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HIStalk Interviews Hamid Tabatabaie, President and CEO, lifeIMAGE

September 13, 2010 Interviews No Comments

Hamid Tabatabaie is president and CEO of lifeIMAGE of Newton, MA.

Tell me about lifeIMAGE.

9-13-2010 7-43-53 PM

lifeIMAGE is a company that got started a few years ago with Amy Vreeland, my co-founder. The two of us had finished a successful career at Amicas. After we decided that the market was on its way to adopting PACS entirely, we decided there was a gap between what happens inside the facility with their PACS and what the needs are outside the facility to have access to that data.

We spent some time and came up with a product design and a marketing approach to make it practical to essentially create a network on which anyone can exchange information with anyone with relative ease. We are in the market primarily offering services that let people deal with outside images. We allow hospitals to receive outside images electronically. If they receive them on CD, we have a workflow that addresses the complexities that exist today with the CDs.

Over time, we will add services to enable people to deal with consumers when necessary, to deal with community physicians whenever possible, and generally bridge the gap that exists today, all the way to having access to anyone’s images at the right time and the right place. Specifically, having a smart network.

I hope that’s who lifeIMAGE ends up being. We’re doing everything we can to get it there.

What’s the general state of interoperability and data sharing with diagnostic imaging systems?

It’s really not good. It’s spotty at best. There is an underground world of image sharing that goes on today that no one really has the right applications for, no one is responsible for. People have CDs and thumb drives and still film, primarily, as the way they exchange imaging information.

It used to be that the useful life of an image ended when the report was done. Now that images are much more pervasive, especially among whom we call image intensivists. The real useful life of an image starts when the report ends. People receive the report to know what they need to know, and they use images for where they need to go anatomically and otherwise.

There’s a huge need, unfortunately, today that is being satisfied with various manual routines and workflow, and/or at best, a Home Depot-style of putting parts and pieces together to accomplish specific use cases.

When you look at the financial and clinical impact of that lack of access or that substandard way of accessing images, what is the impact of having these workarounds?

The financial impact, to start with, is tremendous. In that, everyone agrees. Various different research shows that somewhere between 10-20% of all exams are duplicate exams. Arguably, a larger percentage may be unnecessary exams, but physician support capabilities will hopefully affect the unnecessary exams. The duplicate exams we can stop by having a reliable network. If you believe those numbers, the financial impact starts somewhere around $10-20 billion to our healthcare system.

Then there are financial impacts outside the system. Every time Liberty Mutual is in the middle of a case for workman’s comp, they spend a lot of money getting images from the patient, and to their experts, and to their lawyers, and to the surgeons that afterwards see the lawyers. Those costs are ultimately passed on to the consumers via more expensive insurance bills. We can avoid those costs and hopefully even have an impact in that arena.

Self-insured companies that have a direct relationship with their healthcare expense assume that self-insured companies simply has a rule that says if you ever imaged one of my employees, you have to give me back the images and report somehow that I can avoid the next doctor who would want to otherwise order the duplicate exam. You can imagine that you can extend that to the Medicare and Medicaid patients, to the Blue Cross and Aetna patients.

All together, the cost really starts at $20 billion when you want to look at it from a macro point of view.

At the micro level, the duplicate exams used to be a revenue point for radiology departments, but the new financial arrangements between radiology departments and payers even erode that value.

I would assume there’s patient impact because of lack of timely treatment or over-radiation with retakes.

That’s absolutely a side effect. The financial impact of that alone is all the mistakes that can be made, all the delays it can cause, additional costs and complications. Simply avoiding the duplicate exam is a great deal of value, never mind the negative side effects of it.

You’re selling your offering as service. Who pays for the service and how is it priced?

That is, I think, a compelling point to get people to want to initiate connection to these potential exchanges. We charge the hospitals and imaging service providers, but they have a cost themselves, whether it is for the ingestion of the CD or for delivery of results to the patient or community physicians. We simply replace those costs with better services and less expensive approaches, much more effective at the same time.

Our business model is very much on a per-month basis. You effectively become a subscriber to whichever one of our services. You can almost think of us as a cable box that you choose to have various channels on, and for each channel you pay a monthly fee. Sometimes it’s dependent on the number of exams, sometimes it’s dependent on the size of facility you are. But invariably it’s always less expensive than the current costs.

You just signed Moffitt and Memorial Sloan-Kettering. How do you market to hospitals like that to get such prestigious clients?

We have them on our mind when we design products, when we design services, and when we design our pricing.

We are very mindful of the fact that specialists and sub-specialists are the ones who want to have access to these images more than anyone else, so we target those with the most intensive specialty population. Cancer centers, as you can imagine, are not only a great focus of a lot of specialists and sub-specialists, but also their patient population migrates in and out back to their local communities. That itself is a primary need for imaging exchange between the centers for specialty, like the cancer centers, and the patient and the community physicians.

Tell me a little bit about the size of the company.

We are a relatively young company. We started officially two years ago almost. Unofficially, three of us founders have been doing this for another three years designing things. Today, we are just under 40 people, full-time employees, and perhaps another 20 people in various contract positions.

A lot of the management team came from Amicas. What lessons did you learn working there that you’re using at lifeIMAGE?

I think Amicas, without question, was one of the early innovators of using Web technology for imaging access. We’ve continued the culture of innovation at lifeIMAGE. Our focus is on doing the right thing, and in the process, creating yet another disruptive technology. This time around, you learn both operationally how to run a much more efficient company and you learn how to more effectively market.

At Amicas, we learned a lot about radiology and radiologists. What we’re doing in lifeIMAGE is to focus on the specialists and the sub-specialists in their relationship with the radiologists. I can compare Amicas and PACS companies to the ‘local call’ equivalent of an imaging system, and lifeIMAGE is the ‘long-distance call’. You need to think about the outside world, and the need of the outside world, in order to design a system.

The lesson we’ve learned is how to focus on one constituent for one reason and other constituents for other reasons.

When you look at some of the other imaging companies like Amicas and Merge and Emageon, how do you hope the business evolves for lifeIMAGE?

They will continue to have their great place in the industry. PACS systems have been very much adopted universally and there’s almost nowhere that PACS doesn’t exist. These are complex systems that over time need to be revamped, rewritten, and bells and whistles added and so forth, so they have plenty of backlog to satisfy their markets.

We are an innovative company outside of the market. We start our life with the long-distance aspect instead of the local aspect. I think there’s a tendency to have a cooperative relationship between the ‘local call’ and the ‘long-distance call’ and similarly, our relationship with the PACS companies will be that way. Invariably, the lifeIMAGE environment can be used by smaller settings as the Salesforce.com model for some of the imaging functions that one can assume companies will offer in the future.

Your Web site uses common internet metaphors such as ‘inbox’ and ‘dropbox’. How important is it that your system be easy to use?

I believe after security and reliability, usability is by far the most important aspect of the system. Every time you try to change the current habits of busy people like doctors — or anyone, for that matter, who’s terribly busy — you have a challenge of introducing yet one more thing they’ve got to get used to. The easier you make that experience, the more likely it is to have adoption. Obviously, the choices of our naming conventions are not an accident. I invite you to take a look at some of our products to see that the design and the usability criteria for our systems follow that design.

I was interested in the company’s vision statement that is built around the concept that there will be health record aggregators that will be the equivalent of banks for consumers; and also, that there will be some sort of incentives offered like there is for Meaningful Use for providers to share images. Can you explain how that all fits together?

I think if we fast-forward some years — I don’t know how many years that exactly will be, but it won’t be too long and it won’t be very quick — we will be at a place where a patient walks into a facility and their medical record will be available to their new care providers just as easily as the current and local records.

In order to satisfy that, you have to envision a lot of social economics, political, regulatory functions will get a hold of something like this and bend and twist it to the satisfaction of how you can practically use environments like that. As a result, it’s very much likely that these will have regional flavors. I can see various networks have the capability of reaching across one another’s network so an AT&T subscriber can make a call to a Verizon subscriber — that sort of analogy. But yet among the Verizon users and among the AT&T users, they may enjoy a certain kind of behavior that is unique to them. That will satisfy some of the pressures that will come from various constituents I named and alluded to earlier.

Ultimately, I think the insurance companies and the payers stand to benefit from the exchange and the networks that enable these sorts of exchanges. But ultimately, I think we will have a way for them to either entirely or partially subsidize the costs of these kinds of networks.

I can see a relationship very much like the banking system between the Federal Reserve and the private banks. There will be some overwhelming and overarching missions for the new networks that will be governed by some hopefully good practices. But yet there will be some private providers like lifeIMAGE which will satisfy either regional or national requirements.

Any final thoughts?

From what I’ve read on your blog, you know the market well enough to put this in the right context. But really, somebody needs to kick-start the ultimate goal of healthcare information exchange. Those of us who’ve been around healthcare IT like you know that the concept of boiling the ocean never works. You have to have very, very clever, deliberate places and then you market the technologies in order to achieve some end goal. Imaging tends to be a very good, sticky one. 

The question that I would have wanted to answer if you had asked was, why start with imaging?

The answer may be obvious to you, and that is it already enjoys a great deal of standards. It is a very expensive component of our healthcare expense, and probably just second to pharmaceuticals. It is a growing expense even if we control the expense and utilization.

We are at the infancy of the benefits imaging bring to medicine. We better learn how to take advantage of this, while on one side, not bringing the costs up; or on the other side, choking innovation because it is an incredibly important component of diagnosis. Imaging to me: is a good place to start because there are a lot of good standards and it is very much universal — it exists in almost all sub-specialties.

Patients are already used to touching their CDs and being the courier from one point to the other. Finally, it can act as a catalyst for some of the rest. For instance, we allow attachments to be sent with images. So not only are you looking at somebody’s echocardiogram, but you’re also looking at their EKGs and their medication history.

That’s what’s really needed to have meaningful information at the other end. Hopefully there will be CCR- and CCD-type of standards that govern how to ingest those documents as well. But in the mean time, let’s satisfy the clinical needs.

HIStalk Interviews Ramsey Evans, President and CEO, Prognosis

September 6, 2010 Interviews 2 Comments

Robert Ramsey Evans III, MBA is president and CEO of Prognosis Health Information Systems of Houston, TX.

Tell me about Prognosis.

Prognosis is an EHR software company. We deliver a comprehensive software solution to our hospital clients. The ChartAccess EMR/EHR is a Web-based software application that provides clinicians with a complete view of the patients and their data and to support the optimal safe patient care.

I know of only a couple of handfuls of vendors that offer inpatient EHRs and I’ve heard the least about Prognosis. Why is that?

We were founded in 2006 with the development of the certification criteria. The genesis of our company was a medical records service company, a clinical informatics specialist — mainly out of the Houston Medical Center — along with a software group came together and developed a software application called ChartAccess in 2006, with the advent of that certification criteria. We looked at it as an opportunity of leveling the playing field with there being so many established vendors in the inpatient side.

Most vendors started as technologists building custom hospital applications and then taking it from there. Your approach sounds more like you started with the traditional paper medical records or some form of electronic medical records and built the application around that. How was your approach different?

You nailed it. We married what the medical record looked like in yesterday and today’s environment with a clinical perspective and brought the Web 2.0 web services technologies to marry our application. We started with CPOE and eMAR. That was the first certification criteria focus in 2007. Then we built out from that clinical base CPOE.

What advantages did that give you, having not gone through those generations of rebuilds where the technology changes? You are, I assume, still on your original technology. Has that been an advantage from a maintenance standpoint?

Absolutely. From a support standpoint, our infrastructure requirements are very limited. We can do traditional on-premise. A lot of our hospitals aren’t ready to get rid of their servers yet, but we also can do the SaaS model but it has reduced our maintaining of hardware. Also, with the updates that go to our clients, it’s seamless. There’s no PC to update, it’s just through the Web.

Are your sales primarily hospitals implementing their first EHR system, or is it a replacement market?

Almost all of ours are first-time. They’re in a paper environment. They may have some ancillaries — you know, lab information system or a RIS or PACS system in terms of clinical — but in most cases, they have nothing in terms of a CPOE, the core medical record.

Does that make it easier or make it harder for you to implement, where you’re not replacing someone else’s system?

I would say we have clients that are net new hospitals that are just opened. That’s like a whiteboard. Those clients actually are the easiest. They don’t have a system and they don’t have a paper process. But then when you go into the implementation phase for a hospital that’s doing a paper process, the biggest piece is change management.

You can deliver a great product in the newest technology, but we spend a lot of time on that workflow migration from the paper to the pure electronic. That part of it is, I guess, a little more difficult up front, but that carries big-time dividends when you go live, as long you’re able to take care of the people.

Small and rural hospitals are pretty underrepresented in the land of HIT, so you don’t hear a lot about them. A lot of folks think a 300-bed hospital is tiny. How would you explain what it’s like in the hospitals of the size that you implement that might not be what people would expect?

Most all of those folks are wearing two and three hats. They don’t really have a whole lot of time to spend learning new things. Your IT directors, a lot of times, are also doing something else like running an ambulance team, etc.

You have to be able to come in and work around their schedules. In most cases, it’s like a small business. They’re having to do a lot of other things, so you have to make the implementation process and the training and go- live process as flexible and easy as possible.

The other perception might be that because they’re small, they’re expectations are lower as far as the systems that they purchase. Do you find that to be true?

Absolutely not. They have the same needs as a large hospital. They still have the same emergency departments. They have Level 4 trauma. Their needs are just as great as a big hospital. It’s just they have fewer folks to take care of.

A lot of the HITECH money is probably going to go to these small hospitals that are finally encouraged enough to really be interested in automation. What advantages do think that Prognosis offers them over your bigger and more established competitors in that small and rural hospital market?

We can get them to Meaningful Use from start to finish and in a rapid fashion. We have clients that have made it in 4-6 months and less. Then, with Meaningful Use Level 1 attestation starting October 1, there’s a squeeze here. We’re seeing that in the marketplace and able to help them on keeping those implementation cycles down so that they can achieve their stated goals.

Do those customers perceive that a fairly new, privately-held company holds more risk to them than a vendor that is larger and publicly traded?

Yes, we had to deal with that on a very regular basis earlier in our life cycle. As we have gotten a bigger reputation in terms of delivery, that has gone away at some levels. But in our target market, most of those hospitals require the same type of due diligence of a small, private company versus a big company in terms of their ability to deliver, like checking references. That’s where we have focused in making sure that all of our sites are reference sites.

Can you give me some idea of the size of the company in terms of number of installed sites or employees? Whatever you’re comfortable sharing.

I can. We’re working with about 60 or so hospitals right now in various stages, either all the way fully implemented all the way through to early stages of contracts.

You just had an announcement not very long ago about a relationship with Order Optimizer. What value does that bring to your customers?

That really enhances our CPOE since, as we mentioned earlier, CPOE is where we were born. Those clinicians that elect that option — that upgrade, if you will — are able to merge order sets and code morbidity, and it really cuts down on their amount of time they have to be in the system and they can get back to their patient.

We have found that most of the clinicians that are using our system, as they get very acquainted with the electronic process, that is a natural step in achieving evidence-based medicine.

If you look at your technology advantages in areas where you’ve innovated, what would you say are the benefits that you offer there?

We’re Web-native. One of the biggest pieces in this puzzle, from our perspective, is mobility — being able to access the system from anywhere, wherever the clinician is in the hospital or outside the hospital.

We’ve already developed our platform on the iPhone. The iPad will be next month. In terms of being able to give the clinicians the access to the system from wherever they are, and being able to have that user interface where they can stay off of the keyboard and can be taking care of the patient.

Sounds like you’re pretty comfortable with the status of certification and Meaningful Use and that your customers will have time to ramp up and get going in time. Is there anything that concerns you, or that you were disappointed, at what came out of Meaningful Use?

We made a calculated step. We built in almost all the recommended Meaningful Use pieces into our product, before April, after they were announced in January. So when the announcement came, almost all of our clients were absolutely happy because we were already on our way. The reduced list makes them feel even more comfortable with achieving it if they’re not already there. But we all know they’re coming and we’re planning ahead and staying ahead of that curve instead of reactive.

There is at least anecdotal evidence that hospitals are driving some of the physician practice decisions for EHRs through some type of support. What do you say to a customer who comes to you and wants to integrate their physician practices that are either owned or affiliated with their inpatient practice?

We think the open architecture approach … we offer the whole solution, but we don’t force hospitals and their clinics to replace anything if they’re happy with it. So, we take both ways. If they want that to happen, then it’s not a big hurdle for us because of our architecture. Then if they want to replace, or if they don’t have something, we know that you have to come with a total solution.

Tell me the modules that you have and those that you generally have to advise the customer to seek elsewhere.

We have everything from billing/financial from the front end registration: general financials, general ledger all the way through everything in the clinical world: CPOE, eMAR, radiology, lab, pharmacy, and HIM. We do not have PACs. We recommend PACS solutions.

And you have clinical decision support, I assume?

Absolutely. That’s one of our strengths when we’re talking to our users. It provides plenty of clinical decision support as well as care plans so that they can meet their measures.

When you look at your reference sites, what results have they seen from their implementation?

In all of our reference sites, they’ve been able to access the information at the point of care. That’s the biggest pat on our back we get is that they are able to see everything in real time and be able to make better decisions at the point of care. That’s the biggest we’ve seen.

Then, access to data. They’re all looking at the same thing. Maybe if a doc is on the phone with a nurse from wherever he or she is, they’re able to view the same information in the same system, whether they’re in lab or radiology, and be able to make real-time decisions.

One of the difficult parts of why vendors typically failed at selling to small hospitals is they’re a hard group to market and sell to and they’re also a tough group to implement in a cost-effective way. How do you do it differently than a big vendor who just tries to take the same product and stick it in a 50-bed hospital?

We take the approach that every hospital is an individual and is different. But in our product, you’re able to, instead of customize, we configure. Our architecture allows everyone to have their own workspaces. We take their desk setting, if you will — a nurse’s desk setting — and we convert that, somewhat, into their landing screen. Their landing screen allows them to match their workflow.

It’s not hard coded, it’s just a configuration at the client level, the individual level, and that remains throughout. It recognizes their permissions, etc. so they don’t have to come back. On the cost side, that is one of the things that the intuitiveness of our system allows folks to … if a clinician is able to use normal applications like Outlook, in a relatively short time they can figure out about 80% of what they want with support and training from us.

Where do you take the company from here?

We’re very excited about Meaningful Use being defined on July 13th. We’ve already seen a big increase in requests for demonstrations, so we’re going to continue to execute our plan to deliver our solution to the hospitals and stay at the front on the development side of Meaningful Use and the newest and best practices using the newest tools that we continue to embed into our product.

Any concluding thoughts?

We are very excited to be a part of this transformational time in healthcare and look forward to participating. As we look back, although challenging for the hospitals in terms of change management, we’ll surely help on the cost and patient care side.

HIStalk Interviews Nancy Ham and Nancy Brown, MedVentive

August 31, 2010 Interviews 3 Comments

Nancy Ham is president and CEO of MedVentive of Waltham, MA.

Nancy Brown, formerly senior vice president of business development and government affairs for athenahealth until July 1 of this year, has been named chief growth officer of MedVentive, where she will head up the company’s sales, marketing, and business development efforts.

Tell me what MedVentive does.

Nancy Ham: MedVentive provides a physician performance management solution for whoever is clinically at risk. Traditionally in our industry, health plans have been at risk, but there’s a huge trend towards providers taking risk and becoming more directly responsible and accountable for both the quality and cost of care.

One thing that we think is interesting about our company is that we support providers and health plans, and in fact are trying to bring them together into a more collaborative environment around managing populations and managing the cost on top of those populations.

Our passion around this springs from our history. In the mid-90s, here in Boston, we started as a mega at-risk provider organization affiliated with CareGroup, which is an integrated health system with eight hospitals and 3,500 physicians. At the time, it was the leading marketplace around providers assuming risk. We were bearing full global capitated risk for about half a million patients, managing about a billion dollars.

Everything that we have today, that we believe today, was really forged in that real-world environment managing our own patients, managing our own data, engaging our own physicians, and trying to learn how to do that successfully in a provider-oriented environment. The challenge was that model was really prevalent only here in Massachusetts and in California.

What’s so exciting about today for us is that we see the whole market opening up and moving away from payer-side risk, fee-for-service risk — which hasn’t served our industry well — and into these new risk models. We’re here with 15 years of experience and a very mature product to bring to that problem.

It seems like that whole assumption of risk idea has come and gone for practices. Do you think this time they’re ready, both organizationally and technologically?

Nancy Brown: No, not generally. There have been a number of organizations who have grown up in this model. The one that Nancy Ham has just described. I grew up professionally at a staff model HMO called Harvard Community Health Plan, which is very similar to Kaiser, where we were totally at risk for a population of patients and everything about our work, our DNA, was all around thinking about populations — how to keep them well and how to deal with their illnesses in the most efficient and effective way.

The vast majority of organizations are not incented that way, are not aligned that way, and don’t have that DNA naturally. This is a major shift, meaning a shift in the industry, where more and more risk is being pushed back down to providers.

I would say the answer to your question is no, they are not generally prepared for this. Just imagine doing work the way you do it every single day being more and more oriented towards seeing the patient who’s sitting in front of you, getting paid for each encounter, and then going to a model that is really completely different. That is exactly why tools and services need to be brought out to these provider organizations to ensure that they won’t hurt themselves in the process of converting over.

Nancy Brown, let’s talk about the announcement that you are joining MedVentive. What discussion did you have with Nancy Ham about her long-term plans for the company and your contribution to them?

Nancy Brown: It’s been a really exciting couple of months, to say the least. I’ll answer that question directly, but let me start by saying that what really motivated me to go back out into the market and to leave athena was this trend towards what has really been established by all the work being done through Obamacare or the Healthcare Reform Act, which is to really think about how healthcare is delivered and to really think about how to change incentives in order to get people to think about cost and quality.

Having grown up, as I said, in a staff model HMO, it was a little bit counterintuitive to me that the management of patients was being carved out and handed to payers and third-party organizations when in fact, there’s no one better than the physicians who are in front of the patients, who really know what care should be delivered, to be the ones that think about the approach to patient care and to think about quality and cost.

I am absolutely thrilled that the country is moving away from fee-for-service and moving back towards accountable care or sharing risk and putting risk and quality back into physician hands.

I was approached by a number of people who knew my background who wanted me to either join large companies who are thinking about establishing toolsets to serve this market, or venture capitalists who were thinking about starting brand new companies that would serve this market. Honestly, the entire time I was going through that process, I thought, well, there is actually an absolutely fantastic company that has been around for over a decade that not only has come up with tools, but has lived and walked in the shoes of at-risk providers, and who has been through many, many cycles of the product. We all know, those of us in healthcare IT, that products all need to go through at least three or four life cycles before you get it right.

The conversation I had with Nancy and with Dr. Jonathan Niloff, the founder, was perfectly aligned with what I thought the market needed. I thought, here’s a company that has existed, that has had terrific tools. The market has not been huge, quite honestly. They’ve taken care of probably a lot of West Coast and East Coast clients, and now they’re perfectly positioned to fully take advantage and really educate clients as to what the needs are to take on risk.

What lessons would you say you learned from your time at athena that will be useful to you at MedVentive?

Nancy Brown: I was at athena for six years and it was a wonderful experience. I consider them to be the closest of friends. I learned about a service model. I think a lot of what we talked about in my conversations with Nancy Ham and others is that you cannot just hand a toolset to an organization — in this case, an analytics toolset — and expect them to do everything that they need to do perfectly.

What I hope to bring to MedVentive that I’ve learned — and actually, it’s really part of my DNA now, based on my time at athena — is two things. One is that we’re going to have to get even more involved with our clients to really help them through these significant transitions.

A specific example of what I mean is when you give them dashboards and toolsets, which MedVentive does now, and you point them in the direction of where they are in terms of a red zone around a particular business problem, I think we hope in the future to be able to actually be in there with them, almost as a virtual chief medical officer, to be able to get them through the ongoing change or the overall change; and then the day-to-day work that they need to get done.

Nancy Ham: Nancy’s experience — her whole career — is of incredible relevance and resonance, as you’ve been hearing. We’re very excited about the service model coming into greater use among our customers because we are very focused about real results in the real world.

We don’t build software for theoretical purposes. We’re not an IT company who’s just building something because we want to sell it for revenue. We’re a healthcare company that forged everything we do in the crucible of the real world. That meant moving the needle on cost and quality. Whether it’s pretty dashboards or beautiful analytics was really irrelevant unless we accomplished the business goals.

We have a very strong ROI story for our customers today. Along the way, for example, we were profiled by the US Department of Health and Human Services as one of the five best national practices in pharmacy cost control. Last year, we were honored to win the Microsoft Healthcare User Group Award with a lovely customer of ours, Northeast PHO, for driving breakthrough levels of quality while reducing costs.

So to Nancy’s point, we have customers today who are independently very capable-mature in their ability to take risk and to execute on risk. But as that model broadens across the country, marrying that proven experience in that ability to drive an ROI with more supportive service capabilities, I think, is going to be key.

Nancy Brown mentioned that venture capital wants to get into this and other companies want to start something up. Who would you say is the competition now and what are the barriers to entry going to be for someone who wants to be in the position you’re in?

Nancy Ham: The barrier to entry is the relevant domain expertise. Not from reading about it, not from going to conferences about it, but from living it. There is no substitute for the fact that for ten years, we were the customer. We were in the real world bearing risk for almost half a million patients and driving positive changes against our budget and our risk and our quality and our population.

There is just no substitute for that. So in one sense, unless you’ve come from that environment, it’s really hard to say you have the same relevant experience and DNA that we bring to the opportunity.

That’s what differentiates us with our customers. They come and they see and they listen to it and say, “You guys really get it. You understand what we need to do, and we take comfort in the fact, frankly, that you’ve traveled this path ahead of us and you can share with us the lessons learned — good and bad. And you can share with us how you engaged your physicians in a way that they found appropriate and relevant and caused them to change behavior in a positive direction.”

Nancy Brown: I would just add to that what I observed is this practical-tactical way of thinking about how to deliver information to physicians. But this is all about helping physicians understand what’s going on with their population and guiding them toward the right decision. That’s not easy to do. A lot of the information that comes out of these analytic tools, generally, can create a lot of noise that they tune out.

I’ve been very impressed in the exposure I’ve had from MedVentive to see what Jonathan Niloff and the team here have done to really make sure that they’re getting the most important information to the physicians and making sure that the feedback loop is staying intact. And, that it’s a practical tool that can be used versus just one of these things that the administration has bought, but that in no way, shape, or form will ever be useful at the point of service.

When you talk about the business model as a service, is there any contemplation of selling service as a percentage as athena does?

Nancy Ham: I think it’s a great question. Historically, we have been focused on wrapping services inside of our software subscription fee. Lately, we’ve been really dialing up our capabilities around clinical consulting. We just hired a new senior director to lead our practice. In there, we are starting to go at risk for the actual results that we’re able to drive.

