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An HIT Moment with … Peter Pronovost

October 6, 2008 Interviews 1 Comment

An HIT Moment with ... is a quick interview with someone we find interesting. Peter J. Pronovost, MD, PhD is Professor, Departments of Anesthesiology and Critical Care, Surgery, and Health Policy and Management; Medical Director Center for Innovations in Quality Patient Care; and Director, Quality and Safety Research Group, The Johns Hopkins University School of Medicine, Baltimore, MD.

On September 23, Peter was announced as a 2008 Fellow of the John D. and Catherine T. MacArthur Foundation, recipient of a so-called "genius grant" that will pay him $500,000 over the next five years, no strings attached. The fellowships are awarded to "talented individuals who have shown extraordinary originality and dedication in their creative pursuits and a marked capacity for self-direction" to "encourage people of outstanding talent to pursue their own creative, intellectual, and professional inclinations."


What was it like hearing that you had been named a 2008 MacArthur Fellow? 

Amazing. I do not consider that I fit the bill of genius. What I do is try to make complex ideas simple and use them to improve patient outcomes.

What will you do with the grant?

I’m not sure. I have been toying with trying to make a checklist maker, an IT tool to tap the wisdom of crowds and make a more efficient knowledge market. I believe certain markets are so fundamental to society, like buying a home, healthcare, and retirement, that we need to guarantee that they are efficient.

What is the status of your "List" projects and have you had any interaction with IT vendors?

Still working on it and not working with vendors. I am trying to work out the "plumbing" first and see what product we can create.

What are your big projects going forward?

We are developing programs for MRSA and decubitus ulcers, evidence-based checklists and measures.

Are you a star back at Hopkins now?

I am not a star. I am very much a doc in the trenches doing patient care. That is what keeps me grounded and provides ideas of what we can fix.

I am delighted that patient safety was recognized. It has been very hard to get this field accepted as a legitimate science or as important in healthcare. Though we have a ways to go, we are making progress, and the MacArthur certainly helps.

An HIT Moment with … Matt Grob

September 29, 2008 Interviews No Comments

An HIT Moment with ... is a quick interview with someone we find interesting. Matthew Grob is Director, Health Care Consulting with RSM McGladrey, Inc.

Of all the ways you could have gotten involved with HIMSS, why did you choose CPHIMS?

I had been an annual conference reviewer for a few years and then served for three years on the HIMSS Foundation Scholarship Committee. I was looking for something a little more involved and the CPHIMS program had always interested me.

I sat for the exam at its inaugural offering at HIMSS 2002 in Atlanta and truly saw the value in the credential – what it means to clients, colleagues and employers as well as the personal satisfaction in having it confirmed objectively that I actually know something about what I do for living.

In 2005, I applied and was accepted for a two-year term on the CPHIMS Technical Committee. At the end of that term I was asked to chair the committee for the next year. I must have done something right because they asked me to chair for a second year, which is where I am now.

It has been an exciting time because aside from having the opportunity to work with some really smart and dedicated people who really know their stuff, we recently revised the exam content to reflect both current practice as well as the fact that it is quickly becoming a global credential – I will be presenting on it at the World of Health IT in November in Copenhagen.

For next year, I will be on the ballot for the HIMSS Nominating Committee and urge all your ultra-hip and sophisticated readers to vote for me!

What hospital trends are you seeing in your consulting work?

My practice also deals a lot with the ambulatory and primary care side of the business. We are seeing a shift in hospital environments to tying the two sides of the house together.

There are so many good reasons to do so. The benefits on the clinical side are clear for safety and continuity of care, but we are also seeing it come together on the patient accounting/practice management side as well. Layering business intelligence tools on top of all of those systems are also on the uptick as organizations want a better way to monitor and manage the health of their patients, populations, and their organizations utilizing the wealth of data that is collected throughout the continuum of care and the organization.

How do you think the economy will impact IT budgets in hospitals?

Wow, what a timely question. I see it as a chicken-and-egg scenario. It is clear that the way to better manage the health of our population is through IT and that will, in turn, result in reduced healthcare costs. Payors already recognize that through pay-for-performance initiatives. But to get the benefits, it all takes investment and I suspect that access to capital will be that much harder as we enter this uncertain time in our country’s economic history.

Interestingly, here in the New York market where some of our clients are hiring for technical positions (i.e. those that do not require specific healthcare knowledge or expertise), the candidate pool just got a bit more sophisticated and bigger with jobs lost at Lehman Brothers and the like. I suspect that will be happening elsewhere as well.

You spent a lot of years as an analyst at NYU Medical Center. If you had to take a hospital job again, which one would you want to work for, what job would you want, and why?

I don’t see myself leaving New York in the near future. Given that, I would want to go back to NYU. They were the gold standard when I was there and continue to be leaders in the industry.

Paul Conocenti, the CIO, came from banking but managed to understand pretty quickly how to run IT in a large medical center that has a history of innovation and success. Pravene Nath, the CMIO, is also visionary and understands how to do things right the first time. I would want to use my leadership skills and abilities to improve workflow and operations using technology as an enabler, with a focus on clinical systems. I’ve worked on the revenue cycle side of the house, but my first and true passion is the clinical.

If I were to leave New York, I would love to work with John Glaser up at Partners, Edward Marx at Texas Health Resources, or Buddy Hickman at Albany Medical Center as they are all great leaders and thinkers and they just plain get it. When I started in consulting at Ernst & Young back in the mid-90s, Buddy was one of my team leaders. I often point out that we share not only that history, but a hairline (or lack thereof) as well.

What do you like about living in New York?

I think the question with the shorter answer would be what I do not like about living in New York.

My wife and I were both born and bred on the Upper West Side where we live now. We live a block and a half from Lincoln Center, steps from both Central Park and newly developed waterfront along the Hudson River, and walking distance to most museums. It’s about a 30-minute walk to my office, so I actually get to see my kids most nights when I’m in town rather than sitting in traffic or on a train or bus.

But I’m also spoiled. I am used to being able to find pretty much anything I want 24/7 and within walking distance. The city has a rhythm and vibe that is very hard to find elsewhere and diversity in all aspects is what keeps it interesting. Growing up in apartments, we never had a lot of space and the city and Central Park were our backyards so while yes, it would be nice to have some more room, we’re pretty well adjusted to the confines of a Manhattan apartment. I’m just happy we bought ours 11 years ago. We’d never be able to afford one today!

HIStalk Interviews Todd Park, athenahealth Co-Founder

September 15, 2008 Interviews 10 Comments

Todd Park-1 

I probably wouldn’t enjoy being Jonathan Bush’s athenahealth co-founder. JB is as magnetically drawn to a TV camera as a moth to a bug zapper and vice versa, so he’s always going to be seen as the company’s voice to outsiders. Todd Park doesn’t seem to mind too much, explaining that their original plan for the company called on them to use their respective strengths to build it successfully. They’re still best buds, it seems, sometimes wandering into man-crush territory with their unabashed admiration of each other after a bunch of years of being joined at the hip.

Eleven years after athenahealth’s founding but only a short time after its most noticeable success, Todd has retired from the company at 35, moving on to serve on its board, raise a family, and start other ventures.

I usually provide interview context by noting when the subject laughs, but it’s pointless here because Todd talks fast, laughs constantly, and seems to be having a ball. He’s putting the same energy into his latest startup: a son born last month (he ended his e-mail inviting me to call at any time with, "I’m generally up at night these days, feeding and burping the baby, so am available literally 24-7 :)"

I originally pictured him as Apple’s Steve Wozniak, the ultra-nerdy limelight-avoiding engineer who helped build the company, then left at 36 with mountains of cash and turned it over to the intense visionary Steve Jobs. I think Todd and JB are a lot more alike than the two Steves, though, and I expect that Todd’s business ideas will keep in a non-nerd limelight of his own.

Let’s start with a little background about yourself.

I co-founded athenahealth with Jonathan in 1997. Before that, he and I had met at a consultancy, Booz Allen Hamilton. We were the two entry level analysts in their new managed care strategy practice in New York, so we spent more time with each other than we spent with our significant others. We worked 24/7 traveling around the country together and fell deeply in love with each other. He’s my brother from another mother.

We decided to start a company together and started athena in 1997 as an obstetrics physician practice management company. We bought a couple of practices and got our butts handed to us by how hard it was. We discovered the root cause was that we didn’t know how to bill and get paid. Tried to find an answer to that problem. Couldn’t find one so, built our own. We were the first Web-based revenue cycle management service. Then we were told politely by the doctors that the solution to their problems was not to work for us, but for us to work for them by offering this Web-based “get them paid” solution. So we morphed athena into that, raised venture capital, and then took the company out from there.

I guess that’s my story. I’m so intertwined with athena, I don’t know how to tell my story without talking about athena.

I don’t know you personally, but I can’t imagine Jonathan working happily as a consultant. Still, it must have been a big jump.

Absolutely right. I loved Booz Allen. He did too. We loved being there. We loved learning tons about what was going on in healthcare, but, yeah, you’re absolutely right. Both of us were entrepreneurs at the core, and while we were very appreciative of the time we spent at Booz Allen and the people we met there, we really did want to start an actual business together.

We considered a bunch of different ideas, ranging from disease management to demand management. We briefly considered an air ambulance transport company and a healthcare venture capital company, but then, for a variety of emotional and business reasons, we focused on OB.

The emotional part was through Jonathan’s wife, Sarah. She was training to be a certified nurse midwife in the public health system in New York City. She would come home and tell us stories of what she had seen that were really frightening, actually, in terms of … shall we say, room for improvement … in how babies are delivered in America. From a business standpoint, being analytical geeks, we learned that America spends a lot more per pregnancy than any country in the world, but has outcomes that rank 23rd or 24th. We saw a big opportunity to be helpful there.

We started athena as a baby company. Yeah, we had run nothing but laps before in our entire life, so it was a crazy kamikaze move, but I think that every entrepreneur, at some point in their life, has to have some of that crazy kamikaze spirit to try to do something that hasn’t been done before.

