you fired in the middle of an Epic implementation or shortly after?

I don’t want to give anybody any ideas [laughs] Two things that I think were really, really key to our implementation — and not being close to those other situations, I have no idea whether these were impacts those other situations, but for us these were really important — is that number one, our revenue cycle implementation was outstanding. We very quickly got our daily charges out the door, got payment back for care that we were giving one and two and three days after go-live. We did not have a big dip in the finances due to Epic. 

If you think about the way that healthcare is going today, where there’s just declining reimbursement all over the place for a whole host of reasons that have absolutely nothing to do with HIT. You take hospitals that maybe had some financial stress and then you add Epic and a negative impact for Epic on the finances and I can see why the CIO would be blamed, because now we have some real pain for the organization. That did not happen for us. We had an excellent revenue cycle implementation for a whole host of reasons that I won’t get into.

The second piece is setting the expectations. When you first purchase Epic, there’s a great excitement and everybody is very, very excited about, “We’re going to get Epic and we’re going to do all these new things.” There was a period of time when people thought that Epic was going to solve every problem that has ever happened from a workflow perspective in the hospital. 

I started months and months and months ago talking about how hard this was going to be and trying to set the expectations very reasonably. I don’t know if I did it 100 percent and I don’t know if it got through to everybody, but people were saying that all I did for the last three months is walk around saying, “You know, this is really, really going to suck.” So that when there was pain, it was like, “Remember when I told you about how hard this was going to be? This is what I was talking about. This is painful.”

Now we have completely new interactions between nurses and pharmacists, so our nurses and pharmacists get along really well. But now we have these things where the pharmacist says, “I think nurses should do that.” Nurses think, “I think the pharmacist should do that.” These are the kinds of hard choices that we knew we were going to need to make and it’s going to make somebody unhappy. 

I think the expectations for the high of buying Epic and the long implementation and then the high around going live and then you head into that we call the valley of despair, where you realize it’s just really, really hard and it takes really lot of work. When we hit that valley of despair, people were expecting it. They said, ”Oh, yes, you told us so. You told us that this was going to come.”

One of my responses to the idea that Epic seemed to be coincident with the CIOs losing their job was that if you were going to fail, there was a strong likelihood that Epic’s executive status report told you you were going to fail. Did you find that to be true?

It’s probably a matter of degree. We did not expect some of our issues around the high turnover procedural areas and that was a little bit of surprise. We had some challenges with that workflow. But for the most part, Epic was warning us, saying, “You know, your staff is a little bit low on this team. That’s worrisome.” 

When it came down,  those probably were the areas that we should have shored up and maybe would have avoided some of it. But you know, part of this is just a complexity. You think this is thousands of people, thousands of different processes. Epic is really good, but I don’t think even they’re going to be able to totally predict which way your implementation is going to go. And you know, at 36 or 72 or one week or three weeks later, who are going to be the portions of your hospitals that are going to be doing really, really well and who are the portions that are going to be having some challenges. They just don’t have that much of a crystal ball.

One of the other arguments made about why CIOs seem to lose their job after Epic is the huge post-live expense burden. Suddenly the CIO has to try to make things work within the budget that’s allowed when that expense was larger than expected. Do you think there will be surprises in what’s going to cost you to keep running Epic?

No. We talked very extensively at the time that we were doing the purchase and discussing with our board which resources we’re going to stay on. We set the expectations from the very beginning that we were absolutely not going to be able to run Epic on our previous Meditech-level staffing.

The pieces that potentially are coming up as a little bit of a surprise to the organization are the costs of implementing additional modules. The only two things we didn’t implement are the lab product and anesthesia intraoperative documentation. Almost everything else turned over.

When we started to look at what it cost to implement the lab product, there was some surprise. We said, “Wait a minute. I thought we already bought this. It’s part of the enterprise license.” We did have the license fee, but then the additional implementation resources and additional maintenance fee … they thought they were getting a free lab product. We have a joke around here that with Epic, nothing is free, but a lot of things are included.

You have to think about the frame of reference. If you’re trying to do the cheapest IT system you can, Epic is clearly not your vendor, but if you’re trying to think about value for a price and how much we get for how much we pay, I think it seems a little more palatable.

What work is keeping your busiest?

Certainly where we are with Epic is still keeping me busy. We also just closed on a merger with another hospital, Elmhurst Memorial, which is about 17 miles from our core Naperville campus. There’s a lot of work that’s going on in just trying to figure out how these two organizations are going to come together.

We have started to to implement Lawson, which is our ERP system at Edward. We have started that implementation at Elmhurst.

For me, it’s related to stabilizing Epic and getting the Epic mother ship in good shape. Then, how do we extend it out to our new sister hospital?

They are also a Meditech site, right?

Correct.

Is anything going on with the HIPAA changes coming up?

I saw that in some of your talks online. This is something that we have discussed quite a bit internally and felt pretty prepared for. I don’t know whether our compliance and legal team is just maybe a little bit more HIPAA happy than others. It seems like some of your other readers were kind of surprised by this, but these are things that were really were already in play, for us so that’s not something that I am really too worried about.

We continue to have all the worries around how we’re going to grow our data warehouse and how are we going to continue to provide all of the quality data that are required for patients that are medical home. We’ve applied to be in ACO. We have certainly a number of pay-per-performance initiatives going on with different payers. 

Maybe a year ago I would have said that’s really what’s keeping me up at night. Now it is is how do I find and recruit enough report experts and people who can work on our data warehouse to keep feeding this beast of requests for more and more and more information? Which by the way, they all seem to want to be formatted it in a slightly different way and have slightly different requirements and definitions. That has become an operational challenge for that team.

Are you using Epic’s Cogito or do you have some other product that will be your data warehouse?

We have a SQL longstanding homegrown data warehouse that we use for many different purposes and have many feeds that go into them, including all of our historical information. We also feed Epic into there. We would want to keep up with as Epic becomes more sophisticated in their capabilities. We certainly want to make sure that we take advantage of what they’ve developed instead of continuing to develop our own, but right now, I feel like we’re in transition.

Are you planning to buy anything for the possibility of your ACO-type arrangement?

I don’t think the contract is signed, so don’t want to speak about it, but yes, we do have a few add-on analytical products that we need to get implemented in order to feed data in, get comparisons, render it back to our physicians in a way that is helpful, that drives behavior, and allows us to bend this cost curve and try and deliver better care at a  lower price and then hopefully drive back the gain-sharing that all these systems are intended to drive back to the hospital.

It seems like that’s everybody’s first purchase when they contemplate a risk arrangement is to be able to go to their physicians with data in hand and have the peer pressure do the work for them. How are you planning to take that information out?

We have the beginnings of the team. They haven’t fully hired all of the bodies that will do that. We already have a physician liaison program in place. I think a lot of hospitals do, where they are going out to the private offices and so know the individuals in their private offices and have developed those relationships. What we’ll do is expand that model, arming these physician liaisons with the analytics and the dashboards and the … not just the ‘Hey doc, do a better job,” but, “Here’s the key parts of this. Here is how other practices have improved their quality scores.”

I think the first part is to get the data out there to the physicians. Makes a lot of sense. We’ve been working on that for quite a while on inpatient data, saying, “Hey doc, your length of stay in the ICU is much longer than all of your counterparts. What’s going on there? Your medication costs per patient are much higher than all of your counterparts. What’s going on there?”

We’ve been doing that for a while on the inpatient side. Now it’s more of just getting the individuals out of the hospital into the offices to work on the ambulatory data, which is of course where most of the care is delivered and most of the care that we will be at risk for is delivered.

Most of your physicians are mostly community based, right?

We have a relatively large employed physician group, about 135, so a medium-sized employed physician group. We also have a partner medical group, which I believe now almost 400 physicians, that we work very closely with. We share an instance of Epic with them. That means that for our own employed medical group and for DuPage Medical Group, it’s seamless experience for them. That maybe makes up about 55 to 60 percent of our physicians and then the other 40 percent are independent. The DuPage Medical Group is certainly independent, but we have a tight IT relationship with them.

When you look at the problems you’re being asked to solve in general, do you see a need for technology that you don’t either have or doesn’t exist?

I see a need to utilize the technology that we already have invested in to a much greater degree more than I see the need that I don’t have a product that solves this problem. Here actually I have the opposite. Somebody says, I have a particular quality initiative that I want to work on, and oh by the way, I found a niche product and some vendor and salesperson called on me and here, I want to buy this product. 

When you dig in, you say, OK, but wait a minute. Can’t we already do this with the systems that we have today? That’s where it is a constant going back to, say, instead of buying another product, another product, another product, how can we leverage the investment that we’ve made?

I don’t see that there is a lack of products available for what I want to do. I think sometimes that’s not through the organization, because clearly my organization is still looking for these niche products. I think the piece that we really struggle with — and people say they can do it but I kind of I’m a little skeptical — is getting the ambulatory data out of the private physician offices. People go in and say, yes, I can go into 10 different offices running 10 different EMRs and I have a secret sauce that lets me mine each of those 10 different EMRs and feed quality data back so that we can do things like clinical integration or ACO contracting. I just haven’t seen it, so I’d like to see that actually work.

Does having Epic shut the doors for the need for a lot of other systems?

We come back to our core vendor. We’re focused on that core vendor strategy, so for us, it’s Epic, Lawson, DR PACS, and Merge. We really are starting to say, of these systems that we already own, can one of them already do what this niche vendor might do? So it is very often Epic.