How that evolves towards a different model or towards the athena model, I think, is something that Nancy Brown and I will be working on and thinking about over the upcoming months and quarters.

Everybody wants to talk about Accountable Care Organizations. What technologies do organizations that want to go in that direction need?

Nancy Ham: To start on the journey of taking risk, organizations need a lot of things. They need a culture of quality. They need a transformational ability. They need to think through physician alignment and reimbursement. There’s a lot they need to think through from a services and strategy perspective.

When it comes to technology, there’s really two ways that an organization can begin to assume risk. One is if they’re already financially integrated, they can jump into becoming an Accountable Care Organization. There you need a suite of tools to manage for cost and utilization and quality from a whole new perspective because it’s not about fee-for-service now, it’s around episodes of care. This was a heart attack, not a series of disconnected claims. This is a population of diabetics and I need to be able to look at them as a population — cost utilization, quality, and engagement — because I’m going to be reimbursed on it as a bundle.

If you’re going into true global capitation, you need to be able to look across the entire spectrum of care no matter where delivered, no matter whether it’s in your network or out of your network, ambulatory or inpatient, and budget it and predict it and price it and manage it very differently than what you’re doing today.

If you’re not already financially integrated, then you actually have a step before that, which is to become clinically integrated, which gives you a safe harbor, if you will, from the Federal Trade Commission. There, you really need an intelligent, patient-centered disease registry that can be distributed across the community to promulgate your quality program and to engage physicians in an interconnected network focused on driving guideline-compliant care.

We’re fortunate at MedVentive that we offer them a spectrum of solutions no matter where you are on your journey to risk. We have a technology and a capability that matches up to where you are and what you need to do next to move forward.

Who helps organizations are assess their capabilities to enter into these agreements? Are they going to become standalone at some point, or are they always going to need some sort of support — technology or otherwise — to have ongoing success in being part of an ACO?

Nancy Brown: What I’ve observed in my journey over the last few months in looking at a lot of organizations focused on this market — there’s an equal number of consulting firms that are spitting up new practices to focus on all of the human capital issues. So if you parse apart everything Nancy Ham just said, underlying it is that technology is important. MedVentive has done fabulous things, but I’m sure if Jonathan Niloff was sitting here, he would tell you that it was the people side of it. Once you get the information in front of you, it’s really getting the teams built and the mindset in place to do the right thing.

So to answer your question, I think hand-in-hand with the technology will be folks who come in — and I already see it happening — that will work a lot on everything from organizational design to organizational behavior and the creation of probably all-new incentive plans beyond the medical incentives. I think it will be ongoing, absolutely.

I also think, as I talked a lot about during my days at athena, that there will be an ongoing evolution of these reimbursement plans over time. This is yet another set of ideas that people have, from Medical Homes to P4P to accountable care. Somewhere in all of this there will be a model that begins to effect really positive change. What I mean by that is it will incent providers to actually go in and make changes to workflows and to their approach, which is what Jonathan Niloff probably observed at CareGroup and I observed at Harvard Community Health Plan.

That it is an ongoing journey of give me the data, let me observe. Then, what’s going wrong? Let me improve my processes. Give me the data, let me observe what’s wrong … it’s an ongoing effort that never ends.

The HITECH Act has stolen everybody’s attention, so everybody’s focusing on EMRs or HIEs or whatever it is. How do you expect the vendor landscape and organizational strategic priorities to change as we get past that first total focus on just EMRs?

Nancy Brown: You couldn’t have asked me a better question. I won’t get on my soapbox for too long, but I often said in Washington and other places that I felt like the HITECH Act was a little bit of a distraction. While people were busy looking at it and going out after their $44,000 and had their backs turned, they’re going to get hit by a train and the train was going to be changes in reimbursement, as well as other major changes to how people are dealing with the administrative side, such as ICD-10.

It’s very interesting because it’s very hard right now to quantify how much business is shifting from fee-for-service to these quality contracts. What I say to anyone who will listen is don’t worry so much about the percentages because right now it’s definitely a very, very high percentage still in fee-for-service.

But let’s look at the reality. You can’t bring all of these uninsured into that coverage to have insurance coverage, and then also — simultaneous to bringing this new population of patients in that will now have insurance coverage — mandate that the insurance companies cannot increase premiums and then not expect that the costs are going to go somewhere. Those are going to be really put onto the backs of the providers. The insurance companies really don’t have any other way to get the money other than to assert change reimbursement.

The accountable care concept is owned by Medicare, but I think we’re already seeing a rapid acceleration of a risk shifting by commercial payers. As that risk shifts, people are going to have to be prepared. Compared to taking on an EMR, that’s child’s play in my opinion. This is very, very serious. Meaning you have to have a lot of information, a lot of guidance, and a lot of change in behaviors to be successful.

The other thing I’ll add about the EMR side, which was a big focus at athena, is that the EMRs need to be prepared to take the information that comes out of systems like MedVentive. These are things, to be specific, like gaps in care, for instance. When they tell you that Nancy Brown has not had a particular test or is at risk for a particular disease state, that information needs to be showing up at the point of service, ideally.

Many of the systems, most I would say, the majority of them do not have the capability to take that in and haven’t even reformed themselves in a way to think about population.

I think it’s going to be a very exciting time for those EMR vendors who really step up and think about themselves as being in a continuum that starts with taking risks, managing populations, and then intervening at the point of service.

You’re right, it’s an EMR-centric world out there, and those vendors typically don’t like to acknowledge that there may be contributions from other systems or other vendors. How do you intend to work around that, from the MedVentive standpoint, to convince them that it’s in their own best interest to collaborate?

Nancy Ham: We see, in our current client base, a very interesting spectrum of organizations. We have clients today who are 95% deployed on single EMR, so they’ve already climbed that mountain. But what they have found, to Nancy Brown’s point, is that the EMR does not provide them this horizontal capability to look across their population, to manage populations in an episodic or disease-centric way. It does not allow them to look at their cost in a capitated fashion; to look in-network and out-of-network to control all the levers they need to control to be financially successful.

We have in-the-middle organizations, those who are building broad-based networks in which their physicians are on many EMRs. So there, you have a bit of a Tower of Babel approach where there’s no source of truth, no central view, no view that goes across the continuum of care and across the community.

And then we have customers who have said that $44,000, frankly, is not compelling. We’re looking for tools that we can acquire and implement rapidly to allow us to step into risk because what we hear is forward-thinking organizations know fee-for-service is dying. So whether it dies tomorrow or dies two years from now or four years from now doesn’t matter.

They know now they need to get control of their data. They need to start measuring themselves. They need to get ready so that whatever form risk takes in their market — it could be heavy pay-for-performance, it could be episodic or population, it could be true global cap — that they can’t be ready overnight to spring into that environment.

They have an urgency about that to get started now, and that’s very exciting for us as a company because as we said, we started — Nancy and her path, and MedVentive in ours — in provider risk organizations more than a decade ago. It’s exciting to us to see that model, which we know works in improving quality and reducing costs, spread across the country. We couldn’t be more excited about the possibilities in front of us to help organizations learn how to do that and to be successful.

What are the long-term plans for the company?

Nancy Ham: With Nancy coming on board as chief growth officer, our plan is clearly to execute on our growth strategy and to leverage the fact that we think we have a very unusual capability born on the provider side, but ambidextrous, if you will, because we can serve whoever’s at risk — the self-insured employer, the health plan, the provider — and bring them together on a collaboration platform, a much-overused term that rarely exists in the real world. We think it’s the right model, which is we need to be sharing and looking at the same data with a focus on changing what is a societal ill at this point.

Our collective failure to create a universal model that reduces the healthcare costs in this country is impinging our growth as a society. Really, the ability to bring that all together, we think, is unbounded in terms of size. Our focus is just on getting the word out about what we’re able to do and to do it for more people. And with Nancy Brown on board, I’m sure that that’s what we’re going to be able to do.

HIStalk Interviews Peter Neupert, Corporate VP of Microsoft’s Health Solutions Group

August 18, 2010 Interviews 10 Comments

Peter Neupert is corporate vice president, Health Solutions Group, of Microsoft of Redmond, WA.

8-18-2010 7-43-07 PM 

I haven’t heard much about HealthVault lately. How would you characterize that product and the personal health record market in general?

You have to remember that the personal health record market is a function of how connected is it, right? People don’t want to enter data on their own. They want to be able to connect with their physicians, or connect with their service providers. What we have been focused on is providing the plumbing to get the connections. 

I think there’s been a lot of interesting or exciting activity in the last year, mostly at the policy level. When you look at Meaningful Use and Blue Button and all those things that are saying, “Hey, let’s all get together to get the plumbing going, and then we can really unleash the power of HealthVault,” which is to say that I can share the data, I can reuse the data, I can have applications take advantage of this connectedness in addition to what I want to do direct with my physician or care provider.

I think it’s been an idea that has been very, very helpful in framing the debate, in framing what the right answer is, making people understand that it was feasible and doable, and here’s what it would look like and how to make it work. So, I’m really glad that we’ve invested in it. In the last couple of years, we’ve been investing in the plumbing to make reality happen faster when people start to open the connections.

That didn’t seem obvious up front. There wasn’t disappointment that it’s taken this long?

I’m always disappointed when things take a long time because I think, in general, the health industry moves more slowly than other industries when adopting these kinds of consumer technologies or other things. But it, I think, has more to do with industry structure than anything else. We always understood that we had to do the plumbing in order to make HealthVault a consumer success.

As somebody who’s grown up through the operating systems business, you understand that you have to do an awful lot of work to bring together the physical device and the compute power and the video and the other kinds of things together, and then have an application on top of it to make it really compelling for an end user.

So, no, it wasn’t a big surprise, but that doesn’t mean that I’m not still disappointed that it’s taking many years of investment and talking to get to this stage where I actually think people have put in plans to have consumer portals that will connect HealthVault in a meaningful way.

What about the Medstory search engine? That was one of the first investments in healthcare and I haven’t really heard much about it. I think the site still says its beta, but I guess there are parts of it in Bing?

Yes, more than parts of it in Bing. You know, I’m delighted to be able to say that that acquisition got integrated into our core platform. It was one of the four channels.

You’ll remember when Bing launched, they launched with four domains that were built out. Health was one of them, all based on that technology that we acquired in Medstory. So, the fact that the Medstory site is still out there and live is more an artifact of the acquisition than what the technology has turned into inside the halls of Microsoft.

What about Global Care Solutions? It was bought to some fanfare, but now it’s going away. What was so attractive about a hospital information system with a very limited customer base in Asia to begin with? And then, what changed in two years to make it something that wasn’t that important any more?

I think the way to think about the Global Care acquisition is we have always had a vision around a plug-and-play capability and the ability to have this data aggregation platform — our Amalga UIS — and being able to have flexible solutions that sit on top of that and enable a class of workflows that are important to enterprises.

The domain knowledge and the solution focus of the Global Care acquisition were what was interesting to us. We, perhaps, mis-estimated the amount of work it would take to take some of those solutions and make them easily available on our UIS platform. From a timing point of view, it didn’t happen in the way we’d hoped.

We want to focus on UIS, focus on the value creation of workflows that fit the gaps. You know — care coordination, patient safety, things that are not in the same transactional workflow that might be in a patient administration system or an order entry system. We figure that is a better use of our investment dollars today.

What is the strategy for UIS?

I think people in the CEO chair, as they evaluate their IT strategic roadmap going forward, have to say, “What are the right characteristics of my plan that allow me the agility and flexibility to meet the changing conditions in the marketplace? Am I going to get bundled payments? Am I going to buy more hospitals? How do I get closer affiliation with physicians? What are the right IT strategies to accomplish that?” While at the same time, “I’m getting pressure to do CPOE,” however that’s defined.

My view, in conversations with CEOs and CIOs, is that a one-size-fits-all is not the best strategic roadmap and not the most flexible one. Amalga UIS is a cornerstone piece of middleware that allows you to get more value out of your existing departmental systems or EMR system — depending upon where you are in that implementation — and gives you the flexibility to acquire; to create new workflows that deliver value; to deal with new payment models that deliver value; to take some risk because of some of the capabilities; to be more predictive; and is an important component of your future strategic roadmap. That’s the role for Amalga.

Is it a big enough product to be worth Microsoft’s time?


Do you see it extending in some other way with other technologies? That rumor’s out there about mobile device integration with some other vendors, some workflow pieces. Is this just a centerpiece or is it going to stand alone?

I didn’t mean to be flip, but our strategy isn’t a product-specific strategy. Our strategy is how do we deliver value through technology to help users? Those users are integrated delivery networks, academic delivery networks, life sciences companies, and others. There are many components along the stack for Microsoft that allow them to meet the mission critical and business critical needs that they have.

Amalga’s a great component of that. HealthVault’s a component. Those two things get connected. We connect to SharePoint, we connect to SQL. We’ll connect to, yes, mobile applications.

The question is what’s the right framework and component architecture that really allows you to do what people wanted to do for forever? Whether they talk about it as interoperability or they’re talking about SOA, or they talk about it in some other sort of interchange mechanism, we’re bringing it to life and bringing it to life in a way that people can get value out of it today.

We believe in the extension model that says, “Hey, you’re not going to get dead-ended in a particular vendor perspective.” Ours is — any data that you get in, you can get out. We’ll make it easy to get out. We’ll make it easy to reuse. We’ll make it easy for you to get the BI components that you need to still use the tools you use when you do BI and you don’t have to change everything.

I think it’s a very compelling strategy. Yes, it’s going to extend in all different kinds of ways both up the stack, if you will, in terms of specialized uses or applications, and in a breadth way, and perhaps even in a depth way when you look at how do you add new sensor class information or real-time streaming information or other types of data sources?

The great thing about health is there’s a huge amount of economics. Data really matters. Big data really matters when you think about where imaging and discovery is going. There’s going to be a huge amount of computation, and it needs to be delivered in a mobile way and in different scalable ways — for the individual, for the population of a doctor, for the population of a county, for the population of a country. We need to be able to scale along that dimension as well. We think we have the right infrastructure and architecture to be able to do that.

What about the Sentillion acquisition?

We’re really excited with bringing Sentillion on board — making the connection with their customers, maintaining their momentum and their customer satisfaction, and beginning to build the integration into our environment and our Amalga products to where we have 1+1=3. So we’re pretty excited about that.

What do you think about the proposed Allscripts acquisition of Eclipsys given that you have relationships with both companies and in New York Presbyterian, in which you share a customer?

We share lots of customers with Eclipsys. I’m less knowledgeable about which of all of our customers are also using Allscripts.

I think the vision of the Allscripts and Eclipsys guys is a good vision of how do we bring together, in a modern architecture, inpatient and outpatients and a lot of things they have hanging off the sides that not everybody knows? I think any time you merge different code bases, you have both the opportunity and a challenge to make that easy for customers and seamless. We hope to be part of helping them to accomplish that.

From a competitive framework, when you look at what’s happening in the US marketplace, it seems to be that’s what customers are looking more and more for — how do you bring these inpatient and outpatient environments together for better patient coordination and different workflows? It was hard for either of them to get to alone, and it’s really going to be about how do they go out and execute and make the promise at the marketing level, at the customer level, a reality at the technology level? Which is true of all acquisitions, right? That is always the hard part.

New York Presbyterian, I think you signed some agreements with them for both HealthVault and Amalga. Do you see that relationship changing once their two other products are under a single banner, or do you think you’ll be involved in whatever it takes to tie those products more tightly together?

I’m really excited about our relationship with New York Presbyterian. If you talk to Steve Corwin or Aurelia Boyer, I think they would say the same thing.

I don’t think the change in the vendor relationship will impact us one iota. They have a very complicated environment. They have some Epic, they have some Allscripts, they have a lot of Eclipsys, they have lots of GE, they have some Siemens scheduling. I mean they have a lot of stuff in there. Amalga is playing an integrative role, as is HealthVault playing an integrative role.

New York Presbyterian is one of our flagship thinkers in terms of how do they use these components that they’ve now invested in to meet their strategic goals as a business, both for their internal employees and providing better tools for them; and as a customer-facing, how do they leverage the connected care environment for their own competitive positioning?

We are working on their strategic roadmap. I’m very optimistic that we will continue to do more with New York Presbyterian in establishing better ways to leverage technology for them, and for their customers, using the foundational components of HealthVault and Amalga.

What do you think the lessons learned are from the problems that Connecting for Health is having in the UK?

How much time do we have? [laughs]

I’m kind of an engineering kind of guy. When you looked at the problem 4-5 years ago, the concept of a large, centrally planned, standards-driven paradigm for a large integration care delivery like NHS is always interesting on paper, but at the architectural level, I think they made some mistakes.

At the operational level, I think they made some challenging things in terms of how, really, was it going to work? It was just a little bit ahead of its time, if you will, in terms of what it was trying to accomplish, and probably off focus with the means by which they were trying to accomplish it.

The goals of a national patient repository — they’ve largely accomplished the goals for a large DICOM repository and making that part of the workflow better. But in other parts on the enterprise side for the hospital and the integration with the primary care trusts hasn’t really happened, so the technology challenges that they have remain. Not dissimilar to the technology challenges that we have in the United States when it comes to data interchange, patient record interchange, the ability to do really good registries — patient-centered registries as opposed to disease-specific registries.

As the combined payers and providers in this country, they’re motivated to focus on improved chronic care management, and the technology infrastructure they built for Connecting for Health didn’t really help them accomplish that goal. They’re now looking at, how do we do that?

I don’t know if you’ve stayed up to speed on the policy conversations that are coming out of the NHS, but I find it fascinating that they not only are trying to devolve the technology implementation plans, they’re trying to devolve the whole approach to how they think about planning for care and empower different stakeholders in that and have it be more decentralized — decentralized in a sense that it’s really important to them to empower the consumer, the patient.

They’re thinking about how can they create a marketplace for services where the patient consumer is a key component of the voting, if you will, with their dollars or with their actions? And, they’re devolving it to the general practitioner in terms of what are the right care endpoints at the right point in time in working with consumers?

They are thinking radically about re-architecting their delivery system. What the right technology is to help do that in a more decentralized approach is definitely in the future because that is more likely to lead to successful experimentation and adoption.

I’m pretty excited about what the NHS is trying to do. I think it’s a big shift and change. It will be interesting to see how they manage that big shift and change going forward.

It’s a pretty expensive lesson so far to realize they were on the wrong track. Are we prepared to not make the same mistakes here?

I think there are two things. One, it’s not clear how much money they’ve actually spent. I know they spent some. I know they got some value out of what they spent, and I know they froze some spending in other dimensions. But actual dollars spent, it’s not the reported number. At least that’s what I’m told by leaders over there.

I think the lessons that the United States is going to go through is really about will incentivizing EMR adoption through the construct of Medicare and Meaningful Use lead to better outcomes in and of itself, or is it just a component of a series of changes that are required to lead to better outcomes?

In my Senate testimony over a year ago, before they passed the HITECH Act, I argued — or tried to articulate — that technology’s not an end in itself. It’s a means to another end. What technology is appropriate is partly a function of what goals are you trying to accomplish? When people talk about EMRs, they imbue an EMR with all kinds of things that are sometimes true and sometimes not true in what today’s EMR systems do. Or, in how they are implemented in today’s institutions.

I think we need a more precise conversation about the role of technology: the role of reimbursement systems, the role of how we adopt technology given what goals we’re trying to go after to, perhaps, learn the right lessons.

I sit on the Institute of Medicine roundtable that’s talking about a learning healthcare delivery system. George Halvorson, at the time of the policy debate, the health reform debate, made a pretty clear and compelling statement that we ought to focus,as President Kennedy said, “We want to go to the moon,” that the right way to focus our health policy debate is say, “Hey, we want to improve the number of people with H1BC under control by 80%, or have 80% of them be under control.” That’s the single, best way to manage the cost curve.

Then you say, “What technologies do I need, and how much do I spend to make that happen?” Which is different than saying, “Hey, let’s everybody incentivize to have EMRs.” So, I think there’s a lot to be learned on focusing on the health outcomes and the system outcomes we want, and then to look at the technologies that are most appropriate to deliver those outcomes.

And also, to recognize that we have a lot of data in the source systems already, you know? Lab data’s digital. Medical data’s digital. Even in the small primary care systems they’re digital at some point of the process. Being able to capture, aggregate, and identify would allow you to get more value for your technology spent, perhaps. We’ve been pretty consistent about that and we still believe that. I think we’re not a lone voice in that perspective.

In terms of global health, if you went to another country with problems similar to ours — whether it’s infant mortality or chronic disease — probably the last thing you’d want to throw billions of dollars at is to make hospitals more efficient inside the four walls. You’d address health issues, not healthcare delivery issues. Are we throwing too much money at too little of the problem?

The private companies — hospitals, CEOs, IDNs — they’re looking at it and saying they understand that they need to go beyond the EMR and that they need to go beyond their four walls. That they see the future of payment reform, meaning they have to figure out how to get paid for not doing things. And so they’re already acting as if a change to payment systems really happens.

Now they’re not doing it with 100% of their investments, but they are all investing in that’s where the future’s going to be. I don’t exactly know what I need to do, but I need to be investing in.

When I look outside the US, I think the politics really matter. When you look at what China’s doing, they’re trying to move more of their care delivery out of the hospitals. They’ve got lots of motivation to do that because their hospitals are overwhelmed and overcrowded and they still have a high length of stay. They’ve put in a lot of infrastructure to move people out, but their hospitals are really very different than our hospitals. They are big clinics in addition to being big, acute care delivery stuff.

When I look at what’s going on in Germany, they’re really struggling to figure out what promise … what’s their social compact? What promise can they do, and how do they think about primary care versus secondary care? And again, you have the private delivery system actually innovating more — both from a financial and a technology point of view — than the public system.

I would say that NHS, as we already talked about a little bit, is also very much looking at their investment level. I think what you see people saying both with dollars and with decision makers trying to put more into a “prevention regime” than in a “make me more efficient” inside the “once I’m already sick” regime. That’s where you have these combined payment systems where they have more incentive to really focus on doing that.

But yes, I see lots of stuff all around the world where people … there’s just no really good business model for prevention. It’s a hard problem.

Form factor passes for innovation in healthcare, such as having cool iPad and iPhone apps. That’s where Microsoft seems to be at a considerable disadvantage to Apple and probably Google as well. How do you get involved in that, or do you want to be involved in a market where it’s less about what the application versus just having it untethered?

I would disagree with your premise to start with. Not to say that there isn’t adoption of lots of cool stuff, and so when an iPad comes out or an iPhone comes out, you see a lot of adoption in healthcare. My observation would be, however, healthcare gets less value out of those kinds of investments than other technologies and that it’s a lot of noise. It’s not really where people are spending the money, or the things that they’re making mission critical.

We look at innovation as really enabling transformation in reengineering. The “wow” stuff doesn’t enable that kind of transformation in reengineering. I’m happy to focus on less cool stuff from an end user point of view, but if I can deliver ten times the power and actually get data sharing to really work at one-tenth the cost with some of the stuff that we’re doing, I think I’ll win a lot of business and delight a lot of physicians when the speed is faster; delight a lot of nurses when I make their job easy because they don’t have to go look for information, it’s all in one spot; and win in the trenches as opposed to winning on the “in” gadget or popularity group. I think that takes a deep understanding of what problems you’re trying to solve, what jobs are really important, and how the flow and diversity and heterogeneity of data meet in order to be able to do that.

I think Microsoft is way better situated than either Apple or Google to solve the hard problems. I think if you look at our investments in HealthVault and understanding the ecosystem, and building a set of applications, and keeping pace with the changing conversation around privacy and security and app sharing and all that other kind of stuff, that we have demonstrated the level of understanding and our willingness to continue to make incremental investments to make it a reality. So, I’m happy to compete with popularity, a brand, versus reality of technology all day long. We’ll win in the long run. We may not win in the short run.

What technologies do you see that are innovative and potentially influential that have not yet really taken hold in the market?

I don’t claim to be an expert. You know, there are all kinds of really cool stuff going on. I think if I’m a CIO today or a CEO today, I think the one thing I might be asking myself as I look at a five-year time horizon is, “How do I think about cloud computing? How do I think about really changing the cost environment and the serviceability environment of my application stack at a time when budgets are getting pressured?”

And yet, I’m going to have more data. I’m going to have more applications. I’m going to have more users. I’m going to have more everything, but I’ve got to do it with less dollars. What is the strategy that will allow me, as an enterprise, to really make that a reality and still give me the flexibility to meet my changing business needs? If I want to really cuddle up with a payer or take, at risk, a large percentage of the population and I need information systems to manage that, how do I fit that into my declining footprint? Do I get some leverage out of being able to do predictive analytics in the cloud? Or, how do I think about being able to contribute to solving cancer with a large population and connecting and sharing that kind of stuff in the cloud?

Those would be the kinds of innovations that I would want to have on my horizon before I go sink a bunch more money in physical hardware or a data center or some other thing that may have a short shelf life. And, it certainly doesn’t help my P&L.

I see lots of really interesting stuff going on there. I’m not sure that its stuff that the CMO gets that excited about, but one that probably folks should be thinking about.

Any concluding thoughts?

You know, I think we’ve had a great conversation. We’re excited to be part of the health IT community. We think we, as a player that has both the consumer and enterprise offering — and perhaps a slightly different approach at trying to solve the problem — to help remind people to think beyond the EMR. We’re really excited to be part of the community and look forward to making our customers and our lives better by the smart application of technology to the hard problems in health.

HIStalk Interviews Larry Hagerty, President and CEO, MedAptus

August 13, 2010 Interviews 3 Comments

Larry Hagerty is president and CEO of MedAptus of Boston, MA.

Tell me about MedAptus.

Our focus is on the revenue cycle. We develop software tools, information capabilities, and related services to improve charge capture and charge management.

The company is about 10 years old. We’re headquartered in Boston. We have a development office in Raleigh, North Carolina.

We’re trying to eliminate inefficiencies and improve processes in the revenue cycle. Our customers are generally physician practices. The bulk of our product is in professional charge capture, or physician charge capture. We’ve been fortunate enough to be very successful in the major academic centers and integrated delivery systems because we’ve focused on flexibility and configurability of systems and integration with other systems and scalability.

Because we’re in the revenue cycle, clearly a lot of our value-added is in financial return. We do a lot of work in improving the top line of our customers because we’re helping them avoid missing charges. We help them in terms of the efficiency of that as well because we’re automating things that haven’t been automated and streamlining processes and helping them with compliance.

Charge capture sounds easy. Why isn’t it?

It’s a great question. I think that one big reason is that when one knows best what needs to be charged — which is as close to the point of care as you can be — the tools and systems that are in place aren’t really tuned to help you capture that and to manage it. The clinicians are working in a clinical environment. The systems and tools that they’re working with are geared to supporting that activity. The financial systems and administrative systems speak a different language.

A lot of our work is trying to make it easy for the doctors to capture what they need to know from that administrative or billing perspective and make that workflow between the doc and the administrative and coding staff very, very easy. These systems, again, they’re oriented differently. Connecting that and streamlining it is really where we spend most of our time and attention.