We went to go talk to Bill Donaldson, who is one of the founders of Donaldson Lufkin & Jenrette and later chairman of the SEC. We wanted him to give us money for our new business, so we gave him the business plan for the OB company. He read it and said, "I don’t understand this plan. It doesn’t make any sense to me. But listen, kids, I’m going to give you some advice. I’m going to give you a pearl. This is, generally speaking, probably not going to be the business plan that ultimately you follow. It’s an excuse to get close enough to the customer — the doctor — to understand what they really want. And once you understand what they really want; once that opportunity comes knocking on the door; for crying out loud, answer the door.”

At the time we said, “Oh, this is just a bunch of platitudinous advice.” We really wanted his money. But then, when we were in the middle of getting our butts handed to us as OB practice managers and realized that we’d stumbled across this opportunity to help doctors nationwide with medical billing, we suddenly had Bill Donaldson’s words come back to us. Actually, it took running a medical group to understand what was really going wrong with them and what the root cause of their issues are and to give us the kind of experience we needed to create the business that athena would ultimately ride to success.

So, I would say that the first company that Jonathan and I started failed: athenahealth Version 1.0, the OB practice management company. But like a phoenix from the ashes, the athenahealth Web-based business services company arose from that experience and would never have happened if we had not gone through the inferno of trying to run medical practices ourselves.

So the conclusion is that you might as well jump in, do something, and then react to what happens.

Exactly right. Put enough of an idea together to inspire a team of really good people to jump with you into a general zone like medical practices. Then, just learn as much as you possibly can and what you really can do to be helpful and then act against that opportunity. No question. There was a study I heard about recently that I’ve been trying to track down that looked at 150 companies from start-up to ultimate conclusion. They found that something like close to 100% that had actually survived had changed their fundamental business model at least once, but not more than once. So I think that again speaks to the truth of what Bill Donaldson was talking about.

All we knew is that we wanted to help doctors be the best they could be. In fact, the vision statement of the company hasn’t changed. It was and is, “To help make healthcare work the way it should.” We just thought that meant that we needed to go and run doctors’ offices. It turns out that there are a lot of people that know that really well, but they need help and the kind of help that athenahealth was ultimately able to develop.

Jonathan obviously comes from a privileged family with connections. Was your background similar?

No. My father emigrated to the United States from rural South Korea in the late 60s on a scholarship to the University of Utah. He got a PhD in chemical engineering and joined Dow Chemical. He worked there for the next 30 years. He actually has about 72 patents, more patents than anybody in Dow Chemical’s history except for Dr. Dow himself.

He raised me in a small town in Ohio. He sacrificed a lot to try to give me the best options he could. I went to Harvard for my undergrad education. I actually wanted to be in the Naval Academy and I really had my heart set on that, but then Dad and Mom sat me down one evening and said, “Son, no pressure, but we’ve wanted you to go to Harvard since before you were born.” The way they said, that I knew there was no hyperbole. I knew they were serious. I said, “Jeez, if you’re that serious about it, fine, I’ll go.” So I went.

In the matter of what I do in my life, nothing will ever compare to what my dad did: growing up in the Korean War, born dirt poor, emigrating to a brand new country, and becoming one of the most decorated chemical engineers in the world. My entire life is a quest to live up to half of what my dad actually did in some ways. That’s my background. We’re an immigrant family.

If you hung a label on Jonathan, he’s the Steve Jobs, the charismatic visionary. Are you his Steve Wozniak?

That’s actually an interesting question. Your Wozniak analogy is interesting. I actually don’t know enough about the history of Apple to know whether that’s a direct analogy or not.

What I would say is that he and I have been partners in building athenahealth from the ground up. He’s Yin to my Yang and we have collectively co-led and co-built athena from the very beginning.

One of the things that I insisted upon from the very beginning is that we not be co-CEOs because I didn’t believe in the idea. I believe in clear chains of command, so I said, “Look, you be the CEO. That that doesn’t mean I’m not going to be committed to building this thing together." And so we did, and I think that we’ve got really complementary experiences and skill sets and mindsets.

For example, he’s a terrific spokesmodel with the media and does that really, really well. I prefer to be on the quieter side of things. What’s interesting is that people who meet us say, “Wow, you and Jonathan are so different.” In fact, deep down, he and I are really, really similar. We both have the same world view, the same values. We both believe in doing well by doing good. We both are passionately committed to healthcare and trying to make a difference in a practical and tangible way in healthcare. So we’re bonded at a very deep level, even though we may physically and in other respects look very different from each other. We’ve been partners in building athena like I imagine Jobs and Wozniak were, and each being what the other needed us to be to lead the building of this company.

Have there been times you’ve wanted to put a muzzle on him?

No. Truthfully, yes, but that being said, it’s a package, right? So Jonathan’s great strength as a communicator is that he is a completely frank, completely open, completely honest guy. If you want him to be that way, and he’s incapable of being any other way, he’s going to do things and say things which come straight from the heart and straight from the top of his head. Sometimes the darndest things pop out there, but I’m sure that from time to time he says things he’s wishes he could reel back. But I’d say that 95% of the time, he says stuff that’s spot on. He says things that no one else wants to say that need to be said. I think that athena loves that.

I love that, and frankly, that’s my style as well in a lot of ways. I just don’t talk quite as much as he does. The industry needs people like that. The industry needs more people like you and Jonathan who bring frankness and pizzazz and a sense of humor to a space that badly needs that. I think that he and you have done this industry an enormous favor by doing that.

I worried that his style might be a problem for the CEO of a publicly traded company. Did you guys sit around before the IPO and say, “All right, here’s a list of things we can’t say any more?”

That point was raised to us by the people who were helping us to go public. What we said very explicitly was, “Look, we’ve always been a really open, really honest, really frank company. We’re not going to suddenly change our personality as a public company.”

Yes there are certain rules about what you can and can’t say by virtue of SEC regulation. That, of course, we’re abiding by very strictly. But in terms of being frank about our point of view about what we think is going on, we actually have explicitly said that we want to stay that way. Our early experience is that in a lot of ways, that’s actually potentially, ironically enough, been helpful to us as a public company because people are so used to being spun and getting half-truths that it’s different for them to actually to get a company that just talks in as straight a line as it possibly can all the time. That’s what we always have been and what we feel like we need to continue to be.

Frankly, we couldn’t be any other way if we tried. I think, in the long term, it will actually be an asset for us because it will build a level of trust with our constituencies that we wouldn’t have gained if we were much more carefully controlled and were spinning much more tightly than we do as a matter of course today.

Was it anti-climactic to actually be in operational management as opposed to the thrill of actually starting a company and taking it public?

No. I think that each phase of athena has been incredibly exciting. I would say that the phase that we’re in now is equally exciting, as exciting as each stage we’ve been in in the past. In fact, the IPO itself was a bit anti-climactic, in the sense that it was great and we got together to talk about and celebrate it and then everybody got back to work. The company didn’t think or act any differently to pre-IPO.

Jonathan and Todd 008

You got up on IPO day, got dressed, and then what?

I have to say it was one of the more surreal experiences. We got up and we knew that we had sold our blocks of stock to all the people that we had talked to on the road show. We went to the NASDAQ. Of course, there is no NASDAQ in the physical sense, but they have this little show site in Times Square, right, where they bring you? They’ve got these people on terminals just to make you feel comfortable, like there’s something that’s happening. I don’t know what those people are doing, but it’s like Disneyland, it’s cool.

I remember the first truly surreal moment being that there was this six-story spherical billboard planted on top of the NASDAQ Building in Times Square. They took us outside and they flashed a “Welcome athenahealth ATHN” sign with basically a picture of a baby and a doctor and stethoscope and our slogans and whatnot, six stories high on the NASDAQ. I said, “What is going on here?” I took a picture on my iPhone and e-mailed it to the company and everyone circulated it and was struck by it and said, “Wow, that’s really surreal.”

Then we went in to a little conference room and they had, like, a couple of crackers, which was nice, and there was this screen, and they said, “You’re going to start trading at 11 o’clock.” Great. So we counted down: five, four, three, two, one, and nothing happened. We said, “Uh, did we do something wrong? Is the NASDAQ broken? What’s happening?” And he said, “Oh, we’ll figure it out.” And we waited for what felt like forever. It was probably only a couple of minutes.

Keep in mind, we had gone out at $14 to $16 a share; been lucky enough to get oversubscribed, like 27 times at $18 a share. So we said, “OK, let’s see what happens. It’ll be interesting.” And the first number that flashes on the screen is 30. We said, “Wow, that’s pretty amazing.” Then it floated downward to like 26. Then it shot up again, something like 34, 35 … I don’t remember any more. I just remember just feeling crazy.

Then we flew back, met with the whole company, and explained what happened. We emphasized that the IPO itself isn’t the achievement. The achievement is that we’ve collectively built something that the world is beginning to embrace. Ten years of incredibly hard work to build something that is actually helpful to healthcare. It was beginning to find a broader audience, so everyone should be happy about that. And everyone was happy about that, and then everybody went back to work.

The thing I’m happiest about is that, actually the next day, you couldn’t tell the difference between that day and any day prior to the IPO. That was fantastic, because the thing I’d been most worried about was that the culture of the company would change; the openness would change, the frankness would change; the irreverence would change; focusing on the long-term would change. And none of that has changed, which is testament to the culture that everyone holds so dear here and also to the strength of our recurring revenue business model, which is just a great, predictable foundation upon which to build a business in a really rational, predictable way and be able to stay focused on the long term.

But somewhere in the back of your mind, you must have been thinking, "Holy crap, I’m now worth $25 million and I wasn’t yesterday.”

Of course, intellectually, I understood that, but it still hasn’t really hit me, to be honest with you. My wife resolutely refuses to believe that that money exists. My wife fell in love with me seven years ago when I wanted to be a writer, so she was not expecting to be worth whatever it is that we’re worth now.