Epic also is very good about telling you they don’t have something. They don’t have case management yet, so they’ll say, “Don’t try and take our system and pervert it and put it into some strange configuration in order to make it into a case management system. It isn’t a case management system. When we have it, we will tell you, and then you can implement it.” I don’t feel like we’re trying to do a square peg around hole a lot. I think it’s just a matter of knowing what the full system’s capabilities are.

When you look down the road five years, what do you see is the biggest challenges and opportunities that your department has or your hospital has?

I think the biggest challenges are going to be the new world order of healthcare. How do we take more risk as hospitals, which many of us have never been insurance companies and don’t have that kind of background, so we don’t really understand what that’s going to be? How do we have the higher quality for everyone, not just for certain subsections of the population? How do we do it at a lower cost? 

And then probably most importantly, how do we not go bankrupt between now and that future state? Right now, we still get paid more for doing more. In the future, we will not. But you have to adjust your rate of change with the changes and reimbursement or we won’t even be around in five years in order to continue to serve our community. It’s a very interesting time in healthcare.

HIStalk Interviews Andrew Farquharson, Managing Director, VentureHealth

Andrew Farquharson is managing director and co-founder of VentureHealth.

Tell me about yourself and VentureHealth.

I’m a venture capital investor and entrepreneur focused on healthcare investing and company building. I began my career in life science when I graduated with a BA from UC Berkeley, and went right into the research side of Genentech. After Genentech, I went to Harvard Business School and founded my first company there. I returned invested capital back to investors. I didn’t make a killing, but learned a lot.

After that, a friend and I took over a company called Operon that makes synthetic DNA and built it up into the world’s number one provider of DNA. At Operon, I ended up running the entire demand side of the business: sales, marketing, customer support. My friend Nathan Hamilton ran operations, R&D, and reinvented the way they make DNA. We ended up selling that company for a $150 million in June 2000 without taking any venture money.

After that, I became an angel. As an angel, I realized that one of the challenges is getting access to the very best deals; getting access to venture-quality deals. I joined a small venture fund and then I met my current partner Mir Imran. Mir is one of these rock star innovators in the biomedical space. He’s founded about 24 companies and has returned billions to investors. He invented the implantable defibrillator, among many other things, which has generated over $200 billion in revenues. Not bad. Mir is one of these guys where 80 percent of the things that he does return money for investors. He’s very good at what he does.

VentureHealth was not an idea that came out of nowhere. When we were raising our second venture firm, a number of folks wanted to co-invest with us because of our previous successes. Mir had lots of success. There are many healthcare professionals who would like to get involved in healthcare startups, but don’t know how to do it. Those are the folks who initially began reaching out to us.

Our initial response was really kind of uncertain. Investing is very risky, and we didn’t want to encourage people to partake in investments they didn’t understand. But as we kept chatting with high net worth individuals, we realized that there’s a large pool of financially sophisticated folks who want access to venture capital deal quality deals in healthcare, but who don’t know how to do it and don’t have a time to figure it out. We help them get access to venture quality deals in ways that were consistent with SEC guidelines.

Then the JOBS act came along. The future is going to become very interesting. The future is going to allow groups like ours to expand our investor base and publicly disclose when we’re raising capital. We can’t do that yet. The SEC is being thoughtful and measured in how it goes about regulating the JOBS Act. 

For right now, everything we’re doing is within the confines of the current law and the current regulations, which is why we’re doing what we’re doing with accredited investors we personally vet who really understand the risk. But if and when the SEC begins to actually implement the JOBS Act, we’re watching that carefully and we plan to respond appropriately once the doors are wider open.

Could you provide a quick summary of the JOBS Act and what it means for angels, accredited investors, and the general public?

The JOBS act will allow potentially hundreds or thousands of investors to invest, a true crowd of individuals who have much less money to write much smaller checks and get involved in a venture capital deal or any kind of startup deal.

But we’re not there yet. The SEC is still ironing out the details. It’s something that the SEC wants to move slowly towards that because they really want to make sure folks who invest know about what companies are doing and they understand the risks of investing capital. The SEC particularly wants to protect individuals against fraud, which we agree with.

For VentureHealth, we see the JOBS Act having an immediate impact on high net worth individuals as soon as  the next 12 or 18 months. We’re going to be thoughtful about how we begin to open up to a true crowd.

Right now, VentureHealth is only focused on accredited investors?

Exactly. Healthcare equity crowd-funding is very new. There are companies mushrooming up trying to make equity crowd-funding platforms real. One of the most successful that’s focused on the consumer space is called CircleUp. If you’re an entrepreneur raising money yourself, you should probably have a look at CircleUp’s model just to understand what they’re doing. They’re venture backed. They’re doing deals every month. Like us, they’re focused on accredited investors for now, but are trying to open up to the general public when it becomes legal.

You’re not taking any cash from the startup.

That’s right. The VentureHealth portal takes no cash from startups. That approach may be attractive for entrepreneurs, but does not necessarily make sense from an investor’s perspective.

This can be counterintuitive until you think through the incentives. We’re compensated along with the investors like any venture firm. In the case of VentureHealth, the individual investors make the decisions. The money flows from them. They’re the ones who own the equity through a fund structure. If the company returns cash to investors, we participate as members of the general partner. 

In contrast, if you’re a broker-dealer, you make money every time cash flows into a startup, so your incentive is to drive as many transactions as you can regardless of quality. Whereas for us, the incentive is to only take deals if we’re going to ultimately make money for investors. We’re aligning with the investors to try to find companies that are going to have successful outcomes as opposed to just driving a whole bunch of deals.

What separates VentureHealth from AngelList?

AngelList is a successful, creative approach to crowd-funding at high volume. AngelList has allowed lots of startups to put their wares up on the website and allowed lots of individual investors to look at those deals. It enables connection between the investors and startups. AngelList does not have a model, as far as I know, where it makes money by charging the startups or the investors.

I think they’re providing a really valuable service to everyone. As an angel myself, I appreciate what they do. I think they’re a great company and they’re well off. But what we do is very different. We curate our deals and only select investment opportunities that meet our criteria. As our exits this year reflect, our approach seems relatively robust. We curate our deals and will post far fewer than AngelList.

Conversely, AngelList does not try to protect investors from bad deals, just like Kickstarter doesn’t either. It’s really up to the investor. Investor beware, which is the case with many robust marketplaces. In the case of healthcare investing, however, investors often don’t have the clinical, regulatory, and business perspectives to bring an opportunity into the proper focus. 

I think that there’s a lot of value in their model, but the model does require a lot of understanding on the part of the investors. That does not always translate well into healthcare.

Our model is simple. We do our best to protect our investors, unlike AngelList and Kickstarter and most of the other equity crowd-funding platforms. Another way of saying this is we try to find the most attractive opportunities run by the best entrepreneurs. Our assumption is that, over time, this will prove successful for everyone.

What stops you from taking all of the best deals for yourself?

We manage about $72 million right now, which is really small money in the big picture of things. Our fund is not going to be able to fund all healthcare innovation. Far from it. We sit back a little bit and think about what’s happening in healthcare.

A lot of life sciences venture funds have been failing. The supply of venture capital dollars for life sciences innovation is, shall we say, challenged and at the same time there’s a strong demand from accredited investors who are not traditional angels and don’t know how to source or invest in these deals.

You’ve mentioned life sciences explicitly a few times. Is VentureHealth only focused on life sciences such as pharmaceutical and biotech or are you also looking at software, hardware, services, wellness, PRM, and medical devices?

For us it all begins with clinical outcomes. If we can see a way to really dramatically impact clinical outcomes, then we begin to get excited. That said, our history has been medical devices, and we have recently been moving assertively into biopharmaceuticals.

How big is the team curating deals?

The answer is a little complicated. There are three of us who are co-founders of the portal — Mir Imran, Talat, and me. We all had a lot of experience making and curating deals. But there are another 30-plus people inside InCube Labs — who are great friends of ours  — who actively work in forming companies and doing research. In a sense, we get a free ride from a much larger group of people, primarily PhDs. They’re from pharmacology, engineering, protein science, material science, implantable sensors, Wi-Fi technology, and even guys in social media and web development.

HIStalk Interviews Joe Casper, CEO, Sandlot Solutions

Joseph Casper is CEO of Sandlot Solutions of Fort Worth, TX.

Tell me about yourself and the company.

The Sandlot organization has been around for six or seven years, tied to an organization out of Dallas-Fort Worth, North Texas Specialty Physicians, building a health information exchange solution, managing patient risk, and driving connectivity among the physicians.

I became the CEO because I have 12 years of experience in building health information exchange systems. I’m the co-inventor of the first gateway solution that was initially deployed at Swedish Medical Center, two or three of the sites up in New York including Manhattan, the District of Columbia, the state of New Mexico, a couple of million people in Los Angeles, and the province of British Columbia. Needless to say, I got a fair amount of experience.

I’m somewhat of an entrepreneur. This is the fourth company that I’ve been involved in where we build technology or software that I’d either led as CEO or run as president of the company.

You have a somewhat unusual advantage of working directly with North Texas Specialty Physicians. What are the main lessons you’ve learned from that organization?

When you can come at this from the angle of physicians connecting physicians together, the majority of the health information exchanges that were originally deployed connected hospitals to hospitals. They had a flavor that looked very different then when the problem you’re trying to solve is your independent physician organization with tight hospital relationships. You deploy electronic medical records, you try to connect primary care physicians on one platform to specialty physicians on another platform where everyone is bearing risk, you quickly realize that you need to have solution in place that can connect them.

NTSP invested in Sandlot to solve that problem. As they started to solve that problem, they started to solve other problems, primarily increasing their risk business and then understanding the kind of analytics tools that’s required to do that, the sort of information you need to have at your fingertips from claims data merged together with clinical data so that you have a very rich set of data to run analytics against to look for gaps in care and to push on to physicians in a seamless way.