The industry is talking almost exclusively about the potential payout of meeting Meaningful Use requirements. How would you coach a physician looking at that potential return versus improving the way they capture and bill charges?

I probably couldn’t position it as one versus the other. I would say that, with regard to the charge capture work that we do — again, which interacts with the clinical domain but is not a direct part of it — there’s a much more clear and direct and immediate financial return, and it’s very significant. The clinical systems and Meaningful Use are trying to drive fundamental changes in clinical process. There are longer-term returns on those types of things. Also, there is a real return around the stimulus money.

Really, you have to be attacking both. It’s about timing and sequencing and integration.

When you look at the typical practice PM or EMR, what charge capture deficiencies does it have?

Depending upon what type of EMR system they have and how structured the documentation activity is in the creation of the initial charge, we make it very easy to do that to the extent that the system isn’t using it.

What’s more important are the things that go beyond that. We promote a lot more rules and flexibility and configurability to the physician. We do a lot to create the workflow between the physician and the administrators and the coders. We also do a lot of work that most EMRs don’t, around reconciliation and a lot of things that can be done to make sure that all the charges are captured independent of the tools around where the physician is entering their material.

That’s particularly true in an inpatient setting as well, where the EMRs and the operating systems that a physician may be working with don’t exist in the inpatient setting or they’re not there or not available.

We have a charge capture capability that cuts across those things and makes the job a lot more easy for them. We do things that are just out of scope, really, of a lot of their outpatient and office EMRs.

When you look at the big picture of the revenue cycle, what are the most important trends you’re seeing lately?

There’s a lot of consideration about reimbursement and reimbursement systems and how good the current system is and what we ought to be looking at in terms of bundling, whether it’s bundles of types of patients, or bundles of procedures and capabilities that go around an inpatient visit. I think that’s a very, very important issue and it’s going to change the way things happen.

ICD-10 is coming. Maybe it comes exactly when it’s projected now, or maybe it’s a little bit later, but that’s also a fairly significant item of operational impact.

Lastly, the fact that the EMR is going in place. That’s there, it’s going in, and the stimulus has helped with that. It’s had a big impact on our systems because we’re much more attuned to and aggressive about how our tools directly interact with and integrate and leverage that technology that’s being put in place than we might have been four or five years ago when those things were not moving as fast.

You mentioned ICD-10. How hard is it, overall, and how important is it to keep up with all the coding requirements that are constantly changing?

It’s tedious, it is hard, it’s extremely important, and it’s one of the values that a firm like ours provides because there’s leverage in doing that across multiple customers. It’s not impossible to do; it’s just a lot of work.

Something like ICD-10 is really more of a fundamental shift about the number of codes and some different approaches to the way the classification system is structured. That creates an additional challenge, but that’s what we do.

Isn’t it duplicitous for the government to talk about simplicity and transparency in healthcare, and yet it makes something as simple as getting paid so complex that companies like yours exist to support that?

One could only agree that the reimbursement system is not optimal and it ought to be streamlined. Frankly, we try to drive to do that. I think there’s plenty of room to streamline and improve and optimize processes and systems even with a lot of simplification.

What I would try to do is start the discussion around what are my objectives and what do I want to incent? Because that’s what the reimbursement system ought to be designed to do.

I do think that concepts of bundling are relevant in a number of these situations. I think concepts — to some level — of bundling around types of patients and things like that make sense. I think at various levels within the delivery system, counting what people do is an important part of reimbursement, but that may not be the case at the highest levels of reimbursement all the time.

I just think it’s going to be evolutionary. I would focus first on what objectives are you trying to get accomplished, and how to try to do that. Obviously, there’s a lot of discussion about does a reimbursement system incent more volume than one needs? I’d be looking at some of that if I were in a position of authority in looking at reimbursement systems.

What we’re trying to do is based on the rules that are put in place by the government and other payers. We’re trying to make sure that our customers accurately and efficiently bill properly against those rules. Our job is to understand what they are and get it right the first time. We streamline the process and make sure that the providers are getting it done accurately.

What percentage increase of charges that a practice is entitled to collect might a practice see with your product?

It’s a significant percentage. Five to 10% is not unusual. If they are in a paper process prior to us working with them, $20-30,000 a physician per year is a very routine kind of return that we get. This is because of things they may miss when they’re in an inpatient setting, defensive under-coding, and the inability to reconcile. We make sure they’ve captured all the business they’re charging. It’s a meaningful percentage.

How have the RAC audits changed your business?

They’ve probably created a little bit more of an incentive to use a tool like this because we create an audit trail of the billing and coding activity. As we’ve evolved our tools over time, we’ve expanded our audit capabilities. In a number of settings, data has been extracted to support the compliance work that our customers are doing.

Looking at the big picture of revenue, what impact do you think healthcare reform is going to have?

One is the volume of care through the government and other insurance mechanisms is going to expand. The mix of how reimbursement, or the mix of payments, will increase through the structured insurance industry. That’s an expansion kind of activity for the providers.

I think on the flip side, it would only be prudent to expect that there will be more pressure on reimbursement and more economic pressure on providers. So, while there’s an expansion of volume that’s going to go on, I think there’s going to be an increased push — and one that’s going to be more intense than has been felt in the past — around being efficient and effective and high-quality and high-caliber, both clinically and administratively.

Many people think physician practice reimbursement is going to go down no matter what. How do you see practices reacting if that happens?

I hope they get more competitive. You know, improve their processes. I think that’s what they need to do. Now obviously, we have a wonderful system of clinical capabilities, but there are real opportunities to do things better.

Any kind of environment where you’ve got an opportunity to automate things that can be automated, you have an opportunity to reduce cycle times. You have an opportunity to reduce errors, whether it’s administrative errors or clinical errors. You have an opportunity to reduce frustration, at least within the walls of the provider institution, by improving processes.

All those things have to happen, and happen more effectively. I think that’s the only move that will be a successful one.

When you look at the Meaningful Use requirements, do you see that as doing enough to encourage the kind of behavior that will make practices more efficient?

I would say that it’s probably a start and directionally good, but my personal view — and this doesn’t have much impact on our business directly — is it has to go beyond those things. Whenever you have rules like that, I think sometimes they get at form over substance. I think more has to be done over time.

If you look five to ten years down the road, what are your plans for the company?

We’re a niche leader in what we do. We’ve had a very good run. Our track record is good. Our customer base is strong. We see this area of charge capture and linking the clinical and the administrative systems more effectively being a big growth area. All of our energy is on doing as good a job as we can do with that and expanding our capability.

We’ll probably be doing more in the future with regard to channel partnerships with HIS vendors. For example, we have a nice growing relationship with Allscripts today, so we’ll probably do a little bit more of that, but our focus is all on this particular area. Whatever happens with us down the road, we expect that this charge capture and charge management functionality to be at the core.

Final thoughts?

With our policy reform and a lot of what’s going on in the industry, this is such a real important time for the delivery system. The rules are changing. We think it’s a neat time to improve operationally, clinically, and organizationally. There’s probably no more important time to try to get more aggressive and innovate in ways that can pay off than now.

HIStalk Interviews Peter Stetson, CMIO, ColumbiaDoctors

August 2, 2010 Interviews 1 Comment

Peter Stetson, MD, MA is chief medical informatics officer at ColumbiaDoctors, The Physicians and Surgeons of Columbia University of New York, NY; assistant professor of medicine and biomedical informatics at Columbia University; and associate director, quality informatics at New York-Presbyterian Hospital.

8-2-2010 7-17-14 PM 

Tell me about yourself and your job.

I’m the chief medical informatics officer for ColumbiaDoctors. We’re a multi-specialty physician group of about 1,000 physicians here in New York. We have about 150 practice sites in the Tri-State area of New Jersey, Connecticut, and New York, with our primary base at Columbia University Medical Center. We’re affiliated with New York Presbyterian Hospital, which you may know is the recently re-ranked sixth in the US, so we’re proud to be partners with them. Our physicians admit to the Columbia campus, New York Presbyterian Hospital when their patients go in the hospital.

My other position is assistant professor of clinical medicine and clinical biomedical informatics, trained here at Columbia in informatics. I’m a hospitalist — I work in the hospital part-time while I’m not doing the CMIO thing. I also do research and patient safety and quality using healthcare IT.

Quite a busy guy.

Yep, it’s a busy time.

You’ve got skin in the game, to some degree, with both Allscripts and Eclipsys. What was your reaction when you first heard about the merger and what do you think of it?

We look upon the merger favorably. We actually work pretty closely with both vendors, and have for a couple years, to do integration work.

We felt that this was a natural outgrowth of some of the things that we had explored with the two vendors. We think that it’s going to have a positive impact on patient care and quality of life for the physicians in the long run. We’ve spoken with the presidents of both companies here at Columbia and participated in some conversations with them and other client sites that share Allscripts outpatient and Eclipsys inpatient. I think, as a group, we look favorably on the news.

Would you have stuck with Eclipsys and/or Allscripts had the merger not been announced?

The hospital is deeply committed to Eclipsys’ inpatient Sunrise Acute Care. They’ve had it installed since 2005 , starting with order entry at the Columbia campus, and had Eclipsys Sunrise Clinical Care in place on the inpatient setting at Cornell. As you may know, New York-Presbyterian is both the Columbia University and Cornell’s common hospital. They’ve put a lot of years of investment into Eclipsys products. There was no plan for changes there as far as I know.

We selected Allscripts for the faculty practice after a bake-off of a number of vendors run by an independent evaluation group, a physician-led independent evaluation group within our practice. We selected Allscripts as the product that we wanted to roll with. That was back in 2007, before there was any discussion of merger, obviously. Knowing that we had two different systems, we began our rollout in 2008.

Just give a word or two, if you don’t mind, about where we are in our implementation with Allscripts for the faculty practice, which is ColumbiaDoctors. We are 85% rolled out across those 1,000 physicians and have about 3,000 users. We’re coming to the close of our initial rollout. We’ve gone live on all modules, including electronic documentation — all the features that would be defined as a fully functional EHR, according to Blumenthal’s New England Journal survey.

Even before we started with the first group, we began working on ways of connecting Allscripts and Eclipsys. We’re the first group in the country to connect them using HL7 messages that contain the text of a Continuity of Care Document that we send from Allscripts to the hospital, automatically triggered by admission events in our ADT system for the hospital. We’ve been working with other clients that share Allscripts and Eclipsys to let them know how we accomplished that, and participated in a number of technical calls on that. That went into effect around May 2009 and we’ve been running that live since then.

Is that the route that Allscripts is going to go, sending the CCD over?

Well, I’m not sure. This is the subject of quite a bit of discussion, obviously. Are we going to have two different systems or one? Are we going to have two different databases or one? We’re in a period of pre-SEC approval, so they’re not at liberty to divulge a ton of detail about what they think the future vision’s going to be. The discussions have been pretty focused on patient care and physician quality of life to date. There’s going to be a number of discussions ongoing about what that future looks like as they’re permitted to discuss it.

One of the things that this has meant for the two business partners, ColumbiaDoctors and New York Presbyterian Hospital, is we’ve been asking ourselves internally, what would we like the future to look like; and is there an opportunity for us to influence how that would look with the two vendors? We’ve been having conversations with them about it and how to set that up.

You’ve got probably more experience than anybody trying to make these products work together. I’m sure they’re going to look to you for advice. From your experience, how hard will it be to integrate the two product lines and how long will it take?

I have been very impressed with both vendors, actually, in their ability to do integration work. Let me say a word or two about that, technically. Both applications have, as you may know, open hooks. Objects Plus, which is now Helios, for Eclipsys and Stanley Crane’s Universal Application Integrator toolset for Allscripts. We’ve been leveraging those and building solutions. We’re in the final stages of development integrating note writing and professional physician charging. We’re using those two open toolsets to do this work.

The ability to do that work using those tools is pretty easy to do if you have the experience with those toolsets. That gives me quite a bit of confidence that they will be able to do integration work. Whether that happens at a deeper level, or using this toolset in each case, or additional tools that they have like dbMotion for Allscripts or some other solution that might come from Eclipsys … you know, I’m not sure how that’s all going to play out and they’re not at liberty to say at this point. But, I can tell you from experience that we can hook things together using these open hooks that each of the applications have, and that’s what we’ve been pushing forward on here at ColumbiaDoctors.

From a high level, not necessarily even specific to those two products, what does integration look like to you between the practice side and the hospital side? What are the checkpoints of things you’d like to see it do?

We have what I like to call ‘meaningful interoperability’ that goes deeper than just the normal summary document exchange at transitions of care. That’s health information exchange, I guess, but I like to talk with my crew about meaningful interoperability which happens at a workflow level. One of the key things is discharge integration. You know, you’re in an inpatient space, but doing professional charging is typically something that’s managed by a practice organization. That’s one example.

As it is today, doctors have to manage a bunch of different lists of patients that they take care of, and the different applications, to make sure that they don’t forget to see patients and they generate handoffs. We’ve created a custom handoff application in Eclipsys as well, and so we’d love to see list management happen across both applications so you only have to do it once.

We’d like to see exchange of what I call ‘discrete document types’. Take, for example, patients who are coming into the ambulatory surgery area who then need to be admitted to the hospital. It would be nice at that point to ensure that the documentation from the ambulatory setting and any of the preoperative evaluations that took place for those patients are immediately available in the inpatient nursing station. Those are the points of contact that we’ve focused on developing, and they go beyond the normal ‘give me a snapshot’ — which is what we do today — of meds, problems, and allergies.

Then beyond that, the kinds of integration I think need to happen are around medications, problems, allergies, and immunizations. Those are the things that we target here. Medication interoperability is a challenging one. As you know, these two products use different drug formularies. Allscripts uses Medi-Span and Eclipsys uses Multum. Translating meds from different drug dictionaries at the transition of care is quite a challenge. We may see some changes in the way the combined entity addresses that issue.

Those are the things that I’d like to see emerge as solutions for the merged entity to tackle.

It seemed like the industry was fixated on the concept of physician portals, but doctors never really wanted portals because that meant that they had to go look up stuff. Do you think the industry has moved into the workflow piece that you’ve mentioned, so that doctors can do things automatically without being so aware of the venue of care?

I do. Particularly with the concept of the patient portal, we’ve stressed with the vendors that we speak with is that the docs, the quote I’ve heard from some of my emergency room colleagues here at NYP is that they “cannot have too many rocks to look under” — that’s the quote. If a doctor can manage to interact with their patients through a portal that’s integrated in the tethered model with their EHR, it’s easier for them because they don’t have to leave the application workspace that they use to manage their other patient care duties. I do believe that there is an increasing sensitivity to workflow solutions for docs so they don’t have to look in five different apps.

Are you seeing a lot of demand for or doing work with mobile devices? Are they changing the strategy?

There’s a lot of demand. I don’t think we chose Allscripts for this originally, but we’re really happy that they have an iPhone and now an iPad application that works. We are in very early pilot mode with the use of those devices and feeling out what our appetite level is with the doctors. But from everything that I hear when I’m on the road, in our institution, there’s a big appetite for mobility.

I think that mobility is a solution for managing some of the accountability mechanisms that EHRs have. Let’s take, for example, results verification of tests that are ordered. Sometimes you don’t have the time to respond to all of the messages you might get for critical, abnormal results while you’re in the office. But then when you’re out doing rounds or in meetings and conferences, there’s not a lot of time to get to a desktop PC to respond to those tasks or renew prescriptions and whatnot. The ability to have like a subset of the functions that you could do out of the office in a mobile platform is going to enable better quality, in my opinion.

I think that’s probably what’s driving the interest from the doctors’ perspective because they are accountable for following up on these things, but they can’t do it if they’re tethered to a desktop when they’re on the move.

You’ve done research on the quality of electronic physician documentation, and there’ve been stories lately where information was filed electronically, the doctor never saw it, and patient harm resulted. Are we overloading doctors with automatically generated and template documentation that really doesn’t have much clinical value?

For that reason, we’ve taken an approach with our physicians called ‘structured narrative’; where we embrace the concept that some of the stuff they want to say is going to be narrative, especially the history of the present illness section and discussion and assessment sections. We encourage them to use whatever means necessary to get narrative into the record, whether that’s typing, dictation, Dragon. We want them to do that. Then, where there are things that they’re interested in collecting for secondary use purposes like research or quality reporting at the organizational level and Meaningful Use requirements as they’re emerging recently with the final rule, we try to go after structure.

I’ll give you a good case point — transplant. We’re bringing our whole transplant group up on our ambulatory record with Allscripts Enterprise. There are some standard things that need to be collected for UNOS reporting and we’ve leveraged that as structure. But for the clinical care components that are really narrative, we encourage the use of narrative. That’s what we mean when we say a structured narrative approach.

I think that there is a link to the quality of documentation in two important regards. One is a sense of professionalism between the doctors who take care of common patients. The quality of output of notes that go back to referring providers. We’re a multi-specialty group. We take a ton of referrals into our organization. It is the professional handshake that goes back to the referring doc — the letter. We’ve spent a lot of time working on the quality of the note for professionalism, but more important is the ability of a doctor who’s picking up a case or cross-covering, or even the physician themselves who see the patients at intervals, to be able to tell what’s going on with the clinical care.

We’ve used the research principles that we’ve developed in my lab, and in the informatics department here, to implement documentation in a way that supports those two efforts, to the extent that the EHR can deliver it.

You mentioned Meaningful Use. What was your reaction to the final requirements?

We’re happy with some of the relaxation in the rules. I like the combination of core-minimum sets of rules, and then the additional five that you can select. In point of fact, I think as an organization, we’re going to need to be able to deliver all 10 of the menu set.

Depending on which practice we’re looking at, they may not be able to meet all of the individual items, so organizationally, we still have the full set to address. But within them, the relaxation of some of the rules is going to make it possible for us to meet … we’re optimistic we will be able to meet all of it.

Eclipsys is very strong in CPOE, so I assume you’re OK on the inpatient side.

I’m co-chair of the Alerts Committee for the inpatient for New York Presbyterian. We call it the Clinical Decision Support Committee, actually, and I co-chair it with Rob Green, who is an ED physician. We’re five years into CPOE at the West campus, and I think they are more like 10 years into CPOE at the East Campus we call it, which is Cornell.

We have probably thousands of order sets. We consider that an organizational asset. We have a lot of alerts in the system, and that’s an organizational asset. We consider quality a three-legged stool, with documentation, alerts, and order sets being the three legs of that stool. We actively curate all three. We think we’re in good shape on the CPOE stuff at NYP.

Are you using Sunrise for nurse documentation?

Yes. Nurses document and physicians have come along a little bit later, but my department and my service, actually the hospital service, has just moved on full bore to Eclipsys documentation.

One of the things that we learned in Objects Plus development here at NYP was that we could make calls into the application to get data to externalize it. We were able to create — not me personally, but a colleague I work with in the informatics department at Columbia named David Vawdrey — was able to externalize that data and re-represent it and get it into documentation using a function he calls ‘smart paste’.

To the point that I was making before about enabling structured narrative, that has made the notes faster to write, easier to read, and include data that is meaningful to the users. Nurses now actually can access that function as well, and they’re very progressive and started documenting in Eclipsys very early at our hospital. The doctors have come along a little bit later, but most of the major departments are now using not only CPOE for Eclipsys, but Eclipsys documentation on the inpatient setting as well.

What should the next generation of EHRs do that the current generation doesn’t?

I think that the challenges that we face are specifically in coordination of care. If you imagine trying to infuse an EHR with the principles of Patient-Centered Medical Home and the Accountable Care Organization, it’s going to require workflow solutions that enable communication and coordination.

I see elements that have Web 2.0 and 3.0 technologies being major factors in that design. We imagine enabling a heads-up displays that allows doctors to write their notes, but also write orders immediately and message each other, either within or without the outside of the EHR, to coordination of care — easier ways to mash up data for data visualization so that you can more easily see a temporal trend than a multi-provider-centered view. I see the infusion of Web 2.0 technologies into EHRs being critical to the success of EHRs to meet the coordination of care componentry that’s needed.

You may have read David Bates’ couple of editorials that he’s had recently where he’s talked about trying to improve diagnostic accuracy, improve coordination of care, and try to get the EHRs to move in that direction. I wholeheartedly support that. I think that’s where a lot of the vendors are already looking.

The second thing that I think is going to become more infused into EHRs, and is something that we’re working on here at Columbia, is to enable the representation, the manipulation and physician understanding of personalized medicine concepts — genomic and pharmacogenetic data. I’m not aware of many EHRs that support that as structured data or actionable data that physicians can use to make decisions right in the EHR. A lot of the stuff ends up being scanned for the time being, so as HL7 special interest groups and clinical genomics start to have their standards permeate the health IT space, I think we’re going to start to see ways of collecting and manipulating genetic and pharmacogenetic data in EHRs in ways that we haven’t seen today.

What are your priorities for the next five years?

From the perspective of what we’re doing at ColumbiaDoctors, we’re like everybody else who is two years into their implementation — focusing on finishing our remaining departments. When we’re done, we’ll have probably 4,000 users on the system.

Phase II for us has already started, which is leveraging our order sets, decision support rules that we already have in place, and creating custom ones to start to tackle issues associated with chronic disease management in a multi-specialty practice group.

Then we’ll focus on priority disease states, you know, the common ones; but we’re going to ramp up on our quality mission and start to focus on those things that demonstrably impact patient care and go, not just with Meaningful Use, but those things that also extend to those things we do from a specialty practice perspective.

What I see happening on a more global scale is the two issues we talked about, in terms of what do I see happening next in EHRs — better workflow support, better coordination of care support, and the embedding of genetic and pharmacogenetic data in EHRs.

Any concluding thoughts?

I would say we’re pretty excited about the merger. We actually are looking forward to working with both vendors to create solutions that work really well at NYP and other sites who have it, or might consider having the two applications.

HIStalk Interviews Barry Chaiken

July 19, 2010 Interviews 7 Comments

Barry Chaiken, MD, MPH, FHIMSS is chief medical officer of Imprivata.

7-19-2010 7-19-56 PM 

According to your LinkedIn profile, you’re CMO for Imprivata, CMIO for Symphony Corporation, and CMO of DocsNetwork. You’re on a couple of advisory boards, you own a vineyard, and you just finished your term as chair of the HIMSS board. I’m not sure exactly what you do all day.

I’d like to say that what I do is try to tend to my grapes, but they’re too far away, so I don’t do that.

DocsNetwork is my personal consulting company. It’s just me. I will contract with companies like Imprivata, who basically are at a size where they really don’t have enough work for a full-time CMO. I make sure that none of the people I contract with cross industries and such.

I essentially work for Imprivata. I’m really their healthcare lead and advise them and help them with their healthcare advisory board and basically function as a CMO as much as they need a CMO at this stage. I imagine if they grow, they’ll need more of my time.

Symphony Corporation is a company out of Madison, Wisconsin. I essentially function as an advisor to them. They currently do have their own CMO who works considerably more time than I do. I just help them with some informatics issues.

My vineyard is Chaiken Vineyards down in Uco Valley in Argentina.

I’m most intrigued by the vineyard thing. How does that work?

It’s really a great deal. Woody Allen once said 90% of life is just showing up. I love to travel down to Argentina. I visited Mendoza and I’ve had a long-standing interest in wine. I collect some, drink some, give away as gifts some.

I just stumbled on this wine project that two Americans and the Argentines started several years ago. I got to know friends and family with them and it’s been a great project. I was one of the original 13 of 14 private vineyard estate owners and investors. Now they have almost 80 and they’re going to go to 100.

They just announced they’re going to build a resort on the property. It’s about 60 miles south of Mendoza. They have a great team, great winemakers, and it’s something that you can do in Argentina which you really can’t do in the US or France unless you have a lot of money, which is not one of the things that I have a lot of.

Let’s get back to business now, although that’s a business for you, too. As a physician who works for an organization whose forte is user access and security, you must be the guy who has to make the argument for convenience versus application security. How do you think most hospitals fall in that continuum of convenience versus IT’s lockdown?

First off, you have to address the issues of security and privacy. I think that’s incredibly important. If we digitize everything, you’re going to need to do more of that.

I’m not sure security and privacy and convenience and ease of use are mutual exclusives. I think you can do both of them together. I think the technology exists that you can do them together. Maybe 10 years ago it didn’t, or maybe five years ago, or even maybe two years ago that didn’t exist, but I think it really does exist now.

We have smart cards. We have other ways of authentication, whether it’s fingerprints and things like that, that can make it easy for people to login and log off, just like we’re spending the time learning about workflow. For clinician workflow, how to present the clinical information for the physicians in a way that is useful for both them and efficient and useful for the patient. I think that we’re also learning about the importance of the workflow, securing a desktop, and we can do that today with a variety of technologies we have.

Imprivata has a lot of those technologies. What made me very interested in Imprivata and wanting to work with them is that I understood there’s clinical workflow that’s within, say, an electronic medical record or a clinical decision support tool. But the reality is you’re bringing together multiple applications either from a single vendor, more than likely from multiple vendors, so that has to be created into a clinical workflow which is what hospitals and consultants work on.

There’s this other piece, which is how do you glue all these pieces together? Single sign-on can clearly happen. There’s an intelligence about how you secure a desktop. How long is a timeout? What devices to use to log on and log off? What makes sense with those devices that you use to log on and log off or back on?

For example, one of the products Imprivata has is Secure Walk-Away. It’s very simple. Basically, when you logon to a desktop and a workstation, it uses a camera — which we know today are very inexpensive — and it doesn’t go to a database to look up your photo or your image. What it does is it takes multiple images of you when you log on. It takes images with you turning your head, it takes images with and without your glasses on — whatever you may focus on that camera, it takes that image. The minute you’re out of the view of the camera, the screen goes blank. It goes black. You walk back in within a specific time period and the screen will come up again as if you were there and automatically you’re logged on.

What’s nice about that is it allows the workflow, right? The doctor might be talking to a patient and then walk back into the view of the camera and wants to be able to enter some information. Walk away, walk back, walk away, walk back — it instantly brings up the screen, but when they’re out of view, it blanks the screen and that secures that desktop, yet still facilitates the workflow.

What’s really nice is that you don’t have to have this database of images of you in different styles of glasses or haircuts or whatever. It’s just for that moment when you log on at that desktop, so it works to facilitate that workflow while securing the desktop.

Even though IT shops spend a lot of time worrying about applications, it seems like a lot of the physician frustration is one of two simple things that are infrastructure-based; either they have to wait in line to get to a device or log in multiple times once they get one. If you were a hospital, how would you choose a single technology? Or, what would you do to assess that situation and resolve it?

Let me give you an analogy. I’m sure you’ve flown. I’m sure almost all of us have gotten to the airport and you had to go fly. We’re waiting on line to go through TSA and security and we don’t get really happy when we don’t have enough people who screen people in screening lines, do we?

The first thing you have to do is do an assessment of how many workstations you need. Not by counting numbers, by looking at the workflow that’s within your existing environment in your hospital. Make sure that they are available, because in reality, those devices are relatively cheap compared to the time of the clinicians — the physician, nurses, and others — who may need to access that. You want to make sure you have enough devices available.