Hang on to her.

Absolutely. In fact, she was the trigger event for my recent retirement. So I am hanging on to her and doing everything I can to make sure I hang on to her. From a personal standpoint, my burn rate hasn’t changed pre- versus post-IPO. I don’t plan for it to change.

Surely you bought something cool.

I gave half a million dollars to a charity called VisionSpring that’s mass producing eyeglasses in China for the global poor. That’s something I wouldn’t have been able to do pre-IPO, but that’s about the only thing I did, actually.

What kind of car do you drive?

I drive an Acura TL. I would have bought a Honda Accord because I’m a lifelong Honda Accord driver, but I wanted a GPS because I have bad sense of direction and Bluetooth because I’m menace enough to other drivers without talking on my cell phone. The Accord at the time didn’t have GPS and Bluetooth, so I had to buy this thing called a TL instead. It seemed pretty good value for money. I’m not kidding about being a menace to other drivers and having no direction sense. If we ever get together, Tim, don’t let me drive you anywhere. Actually, now I that have the TL I’m a bit safer, but still, don’t let me drive you anywhere.

It doesn’t seem like a really emotional purchase that you went with something with a GPS.

Ha. Actually, I specifically told the dealer I want to buy something that just blends in the road. I do not want to drive anything that calls attention to itself, so get me the most generic-looking car that you have that has GPS and Bluetooth. He said, “Well, I’ve got this thing called a TL.” I said, “Well, I’ll take a look at that.” I still don’t remember what it looks like, so it’s very forgettable. It’s great. It’s perfect for me.

I’m absolutely delighted that athena is a huge financial success, but the thing I’m actually prouder of is that we’ve collectively built an amazing company that is actually doing something to be helpful in healthcare. If you wanted to make a fortune in 1997, you probably wouldn’t have started a company to buy OB practices and run them and you probably wouldn’t have bought, as your first OB practice, one in San Diego that serves undocumented immigrants and Medic-Cal patients, which was the practice that we bought and the practice from which athena was born. If you wanted to make a killing, you would have started buypottedplantsonline.com. You wouldn’t have started with an indigent OB women’s health practice. But that’s what we did.

What’s wonderful to me is that there are a whole bunch of people that jumped in feet first with Jonathan and I to do that, including the doctors and midwives at that practice, who suddenly found themselves holding stock in the company worth over a billion dollars, which is crazy to them, but it couldn’t happen to a better group of people. That kind of financial reward to me is not the end goal, but is just a wonderful by-product of what is really wonderful, which is building an institution that actually helps, that is actually helpful in a concrete way. That’s what I’m proudest of and that’s what makes me happiest.

It’s hard to believe you’re retiring permanently. What led you to that decision?

The root of why I’ve retired as an employee is that I made a promise to my wife years back that, as soon as we’d gotten athena to be strong enough such that it could fly without me on a day-to-day basis, at that moment, I would take myself out of the day-to-day management, we’d move to California where Amy’s from, move next to her parents, and start a family. That’s what we’ve always wanted to do.

Being a first-time entrepreneur, I didn’t really have a good sense of the entrepreneurial space-time continuum, so I told Amy, “I’m positive this will take me no longer than 2004.” And it turns out it took a little longer than that, but by 2007, I was sure that we were there. Actually, it wasn’t the IPO that convinced me, it was the state that the company achieved in order to be ready to be public. So the IPO was more the functional fact that we’d achieved that state, as opposed to the actually certification of it.

I feel that athena is now strong enough to be an institution to withstand the loss of anyone day to day. So at this point, I really have to keep my promise to my incredible wife and do this thing. I retired from day-to-day management in January of 2008 and joined the board and then took on this Chief Athenista role. The title was not my idea, by the way. The root of the title, in case you want to know, which you probably don’t, but in case you do … remember our first practice when we were an OB company was in San Diego and we were serving a predominantly Latina population and our workforce was predominantly Latina. They started calling themselves Athenistas and to this day everyone at athena calls themselves an Athenista. So they gave me this title Chief Athenista.

Basically, the function was to be a long-term strategist. I’d spent so much time nose to the grindstone, nuts and bolts building athena, that I hadn’t actually in quite awhile taken a step back to take a look at what was going on in healthcare and to plot where I thought athena should ultimately go, in the next 10 years anyway. I spent the next six months interviewing over 150 leaders across healthcare and reading through about 50 major studies on the healthcare system and various aspects of it. I put together an assessment of state and direction of U.S. healthcare and a long-term, 10-year vision for athena.

What was interesting, when I initially started, people gave me all kinds of ideas: athena starting a data business, athena going international, athena doing all kinds of things, athena Intergalactic. The most interesting was that I’d traveled the furthest reaches of the healthcare system and was looking for the boat we had missed. The more I learned, the more I actually became convinced there was no additional boat to launch; that in fact, the sweetest spot in healthcare to be was the space that we were already in and that we had less than 1% market share.

So I came back and I said, “Look, I’ve walked the furthest reaches of American healthcare and what I’ve concluded is we need to double down and focus on executing the bejeebers out of what we’re doing right now in creating a national infrastructure to help doctors be the best they can possibly be and do that for more than 1% of American docs."

So that’s what I put into my long-term vision for athena. I profiled a bunch of different trends that you’re familiar with: consumer-directed healthcare, pay-for-performance, medical home, all of which are things that I think that athena, through our national platform, can do a lot to facilitate and to help doctors deal with and actually turn to their advantage and to the advantage of their patients in the next ten years. I said, “Look, let’s just double down on this national infrastructure play for docs, nurse practitioners, and midwives. Let’s do that play and not get distracted by delusions of grandeur.”

Once I’d presented that and once our board and management team had bought into that, I said, “There’s no athena Intergalactic for me to start, so what I should do at this point … thinking about our long-term strategy is not going be a full-time endeavor unless I’ve really gotten it terribly wrong, which I hope I haven’t, so let me hang up my cleats as an employee entirely, which I did at the end of August, and convert to a pure board member.”

One of the reasons I wanted to do that was because I wanted to become an independent board member so I could take a bigger leadership role on our board, eventually, in doing things that independent board members can do that non-independent board members can’t. I’m actually now functioning as a very active athena board member, functioning as a godfather/co-founder, visiting athena every other month. I’m writing an internal blog, inspired by HIStalk. I’d actually like to get some tips from you if you wouldn’t mind at some later point.

I’m thinking about long term strategy, networking across the industry, speaking on behalf of athena at conferences, hosting brown bag lunches with our employees, starting an athenahealth Foundation, which Jonathan and I are going to start funded by $1 million each of our own money, and just taking a godfather/co-founder role and a board role, and then moving to California.

I just had a son at the beginning of August. I’m trying to be the best father I can possibly be. Over time, what I anticipate doing is investing my time and money in a set of entrepreneurial ventures, both not-for-profit and for-profit, that can advance the ball in healthcare; that can advance the cause of healthcare in a variety of ways. athenahealth was obviously my first corporate child and I’ll continue to serve on athena’s board and be its godfather for as long as I draw breath. I have recently got involved in another venture which was mentioned in the Washington Times article, called Maria Health, which I’ve started with Giovanni Colella, who was CEO of RelayHealth and then Sapient before that. Our venture capitalist is Bryan Roberts of Venrock, who is one of the lead VCs behind athena.

It’s actually a consumer-oriented company. It’s super duper early so I can’t really get into specifics at this point, but generally speaking, it’s a company that’s seeking to take an athena-like approach to helping healthcare consumers navigate an increasingly complicated healthcare system. It’s got a great team, veterans of athenahealth and Yahoo who are part of it. It’s off to a great start. It’s too early to talk a lot about, but it’s been a ton of fun for me to learn more about the consumer space.

As you know, consumerism is a force of growing power in healthcare. I think a lot of what’s going to be happening in healthcare is going to be consumer-driven in the next ten years, so it’s exciting to be learning about that. I’m looking at a number of other both not-for-profit and for-profit ventures in which to invest time and money to help these entrepreneurs make the differences that I think they can make in healthcare for the better. So I think that’s what I’m going to do. First and foremost, be the best dad and husband I can possibly be going forward.

There’s one question that has come up in the past, maybe kind of a dweeby technical question. There’s been some speculation that I’m going to dump all of my shares in athenahealth. I just wanted to say that I’m not. I’ve actually exercised and sold a set of employee options that were “use them or lose them” as a function of my employee agreement. When I transitioned from employee to chair board member, I had to use or lose them, so I exercised and sold them.

But even after those transactions all go through, I still hold 900,000 shares of athena stock. I am very, very bullish on athena. I will hold a lot of stock athena for a really long time and continue to a very active board member and godfather to athena. Again, the proof is in the pudding. So people can watch and see if I dump my 900,000 shares or not, but I thought I might communicate more expeditiously and say that that was behind my recent sales and that’s what my plans are going forward with athena.

You’ve been attached by the hip to Jonathan for all these years, but now you’ve got a chance to do some things on your own. It must be satisfying to have feet in both courts.

I’m grateful that Jonathan is here to continue to lead athena, because if Jonathan weren’t here, I couldn’t retire and go on to the next phase of what I want to do. So, I’m grateful for that, but honestly, if I had a choice, I’d want to do the next set of things with him, actually.

I think that starting any business is incredibly difficult. Starting a business in healthcare is especially difficult, and if Jonathan and I didn’t have each other, then athenahealth wouldn’t be here now. Frankly, if Jonathan and I didn’t have a whole bunch of other people, athenahealth wouldn’t be here right now. There’s too long of a list.

I’m not a big believer in the epic hero theory of entrepreneurship that “One man, in a world filled with chaos and darkness, takes a stand.” That’s bullpucky. I think that it’s a small group of people that decide to take a stand and make something happen, each of whom couldn’t do it themselves, but collectively they render it possible to do something really unbelievable.

