HIStalk Interviews Rich Helppie, CEO, Santa Rosa Consulting

Richard Helppie is chairman and CEO of Santa Rosa Consulting.

Tell me about yourself and the company.

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

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

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

How would you differentiate Santa Rosa from your competition?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tell me about yourself and the organization.

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

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

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

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

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

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

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

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

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

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

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

Tell me about where you are with Epic.

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

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

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

What benefits and results have you seen so far?

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

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

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

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

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

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

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

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

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

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

Will you be using the Informatica platform going forward?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HIStalk Interviews Robert Lorsch, CEO, MMRGlobal

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

Tell me about yourself and the company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Have you ever taken someone to court for infringement?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Any final thoughts?

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

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

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

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

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

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

HIStalk Interviews Keith Ryan, President, Cornerstone Advisors

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

Tell me about yourself and the company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Are hospitals still interested in return on investment?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Any concluding thoughts?

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

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

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

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

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

HIStalk Interviews Margaret Laub, CEO, Intelligent InSites

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

Tell me about yourself and the company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Where does the company go from here?

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

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

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

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

Tell me about yourself and the hospital.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HIStalk Interviews Jon Phillips, Partner, Healthcare Growth Partners

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Who needs to sell or find a partner?

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

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

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

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

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

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

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

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

HIStalk Interviews Charlotte Wray, VP/CIO, EMH Healthcare

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

Tell me about yourself and the organization.

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

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

How is the IT department structured?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What systems are you using on the physician side?

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

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

What are you using for inpatient clinicals?

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

Do you bring in outside help?

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

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

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

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

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

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

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

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

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

What are your biggest IT-related challenges and opportunities?

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

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

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

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

HIStalk Interviews Mike Long, Chairman and CEO, Lumeris

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

Tell me about yourself and the company.

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

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

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

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

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

Very odd. [laughs]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HIStalk Interviews Reed Liggin, CEO, RazorInsights

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

Tell me about yourself and the company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Are those technical resources employees or are they  contracted?

Some of both.

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

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

What can you share in terms of company size?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HIStalk Interviews Lorre Wisham, CEO, Health Technology Training Solutions

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

Tell me about yourself and the company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Can training programs be a competitive differentiator for vendors?

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

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

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

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

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

HIStalk Interviews John Howerter, SVP, Levi, Ray & Shoup

John Howerter is senior vice president of Levi, Ray & Shoup of Springfield, IL.

Give me some brief background about yourself and about the company.

I’ve been with LRS for 20 years. I have been involved mostly in the software side of the LRS business.

Before coming here, I was with IBM. I started as a technical guy and then got into sales, then back into systems engineering management and sales management. I left IBM in 1992 and wanted to stay in the central part of Illinois. I really wasn’t interested in moving around the world, so I came to work for Levi, Ray & Shoup, a privately-owned software company, in July of 1992. I saw it was a good place for me to learn some things.

The company is owned by Dick Levi. We continue to stay focused in this niche. It’s been a crazy ride for 20 years, but a lot of fun.

It doesn’t seem that people think of hardcopy printing as mission critical. Do you think that’s the case?

I’d say certainly printing is the last thing that people think about. The fundamental issues about what people think about printing now versus what they thought about it 20 years ago has not changed much. When I came to LRS 20 years ago, before accepting a job here, I asked Dick Levi — who was going to be my ultimate boss — what his biggest concern was at that time. It was that the mainframes would go away. Certainly the role of the mainframe has changed, but people’s attention to the issues surrounding print management haven’t changed at all. People never think about it.

Since I’ve been here, we continually get phone calls and talk to people who say,”I’m going to print less.” They’ll implement the system without regard for even thinking about the printing infrastructure. Then they run into problems. That’s when we get involved. 

Hard copy has never been sexy or at the front of a business process, but in many industries — and particularly in the healthcare industry — things that get printed continue to have an impact on successful and smooth operations.

In healthcare, the end result of the workflow is often a label, wristband, or report. Until you get that, you haven’t accomplished much. Do prospects understand that?

I guess it depends who you ask. [laughs] I think the people doing the work clearly understand that. Our customers have told us that vendors today and over the last 20 years have said, “We’re not going to print any more.” What? You’ve got to put labels on prescription bottles, samples, blood, and patients. People never think about printing until it stops.

It almost seems that companies trying to sell managed print services took away the impact. Paper and toner is so cheap that it was tough, at least in my hospital, to make a business case for consolidating and centralizing printing. 

Certainly people are printing more today than they used to. There are more opportunities to print. People print from Web pages. People today print all kinds of things that they probably shouldn’t be printing in their daily jobs.

We think about printing in a couple of different ways. We think about printing that is a part of the workflow of any line of business application. Then we think about printing that occurs in the Windows office environment. 

I think there’s a continued push for people to move towards managed print services. Certainly the printer vendors are all trying to add value to differentiate their commodity products in some way. Money can be saved in printing, but the things that you try to do in managing and controlling the costs of printing in an office environment are very different than the things that you need to do to control and manage the printing that occurs in a business workflow environment.

Application software printing usually involves an uneasy technical handoff to the underlying operating system, putting the customer in the middle where it’s hard to say for sure that something that was supposed to print really did at the place they expected. The end result can be a workflow nightmare. What’s the value of putting your solution between the vendor software and the operating system?

Seventy percent of our sales in North America in the last couple of years have been in the healthcare market. The reason for that is exactly on the point that you just mentioned. The value that we provide is that we are a reliable place where your output is. Output is either in our print spool or it has printed. There’s no in-between. 

We provide end-to-end visibility. If the Epic system has created the output, we have it or it’s been printed. When somebody walks through a printer and looks for their output and says, “Wow, it’s not here,” with our tools, we can tell you where it is. We can instantly re-route it to another device where you’re standing and we can manage all that. Our value add, quite simply, is we give you end-to-end visibility. Without a subsystem to ensure delivery, it gets lost in the middle, and that happens far too often.

I’ve seen first-hand where patient care was compromised because of delays caused by missing printed documents, often because the print spool service was hung up on the server or a printer was stuck in an error state that nobody knew about. Do people tell you those stories?

That’s exactly what happens. A lot of people cannot foresee that. The technical people foresee it. The people who are buying applications like Epic, Millennium, or Soarian want to believe that those problems are resolved by the application vendors. They’ve got bigger problems. That’s what we hear about constantly.