The company has been described as offering a fourth-generation solution. What does that mean?

Having participated in these things since 2001 when I first touched health information exchange, we were off initially just connecting hospitals. The fourth-generation health information exchange starts from the physician end. It creates the connectivity required from hospitals to physicians in a bi-directional way. If you go back to, say, the second generation, they were pushing information out, so discharge notes were being pushed out to the physicians. But you weren’t able to capture that information and ingest it back in.

The fourth-generation product first connects the physicians together in a way that the clinical dataset is not only brought into a repository — where you can run analytics against it, look for gaps in care, report so you can manage frequent flyers, look at your top admissions — but you can then bundle that Continuity of Care Document back up and push it back out into the physicians. When the patient shows up from primary care to a specialist or secondary care, that aggregated CCD is there ingesting data from the hospital visit, from national labs, and from others. This continuum moves us further up the pipeline to say it’s aggregated along the way. What was documents has been broken down now into discrete data.

Where we would immediately differentiate ourselves from many of the folks who are moving documents around, CCDs around, is that they keep that data in that format. You can’t run analytics and gaps in care against documents. You have to break that down. You have to organize that. You have to normalize that.

As you push it back into the hospitals, or as you start to build communities out of that, you have the advantage of a system that was built from the ground up knowing that as you add data to it, you take it, put in discrete data, you merge that together with claims data. When it comes time to run an analytics view, it’s not only the valuable clinical data you’re doing that with, but you’ll also have the ability to look at the claims, where we identify that specific tests have or have not been done as well outside of the system because we see or we don’t see a claim for that.

Most technology vendors offer systems that were designed for statewide and regional exchanges, and sometimes they and their customers are still struggling to make that work. Will those products become obsolete, or is there room both for what Sandlot does and what they do?

That market will break itself up based upon how well the specific states did. There are some states, some of the smaller ones, who have been very successful in this. Very large hospital entities who have a very large market share, they came on board early, and in some cases they were innovators in what they did. Those have stabilized, and many of them have found a sustainable business model, which the HIEs have lacked forever.

Then there are systems that are being deployed right now, dollars being spent, and unfortunately those systems will never make it, because they don’t have that planned for that sustainable business model. We’re seeing private organizations saying, I need to do this. I have to do it for Meaningful Use. I need to do it to run my business. I’m taking on risk and I can’t take on risk if I can’t see both the clinical and the claims data for that patient. I can’t trust the state to get it done, so I’m going to go do it myself.

As a result of that, where we see the folks who really want to drive to make that happen, we’re seeing hospital associations stepping in and saying, “I’ll take that lead. I’ll run that,” or a lead hospital and the community saying, “I’ll take lead, I’ll do that.” We’re seeing that from two sides, where there clearly is plenty of room for us to coexist with the state systems that are out there, and in fact, connect to them as needed.

Insurance companies have jumped on the HIE technology business. Why do you think they were interested, and does that affect your business?

It certainly affects it, but maybe in some cases in a positive way. I’ll try to be kind here and not necessarily name names.

There is one of those entities who spent a fair amount of money — in the hundreds of millions of dollars — for one of those solutions. Unfortunately, the solution platform was near its end of life. As a result of that, many of their clients and many of those systems are really troubled. They’re ready to skip on to the next opportunity here with a richer set of analytics, with a richer set of things that one, aren’t going to cost as much; two, are far more creative with their capabilities; and three, can be turned up in timeframes measured in weeks, not in months, and the larger complex pieces measured in 100 days. I just made a commitment to do something that I will turn up 30 hospitals in 100 days. As a result of that, I think far more agile in that mode.

They are powerful when you find an area where they happen to be the carrier of choice. If you cross one of those paths … the other one on top there that is certainly quite sizeable has very good footprint, and when you look at that footprint and there is a relationship with them as the largest payer in the market and they rear their head. They’re capable, but as I heard, they’re quoting 15 weeks to do something that I can do in a week. The new generation of this drives down the cost significantly. I think they are opportunities for us. We are pursuing those entities knowing that they are quite vulnerable right now, and we’re getting traction.

Is there still an interest in acquiring companies like yours, and do you see that changing?

There is interest. Now we’re seeing others who have interest that see this market is quite rich in many ways. As soon as we start to see the risk markets stratify, there are entities who want to provide product that manages risk, they want to provide product that looks at analytics. Some more of an IT bent than those of a classical insurer, but I’m not having any discussions with any insurers right now.

Do companies try to cobble together a solution using something that’s strictly connectivity and then drop the analytics on the back end?

Of course. You can look at that as one of the insurers that you mentioned came from the other direction. They had those pieces and they tried to cobble on top of it an analytics tool and tried to bolt those pieces together to build something. You can get it to work. You don’t have the efficiency of it if you look at how those pieces are integrated.

If you build it from the ground up, you are smart enough to say that if I have this piece of data and I want to offer a care manager … so one of the things we offer is care manager suite, it’s integrated right into the core foundation platform. If I’m looking at a patient that I’m managing under a care manager, one click and I get to see exactly what the reports would be on that patient. One more click and I can see exactly the medications that patient is on.

It is all pretty seamless, so when you look at it, has a nice look and feel to it. It’s pretty intuitive. It isn’t cobbled together so that somebody working with it has to say OK, this is obviously a different system, and this is obviously a different system. But I think over time, people will recognize they need to build those pieces out and they’ll come back with the products that are similar.

It would seem that the most oversold concept right now is analytics. Everybody says they’ve got it. Nobody really even knows what it means, much less what they’re trying to buy, or in some cases buying without even knowing what they’re going to do with it. What are the most useful or most commonly used analytics parts of your system?

NTSP as an organization was a pioneer. Took a second batch of pioneer, run a book of business through their own health plan, Care N’ Care, and operate a Secure Horizons book of business. By the time they’re done, there are about 80,000 at-risk patients sitting inside there. To climb the stars ranking, they started at three and a half stars. Over the last year, they climbed to four and a half stars. They did it by taking our analytics. The base piece of these are I ingest data such as A1C tests from a primary care physician or directly from a laboratory or from a specialist or from a bill that I’ve paid.

When it comes time to look at, am I compliant with my diabetics, am I compliant with hypertension, am I compliant with the various measurements required for five-star, I take that data, and at the time that the physician or anyone who’s caring for that patient, our analytic set metrics together with the product called Dimensions scans across that patient in milliseconds, identifying the presence of or the absence of whatever that patient needs — based on whether their particular age, whether their particular disease state — and within seconds identifies that these are the appropriate gaps for this patient that need to be dealt with. Then we have a proprietary capability that we’re patenting that allows us to push that message into the EHR platform without regard to who that EHR platform is. It’s something we call the digital envelope.

What are your thoughts on CommonWell?

I think the CommonWell organization is a good idea. We all know why they banded together. There is certainly a particular vendor out there who’d love to see all these things connected together in their own schema. The schema among how the hospitals can connect together when they’re on the same platform works quite well. When they’re on various platforms, a diverse platform doesn’t work at all.

There is defined need there. CommonWell saw that as an opportunity to say, if we pull together, I think we can do this. I think in the end, it’s a good idea. The more we get people out there who are opening these gates up, opening up APIs, making this data available on standards and moving it around, the better healthcare United States will be. I’m all in favor of that piece.

But as we look at it and say, where are the EHR vendors headed, it certainly seems that another round has occurred. I know three or four organizations that started the path with one EHR platform, cut their teeth on it, and now recognize it’s not going to be able to do what they want to do, and so they’re switching. As they switch, that churn seems to give them an uplift to organizations who recognize things that need to be in the next generation of EHR platforms. Some of these folks are seeing their market share go downhill and they’re chomping to see, can they do something in CommonWell that might help that.

At the same time, there are EHR vendors out there who are right on the cutting edge of what they need to with EHR systems to meet Meaningful Use, to be compliant in this area, to push CCDs and CCDAs around so that the information that people want to manage risk can be done without a lot of cost and without a lot of pain.

Some will suffer in this process and some will prosper, but I think the ones that I’m dealing with that I see … I mean, we’re talking large groups, not a doc here and a doc there. This is 116 docs here and 200 docs here, and they’re making those changes. All of that seems to help foster that as we connect to them, they’re ready for that next step. They’re ready to ingest the data that we pull together. They’re ready to have that be part of their system. They can compile whatever they do and send it back to me so I can do the same thing again and again.

Where do you see the company and the market being in five years?

I’m embargoed for about two weeks from the best example that I could give. We’re seeing these entities who had been put together in patchwork in the past and have tried to make that work recognize it can’t work. Consequently, these entities have stepped up. Hospital associations looking to say, I can solve this problem. Larger community rollups that say, I can solve this problem if I put a common umbrella or a common platform around it.

We have grasped this because it’s right in our sweet spot. We have the ability to take the output of another HIE platform — any of those insurance companies or the ones you spoke of or any of the other ones out there — and sit on top of them. As long as they are compliant with the latest standards, our ability to do HIE-to-HIE connectivity exists.

Certainly the ability to go out and connect the physicians where hospitals are really struggling so that they can’t buy physicians any more. They know they need this physician affiliation strategy. They’re going at risk in the community. They need the information to go at risk in the community. They’ve tried to hook up to the state systems, but they’re not cutting it. They see the timeframe that is going to take them, they are not cutting it.

A cloud solution like ours, our base product that can come in and fill it up pretty quickly, is pretty attractive. We’re doubling our sales force in the last month. We’re doubling our capacity. That should give you an idea of the kind of interest that we have in what we’re doing.