Then, you have to design the clinical workflow within the application to make sure that fits two needs. One, it is streamlined — it makes sense. Also, it produces good outcomes.

The last thing is you should look at the existing technologies to facilitate the workflow between applications — single sign-on, secure authorization, things like that — to make sure you’re able to keep the medical information private and secure, but facilitate the workflow. That technology exists. Every day it’s less expensive to do, but I think the IT department has to focus on workflow. Workflow backs up to enough devices, backs up to a secure way to access those devices. That facilitates, encourages, and makes seamless that workflow. That way, the hospital can focus on the clinical care of the patient and the physicians can focus on the best clinical workflow to deliver the best care to those patients.

How do you think mobile devices are changing the whole security picture?

Big problem. They’re really a big problem. I have to tell you, for years I’ve been speaking to people who’ve talked about that problem of securing those devices. Now we have an iPad and I imagine revision two or revision three of the iPad’s going to have a camera in it too, besides a smart phone.

Now you have these unsecured networks sending personal health information over them. That’s a big problem. I think that problem needs to be addressed. As best as I know, there’s no technology to specifically address it right now. I mean, I guess you can shut off everybody’s smart phone, but still, they can take pictures and when they leave the hospital they can obviously send them.

I think the first thing you have to do is to educate the clinical people about the security issues and privacy issues about using their smart phones or their iPads or whatever else device they may have — or their cameras, even — and understand what the rules are and why those rules need to be followed. Then, over time, I think we’ll develop technology to lock down. I should really use the word ‘secure’ — to secure, whether it’s a smart phone, the iPad, the tablet, the whatever — to make sure that the PHI is protected.

Do you think part of the reason doctors and other clinicians like portable devices is that they bypass a lot of the IT restrictions on devices that aren’t theirs full-time; can’t be personalized, and aren’t really under their control?

You know what? That’s possible, but you know what I think it really is? Let’s think about what a physician does. The physician is the only professional that I know of, the only one I know of, who every single day of their career is never like the day before. I’m not talking about what they see or the work they have to do. I’m talking about where they are, where they physically are. No physician walks into their office and sees patients, room 1, 2, 3, 1, 2, 3 — they don’t do that. They move whatever is happening for the day. They may spend more time in one room or the other, and the same thing in a hospital, they roam all over the place and it’s never the same.

But if you think about an attorney, an accountant, those types of professionals — they walk into their office, they sit at the desk. Their pencil is in the same place, their computer screen is in the same place. Everything is the same for them and they get to do their work.

What happens is doctors have to have their desktop roam with them. The only way today that we do that all over the place is through these smart phones. They have their own personal device they put in their pocket, they have it in their arm, and they can use it for multiple things. You could use it for Hospital A, Hospital B, Hospital C. They can use it for their practice, depending on how they set it up. It’s a very convenient device for them. Applications that allow that desktop to move around with the physician are the ones that will usurp those smart phones and the other things that they carry around with them.

Imprivata has a product that allows them to do that with the roaming. It moves the desktop around the hospital. But for now, it works within the hospital, in the application. At some point we’ll have a device that allows that desktop, in whatever form factor we have it in, it will allow that physician to move around everywhere with that secure desktop and do their clinical work. Then they won’t care about having IT locking it down and wanting to go outside IT. Except the way the applications are implemented and the workflows don’t fit in to how the physician wants to work.

I understand the concerns of the IT departments around security and I commend them for the work they’re trying to preserve — the security and privacy of the PHI. What we need to do is let’s think a little bit outside the box here. Let’s put a couple of things together. Let’s think about the clinical workflow and let’s think of the IT issues in securing the desktop. Let’s get a bunch of people together, those multidisciplinary people together, to figure out what’s the best clinical workflows that we can satisfy both for those stakeholders.

As you look back at your term as chair of the HIMSS board, what would you say the organization is doing right and what would you like to see it do differently?

First off, I really enjoyed being part of HIMSS. I think that HIMSS has been a great experience for me, and probably for a lot of my colleagues. The thing that’s really wonderful about HIMSS is that, really, all the volunteers really decide what happens at HIMSS and things bubble up from committees. A lot of times people on the outside really don’t see that.

When I was on the board, anything that would be presented to the board that we would vote on and endorse, so to speak, or any position that came through, always came from all of these committees of volunteers that were just spread all over the place. As HIMSS chair, I got to review some of those resumes of those people on the committees and then appoint them at recommendations by staff and others. The diversity was enormous. I think the thing that’s wonderful about HIMSS is the fact that it has this diverse group of folks.

In this past year, one of the things I specifically emphasized in my HIMSS keynote was the idea of clinical transformation, which was, let’s see if we can make access to care better. Let’s see if we can make it safer. Let’s see if we can make it higher quality. Let’s see if we can reduce the cost of providing the care. My belief is that IT is able to do that.

I think that I’d love to see HIMSS continue with that and emphasize that clinical transformation and emphasize helping other stakeholders in other disciplines be able to improve healthcare and make it affordable for us. We’re on this cost curve that’s really unsustainable and we need to fix. Our quality isn’t there, our safety isn’t there, and our accessibility isn’t there. I just believe IT can help and I think HIMSS can be a leader for that.

I noticed in your keynote that you were talking about population health and arguing that automation is needed. But what HIMSS does is primarily just work within the four walls of the provider’s office, helping make episodic healthcare delivery more efficient and caring nothing about health in general. Other than the fact that healthcare services delivery is profitable and population health isn’t, why do those areas have to be so different?

Well, let’s look about healthcare policy. It’s, you know, reimbursement.

I just recently had a conversation with a colleague of mine. We were talking about accountable healthcare organizations, talking about medical home, things like that. Currently, providers across the spectrum are incented to provide volume care. They’re not incented to deliver value. I don’t blame any of those providers. We know from studies of human behavior that even if the conscience says, “I want to do X;” if there’s an incentive that’s subconscious, they end up not doing exactly X.

We need to change our reimbursement system that reimburses all of us for quality, accessible, safe care. That’s what we need to do. HIMSS has to and will, with other stakeholders, medical organizations, other hospital associations, medical societies, nursing societies and others, get together and decide what they need to do as stakeholders and push towards changing that reimbursement so it compensates providers for their quality and value that they deliver, as opposed to the number of times they’re able to do a particular test or procedure or have an admission or whatever.

We see, in organizations that have different types of reimbursement models, that we see different utilization patterns. I know the society is very concerned, our public is very concerned, about limiting care, but the one thing you have to understand is more care is not better care. More care is just more care. What we need to do is forget about more or less care. Let’s just get better care.

You also said that the industry needs to create solutions that are so compelling that people want to use them and that it shouldn’t be because an executive order, that demand should be created by the quality of the products. Is anybody doing that? I’m not seeing anything where people are getting excited about somebody’s product to use it voluntarily.

Well, I think we’re still at a tipping point. I think I wrote about that in a piece called “The Glue” recently. People are working and making the applications work better, you know? Let’s be fair to these folks.

You’ve probably used Mac, an Apple product like an iPad or an iTouch, or an iPhone I imagine, right? If you compare that to your experience using some other, whether it’s a Microsoft product or somebody else’s product, clearly there’s something about that user interface that makes it incredibly compelling to people. Look, they sold over two million iPads in the last six weeks. Man, that’s a lot of iPads in six weeks.

We’re still learning, in healthcare, about that user interface. We’re still learning about how to put the applications together in a clinical workflow that’s going to be valuable to the patients and to the people who are providing care. Let’s be patient. Let’s give them a chance to figure out the right way to do this. Let’s give the application providers an opportunity to make this better. Let’s hold them accountable if they don’t. Absolutely, hold them accountable if they don’t; and the marketplace, I hope, will be able to make those choices and hold them accountable when they don’t. But, we’re still learning.

But HITECH has pushed the marketplace into buying today. Everybody’s picking their dance partner now for a lot of years, so everybody’s buying the same stuff that was already being sold. Where’s the market incentive to put out a better product when everybody’s bought what they’re going to be stuck with for years?

Well, there’s still the clinical workflow. You still have to worry about putting together the clinical workflow. It’s not just the app.

OK, but if you’re the vendor, what’s your incentive? If you’ve sold all of the systems you’re going to sell because everybody’s blown their HITECH money and now there’s no market out there, what’s the incentive? How do you get existing customers to convince vendors to improve their product when they’ve already signed on the line which is dotted?

I think you’re going to have to ask the vendor that. I’m not a vendor of an EMR system, so you’re going to have to ask the Epics and McKessons and Cerners and Eclipsys, and Meditechs and GEs of the world what they are doing, I think. I still emphasize the fact that it’s about the clinical workflow, and they need to go — and the hospital has to be a partner in that — to improve that clinical workflow and make it better. You know, the reimbursement systems are a little bit crazy.

I did work for a vendor. It’s really weird. On the one hand, when you have an EMR, for example, it’s really dealing with two masters. One master is I want to be able to record the clinical data on a patient so I can treat them as best as I possibly can. I’m a clinician, I know that. I want to record the data so I can do a better job. I’ve seen plenty of paper records that you don’t know what the heck is going on if you want to do that.

On the other hand, I have to record the data in a way that I optimize my coding so I get paid what I deserve. If you’re an EMR vendor and you have to write code to be able to address those two issues, that’s a real challenge. Then, for the end user, it’s a real challenge. But, I think we can get around that. I mean, there are things that new technologies are coming out all the time.

I think, relevant to the workflow, again, we have to redo that workflow. I think what Imprivata has to offer allows, at least — that single sign-on and the authentication and privacy protection — that allows us to bring these apps in a way that hospitals and the clinicians in those hospitals can work to develop their own effective workflow.

Last question. If you look out five to ten years, what would you predict will happen with healthcare IT versus what you would like to happen?

OK, let me say what I’d like to happen. I think the whole way that we deliver healthcare in the US has to be completely redone. Of course, our incentives — we talked a lot about that, but what I think is we have to really leverage information technology in such a way that doctors no longer do what they do today, nurses no longer do what they do today, other clinicians no longer do what they do today.

In other words, if I have a runny nose, I don’t necessarily need to see a physician to be able to be diagnosed on that runny nose. I can go ahead and see somebody who’s trained at a lesser level who will see hundreds and hundreds and hundreds of thousands of runny noses. Then, if my runny nose is different than the normal runny nose, they know to escalate, to triage me up to the clinician who’d be better suited to treat me.

What we need to do, is if we know best practices, if we know clinical knowledge, we know the things that really make people better that deliver better outcomes at lower cost. Forget about the cost for a moment. Just deliver a better outcome, less morbidity, less mortality, OK? We need to have that, to have everybody access that best care. Right now, we don’t access that best care.

If you want to predict what a physician’s going to do in their practice, all you need to do is look at where they got their medical degree and look at where they did their residency. That will predict the practice patterns that they will follow. We need to change that. We need to choose best practices.

I think IT is the way to deliver, at the desktop, at the point-of-care with the patient, best practices. There isn’t a single best practice most of the time. There may be a couple of different best practices, and for a variety of reasons, you may choose one over the other. The thing that a human being does better than a computer, and will do for some time, is their ability to use disparate pieces of information.

Let’s assume a patient has coronary artery disease, so they have high lipid levels and they have diabetes. Maybe today they also have a cut on their arm and it looks like it’s getting an infection. You can look at best practices for treating that patient. Computers can’t pull those three diseases together today, but a human being can do that. They can look at those best practices and put together a treatment plan for that patient that really will work well for that patient. Oh, and on top of that, the physician or the nurse or the other clinician can motivate that patient to take their medications, to follow their treatment plan to get them better — again, something that a computer can’t do.

What I want to see, what my vision is 10 years from now, is you’re going to see more and more clinicians who are going to be rewarded, who are going to be respected for their ability to synthesize multiple sources of information and then deliver it in a good care plan for a patient and treating their patient, instead of being looked up to because of their ability to remember a long list of facts. Computers are great at remembering facts. We don’t need to do that as human beings anymore. Human beings are great at pattern recognition. We should be able to move in the clinical space where physicians and nurses and others are doing their skill set around pattern recognition and treating the patients. IT is the source of that.

You asked me what I didn’t think was going to happen? Well, what I don’t think will happen, I don’t think it’s going to move as fast as I want it to, you know? I think we should do this now. I think we should be teaching this kind of stuff in medical schools and in residency programs and switching to that type of environment. That’s the way we’re really going to leverage healthcare IT.

HIStalk Interviews Rick Stockell

July 16, 2010 Interviews 1 Comment

Rick Stockell is president of Stockell Healthcare Systems of Chesterfield, MO.


Tell me what Stockell Healthcare Systems does.

We write software for patient access and revenue cycle management. By patient access, that’s the registration and scheduling components. The revenue cycle is all of the regular registration, ADT, charge capture, medical records interfaces such as a 3M encoder, a collections module, and the 837 and 835 back. Eligibility checking, medical necessity checking, and those types of things.

Our roots are all the way back to McDonnell Douglas Healthcare that was here in St. Louis. We’ve been in the healthcare market for quite a while. We were a contract programming group from McDonnell Douglas. We did a lot of development for McDonnell Douglas and their mainframe and minicomputer lines.

We go back to the original UB-82. We were writing that, so we’ve been in the patient accounting and billing space for years and really understand how it’s changed and how it’s evolved. We’ve got a tremendous amount of experience in the patient accounting area and we’re going to use that to our advantage as we pull this product together. We’ve been in the business a long time, so we’re not an upstart.

Maybe everybody’s more familiar with the company than I am, but I mostly remember back in the days where 3M used your order entry system for Care Innovation, if I recall.

That’s correct.

Who would be most familiar with the company today?

We typically partner with electronic medical record companies. We’ve partnered with, like you say in the past, 3M. Until GE bought IDX, they used us for the same thing — order communication and order management. We also partner with Medsphere, with OpenVista. DSS is another one. They tend to be in the government space more than others.

They don’t have revenue cycle solutions. When they compete against the other healthcare vendors in the marketplace and to have complete solutions, they need an answer for patient access and revenue cycle. We’ve partnered with them. We’ve done that multiple times with them.

Also, some new ones that are international. Alert is one out of Portugal. We are also partnering with Eclipsys internationally. We closed a deal in Kuala Lampur, Malaysia — Pantai Health System.

I saw that. How did that come to be? You don’t think of revenue cycle when you think international, yet you’ve got this string of hospitals in Malaysia.

It has to do more with the footprint of the product. It’s all on a Microsoft technology, so it doesn’t require mainframes or any of that type of thing.

A lot of the older patient accounting and billing systems — ones that have been in the market for years, really, 25, 30, maybe even 40 years in the case of the Invision product line — most of them came from batch-oriented systems. They require a lot of hardware, a lot of software, layered products, and bolt-ons for them to be useful. It’s just not conducive to the international market because there’s such a large amount of the architecture dedicated to third-party reimbursement here in the States and the regulatory environment here, so it’s a lot different there.

It’s a real-time system as opposed to batch. The footprint’s smaller and it’s easier to use. It’s very user-friendly. It makes sense really quick. It’s got a complete relational database designed underneath it. To configure it for different needs is relatively easy to do. We’re in a lot of different market settings — behavioral health, long-term psychiatric, government, all kinds of different reimbursement models.

At Indian Health, we have three sites. We’ve gone independent from the Indian Health Services and we’re opening our own facilities and they’re like a commercial private/public consortium. We’re very, very flexible in our abilities to implement different revenue cycle designs, Because of that flexibility, it lends itself to the international market.

You mentioned the Alert product and a couple of variations of the VistA product. How easy is it to coexist with those applications?

It’s actually very easy. I think we’ve integrated now with interfaces to about eight different clinical information systems; including Cerner and Eclipsys. We did it with GE as well, their original Centricity line. I think they re-labeled all that. Now it’s really the IDX product, but we haven’t integrated with the IDX system. But the precursor, the original versions of Centricity, we’ve integrated with. So, yes, we’ve done quite a few. In the behavioral health area, Sigmund, MindLink, and Sequest. 

We’re really, really good with HL7. You recalled we did order communication for 3M — their Care Innovation suite. We also built the order communication component for the original Centricity product for GE. Since we’ve had so much experience with HL7 integration with these electronic medical records and departmental systems, it’s really pretty straightforward for us to do integration to a clinical suite.

It sounds like you could either be the revenue cycle component for a vendor that has only the clinical and departmentals; or you could be the clinical component for someone who has the revenue cycle.

No, normally we’re really the revenue cycle. We’ll do some order communication if they don’t like order management. If they’re not really good HL7, bi-directional — you know, orders in and out and ADT and all that — if they’re really not good with HL7 or have limited capabilities with HL7, we can stand in as the order management system for them until such time as they can get that on board. Principally, we’re patient access and revenue cycle.

It seems like a lot of companies are either offering revenue cycle services or software, or both. What trends are you seeing out there since you’re the independent among that group?

The traditional revenue cycle sector is a lot of bolt-on technologies. They’ll work well or co-exist with Epic, Siemens, or McKesson and do a lot with the output of the bills. UBs and 1500s are produced off the primary patient accounting system. They do contract management, for example, a standalone; and then the 837 and 835, some of the electronic claims, and that type of thing. Maybe eligibility checking on the front end, that they just offer services that are really kind of bolt-on. They’re really integration-oriented, just in different pieces of an existing patient accounting system like the older ones.

Our approach is that we’ve built everything into the products, so contract management is part of the product. The eligibility checking and medical necessity checking is part of the product. We don’t need a bolt-on to do that. The 837 processing, 835 processing is embedded in the product so there’s less of a dependence on bolt-on technologies.

We find some of the bolt-on players are trying to get into where they can start to integrate more directly with the electronic medical record to increase their value. We can already do that, and have done that for about a decade now, plus, the order communication piece.

What would be the attraction for customers to look at your solution?

If they are in the market for a new electronic medical record system and they don’t have a good solution or it doesn’t integrate well. Their traditional system, their registration and patient accounting and billing systems — if they don’t integrate that well with the new EMR or if the vendor doesn’t have a good solution for that, then what we are is a replacement opportunity to replace that older patient accounting system with something that works more seamlessly with the electronic medical record. That’s so we can capture charges at the point of care if the electronic medical vendor that they choose doesn’t do charging very well. It handles the clinical components for orders and those end results, but it doesn’t do charging very well.

We can interface at the order level and convert those to charges — charge on order, charge on result — and map those orderable items to the appropriate charges. Then, of course we have a charge master and we can have the HCPCS codes and modifiers imbedded in the charges and make that a little bit more seamless, which reduces the batch charge entry requirement and less manual entry of charges.

I can see, with one of the VistA products or with Alert, they would probably bring you in as an option, but it must be tough if you’re trying to get replacement business. You’re competing against the vendor who’s already in-house. Is that difficult?

It can be because they’ve been in place for long periods of time, maybe 10 years or longer, that they’ve been working on the patient accounting system. But some of the problems with that is that they can’t get the reports they need. It’s difficult to get the information out of the system. They don’t have as good a control over the revenue cycle. Either their AR days are longer or there’s more leakage of cash or reimbursement because of all the integrations they have to do to the bolt-on products.

We can build a pretty good business case that it’s more seamless, it works better with the clinical information system, reduces the amount of staff that’s required versus a lot more automation in our solution. Where a lot of the other systems require a lot of manual touching — they’re more like inspection-based instead of exception-based — so there’s an opportunity for operational efficiency with using our system over some of the older mainframe or batch-oriented systems that have been in the market for years.

How do you think the Meaningful Use and the whole healthcare reform change is going to effect the revenue cycle side of everybody’s business?

It seems that regulatory compliance is one of the big change agents that are always in healthcare. With Meaningful Use and ICD-10 and some of those things, I think it’s going to have an impact on the back-end systems as well. I’m not sure that the clinical information systems just on the front end are going to be adequate to address all that successfully.

I know that in the case of ICD-10, specifically, you’re talking about a larger field length because it’s a larger coding method than the ICD-9; like six or seven digits versus like four or five. So then that’s a change of storage location. That’s got a lot of different places to go and fix that because they’re on traditional file systems where the applications were originally written. We’re already ready for ICD-10 because ICD-10 is what’s being used right now in Malaysia, so we have an advantage there.

I think that all these regulations, as they come along, are going to put a lot of pressure on the older systems. It may be the cost of making changes to those systems may be more than the vendors that own those products are willing to put into them.

I think with all the excitement about clinical systems, maybe people have forgotten about things like ICD-10. What are your thoughts on how that change is going to affect everybody?

There’s the coding. I think, in the medical records area particularly, where they’re coding; that there’s so many codes that coding method’s going to cause a lot of change for all of the medical records departments. With the Correct Coding Initiative, that’s a lot to learn. Everybody’s been on ICD-9 for quite a while and ICD-10 is a lot different.

Then, all those codes will have to filter through for the claims and the edits that come along with those. New codes are going to be a little bit more complex. I’m not sure what impact they would have, specifically, on the bills themselves, but that would open it up for a lot more rules. There may be a lot of gaps in the older systems that might take quite a while to fill when they move to ICD-10 and I think we’re ready for that.

What do you think about ERP systems?

That’s a very mature market. In the US, it’s Lawson, which seems to be the one that has most of the market share.

We are integrating with Oracle in Malaysia. That is an opportunity. Oracle had a couple of tries at trying to get into the healthcare vertical and hasn’t really had much success with that, especially in the US. I think that an opportunity to get into the healthcare market, probably internationally, is what we’re going to see more with Oracle.

We don’t run into PeopleSoft or SAP very often. Those seem to really high-end and geared more towards the manufacturing environment than healthcare, but I think they’re going to continue to do all right.

I think that most people have made decisions for the ERP system, but again, traditionally, accounts receivable would be part of that solution. But when you’re having to do everything down at the encounter level and case mix and all those types of things in healthcare, it really strains the architecture of those ERP systems, which seem to be much better suited for direct customer-vendor relationships as opposed to this third-party and multiple payers and coordination of benefits.

One of the other things that everybody’s paying some attention to, at least, is data warehouse, data retrieval, and business intelligence. What are you seeing in the marketplace for that?

That’s another bolt-on opportunity, it seems, in healthcare. That’s another thing that’s embedded in our products.

Since we’re on a Microsoft environment, you have the whole Analysis Services that’s part of SQL Server 2005. And now, 2008 is even stronger — we’ve got scorecards and analytics. The warehousing is built right into the product, so the detail source that’s coming from our applications feeds the warehouse directly. We’ve got some pretty good score-carding and reports right out of the application set that makes BI a lot easier.

For us, it’s not a bolt-on. The product automatically can see it’s a warehouse that has a lot of those key performance indicators and scorecards and analytics built right into them. For example, we have one for denial management because we get the 835 detail back. We post the details from the 835 so you can drill all the way down to the level of detail of a line item that would be on a bill. If that detail was passed from the 835 from the payer, we can capture all those details and report on that.

Elimination of denials is something that’s much easier for us to do. It’s integrated right into our collections module. If you get a denial, if it’s something that’s workable, we will map that denial right into the accounts receivable system. The user knows that there has to be some action item to clean that up or address that denial. We’re using the business intelligence and warehouse for operational efficiency and management insight.

Does that complement or compete with Amalga?

I don’t know if it competes with Amalga. I guess it could complement Amalga, but Amalga seems to be really more of a framework around the whole care delivery delivery model. Ours is operational efficiency — all of the revenue cycles like AR, days calculation ratio, collector productivity. Those types of things are what we’re using for the warehouse, as opposed to trying to capture various points of care. I think Amalga’s got a much broader approach to healthcare than we do. We’re more specific to our area.

You’ve been in the industry for a long time. Looking outside of your company and your products, what’s going to be happening over the next 5-7 years?

I think that moving from paper to electronic, there’s going to be a lot of workflow issues from that. I think the traditional batch system that we’ve had for quite some time –  they’re going to have to have replacements for that. I know that all of them — Siemens, McKesson, Eclipsys, etc. — have large revenue cycle systems that they’re trying to bring to market to replace those older systems. They’re usually larger. I think they’re really aimed up-market more than they are mid-market or even down-market.

I think there’s an opportunity at the community hospital level, for certain, because they do have money and they’re the ones that haven’t been able to automate like the larger institutions. They have more wherewithal to spend on electronic medical records. A lot of them already made decisions on what they’re doing. Then they’ve got those vendor relationships that probably are going to go with their revenue cycle solutions.

But you get into the community hospital space — the pressure to have an electronic medical record in place for Meaningful Use and all these other things — I don’t know that the revenue cycle systems are going to be able to keep up with the older revenue cycle systems that some of the smaller vendors have. They’ve got to be able to keep up with all that.

One that comes to mind is QuadraMed. QuadraMed’s had a difficult time trying to handle both the clinical R&D and the revenue cycle side, which is a tremendous amount of R&D. They’re kind of caught. They can’t go up-market very well; that’s pretty much saturated by the larger vendors. I think the community hospital space is underserved and I think it’s a great opportunity for us. In that real small footprint, we’re more affordable, easier to use, and have less moving parts when you start looking at all the bolt-ons that have been traditionally required. I think that’s an advantage for us.

Any concluding thoughts?

I think that we’re going to continue to see what we can do in the international space, continue to partner with clinical information system vendors that don’t have a revenue cycle component. There are people looking to get into the electronic medical record, but outside vendors that are taking a look at the US market and say, specifically for the community hospitals that the vendors served — and there’s a lot of competition out there and there’s a lot of clinical information systems that are already written and up and operational around the world — they’re looking at the US market, maybe, for an ability to expand for them. They won’t have a revenue cycle solution with the US regulatory and third-party. A company like ours that’s independent would be a good partnership opportunity for them.

We could help bring some competition into the US market, maybe, from overseas that hasn’t been here before.

HIStalk Interviews Daniel Barchi

July 7, 2010 Interviews 11 Comments

Daniel Barchi is SVP/CIO of Carilion Clinic of Roanoke, VA.


You just finished your massive Epic project, with eight hospitals and 100 practices brought live over a couple of years. Tell me about that project.

When we decided that we wanted to integrate from 11 different medical records — 10 electronic and one paper — down to one integrated system, it was 2006. At the time, we were also merging from being a confederated health system into a single Carilion Clinic, so the two projects converged nicely.

We knew if we wanted to operate like an integrated system and have a continuum of care for our patients, we needed one tool to do so. It was an easy choice to select the one integrated EMR.

We ended up choosing Epic because they had a reputation at that time, and I think still do, for implementing well. We knew we had the focus of the entire organization, so we took advantage of it and used it as a tool to integrate all of our hospitals and our practices onto one platform as rapidly as we could, while still protecting the use of clinical data and the health and safety of our patients.

Carilion was a high-profile Siemens client and an early Soarian adopter. What led to the change from Soarian?

Soarian had a great reputation and was doing a lot of innovative things. But when we traveled to Malvern in the summer of 2006 and saw where they were in the development cycle, they were making progress, but they weren’t going to be ready to do everything that we wanted to do as rapidly as wanted to do it.