We commissioned IDC to do a study for us two years ago. Our biggest challenge is convincing people buying and implementing these large line-of-business applications that printing is going to cause enough of a problem for them that it’s worth investing in solving those problems. IDC concluded that after talking to 10 of our customers and analyzing their environments before and after our solution, there is about $51,000 per year per 100 printers managed in savings for customers who have selected our system. About half of that savings comes from improving the productivity of the people in IT who track down printing problems.

Of that half, 60 percent comes from eliminating the tasks required to track down failed print problems. That doesn’t mean the server is down. That might mean the printer is turned off. That might mean there’s no paper in the tray. That might mean the application has sent it, but for some reason, there was a network problem. The hassles and the time that people spend tracking print that didn’t show up where it was supposed to show up –that is the lion’s share of the value that we provide to people.

It’s always frustrating when tracking down printer problems that you can see documents waiting to print, but Windows doesn’t let you see their contents. You can’t tell what’s in the documents the user didn’t receive and you can’t route them to another printer.

That’s real. Here’s what happens. IT organizations deal with that. Those problems are being solved by people. They’re being solved the hard way. 

I  can talk to a CIO in a healthcare organization and say, “How much time do you spend with this?” They say, “Well, I don’t know. I don’t hear that this is a problem.” You don’t hear it because your organization has solved that problem, but they’re solving it in a very inefficient way. They’re solving it with people. 

You’re right. You can’t reroute a job out of a Windows queue. You can’t reprioritize it. You can’t reformat it. You can’t instantly say, “Oh, I see. It’s here. Let me print it on this device over here.”

It was a nice luxury on mainframes and midranges to be able to view the contents of waiting spool files, make a copy, or move them around. Windows doesn’t seem very enterprise strength in that regard.

That’s exactly what we do. As I mentioned, this company started in 1979. Our owner wrote a program to allow access to IBM’s mainframe spool called the JES Spool and route that output to a network-addressable device. We utilized the IBM JES Spool as our spool mechanism, but we took the output from an interface of that spool and allowed people to manipulate it, to translate it from IBM data string formats so it could print on an HP LaserJet, for example.

That’s our heritage. We focus on the enterprise. We are bringing that kind of reliability and manageability to distributed environments. That’s what our primary business is today – giving that kind of flexibility to manage the things in the spool and deliver them. If you don’t do that, you’re flying blind. You have no visibility from the application all the way down to the output device. It’s more complicated than it used to be because everybody does things their own way.

You seem to work a lot with Epic shops.

I talk to people a lot about whether or not they should consider investing.  We have a lot of very large and very successful Epic customers. We fulfill that value proposition for Epic customers as we do some of the others. We have worked with Epic to help us get metadata about output. For example, for every piece of output that we print, you can know the Epic user who initiated the output. We have worked with them to enable our software to get data so we can account for who printed it, where it was printed, and where it came from.

Our Epic customers fall into two categories. They’ve bought Epic, and on the front end of that implementation, recognize that they need a more robust management system for output to avoid inhibiting the workflow. Compared to an investment in Epic, an investment in our software is fairly insignificant. Many of our Epic customers start on the front end and say, “We want to do this right. We want this implementation to go well.”

There’s another category of customers who have been implementing Epic for a few years and had been struggling with the problems that you mentioned — I can’t find my output, it was supposed print and it’s not there, why is it not formatted correctly, who knows what. After a couple of years in an organization that has any scale to it, physicians and caregivers have raised the level of noise in the IT organization so that it’s a problem that needs to be dealt with.

I’m not sure that there’s anything specific about Epic that is different than the others. It’s just that people are not willing to let an Epic implementation suffer, I suppose, at least from my perspective. In lot of cases, we are dealing with enlightened IT people who want to avoid the risk of not providing a stable, hassle-free environment, so we take that pain away. A lot of people don’t realize they’re going to have it until they get into it.

Have you seen any impact from the changing HIPAA requirements and HITECH?

Certainly. We are an infrastructure vendor. We talk a lot about HIPAA. When you say HIPAA to me, it makes me immediately think of securing data and controlling where output can go and accounting for where output can go. Certainly that is in our sweet spot.

We intend to be the single output server for all output in a large organization. We can efficiently route that. That means we can officially keep track of who did what. HIPAA, Sarbanes-Oxley in other industries, and all these regulatory environments that cause people to want to know who did what so they can audit it certainly have been helpful to us.

How do you see the business changing?

We work with all the printer vendors. We are working with a lot of these folks in terms of trying to ensure that when print vendors are engaged in managed print services projects, we’re working together with them to try to create the best possible environment for the customer and allow a customer to buy our software in the way that fits their budgeting and their management systems.

We’re certainly dealing with mobile devices, where our tools allow you to manage output and see output queues, for example, from any smartphone. You can manage print queues, see what’s going on from a mobile device.

We have enabled and provided downtime reporting tools. We allow you to electronically store and view output in a very simple way, interface or output management systems. We’ve provided in Epic environments some very usable and affordable downtime reporting technologies. We’re trying to figure out how the tablets and the iPads integrate into this. We’re working very hard to support virtual desktop environments.

This is all we focus on. We’ve been successful in this niche because this niche that we’re in isn’t big enough for the big guys. The application vendors have more to worry about than just printing. Many times they think you just create a PDF file and you’re good to go. We’re focused on integrating mobile technologies. We’re focused on making sure that we can support all the devices that are there. We’ve always been on the leading edge of supporting all the devices that exist because our large customer base contains lots of different devices.

In terms of development, it has to do with creating an enterprise output management system that serves the needs of a line-of-business applications like Epic and Soarian and Millennium and anything else that’s out there, balancing that with enabling use for office printing technologies. We’re eliminating hundreds and hundreds of Windows print servers. We are enabling pull printing technologies where that makes sense. 

We’re trying to just continue to focus on this niche and all that’s there because that’s what we know. We’ve got a very loyal customer base and a reputation that allows us to compete in these kinds of opportunities.

An HIT Moment with … Chuck Demaree, Access

An HIT Moment with ... is a quick interview with someone we find interesting. Chuck Demaree is CTO of Access of Sulphur Springs, TX.

What’s the continuing role of electronic forms as hospitals move to EHRs and other systems?

First, we have to establish a basic understanding about forms. A form is merely a structured tool to collect and organize data. Whether it is paper or electronic, its purpose remains the same.

Electronic forms can be placed in two categories. Online forms are primarily used for data acquisition. Managed output forms re-structure and automate the distribution of data in either a printed or electronic format. 