We’re doing some very innovative things in Medicaid space. We won a contract to demonstrate that you can manage Medicaid patients in the same way that CMS was trying to manage Medicare patients. The ACO models that drive down cost and improve quality for Medicare are applicable for Medicaid. We’re going to be demonstrating that. We won a contract to do that. There’s great hope in the sorts of things we can do with states that are struggling with lack of budgets largely due to healthcare costs in a Medicaid population. We’re right on the cutting edge of that and excited to be there, too.

An HIT Moment with … David Engelhardt

An HIT Moment with ... is a quick interview with someone we find interesting. Dave Engelhardt is president of ReadyDock of West Hartford, CT.

What problems do hospitals have with iPads that ReadyDock solves?

Hospitals deploying a pool of tablets for distribution to patients or healthcare personnel need a place to securely store and charge them. In addition, these tablets also need to be periodically disinfected. If a patient touches a tablet, the device should be disinfected before providing it to another patient, especially if a patient is known to be on precautions.

The ReadyDock platform serves as a home base for these tablets. You know when you grab a tablet that it is charged, disinfected, and safe for use.

What evidence exists that tablets used in hospitals require disinfection?

Tablets used in the clinical environment are roaming high-touch surfaces. They require the same consideration with respect to cleaning and disinfection of other high-touch surfaces. These high-touch surfaces can serve as reservoirs for dangerous microorganisms and can harbor them for days, weeks, or even months. This in turn can cause infections in patients and healthcare workers. 

It is for this reason that significant R&D has gone into developing an engineered solution that integrates with the existing workflow of secure storage and charging while at the same time provide a process to consistently and automatically disinfect tablets without the use of chemicals. The efficacy of the system’s general-purpose disinfection has been validated in controlled studies by Yale-New Haven Hospital’s microbiology lab.

How would hospitals that allow staff and patients to use their own devices use ReadyDock?

ReadyDock can disinfect an iPad in less than 60 seconds. ReadyDock can serve as a disinfecting processor for tablets and other mobile devices such as smart phones upon entering the building, between patients, and before going home for the day.

Describe the process and time required to run an iPad through a disinfection cycle.

When a tablet is placed in a ReadyDock for secure storage and charging, the system puts it in a disinfection queue and the tablet is automatically disinfected.  If a user only needs to only disinfect their device, they have the option to have it disinfected immediately. Total cycle time to disinfect in this mode is about one minute.

How does the CleanMe app help improve user compliance?

CleanMe is an easy to use software app available free in the iTunes store that allows users to setup their own personal cleaning and disinfection policy. Users can configure what days and hours they work within a clinical environment and how often they would like to be reminded to clean and disinfect their devices. For instance, they can insure that they are reminded to clean & disinfect before they go home, clean twice a day, etc.

Of course, when it tells them to disinfect, the app documents that they did.  This in turn will help users improve compliance. By design, the workflow of storing a device in a ReadyDock unit will ensure that disinfection occurs automatically along with secure storage and charging. 

HIStalk Interviews Drew Madden, President, Nordic Consulting

Drew Madden is president of Nordic Consulting of Madison, WI.

Tell me about yourself and the company.

I have 11 years of EHR experience. I’ve done everything from “roll up your sleeves, build the system” to project management and business development and now to helping run things here at Nordic.

I started my career at Cerner Corporation and then moved on to Epic consulting. I always tell people I felt like I was drinking Pepsi for four straight years and wanted to try a can of Coke — I was intrigued by the other big vendor out there. The company I was working for was ultimately acquired by Ingenix Consulting. I spent some time there as an Epic implementer and business development person until I joined Nordic.

When I met [Nordic CEO and founder] Mark Bakken, the light bulb went off. It was the right place. It was the right time. It was the right culture and vibe that I would have been looking for as a consultant and what I think a lot of consultants are looking for.

It must be interesting running a consulting company right in Epic’s back yard and with all the connections I imagine most of the employees have with Epic. What’s that like?

It’s really pretty good. Only 30 percent of our employees live in Madison. One of our differentiators is certainly being in Madison, but we end up finding a lot of people who worked at Epic and lived in Madison, but life got in the way. Epic requires people to live in Madison in order to work at Epic. They do a great job of finding the best and brightest people in the industry, but some of them want to move back closer to home when they start having kids or their spouse wants to do something different. But like myself, a lot of them still want to be in the EHR area.

They are super excited to be able to continue working on Epic, and ultimately our goals are very much in line with Epic. We want customers to get the most value out of their Epic system. We want to make sure they’re using it in an efficient manner and make sure that we can help do that.

Is it difficult to stay in Epic’s good graces as a consulting firm?

Mark, who started Nordic, started two Microsoft consulting companies. He has his own history and experience with the way Microsoft worked with consultants and consulting companies, so it’s different than what Mark was used to. But I think they do have channels with people that you can communicate with. 

We preach transparency to our employees. That’s part of our selling point. I think if you’re open and honest it’s not difficult to work with Epic. We’ve found a way where I think they recognize the value we can bring to a project when the time comes. Our relationship is really solid.

A lot of what makes consulting companies successful is their culture that they instill with their employees.  Epic folks are used to the culture there. Does that spill over into Nordic’s culture? How do you manage that when you have employees whose first job was working for Epic?

Two-thirds of our employees used to work at Epic. The other third have like an IT or clinical background. We feel like that’s a good mix.

We take a lot of time to get to know the people that we interview. We currently don’t have any recruiters. We have a couple of people who schedule interviews with the inbound interest at Nordic. We take a different approach. We don’t do LinkedIn e-mails and that kind of stuff. I always joke and say that I still get invitations to work as a Cerner consultant based on my LinkedIn profile, but you wouldn’t want me implementing Cerner. We take a different approach and try to get to know the people.

For the first couple of years at Nordic, I think I talked with almost every single consultant, up until we got to maybe 120 or 125. As we scaled, we made sure that we had people that really understood Epic that were talking with the candidates. To a certain extent even over the phone they feel the camaraderie, the secret handshake so to speak, that this person on the other end really knows Epic. We get a lot of respect and excitement from that.

Epic talent is in short supply. How difficult is it to stand out among all the other places they could work?

The secret is focusing on their needs. Our average consultant could probably get a job at five other places in 48 hours, so we’re trying to understand their needs while we’re understanding our clients’ needs. A lot of the work we do is trying to put that puzzle together. It doesn’t always fit right out of the box and intuitively, but we spend a lot of the time trying to make sure that our consultants are in the right role and they’re happy. 

We always say if you have a happy consultant, most likely you’re going to have a happy client. The caliber of people we have here is, I would say, second to none. It’s certainly better than any other organization I’ve ever worked for. If you focus on making sure that your consultants are happy — and that doesn’t always mean giving them exactly what they want, but helping them see that the partnership between Nordic, the individual consultant and the client has to work for all three parties – we spend a lot of time trying to make sure that happens.

What does the staffing curve look like in comparing an Epic implementation to go-live support versus post-live support and optimization. Are clients surprised by the ongoing needs?

Some of our clients probably are surprised by that. I think it’s a byproduct of a tight deadline for an implementation. You do everything possible to meet that deadline and it eventually means that you probably gave up a few things that you wanted. You decide you’ll circle back and get to them post implementation.

We’ve created the Summit series of post-live solutions. The next wave we want to be at the front of is to circle back with clients and do what I would call true optimization. Not just one-to-one staff augmentation and consulting, but more of packaged offerings to go in and do quick assessments on the current state of the Epic implementation or the Epic install is and listen to the client and understanding where they want to go with it. Then do a gap analysis and help them figure out how they get from A to B. We’ve already had a lot of success work with a few customers that had been live for – one in particular has been live for 10 years — but we were able to flesh out 30 months’ worth of potential work they could do to get a little bit more out of their EMR, which was exciting.

Nordic is number one in KLAS among Epic consulting firms. Why do you think that’s the case?

We talk about the fact that not all certifications are created equal. Our consultants are well positioned to really be different. We’ve been told by our clients a lot that a Nordic consultant is different — the way they run a meeting, the way they deliver, the way they’re able to start and hit the ground and have a big impact right away.

I think a part of is that two-thirds of our employees that are former Epic. Epic does a phenomenal job of zeroing in on top talent. At Cerner, they recruited much more from – I was an engineer, my background – so engineering and computer science. Whereas Epic does a fantastic job of looking at the individual. Some of the smartest people I ever worked with at Epic have been zoology majors or music majors, but Epic somehow identifies that recipe for success. Those types of people flourish in the client opportunity. Some of it is again our view of trying to make it a partnership between the client, the consultant, and Nordic. If you can do that, then I everybody feels like they’re getting a fair and equitable deal, which has been successful for us.

Epic doesn’t like people with experience very much — they would rather train somebody who doesn’t have any background than retrain somebody who does. Does the selection process that put them at Epic make them good candidates to work other places?

I think so.  One of the ways that our consultants stand out is they have probably seen between five and 10 implementations. For any given Epic module, they saw a customer do it this way, that way, and three other ways. At last count, our consultants had worked with 240 of Epic’s total client base of around 290. For us to be able to pull from all that data, from all those best practices, and understand the gaps between where a client started and where they want to go … that gives us that extra advantage.

Which areas of specialization or which Epic certifications are the hardest to find or are in the most demand?

Some of that is always driven by what you have. We have almost 100 consultants that are certified in Epic’s inpatient orders and clindoc modules. We have probably 70 in ambulatory and 50 in OpTime. Rev cycle, we have less certified consultants there. That probably has a lot to do with as you look at organizations that maybe are tightening things down financially having a rev cycle person who can come in and help out. There’s a premium on that.