It’s one of my favorite quotes. I don’t remember who said it. but it’s a question and answer. Someone says, “Is it possible for a small group of people to change the world?” and the answer is, “Yes. In fact, it’s the only thing that ever has.” I think that athena is a great example of a change that’s helpful that couldn’t have been done by any one person, that was engineered by a group of really committed people.

One of the best parts of athena has been the privilege with that incredible group of people. The reason why I was so confident that athena would continue to rock the house even though I’m not there day to day is because that group of people is still here and bringing on wave after wave of new people who are incredible to perpetuate the beneficial change that we’ve gotten going in our corner of the world here.

How do you scale it up, though, and make sure that what made you special when you were small can still make you special when you’re huge?

That is a terrific question. I don’t think that we necessarily can come up with a definitive answer to that question even if there is one. But what I can say is that we’ve fought harder about that question than any other similar question.

I think the gist of our answer is culture, at the end of the day. We have a culture that’s extremely focused on dong well by doing good, a culture that’s focused on teaching and learning and playing for the team to win, and a culture that makes each of those things a living and breathing art of how we operate, how we recruit, how we pay, how we think, as opposed to just banners on a wall somewhere. It’s that culture that I think, more than anything, has attracted the people we have attracted.

It might be the fact that medical billing is so super sexy, but actually it’s probably the case that it’s less the sexiness of medical billing and more the fact that there’s a do good, do well team-oriented, continually teaching and learning focus culture at athena that attracts the best people in the world. Those best people recruit more of the same kind people. They come up with the best strategy, the best technology, the best operations, and execute the best. I think it’s that culture that’s our greatest asset.

It’s a culture Jonathan and I are no longer required to continually breathe into the company every second. We think that there are many people now that do that, in the sense that its part of the fabric of the place, as opposed to pumped into athena by a couple of people.

Some would say you’re in the billing business and others that you’re an advocate for physicians. What I heard you say is that there’s value in the network that you’ve built that makes the footprint valuable. What is the business going forward?

I think it’s all the above, but it’s in the proper sequence. I think that the business that we’re clearly in today is getting doctors paid. We’re growing really rapidly and have a lot of traction because we are really, really great at getting doctors paid. We do that through a combination of workflow and rules and back office operations on a single living, breathing, Web-based platform. The whole point of the platform is to get the doctors paid more faster with less hassle. That will continue to be the focus of our business, I think, for the next 10 years. We have less than 1% market share of that business, so it’s something we’ve got to keep executing on.

That being said, as that business grows, we are as a function of that business, building a national network for doctors on a single Web-based platform with a single Web-based rules engine and a single back office working on their behalf. Once that network gets to a certain size, there are a bunch of things you can do with that network. They go beyond just getting doctors paid more, paid faster with less hassle. I think the first thing we’ve got to do is just get big enough for this network plays to really be viable and our ticket to get big enough is to continue to be the best at getting doctors paid. So even stuff like EMR.

We recently launched athenaClinicals, which is our version of an EMR. We think of an EMR in the lens of getting doctors paid, and so we’re fusing our EMR with our practice management and billing service and using the EMR as an engine to make sure that our revenue codes are right, to make sure that charges flow smoothly, to help optimally manage the increasing array of pay-for-performance rules to help blow away paper in the back office. That is a function of and part of clinical paper and part of the whole billing process. We even view athenaClinicals as part and parcel of an overall engine, and overall service, that gets doctors paid more faster with less hassle. I think that right now, and for the foreseeable future, we’re in the “get doctors paid” business, but eventually that business will build itself into a network upon which athena can do more things that are really useful and are additional excellent lines of business as well.

How much of the company’s success is because of the work your brother Ed did technically?

A huge portion of it. There’s a long list of people that deserve to have their name in lights, not just me and Jonathan, a long list of people, without whom athena’s success would not be possible. One of the prime names is Ed Park.

Basically, he was superstar young Internet consultant at Silicon Valley Internet Partners in 1998. I was a practice manager of a failing OB practice in San Diego, California. We needed to get a handle on this billing problem and we needed to get a handle on our operations and build technology that could help with that. So I called Ed, rock star Internet consultant, and said, “Ed, I need your help.” And he quit his job that day and flew to San Diego and partnered with another guy named Bob Gatewood, who was our CTO at the time, to basically build athenanet. Without athenanet, athena wouldn’t be possible.

There’s a long list of names like Ed. One of the things that actually I have a private pet peeve about is entrepreneurs who portray themselves as God’s gift to humanity and as the epic warriors who single-handedly built their business from the ground up. Those entrepreneurs are either full of it or have faulty memory. Businesses like athena are built through collective effort. Not just by one or two people, but by a lot of people, so there a bunch of Ed Parks that we owe this company to and I’ll be forever grateful to them.

I saw that you have donated money to both the Obama and McCain campaigns.

Yes, I have. You really do your research!

Who do you want to win, or who do you think has the better story?

Obama. We talk a lot of politics here at athena. By the way, athena is 98% Democrat and 2% Republican, which is interesting, actually.

So, I was talking with one of my buddies and we were saying, “Wow, wouldn’t it be great if Obama and McCain were the nominees?” This was when it looked like Clinton and Romney were going to be the nominees. We said it would be great if it was an Obama-McCain contest because they seemed to be terrific guys and potential presidents, but that’s not going happen. So I gave money to both Obama and McCain in hopes that one of them would break through and, lo and behold, both of them got through by some strange twist of fate to be the nominees, which put me in a real quandary.

I think actually either one would make a really terrific president. I think The Economist cover was dead on with the “Best in America” over the American flag with McCain and Obama on it. I think they got it right on. But I’ve picked Obama for a bunch of different reasons, less anti-McCain and more pro-Obama. People keep calling me and I have to say, “Look, I really like your guy, but I’ve actually picked the other guy.” But I’m an Obama guy.

When you look at healthcare, both as a campaign issue and in general, do you think it’s broken, and if so, what will it take to fix it?

I think healthcare is incredibly broken. I can’t think of a word that does justice to how broken it is at so many levels. I think we all intellectually understand that, but it was really eye-opening for me in my walkabout when I talked to these 150 leaders, to understand just how broken it is looking at the underlying data in terms of cost and quality and access. So I think it is actually broken.

I think the silver lining is that everyone knows it’s broken. It’s hard to find people in any position of responsibility that believe it’s not. There was a Commonwealth Fund and Modern Healthcare that was done recently. It surveyed leaders specifically in healthcare and it found that 9 of the 10 leaders in healthcare say that not only is change required, but fundamental transformation of the healthcare system is required. And that is certainly what I learned about on my walkabout as well.

There’s also a pretty surprisingly broad consensus about why it’s so badly broken at the end of the day. The consensus that I heard on my walkabout is that it’s fundamentally the massive misalignment between payer, provider and consumer. A key to actually healing the healthcare system is to realign those incentives between payer, provider, and consumer such that savings from smarter care and better health are shared with provider and consumer so they are incented to move in that direction through a variety of different means. So that fundamental incentive alignment problem is at the root of the issue and we need to address it in order to heal the healthcare system.

Len Nichols, who is a great healthcare economist at the New America Foundation, has a great sound bite he uses to describe this. He says, “Fee-for-service payment for providers plus low cost-sharing by consumers plus a very small effective evidence base on what works and what’s cost effective equals number one in the world in healthcare spending and 37th in the world in outcomes behind Slovenia and Costa Rica." I think that was a great sound bite that kind of puts it in a nutshell.

Everyone in the system has a different theory about what to do about it. I actually think there is no silver bullet. I think it’s actually a collection of initiatives, public and private, that will be required to put the healthcare system on an even keel. I think a system that’s more consumer-directed. A system has better incentives for provider and provides better funding for providers to do population health management. An innovation on the delivery system side along the lines of retail clinics, medical homes, virtual care teams around care episodes, and the government doing something about the insurance coverage situation, helping to facilitate broader coverage.

Healthcare IT, not technology sitting there naked and expensive and not very effective and efficient at actually helping, but technology utilized to help re-architect the business and care processes in healthcare to make it more efficient and effective and to help consumer-directed healthcare and pay-for-performance move along more expeditiously. It’s not a situation where there’s going be a solution that’s sent from the heavens that will fix everything. I think its actually going be from the collective work of a lot of people, public and private, and a bunch of different ideas that mesh together into a much healthier healthcare system where there’s a better incentive alignment where we’re getting more bang for our buck.

A lot of folks are happy with it, including those that vote and legislate who have access to good healthcare and may make a lot of money from it. Politicians don’t like to take away the lollipop of entitlements, either. Who will come forward to say it’s not working?

I think the most encouraging thing I learned in my walkabout is that I talked to a fair number of people who were pretty influential and pretty powerful. Not just entrepreneurs at the margins throwing stones at the center, but people who were actually at the center.

It was very interesting and refreshing to me. They are very actively thinking about how the system needs to evolve. Now, no one things the system is going to evolve overnight, but they’re thinking of evolutionary innovative change at a level that is more intense than I could certainly remember.

It goes back to something that Winston Churchill said, which is, “America can always be counted on to do the right thing after it has exhausted every available alternative.” I think that healthcare is finally at the point where it really can’t continue in its status quo state. Healthcare consumed 9% of GDP in 1980. It’s up to 16% now. It’s going to be 20% by 2016. It’s going to be 30% by 2030. Simultaneously, we rank 37th in the world in outcomes, according to WHO, 42nd in infant mortality, 46th in life expectancy from birth. More and more Americans are underinsured and uninsured.

There’s a great survey done by the Center for Studying Healthcare System Change. They looked at access to care, measured by, “Were you able to access medical services when you needed to?” That figure of those who couldn’t jumped massively from ‘06 to ‘07 to an all-time high. Every metric you look at. We spend 2.5 times as much on healthcare per capita as the developed world average. Our outcomes are the worse than the developed world average. We spend 2-3 times as much on health benefits per worker as our competitors in the developed world, let alone the developing world. Healthcare premiums are rising at triple the cost of wages. Healthcare costs are rising at 2-3 times than the rate of growth and productivity of GDP.