Hospitals need both types of forms going forward. The online, outward-facing forms collect data from sources that may not be connected to their hospital network, such as patient homes, clinics, and physician offices. Managed output forms organize data from the many disparate systems used in a hospital into a normalized format prior to routing forms into a document repository, or ECM/EDM system, as part of the EHR. This also becomes important if a Legal Health Record (LHR) ever needs to be produced for litigation purposes. 

What are some examples of workflow, productivity, and information needs that for most hospitals can be met only via the use of electronic forms?

Most health information and EHR systems — including those from Siemens, Meditech, Epic, McKesson, and Cerner – utilize some sort of workflow, but there is almost always another process or workflow that takes places even before the HIS or EHR is used. Today, that workflow is still a manual process that is either verbal or written. It is difficult to build a system that can address all the varied processes that exist. Electronic forms allow a hospital to address each process uniquely by designing a form or set of forms and custom workflow to address that process. 

Some examples are patient scheduling or pre-registration from home, feeding a registration or scheduling system. Automating acquisition of data from systems such as endoscopy, EKG, and perinatal and normalizing the structure of the data and routing and indexing the documents into the document repository. Adding electronic signatures and barcodes to existing forms and systems that do not currently provide that capability, such as discharge instructions or patient teaching documents. Business and back office functions, such as human capital management, purchasing processes, and accounting output such as checks or direct deposit notices.

If a hospital has already purchased an EHR, what would they do with your systems that would benefit patients?

Some EHRs have very nice patient portals to access the patient’s medical information, but not all patients are technically inclined or have access to the Internet. Some patients still prefer a physical document, and sometimes that is the only method for transferring data from one hospital’s EHR to another.

Our systems can provide outward-facing secure data acquisition across the Internet for patients and practitioners who are not on the hospital’s network. They can also easily control the format of data before it is printed or aggregated into an EHR. Controlling and normalizing the format of data makes it easier to read and find the information needed. This helps expedite care and reduce mistakes.

What is the role of electronic forms during system downtime and disaster recovery?

This goes back to the purpose of the form as a tool. During a downtime or business continuity episode, well-designed forms make it easier to continue to move patients through the clinical process and still capture data in a structured and familiar format. If these forms are barcoded with the form ID and the patient ID, then automatic indexing of this data into the document repository becomes much more efficient and less prone to error or misfiling.

Do hospitals intentionally use electronic forms as an alternative to entering data manually into a cumbersome online system?

I think there are a limited number of choices for hospitals to fine tune a system to make it easier for their staff and patients. We have many customers that use our output management products to automatically capture disparate medical device and clinical system data and redistribute it into an EHR or document repository. We have others who have chosen to not purchase employee or patient self-service systems and instead use our online forms solutions to create their own user-friendly front end for data acquisition.

HIStalk Interviews Dan Schiller, CEO, Salar

Dan Schiller is CEO of Salar of Baltimore, MD.

Salar has been through a couple of acquisitions. Explain what happened and how the company will operate going forward and the changes Constellation Software will make.

To say it’s been an interesting ride is an understatement. In the last 15 months, Salar has been purchased three times.

Initially we were bought by Transcend Services, a transcription company, in August 2011. Our hope was to create a budget-neutral documentation transition solution for existing Transcend customers by moving them off transcription and on to TeamNotes, Salar’s electronic physician documentation platform. Before we were able to formalize and launch this strategy, Nuance purchased Transcend to expand Nuance’s share of the transcription services market. This was early 2012, and we became a small blip on the larger corporate radar.

While we may not have been given the visibility we wanted, we used this time to focus on our internal processes, customers, and R&D. I think it was time well used. We’ve emerged with a new Web-based platform that we’ve deployed over the last few months to a new customer.

That brings us to our acquisition in early December by Constellation Software, Inc. We think Constellation is an ideal partner for us. They’re focused on growing vertical market software businesses that provide mission-critical solutions. They have a solid track record of purchasing and nurturing software companies in many industries. Most importantly, they believe in us – the strength of our solutions and our team.

So no immediate changes. They’re going to let us do our thing. I believe we already have the best electronic clinical documentation and billing workflow solution on the market, and with Constellation’s support, I believe we will be even stronger on the other side of 2013.

You’re a programmer moving into an executive leadership role, which rarely happens since the business world often ends up being like Dilbert and the pointy-haired boss. What are your priorities for the company and what parts of the job are you looking forward to?

I might feel out of place if this were a clothespin factory, but I know how to build software pretty well. Technical innovation has always been key to Salar’s identity, so it’s natural that a software engineer has always been at the helm. Hey, if you call in the middle of the night, you might still catch me on Tier 3 support. I hope to keep up my spot in the rotation for as long as I can.

My main priority is keeping us innovative, agile and relevant in front of all the change this industry will see in the next few years. We have always felt that, at their core, initiatives like Meaningful Use, ICD-10, and quality-driven payment reform are documentation problems, which are right in our wheelhouse.

The bottom line is that I’m eager to leave behind the mess of the last 15 months and lead this company into a very exciting future. I am fortunate to have a smart group of people who are passionate about solving real problems. With their support, this is going to be fun.

Salar’s selling point in documentation with TeamNotes has been a form-type metaphor that users could customize to look like familiar paper forms. How are users responding to that, and what kinds of devices are they using it on?

We all know that there are still large facilities using paper documentation, so that metaphor still translates to some degree. But TeamNotes has evolved far beyond just mimicking paper notes, and that’s been driven largely by the evolution we’ve witnessed in how comfortable physicians have become with technology. They want it to work for them, not against them.

For example, they want the ability to interface clinical data within their notes, jointly author notes with the entire care team, and capture structured data. Our newest version of TeamNotes enables physicians to do all these things, and do them on their preferred desktop, laptop, or mobile device. As our template content has become richer with each implementation, all of our users benefit.

Where do your documentation products fit with a hospital that’s already running a major EMR?

All of our customers already have major EMRs in place. In each case, the EMR was not able to fill their inpatient documentation needs functionally or achieve acceptable physician adoption rates. In most cases, the documentation tools are not intuitive and too rigid to fit varying clinical workflows. With Salar, each hospital has developed notes that are intuitive, reportable, and effective in their unique workflows. In our opinion this is how you achieve physician adoption of electronic clinical documentation.

There have been a lot of great strides within the industry to develop CLU and CAC tools to accommodate notes coming out of the EMR because they were never structured well in the first place. To get any sort of specificity out of a flat unstructured note, you’re required to use some expensive tools or employ smart people to deduce what happened at the point of care. This specificity needs to occur at that point of care, in the physician’s hands, and the outcome must be represented in a structured, discrete way.