I also think some of the new emerging Epic applications – Cogito, which is the new umbrella reporting application, as well as Willow Ambulatory … we’re fielding more requests from Beaker, the lab module, as more and more clients move that direction.

Beaker follows the typical Epic model where it starts out as being clearly labeled as not ready, but then moves up the food chain. Are there other modules that you see them bringing out or that you’ve heard about?

We don’t really have that visibility. I might take that question and go in a little bit at different direction. I think one of the up and coming modules — more of a methodology than a module – is Community Connect, Epic’s methodology around implementing Epic to reach out to affiliate physician groups or critical access hospitals. It starts to answer the question of how do you offer Epic to areas or organizations that may not otherwise be able to afford, but can work in conjunction with an existing Epic customer in order to have access to an Epic EMR whether they’re acquired by the hospital or not? It’s offered in both capacities. 

We were recently credentialed as one of four Community Connect consulting firms by Epic, which means that we’ve gone through a successful install and that Epic was involved in making sure things went well. As as consolidation happens across healthcare, that will become more and more a need in the industry.

How do you see your business changing as the Epic business changes?

I mentioned the Summit series of post-live solutions. We’ve broken that down into four areas that we think the industry will go and needs to go.

One is optimization. The second is helping customers get the full utility of the Epic upgrade that they take on a one- to two-year basis. We’ve heard from a lot of our customers that doing the upgrade in addition to all of the daily support types of things just becomes … you end up maybe not doing either of them at your level best. That’s another area that we’re looking at, from a command center, sort of a NASA Mission Control, to be able to help multiple customers with upgrades and help them be successful in that area.

The third area is data and analytics. We know ourselves well enough to know we’re not going to create a reporting tool that is going to wow anybody, so that will most likely just be us in trying to be certified industry experts in Cogito and making sure that we can be at the forefront of that as clients have needs.

The last one is ongoing support. What we’ve heard from clients is often they’re left having to choose between, am I going to go out and optimize and circle back and get more efficiency out of the system, or do I just need to keep it running, but I’m having a hard time doing both? In the case where a client wants to use their staff to do some optimization or to run the upgrade, we have the ability, potentially on a remote basis, which could lower the cost of maintaining a system due the ongoing support for the Epic system.

HIStalk Interviews Frank Naeymi-Rad, Chairman and CEO, Intelligent Medical Objects

Frank Naeymi-Rad, PhD is chairman and CEO of Intelligent Medical Objects of Northbrook, IL.

Tell me about yourself and the company.

I received my computer science doctorate degree from Illinois Institute of Technology. My dissertation research work was in developing medical dictionaries that support electronic medical records, decision support, and information retrieval used at the point of care.

I got introduced to medical terminology when I was teaching classes to medical students, where I was directing academic, research, and administrative information services at the Chicago Medical School. These classes included use of computers for directed history and physical documentation, informatics workup, and concepts in medical artificial intelligence as senior electives.

During the senior elective setting, I wanted students to build knowledge for different decision support applications. The major task and challenge that we had developing knowledge for the decision support was standard terminology. Each system had its own dictionary. The systems we used were MEDAS, Dxplain, QMR, Knowledge Coupler, and Iliad. The medical students had to build knowledge for pattern recognition as well as rule-based decision support and application.

The knowledge created by students for a given diagnosis was then compared to knowledge within these expert systems for the same topic. The key learning objective was that everyone learned how the computers were used to make decisions and the results could be manipulated to reflect the new discoveries.

During that process, the most important aspect that came out was when we compared students’ patterns to other expert systems. It became clear that what was missing was standard medical terminology. This became the topic of my dissertation. It was really the concept of capturing and preserving the truth, what the source of truth about a given decision was and how the decision was made by the computer.

It was then necessary to reverse engineer the patterns back to the original form to explain why it led to the need to build a dictionary that students used to codify the rule. This allowed us to compare the pattern across multiple domains using the same foundation dictionaries. This led to my dissertation topic, which was a feature dictionary for clinical systems and electronic medical records.

The ultimate test was how the students’ knowledge would perform when interfaced to real patient data. Into the late 1980s and early 1990s, there were no coded electronic records. This led to the development of a history and physical documentation program on the Apple PowerBook for medical students. This program was expanded as a tool for second-year students as part of a supplement for the introduction to the clinical medicine class.

This program allowed students to develop comprehensive documentation for the history and physical exam. While the objective was to a develop a patient electronic record that could be used to test the student decision support pattern, instead it led to the creation of an electronic medical record which was used a the Cook County ER. IMO was created to help commercialize the product that was sold to Glaxo Wellcome, which at that time was called HealthMatic.

Later on, HealthMatic was sold to a company called A4 Sytems, and then A4 Systems sold its assets to Allscripts. The EMR that we developed at the medical school, with the help from many of the same IMO team developers working with me at the medical school, helped commercialize it. The current generation is called Allscripts Professional.

You can understand how the team who is working at IMO right now are key players in the industry. This is the same team from the medical school as well as the same team that developed the early clinical documentation for HealthMatic and medical content work for Glaxo Wellcome.

Describe how IMO’s product and the terminology works with EHRs.

Our flagship product is interface terminology. Our primary objective is to capture and preserve the clinical intent and then map that clinical intent — the truth — to their corresponding regulatory requirement. Interface terminology manages and maps between clinicians’ terms and the required regulatory code terminology like ICD-10 and Meaningful Use codes as well as reference terminology like SNOMED CT.

The way we have succeeded is that we have removed the overhead of making a clinician to be a coder. They can say what they want to say. We manage the code and mapping and help our EHR partners to capture and preserve the truth.

Who is your most significant competitor?

The competitors that I see are people who do not really understand the challenge of terminology and the importance of preserving the clinical intent. Fortunately and unfortunately for us, I think the knowledge base within the marketplace is growing. We need a dynamic model to respond to these changes as soon as possible.

We are very happy that we are able to help our partners meet regulatory standards. Adaption of standards is a very daunting task for many of our vendor partners. There has been a lot of movement in our space because most of the new regulatory standards require several new coding subsets.

We expect large and innovative competitors coming into the terminology space. What they are missing is the understanding of the electronic medical record and how terminology should be used within the electronic medical record. Having the EHR knowledge expertise gives a true edge to IMO’s team as the market moves from fee-for-service to fee-for-performance.

There are many competitors within the terminology space. We have competitors who are managing the coding for reimbursement and now have to also do clinical. We have competitors who sell you tools in order for you to manage the complex mapping for the coding within the clinical setting.

Terminology management is hard and tedious work. We have a unique group of knowledge workers and physicians because they are good at it and love doing it. Adding to that our technology team, with the understanding of the electronic medical record and how terminology is used within the electronic medical record, creates a major barrier for others to match the quality of our service delivery.

What parts of HITECH have caused both vendors and providers to seek you out as a company?

It’s compliance to the Meaningful Use requirement and making sure that they are able to manage the changes associated with Meaningful Use requirements. When you look at our portfolio of clients, they initially used us to enhance clinical searching and finding codes for reimbursement. I believe Meaningful Use is creating a unique challenge for them because it is moving the market from fee-for-service to fee-for-performance and that aspect of care creates a unique attribute and need of understanding the use of terminology within the state of care. Our interface terminology service is to make sure that the truth about clinical data is stored as expressed by the clinical team.

For example, when you’re on the same term within the assessment, it may have a different ICD-9 code versus that same term in the history section. Being able to have a concept-based architecture that manages this complexity allows for correct mapping to ICD-9 as well as to ICD-10 complex billing post-coordination, but also maps to SNOMED CT and other required Meaningful Use terminology subsets.

We take that complexity out. We manage that complexity within our tool set and then we deliver those to our client base, allowing their clinical user community intent to be preserved so we can also code for care.

A recent study found that IMO’s interface terminology can identify population health issues when paired with EHR data. What are the implications of what that study found?

The early studies that I did historically looked at finding the clinical truth. You really want to make sure that what clinicians are saying is preserved in their words and that the data being collected is following guidance dictated by the clinical team. The data collection service needs to provide terms that reflect the clinician intent in its original form.

We as a company have been very fortunate to be trusted by and permitted to serve one important population of our society, and that’s the clinician. We believe clinicians are under massive pressure to do their job through primitive electronic documentation services that do not speak their language.

I worked at the medical school for 12 years and I observed students going through all of the different stages of medical training. I understand and appreciate the difficulties physicians have to go through in their medical training. The knowledge base learned as part of their training is their most important tool to make them master problem solvers. Capturing and preserving their clinical intent is always the best card we have in understanding exactly what is wrong with the patient and even when a physician is making a wrong assumption.

Our interface terminology allows the truth to be preserved and not distorted by coding optimization templates or services. Preserving the physician intent is responsible for the success of this study, identifying 99 percent plus patients correctly in this publication. By empowering the clinical team and using IMO interface terminology, we are going to have a near perfect understanding of our patients at risk.

What’s your perception of the state of readiness for ICD-10 transition and what impact this is going to have on providers?

The impact for our vendor partners is going to be nominal because we knew going from 14,000 ICD-9 codes to 90,000 ICD-10 codes will be a massive transformation for many EHR vendors. But for our clients, it’s different because we started distributing ICD-10 mapping last year and we have been working with them to deliver their point of service solution.

As part of our support for ICD-10 CM, PCS, and MU 2, we are expanding our terminology foundations by 3,000-plus concepts and as many as 30,000 interface terms per month. What that really means is that our clients are able to manage all these lexical variants long before the regulatory deadlines for ICD-10 and MU2.