These are all unsustainable trends. We can ignore them for awhile, but they’re getting to a point where we can’t ignore them any more. Everyone talks about Social Security being bankrupt. Social Security is something like 8-10 trillion dollars underfunded. Medicare is 30 trillion dollars underfunded, meaning that to cover the gap between benefits and revenue for existing Medicare beneficiaries, we have to put 30 trillion dollars today into an interest-bearing account to cover the difference.

It’s getting to the point where I think that healthcare reform on a political level is actually increasingly not going be the third rail. I think at a private sector level, even people in a positions of power are sensing they are going to have to do something, otherwise risk potentially near-catastrophic events. I’m not predicting any tsunami-like change in the industry. The industry is too big, too complicated, but I do see the winds of change starting to blow through in a really meaningful way.

When I interview people, most of the people I talked to didn’t just have ideas, they were actually in the process of doing things that were really interesting. So crossing the line from “say” to “do” is something that is happening more and more and that’s really encouraging. So I’m an optimist. Maybe that’s because I’m an entrepreneur, but I think that we are just in time as a country going to figure this out and get ourselves to the other side without getting too many bones broken in the process.

Fifty years from now when someone is looking at your picture on the wall at athenahealth Intergalactic, what do you think your legacy will be or what would you like it to be?

That’s a really great question. I haven’t really thought about that. I guess I would say someone who, in some small way, helped to show that you can actually make healthcare better in a meaningful way. Someone who helped inspire other people to in small ways, medium-sized ways, and big ways make positive changes to healthcare and demonstrate that change is, in fact, possible.

HIStalk Interviews Michael Nissenbaum, President and CEO, iMedica

July 7, 2008 Interviews 3 Comments


Many folks probably heard of PM/EMR vendor iMedica when Misys announced that it had licensed iMedica’s product and would sell it under the Misys MyWay nameplate. That put the company on the map, but it seems go be gaining visibility on its own. CEO Michael Nissenbaum has the reputation for being able to deliver and for being a straight shooter, so when a reader suggested interviewing him, I asked and he agreed.

Let’s start with a little bit about yourself and about iMedica.

I’ve been in the industry for 10 years, going back to my days at Millbrook Corporation back in 1998. They had a great product, but it had been driven off the cliff financially. It took about three to six months to put it back together, and then we enjoyed five consecutive years of 85% compounded revenue growth, profitability, best-of-breed selection in the marketplace.

The end of that story was GE came in and offered my directors a price. They were interested in exiting. They made good money. It migrated the Millbrook team to GE. Most of us stayed there for a year, year and a half, and then started looking around. GE was not the entrepreneurial environment that we had at Millbrook. GE had a different culture than we had.

I was contacted by two investors who had a significant equity interest in the iMedica Corporation. iMedica, at that time in 2004, was already a six-year-old company. Charlie Koo, the founder, had, during his PhD dissertation, convinced 18 physicians at Stanford to, instead of building a template-driven EHR, to build a chief complaint-driven EHR. Those Stanford physicians compiled about 1,000 chief complaints and then associated 400,000 clinical terms with those complaints. That provided the unique speed into the application.

Charlie and his team built the product out for EHR. It was very fast. It had the replication features which are now the patient record to cache onto the tablet. Not only the single record, but you can determine every record for everyone I’ve seen in the last 90 days and will see in the next 30. You set the parameter. It gave the physician incredible mobility on the tablet PC.

Charlie’s target market, though, was the 50-doctor and larger groups. As you and I both know, two things are required to claim that market. The first is the capital to sustain yourself through the committees, the consultants, and the “we’re not sure if we want to do anything right now” decisions. The second is having another 50-doctor group so that you have a reference account.

Charlie was able to get one account up and running, a 62-doctor practice in California, but it was late in the game and he ran out of money as well. Good product, good technology – at least the investors saw that. They decided to look around for a different management team, which got to me.

I had some individuals take a look at it on my behalf. I’m not technologist; I’m a finance guy. They came back and said, “It’s Microsoft-based.” They thought it had a lot of potential. On June 13, 2004, I came over to iMedica and was followed over the ensuing months by some others who joined me from Millbrook and at GE: Neil Simon, Daniel Popp, Lonnie Cordell.

We were very fortunate that, in September 2004, literally on our doorstep, Sanofi Aventis wanted to get out of the practice management business. They had a team of developers right there in San Jose. We were in Mountain View, California at the time, which is just a stone’s throw away. They were willing to give us the code if we would just support their existing client base, which I think were eight practices. So it wasn’t any type of bonanza.

So, all of a sudden, we had an EHR team and a PM team and were able to begin the integration of those products into a single database application offering both PM and EHR in a .NET environment. As any other software development goes, the first 90% of the time, the last 10% took the other 90% of the time. We found ourselves about a year behind in getting the product to market from our original date.

We came to market and the company we took over, iMedica, had, I think, 12 clients. Today we have well over 300 practices ranging from single doc to over 62; from single sites to over 17 sites; multiple specialities. The only thing we really don’t do are oncology and ophthalmology, but everything else is in our portfolio. We’ve continue to grow over the last three years at over 100% per year.

So you joined iMedica and they had the existing EHR product?

They had an EHR engine. It was a great documentation engine, but there were other parts of the EHR product that weren’t in the product. It was an incomplete EHR, at least when you look backwards from today. At the time it was pretty complete, but as we are seeing with CCHIT and other requirements in the industry … things that we didn’t even think are required by the EHR and we now have in the application.

Why do you think Misys decided to license your product and how to you think that decision has worked out for them so far?

They represented to us that they decided to license our product because of the underlying technological architecture upon which our product is built. For Misys, they looked around in this marketplace and nobody had the structure that was as flexible and as strong as what our development team had built. They believed they could take that and continue to leverage it into their market. So, that was the differentiator up front.

Misys is many multiples the size of iMedica, so the obvious question would be why wouldn’t they build their own? Usually you buy someone else’s technology because the market won’t wait for you or you don’t have the capability.

Their EHR has some traction in the marketplace, but it’s not a single database application with either their Tiger or Vision application. So yes, they saw the time-to-market being a hurdle in front of them if they tried to build.

Second, they had purchased Amicore. They bought the remnants of that product, if I recall correctly, in 2005-6. They were supposed to come to market in late 2006 or 2007 with this single database application. They missed that date. Just anecdotally, from what I heard, it was going to take a significantly longer period that they anticipated to bring that product to market. Then they had the change of management and I’m sure the new management had different objectives and different strategies.

I  know there was some equity consideration as part of your licensing arrangement, but I think most people said, "Why didn’t Misys just buy the company outright?"

We weren’t for sale outright. We had no desire to sell the company at the time.

Everything is for sale at the right price and Misys certainly has the deep pockets.

They do. Again, we think our value will continue to accrete. Again, we’re growing at 100%+ per year. We will continue to grow 100%+ this year even without any Misys involvement. With the Misys involvement, the numbers go up considerably.

Why didn’t they buy us at the time? At Millbrook, we think we left money on the table by selling too early. And while we have no plans of selling presently, when the time is right, we want to make sure that we get full value for our investors. They’ve been very good to us.

Is there any agreement that gives them the right to purchase more of the company?

There’s absolutely no agreement which allows them to buy any more of the company in any preferred mode. If we went out to raise capital at any time, they would have the same rights as any other shareholder.

Is the version they sell under the MyWay nameplate the same product or did they fork it off?

It’s the same source code. The source code is ours. If you go to the About button on Misys MyWay, you’ll see iMedica.

Then what value is Misys adding, other than they’ve got a big footprint and a lot of sales people?

They claim they have 110,000 physicians. They claim 85% of those do not have an EMR. That’s a heck of a business right now, going back and getting your existing installed base captured with an EMR. I don’t think any of us in the business have 85,000 EHR sites and or EHR physicians today.

Wasn’t that the same argument for their hooking up with Allscripts? Now they’ve got products from two competitors confusing their own customer base. How do you think it will shake out?

I haven’t been privy to the conversations in Raleigh. They are having discussions between Misys and Allscripts. We’ve been talked to once or twice. The MyWay product has been exhibited at their analyst day in Raleigh and got a great reception. They continue to sell it aggressively and we think it’s part of the portfolio going forward.

How it plays into the Allscripts portfolio, I really don’t know. I heard that they were supposed to bring an application to market and that’s, anecdotally, in the fall on a single database. They still had their challenges with Version 11 on their TouchWorks, their HealthMatics product. It looks like a single database is really still two different products integrated together.

You’re fully competing with both companies and will continue to do so with the combined company?

Tooth and nail until somebody notifies me otherwise.

Why would prospects buy the product from Misys instead of the company that develops and supports it?

You’d probably have to ask the few that I know that have bought it from Misys. Usually it’s continuity. They have an existing Misys contract and maybe Misys is having special deals. When we go toe-to-toe with them, we’ve been very aggressive, they‘ve been very aggressive, and fortunately, knock on wood, we’ve prevailed and we plan to continue doing so, even in light of the Allscripts acquisition.

Surely Misys will have to make a bunch of sales to get back the millions of dollars they paid.

I think they are well on their way of reaching the numbers they need. From all reports we’ve seen and heard, they continue to do very well with Misys MyWay and the product in the marketplace. They had their fiscal year end. I read the press release. They talked nicely about the Misys traction which they received. I don’t have the figures or number of units and other distribution channels. It seems like they’re meeting their plans.

Were you the only company they approached, or are there others they would have struck a deal with?

We understand that they approached a great number prior to coming to see us. Whether they did as deep a dive as they did in our house, I’m not sure, but we had Misys people camped out for the better art of a week or week and a half.

I promise that’s the end of the Misys discussion. We had to get that out of the way.

It’s not an issue. I’m very comfortable speaking about it.