These CAC tools are tremendously capable, but are employed in the wrong place in the process. By embedding CAC capabilities into the documentation workflow, Salar helps hospitals realize the full potential of their EMR investment.

How do you see your market and products changing as healthcare reform continues over the next several years?

For the short term, the customizability of our documentation platform makes us ready for everything we’re going to see in the next year or so. For ICD-10, we’re incorporating NLP tools from HLI and other vendors to accomplish meaningful front-end CDI at the point of documentation. For Meaningful Use or any other report-heavy regulations, the ability to add specific fields overnight is going to allow customers to handle these changes without any additional overhead.

Looking out a little further, we will be focusing on the front-end CDI loop in TeamNotes. By incorporating more computer-assisted tools to physicians, as well as providing for more complicated workflows with CDI staff, we believe we can truly maximize the value of these tools for both hospital and physician.

We’re very interested in how Physician/CDI/Billing workflows develop and how we can facilitate a more efficient process. We’re also very interested in the ACO model and what needs to be provided from both a reporting and a documentation perspective. We think we’re in a good position to accommodate multiple reimbursement models because of our customizable templates.

In the longer term, we’re looking at how other workflows within hospitals – and workflows between hospitals and other care organizations – are starting to blend. There are many processes that have been overlooked and underserved from a technology perspective, and for the good of the patient population, should be optimized. We can’t wait to solve these problems.

HIStalk Interviews Yann Beaullan-Thong, CEO, Vindicet

Yann Beaullan-Thong is CEO and founder of Vindicet.

Give me some background about yourself and about the company.

I’m the founder and CEO of Vindicet. We started the company in 2009. Prior to that, I was the vice president of e-business at Aetna for a division called Intellihealth. It was the first public healthcare website prior to WebMD.

My intention when I started the company was to create a software company that would provide affordable, process-oriented solutions to providers. In 2009, I met Dr. John Votto, CEO at Hospital for Special Care and a thought leader for long-term acute care hospitals. I was asked to provide a system to make the referral process more efficient.

As we started to build a patient referral tool, I took the bet that bundle payments and ACOs will be here to stay and will need systems to support these new business models. We morphed our referral tool into a coordination tool to manage the patient through the continuum of care.

Who does the company compete with?

Indirectly, we can compete with a lot of other players, like Curaspan, Cerner or Allscripts. The patient management process, the referral process, the compliance process , the admission and discharge process are supported by many vendors. They are part of the problem — too many vendors supporting different processes at the facility level.

We are the only system that can support all these processes for the ACO or enterprise health system level using one platform. We are able to provide a safe transition care tool using a light Enterprise Resource Planning approach.

Describe the referral process as it exists and how you think it will look under the new models of care.

Today with a fee-for-service payment, each facility operates as an island. Referrals are no more than a discharge to home or a post-care facility. Moving forward with ACOs, the referral is becoming a central component. The financial compensation will be tied to the overall outcomes. Tracking the patient through the entire continuum of care and managing the coordination of care between the different providers will be essential to optimizing outcomes.

Let’s assume that a patient comes in for congestive heart failure and they are a Medicare patient. We know that out of 10 patients, five to six might will end up into a post-care facility. Suddenly everybody has to be very well aware of how well they’re going through the entire episode. Not just from the acute side, but when they are discharged to a long-term acute care and then moved into an inpatient rehab center and finally discharged home under the supervision of a home health agency.

Under a bundled payment model, you’re going to be responsible for that whole episode. Under this coming model, absolutely nobody is prepared to deal with this new challenge.

Initially, we designed a referral system for standalone post-care facilities. Through the years, we modified it to become a multi-facility transitional and coordination care system. Our unique approach allows us to integrate the enterprise coordination process with patient management and compliance reporting.

Do you see new companies starting to try to do what you’re already doing?

There are a lot of companies that are coming to the space, but we are about 18 months ahead. We have been approached by some large companies, very large payers who are looking into the ACO space.

I am looking to make the coordination of care more efficient between providers, including primary care physicians. I would say that the problem I’m trying to resolve is transitional care. An EMR is not solving that problem. An EMR is designed to provide care at the delivery point. It’s not designed to manage care across providers.

It’s interesting, because when I started the company about three years ago, a lot of people were asking me to build an EMR. My answer was, “There’s plenty of EMRs. The last thing you need is another one.”

Also, talking to CEOs and CFOs, I often hear, “OK, now that we have an EMR, we need to integrate with the ambulatory care services and post-care facilities.” And in the same breath, they will say, “We are running out of money with this EMR project.” Literally people are looking at each other around the room and saying, “How are we going to do this? How are we going to pay for it?”

Either you build what I call islands — EMR for post care, EMR for ambulatory care, and for acute care — and spend a ton of money to add the bridges. Or, let’s look into a system that will allow us to have one view of the patients across the continuum. That’s when I come in with my poor man’s solution.

Do you think providers believe that HIEs will provide that capability or that interoperability is the answer? Are they beginning to realize that just talking to other systems may not be enough?

Executives are starting to realize that it’s not as easy as it sounds to integrate legacy systems. HIEs don’t address the process issues. Also, I’ve noticed a trend of information overload. It is not just pulling the information, but making it relevant and usable.

The other riddles that need to be solved when we’re talking about the HIEs — besides the exchange of information — is integrated process. You’d have to integrate various processes if you’re going to go through a longitudinal-type of continuum of care. It’s not just tracking the information at each point of care with different providers. You need a seamless process on how you can move a patient from one place to the other.

Do you think providers are ready not only technologically, but as you said process-wise, to be able to function effectively in that kind of environment?

I’ll try to give you a response that is apolitical. I’m absolutely convinced in my fiber that as a country, if we don’t resolve our healthcare problem, we will go bankrupt. We’re already at 16 percent of GDP.

If you’re going to do reimbursement based on outcome, which is where the industry is going (the Kaiser model), we are going to need to collect a lot of data and use key performance indicators to increase efficiency. We are already there. 

I just built a CMS data quality tool for 17 long-term acute care hospitals where they had to report outcome within 24 hours for discharges and within four days when it comes to admissions,. They need to report outcomes to the government in order to avoid the 2 percent penalties.

Moving forward, the government is going to ask for more data. Collecting data is a very expensive business. Healthcare systems out there are struggling to implement an EMR system, and now we are asking them to track outcomes through the different providers. Most of providers have no funding left following an EMR implementation, and now we want them to fund projects to track patients across the continuum.