ICD-10 is just a different mapping for you and you allow customers to create or maintain their own in addition to what you supply, correct?

Correct. We don’t allow them to manage their own mapping outside of our mapping because we really believe in this crowd-based or wiki-based model. It creates transparency that our clients have the correct standard mapping. Our mapping obviously grows and changes faster because of this transparent model and medical knowledge changes. We have developed sophisticated tools and workflow to manage all the mapping ourselves. 

Normally when people go to IMO we move them to what we call a migration process to make sure that everybody standardizes their local dictionaries to the same datasets. If there is an error in our mapping or if there is an inconsistency, we can always correct it quickly in the next release. But if we allow local mapping, it really can violate some of the principles that we have. We don’t prevent them from having local variation and mapping. They can have their own lexicons if they want to, but we don’t take responsibility for those maps and will not distribute to other sites.

If they have like a certain phrase that they use locally, they can build it into the equivalent of a dictionary so that even if it’s not commonly used they can still understand?

They could still understand, but they should normally be asking to send it to us. If it matches our editorial policies, we distribute to everybody else. Everybody else would use that as well.

But I think it is important for them to be cognizant of the bigger picture because we really believe that this is the grand opportunity to really make standards like SNOMED and ICD-10 to truly work, because if we map correctly to them, at least these standard coding systems and these regulatory coding systems become more valuable for our future. Obviously they will be changing as well. If people start mapping their own local terms, there’s no way to be able to validate or review that and then challenge it.

That would be unusual, right?

That’s unfortunately not true. There is always going to be new concepts requested. We have term request workflow to incorporate new valid terms in our next release within six weeks and to have everything made available to our community. There are going to be some domains that most likely our clients would need to have their own local terminology, but terminology as it relates to clinicians’ decisions, like the problem list, the past medical history, assessment, and plan, which are foundations for clinical team decision making and requires billing codes that need to be codified correctly.

Has ICD-10 changed your business substantially so that people are seeking you out for a painless solution?

I don’t believe that ICD-10 alone is the issue. The reason our product has been sought out is EHR adoption and usability by clinicians. I really do believe that clinicians are commanders-in-chief when it comes down to fighting diseases and planning treatments. Clinicians are the key stakeholders as we transform from fee-for-service to fee-for-performance. They must be in control.

What our vendors do is use IMO as a source of truth for tracking clinician commands and orders, preserving the patient problem list and differential diagnosis using their dictation into the electronic medical record. ICD-10 is just a byproduct that the EHR vendors needed to comply to. You could say the usability is how the value of IMO is realized when complying with ICD-10, SNOMED CT, and within a few years ICD-11 are byproducts.

What research and development is the company working on?

We have been done with ICD-10 for quite a while. Our biggest research and development is invested in tools to manage our growth that we are facing right now. We are becoming the foundation technology innovation platform for many of our EHR partners. What that really means is that we have worked very, very hard to make sure to marry technology with terminology.

We have a cloud-based solution we call our portal service that allows the physicians to search the way they want to search. We can then rank order the search results in context of the domain that they’re searching for. This new technology allows us to do what we call just-in-time vocabulary releases. We have 60 releases a year total and for diagnostic and procedures 10 releases each. Using the portal eliminates many of the overheads associated with local dictionary normalization.

But these 60 releases a year historically without our technology would be impossible to adopt with import/export technologies. In most cases it takes maybe some times two or three months for people to deploy updates or in many cases people only deploy the regulatory requirements rather than updating on a monthly basis. By having this portal technology available, allowing the marriage of technology and terminology, we are able to make these datasets available at the point of service for our clients almost instantaneously after delivery of our service.

This has really increased our product usage. We have over 350,000 physician users and over 2,500 hospitals using our product. Many of our vendors are moving to our portal as their terminology innovation platform. One comment that we get from our clients is that they know when IMO is not there. That’s by far the biggest compliment that we could get.

What does the physician see differently if they’re using a system that uses IMO versus one that doesn’t?

They can find what they’re looking for and the description that they want to assign to the patient’s problem in the right lexical context and within the top three to five term list results.

Is that time-saving for them?

Absolutely. We are seeing up to three minutes for complex visits and as much as 30 seconds per common visit. The most valuable is a more granular problem list and orders in their clinical speak. We have not measured the IMO factor in follow-up time saving. We hope to work with our partners and perform independent research on the effects of having IMO in time and quality.

Where do you see the company going in the next five years?

Where we are going is to empower our vendor partners to deliver the best EHR solutions in the marketplace. We believe that our technology and removing this complexity associated with its managing terminology makes our partners stronger. They can do more innovations for clinician documentation. That is the most important thing to us.

We believe we want to participate in the success of the care delivery organizations in our country. I believe that as clinicians become empowered in the clinical setting and take over the responsibility of delivery of care using IMO-enabled EHRs, they and care delivery organizations will see a reward based on the quality of care they’re delivering. We would be a key part of this transformation for our vendor partners, their clients, and users.

As we allow our vendor partners to innovate, many of IMO’s portfolio terminology-enabled assets that we have been developing in the last 20 years will become more valuable at the front line and will allow our partners to build a positive distance between their offerings and others not using IMO. We hope to grow with our vendor partners to eventually make the US destination healthcare through new innovations in medical terminology-enabled technology. This is the way it should be.

Do you have any final thoughts?

Thank you for your time and opportunity to present IMO to your audience. We are honored with the finding of the independent study result showing that when using IMO interface terminology, nearly perfect agreement is achieved with greater than 99 percent in a peer-reviewed CDC publication. This article was truly energizing for me and the IMO team working in this space of dictionaries and terminology innovation to capture clinicians’ intent. It seems that finally after all these years we can actually see the fruit of our work, and that is really a good feeling.

HIStalk Interviews Benjamin Albert, CEO, Care Team Connect

Ben Albert is founder and CEO of Care Team Connect of Evanston, IL.

Tell me about yourself and the company.

The company started officially in late 2008, but I took it on full time in early 2009. Prior to starting Care Team Connect, I worked in healthcare technology for my whole career, most recently in a services company, PatientKeeper, for the acute care setting, where we were pulling together data for hospitalists and the providers within the hospital to better coordinate and manage care within the hospital.

As a result of that and parallel to that, my grandfather had his second stroke. Seeing all the effort that was going into the inpatient setting and very little effort going into the community setting compelled me to start the company to better coordinate care in the community for high-risk patients.

Describe how care coordination should work ideally.

There’s a number of perspectives on that. In my opinion, the way care coordination should work is that patients should get a patient specific plan of care that encompasses all people who touch that patient so they’re singing off the same sheet of music. Making sure it considers psychosocial factors, patient history and patient risk, and the whole patient as the plan is assembled, so that everybody knows who is going to do what when for each patient. That will enable efficiency, lower costs, and higher quality.

What needs to happen to make the patient-specific plan of care ubiquitous, like medication reconciliation?

You need to have the right team in place in order to manage and coordinate a population’s care. While our technology will streamline it and allow you to do a tremendous amount more with the resources that you have than if you don’t have a platform like ours to power workflow and coordinate care, if you don’t have the people who are focused on it — and I mean truly focused on it, not tangentially focused on it — as soon as you determine that you need to establish a team that’s responsible for coordination, then you need to power that workflow and allow it to scale.

Where we see most of the initiatives fail is that people will make that decision, but then they won’t be able to get lift or scale around the population, because they end up managing just the highest of high-risk patients with a few part-time or full-time resources. That in itself isn’t a way to enable full, broad-scale care coordination.

You need a more systemic process around how you are going to manage the high-risk, moderate-risk, and low-risk patients. What things are you going to do specifically for each patient as they impact quality and cost? Then allow yourself to scale that through automated processes like our technology. But before you even get to technology, you need to talk about your program development and how you can scale,  which we also help our clients with.

How does your platform support that process?

The platform listens for data that would trigger action on a patient that’s being managed in a population. Truly managed, not any patient in the population. We’ll identify which patients need to be managed. We’ll reconcile actionable data, which could be a real-time admission alert from an ADT, it could be a new medication, it could be a change in a patient’s psychosocial status like a change in home setting.

Any number of these things can be a triggerable event in our system that would drive action. The system listens for that, weights it against the patient-specific information and the risk to the patient and the care program that that person sits in, i.e. what we need to do in the event this piece of data comes in for this particular patient at this risk?

It drives the specific tasks to the right people across the continuum. When I say that, I mean those right people can be a family member, a clinician, a nurse, and anybody who has a relationship to that patient. The system’s rule will tell you, OK, based on this patient, here’s where you fire this task to.

What integration is required?

The most common integrations we do are to either claims or attribution models from payers or a shared savings program or ACOs or however they have their attribution models in their claims from the payers. We’ll pull that in as the foundation for the population being managed. Then we’ll marry real-time data to that on the fly, which includes ADT, medication feeds, and visits to the physician office. Those types of pieces of data are real time, married to the attribution and patient-specific data.

It can be labs. It can be any number of data elements that will trigger action. Based on the population being managed, we build these programs and actionable events around the data that’s more pertinent to the population being cared for.

How would a typical customer connect to that data and what are they doing with the results?

I’ll walk you through a couple of customer scenarios. We work with medical homes, ACOs, health systems, and we’re starting to get into some more of the employee health types of things. In the ACO medical home scenario, we’ll take a client who is currently managing 120,000 lives across an entire state with 77 physician practices. They need to manage that care across all those lives, across all those demographics.