We knew that we wanted to implement our integrated EMR in every clinical area and work financials in at the same time — front office, back office, hospitals, physician practices — and so it really forced us to find another vendor, which we did relatively quickly.

Soarian has been on the drawing board in some phase of rollout for forever and it still seems like it’s always going to be a year or two more. Do you think it will be a tough job for John Glaser to make Siemens a little more competitive with the window of opportunity that’s out there?

You know, that’s the reputation Siemens has had, and yet it’s a great company. We’re still a big Siemens customer for its many imaging products. If there’s anybody who can make this happen, well, it’s John Glaser. I was alternately surprised and thrilled that he was the one going to take the helm, so I’m happy for him.

I do think, with the right leadership, they’ve got all the right tools and financial backing. There’s certainly a need for more integrated systems. Two or three big companies should not have a monopoly on everything that is out there. The more systems that meet all of the needs of our health systems, the better.

When you looked at systems, what were your overall thoughts?

At the time, in late 2006 to early 2007, we were looking for one that flowed seamlessly. At the same time, I didn’t want our technology team to make the decision. We were adamant that it had to be our clinicians and our financial teams that chose a product that was going to work well, both face-to-face with the patient and in the back office as well.

When we did the selection, we got literally 300-400 doctors, nurses, therapists, and financial folks in the room with some of our IT folks as well and scored them. We went from eight, through a quick cut down to four. We had four vendors on site in front of 200-300 people in a large auditorium. We narrowed that down through the choices of my colleagues in Carilion Health System down to two.

That’s when we had 300-400 people in a room looking at day-long shows from the final two, which were Cerner and Epic. We put a team of about 10 doctors, nurses, therapists, financial folks, and IT folks on the road to do a couple of site visits to see Cerner and Epic in action. Like I mentioned, we chose Epic in the end because they had seemed like a great partner and we were eager to select a vendor that was going to work with us for a rapid implementation.

When you look back at what you chose and where you are today, was Epic something that you were truly excited about compared to your experience with Soarian or was just the best of what your choices were?

We were truly excited. This was not that many years ago — three, three and a half years ago — and certainly, they’ve made a lot of progress even since then, but it was state-of-the-art at that time. In fact, we are still operating all eight systems and about 110 physician practices on the original version that we installed, the Epic 2007 version.

We have plans to upgrade for Meaningful Use purposes next year, but we are very, very happy with the way that the system is operating in all aspects of our health system. At the time, we were very excited about consolidating our many different systems onto one platform. It has certainly met our needs.

Tell me about the structure. You did it all internally — who led the teams? How did you actually set about doing this to get it done on time?

The first thing I’ll say is that you’ve got to have cooperation from all facets of the health system to make it successful. We had great executive leadership and good cooperation with physicians and nurses. While our IT team staffed and managed the project, I made sure that our governing structure was led by our chief medical officer and chief nursing officer.

We were led at an executive steering level by a small team — a CMO, CNO, chief financial officer, the head of our physician practice group, and me. That small executive team ended up making the hard decisions.

Below that, we had our IT team, led by a vice president of clinical information systems who was essentially our vice president of the Epic project team. Her name is Kay Hix. She did a fantastic job organizing the structure and allowing us to use our existing infrastructure to get it done.

Instead of going out and hiring a third party to do it, we decided that we would make our IT team work in tandem with a new Epic team that we set up, and largely within the confines of our existing organization, built a team to develop, train, and build and implement the system.

Underneath Kay, she had two directors, one primarily focused on ambulatory physician practices and one primarily focused on the hospitals. Beneath them was a large team of talented people, including about 35 trainers. We ran training from about 7 a.m. to 11 p.m., six days a week, to train more than 7,500 users.

People say, “Well, Epic just sends out a lot of inexperienced kids who follow the cookbook.” How would you describe how they got involved and contributed to your project?

I’d say the team that we worked with from Epic was top notch in every way. They are very focused on the area that they know well, and almost skill-typed. If you ask an expert in one area about another area, they are quick to get their colleague involved and won’t go out on a limb to guess at what they might not know.

In that way, it seems like Epic does a very nice job of training its people to be subject matter experts. They can have people very deep in knowledge without having to worry about being too wide.

It also works out well with the health system team because we’ve certainly had subject matter experts, whether it’s our OR team or our ED team, who was going from a legacy application that they knew well. They had been trained on Epic, but wanted to interact with an Epic person who was a subject matter expert in that area.

In that way, it seems like Epic has been able to replicate — and continues to replicate — its success with a slightly changing but relatively stable workforce.

Everybody wants to be Epic these days. Can other vendors copy what they’ve done?

I hope so. People ask me, “What’s Epic’s secret sauce?” I often say, if you look at the two biggest players — Cerner and Epic — Epic is Apple and Cerner is Microsoft. Both very talented companies, but each has a unique feel and flavor about them. Even when we were making our selection, Epic felt more university campus-like, while Cerner felt more business-like.

I think that other health information systems can do as good a job as Epic without trying to replicate all of its collegiality. But at the end of the day, I hope that other health systems continue to grow in the way that they are and that we have more systems out there that meet the needs of hospitals and physician practices.

Do you see that happening?

One of the challenges — and I’m amazed every time I go to HIMSS and walk the halls — is all of the small start-ups who think that there is an opportunity to break in at this point. I think if you’re a relatively established big player — one of the big ones already, an Allscripts, a GE, McKesson, Cerner, Epic — there is opportunity to grow and gain market share. I’m happy with John Glaser and his role with Siemens because I think he will make it happen there as well.

Growing from a smaller, unknown vendor at this point into one of the larger players? No, I don’t think so. I think this is a game of musical chairs. Within five years, every large and medium hospital and health system will be seated in the place where they’re going to be for the next 20 or 25 years  without much opportunity for anybody smaller to work their way in.

You’re talking about for the major, core systems – correct?


CIOs could be fairly accurately characterized as risk-averse and finance people obviously are. How would you approach the market? People say they want innovation, but nobody seems to want to be the first to buy it in hospitals.

The funny thing is the tools that we have out there at our fingertips have been adopted in such a limited way. I think I saw the fact recently that fewer than 14% of US health systems or hospitals have achieved 10% or greater CPOE to this point. It’s almost funny to be out there demanding more innovative products when we’re not even using the products that are out there well.

I think there is a lot of runway for hospitals and health systems to use the systems that they have, tweak them, and make them more meaningful for their physicians and patients before we go out and try and demand something else. I think that the products that the big players have put out in front of us today should more than satisfy our needs for the next five or 10 years, even without a whole lot of smaller innovation.

What’s held everybody back? Why aren’t they using what they paid for?

It is very difficult. I’m surprised at even the way that some large health systems have achieved what they have. You know, and all of our colleagues do, that these are tough and challenging projects made challenging not only by the fact that they’re very complex, but they involve human lives, so there’s a premium on risk. They involve physicians who are well trained and want to be very efficient and good in what they do and see these tools occasionally as a threat to the way that they operate, and a threat to the way that they care for their patients.

Balancing all those factors is very difficult. Even a well-run project, which on paper has good governance and structure, if it doesn’t balance those needs, and especially if it doesn’t meet the needs of the physicians and the nurses using the system, it’s a recipe for failure.

What are some things that you learned that most people would not pick up on or that you wouldn’t have expected that really made a difference in how your project was completed?

I’d say the factor that made our project a success more than anything else was a buy-in to the schedule. We knew that this was something we needed to accomplish across all of our hospitals and practices. We knew that if we went very slowly it could take many, many years, and that if we were going to achieve the benefits for our doctors, nurses, and patients in a reasonable timeframe, that meant we had to implement in a reasonable timeframe.

That meant we had to make our hard decisions upfront and then stick to them and operate in a system fashion. When we focused on our order sets, for instance, we went from more than 3,500 order sets down to 500 common order sets. It was not 120 order sets for Hospital A and 50 different order sets for Hospital B. It was 500 order sets which you could use, and were the same at every one of the Carilion Clinic hospitals. We did all of the hard work upfront, set a schedule that we said that unless we were going to put patient safety at risk, we were not going to deviate from.

Then, once we had that focus that we knew what we needed to achieve and when we needed to achieve it, we looked for any outliers that would get in the way. As long as everybody was on board — our executive leadership, our clinical leadership, and our project team — we didn’t deviate from the schedule. It was more like riding a train than it was stopping and approaching every new hospital and physician practice and making decisions about it.

For a lot of hospitals, their problem is that their milestones are all wrong. They have to pay more money when they get the code loaded and then pay more money again when they get implemented and go live. It’s almost like an anti-sense of urgency.

That’s a great point. One thing we did was we bought an enterprise license upfront so that we had laid out the capital dollars initially. It was just a question of when we were going to use it, not if we were going to pay more when we got around to using it.

We also front-loaded the project. We did our largest hospital first. We have our largest, 880-bed hospital going to down a smaller 120-bed and even smaller hospitals than that. We decided to start with the 880-bed medical center first because we knew that we would run into the biggest, hardest issues there. Once we solved them there, we would just replicate the same process at our other hospitals.

By getting all of the right people on board, knowing that they had to make the right decisions upfront, and that there was not room for error at a smaller hospital that we could go back and fix later on, we really did have focus and cooperation in a way that I think we would have not had had we started at the other end and worked our way up.

You mentioned Meaningful Use. Are you comfortable with what you think Meaningful Use will be and where you are?

We are comfortable. I’m very interested to see what rules come out. It’s been a fascinating process to watch it all along. I do hope that the standards are held relatively high, but I agree with many of my colleagues who worry that they’re high, almost to the point of a lot of people not being able to participate. It almost seems like it begs for a common ground — that that bar is set high enough that it causes us to achieve more, but not enough that it decapitates anyone.

At this point, I expect that it’s going to be challenging for many hospitals across the United States to achieve it. We’re comfortable with almost all of the elements as they’re laid out today. There are four or five that don’t come easily that we have planned reporting for. We’re prepared, but we’re counting on achieving both certification and Meaningful Use in fiscal 2011.

You mentioned Carilion’s move to the practice-type model, the Mayo model, in 2006. What kind of IT changes did you have to implement to support that?

It was all about integration. We had 11 different systems, more than 512 different interfaces, and we had the challenges of trying to get down to a common way of operating because we really wanted the physician in Roanoke to be able to refer to his or her colleague in Blacksburg, and for both of them to see the same information on a discharged patient from our medical center. We thought we were only going to be able to do that, not by brushing up on our 500-plus interfaces, but by having it all operate on the same system.

One thing that we had done was that we had a whole lot of experience with the GE Centricity product. In the previous eight years, we had rolled out GE Centricity to every one of our 140 physician practices. When we implemented Epic, we knew that we had a responsibility — not only to our patients, but to the doctors that had put all the work of entering and maintaining that information — of having it available at their fingertips the first time they logged in to Epic.

One of the biggest early challenges we had in this project was converting literally eight years’ and about 800,000 patients’ worth of data from GE into Epic. We had a small team led by two of our physicians and about five of our IT people who did nothing for about four months than plan the migration of the data and test it over and over again.

Then, when we actually did push the button and convert the data, our data center literally chugged for about 11 days converting all of that information from the GE system into the Epic system, so when our first practice went live, it was all there. That was a commitment we needed to make so that our physicians had, in their new tool, all of the data that they had in their old tool.

There’s a new Virginia Tech Carilion School of Medicine. How are you involved with that?

We do have a new school of medicine that we’re very proud of. It’s been a challenge. In the past four years, we have implemented Epic. We’ve build 200,000-square-foot new medical center. We’ve acquired two major practices. We’ve acquired one hospital. We’ve built a research institute. We just started the Virginia Tech Carilion School of Medicine. All of which made for a very busy past four or five years.

My team and I are responsible for the technology for the school of medicine. It’s been a fascinating experience helping them stand up their practices, implement IT for them, and put the systems at their fingertips so that they’re ready to go when their first students show up 23 days from now.

One of the most fascinating things was participating in the selection of medical students. The Virginia Tech Carilion School of Medicine used an innovative interview approach where they had many people, lay people and clinicians alike, participate in the student interview process. Getting to do that was a highlight in addition to being the CIO for that school of medicine itself.

In terms of the curriculum for the medical students, are you involved in any IT or informatics training components?

Yes. In fact, we’ve made use of the medical record one of the components of the school of medicine. It’s not something that the students will have Year One, but by the time they get to their clinical rounds, we will have them trained on the Epic electronic medical record and built templates for them to use on their own, in ways that they can step slowly from viewing patient data initially to full CPOE over a period of about six weeks.

The other hat you wear is that you’re involved with the Virginia Information Technologies Agency. What kind of work is being done at the state level?

I’m proud of the way that throughout the Commonwealth of Virginia, we’re cooperating to make sure that the data that we have in each one of our health systems is available to others. Part of the HITECH Act was $2 billion set aside for HIEs. Five of the CIOs of the other large health systems in the state of Virginia and I serve on a Governor’s Commission to help define the standards for the HIE.

We’re also on the advisory board for implementing it. We’ve been meeting in our state capitol  at Richmond  for the past 12 months focused on how we’re developing HIE, who we will have implement it for us, and how we will begin to exchange data and interchange with the NHIN as well.

What are your IT priorities for the next several years?

One of the things that has been nice about getting to the point where we’re close to wrapping up this implementation is that we know that for the next five years, we’re going to be all about optimization. We don’t want to go into the next big project. We don’t want to go buy the next new piece of cool technology. We want to take what we’ve built and implement it and make it work as well as we can for our physicians.

We have an optimization team, which is getting larger all the time, and that we hope through our upgrade to the 2010 version of Epic next spring that we will bring even more useful technology to our clinicians. Our priority, instead of being very forward-thinking and cutting edge, is all about using this tool that we’ve built to its maximum advantage.

Any concluding thoughts?

It is a heady time to be part of healthcare IT. For the first time in my career, my mother understands what I’m doing because it’s front page in The New York Times. I’ve really enjoyed being part of it. Doing it in a large health system and trying to make it integrated is very rewarding.

An HIT Moment with … Dennis L’Heureux

July 5, 2010 Interviews 3 Comments

An HIT Moment with ... is a quick interview with someone we find interesting. Dennis L’Heureux is SVP/CIO of Rockford Health System of Rockford, IL.


What are your most important IT projects at Rockford Health System? Which ones represent a change in strategy from just 2-3 years ago?

The most significant IT undertaking at RHS is the introduction of an integrated electronic medical record. This said, it seems that we can tag almost every project we do as “important”.  Among other important projects are C-PACS, Bed Management / Patient Flow, Utilization Management, and Patient Dietary Service.

Many of these projects were defined as needed during the past three years but are just getting underway. Strategically, however, we are now exploring the feasibility of a more tightly integrated approach.

You’ve said that the hospital’s transcription program is cost-competitive with offshoring because of speech recognition. What benefits have you seen, and how does dictation and transcription fit into your electronic medical records strategy?

Before leveraging speech recognition technology, we could not seem to compete with offshore transcription options. As we analyzed costs, we found that typical employee benefit costs measured in cost per line seemed to be the component that made us uncompetitive.

However, speech recognition — we use Enterprise Turbo Speech from Nuance — has provided us the ability to drive transcription productivity high enough to offset this disadvantage. Additionally, it is important to note that in-sourcing our transcription workload also increased the qualitative satisfaction that our physicians demanded.

As we transition to an EMR, we believe that we will use voice recognition to allow physicians to add narrative to their patient’s records. We are in the process of taking a look at the benefits of Dragon Medical, which would allows our physicians to dictate directly into our EMR for real-time documentation.

What changes do you anticipate from healthcare reform, specifically with regard to reimbursement?

I believe that healthcare reform will increase volume and reduce reimbursement. Overall, providers will not fare well if they do not align their cost per unit of volume to the corresponding reimbursement per unit of volume. As bundled payments are offered, this will create a need for more cost accounting detail.

Are you considering any innovative technologies or vendors that the average hospital CIO would not have heard of?

There are many innovative technologies being introduced. For example, natural language processing and script digitization. However, many CIOs are not well positioned to take risks since budgets are razor sharp and it is difficult to prove ROI beyond a paper exercise.

That is why I believe it will be difficult for new products to find any kind of market penetration unless they are built into existing, well-known products. 

What are some ways that the IT department interacts with the clinical front lines to improve patient care?

Technology is hard, but process change is harder. IT is learning that much of what it does relates to facilitating change, and this cannot be done without direct involvement with care givers at the point of care.

Integrated implementation teams are the norm these days, whereby IT analysts must work in tandem with those that are to optimize the utilization of the expensive information systems we invest in.

HIStalk Interviews Howard Messing

June 30, 2010 Interviews 10 Comments

Howard Messing is president and CEO of Meditech.


How’s business?

I think we’re doing very well. The stimulus bill has certainly stimulated.

I noticed on the financials that operating income dropped last year for the first time. Was that just an accounting irregularity, or what happened there?

Operating income dropped last year… Well, we had a drop in sales last year because of the first half of last year. Nobody was buying anything because everybody was figuring out what was going on. That’s probably why you see a small drop in there.

I take it that’s totally reversed and then some.

Right, the problem being that between the time we make a sale and the time the income shows up is the better part of a year. Even though we were making a lot of sales, the second half of last year wasn’t reflected until this year.

Tell me about the challenges and the successes with 6.0. That’s a pretty big step for the company.

6.0 is, yes, a very big step for us. We’ve rewritten a bunch of our software from scratch, which we tend to do every certain number of years, certainly every 7-10 years, as we get new ideas and better ideas. It’s gone pretty well. It’s gotten a great reaction from people.

The biggest challenge for us is that we have so many customers running our older version of software that we have to not only maintain the older version, but actually continue to development in it. We’ll have to continue that for some number of years to come until the vast bulk of our customers upgrade to our newer software.

In addition, we still have the rest of our apps. We’ve only done a core set of applications so far. We’re going to have to do the rest of those over the next 2-3 years.

I take it those would co-exist? If someone wanted 6.0, they could still run everything, it’s just they would be 6.0 on some things?

Right. That’s the way we do it.

I would assume there’s quite a number out there running Magic?

Yes, there’s quite a lot.

Do you have a feel for how many that is?

Something over 1,000-1,200 sites, I believe, are still running Magic.

And your total count — I don’t know what it is now. It used to be around 2,100.

2,100 or 2,200.

So half are still on Magic. Is that the next logical step, that they would go all the way from Magic to 6.0?

Yes, we do have a plan where people go straight from Magic to 6.0. There’s no reason to go to the intermediate.

There were some good things said by the folks at the HIMSS conference — by Dave Garets, if I remember right — about the CPOE adoption with 6.0, which seems to be dramatically improved. Was that part of the reason for rewriting it in a way that was more Windows familiar?

Yes. I think the big difference there is functionally. The old stuff and the new stuff currently is pretty much the same, but the look and feel is certainly different.

People, particularly doctors and nurses, are much more desirous of a modern look and feel and they’re willing to accept things a lot easier if it’s a modern look and feel. I think, yes, that’s why you’re seeing a much greater acceptance. I don’t know about much greater, but a greater acceptance, certainly, with 6.0.

At the same time, the new interface also has allowed us, I think, to reduce things like number of clicks and all those good things. That’s also helped.

Some of the attention that’s out there now is going to companies like Eclipsys and Cerner for opening up their system to third-party customization or hooks into the application. Meditech’s always been pretty close to the vest on not letting clients screw around with the underlying stuff. Is that something that’s in the works or do you even believe in that concept?

I’m not really even sure what the competitors are doing in that area. We’ve always had some ability for our customers to define some things on their own, but overall I would say no, we don’t believe in customization as a desirous thing. It certainly is a necessary thing, on occasion, to do.

I think, moving forward with certification and the patient safety and all that, it’s probably going to be a less attractive feature for people to use than it is in the present time. We don’t have any great plans on that.

What do you think about the whole certification argument? Do you like the way it’s changing? What are your thoughts, as a vendor, on what certification means to you?

What certification means to me? I guess in many ways, I would have been the last one to say that certification was a good thing, but I have surprised myself by coming around quite a bit in thinking that it, perhaps, is a good thing for our industry. Certainly, we’ll quibble over the details of how it’s done, and quibble about the particular way of the government’s getting involved.

I’d like to say I’m a short-term pessimist and a long-term optimist, but in the long run since I worry a lot about patient safety, I think certification may very well be in everybody’s best interest. I would rather that it was cast in terms of results rather than specific ways to get there, but over time, I assume that we will get modification into the way it’s written and be able to do it in a meaningful way — not to use the word too much. We’ll see …we’ll see.

In the short-term, yes, it’s a pain in the ass because you’ve got to get it certified. We don’t know all the rules and we may have to get it certified multiple times, but so long as it’s a level playing field for everyone, and so long as the eventual outcome is to have better systems and interoperable systems, I don’t think it’s necessarily a bad thing.

How do you think the whole CCHIT will change now that Meaningful Use is off on a different direction? What do you think certification’s going to look like in a year or two?

I really don’t know. We’re certainly will have some people who continue to look at it and put their ideas in and we’ll see how it goes.

Do you think, under the CCHIT requirements, that you had to invest R&D to do stuff that customers probably didn’t really care about that was still on the checklist?

A very small amount of that, but most of what’s on there is stuff that people do care about. I’d actually have to think long and hard about something that nobody cared about.

Meditech’s one of the few systems out there that’s really appropriate for those many small hospitals that maybe aren’t very far along on their IT journey. Are you doing anything new to go after that business?

Not really. First of all, we think we’re suitable for all hospitals regardless of size, but I will agree that the small hospitals find our cost of ownership to be particularly good for them, and tend to work with us. No, we’re not doing anything specific to do that, other than we continue to watch our pricing to make sure that we remain appropriate for various sizes of hospitals.

What competitors do you face across the table most often?

I think McKesson is certainly in the medium-sized hospitals as the competitor, and I think we face them most often. In the small hospitals, probably CPSI. In the large hospitals, it’s mostly Cerner. Occasionally in the largest hospitals, Epic.

I’m assuming you displace some in-house vendors occasionally. Who are the ones that usually get displaced in favor of Meditech?

It’s a mixture of all of them.


Yes. I’m not going to single out any particular vendor.

Have the demographics of your customer base shifted as far as size, location, or type of hospital?

Yes, I think the size is slightly larger than it used to be. If you would have asked me five years ago, I would have said our sweet spot was 200-225 beds. I would say it’s closer to 275-300 beds today.

If you took that as a percentile, that’s probably a fairly huge chunk of the hospitals that are out there. I’m sure you probably know that number by heart, but that’s, I would guess, most of them by far.

Well, we think we’re in about 25-28% of the hospitals in the country, if that’s what you’re asking me.

I was just saying, if somebody drew a line and said, “Well, your sweet spot’s 300 beds,” or whatever it is, you would still not be ruling out very many potential prospects.

That’s true, that’s right. We don’t want to rule anybody out.

What about hosting? What’s the latest buzz on people wanting hosted solutions or turnkey solutions?

Actually, that’s kind of interesting because I used to not be at all a fan of hosting. I didn’t think that made economic sense for Meditech customers again because I thought our cost of ownership was pretty low.

Having said that, I’ve seen more interest over the last year or two than I expected, and not necessarily from the places that are most cost-pressed, which is what you would expect. I think a lot of people are taking the attitude that even if they don’t save money, it reduces management time and frees them up to deal with more long-term issues.

We’re seeing more of it. We ourselves have no intentions of providing that service directly, but there are various people out there who are interested in providing that service with Meditech software and we continue to say that’s fine with us.

When I talked to you years ago, it was the ‘stick to the knitting’ philosophy; that you didn’t want to be in something that was distracting. Is that the reason that you don’t want …

Absolutely. We sell software and the services around that software. We don’t do anything else.

The proposed acquisition of Eclipsys by Allscripts moved the idea of integration between hospitals and physician practices to the forefront. What do you think about the acquisition and that trend of people suddenly short-listing only those vendors who have strong integration with outpatient?

I don’t pay too much attention to what the competitors are doing, so I don’t know that I have any particular impression on Eclipsys and Allscripts. But in general, I agree with the philosophy and something we’ve promoted –  that there has to be tighter integration with all avenues of care, both ambulatory and acute care and eventually, nursing homes and independent care and whatever.

Obviously the biggest connection is between ambulatory and acute care, and one way or another, there needs to be a seamless integration with that, both in terms of getting the doctors to appreciate better what’s going on and in terms of taking better care of the patient. So I think you’ll see, whether it’s by acquisition or strong partnerships between companies, a tighter and tighter integration between all horizontal attributes of care. We’ve done that for a long time ourselves with our partner LSS, but even with us, I think you’ll see a tightening of that integration.

At the same time, still recognizing that for a long time to come, there are going to be doctors out there who have their own systems that are not necessarily the one that the inpatient or the acute care facility might choose for them.

Are you finding that that question comes up more often when you have prospects; and are they comfortable with the answer that you can give them on your strategy for either one system for doctors, or foreign systems that you can integrate?

It does come up more often. I’m very happy with that answer. It seems to be something that most people respond well to.

What do you think about the trend of smaller hospitals that are struggling with everything from technology to financing being acquired? How do you think that will change your business?

I don’t think it will change the business that much. There may be less customers, but they will be bigger customers overall if that trend continues.

I think we’re actually a few years away from the real cost pressures hitting our hospitals. Many of my hospitals would disagree with me on that. They’d say they’re under that pressure today, but as the baby boomers age in the next four or five years, there’ll be a lot of cost pressure and there’ll probably be a lot of consolidation in the hospital industry at that time.

When we have customers of ours that are acquired by another hospital, often our system is the one that stays in place. Often they do a search to decide what they want to do and it’s just another competitive situation. I don’t think it changes the business that much.

It might hurt a vendor that specializes only in the smallest hospitals if they tend to disappear, but I actually don’t think the smallest hospitals will all disappear. There’s a need for those small hospitals out in rural areas, and many of them are fiercely independent.

It seems like nobody even blinks an eye these days when you see a deal signed for $30 or $50 or even $100 million. Does your phone ring more often when hospitals that can’t afford that suddenly think the Meditech picture looks attractive?

Well, I blink at somebody spending $100 million. I don’t really understand some of the economics behind these decisions that are being made at a time when the hospitals are claiming they’re under so much cost pressure. Then you see them making these gigantic deals for huge amounts of money for a system that I consider to be basically equivalent to what I offer for 20% of the cost. It’s very, very strange, and I think that will catch up with people in the long run.

So, I’m not sure how to answer your question, but we continue to say that we’re good value. We’re not looking to take advantage of anyone by raising our prices tremendously. We think that, in the long run and with the cost pressures now, people will more and more realize that we were a good alternative.

Assuming that it would be difficult to look at the marginal benefit compared to the marginal cost of $10 million versus $100 million, why do you think people are making those decisions?

I think there’s some element of people thinking if you’re spending that much, you must be getting a better system. I think there’s some element of … how do I want to put it? There’s some element of people wanting to … I have to be careful how I say this.