I guess hospitals aren’t happy when they have to come to you, then?

They’re not, but I came up with a value proposition that makes the solution affordable. A lot of clients tell me, “How do you make a living with the way you’re selling it?” I say, “Don’t worry. I’m OK.” I moved away from the licensing per bed to unlimited number of users. It’s time as an industry to think out of the box and come up with solutions that are affordable.

Will other vendors get that model of following a long-term strategy rather than just charging the absolute most they can?

I think they will have to. One of the reasons why I believe that system is going to do well is transparency. I truly believe that transparency will exist in healthcare. I come from a payer and they’re probably not the most transparent players, but they have the tools to become more transparent.

They are data-driven companies. I learned one thing. If you want to be efficient, you need to change your mindset from being non-profit to a mindset of better outcomes in order to stay in business. You need to be transparent. You need to be transparent in front of the patient. You need to be transparent with physicians. I think as an industry, it’s time we start to be transparent. If we do not become transparent, we’re going to go broke, period. It cannot stay the way it is.

I think there’s a movement out there toward change. All of us recognize that there’s need for a change, and I think the change will come from the outside. I always say when an industry has a problem, the answer is not within. Usually the guys that start to find the answer are guys that come from other industries.

Any concluding thoughts?

As an industry, in healthcare, we need to change our mindset from a non-profit mindset to what I’m calling for-profit, where we’re going to be more accountable. To be more accountable, you need to collect data. To collect data, you need to build systems that implement new processes. I envision healthcare facilities being managed like a Walmart by the minute to keep costs down.

When I go to see CFOs in hospitals, they manage their business by quarter or a year ahead. There’s a need to manage your business by the minute. To get there, we need to start to collect data. Not just clinical data, but financial data and administrative data .We need to create key performance indicators, or KPIs. If you don’t run the business according to KPIs, there’s no way in the world that you’re going to change the way you are operating.

The government is probably going to make people more accountable and switch from fee-for-service to pay-for-performance. However, we’re a long way from being efficient. I see  government mandating more and more data collection for compliance. As an industry, that’s where we’re going. Whether you’re from the left or the right doesn’t matter. Accountability is the buzzword. I think it’s going to force the entire industry to learn to do more with fewer resources.

HIStalk Interviews Winjie Tang Miao, President, Texas Health Harris Methodist Hospital Alliance

Winjie Tang Miao is president of Texas Health Harris Methodist Hospital Alliance of Fort Worth, TX.

Tell me about yourself and the hospital.

I’ve been in healthcare for about 12 years now, all with Texas Health Resources. I guess it’s rare nowadays to be with an organization that long. THR is a faith-based, not-for-profit healthcare system in the Dallas-Fort Worth area. We have about 25 hospitals, a large physician group, and other healthcare services.

In my 12 years, I’ve been really privileged to work in three of our facilities, but most recently at Texas Health Harris Methodist Hospital Alliance, a brand new hospital that just opened in September.

When you look at the organization’s overall positioning and strategy, how important is IT?

I think it’s essential. Our stakeholders are demanding more of us, “us” being healthcare and the healthcare industry as a whole. We need technology to help us met their expectations of us, and honestly, our own expectations of ourselves.

Do you see the technology becoming more visible to patients or becoming more of a competitive differentiator?

Yes, I think it’s definitely already more visible to patients. For example, in our facility, we have technology now where you can look at your medical record in real time while you’re lying in your bed. You know what the physician has ordered for you in the morning and the afternoon. 

The education that’s been ordered for you now gets automatically pushed out. If I’m a congestive heart failure patient and I require some smoking cessation education, for example, technology enables us to make sure that patient gets that education and that they receive the education as documented in real time. All of that is direct technology that the patient sees.

I think there’s a lot of technology, though, that is really there to enhance the human capacity that patients may not necessarily see. Those are some of the things that I’m most excited about. How do we make the environment more user friendly for our caregivers, our physicians, our nurses, and all the staff that are at the facility? Because as we know, as the baby boomers retire, the workforce is going to shrink. We really need that technology to help bridge that gap.

In terms of being a competitive edge, I think there are certain parts that are going to be non-negotiable. I think an EMR is going to be non-negotiable. You’re going to have to have it, so I don’t think that’s a competitive edge. But I think having some other technologies — like proactive tools that will help improve management of chronic conditions and those type of things — would be a competitive edge.

What is the most innovative of the technologies that you’re using or planning to use?

What I would say is innovative is not necessarily the technology in itself. We do have a patient information device. We do have RTLS throughout our facility. But it’s not the technology that is innovative for me.

I think what is innovative in this particular facility is how we’re integrating all those technologies together. How does Vocera talk to RTLS and to nurse call? How does that mean that, OK, now that I have I have a patient discharged, I can just take their RTLS locator tag, dump it in a box, and because it’s in that box, it automatically sends a note to TeleTracking to say, “Now it’s time to clean this room.” The housekeeper on Vocera automatically gets notified because through RTLS, we know that that’s the housekeeper on that floor. A process that normally would take either multiple phone calls or multiple clicks on a computer is now automated in real time.

As a new facility, you’ve probably had conversations with vendors about what technology you’re going to use and how you’re going to use it. Is that different from what the other Texas Health Resources hospitals use?

I think the extent that we’re integrating all the technology is more than what other Texas Health facilities have. That required many vendors to come into the room and have a conversation that they’ve actually never had. Vendors who had never met each other, even though we’ve had their systems in some of our hospitals for years, because it was very siloed. We bought the nurse call system or we bought the Vocera system or we bought Epic or whoever it was. We bought these systems, we implemented them vertically, and then we integrated them horizontally. 

There were a lot of vendor meetings that we had. In fact, as we were choosing what systems to go with, one of the most essential criteria that we made the decision on which vendors to go with was either past history and experience that they could demonstrate a
successful collaboration and integration or a willingness that they showed to be able to do that.

Is the IT support centralized, do you have some IT people locally in the hospital, or some of both?

All of our IT is centralized at the system office. From the system office, there are certain members of our IT team that are deployed locally.

What expectations do you have of the IT department and the folks leading it?

I have the same expectation that I have of any leader in the organization, which is one of collaboration, transparency, communication, and all those good things.