In the KLAS reports, the iMedica PRM product is not listed. Why is that and does it impact your marketing?

Sure, it impacts our marketing. Our PRM 2008 product went generally available in April. It’s the product we’ll come to KLAS with in December. We did not have it installed in enough locations in time to qualify for the June book. You need 14 sites for each different group in KLAS and we were just getting all those up and running and getting their interfaces tuned.

We wanted to have, not just 14 in each … I’d like to have enough in each that it gives us a representative sample, because you only get the first level of confidence at 14. By August 15, every one of our practices will be on the newest version. We’re migrating practices every night now.

It will be the first time since we took over that we’re going to have all practices singing off the same song sheet with regard to versions. That’s going to give us the ability to address issues more effectively; to bring featuring functions to market that will enhance their environments. Up until this point, there were practices still sitting on the PRM 2006, 2007, and 2008 release candidate. That was a really hard environment to bring to KLAS. So now we’re going to have one product in a universe that will be highly satisfied. We think we can be a very competitive in KLAS.

I meant to ask you about the number of employees.

We have just about 105 employees today. The bulk of them are in Carrollton, Texas, I would say 55 to 60. The rest are sales people and training personnel and they are scattered geographically around the United Sates. If anybody is looking to come to Carrollton, Texas in a support role or to become a trainer, we’re looking for them. That’s a plug. Can they send resumes to HIStalk?

Sure, why not? We’ll hook you up.

I think we actually found a trainer recently through you. You didn’t know you had that feature, did you?

I didn’t.

We continue to grow. We continue to be selective as to who we bring on board. Interestingly enough, about 40 ex-Millbrook people have joined us around the United States in development, implementation, and sales. Somebody actually said we’re putting the band back together, but this time we’re playing a different tune – EHR and PM.

This is slightly off topic but I can’t resist asking the question. You’re someone who was entrepreneurial and went to GE. Now you’re back out of that environment. For you and those 40 people who bailed, what made you not want to stick around?

You know, that has been raised to us a number of times. While GE is a phenomenal institution, many of us felt that we spent more time fighting internally than we did fighting our competitors. Whether it was resources, product direction, technologies, getting contracts done – the bars that were set internally by the different functions sometimes made it more difficult to do work internally than getting done internally than getting contracts done externally.

In an entrepreneurial environment, everybody is focused on “Let’s take this to the next level.” You have payroll to make; you have commitments. There’s just a nice, healthy tension in an entrepreneurial environment, whereas at GE, there would be people who could live in that house for an extremely long time not having to make a payroll; not having to make the commitments; and it made it very frustrating for those of us that came out of the entrepreneurial environment.

I always say that GE is the place where good products go to die. Would you say that, in general, your direction with the product would have been different from theirs?

You know, that’s five or six years of hindsight, so I really don’t know. We had been looking at a skunkworks on EHR. At the time that we sold Millbrook, we had over 50 partners and 18 of them were EHRs. It would have been very easy to reach out and embrace one of them to come to a point where we are today, but that’s speculative at best.

Even at GE, the product and the market continued to grow, so we had a very viable business. I think if you’re in a nice trajectory, don’t walk away from it. Again, it was more the board that did this than anyone on the management team.

So we’re enjoying it. The company comes to work each day with a passion of getting out a great product. We maintain our Millbrook mantras of never letting a physician office fail and hugging the physician — God knows they’re being beaten up by everybody else in the market — and to make sure at the end of the day they have an excellent experience.

I think everybody recognizes that the EHR part of iMedica is really strong. Would you say the practice management aspect of your system is equally competitive?

You know, that’s a question that’s been raised over the last 45 days. Up until our 2008 release, our 2007 product lagged, I would say, the same level performance of performance as our EHR. But with our 2008 product, we will go toe to toe with anybody in the industry on the PM side. In fact, we will bury most of them.

The product has a tremendous report portfolio. It has great claims processing. My PM is doing what the PM is supposed to you. It has front-end claims and demographic activity, scanner capability. There are a few features that we’re going to continue to add, but as we’ve always said about our product, it’s a work in progress. It’ll never be done. We will have an upgrade coming out during the third quarter of this year, a service pack, and we’re already working on the 2009 product as we speak, which will have additional features and functionality and meet the CCHIT 2008 requirements.

Who would you say your strongest competitors are?

I would say we probably are looking at three significant competitors out there, the first being the Allscripts portfolio. Mainly on the lower end, which I think is the HealthMatics product. We run into them regularly. We have eClinicalWorks, although over the last four months, we have not seen them quite as much as we had previously. And then we see e-MDs in certain geographies.

Sometimes I list competitors and ask for some adjectives. Would you be willing to do that?

I’m not going to sit here and diss someone, but I’ll be glad to give it my best shot.

One that you probably don’t run across too often – Epic.

We don’t run across Epic too often. We see them in some environments where physicians have been offered Epic by a hospital. The interesting thing is that they are perceived as being a bit kludgy for a small physician office — overkill. That’s not surprising, because when you try to bring a large practice application down to the small market, sometimes there’s too much in it and it’s very difficult to maneuver with that product.

One of the marketing initiatives we have going on right now is called “Take a Tablet.” It’s different from anything else in the market. When you take a demonstration of our product, we put a tablet in your hand for a week, load it with the application; load it with 200 patients in a demo database, and give you an hour and a half of training and say, “Go play and here’s a number you can call if you have questions.” The application is so intuitive and the physicians get it so fast that they can look at an Epic, which is rather cumbersome for them, and with the nimbleness and the ease of use of our application, they tend to migrate more to ours.

I want to ask you a question about that a little bit later. What about Sage?

I really haven’t worked against them. Sage is the old Medical Manager. They have a tremendous installed base. The one deal I remember losing against them was because the nurses like the colors on the vitals screen. I’m going to have a hard time fighting that, but I really don’t know too much about their features and functions and haven’t seen them go head to head against us.

This might be a tough one: GE.

GE, we don’t really see that much in the EHR any more. We have started to replace them on the PM. We’re thinking that there’s an opportunity there for us. I don’t think GE has taken care of their customers to the extent that we’re able to.

And next on my list was Misys, but let’s separate that out as the non-MyWay Misys.

Well, I’m not sure what the non-MyWay Misys is. I know they just announced a big deal where they had their EHR and their non-MyWay EHR accepted at a very large practice. But I haven’t seen anybody buying Vision and Tiger lately. They’re buying MyWay.

What about Allscripts?

Allscripts is tough. They have a nice portfolio of products and they do a great job of marketing it. We think, on a functional basis, we can compete with them, but they are tough in the sandbox.


David Winn has done a great job of putting that company together over the last few years. They’re tough. They have a good product. I don’t think they have as big a footprint, although David is very imaginative and a good leader. We go toe-to-toe with them. Sometimes we win; sometimes we don’t.

What about eClinicalWorks?

They were tough early on. We’ve understood what they’re selling, how they’re selling it, to whom they’re selling it. They’re formidable, but I think when physicians drill down feature by feature; when they understand what they’re getting and what they’re going to be required to get, I think our total cost of ownership is equal to theirs and I think our product dynamic is better than theirs.

What about athenahealth?

We’ve only come up against athena once or twice. I’m an accountant by trade, a CPA. I find in a small practice with what they charge, it’s almost irrational to go with them. If you look at the total cost of ownership over five years, the physician could probably pay for his kids’ college education. If you look at the cost between our application and athena, obviously their business model is working well in some of the hospital environments, but I think long term, we will continue to grow our company and be able to go toe-to-toe with them.


We don’t see a whole lot of NextGen. We’re in the 1-to-10 market, primarily. NextGen, even though they play down there form time to time, really isn’t that big of a footprint and they’ve said that publicly. They do well in the larger practices and more sophisticated enterprise situations.

They’ve built a hell of a product and they’re a tough competitor. They are very expensive. If we can get to a practice to look at what we have versus what they’re looking at with NextGen, and you look at a total cost of ownership, the ability to modify our application on the fly versus requiring programming, help for templates and other items with the NextGens and the GEs of the world, I think we walk away looking very good.

Some of those that are very competitive on price. I’m thinking specifically of eClinicalWorks and e-MDs. Is it tough to compete with them on price?

I don’t think it’s tough. I mean, we’re all in the same ballpark. I can’t remember losing a deal because of price. You usually you lose a deal because of features and functions.

The market seems to be polarizing around two extremes, the doc buying a simple, functional system with his own money and hoping not to kill productivity, vs. the hospitals who will provide the systems, but who pick big, traditional applications. Will that continue?

I see a cycle that’s been in healthcare for years. Right now, it’s hospitals providing software to physicians under the Stark exemption. A year from now, when we have a new administration, God knows what the new rules are going to be. You and I both have seen it. We have seen centralization and de-centralization.

I think in our market, which is the 1-10 physician group, those physicians realize that owning their patient records, being able to touch that patient record on their server, is the biggest asset they have and that’s their livelihood. To stick it at or through a hospital is problematic. It could compromise their existence and, long term, bring their livelihood into jeopardy.

I think physicians are more independent than that. They’re seeing that. Hardware has come down so much and is so easy to use that you can stick a server in a closet, essentially. You don’t need an IT department when you’ve got five or six physicians. The only thing you probably need to do is change the tape once a day. So I don’t know whether that division continues, but I’d be surprised if we didn’t see something in the next 24 months to turn it around.

The New England Journal of Medicine article reinforced what everyone already knew, that physicians aren’t using EMRs. What will it take to get them to?

I can only attack this from two sides. Putting my CPA hat on, for a physician who wants it, it’s not an expense, it’s an investment. Yes, it’s disruptive. I like to tell physicians, “Go home tonight. Turn off the lights in your bathroom. Stand on one leg and brush your teeth with your left hand. That’s what it’s going to be like using EHR for the first 20 days. It’s doing something differently that you’ve done for the last 20 years, but you will come around to it.”