Many hospital managements are afraid of losing their doctors, and so they turn the decision over to their doctors. The doctors are not necessarily concerned with the overall finances of the acute care institution, so the cost does not become a factor in the choice. I think we see a lot of that happening. I don’t think there’s any way it can be cost justified.

As I understand it, the HITECH reimbursement isn’t based on what you spend, it’s based on volume. Bottom line, it would stand to reason that the less you spend, the more you get to keep of the difference. Are people asking you to run those numbers?

They do ask us to run those numbers. That’s the way I understand it. Like I said, I think it will come back to haunt some people who are spending gobs and gobs of money on some of these systems.

And it’s not, of course, just the capital upfront. The maintenance is going to be just excruciating on some of that.

Right, right. Total cost of ownership is huge on some of these systems.

Are you pricing 6.0 differently, or is that basically just a replacement at the same price?

It’s a replacement. We don’t charge different amounts for different systems. It’s too complicated.

Your maintenance fees are, I assume, still low?

Our maintenance fees are basically the same as they’ve always been. We charge basically, 1% a month of what people buy for maintenance and we intend to keep that. Not that there aren’t modest raises over time, but we try to keep it low. We don’t think that our systems are difficult to maintain.

With other vendors, not only do the price goes up, but so do the maintenance percentage. It seems like it shames the other vendors who get 18 or 20% on five times the cost.

They don’t seem to be shamed by it. If they were truly shamed by it, they would do something about it.

Or the customers would stop buying.

Right, right.

How do you educate someone who somehow sees that as an equivalent alternative? Are they just not price sensitive?

To be honest, we don’t actually lose many sales to the real expensive systems that are out there. Many of our customers do toy with it. Many of them do understand it’s too expensive and then back off on it.

We just do what we’ve always done, which is we want people to want our system. We don’t want them to buy from us because they don’t want somebody else’s system, so we continue to demonstrate what we do.

If they bring up specific features that they think they’re getting with somebody else’s system that we don’t have, we try to point out to them that it’s actually there in our software. Hopefully, we make our case and it’s a strong one, that it’s better to go with Meditech.

Three or four years from now is when I believe the real crisis will happen in healthcare. Again, I know people say it’s happening now, but I really believe it’ll be three or four years from now. As the baby boomers enter Medicare, hospitals are not going to be able to spend as much on healthcare information systems as they do today. I think Meditech is very well positioned for when that happens, and the companies that are charging a lot will have built cost structures that they won’t be able to maintain.

Do you think there’s a certain snob value that a hospital says, “Oh, I can’t run Meditech. I’ve got to have Epic or Cerner because that’s what all the cool hospitals like mine are running.” Do you think that there are people who never even pick up the phone to call you?

Yes, I believe that exists. I think it’s less than it used to be. I think we’ve made a lot of progress, particularly in the multi-hospital chains. Particularly among the Catholic hospitals we’ve done very well, so I think it’s less than it used to be, but yes, there is certainly the snob appeal or whatever you want to call it — the CIO of the large teaching institution who can’t do Meditech because we’re also in community hospitals.

I would assume your win percentage is a lot higher when the CFO is involved more actively.

I’ve never really looked at that, to tell you the truth. I’d imagine it’s true, but I’ve never actually thought about it.

What’s your overall thought on the proposed Meaningful Use criteria and the whole healthcare reform issue and how it’s going to affect your business?

I wish the Meaningful Use was caged in terms of results than it was caged in terms of features of software. Then, I would think you would have a much better impact on patients than it, perhaps, will caging it the way that they’ve done it. It’s certainly is driving a huge amount of sales for us today in time, as people decide they have to make a decision now.

If they are going to change systems, they won’t be able to afford to change their system 18 months from now when they’re in the thick of trying to get that money from the government. So, it’s driven a huge amount of business today, which I expect to be a blip.

I expect that 18 months to two years from now, there’ll actually be a lull in people buying systems; much as it was after Y2K, wherein 1999 was a huge year and then 2000-2001, business really fell off. I see the same thing here.

I do wish the government had spread this out over a longer timeframe. I think that our customers would be able to be better focused on the real results they can get from it if we had done that rather than chasing after the money and doing the minimum they can to get the money because it’s under such a tight time frame. But again, as I said before, I’m a long-term optimist. I think in the long run this will all be good.

How do you plan for your business knowing that that hump is going to go away after the people have locked in with whoever their partner is?

The main thing we’ve done is limit the implementations that we’re doing currently, which has been a struggle. We have done that in term of we are growing, but we’re not growing so fast that we’ll have people who won’t have what to do 18 months or two years from now.

We’ve really spaced out the implementation. As people coming to us for the first time today are getting dates for delivery that are well over a year, to sometimes, depending on what they’re buying, as much as 18 months from now, which many of them don’t like. But that’s the way we control the business and make sure that our long record of no layoffs and controlled growth remains intact.

How do you think your job will change as CEO?

I don’t think it’ll change very much at all. Neil Pappalardo, who has been our CEO for 40 years or so, has just decided that it’s time for him to give up that title, but in effect, I’ve been running the day-to-day business for quite a while now. He’s still around; he just has been gradually spending more and more time on other pursuits, and so thought it was time to pass the baton. So, I don’t really think it’s going to change much on a day-to-day basis.

Is there a movement to prepare to transfer to the next generation of leadership?

I think we’ve always done that. It’s the case that we have appointed new officers several times over the past three years. I think you’re going to see us doing that again before too long.

We have a great set of people who are what we call directors, the round of people who report to our officers. It’s a lot of good people who have been here a long time who see this as their life’s work, and they will gradually take over. Our succession planning is thought out very carefully. We try very hard to get people promoted before the person who they are going to be, so to say, replacing, is ready to retire.

For example, we had a VP of development, a fellow named Bob Gale, who about 2-3 years ago we promoted him to senior VP and brought in a woman by the name of Michelle O’Connor, and she has been gradually taking over responsibility from him. You’ll see that in all of our areas.

This is one of those boom cycles where suddenly everybody and their brother want to be in healthcare IT. Is the company going to stick to its guns about not selling, not going public, not changing?

As long as I’m around it will. Yes — the answer to that is yes. We have too much fun the way it is. Again, we think the prospects for the future are very, very good. We see no reason to change the structure of the company. It’s worked well for us and we don’t see any benefit.

If you looked out 5-10 years, what are the strengths, weaknesses, opportunities and threats for Meditech?

I think the biggest threat is if the healthcare system changes in such a way that we can’t adapt correctly, and nobody really knows where the healthcare system is going. There are certainly many competing thoughts. That’s one of the reasons that I have been pursuing international business is to give us some stability that doesn’t depend on, let’s say, one healthcare system in the world. I think that’s the biggest, biggest risk we have.

I also think in some ways that that’s our biggest strength, in that we’ve shown flexibility. We reinvented ourselves many times and shown that we can have multiple generations of software running that address the different needs of the healthcare system. Hopefully, whatever does happen, we’ll be able to deal with.

Anything else you wanted to talk about or any concluding thoughts?

You know, there’s one thing you didn’t ask me about that I think is going to become more and more important as IT systems become more and more central to the clinical care process, which is patient safety. That’s something that’s a very big personal concern to me. We’re making every effort we can to produce a safe as possible software as we can. To some extent, I wish that the ARRA requirements actually included some patient safety issues as well in them.

I’m sure that the FDA, if they ever get funding, will start to regulate our software. In Canada, our kind of software becomes a medical device in about a year. We’re going to have to be regulated if we were a medical device which has patient safety implications. I think that’s the biggest issue for the industry that we should all be cognizant of and we should all care a lot about.

The only thing that keeps me up at night is the fear that we’re doing something that’s going to hurt someone. I hope that all the other CEOs have the same kind of feeling, because if one hurts somebody, it casts a light on the entire industry.

Generally when that happens, either it wasn’t designed to be very usable or the QA wasn’t very good. What steps do you take to build that safety into the product?

We certainly have a fairly thorough QA process that we do to make sure that the software is as absolutely safe as it can possibly be. Then we also have a fairly detailed process when a customer reports a possible patient safety issue. That problem is immediately elevated in status. We make a quick determination whether it’s even possible that there’s a patient safety issue so that we can notify all customers of the possible issue. Then we throw a lot of development resources and QA resources on it to figure out what the problem is and fix it.

I agree with you that sometimes patient safety issues are bugs, but sometimes they’re just a misunderstanding of how the software needs to be used; or a question of terminology. Those are actually a lot tougher to find, so you have to be that much more careful in your design, and that much more careful in your quality review of things.

An HIT Moment with … Sharona Hoffman

June 28, 2010 Interviews 20 Comments

An HIT Moment with ... is a quick interview with someone we find interesting. Sharona Hoffman is professor of law and bioethics and co-director of the Law-Medicine Center at Case Western Reserve University School of Law in Cleveland, OH. She recently published an article, E-Health Hazards: Provider Liability and Electronic Health Record Systems in Berkeley Technology Law Journal with co-author Andy Podgurski, a CWRU professor of computer science who also contributed to the information below.


The article suggests that a hospital may expose itself to liability for physician acts, from which it is currently protected, by forcing doctors to follow its EHR-enforced practice guidelines. Should this be a significant concern?

This is a complicated legal question and I don’t think it should be of primary concern for hospitals. Whether a hospital is vicariously liable for the acts of physicians will depend upon the degree of control it has over them. Often, a hospital can prove that the physician is an independent contractor. In some circumstances, however, doctors are found to be employees and not independent contractors. The issuance of an EHR practice guideline alone, however, probably will not undercut the independent contractor defense.

Provider errors due to software usability issues have made headlines recently. The article suggests an option of requiring all EHRs to use a standard user interface. Given the competitive and proprietary nature of the EHR industry, is that likely or even advisable? Is there a precedent in other industries?

Major software platforms like Microsoft Windows and the Mac have user interface standards or guidelines that application vendors follow. An EHR interface standard should define an essential level of consistency between the UIs of different system. It shouldn’t require them to be identical.

How much liability do software vendors and hospitals have for programming errors and setup mistakes, respectively? Do you think those cases are coming up but being settled out of court such that the problem is understated?

Vendors would have primary responsibility in such cases. Vendors both design the software and help hospitals implement the systems and train employees. Hospitals would have liability if they tried to customize the system inappropriately on their own or did not engage experts to provide responsible training. They could also be held liable for mistakes that employees, rather than independent contractors, made with the system that caused patient harm.

The vast majority of cases that are filed in court do not produce a reported decision and many of these are settled, so you are right that it is difficult to know how many EHR cases have arisen.

In fact, regardless of litigation, a major problem is that there is no adverse event reporting requirement. If an EHR system has a problem, the vendor or user doesn’t have to report it to any regulatory agency. Nobody is keeping track of what kinds of problems are arising and how frequently. Therefore, EHR system purchasers can’t obtain information they need to make educated decisions.

The article concludes that the federal government should oversee and monitor EHRs in some way that goes beyond simple certification. Explain why that’s the case and who in the industry should advocate for government involvement.

EHR systems are much more than just record-keeping systems. They manage patient care in a lot of ways, and therefore, they are safety-critical. They provide doctors with prompts and alerts concerning patient allergies, other drugs patients are taking, and the patient’s medical history. They provide a mechanism by which doctors order diagnostic tests, medications, and other treatments. They will create the patient record and could be the way by which a physician communicates with other departments or with the patient herself. 

If anything goes wrong with any of these functions because of software bugs, computer shutdowns, or user errors due to poor system design, this could be catastrophic for medical outcomes.

The FDA regulates drugs and devices. A responsible doctor would never think of implanting a pacemaker that is not FDA-approved, because a flawed device could kill the patient. We believe that EHR systems will be just as critical for patient welfare and therefore, they require an equal degree of government oversight.

Anyone who really cares about patients and medical outcomes should be advocating for government involvement.

As you looked at the EHR industry and EHR adoption by providers, what aspects concern you the most, both as an attorney and a patient? 

EHR systems have the potential to improve patient care significantly. They can increase efficiency, provide doctors with essential information about the patient, and help doctors make optimal medical decisions. Most other industries are computerized, so it is certainly time for the medical profession to catch up. However, in implementing EHR systems, we must proceed cautiously and responsibly.

It is extremely important that the government establish appropriate approval and monitoring processes for EHR systems. These must include an adverse event reporting requirement.

We have heard from a lot of health care providers that the systems they have are difficult to navigate, reduce efficiency because they require too much time and data, and disrupt the relationship with the patient. Some doctors feel that they are overwhelmed by irrelevant or trivial electronic alerts and that they don’t have time to listen to and examine patients because they are too busy attending to the demands of the computer.

Therefore, we need regulatory standards and criteria that ensure that vendors minimize these problems. Once a practice purchases a system for millions of dollars and trains its staff, it will not be able switch to a different system that is better. It is only with appropriate oversight and quality-control that we can maximize the potential of this technology.

HIStalk Interviews Terry Edwards

June 25, 2010 Interviews 1 Comment

Terry Edwards is president and CEO of PerfectServe


Tell me what PerfectServe does.

At a high level, it’s all about making it easy for clinicians in a hospital environment — nurses and doctors — to connect with the right doctor at the right time and in the right way. It’s about enabling communication processes that are accurate and simple.

Then from the perspective of the doctor, it’s about enabling processes that gives physicians the ability to really selectively filter and control the communications that they receive throughout their work day. When I use those terms, ‘the ability to selectively filter and control,’ it’s really about enabling them to mold the flow of communication that a hospital directs at them around their own personal unique workflows.

Give me an example of two or three problems that this would solve.

Let’s say that we are three physicians, and maybe we’re cardiologists. Our workflow rules might be that we each take our own calls during the week beginning at 6:30 a.m. until 4:30 p.m. except for the days that we’re off.

John is off on Tuesdays, Bill is off on Wednesdays, and I’m off on Thursdays. On those days that we’re off, one of the other two covers for the person who’s off. Then we have our consults during that same weekday time period, handled by our PA. Our PA will route those to one of us based on the things that are unique to those consults. In the evening hours and on the weekend hours, everything is handled by one doctor on call and we change that schedule daily. One guy would cover the whole weekend, like Friday night through Monday morning.

In addition to that, maybe John likes to have everything just route to his cell phone in real time. He doesn’t mind being interrupted; he like being really accessible. Maybe Bill likes only the urgent things routed to his cell phone, and for everything else, he wants a text message to show up on his phone. Me, maybe I’m just a numeric pager kind of guy — I just want a call-back number and that’s it, but beginning at 9:00 p.m., I want you to call me at home.

Instead of all those instructions living in pieces of paper, Rolodexes, and call schedules in three-ring binders and things in and around the hospital that nurses and other doctors need to refer to and interpret every time they need to call one of us, we build all of those rules into the PerfectServe system. We give the hospital one number to dial.

This is where the ease comes in. If I’m trying to reach Bill, I just call on the system and I say, “Bill Smith.” The system will confirm that, it will interpret the rules, and then route the call either to Bill or maybe the PA or one of us according to the workflow rules, and then our individual instructions for that specific moment in time. It does it automatically.

That sounds something a little bit similar to what Vocera offers. Who would you consider to be your competitors?

Our competitor is the status quo, just in terms of all the manual processes that are in place in health systems today. Vocera is not really a competitor. They’re really a complementary technology in that Vocera is more like a device or a node on PerfectServe’s network or PerfectServe’s platform.

We can answer calls and messages that would originate on Vocera devices and we can send calls and messages to clinicians on Vocera devices. But Vocera, for the most part, is an ‘in the four walls of the hospital’ solution; whereas PerfectServe includes the communication to physicians regardless of whether they’re in the hospital or out in their practices, or mobile — wherever they are. We’re device agnostic.

Someone comes to you and they decide what end-user devices they need, whether it’s voice-over-IP or plain old telephones, or whatever. Then you’re what rides in the middle to decide, when those calls come in, how to route them?

Exactly. It’s about really intelligent workflow-based, rules-based routing according to the rules of the recipient. Physicians are the biggest users in terms of receivers of calls and messages, and then those who might be around them as part of their workflow — like a nurse practitioner, physician assistant, or some other sender.

Like in the example that I gave, the consults during the weekdays would route to a PA. If, for example, I was the nurse on the floor, I might not know that those are the rules, but when I called in and said, “Bill Smith,” I might hear prompt, “Are you calling about a consult?” Yes. Then, that would route that call to the PA, and maybe the outcome would be a voice message where I can leave all the detail, and the PA picks those up throughout the day and then determines where to forward it to.

So if I’m calling a doctor and their preferred method at that moment is to roll to a pager, do I then get prompted for their pager number or does it just say, “Your message will be delivered,” and then it logs you off and it just does what it does in the background?

Yes, it does what it does. When we configure the system in a hospital, we configure it so that we’re pulling all the appropriate Caller ID information. We map that back to departments so that we greatly reduce the need for nurses to key in numbers and make mistakes and things like that, as well as speed up the system.

Everything that happens on the platform is documented automatically. We’ve developed an analytical tool that then allows, say, a chief medical officer at a hospital to look and see how many calls and messages we are initiating to which doctors and from which departments, and drill down into that by specialty and contact method. When you have that data, then you can begin to use it as a tool to enhance process improvement for those clinical processes in which communication are really a fast, and/or efficient communication is central.

What about patients? Would physicians’ practices use this as the front-end for patient calls?

Yes. There is another module of the service that is designed to replace the conventional answering service. That provides a portal, or an access point for patient calls coming into the practice. The caller experience is different than the hospital portal, which is optimized for communication that originates from clinicians at a given hospital site.

What would be the compelling reason that they would do that? I know a lot of them are really tied to their answering services.

It’s the elimination of human error. In the current communication processes, whether they’re those that originate at the practice, or those that are being done manually in the hospital environment, the complexity of the physician workflows coupled to the manual processes — you’re basically dealing with a high volume of highly variable processes handled in manual ways, so you have a high degree of communication breakdown.

When you have a breakdown, you have situations where the wrong doctor, for example, is paged or called when he should be off. Or maybe a doctor, when he is on call in the middle of the night, his rule is that he wants his pager to go off and not his home phone to ring. The reason why is if the home phone rings, it wakes up everybody in the house. Whereas another person, when they’re on call and they’re at home, they might sleep in a different room from their spouse and they want their home phone to ring.

With doctors, those breakdowns really result in a high degree of frustration; and then the overall process inefficiencies cost them time. Time is the only thing that the doctors have, really. That’s their key asset.

Looking at it from the hospital perspective, tell me about what the advantages would be to hospitals and to patients for physicians being able to directly access physicians and nurses to make their communications with physicians.

Those benefits, at the highest level, really accrue up into the coordination of care, the reduction of risk, and tighter physician alignment. When I talk about tighter physician alignment, I mean really being able to integrate the care delivery processes of the hospital with the communication workflow of the physicians. These things are important because of the high volume of communication that takes place just in the coordination of care.

For example, a typical 300-bed hospital will probably initiate some 15,000 voice-related calls to doctors every single month, or 180,000 a year. These are interactions where it’s about: there’s been a change of status on this patient; or we’ve got these results and I need to act, but I need to know what order you’re going to write.

Those events are all related to patient care. When you improve the accuracy of those processes, then nurses aren’t wasting time making phone calls to the wrong people. You reduce the delays in communication and decisions can be made faster. That has an impact on not only reduction of risk and quality, but faster throughput; and it can make a contribution to reducing length of stay and everything related to improved efficiency.

You mentioned the measurement of length of stay. Have any users done any quality measures or satisfaction measures?

We had started a study with one of our small hospital accounts and we didn’t complete it because of some changes in their operation, but that was a study that suggested that we had been able to impact length of stay when physicians used the tool in the right way; but some of that data was inconclusive.

I was in a meeting actually yesterday with one of our clients at the St. John Health System where we were talking about value. It was a value analysis discussion with some of the executives. They had indicated that their length of stay had gone down with PerfectServe. There were many things that they had done to drive that, but they felt that PerfectServe was a major contributor.

Has anybody ever asked you to do anything with emergency communication to an entire group, where one call blasts information out in different ways to more than one person?

We have what we call a ‘team alert’ function, and it’s really designed for smaller clinical teams; although I think we have some applications of maybe 50-100 people. We’re not designed for mass emergency notification. There are other companies that do that.

Where our team alert applications work is when we have processes — such as a process around mobilizing an open-heart team or maybe a cath lab team where there are multiple people who might serve in one of the handful of roles — we need to know who’s covering which role at what time. Then we need to have fail-safe or measurable processes, where we can get a message out and know and receive confirmation that it has been retrieved or acknowledged within a certain time period, and if not, it escalates.

We have a lot of those applications that are out there and running in hospitals for not only what I mentioned in terms of cath teams and open-heart teams, but rapid response teams and other code teams as well.

I had read the case study on your site of Fairfield Medical Center and the cardiac cath lab, which I thought was pretty cool. Can you describe that and think about other ways hospitals might do something like they did?

In that particular application, they had … it was again, manual processes, and they literally had one person who would go down and manually call through a list. It just took time. They were able to basically replace multiple calls, and the time and the acknowledgements back and forth, with a single phone call.

There’s another case study on there around Henry Ford Macomb Hospital, and that’s an interesting story. They had an environment where there was a lot of dependence on paging. The call-backs and the repeat calls were creating satisfaction and quality problems between the ED physicians and a lot of the primary care doctors.

The ED physicians got together with the primary care doctors and they said, “Look, we’ve got in PerfectServe the ability to filter communications that go to you from the ED. Here’s the deal. If you guys will enable rules to route calls from the ED to your cell phones, we’ll make sure we’re on the other end of the line when we call you.”

They put that process in place and saw significant increase in real-time calls to physicians, which had a major impact on helping them improve flow, as well as physician satisfaction with both the ED and the primary care doctors.

What are the time and the requirements and the cost of implementing?

The costs depend on the size of the hospital and the medical staff, but the time requirements are … I mean, there are certain things that can change this a little bit, but typically, in about a three- to four-month time period from the project kickoff.

In fact, we just went live at Monroe Regional Medical Center just about two or three weeks ago. I guess it was about three weeks ago because it was in May. That project kicked off the end of February, and in addition to the planning, the big job of implementation is gathering the workflow rules of all the members of the medical staff and educating them on what the platform can do. That starts with some high-level awareness, workshops, one-on-one meetings with heavy admitters and other key doctors and practices; then gathering and collecting all this information and configuring it, and then we have the go-live.

In Monroe’s case, we went live on one day with the entire medical staff, 552 doctors, and they were immediately, out of the gate, processing at a rate that was equivalent to probably about 20,000 interactions a month. It will just go up from there.

On that particular thought, one of the things that has really amazed me about their organization, even to this day, is that it’s the kind of project that a hospital can do and actually succeed. I mean, it has a major impact on nursing and a major impact on physicians. They can actually drive a process change in a very short amount of time and realize and see those benefits just immediately.

HIStalk Interviews Loran Hauck

June 21, 2010 Interviews 11 Comments

Loran Hauck, MD is senior vice president of clinical effectiveness and chief medical officer of Adventist Health System of Winter Park, FL.


Tell me about your Cerner electronic medical records system.

We have our Cerner electronic medical record installed in every single hospital campus that we own. I think that’s 36 campuses. We’re blessed that, as large as we are, we have one common EMR vendor across the entire system.We finished that process in about four years.

Now we’re in the process of rolling out computerized physician order entry. We have five sites live and quite a few to go between now and October 1 of next year.

In terms of your overall corporate strategy for measuring and improving quality of care at the individual hospitals that range from tiny to huge, what efforts are you undertaking to work on that from a corporate level?

Before we started the project, our CEO was real clear that he wanted us to collect data so that we could publish. We sat down with my department, the Office of Clinical Effectiveness, and our clinical IT team and figured out a group of metrics that we could collect prior to CPOE implementation and then collect post-CPOE implementation so that we would have firm data on whether or not we were improving a number of things.

For example, mortality rates, length of stay, cost per case, compliance with national hospital quality measures, hospital-acquired infections, and things like that. We also have the Cerner clinical data repository called PowerInsight across our whole company so that from that clinical data repository, we can do retrospective mining.

It’s our intent to measure the impact of computerized physician order entry on a whole variety of measures — financial, quality, safety — pre- and post-implementation. We only have five sites live and we’re just beginning to do some early looking at that data.

What benefits have you seen so far?

I started to say I haven’t seen any of the financial data, but the point is that I did see a little bit. The difference in overall length of stay and cost in the early, early stages of our first two sites was not particularly eye-popping, but we found some interesting things.

For example, lab turnaround times and radiology turnaround times were dramatically shortened. When I say that, I don’t mean from the time a doctor took a ballpoint pen and wrote an order for a CT scan until the results were available for viewing. I’m talking about the time when a ward clerk or a nurse entered that order for the CT scan into the system and it was completed, dictated, and resulted and appearing in the system versus when a doctor gives a direct, online order. There were fairly striking reductions in lab turnaround times and radiology study turnaround times. 

It was something I wouldn’t have predicted. I would have thought once the order was in the system, it wouldn’t make a whole lot of difference. I don’t know if that’s partially the Hawthorne Effect — you know, you’re live with CPOE, everybody knows you’re measuring metrics, so they’re hustling a little bit more.

We plan to look at all of the CMS and Joint Commission National Hospital Quality Measures and see how our scores are improving. We’re just a little too early for me to give you anything concrete there, but early impressions are that it’s going to make a significant difference.

Tell me about the collaboration with the other health systems in your order set work that you’re commercializing through Zynx. How did that come about?

That came about because of an idea from Dr. Jeffrey Rose, VP of informatics at Ascension Health. He’s a good friend of mine. He called me up one day about four years ago and he said, “Hey, Loran, I’ve got an idea. There are three of us that are very large Cerner clients. We’re also Zynx clients. We’re also faith-based health systems and we’re all in markets where we don’t compete with each other. What would you say we tried to form a collaborative and see if we could do several things: build some content in common and share our learnings with each other from what we’ve learned from our CPOE implementations so that we can shorten the learning curve for everybody?”

We got together in Nashville, Tennessee and met in one of the Ascension hospitals for a day and talked about it. At the end of that, we said, “This makes sense. Let’s do it.” 

The fourth partner of the transaction was Zynx. We really needed Zynx to help us with some of the projects we wanted to do and accelerate their order set module development. 

Did you actually develop the content together and weigh the evidence and make decisions, or did each of you do sections and then merge it together later?

Well, that will take some explaining, so let me just jump right in and explain that.

Believe it or not, it took a while for our respective corporate legal departments to get an agreement in place to create the Care Collaborative. It was an intellectual property agreement.

In the mean time, all three of us were really under a lot of pressure to get content started because we all had aggressive timelines to get CPOE implemented. To some extent, while this thing was in its formative stages, we all took off and started building content independently.

Once the collaborative was legally created, we asked Zynx to create a shared library on their Web site. If we were getting ready to build content for stroke or heart failure or pneumonia, we could go onto the Zynx Web site — we agreed amongst ourselves we would share our content freely between the three of us — and we could look at the Ascension Health order sets for stroke. We could move them over into our corporate library and then edit and modify them. So, one of the things we did was to share content that we had each independently created.