They take their attribution, and then they take some real-time ADT information from various places across the state, and the plan of care that’s been established for each of the patients based on their criteria. They marry that specific data, i.e. an admission for anyone in their 120,000-patient population will trigger a workflow for the care managers or care navigators supporting that population. That’s a very basic core workflow that prevents readmission, increases coordinated care, and truly establishes a workflow around it, a transitions of care workflow in particular. That’s one example.

Another example might be a pure preventable readmissions initiative with a specific client, who upon discharge, we receive just ADT information along with some other data to identify which patients are at risk of readmission. From there, we’ll drive a particular plan of care based on what type of patient it is, what type of follow-up needs to occur, and drive the tasks and the actionable plan around that in an automated fashion.

If I go back to that first scenario for a second, I failed to talk about one core piece of data that is a differentiator. The population health analytics companies who today are doing a great job of identifying gaps in care and managing the data around the population that also in case of truly managing the health of a population, that data is valuable in addition to the real-time data, in addition to the attribution to trigger the right plans of care based on the patient’s attribution, risk, gaps, and beyond.

Many companies are involved in analytics and population health management. How do you see your offering fitting and who do you consider to be your competitors?

In the population health analytics space, we look at their data as great triggerable events married to all the other things we’re doing with the population. We like to work closely with them, especially if our clients decide to go in that direction and feel the need is strong enough for their population to identify gaps and do that analytics.

We really don’t feel like we’re competitors to the analytics companies. It’s more as a partner, where we can leverage their data to truly drive workflow and action, which seems to be a pretty big gap in the market right now that we’re filling.

Is it difficult for people to understand what you’re offering and how it fits in?

It can be, until the market understands the difference between care coordination and care management and population analytics, which we’re charged with helping the market understand. There’s a huge difference. It can get gray in terms of the client’s perception of what we do versus what those solutions provide.

But as soon as a client really digs in and says, OK, how are we actually going to manage the population? Not how are we going stratify and identify the population, but how are we actually going to manage the population and all of these care coordinators we’re hiring now? How are we going to power their workflow in a way that we’re sure that they are going to follow the right patients and that we’re going to get the yield out of the initiative that we anticipated getting?

It’s the next step. People recognize that as a major need. We sit on front of it to make it all happen. But until there is that understanding of what analytics is really built around — and it’s really built around crunching the data and what we do, which is built around workflow and coordinated care — I think the market does get confused until they understand the difference.

It sounds so obvious that there should be a patient-specific plan of care. Describe how it gets created and maintained and what the end result looks like.

It is somewhat of a new concept in the way in which we approach it, but I think there had been a lot of folks after the longitudinal plan of care for a patient. They are often templated and disease based, much as disease management companies or groups like that have approached the market in the past.

What we do is much different. There are elements of disease-based plans of care, but it’s really about the patient themselves, the psychosocial data, meaning what is their mental health, what is their home status? A number of those other elements which can help dictate how to follow up and manage that patient. Essentially, how much do I need to do to support this patient as opposed to how much can they do on their own without my involvement?

Our approach takes that data, which changes over time, and marries it to the real-time data. The plan is always changing. It’s a living, breathing plan of tasks and documentation to support that patient. As data changes from a real-time perspective and there is a profile change for a patient, the plan morphs along with the patient to make sure that it’s always providing the right level of support and efficiency around that patient’s care as required.

That’s really a big difference for us. It’s by no mean a single-threaded plan of care. This is a living, breathing plan of care based on the data coming in to the system and the patient’s needs, which really hadn’t been done before, not in this way, anyways.

It seems to be getting a lot of traction in the marketplace as a result, because our clients don’t have all the resources in the world and that’s not going to change. How are you going to truly manage this population of patients and help our community members who are collaborating with you in this ACO or in this shared risk initiative to support the population in real time? That’s how we help it happen.

A typical example would be where there is a primary care provider and a hospital relationship that integrates specialists and therapies. They’re potentially with an admission or an ED visit and there might be a specialist involved and there might be therapies of some sort. The resulting plan integrates all that into a single single source of truth that everybody agrees and understands that is taking care of that patient.

Absolutely. You’ve got it. That plan is driven by the individual or group that is responsible for the population. The ACO group may create that source of truth through our platform, or the hospital. It really depends on where is the risk is. They’ll drive that plan based on the automated routines.

The new brave new world of ACOs has put together some bedfellows that may not be comfortable with each other, as in hospitals and practices. 

You can add the health plans into that mix as well, in terms of all the groups who are participating in these initiatives and how well they work together in a way that makes sense for everybody.

I suppose the answer to you is that’s initiative by initiative, community by community. In some cases, like in Battle Creek where we are working, everybody is collaborating really well. It’s actually the practices who are leading the initiative, supported by the health systems and other folks in the community organizations and the community.

In the hospital-driven initiatives, it can be very effective. For example, we’re working with a health system in the Northeast. They are powering all their skilled nursing facilities through our platform. Upon discharge, one of the skilled nursing partners will get all their detailed plans for a heart failure patient that’s being discharged to them. Not in the placement type of variety, which I know is probably the next question, but more on, what’s the plan of care for this patient?

Those people are engaging and wanting that type of information because they aren’t armed with that data in a way that makes them successful. They want that type of collaboration. They know in the future it’s all going to be shared, and if they are not lining up to collaborate well with the health system today, it’s going to be a big problem for them in the future.

Everybody thinks about physicians and hospitals when they think about care coordination or ACOs, but in this model that you’re describing, it sounds like there is an important role for a nurse.

A huge role for a nurse and family and community partner. If you fall in to the trap of this is only a physician-led or hospital-led initiative, you’re not going to change things the way that they need to be changed in order to really coordinate care.

You need to infiltrate that with a care navigator-type nurse function that supports the population and also understands what it means to truly work with community members, Meals on Wheels, various partners in the community, family members, adult caregivers. All these people who can play a role for you. 

I’ve got all this work to do for this population. I know I need to do to support the population well. I have a handful of resources to make it happen. There are community resources out there willing to do this and they just need to be armed and ready to go. If you put that process in right, you are actually solving a much bigger problem by truly supporting the community and the population as a whole.

Where do you see that company being in five years?

That’s a great question. I get it often. The way I answer that is, I’m not sure where the company will be in five years. We just keep delivering value week to week, month to month, year to year basis, and keep listening to what our clients are telling us. Making sure we understand where the market is going and keep driving and building a successful organization that has value and purpose.

We try very hard not to focus on our five-year plan, but to focus on execution, action, value, and purpose as an organization. The rest will take care of itself.

Any final thoughts?

The company is doing tremendously well. I’m sure this is consistent with what everybody says, but the company is truly doing great. We recently signed our largest client to date. I think Care Team Connect is very, very well positioned for the foreseeable future. We’re just excited to continue to read your blog and hopefully show up there more and more with good news.

HIStalk Interviews Elizabeth Holland, Director HIT Initiatives Group, CMS

Elizabeth Holland is director, HIT Initiatives Group, Office of e-Health Standards and Services for CMS.

Describe the scope and process for the Meaningful Use audits for hospitals and EPs.

It’s really two pronged now, because we started last year. We started a post-payment audit program and now we are also doing pre-payment audits as well. 

When I say audits, it’s mainly the audits that are being done on the Medicare side. Medicare is actually handling the audits for all the Medicare eligible professionals and then all the Medicare hospitals as well as the Medicare dual hospitals, the hospitals that can get Medicare and Medicaid. But the Medicaid audits of the eligible professionals are being done by the individual states. 

Our audit are looking at Meaningful Use. We’re looking at providers to validate that they are using certified EHR technology. Secondly, we’re looking at them to see if they have the documentation and can justify that they are in fact Meaningful Users.

Will all attesting providers be audited in some fashion or will it be a random selection?

It’s actually a little of both. Certainly not all will be audited, but we are looking and refining our ability to make selections. Some selections are totally random and others are more targeted. We’re using a combination of both.

Some of the targeting is really crude and basic, like we had people who wrote a numerator and denominator to get 100 percent on every single measure. That flagged them for audit.

Like IRS audits, where you have a chance of being randomly audited, but there are certain red flags that you may or may not publicize?

Exactly.

Will the audits be strictly desk audits or will there be field audits?

There may be some field audits, but so far they’ve all been desk audits.

The question I’m asked most often if it will be like IRS forms that tell you how long it will take you to provide the information. Do you have an idea of how much time providers will need to set aside?

I don’t have a feel for that. The audit process becomes very individualized. We’re using the same contractor for pre-payment and post-payment. They send an initial request letter asking for certain things.

What I’m told is that it varies by practice how quickly they can pull that stuff together. Some providers have it all together because they pulled it together  when they did their attestation, so it’s very easy for them to pull it together. Others, it takes more time.

I believe the initial request gives them two weeks to pull everything together. However, if they need more time, we’re very flexible. All they need to do is contact the contact names on the letter they received. We’ve been giving everybody who’s requested it additional time.

What criteria were used to select the audit contractor?

That I honestly don’t know. The selection wasn’t done in my office, so I don’t know how.

Will the auditors, either the individual auditors or the auditing firm, be financially rewarded for identifying fraudulent attestations so that they’re encouraged to find problems?

I don’t believe so. I think they’re paid by the audit. We’re not looking for fraud so much. We’re wanting for people to tell the truth, but so far the only thing happens if you’re found not to be a Meaningful User is that you return your incentive payment. That goes right into the Treasury. It’s not like the whole practice and all your Medicare claims billings are being looked at. That’s not the way these audits are working.

I  assume that a lot of what you may find wrong, like on tax forms, are honest mistakes rather than intentional fraud.

Exactly.

How will you determine intention if you’re only doing desk audits? It would seem like you would need to have a direct conversation.