In terms of specific IT leaders, though, I’ve had the opportunity to work with a variety of IT leaders in my career. I think that what separates the good IT leaders from the exceptional IT leaders are the ones who are able to balance that creativity and desire to be on that leading edge and try new things with an understanding of hospital operations. Having that knowledge, having the common sense, and really sometimes the humility to say, “You know what? That’s a great technology. I’d love to put it in, but it really doesn’t make sense for us, and here’s why.”

In terms of the risk involved with being innovative, is there conclusion about how much IT innovation is the right amount?

I really think it’s based on the culture of the organization that you’re in. Implementing new technologies and being innovative is really about change management. If you have a culture that is used to change, open to change, wants that change, is able to function still and maintain high performance while going through change, then that organization, I think, can tolerate more innovation.

In an organization where perhaps you don’t have as talented of leaders, both from the IT and the operational side, to manage that change through, then it doesn’t matter if it’s even the smallest of innovations, managing that is going to be difficult. You’re not setting yourself up for success. I think being able to gauge the level of tolerance in an organization is important, but for those who have that capacity, then I think go for it.

Between the operational leadership and the IT department, who should look for something innovative and who should lead that change if and when it happens?

I hate to give “it depends” answers, but I think it depends. [laughs] When I look at how we created this facility and all the technology that we’re integrating, some of the best ideas came from the IT side and some of the ideas came from the hospital operation side. It’s really a blending of the two.

I think ultimately deciding whether or not to pull the trigger on a specific technology requires everybody at the table. Then once that decision is made, clear delineation of roles and responsibilities for that particular technology, because again, all technologies aren’t created the same, either. 

You may have something like telephones. We made a decision to go with a particular platform. While that’s really read better from the IT side, it’s not as invasive from a clinical standpoint, Obviously we all need telephones, but it doesn’t require a whole lot of clinical expertise to do telephones. We just need to make sure they’re programmed correctly so the clinicians use them properly. But you take something like Vocera or nurse call or AirStrip OB, which is much more clinical, I think the ratio changes. 

I think having a “one process fits all” solution is unwise. I’ve seen that happen sometimes. I think that’s where the roadblocks come in and some organizations have run into trouble. But to really look specifically at the innovation, and for this particular innovation, what are the roles and responsibilities going to be? A strong PM does that and can manage that through the organization for a successful implementation.

In large health systems, the smaller facilities or the bigger ones or the ones that are furthest away sometimes feel they’re not getting the right amount of IT attention. What’s the IT secret to making sure that you’re engaged and feeling like you’re well served as part of an organization that has several people who want those same things?

It’s funny you ask me that question. I mentioned that I’ve been with Texas Health for 12 years. I’ve been at one of our largest facilities — it’s 850 beds. In fact, that’s where I started my career. Then I went to literally the smallest facility in our system, which had 36 beds.

What I’ve always said is I think the key to success from an IT standpoint is understanding that smaller facilities don’t have less needs, they just have different needs. I say that from a management standpoint, too.

I remember being in a larger facility early in my career. I’d  look at the smaller facilities go, “Gosh, they have it so easy. They only manage this and it’s a small patient population. Of course they’re outcomes are great, because they only have 18 patients to manage compared to the 800 that we’re managing here.”

And I remember when I first got to the smaller hospitals, I’d look at the larger hospitals and think, “Gosh they have it so easy. They have all these layers of support and people that just do education. Whereas at the smaller facilities a lot of times, the managers take on additional roles and wear multiple hats because you can’t have a million FTEs taking care of 36 patients.”

When I had those two experiences, I remember one day sitting back and going, “It’s not that one job is easier or harder than the other,” which is the perception when you’re in those facilities. They’re just very different jobs. I think from an IT standpoint, it’s the same thing. The needs aren’t less, they’re just different. The good IT leaders can go in and understand what those needs are and deliver on those.

I would think it’s unusual for someone with a degree in biomedical engineering to be in a leadership role. Do you think that gives you more affinity with the IT operation or are you an outlier among your peers who went through a more traditional undergraduate program?

I would say that I’m definitely an outlier amongst my peers. I’m not familiar with any of my peers who have an engineering degree.

I think that having an engineering degree and understanding systems and processes and being trained in that gives me less angst in terms of dipping my toe in the technology waters, because I have a little better understanding of how things work. Clearly I’m not a computer programmer — the last time I programmed was in C++ , so that’s definitely not something you want me doing [laughs], but at least the philosophy behind that and how it works. I think the mystique is maybe less and so the apprehension is less.

You went through a construction project, which forces you to be as innovative as you can knowing that you’ll be stuck in that footprint for a while. What are some of the innovations in the new facility that would not have been common in older facilities?

I think that if you look at older facilities and facilities that were planned 20-30 years ago, most healthcare was provided in a hospital or in a doctor’s office. You sought healthcare because you were sick.

Today, your healthcare happens in a variety of environments — from your home thanks to telehealth, to the doctor’s office, to even your local drugstore. Walmart now has minute clinics or different things like that. Or you go to a surgery center or a freestanding lab. There’s a lot more venues now to deliver healthcare.

We understand that we need to optimize well-being in order to really control healthcare costs, not just take care of people when they’re sick, which is what we were focused on doing 20-30 years ago. For us, designing a new facility was trying to design a system where care is rendered where it makes the most sense. Going back to that engineering background that I have, how do you optimize the system, both from a cost and a convenience perspective? 

In our facility, for example, we don’t have a large outpatient imaging area because a hospital isn’t the most cost-effective place to the get that service. In our facility, we have a separate ambulatory surgery center that’s wholly owned as part of the hospital. We did that for two reasons. One, patients don’t want to pay a high hospital deductible in order to have some-day surgery. They want to pay whatever it is on their plan, $250 co-pay and have their surgery and go home. But a lot of times, we’re still doing those outpatient surgeries in a hospital.

Secondly, I can build that surgery center space at significantly less cost than I can build hospital space. I’m not going to get into the details of why that is, but that’s just how it is. If we know that we can deliver that care in a more efficient setting, we’re going to do that.

And of course, technology has played a big part in building design as well. The most obvious example is the first hospital I worked in had a medical records department the size of a football field. At our facility, we have a fully deployed EMR, so we didn’t build medical records storage at all. We get to use that space for other things. Those are just a few examples.

In that planning of what the future looks like, both healthcare in general and your organization and your facility specifically, what are the most pressing opportunities and threats looking five to ten years down the road?

I think the biggest opportunities are being creative and developing those new processes and systems to address things like coordinated care across the continuum. As we move towards managing the health of populations and ACOs, what does that look like? Do we build that? Do we partner with somebody who’s already an expert in that? Do we acquire that? How does that all work together? 