Zynx had very weak content at that point — that was four years ago — in the pediatric arena and it had no content whatsoever in neonatology. In conversation with Zynx, we decided this was something that we would do in a truly collaborative way. We got some neonatologists, neonatal pharmacists, and neonatal respiratory therapists — a variety of disciplines from each of our three health systems. We had about eight or ten neonatologists and the other specialties I mentioned. That group met every two weeks for two hours in an evening for two years. Adventist Health System took on the responsibility of leading out in that.

It was a virtually meeting on the Web. Everybody logged on to a Web conferencing site and you could see the Zynx authoring platform. The neonatologist that led the project from our health system and a neonatal nurse practitioner would create a lot of the draft work. Then the committee would meet and discuss it and they would literally edit it and update it and make changes live during these two-hour work sessions every other week. They created about somewhere in the area of 38-40 neonatal order sets that deal with all the common conditions in neonatology.

Zynx assigned a physician so that the Zynx team knew what our content development timeline was over the two-year period. They were ahead of us. They knew that next month, we’re going to work on neonatal jaundice or neonatal sepsis, so they would be out reviewing the medical literature trying to find the evidence ahead of us. They were finding the evidence and then clinicians from all three health systems were reviewing it and creating the order set content in this parallel process. It really was an amazing, amazing accomplishment.

The neonatologists really bonded. We had several meetings on site. It came together in Orlando, Florida for two days, from 8:00 a.m. until 5:00 p.m. — worked on site to accelerate the process. That was the best example of where we totally, totally collaborated to create brand new content that we, all three, implemented in our CPOE library.

Much of healthcare practice, rightly or wrongly, is localized. Were there areas where you didn’t reach consensus on what the best practices should be? Along those same lines, would other hospitals be able to use what you’ve developed and not find them in need of some changes because of localization or because it doesn’t fit their practice?

Very good question, and here’s the answer.

Not very many people do experiments on neonates, so there’s not a lot of hard … in the medical literature world, we call it ‘randomized double-blind, placebo-controlled trials’ of testing Drug A versus Drug B on a newborn, or Treatment A versus Treatment B. 

Some of the work was based on consensus. Consensus meaning in our hospital in our neonatal unit/NICU, we do it this way, we do it this way, and there was some negotiating and back and forth and eventually, the consensus — which is actually the way that many guidelines are developed. Evidence is used wherever it exists. That is pretty firm because if the evidence is solid and it is what it is and it doesn’t matter whether you’re in southern California or Maine — it is.

In the areas where there was an absence of evidence and some of the order set content was created based on consensus, then that would be somewhat left open to local adaptation. If client licensed the Care Collaborative libraries and said, “Wow, I really like this neonatal content, but in our NICU we do this one thing different,” some aspect of the care of a newborn/neonate, it’s very easy to customize the content for a local facility.

To answer that question in terms of a health system, we — Adventist Health System — made the decision right out of the chute that we were not going to create a set of CPOE content for Hospital A or modify it or add new content for Hospitals B and C. As big as we are, by the time we had 37 sites live, we would have thousands and thousands of order sets and no way to keep the content consistent to update it because there would just be so many varieties and so many different flavors of it.

The other two health systems in our Collaborative — Ascension and Catholic Health Care West — came to the same decision. We know one health system that after they had eight sites live, had 3,500 order sets and they had like 60 more sites to go. We just knew that wasn’t going to work. That was one of the beauties of the collaborative. 

We met every month and we would talk. We had a working group and an executive group. We would talk about what we were learning, what was working. The experiential knowledge of not only building the content process, but the implementation process we shared with each other — that’s an enormous benefit of the content library, the Collaborative content library, that now exists. It builds off of the experience and the knowledge of three large health systems that are rapidly deploying CPOE.

An order set is a guideline, but not a hard and fast rule. Are you measuring the compliance and adherence to those sets within individual facilities?

Yes. just was talking to our CIO about that two hours ago. We are using our Cerner clinical data repository and the PowerInsight tool. We’re able to measure what percentage of patients the doctor used one of our evidence-based order sets, at least one, in the care of that patient. For our last three sites, we’re averaging about 65%.

Now let me be real clear about what that means. Our goal out of the chute was to build content for 80% of the most common diagnoses and surgical procedures for which patients were coming to our hospitals. We did an analysis of our DRGs and did a cutline of 80% of our total admission volume and said, all right, this is our goal. We’ve got to develop CPOE order sets for this many diagnoses. We never expected to hit 100%. Eighty percent was our a priori, out-of-the-gate goal.

In these last three sites where I’m telling you we’re hitting 65%, the first one of those three went live April 20, so it’s just very preliminary data. By that, I mean physician experience with the content is very early. We’re pretty pleased with the rate of adoption. The goal of the evidence-based order sets is to not just make the physician ordering process electronic, although that has some benefits — drug-drug interaction checking, drug dose checking, drug-allergy, and drug-food interaction checking — but to actually take evidence that not all physicians may be aware of and put it into the order sets, create the orders that would help physicians follow the most recent, best scientific evidence that’s available.

As we increase our percentage of usage of those order sets, our expectation is that all those things that we’ve built, we plan to measure and monitor the things I mentioned — cost of case, length of stay, mortality, quality metrics, safety metrics, financial metrics — that will be able to demonstrate that it does, in fact, make a difference.

It sounds like you subscribe to the model that usually works, which is make it easy for the doctors to do the right thing.

Right, exactly. It’s pre-built. You don’t have to go out and order the imaging studies, laboratory test, drugs, and other things. It’s one-off orders. They’re gathered in an order set and they’re put in a logical sequence.

When there’s important new information … for example, in 2009, the American College of Cardiology put out new guidelines for the treatment of myocardial infarction and there were some pretty substantial changes in those guidelines. We spent a lot of time editing and updating our content to reflect those changes.  A couple of the cardiologists that were on our committee said, “Wow, I didn’t know that was now recommended.”

That’s an illustration of busy, practicing clinicians. You just can’t stay abreast of the exploding knowledge base in medicine. This is a way of creating a systematized, regular process with that content. I love your phrase — to make it easy for the doctors to do the right thing. That’s exactly what we believe.

You mentioned your CPOE timeline, which I assume is driven by the HITECH incentives. Is there anything in what you’ve read about the proposed Meaningful Use criteria that is worrisome to you?

Yes. When we read the first draft, the section on quality measures where the draft legislation said that we had to: a) capture the data electronically; b) aggregate the data; and c) submit it electronically, directly to CMS. That list was huge. There were close to 100 quality measures. 

Everybody turned to me and my evidence-based medical team and said, “What do you guys think of this?” I said, “Every single one of these is a great measure. They’re all evidence-based. But to create the ability to capture it electronically, aggregate it, and submit it electronically in this incredibly short timeframe is way too fast and way too aggressive.”

Quite a number of national organizations that we belong to felt the same way. We submitted a lot of feedback to Congress through the mechanisms that were provided and said to the secretary of HHS, “We believe these are all great measures and they should all be adopted. This is a great roadmap. You just can’t expect us to go that far, that fast.” That’s an example of just a by-product of CPOE.

As far as HITECH, the ARRA stimulus plan, that we hope gets modified when the final records are released here in the next two to three weeks, because it’s going to be an extraordinary challenge to comply with that in that short of a timeframe.

In your areas of responsibility, what would you say are Adventist’s most important IT corporate projects?

Corporate clinical IT projects?

Anything that you’re interested in that you think is important enough that it gets a lot of corporate exposure.

Obviously the system-wide implementation of the EMR, which we did in breakneck speed. We have one of the largest footprints of Cerner applications of any client in the world. We’ve basically have every Cerner application there is. So to roll out that many and we did it — by the way, since you’re an IT guy or you write about this, you’ll probably appreciate this — we did a big-bang implementation. On a Sunday morning at 6:00 a.m., we turned on the system at a hospital, live house-wide. We did one every month for over three years to get it done. That was an unheard-of accomplishment.

Back to strategies. Deployment of the EMR and creation of the evidence-based content for CPOE — that went on in parallel while we were deploying the base EMR. By the time we had the base EMR live everywhere, we had the content created in the Zynx world and exported it to Cerner PowerPlan and we’re ready to go. Now we’re moving aggressively into that phase so that we can be done by October 1, 2011 for HITECH.

Another thing that we’re looking at is health information exchanges. We own over 1,000 physician practices in Adventist Health System. We’re in the process of installing the NextGen physician office EMR there. We want to connect our physician offices. We’re in the process of co-developing an electronic medical record for long-term care facilities and nursing homes. It is a co-development project with Cerner.

We’re also licensing Cerner’s home health product. If we have our nursing homes, our home health agencies, our doctor’s offices, and our hospitals linked to a health information exchange, then we’ll have a health record that can follow the patient across the continuum. We believe there is enormous opportunity there to streamline the care. The physician has to be in an Accountable Care Organization to avoid duplication and retesting and to improve communication between the hospital and the other venues of care.

Any closing thoughts?

I’d like to speak a little bit more to the collaborative issue. You had asked a question about customization and localization. If a hospital or health system were to license the content of the Care Collaborative, what it really gets then is speed to implementation. For us, given our objective of creating order sets for 80% of the diagnoses across all of our hospitals, including our large quaternary medical center here in Orlando, it took us three and a half years to do that, working feverishly with 12 separate committees working in parallel.

One of the things that someone buying the Care Collaborative content gets is the advantage of all the multidisciplinary input that went into taking the Zynx content and refining it and making it more usable. Number two, this content is live and in use every day in hospitals around the country.

The third thing is that we as a system and our two partners in the Collaborative have made the commitment that we will review our order sets on a regular, systematic, scheduled basis and update them. If someone licensed the Care Collaborative library and then paid the annual access fee, you would have the ability to take advantage of the work of three large health systems. If you’re a 200-300 bed, standalone, not-for-profit community hospital with limited resources, for a relatively modest price, you get access to the intellectual work of three of the largest health systems in the country. 

HIStalk Interviews Glen Tullman and Phil Pead

June 16, 2010 Interviews 17 Comments

Glen Tullman is CEO of Allscripts. Phil Pead is president and CEO of Eclipsys. This interview was conducted Tuesday evening, June 15.

glent    philp

Do you think it’s going to be a distraction, in the heat of HITECH and the window of opportunity that’s there, to be trying to merge two organizations?

Glen:  We are already working together doing many of the things we would be doing as part of the merger. We have top clients of ours who have shared clients like Columbia, like Hartford, like North Shore – Long Island Jewish, who’ve been saying to Phil and to me, separately, “The two of your organizations need to work together to create an integrated end-to-end solution.” So we’ve been doing that in a very haphazard, unplanned way.

The beauty of this is that now we can be much more efficient. Our teams can work together, That actually saves rather than adding complication. That reduces it.

The other piece I’ll tell you is our joint sales forces now have a much broader offering, which is easier to sell, than they did prior to the merger.

The last point I’d make is that usually in a merger the technology is an issue, but the beauty here is that we’re both from an architectural standpoint. We have Microsoft .NET and other technologies that fit together very well.

So from my perspective, it’s not a distraction, it’s actually an accelerator.

Phil:  I’ll just add to that by telling you that we’ve actually had one RFP process reopen after the announcement of the merger because they loved what they saw.

On the poll I’m running, I was surprised that the leading response of who benefits from this is Eclipsys clients, which I didn’t really expect. Does that surprise you?

Phil:  I think maybe the poll views it that way, but I think it’s a great benefit for both sets of clients because as Glen mentioned, we share mutual clients today. New York Presbyterian, Columbia would be a good example of that. Obviously, North Shore, which is our largest client, has also gone with Allscripts.

I think there’s a big benefit, certainly for the Eclipsys clients who are looking to broaden the Sunrise platform out into the community, which was a big driver for us to do this deal. So many of our clients are looking to incorporate the ambulatory physicians into their environment and with the huge footprint that Allscripts has. That meant a lot to us and it obviously means a lot to our clients.

On the flip side, there are a lot of Allscripts clients who would love to create that seamless patient experience going from the ambulatory back into the inpatient. This gives Allscripts an opportunity really, now with Eclipsys, to offer an inpatient solution that ties it all together. Too many physicians used to say, “Look, I’m working in my office, I see a patient, and the next thing you know I work in the hospital and I’m using a different system and I don’t even get the data out of my existing system back in the office.” I think that probably from the poll that you’re seeing it looks that way, but frankly, I think it’s a mutual benefit for both of us.

Glen:  I would just add that this is a merger, and the reason it’s a merger is because both sides benefit. What this is really about is it’s capitalizing on what today is the hottest and most important trend in healthcare, and that is hospitals are aggressively moving to capture the communities that they operate within. Hospitals have said, “We want to connect to physicians. That’s our lifeblood.”

If you think about that, each physician is worth between $1 million and $2 million to a hospital, so they want to be connected. They can’t buy all those physicians, so they want to connect with them. It would be easier to do business with them and do that electronically.

Eclipsys is tops in terms of usability in hospitals. If you believe the US News and World Report list of best hospitals, of the top 21, 18 are Eclipsys. We’ve got the top hospitals that are now going to be connected into the largest base of physician practices out in the community. It’s more than 40,000 practices.

I use the analogy — if you were starting a new bank and you came into a community and said, “I’m starting a new bank and I want to have an ATM network,” and you had a choice: should I build one, or should I connect to the ATM network that already has 40,000 locations? The choice would be, of course, connect to the network that’s already established that has 40,000 locations.

What we’ve done by putting these two companies together, we’ve created a new company that essentially has the top hospitals connected to the largest network in America of not only physicians, but ambulatory care. Post-acute care facilities, I should say. So when you talk about closing the loop of care … because at the end of the day, this is about the patient having one record and that means you pull information from the hospital, from the ambulatory world, and from the post-acute world, and you present it in one patient record. That’s what we can do today. No one else really has those capabilities all bundled together.

Both companies clearly had a reason to both hate and fear Epic. How does that change with the merger?

Glen:  I don’t think it’s so much hating and fearing Epic. I think the fact of the matter is that Epic’s solution is based on 25-year-old software. They have an ambulatory system that doesn’t really work for smaller practices, and that’s half the physicians in America. It’s the equivalent of trying to put a mainframe into a two-doc office. Can we do it? You can do it. Should you do it from a cost, quality, and usability standpoint? You really shouldn’t. 

This is less about fearing Epic. I mean, frankly, Epic needs to worry about what we’ve just created because this is a real solution on modern software with a real connection between usable hospital software and 40,000-plus practices that are already using at least one piece of Allscripts software, 10,000 post-acute facilities that are using it. Now you’ve got a real network. Somebody last week, one of the analysts, called it the Verizon of healthcare, which is a real connected network. For the first time, there’s software that can actually be used. I think this is going to create a very distinct competitive advantage versus an Epic.

Phil:  I’d just add to that. If you just look at the healthcare marketplace, the merger will create a network of 180,000 physicians, about 1,500 hospitals, and as Glen said, 10,000 post-acute, but it actually goes beyond that, because one of the things that I think all the physicians really crave is, OK, so now I’m connected — so what?

Well, the ‘so what’ is … and let me just give you a really interesting example of a client that I talked to just the end of last week. One of their biggest problems is that they track all this data, or all these hospitals do this. They showed — and this is a typical big scenario — one patient that showed up seven times over a two-year span for the same problem in the hospital. When they analyzed why that happened, this patient shows up in the hospital the first time with this problem and they’ve got the best, brightest minds with all the CPOE, the integrated environment the hospital creates, and they see this patient and they go, “I know what’s wrong with this patient,” and they follow the protocols that are already built into order entry. They’ve got their order sets, they take care of this patient, and the patient leaves.

The patient then goes back into a primary care environment and then they start to deteriorate for whatever reason. They didn’t control whatever their chronic disease was. They go to the primary care and the primary care goes, “Yup, I’ve seen this before about 30 years ago, and this is how I treat that patient.” None of the protocols that treated that patient successfully in the hospital transfer to the ambulatory environment.

So, the ‘so what’ here for us is now that we’ve got these physicians connected, our goal is to use clinical analytics and clinical decision support to take the fundamental care that patients are receiving in a hospital. When they move to a post-acute or go back to their home, all these protocols will follow with them so they’re not returning to the hospital at a higher level of acuity because they go back into an environment that doesn’t understand how to treat them.

This is the massive inefficiency that exists in our healthcare system today. What’s interesting is Medicare is going to stop that. They’re already starting at a high level, I would call it, with the Never Events. But at some point when you can look at following a protocol of care and the pathways associated with an optimal outcome that a physician doesn’t follow in an ambulatory setting that results in that patient showing up in an acute care facility and at a higher cost, someone’s going to know that. I think that’s ultimately where we’re going to get to in this bundled payment for quality reimbursement that I think we’re going to move to over the next 3-5 years.

Glen:  One other thing I’d just mention. You mentioned Epic. We are both, Eclipsys and Allscripts, big believers in open systems. We’ll connect to anyone. We’re working with a variety of systems. That’s important because while our offerings will be richer and more vibrant, we are an open system and we believe that the information has to flow. That’s a very big difference from somebody like an Epic.

You mentioned in terms of the differences — again, modern software versus 25-year-old MUMPS; open versus closed; ambulatory — we have it, they don’t; and again, more of a PC versus a mainframe. When you put all that together, what’s really happened is, for the first time, the market has real choice. We think they’re going to choose this new, combined organization that we’ve created together.

Some would say the advantage of Epic is that they’re privately held and all the work that you have to do to integrate two quite different companies and two quite different sets of products has to be done under the careful scrutiny of Wall Street. Are you concerned about how long this will take and what kind of scrutiny you will get while this all takes place under the covers?

Phil:  We actually love the scrutiny. We really do. I think that’s a great point, and the reason that we love it is that you’re going to be able to see the progress every quarter. When you’re a private company, you have no clue what’s going on behind the curtain. You don’t know how profitable they are; how many people they’ve got working on all the problems.

You know, I got LASIK surgery about three years ago, maybe a little longer now. The reason that I chose the company I went with was because they were public. I could read every one of their filings and see who was suing them for not doing a good job. You have no clue what goes on in a private organization.

I like the scrutiny. I think Glen does, too. I’m responsible, with Chris Perkins, for the integration. We’re going to be able to demonstrate the progress that we make, but let me just say this, and I think that Glen started off by saying it. We already have mutual clients that have merged or integrated, where we can believe that there’s a level of integration between our software.

The reason I say, ‘believe it’ is because at their level. what the user sees, what a physician uses at Columbia and that’s integrated with Sunrise, is very real to them. That level of integration has already occurred. You could talk to them tomorrow and they’ll tell you absolutely, I get whatever I need and I’m done. But that level of integration is at that first phase. We’ve made it usable, data transfers, and as far as they’re concerned, they’re done. We’d like to do it at a much deeper level, but it’s transparent to the user. That’s the first thing.

The second thing is we’re both Microsoft .NET and SQL Server. That makes the level of integration far less complex as a result of the platforms being the same, and as Glen mentioned earlier, the open architecture that we have. Allscripts has an architecture called UAI and we have Helios. The similarities are quite amazing, and of course we didn’t realize this until we started doing our diligence, but both of us have abilities to actually integrate levels of applications at a speed that would be very difficult if they were Oracle, Linux, MUMPS. It’s just fortuitous in many ways that we’ve got the similarities in the platform.

As far as the operational integration goes; again, there’s incredible complementary resources between the two companies. I won’t get in and bore you with all the details, but I will tell you that operationally, Allscripts was taking advantage of some of the back office functionality at Misys. They can now take advantage of the back office functionality of Eclipsys. It almost transfers over pretty neatly when we move the operations into a combined company.

We have substantial resources in India for development, for product support, for back office finance functions. Allscripts can take advantage of those. We’ve already mapped out — and of course, we’re going to get down into it at a far deeper level of detail now — but we’ve already mapped out exactly how the integration would work on an operational level. We’ve already started our planning an integration team on the product side.

We’re already getting excited because we’ve already been able to do stuff in just a few days because we’re actually working together, as Glen said, in an organized fashion as opposed to two companies separately sharing clients out there. We can actually do things that we never thought about doing earlier and we can do it a lot more quickly.

Glen:  The timing is perfect. It’s interesting. We were just getting ready to spend millions of dollars on upgrading to a new financial system and, lo and behold, one of the choices is one that Eclipsys is already using and they have great expertise in. Now that makes that decision and saves millions of dollars. It makes the decision easy and they have the expertise to do what we would have probably struggled with. Again, when you look at some of the things we have to do, it fits together very well.

I’d also point out … you talked about being public. Being public means you have a certain discipline, and when you’re well-managed, you don’t mind that. But if you look at what we’ve created together, this is a company that’s going to be accretive in 2011. This merger is going to be accretive, number one.

Number two, we’re going to be producing $40 to 45 million per quarter free cash flow. Forty to $45 million per quarter free cash flow. And we’re talking about a synergy, cost synergies, that will ramp up to about $40 million per year. When you look at those numbers … and doing all that, our R&D spent between the two organizations will be one of the highest in the whole industry. With all of that, we can create great returns for our mutual shareholders and yet deliver world-class products.

Phil mentioned Sunrise 5.5. That’s brand new, it’s coming out. It’s been a year longer than anyone else — a year in QA and QC to make sure that this product, when it hits, is perfect, or as close to perfect as software can be. In the first installs, we’re seeing that … all that investment.

Similarly, on the Allscripts side, both our Enterprise and Professional products have been updated recently. We’ve worked through some of the kinks that we had in the Enterprise product. Professional, that came out — the full redo of that — without any issues, and it has the least number of defects, I think, of any product in the industry.

Quality products, strong financials, and a great base to draw from. We think that when you put these together… You know, the most important thing, I’d say is the genesis of this transaction. Sometimes you see companies merge and say, “Why’d they do that?”  Other times you see companies merge and the clients scratch their heads. This merger was driven, in large part, by a lot of our clients, some of the most prestigious organizations in the country, who said, “The two of you belong together. This would be better for the client if you were  and better for the industry.” A lot of people are frankly saying it’s wonderful to have an alternative to some of the old-time choices that they had before. We think that the clients’ reaction has been strong and we couldn’t be more excited.

There was a number given, I think, in the conference call of expected annual growth of 8-10%, which doesn’t seem all that impressive. Is that basically just under-promising and over-delivering?

Glen:  Well, there’s a little bit of that, but more important, a strength of both organizations is almost 60% of Allscripts revenues — and Phil, roughly the same amount for Eclipsys? — are recurring.

Phil:  That’s right.

Glen:  So you’ve got this enormous base of recurring revenue because we both have such great customer bases. The problem with that … that’s great news for an investor, but on the flip side, that base doesn’t grow the way new sales grow. When you look at that, that base is probably growing kind of CPI. The base is growing 2-3%. If someone’s paying you software maintenance on their software from year to year, you’re not going to be increasing that very much because that’s so big. If that’s only growing — that huge base of 60% of your business — is growing 1-2%, to get to 10%, that means the other parts of your base have to be growing 20, 25, 30%. That’s surely true in areas like electronic health records, where our separate growth in those areas is in the 20s and 30s. Again, you have to accept it.

Phil:  Yes, the metric there is really on backlog growth. As Glen said, if you remember on the Eclipsys pricing model, we sell predominantly on a subscription basis and we spread that revenue over a 5-7 year period. Unlike a Cerner, for example, that takes revenue upfront, that’s why you’re going to get a different metric. But the metric to follow is really the number of deals that we’re signing and the backlog growth that we have.

Glen:  By the way, it’s better for — let’s be clear — it’s better for the clients if you balance the revenue with how they use the product, as opposed to taking a big hit upfront the day they sign it. That’s not a benefit to anybody. We actually have to do the work to get paid for it. We think that’s good for clients, and it’s good for us. It aligns us with our clients.

Probably the one consistent observation is, gosh, there are too many EMRs now under what will be the same banner. Surely some of them have to be retired. What are the thoughts about, are there too many and are there plans, preliminary or otherwise, to prune the family tree a little bit?

Phil:  I love this question. It’s a great question, and I’ll tell you why I love it. It’s because the marketplace demands different kinds of solutions depending on the workflows and specialties of the physician practices and the workflows and complexities of the acute care environment.

Let’s just take the ambulatory piece, and I’ll let Glen jump in here, but if you look at our combined ambulatory EMR solutions, you’ve got MyWay — great product for the single-physician practice, simple, easy to install, allows them to keep a workflow that allows them to see a patient every 15 minutes. Primary care, they’ve got 50 codes they need to bill, and they’re in and out and done.

PeakPractice on the Allscripts side is a great product that will take the market slightly bigger than that, where they’re looking at a more complex environment, and Peak is Software as a Service. Again, it’s a great technology. It’s brand new. As you know, Eclipsys purchased that from a company the end of 2008. We’ll be able to take advantage of some of the great content now that Allscripts has and pour that into the Peak product so we’ll be able to address that next tier up in the segmentation of the physicians.

Then you’ve got the mid-tier market, so we’re looking at the 10-20 physician range, and that’s where Professional fits. Again, it takes those physician practices with a higher level of complexity, different workflows, and Professional is a perfect product for that.

Then you go into the larger-scale practices; the faculty plans, all that good stuff. That’s where Enterprise plays, and that’s where Enterprise is being very successful. Now what you need to do there is you need to do something a little different. You’ll still be able to sell Enterprise on a standalone basis because you’ll still have the large physician practices out there who may want to have a standalone, but a connection back to the hospital. But more often than not, that’s going to be a full Enterprise solution where you’ve got the content and workflows of Enterprise being integrated onto the Sunrise platform.

Again, .NET, single database, single sign-on, auditing, context management will all be built into the Eclipsys platform. So now you get a seamless environment between the owned physicians — especially if they’re at a big group level, faculty plan, and so on — back into the hospital. We see zero overlap on the ambulatory side and we see that market segmentation naturally fits into our respective product lines.

Glen:  It’s interesting because if we wanted to optimize our bottom line, sure, we could only have one. I mean, Epic only has one. The problem is it doesn’t work in a one-doc or a five-doc practice. You’re trying to put a mainframe where a PC can do the job.

Phil:  Which is the majority of physicians.

Glen:  Yes. So they’re actually not optimized. I mean, again, look at the auto industry. You have a pickup truck, you have a minivan, you have a sports car. Imagine if somebody said to you, “Don’t you think you have too many? You have three different ones.” People would laugh. They’d say, they’re for three different uses, three different markets. Even within that, you have some variation for different specialties and the like.

There’s a reason that Eclipsys has been the leader in CPOE. There’s a reason that Allscripts has been the leader across each of the small-doc, midsize-doc, and large-doc practices in the market. That’s because we have products that fit the needs of our clients. The reality is if the clients stop buying them — you know, it’s great to speculate; for analysts and everybody else to speculate — but the fact of the matter is the clients are buying them and they’re buying them in record numbers.