We have physicians older than 60 who have adopted and become the leaders in their practice on our applications. So it’s disruptive, but once you get through that disruption, it makes your life better. And there are really economic benefits to the practice, whether it’s PQRI or whether it’s higher average reimbursements because you’re getting higher E&M scores. At least in our system, we score out the E&M points. We do a recommendation of the level visit and all the physician has to do is concur and it’s supported. We’ve repeatedly seen throughout our installed base a significantly high single-digit increase in revenue per average visit.

You add PQRI to that, you add health and maintenance reminders that are established in the clinical environment, but then go to the front desk at the time of scheduling. If I’m calling in, I think I have a sore throat, and it comes up that I have not had my PSA in a year, it reminds me to schedule my PSA at the same time. That creates more revenue opportunities for the office.

You add those together, those are the hard dollars based on revenue streams. You suddenly aren’t looking for charts. I was at a practice in Baltimore who said 60 to 70% of one head count was utilized looking for charts in a five-doctor group. That’s insane. That goes away. So the economics very much are there.

People think of electronic medical records as something you just have or you don’t, but products obviously differ. What differentiates them today and what will that be five years from now?

This goes to the previous question: what is going to make life easier for a physician? It’s the ability to use an EHR to the extent they want. In that New England Journal article, it was interesting to see that some physician use it for documenting history; some use it for e-prescribing; some use it for orders.

One of the features we are bringing to market is, in fact, the ability to structure the EHR to the extent that the individual physician in a practice wants to use it. If I don’t want to do the histories or the physical exams on the EHRs but want to continue to do it by paper, I can do that, but I’ll do the labs, the health maintenance, the prescribing, the follow-up, all on the EHR system. I don’t think any of us to date have been terribly flexible to the requirements of the physician. I think we’re going to be taking a large step very shortly in that direction.

Could products could be improved to give physicians more information as opposed to capturing more information from them?

I think it’s very important. I don’t how familiar you are with our EHR, but it’s highly customizable, starting out with the one-page summary that the physician looks at before going into a room. There are many fields on it, but they set the hierarchy and they set what they want to see. It’s by physician, care team, or practice, depending on rights. That allows individual physicians to modify the entire knowledge base. It’s not template-driven.

This is what’s different. You can modify in four or five key strokes in about 8-10 seconds virtually anything in our system and therefore customize it to your needs. Up front, we put together common problem palettes. We have adaptive learning, so that once a physician sees a bronchitis patient; if they see them again it will say, “This is what you’ve done for bronchitis in the past.” The adaptive learning continues to grow and it becomes dynamic with the physicians’ use.

I think too many of the EHRs out there, as you said, are too rigidized in templates of, “This is what you have to do and this is how you have to do it.” And if a patient walks out the door and sticks there head back in and says, “By the way, I was playing softball this weekend I heard a pop in my elbow” after you’ve seen them for an upper respiratory infection, you suddenly have to scramble and start the examination all over again.

But when you’re chief complaint-driven, you just add the chief complaint and it will pull through all the pertinent items for a sore elbow. Again, we need to adapt the applications to the physician’s reality as opposed to expecting the physicians to stick themselves inside of the template. These guys are thinkers. They went to med school to become thinkers.

You emphasize in your marketing material that physicians don’t have to put a computer and monitor between themselves and the patient. What are your thoughts on that?

Our application was designed primarily for a tablet. There are no double clicks, there are no right clicks – it’s all tablet-driven. So our physicians do some of the work in the exam room and then, as any other physician, when it’s done, walk out and finish the note off to the side.

I know, from my personal experience, last time I saw my physician, she had three inches of paper sitting on her lap and while she’s talking to me. She’s leafing through 20 years’ of paper. How that is different from sitting down looking at a computer screen or a tablet? We may not like it because its not a personal and as warm as paper, but it’s the same thing.

That leads to an interesting question. Your physician doesn’t use electronic medical records, yet you still see that physician. How strongly should someone consider whether or not their own physician uses EMRs?

My physician’s practice purchased GE’s medical record before we had a product to show them. It has taken over three years for them to implement this application. When they implemented it, it lasted two weeks and then they were back on paper in her practice. So I didn’t have a chance to get into that one. I may have a chance, depending on GE’s future success or lack thereof.

Let’s talk about the Take a Tablet test drive program. What’s the response to that and how many folks make a decision based on that one-week trial?

It’s been phenomenal. It was predicated on the fact that we had about eight physicians in the last year that looked at us and said, ‘If I could try this, I could probably give you an answer.” Of the eight that tried it, seven of them bought it.

We were able to work a promotional deal with Fujitsu. Remember, our application is fully functional on a tablet because of the caching mechanism. This is not a partial; it’s not different application; it is the exact same application when you buy the program.

What we did is we put it out there with our demo database and we teach them how to chart. If they want to chart another 1,000 patients, we warn them not to do real patients because of HIPAA considerations. But if they just want to play and create patients, it can stand alone for the physician.

One of the beauties of that is our physicians are able to take their tablet with them — whether it’s to a nursing home, to the hospital, or anywhere else — and document the full patient encounter. Take a Tablet is nothing more than an extension of that. We’ve given them skeletal training, an hour and a half to two hours, and they get it in that time frame.

I’ve seen old physicians grab tablets out of our salespeople’s hands during demonstrations saying, “I can do this” and begin to document. It’s highly intuitive; it follows logic which they were taught in med school; it’s easily modifiable; and when they look at it and play with it, they adapt to it very quickly.

We have quite a few machines in the field. We have a waiting list for our machines and we expect it to continue to see success through this promotion.

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

We just want to continue to grow this company and develop a world class product. We were able to do it at Millbrook with practice management. We were able to do it under the radar against 4,500 competitors. We continue to do it here. We have the resources. We’ve been able to attract great talent and we continue to attract talent. We think that we will evolve to be the market leader in the single database EMR space.

You go to work everyday, you do the best you can, and you hope somebody takes notice. We got some traction and as long as it keeps growing, I’m happy and so are my investors. They have a medical background. They’re not in this just for, “Let’s make a dollar.” I hate to use the words, but they don’t need it.

They’ve been very active since the 1970s in enhancing the quality of healthcare in the United States, so this is not something new for them. They see the ability to put a great EMR in the marketplace that enables the physician, empowers the physician, and allows then to practice better medicine. It’s their life’s work. It’s not just, “This is another investment we can make a dollar on.” Having that type of philosophy behind you allows you to do the right thing as opposed to the expedient thing.

HIStalk Interviews Stephanie Reel, Vice Provost for IT and CIO, The Johns Hopkins University

June 23, 2008 Interviews 7 Comments

Photo: Johns Hopkins University

Stephanie Reel is the only CIO I know who runs both the academic and healthcare IT organizations for a university, and not just any university at that: Johns Hopkins is always high on the lists of best universities, best medical schools, and best hospitals. Among her many honors, Stephanie was a 2005 HISsies winner for most effective healthcare CIO. It was great of her to share her thoughts with the readers of HIStalk.

Why don’t we start with a little background about yourself and your job?

I’ve been at Hopkins for 18 years. I grew up in Baltimore in the shadow of Johns Hopkins. I always had enormous respect for the place. I remember my mother saying to me, "They don’t call it THE Johns Hopkins hospitals for nothing”. I grew up in all of the science and the wonderful things that happen here, but had no real interest in healthcare. I wanted to be a schoolteacher. So I played around with that for a little bit.

As it’s true with many fortunate people, I happened to meet someone who became a mentor for me. He said, “Boy you really like this IT stuff and you seem to like leadership. Why don’t you consider healthcare information technology?” This was about 25 years ago. I said, “I don’t know if I have what it takes.” And he said, “Why don’t you give it a try?” He introduced me to the president of a hospital here in Maryland, a small community hospital that happened to be searching for a director of information technology.

I talked to them and they thought that I had the right education background, skills, interest, and passion to become a director of IT. I took that job and worked at it for about five or six years. Then someone mentioned to me that Hopkins was searching for a similar kind of position. It wasn’t the CIO at the time. This would have been in the early 1990s. It was another Director of IT kind of role. I was approached to interview for the position and I did. I took the job July 1, 1990 and immediately became overwhelmed by the complexity of a place like this and the opportunities that were available.

I took the job and started out just getting to know the place. I was really placed in a wonderful position where I had an opportunity to sort of serve as an internal consultant for a little while and work at all our affiliate organizations. At the time, the Johns Hopkins Health System was growing up and I was given the chance to bring some of the affiliates into the fold and try to encourage them to work collaboratively together with the mother ship at the time, which was the Johns Hopkins Hospital, and look for opportunities where we could benefit from collaboration or synergy. And I loved every single minute of it.

One thing led to another. The CIO resigned in the late fall of 1993 and Hopkins conducted a national search, as places like Hopkins do. The search committee was kind enough to interview me for the position and ultimately offered it to me. In early 1994, I became the CIO of the hospital and the health system. A little while after that, Johns Hopkins Medicine was formed, which was the coming together of the university’s school of medicine and the hospital and health system. I was offered the opportunity to serve as the CIO of Johns Hopkins Medicine. 

In 1999, the president of The Johns Hopkins University initiated a search for the CIO for Johns Hopkins University. I was on the search committee. I assumed I was searching for a partner or a colleague with whom I would work. He or she would be responsible for IT for the university and I would retain responsibility for IT for the Johns Hopkins Medicine organization. One thing led to another and the president of the university offered me that position as well.

I became the CIO of the university in January 1999 and serve in that capacity as well as retaining the role of CIO for Johns Hopkins Medicine and have had a pretty good time ever since then. I have had an opportunity to serve people in all three walks of life: education, research, and patient care. It’s really been a wild ride, but pretty wonderful to get to live in these different worlds that define what Hopkins really is. It’s been fun. I guess that’s why I am what I am.

Is there anybody else that you know of that’s both over academic and healthcare sides of a university?