Getting to create something new in an industry is fun and exciting and a great opportunity for a lot of innovation and growth. I think the challenge to that, though, is that our current reimbursement system is still build on that per-click system. We take care of you when you’re sick, and when you come to my hospital and you need your appendix taken out, I get paid for that appendix to be taken out.

What we need to be careful of is that as we transform our organization and as we optimize health and well-being, that the timing is appropriate and sustainable for the organization. 

The final wildcard which I’m sure everybody is aware of and throws out there is, we still do not understand the full impact of the Affordable Care Act. All that is still being developed and rolled out. How do we implement the exchanges and what are the rules for exchanges? All that good stuff is still coming, so I think that’s still a big wildcard.

What would surprise people most about what it’s like running a hospital?

I will tell you, what surprises most people that I talk to outside of the healthcare industry is that either (a) we do not employ our physicians, or (b) a physician does not necessarily run a hospital. People really think, “Oh, physicians don’t work for you in the hospital?” That’s really the thing that surprises people the most.

What do you like best and least about your job?

I think what I like best is that at the end of the day it’s very fulfilling and challenging work. It’s an exciting time to be in healthcare. There’s a lot of change going on. What we’re doing hopefully at the end of the day improves the lives of the people in the community you serve. Having that fulfilling, big-picture goal drives me and sustains me.

In terms of what I like least, I think that just like anybody else, the parts I like least are the parts that aren’t necessarily value-added to meeting the goals of the organization and making necessarily our stakeholders’ lives better. Things that perhaps required from a regulatory standpoint, or certain things that we do that we have to do for governmental reasons.

HIStalk Interviews Don Menendez, President, White Plume Technologies

Don Menendez is president of White Plume Technologies of Birmingham, AL.

Tell me about yourself and the company.

I began my career with IBM. I’ve been in software for a long time. I got into healthcare in the late 1980s. I joined a company that had a billing operation, a Unix-based PM system, and an RCM element. The real interesting thing was that we had a shared resource, a large IBM mainframe that we were selling time on. Clients didn’t incur technological or cost risk — they paid on a monthly basis. We didn’t even know it, but we had an ASP before we knew what it was.

That’s how I got to the healthcare side of it. We sold that company to a publicly-held company and then I was looking for a problem to solve. I believe software should solve real problems in a simple way.

I looked at  two things. There were two big gaps in the workflow in the physician offices that I saw. One was, back in 1999, clearly the EMR gap. I felt from a timing perspective and the amount of disruption that it would cause for physicians the timing didn’t make sense at all.

There was another one that was kind of interesting. It was what we ultimately got into. It was the automating of the front end of a revenue cycle management process.

It had been the same for quarter of a century. I’d always known that the first time you automate a manual repetitive, complex, confusing process, that’s when you get to ring the bell financially for your costumers, as opposed to what version 10.1 does for him. That was what this area was. A lot had been done on the back end, but very little on the front end. We felt that if we could push the process use technologies and know-how at the front end without negatively impacting the doctor, we had a real winning solution for him.

Why would practices that already have a PM/EMR system need your products?

It’s really interesting because probably in the last 18 months, the great majority of our new clients are exactly that – people who have an EMR already installed and a PM system. 

I think what happens is this. We approach a number of these practices when they’re in an EMR evaluation stage. Many of them feel like they’re going to be able to achieve the results that are provided by the kind of solutions that we provide once the EMR is implemented. What a  lot of them seemed to find out was that for any number of reasons, they’re all different. The EMR solution is working well, but they’re not satisfied with the results they were able to get as it related to the automated charge capture and coding process.

Sometimes these physicians find the charge capture process too time-consuming and they won’t do it, or it just doesn’t work for them. Other times it doesn’t match the workflow within the practice of how to do what we call post-encounter coding, taking that encounter and adding all the additional things to it necessary for it to get paid correctly. It’s not all done by the physician, and so there are some real workflow issues.

Other times, what ends up happening is they come to us because they’ve figured out that to solve this problem, they’ve had to hire additional administrative people just to do additional work to get the charges in correctly now because they’re starting with physicians than a different manner they started before.

While they took a step forward in the clinical process, it seems like they either made no progress on the RCM side, or worse yet, they took a step backwards. It’s been really interesting that most of our new business is coming from those folks. I would not have predicted that, to be honest, three or four or five years ago, but that’s really what happened.

Do you think it’s a surprise to physicians that when they finally get a PM or an EMR system, much of the benefit accrues to someone else?

My personal opinion is it’s all across the board. For some of them, they predicted that forever. They were very skeptical in the beginning and it was borne out. For others, they were skeptical and it’s borne out differently. They’ve really gotten some value out of it.

In our particular area, the niche that we serve, and what we’re trying to accomplish — quite frankly, the functionality that we provide is an afterthought for both the physician practice and the vendors that are trying to sell the EMR product. Automated charge capture and coding is an afterthought. Many times is an afterthought in the design process, during the sales process, and during the implementation process.

For what we do, they really haven’t thought much about it during the evaluation and implementation process. But when they get down to the point where they’ve rationalized all that technology and are starting to move forward, we find the administrative people say, “We’ve taken a step backwards” or “We made no progress on this at all, and we didn’t realize that there were something out there that could solve some of these problems.”

Describe how your system works differently from the PM and EMR.

Our whole approach was that you can’t slow the physician down for an administrative task or process. It just didn’t make sense. It was counterintuitive to do that. Everything that we’ve done has been designed around that. The part of the process that starts with the physician needs to help them with their productivity, or certainly not slow them down.

This is an odd thing. It sounds counterintuitive, but when we started this business 13 years ago, the great majority of physicians out there — I’ll bet 90 to 95 percent of physicians — were marking encounters on a paper encounter form. They would spend somewhere between three to 10 seconds with that form. That would be enough information to start the process so they can get reimbursed with that encounter. That’s a pretty high standard against which to take an electronic system and try to make that work. 

We’ve focused on the charge capture device, whatever that is, to be productive for the physicians. We’re agnostic towards that. We don’t care. We’ve always had a real open attitude. The best way to get a charge into the system is whichever way is the best for the individual doctor. It could be an iPad. It could be another tablet device. It could be an iPhone, an Android, or other mobile devices. It could be EMRs, keyboards, and lab systems. It could be paper. Regardless of the tool used to capture that data, it should complement and leverage the process and the workflow of the practice. That’s what’s important.