If you look at our numbers from last quarter, last quarter we actually raised our guidance on bookings, on sales. Then, one quarter later, as you heard our CFO Bill Davis report when he announced this merger one quarter later, we’ve substantially exceeded the guidance we had given one quarter earlier for sales. Why did we do that? Because the clients are buying. They like the offerings that we have.

Ultimately, at the end of the day, people can speculate, but I like to use the metric of who’s buying the most. Where we see that, the clients are buying. We feel like the strategy works and that’s, I think, the best vote in the marketplace.

Phil:  One more point, not to bore you to death here, but Sunrise Ambulatory Care, for example, on the Eclipsys side, will benefit hugely from the richness of the content that Allscripts has built up over the years. Again, if you’ve followed Eclipsys, we have really great clients using Sunrise Ambulatory and we’ve made, I think, a huge market out of the oncology area. Now we’ll be able to really address a lot of the other ambulatory specialties which will benefit from that content and workflow out of the enterprise.

So when we talk about too many, we’ve actually got a perfect number, and we’re going to be looking to integrate back onto the Sunrise platform at the top end; and then work our way down through the segmentations. But every single one of those products will connect back to the hospital at whatever level of integration the hospital desires and the physician desires.

Glen, you mentioned some of the analysis commentary. When you look at what you’ve read after the announcement, both from the analyst perspective and from the industry perspective; are there aspects of what people have said that you think are either unfair, or that they’ve missed key points about why you’re doing this?

Glen:  I think that generally, the industry has understood, the analysts have understood, the investors have understood the strategic rationale. I think everyone buys into that. I think where people have had some confusion is the structure of the agreement. That is, why is Misys, who owns 55%, selling, and how is it structured?

The reality is there’s a technical rule on the London Stock Exchange where Misys PLC is traded. That says if you’re going to make an investment, you either have to control that investment, or it has to be de minimis. To translate that in rough terms, you either have to have more than 50% or less than 10%.

Because of that, when we came along and our Board looked at this and said, “It is a perfect fit here for Allscripts and Eclipsys to come together,” we looked at that and we said, “Boy, the way to do this is to use stock for this transaction, because that way, the Eclipsys shareholders and the existing Allscripts shareholders all benefit from this new, combined organization that we’re going to create.”  So that was the way to do it.

The problem is if you use stock to facilitate this merger, then all of a sudden the shared ownership of Misys PLC would drop down to 40%. That’s not allowed, because now they don’t control the asset and it’s not less than 10%. They were faced with a decision: should they invest hundreds of millions of dollars more in that company or should they use the opportunity to give their shareholders $1.3 billion back, keep 8% of the company, and allow us to move forward strategically in a way that best suits our own shareholders?

I think they made a very good decision. That decision is good for their shareholders. They have a billion dollars. That decision was good for Allscripts. The shareholders have a better position than ever. That decision benefits the Eclipsys shareholders because they’re going to, from this combined company, they’re going to have a larger, stronger platform to work with.

I think it was a smart decision, but I think there’s been some confusion because people don’t understand the intricacies of the London Stock Exchange and why Misys was essentially forced to either divest a large portion of their holdings or invest hundreds of millions of dollars more to keep their share above 50%.

I think that’s the most confusing part of what is otherwise a very strategic and understandable transaction. I mean, in today’s world, if you look at this, we’re combining two companies in what is one of the hottest, fastest-growing areas in the largest sector of our economy, and that’s healthcare. It is a $30-billion government stimulus being injected, and getting that money is all based on utilization. Just taking the two companies that are the leaders in utilization, Eclipsys in CPOE and Allscripts in the ambulatory area, and we’ve combined them to create a new powerhouse in this area of healthcare that is going to change the way healthcare is driven in America.

If I were going to grade the two of your performances, let’s say two years after the acquisition closes, what should my criteria be? 

Phil:  Let me start, and I’ll tell you from a shareholder perspective, I would like to see you grow the top line and prove your earnings per share leverage over that period. If I was a client, I would grade you by the integration between the product solutions to make this a great experience for their hospital and ambulatory environments so that the two came together. If you were looking at it from the employees, I would want to say that the next few years will be some of the most exciting with all the new opportunities they have to plan. Of course, the employee part you know you’ll get because employees love to share their rumors and stuff like that.

Then, finally, I’d tell you that the folks who I think are going to benefit the most from this will be the patients. Too often they’re the ones who get left out in any of these merger discussions, but ultimately, our goal — Glen’s goal, my goal — is to bring to healthcare what we’ve all wanted as individuals. That is, that wherever we receive care, by whatever specialists we see, whatever primary care physician we see, whatever hospital we go to, I won’t have to deal with the triplicate forms. I won’t have to deal with the duplicate tests. I won’t have to deal with an environment where physicians have no clue who I am.

Restaurants today, with OpenTable.com, have more information on me as somebody just sitting down to dinner than a physician has one me looking at me and my health, my life. If Glen and I can truly change that in the next two years by what we’re doing, then frankly, I think this has all been really worthwhile.

Glen:  There is nothing I can add to that, which is rare for me, but I think that summarizes it perfectly.

Is there anything I didn’t ask you that you want to talk about or any concluding thoughts?

Glen:  I’d just say that it’s really a privilege — and I think both Phil and I feel this way — to have this opportunity to provide a connected system of health that really gives an integrated, end-to-end solution, which is what everyone has been … that’s been the Holy Grail of healthcare, and it is within reach.

We’re in the perfect storm of all the reasons that people should change. The financials are there, the need is there, physicians are ready, the software is ready. This is the most exciting time in healthcare that we’ve ever had. We feel, like sitting on top of this new organization, we have a very unique opportunity and it’s a great opportunity, as Phil said, for all of the stakeholders in healthcare.

HIStalk Interviews John Holton

June 7, 2010 Interviews 4 Comments

John Holton is president and CEO of SCI Solutions.


It’s been a year since we’ve talked. What’s new with you and the company?

We’re doing well, especially given the economic challenges that the country’s gone through. Our revenues were up about 15% last year and we added about 62 new customers, so we’re over 400 now.

We’re seeing hospital clients starting to do a second generation of buying. They understand that access management is more than just scheduling and pre-registration, that it really focuses on taking a look at customer service for the physicians and the patients and starting the revenue cycle as early as possible, ideally in the physician’s office or better yet, in the patient’s home.

They’ve really been receptive to our ideas. We’ve been focusing a lot on self-service ideas over the years, looking at other industries and how they use self-service tools, either over the Web or things like kiosks, to offer a much better customer experience to their clients. We’ve been trying to apply a lot of these to the healthcare or the hospital environment.

What about patient scheduling? That’s your forte.

Some of the first things we’ve done are self-scheduling.  By self-scheduling, I don’t mean requests, I mean actually like an airline reservation, typing in the information, your appointment preferences and automatically, within seconds, getting back appointment choices so you can decide when to have the service. We’ve got hospitals where the physician’s offices do self-scheduling, as well as the patients in their homes self-scheduling various procedures.

At one SCI client, more than 40% of their outpatient volume is self-scheduled. We’re starting to see some real progress made in those areas. A lot of the hospitals are in competitive situations and understand that it’s so important to tie physicians and patients through the service end; but the good part about it is it also starts a revenue cycle out in the physician’s office as well, or in the patient’s home. We’re starting to see those two ideas really catch on in the industry.

The new stuff that we’re really excited about is kiosks for the patient encounter and for check-in. We think, just like in the airline industry where they’ve been a huge success, or in the banking industry where they’ve been a huge success for the ATM machines, that there are a lot of possibilities and benefits that can be applied to hospitals in really improving their patient flow and the check-in and making a better patient experience.

The other thing that I’m really excited about is our ordering product now connects directly to the physician’s EMRs, and the EMR integration that seamlessly initiates the scheduling and revenue cycle activities right from the physician’s exam room. You know there’s a lot of effort underway with the stimulus money to get physicians and hospitals to use EMRs and then to integrate those and pass information. This is really a first step.

What are the advantages?

Our ordering product, Order Facilitator, automates the orders from the community physicians to the hospitals and then coordinates referrals among the primary MDs to specialists. The purpose of the programs is really to track every order and make sure that they’re not lost and that they’re legible. We provide that information and eliminate lost orders.

The doctor’s office doesn’t get interrupted, patients don’t have to wait around when they come in because the order’s been lost and they have to call the physician. The revenue cycle for medical necessity and for authorizations gets started in the physician’s office, while they’re still fresh in his or her mind.

I think one big benefit is that patient care is actually improved now because we can track every order the physician makes, and every appointment that’s made by the patient, and give the physician feedback as to which patients are following through on their orders.

I was pretty surprised at an article that appeared in The Journal of American Medical Association that said that up to 40% of orders written by physicians don’t get followed through by patients. That really doesn’t help much for their physical well-being. We’re excited that even a product that’s as administratively focused as getting orders into the hospital is able to also affect patient care positively.

Order Facilitator, the original version enabled, you to enter the orders — usually by the staff or the physician — through a portal or you could fax them over and they would be automatically entered into the system and then passed on to the correct departments and worked through a revenue cycle tool to make sure that they were preregistered successfully.

But now, with our new version, we are connecting directly to the physicians’ EMRs. Rather than receive a fax out of the EMR, we’re actually getting a structured record which eliminates the need for entering the order by the medical staff or trying to index a fax. We’re really excited about this. This may seem kind of ho-hum, that everyone has order entry systems, but in fact, when you look into it, it’s a very challenging problem.

As the Meaningful Use criteria get put into play, we’re going to have to, as an industry, deal with a lot of the challenges and quirks that we uncover and find solutions to them. It’s a Meaningful Use criterion to get the physicians to enter in the orders into the EMR. I think in Stage 2, sending it to the receiving provider will be required as well.

The challenge lies in the fact that the hospital systems that are in place today require an order message to have a medical record number, and often an account number. The physician’s EMR doesn’t know either one of these numbers and the hospital account number hasn’t been generated yet. If you have employed physicians and you’re all on a single system, you might be able to solve this challenge because you can generate an account number; but you probably don’t want to because you’d be generating a lot of accounts that may not get acted on.

With community physicians on all different types of EMR solutions, you have a real problem on your hands. SCI designed our orders product, now in the new release, to make sure that it’s architected in a way that it doesn’t require either a hospital medical record number or an account number. Through the process of ordering directly out of the EMR, it leads a scheduler and the registration folks through a process that gets the right medical record number on the patient as well as the physician’s EMR number. We’ve been able to cross-reference these electronically, and pretty easily. Then we pass those on to the various systems within the various hospitals.

Really, what we’re trying to do here is much like the way the integration engines standardized interfaces between proprietary systems back in the ‘90s, maybe even a little earlier. We are now integrating the orders between physicians’ EMRs and various hospital systems that need those orders without having to require the legacy vendors to go back and make a lot of programming changes to their system. These are not trivial changes.

You mentioned your business is up. Do you think having this inordinate focus on electronic medical records will take away from your business or will it help it?

No, I don’t think it will take away from our business. Our business is up because we solve real problems with real benefits to hospitals. We can make a huge difference to their bottom line very, very quickly; and we have a business model which is subscription-based. 

For a very small amount of money on a monthly basis, you can get our software and our systems with our technical model of the Software as a Service. It deploys very fast relative to other large enterprise systems. Your return on investment, which is just a monthly fee — say it takes you four or five months to get this in. You’ve got five months of a subscription fee versus millions of dollars you may have paid under the license model.

Hospitals reap more benefits. The ratio of benefits to cost is so extreme that it’s a no-brainer in terms of doing this. What we found over the last year and a half or so is that when hospitals had capital equipment fees is where license vendors and others were having difficult hard time. The hospitals wanted to continue doing something and wanted to continue making improvements. They looked to vendors with these models that were easy to get started with and didn’t cost a lot to get in, but you could still make real gain.

I think that’s why we’ve been successful. I think the only gotcha, maybe, is that IT staffs have only so much bandwidth, so they may be focused on EMRs rather than other aspects. We’ve tried to address that by requiring almost no involvement by the IT staff, given that we host everything and do the interfacing and the stuff to run efficiently.

Do you think the HITECH Act will encourage innovation or will it discourage it?

I don’t know if it will encourage innovation. I think it will encourage better practices by some of the larger vendors. I think there may be a move towards more certification. The vendors will be more responsible for putting out better software and getting that software installed. We’re continuing to see some very bad software being offered to the industry.

One vendor that I won’t name recently introduced a product in our area of expertise. Instead of putting the time and effort into developing a rules engine and being able to implement fairly complex rules, they did nothing more than stick Visio flowcharts in their product. You could click on it if you needed to know the rules and a Visio flowchart would pop up in front of the telephone staff who were answering the phone. They had to go through and figure the scheduling process themselves.

Last time we talked, you were pretty pessimistic about uninsured patients, credit markets, bad debt, and self-pay. In the meantime, we’ve had healthcare reform. How do you think that will change the situation?

Healthcare reform, despite all the naysayers, is going to be a benefit to hospitals. We have 18% more Americans of the total population who will have insurance, so there should be more money in the system. Obviously there’s going to be more scrutiny through Medicare and cost-shifting.

The thing that worries me the most was not the government-supplied insurance, but it was the new high-deductible plans that are sweeping the nation now; the high-deductible plans where a person may pay the first $1,500 or the first $5,000 for the family. What happens is because there’s little price transparency — and we’re trained from our old system not to even ask about these things — a patient will come in and get a procedure not knowing the cost. It could be something as simple as an MRI after they’ve twisted their knee playing softball over the weekend and its $2-3,000. That’s significant money to lots of folks. If the insurance company isn’t paying that, then you have a real problem on your hands.

The research that I’ve read says that if you don’t collect self-pay money before the procedure’s done, you have less than a 40% chance of collecting it afterwards. It doesn’t matter what socioeconomic class the person belongs to — people just pay their healthcare bills last. What I’m concerned about, and what I’m seeing more and more with our clients, is bad debt being incurred in the self-pay portion of these patients’ bills. I still think that it’s a big problem that’s sitting on the horizon that our hospitals are going to have to deal with.

I always like to finish with your predictions since you’ve been pretty well on the money there. Tell me what you foresee for healthcare IT for the next three to five years.

I think the next three to five years is going to be a heads-down focus on these clinical products; getting those in and getting them going. I think we’re going to see a bit of a shakeout in the industry. This is really going to tell, among the big vendors, who are going to be successful.

I think companies like ours, which are focused on niches — but really big niches if you could call the revenue cycle a niche — are going to be very successful. I think you’re going to see the emergence of companies that are not today thought of as major financial players in the industry. Financial system providers in the industry will come to the forefront and you’ll see some new companies.

If we’re talking in five years, I think you’re going to see some new companies that are leading those areas. I think there’ll be a much clearer delineation between companies that provide financial systems for the hospitals versus those that provide clinical systems.

The third thing is that I’ve always been a big believer that large, outsourced business offices are going to have to be the way of the future. There are huge economies of scale that are available starting from orders, scheduling, and pre-registration functions, all the way through to denial claims management and collection agencies. That whole process can be done on a very large scale much more effectively and save a lot of money for the hospitals.

I would liken most hospitals to mom-and-pop shops in terms of their expertise and ability to do these things. I think that what we’re going to see is even more. The for-profit chains have been at the forefront of developing these large regional business office systems, but I think you’re going to see private companies coming in offering those services and more and more hospitals taking those up.

HIStalk Interviews Jay Mason

June 2, 2010 Interviews 1 Comment

Jay Mason is CEO and chairman of My Health Direct of Brookfield, WI.


Tell me about My Health Direct.

We’re a SaaS access management platform that broadly and seamlessly connects patients to healthcare appointments throughout either an entire community or an entire network. Think of it as OpenTable for healthcare.

It’s utilized by hospitals, the managed care plans, and state health initiatives to reduce unnecessary ER visits, to improve continuity of care with patients, and to correspondingly improve access to care for the patients. Those patients are primarily uninsured or covered by Medicaid or maybe one of their other public program counterparts.

Access management systems often do eligibility checking and other revenue cycle functions. Is that different than My Health Direct?

Yes. We take the term ‘access’ literally. We’re talking about access to health appointments and access to care versus access in a broader sense like revenue cycle management programs.

Talk about the ED overcrowding issue.

Two big articles just came out, one in USA Today and the other in The Washington Post. They coincidentally came out on the same day and speak to the same issue: there’s a tremendous amount of overcrowding in the ERs today.

People believe that’s principally due to uninsured patients. Studies show that’s not the case. Unfortunately, uninsured patients avoid care until it’s really bad. They get it when it’s absolutely necessary.

The drivers in overuse of emergency departments within the urban setting is patients who don’t have the knowledge and the skills and the resources to know what their options are to get care like you and I, who may be commercially insured. Not knowing what their options are, they’re going to the ER. The majority of times, it’s for for non-emergency conditions. They’re using it as a clinic.

We aggregate the appointment availability in the entire community with the community clinics and other participating physicians on a real-time basis. We make it available via a search engine through My Health Direct’s Web site for those people who are interacting with the patient. 

A discharge planner or a nurse or physician in the ER who’s interacting might say, “We put a cast on your arm, but we need to get that thing taken off in four weeks. Instead of you coming back to the ER to take it off, let me find you an appointment in your neighborhood and schedule that appointment now so we can get your cast off.”

It’s amazing how many appointments show up to do things just like that — to get a script filled or a cast taken off or sutures removed. We all know the right setting for that stuff is an ambulatory setting, hopefully a low-cost one or at least one with a lower cost than the hospital ER.

Practices never seem to be open during convenient hours, with nobody staying open past 5:00 or 6:00 p.m. Is there really enough capacity in the system to handle patients who don’t have the luxury of going during normal working hours?

You would be amazed how much capacity there is in a community. When we first started this thing four years ago, we really thought the problem is probably there are just not enough appointments.

What we found is there’s a ton of locations and they’re not very efficient as far as their model is concerned. We find a lot of unused and inefficient capacity in a community where we’re able to collect it, aggregate it, and drive volume to it and maximize the efficiency of what might be smaller community clinics or free clinics or independent docs.

The advantage to the clinic is that our system allows them to really operate. My Health Direct is a front-end revenue cycle management tool. A clinic might say, “Gee, I really need about 45% of my practice to be Medicaid. I’m willing to take 15% charity and the rest has to be cash.” They can load that into our system and we actually deliver that payer mix according to what their requirements are. It allows a doc to manage their portfolio of community-based care and know they’re not going to be inundated with something that they don’t want.

Specialists stopped taking ED call because they couldn’t get any paying patients. Do specialists and imaging centers really want to compete for ED referrals?

Their fear is that they’re going to get too much bad business. I don’t want to be inundated, as a PCP or a specialist, with too many charity patients. I’m willing to take my fair share, but don’t give me more than I think is reasonable.

That’s the problem is a lot of physicians, a lot of centers, elect not to participate because of either that experience or that fear. So, we said, “What a minute. If there’s a way to do a load-leveling or logistics management here and spread it widely and appropriately and allow the physician to have control.”

Who pays for your service?

We’re a community-based solution ultimately. Our clients are made up of hospitals, managed care plans, and then various public access programs or the initiatives. Those are all customers, currently, that pay for services with My Health Direct.

Who recruits the providers who will take the referrals?

We have provider relations folks who go out in concert with our clients. A hospital ER might say, “Look, there are six clinics within two miles of here.” They identify them and they work with us to get in front of those clinics and we can put them on a managed care plan. Then they say, “Yes, these are contracted facilities. We’d like to get these 37 clinic locations on.”

They identify, we work with them. We go together and we get them on the system. It’s a SaaS model, so this is a pretty easy implementation process for clinics.

Does your system go out in real time and poll the locations for open scheduling slots? How does that work?

We’ve got two methodologies to gather that information. Low-tech and high-tech, for lack of better terms.

The low-tech solution is there are, unfortunately, still a fair number of practices that are operating either on paper or an Excel database. We give those clinics our SaaS scheduling module that they can use to run their practice. It’s a nice improvement for them. It’s not a full PM system. It’s not intended to be, but for small practices who really are struggling to get to that next step, it’s a nice tool. We can maximize the throughput even though they may be a small clinic.

Or, for a higher-tech solution, we’ve built spiders into the major practice management systems. We can drop those in and, on a real-time basis, read the calendars of those major practice management systems.

How do you assure that they won’t be double-booked, once in your system and again on paper?

A lot of the low-tech practices actually do most of their business via walk-in. They don’t do a lot of appointment making, probably because they don’t have a practice management system to schedule it. A lot of the FQHCs — the Federally Qualified Health Centers — probably 80% of their business is walk-in, so we’re not running into scheduling conflicts on the low-tech solution because generally speaking, as I said, they’re working on a first-come, first-served basis.

Some people might not want to be seen by a doctor who’s so available that he or she will take automatically scheduled ED patients. Who makes the quality decision on the providers?

The hospitals, when they’re the client. They’re controlling what clinics are on the system and what clinics they want to interact with. Similarly, the managed care plans are doing that. We don’t have a quality assurance process to make the determination what clinics are in or not. It’s our partners, really, that are directing that.

Is there feedback? Let’s say it’s a hospital ED that makes the appointment. Do they know or care that the person actually kept the appointment?

Oh, yes, absolutely. It’s critically important. We really designed this thing on the floor of the ER with the help of a lot of overworked, underpaid nurses. Some of the feedback we got was that they want to increase the show rate. They want to make sure that people are showing for these appointments.

We’ve been able to document that we’ve increased the show rate tenfold from the old system — the old system being the nurse hands you a piece of paper with a couple of clinic names on it and says, “You need to go to one of these.” About 5-8% of the time, patients will actually follow up. The other, they’re not doing anything, and unfortunately, they show up back at the ER with complications to their conditions.

We confirm appointments with each clinic. At the end of every week, we ask the clinic, “Hey, here are the 42 patients we sent you. Please click this box and let us know if they showed, if they didn’t show, or if they rescheduled.” We aggregate all that data and feed it back to the hospitals and the health plans.

Why would they be more likely to show through your system? Because they’ve already got a confirmed appointment versus “Go make yourself an appointment?”

To a degree. Some of the criteria we use to find an appointment are obviously pair-typed. If this is a Medicaid patient, we need to find a physician who’s taking not only Medicaid in general, but who’s contracted with the plan that they’re in. That’s the first cut.

Then we look at the neighborhood they’re in. We want to get in close proximity to their home. We look at provider language. Many times that’s a barrier, so we add that. If public transportation is needed, we make sure that the provider offices that we’re selecting are on a bus or a light rail route. We have other criteria such as provider gender or religion, if that’s a preference for the patient.

You take all those things combined, much like OpenTable does. You find a provider that’s most culturally competent to what the patient’s needs are. That, and getting a confirmed appointment that’s printed off in the consumer’s language are the game-changers that allow us to find the right location. That’s why we’re getting the show rates that we are.

Unlike OpenTable, just so I’m clear, the patient themselves is not interacting with your system. Is that correct?

Not today. We are in Beta with a couple of clients and we’re opening up a direct-to-consumer tool as well. Not for Medicaid patients, but actually for commercially insured patients.

If you did that, would you follow the OpenTable model of allowing people to rate their satisfaction?

Yes. We’ve got a feedback loop built in.

With OpenTable, you see reviews and the price range and all the other factors that made their experience whatever it was. That would be interesting, where you didn’t have just anonymous reviewers, but those who actually confirmed their appointments just as someone made the OpenTable reservation.

That’s where we’re going. That’s kind of the future for the second half of this year is we want to be able to use it in an advocate model like we are today. Someone using it on behalf of a patient, be it an ER staff member or a managed care caseworker.

Ultimately, we want to get this into the consumer’s hands. It’s an easy to use tool that, for a hospital or health system, can help move market share. For the consumer, is a great differentiator in the market. I mean, everybody always complains, “Gee, it’s easier for me to order a book on Amazon or order tickets for a movie than it is for me to communicate in any way with my doctor. Why can’t I just get the appointment that I need?” That’s really where we’re heading with the next phase of our evolution.

You had a CMS contract with the State of Connecticut to reduce inappropriate ED visits. What was the result of that?

CMS provided some grants to states a couple of years ago. We were working with the State of Connecticut to write their grant and they were fortunate enough to get that.

We’re working with the state, the primary care association, the hospital association. We’ve picked about eight clinics and six hospitals throughout the state that were in desperate need of what we do, and it’s worked out great. We’ve been able to move those non-emergent patients — either if they’re triaged, or for follow-up care — to community clinics. We’ve got a tremendous show rate. It’s worked particularly well. It’s one of the more successful CMS-funded initiatives.

If you were going to use that, or other experience as a selling point, what are the numbers that would get someone’s attention to the strategic use of My Health Direct?

On a visceral basis, the ER staff knows what the problem is. They know they’re overcrowded. They know they have non-emergent patients. They know these people aren’t showing where they should show. Just intuitively, what we do makes sense. I think that’s one of the reasons why we’ve been as successful as we are is we’re a pretty simple tool that’s very effective.

But we have done studies with our clients and have found that there is a hard ROI, and that we’ve been able to, because of moving those patients, reduce subsequent ER visits. Additionally, we’ve been able to reduce inpatient confinements because we’ve got those people connected to what we’ll refer to as a Medical Home.

There’s got to be some quality impact as well. Obviously, if the no-show rate goes down when you make an appointment right in front of someone, that whole compliance issue then comes into play. Not just for what it costs or where they go; but whether they get treated at all.

Absolutely. There are clinical aspects along with operational efficiency aspects and financial aspects to what we’re able to do.

How do you think the whole ED visit and referral pattern will change with whatever healthcare reform changes?

Unfortunately, that is the elephant in the room. There have been a lot of studies. I mentioned the studies that were referenced by the two articles this week, but Medicaid patients are four times as likely to use the ER than a commercially insured patient. They’re using it for a majority of their visits for non-emergent care.

If they reduce Medicaid reimbursement, the result of that is fewer physicians are going to participate in those contracts. If you’re going to increase the rolls of Medicaid recipients by 30 million-plus, you are equally going to see a substantial increase in ER visits. You’re going to have a much bigger gap of supply and demand than we do today.

Today, it’s really significant. I think that’s the unintended consequence of reform is that we’re going to see our ER visits, which last year was 121 million ER visits in the country – it  could easily hit 150-160 million visits.

The other trend that’s occurring is that urban hospitals are closing at an alarming rate and so are their ERs. Not only have we seen a substantial increase in ER visits, but we’ve seen a corresponding decrease in the number of ERs. Compounding that with reform and what is going to happen with Medicaid usage, it’s a big issue, a very big issue.

More patients will have insurance, so I assume more providers will accept their referrals. However, it might be a golden opportunity to educate patients about how to properly use healthcare resources since they’re suddenly more desirable with insurance.

If they’re privately or commercially insured, the studies are indicating that those people are connecting with much higher frequency to their primary care physician. It’s the Medicaid population that we really need to think outside of the box and try to find ways to fully engage them in their care and trying to do that early and often.

I think that’s going to be our biggest challenge is the economy and the country. You have to try to engage those people so they’re not using the ER inappropriately and they are getting the care that they need.

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