It has varied. We have sent audit letters and people have returned checks without sending in any documentation. What does that mean? I don’t know. I’m just telling you that’s a fact.

This is not really meant to be a gotcha. If you attested to a particular measure and the standard for that measure was 50 percent and what you told us is you had 90 percent … if we go back in and see you only had 80 percent, that’s fine. You’re still a Meaningful User. We’re not going to say gotcha.

We’re really looking to validate Meaningful Use. if it’s like a percentage off on one measure, we’re not going to die on our sword for that. It’s just if you have repeated measures where what you told us is massively different than the documentation that you’ve shared with us, that’s when you may have more of an issue.

How many audits have been done so far?

All we’re saying right now is that we’re aiming for 5 to 10 percent of the people who received incentive payments.

Based on experience and what you’ve learned so far, do you have any feeling for what the percentage might be that you will find not in compliance that will have to return their check?

I don’t have the feeling for that yet. Part of it is when they first started doing the audits, there were a lot of things that the auditors weren’t totally clear on. My policy staff has worked with them very closely to try to clarify things. That’s part of why we put out some of the guidelines that we put out, so that everybody can be more clear about what documentation they need to save, what they need to be attached to, all sorts of things like that, so that everybody’s nearly well aware of what the requirements are.

I think in the beginning there was just a lot of cloudiness and now we’re trying to make everything much clearer for the auditors and for the providers as well.

Will it be a phased approach where they’re looking at a random sample over a fixed time period, or will it be a big swoop of people …

It will be ongoing throughout the program. What will probably happen — and I don’t know this for sure — but my sense is that if you are audited and you pass, the likelihood of you being selected in the next year will be lower than if you did not pass and you participate in a subsequent year.

Going back to the model of financial audits or IRS audits, there’s usually a thoroughly documented step-by-step process that has every procedure down pat so that the audit person doesn’t have to use a lot of judgmental analysis. Does that exist for Meaningful Use audits, and if so, is it publicly available?

Very close. Any time there is any call for judgment, it comes to my staff. If there’s anything that’s not clear, we make the decision.

Since providers are being held to those audit standards, would they have access to see what those standards are other than the obvious about how the process will work?

I’m thinking we’re going to be putting out a lot more information on that. But yes, they should know what the standards are, and part of that is what the definition of Meaningful Use is.

The goal of the program from my perspective is to get people to switch from paper to electronic, and then once you’re using the EHR, to use it in a meaningful way. We’re not trying to scare people. We’re not trying to get people to return to paper. But then again, we’re also paying out an incredible amount of money. We want to make sure that taxpayers are getting what they expected — that people are really switching to electronic health records.

We have a really strong fiduciary responsibility, so we’re trying to balance that to make sure people know that we’re serious. You should have documentation that backs up your attestation, but it’s not going to be like a “surprise, gotcha” thing. It will be things that you know about.

If the provider is judged to have not been in compliance, is there an appeals process?

At this point, we are still deciding that.

But from what you said, the auditors won’t hold the sole authority on any decision …

That’s the thing. The appeal process is run by my office. If we’ve already weighed in back and forth on the audit, then there’s no need for us to weigh in again.

Let’s say a provider fails the audit and blames their certified vendor. Will there be any push to then evaluate the vendor as well as the user?

We’re talking to the Office of the National Coordinator a lot about that. Honestly, a lot of providers are concerned about their products. But what we’ve said is if the product produces a report and you rely on that report for your attestation, that gives you documentation, and if the tool itself is not calculating accurately but you have reports that document what you attested to, then you’re fine.

There have been lots of instances that the EHR is not calculating things correctly and patches going out and providers being really scared.

If that occurs and it turns out the vendor software has made a mistake of some sort, will there be repercussions to that vendor?

I don’t know if there will be, but we’ve certainly known of several instances with different vendors about patches they’ve put out. We made the auditors well aware of those things so that they don’t penalize the providers.

Much of the documentation involves EMR-generated reports with the vendor’s name on them. It seems like it would be pretty easy for someone to just Photoshop those.

That’s one of the things we’re working on.

Doctors are telling me that there is definitely fraud occurring under the Medicaid program Adapt, Implement, and Upgrade where providers claim to be customers of a vendor and the vendor has never heard of them. Is there ability or an interest in checking to see that if a customer claims that they’re using a particular vendor software that by simply contacting the vendor to find out if they really are or not?

Each state is handling that differently, but before they pay, they’re supposed to have in various standard of validation comes before they pay. In a way it’s like a pre-payment audit where you have to give a bill of sale and things like that to justify your payment.

I don’t want to suggest even though I used that Medicaid example that the possibility is limited to Medicaid. Under the Medicare audit, it could be the same issue, where someone has attested and says, “I use NextGen,” but NextGen says, “No, they’re not a legal user of our software.”

Some of the things that we ask for in the audit are screen shots and things like that. We’re talking about trying to get some sort of automatic … like you have to send an e-mail from the EHR to us so we can validate that they’re actually using the tool. But I think for Medicaid, it’s because you don’t have any measures to do. You are just adapting, implementing, or upgrading. You don’t have to be using. You can just get these tools. I think it’s harder to validate. At this point, the number or people we have participating is so large that I don’t know how we would call all the vendors to find out.

Will the results of the audits be made publicly available in any form?

Yes, but I don’t know when that will be. We have a lot of people who are wanting that.

That wouldn’t name providers, I assume.

I don’t believe so, no. It could certainly go after like provider type, like  large or small eligible professional or hospital. I think from my understanding right now we’re doing a lot more audits on EPs just because there’s more of them. The hospitals are doing really well. The EPs have more issues, but that’s mainly based on sheer numbers.

Audit notices are going out by e-mail. In the experience so far, have there been providers who just didn’t get the e-mail or just ignored it hoping it would go away?

I don’t know that if they ignored it to would go away, but I think if they don’t respond then we send them a letter, like a mail letter. That’s just the first. Just because they don’t respond doesn’t mean they’re off the hook. Good try.

There’s been a lot of attention paid to the group of Republican senators who are challenging the Meaningful Use program. Do you see that the nature or the scope of the audits will be adjusted in any way to appease the folks who want to see it made tougher?

Quite honestly, I think that was an interesting letter. And I think we’re actually, despite what the letter says … a lot of what they want us to do is already included in Stage 2 of Meaningful Use. I believe we’re on the path that they want us to be, but also in the letter they told us to slow down to Stage 3. Stage 3 would be an additional push to do more, but they asked us to … they were happy that we were delaying the rulemaking. 

We’re definitely going to have more conversations with them to clarify how we’re moving forward. We believe we’re really in alignment. We just have to make a better case for ourselves, I think.

One of the most misunderstood aspects from the beginning is that you didn’t have to buy anything to qualify for the incentive. Do you think that people understood that you didn’t necessarily have to invest? Do you have a feel for how many people did invest to earn the payment versus those who are already pretty much in compliance already?

My understanding is that every EHR system out there had to be tweaked. Some were major tweaks and some were minor tweaks, so depending on what kind of system you had, they had to be certified, but in that most cases like the vendors would take care of that. Then you had to make sure you got whatever upgrade or whatever and made sure that it was certified. 

What we don’t have good intelligence on are how many people, especially with the early adopters, were already electronic and just had to do Meaningful Use to get a payment and how many people were nowhere. They just decided, oh, here’s an opportunity to go electronic — you can get some compensation for it. We’re trying to look more into that data.

There’s misinformation out there thinking that there’s a mandate that they must go to electronic health records. That’s not true, although it is true if they’re not Meaningful Users for Medicare, they will get a payment reduction starting in 2015. It’s sort of like the carrot or the stick, any way you can get people to switch to going electronic, because one of the big goals is having interoperability but if you have half the EPs still on paper, reaching true interoperability is going to be really hard.

I don’t mean to harp on this question, but I have a lot of vendor readers. Do you see any reaction to the results of the audits that would impact vendors, such as some changing of the certification criteria?

The certification criteria are already changing for 2014. That was all in rulemaking, so there’s nothing else we can do for Stage 2 at this point. We had to do the rulemaking so early without, in my opinion, enough data to really know what the main issues were with Stage 1.

What we heard anecdotally from vendors is a lot of them have many different tools and that there’s going to be some sort of consolidation as they move to Stage 2. Not necessarily a merging of vendors, but a vendor may have 10 tools that he may only get six or something like that certified for Stage 2 or the 2014 certification. Hopefully that means that vendors are concentrating on certain products and trying to make those products as good as they can possibly be.

Any final thoughts?

From my perspective, we’re trying really hard to educate providers, but we’re also trying really hard to educate the vendors. We have a new vendor work group that we have called with the vendors, working through issues that they’re having. My staff are the people who wrote the Meaningful Use rules, so that we go into in depth explanations about what we mean about each of the Meaningful Use objectives and measures. 

We’ve had a much more collaborative process as we’re moving through Stage 2, mainly because there were a lot of misinterpretations of Meaningful Use measures at the beginning of Stage 1. This time we’re trying to be more proactive as we move forward. The providers have been appreciating that and the vendors have been very appreciative.

We have a really large group of vendors that is participating with us. Hopefully that will lead to a more unified determination for programming of the Stage2 EHRs so that the EHRs will just do better work. They’ll work for providers better.

The main thing that I keep saying to people that I talk to is you shouldn’t be worried about the audits as long as you have told the truth. I know there’s some panic out there, but if you’re honest and you’re telling the truth, you have really nothing to worry about.

HIStalk Interviews Keith Figlioli, SVP Healthcare Informatics, Premier

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

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

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

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

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

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

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

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

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

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.