Like most software companies, we learn on the back of our customers. We’ve been doing this same very focused process for 13 years. They’ve taught us a bunch about how it works. It’s not slowing the physician down.  It’s not pushing administrative tasks to the physician. It’s leveraging productivity and accuracy on the front end of the process as opposed to the back end of the process where most of that’s been.

How does it integrate with the PM/EMR?

We originally integrated with PM systems because EMR adaption was so minimal that it just wasn’t an issue for most of our clients. We probably have upwards of 30+ different interfaces that have been in place for quite some time now. Over the last three or four or five years, we have been doing many more EMR interfaces, so that once the doctor is finished with the patient encounter from an EMR basis, they will send us the important bits of data that we need for the charge encounter.We’ll run it through our automated workflow and coding system and then electronically send it to the PM system as if it had been keyed in by the PM system itself.

Obviously, there’s a real benefit there when you got an environment where there’s one PM system and a different vendor for the EMR system. We provide a nice middleware bridge for them just to pass the data, but when we pass it, we clean it up.

I notice you just brought AccelaMOBILE for mobile capture of physician hospital charges. Explain how physicians bill for the hospital services they provide.

It’s really interesting. In the ambulatory setting when they’re in clinic, the administrative personnel will put all sorts of procedures and processes in place around the physician to make sure they get the information they need to get an encounter paid. But when those physicians go out to the hospital, they’re on their own. 

It’s almost like the Wild West out there. It’s every way possible you could think about it. Some are doing along 3×5 card. Some of them get a rounding list printed off from their PM system and they jot those things down. I’ve seen physicians jot it down on their scrubs. They run into a colleague in the hall and they do a consult that nobody knows about and they forget do it. They go to the football game or the music recital right from the hospital and they lose their charges.

One of the big problems with mobile charge capture is just getting decent good data back to the billing staff so they can clean it up. That’s the real allure of mobile charge capture and the concept of AccelaMOBILE. It’s always been about getting the form factor and a technology used by the physicians. 

We looked at doing this 10 or 12 years ago, but the technology just wasn’t there. But now, with physicians being 10 years younger than they were, they’re accustomed to the form factors of smartphones and iPads and those kinds of things. We can now at least solve that first part of the problem — we can get the data back to their billing office in a legible manner that’s complete about what they were doing in the hospital. That’s what the real excitement of the mobile product is.

The second piece is that once you get the data in, it does need to be cleaned up and appropriately done so that you get paid for it. The mobile product is the front end for remote charge entry by the physician. That is complimented by our back-end suites of products that do the workflow and the coding on it.

For some companies, it’s a whole different ballgame to develop their first mobile application and do it right. What did you learned in bringing out AccelaMOBILE and seeing how physicians are using it?

I’ll sound like a broken record, but we’re dealing with high-knowledge professionals that are extremely busy. They were trained to see one, do one, and teach one. That’s the way we try to do the user interface. It has to be simple, it has to be quick, it has to have very few clicks, it has to provide them shortcuts necessary so that they can get into the technology and get out of it very quickly. That’s a continually improving process, and frankly, our physicians are the ones that teach us the most about that. But the simpler the better for them.

How hard is it to make a business case for a practice that may have stretched themselves to buy another new system and now you’re offering them a different one still?

A big issue for everybody is the bandwidth of the practice. Intellectual bandwidth, time to do another project, certainly finance is a commitment, that kind of thing. That is a big issue for us in the marketplace at this juncture, but we try to do things to minimize that. Our whole approach is focused on minimizing that.

We believe that if you’re seriously looking to improve your automated charge capture and coding process on the front end, you can take a look at what’s out there in the marketplace. You can evaluate the systems. You can evaluate what’s available and how it’ll work, probably within a week or two if you could devote a little bit of time to it. 

For us, implementations are typically three days. We’re in and we’re out. It’s a pretty quick process, so it’s pretty light as it relates to the staff itself, but the bigger issue is just the idea that you’d even think about looking at something there.

On your website, it says that HITECH has skewed the EMR market and the vendor accountability to customers with what was described as a checkbook and a gun. How do you see the EMR/PM market evolving over the next several years?

I’m bullish about that, for two reasons, primarily. We believe that once Meaningful Use settles down a bit, the same market forces that have been in place for years will be refocused on, and that’s downward pressure in reimbursement — we don’t see that changing – and increasing complexity and cost associated with physicians figuring out how to get that reimbursement. We expect the focus to shift back to operational efficiency in the ambulatory setting.

I may be wrong about this, but it seems as if none of the current incentive programs are really incenting operating efficiency for the practice. What they’re about is about driving data. Once that moves a bit, I think we’ll play really well, and that as they start to turn towards maximizing efficiency again.

The other piece, the wild card that everybody’s talking about and knows about, is ICD-10. It’s a huge, huge threat to physician productivity and to revenue cycle performance. That’s not about driving data — although for the government it is about driving data — but to practices just trying to see their patients and do what they need to do, it’s a huge threat to both those areas. That’s where we focus. We hope that it doesn’t get pushed out. It’s a distraction. We understand the importance long term about it, but we think it’s an unfortunate distraction.

We think that once all that quiets down a bit, it will return to some of the basic issues. Frankly, they’re going to be harder. The economics are going to be different in an acute setting than it is the ambulatory. The hospitals are buying up all these practices. As they move out of that acquisitive mode and they start to try to rationalize their acquisitions, I think there’s going to be more focus on maximizing operational efficiencies. They’re going to look for help in the ambulatory setting with revenue cycle systems and that kind of thing without having staffs.

Any concluding thoughts?

I’m grateful for the great team we have here. I started this because I thought that business is a part of the fabric of life. You can do both. You can have a great team, you can compete effectively, you can be profitable, but you can have a place where people can live balanced work lives. I’ve been fortunate that the folks that decided to work here really care about our customers and find ways to solve problems. I’m grateful for that. 

I’m grateful for that and I’m grateful for our customers. We have learned so much from them about the challenges that they face and how to make our product a better result of that. Software companies learn on the backs of their customers. I’ve been in the software business since I got out of college and they never get credit for teaching us, but they do teach us. I’m grateful for that.

This is a great time to be in the business. I don’t know what’s going to happen, but as long as physicians wake in the morning, see patients, and hope to get paid for what they do, they’re going to need to get encounter data to the payer and we seem to know how to do that pretty well. There are lots of different ways of making that happen, so we think that means that there’s going to be an opportunity for us. Even as a small player, we’re bullish on what the next three to five years might look like for us.