I don’t know for sure because the way people define their organization is a little bit different. There are a number of CIOs down in Emory and University of Chicago. By example, I know those two CIOs are responsible for the school of medicine and the hospital health system. I don’t know of any CIOs who are also responsible for the undergrad activity — arts and sciences, engineering, business, education, and those kinds of things. It doesn’t mean it isn’t true. I just haven’t met anyone who has that responsibility.

It is a bit of deviation, I guess, to serve that part of the population, but — I know this sounds almost Pollyanna-ish — but it really is amazing how much you can learn from different disciplines. What I do for medicine is absolutely informed by the great work that’s happening in physics and astronomy because they manage enormous data sets, far larger than what we manage in healthcare. They need high performance computing in ways that are somewhat different from what we need in basic sciences and medicine.

Learning from experiences in those other departments and divisions that are very different from medicine has been a really incredible learning opportunity. I don’t know if it’s easy to explain it, but it happens frequently that I get the chance to apply something I learned in one area with what we’re doing in another area.

It’s really been much more beneficial than I thought in the early days. I thought, "The great news here is that I’ll know the enemy." So, when the computer science department is going to do something really interesting with the network or with some high performance computing they are doing, it might have an adverse impact on the rest of the environment, but at least I’ll know about it ahead of time. Or, if there’s going to be some huge security breach that’s caused by one division, at least I’ll know about it.

But that didn’t become the benefit, although there were some opportunities to learn from that as well. The real benefit was to figure out what people were doing in really different disciplines that could be applied to medicine and vice versa. Even some of the issues with security confidentiality and privacy. Students and parents who were applying for financial aid want their information to be protected every bit as much as a patient does. People who are managing grants want their intellectual property to be protected every bit as much as a sick patient does. And so it’s been interesting also to see some of the similarities between those kinds of organizations.

What’s the total size and scope of the organizations that you’re responsible for?

All of Johns Hopkins is about $7 billion in annual revenue. Hopkins employees number about 46,000. The IT organization, IT Central, which is what I’m really responsible for, is about 650 to 700 people in total. Maybe it’s a little bit bigger now, maybe closer to 750. My annual budget, just looking at IT Central, is about $65 to 70 million. That’s the operating budget. Capital budgets run in the neighborhood of $25 to 30 million a year.

So, we spend $100 million a year in IT Central, including capital and operating expense. I would venture a guess to say another $50 million or so is spent out in the departments and divisions where there are small IT shops doing some really clever innovative things to support research or to support some scientific issue, some discovery. Our health system is not that big. We’re only three hospitals in size, plus community physician sites. So it’s a lot of money considering the size of the organization.

I assume that there was a sharp delineation between the academic and medical sides when you took over. How did you bring them together?

There were two completely separate organizations. One Central for the university and one Central for the health system and Johns Hopkins Medicine. They behaved very differently. In fact, even the one that was responsible for the university was somewhat bifurcated. There was a group responsible for academic computing — the teaching side of our world — and there was another responsible for the administrative computing.

Those two were actually pretty far apart even though they both served the university. They didn’t necessarily work well together because the education group perceived themselves as being very mission-driven, while the administrative group was all about business and ROI. So I had to bring together those two groups together with the Johns Hopkins Medicine group.

The first thing that we did was consolidated networking in telecommunications. That is where we knew we would see real value because we were buying Cisco routers on the heath system side and I think UB was the name of the routers on the university side. Purchasing power alone was reason for us to come together and look at opportunities for consolidation.

But aside from that, there were also opportunities for staff development, for user satisfaction, for standardization. Some of our customers had to live in both worlds, even though as IT folks, we didn’t see that. The first charge was really to bring together networking, telecommunications, and then some of the other things that are now considered to be infrastructure, like information security; e-mail services and post offices and gateways; collaboration tools. Things we now take for granted as being part of our infrastructure. They weren’t back then. They were really separately managed applications, so we had to bring all of them together as well. Most of that happened in 1999-2000.

By 2001, we consolidated our data center into one very large data center with a few satellite data centers for disaster recovery to improve continuity purposes. One large, 35,000 square foot data center now serves the university and the health system.

We brought real money to the bottom line in those first couple of years. Data center consolidation alone saved us about $1.3 million a year, some of which we’ve re-invested in more sophisticated tools and technologies. Just bringing those kinds of services together gave people an opportunity to grow and learn more from other people. It really was an attempt not just to improve service to the customers, which obviously it was, but to really improve satisfaction among the staff. I think it did do that. It gave people much broader exposure, and really an opportunity to make a difference, which some of them didn’t feel they had in their smaller organizations. That was actually a positive, maybe unanticipated, consequence. The staff got an opportunity to learn a whole lot more about other technologies and innovative things that they might not have been otherwise able to see.

How much of your job involves some sort of organizational politics?

Maybe 125%. I think there is clearly an understanding among senior leadership at the university and at the hospital health system, that we really are all about … at a place like Hopkins, it might sound trite, but we really are all about knowledge for the world, excellence, and patient safety. The things that are all over our web site are pretty sincere. Even though there may be some different approaches in the way the health system and the university might tackle a strategic imperative, at the end of the day, there really is a tremendous commitment to wellness, to science, to excellence in education.

I read a book one summer called Getting to Yes. I read it probably ten or twelve years ago, but I remember the author saying, “People come to the table with very different positions, but they often come to the table with very similar interests.” And I think that’s proven itself to be true in the world that I serve. People have different positions, but their interest areas are generally much more closely aligned. They want to make a difference; they want to do good things. Maybe it’s curing a disease, or maybe it’s figuring out how to solve global warming, or mapping the universe, or making our national infrastructure better; but most people come to the table because they want to make a difference. I think if you listen carefully enough, you can find those things that make us the same as opposed to worrying about those things that make us different.

It’s interesting that you were a home grown product put into a job that didn’t exist involving two different but highly regarded sides of the house. How would they replace you?

Well, we’re all sort of replaceable. for darned sure. I think the reason I was given the opportunity is because it was obvious that I had respect for the place and I still do. I think finding someone who respects what the place stands for is an important attribute.

I think the other thing that I have hopefully brought to the position is that I am genuinely humbled by the people who work here, It is so easy to be successful because all you have to do is leverage that excellence or that brilliance, the discovery, the passion. The thing that I’ve enjoyed most about my opportunity here is to work with all these smart people who really do most of the heavy lifting.

We have a clinical systems advisory committee, for example, and it’s been meeting for 15 years. This really is a true story. One Tuesday night a month, we have dinner, and that dinner is generally very inexpensive chicken and some potatoes and green beans. We’ve been meeting since 1993 and the group that meets is now larger than ever. At our June meeting, we had 68 people in attendance, half of whom are physicians who practice real medicine at Johns Hopkins. The other half are nurses or administrators or IT people.

We do this one a month and people come together because they see this as an opportunity to influence the direction of information technology at Johns Hopkins. I feel like I have this amazing group of partners and colleagues who are willing to give two hours a month to sit around and eat chicken and talk about what really matters and how our information technology really can make a difference. Honest to goodness, I don’t know any other CIO in the country who is as fortunate as I am in that regard.

These folks come selflessly. They absolutely come to listen, to share, to contribute to the overall strategy of IT at Johns Hopkins. It’s amazing to me. Every single month when I leave that meeting at about eight, I walk out of that room thinking. "I am incredibly fortunate to have people who are willing to give so much of their time to help us define strategies for the future." It makes the job so much easier.

We have similar advisory committees in some of the other areas, but this one has been in existence for the longest. The current chairman is Dr John Ulatowski, the chairman of anesthesiology and critical care medicine here at Johns Hopkins. Not only do all these other people give up their time and energy, but he sits at the head of the table with 65 or 75 people in a room and helps drive us toward the right decisions so that we do more than just support this place. He really drives us towards a vision for innovation and collaboration, collegiality, excellence — all those words that are all over our web site. He really helps the group coalesce around those things that matter. It’s pretty amazing really. I do feel very privileged to be able to learn from those experiences. They are pretty special.

Folks in a community hospital, who see doctors for an hour in the morning and again in the evening, might find it hard to picture that you’re constantly working with people who have won Nobel prizes or led world-changing research. I just remembered that I interviewed Peter Pronovost, for example, and he’s a pretty big star in my mind. That has to be humbling.

It is humbling. It truly is humbling. I remind my IT team all the time that we’re mere mortals here in the midst of all these folks who are doing remarkable science. Think about how amazing it is to be able to work at their elbow. That’s exactly what we do. The other phrase that’s become pretty common, especially here at Johns Hopkins, is “standing on the shoulder” of these guys. That’s exactly what we get a chance to do.

People who come to work in IT at Johns Hopkins either stay six months and say, “This clearly isn’t for me — I can’t live in this whitewater where it’s so intense” or they stay forever because you get so addicted to the adrenaline and to the opportunity to rub elbows with these amazing people.

This really is a true story. Once people are here six months or a year, retention is pretty easy because you get a chance to work with the best. You probably know the name Ben Carson, a famous pediatric neurosurgeon who does amazing work with children who have serious problems with their brains. He was all over the news last week because he did surgery on a young girl from Texas who had some very serious hydroencephalitis or something.

I had a young lady who worked for us about 20 years ago. She was leaving because she was offered a position someplace else. I said to her, “What will it take to keep you, because you’re a great member of the team?” And she said, “If you could arrange for me to meet Dr. Carson, I’d stay.” So I called Dr. Carson and he said, “Of course I’ll do that.” She got a chance to sit down with this amazing guy, who just this week President Bush named as a winner of the American Medal of Freedom. Ben agreed to meet with her and she’s still an employee here. I think that says it all. That’s what makes it so special. People are willing to do that kind of thing because we’re all in this together. People value that. I think it really does make a difference. 

Hopkins does another thing that makes it very special. Through Peter Pronovost’s leadership, we created this patient safety institute. We allow senior executives to adopt a patient care unit because we feel it makes them better in their jobs. As CIO, I would have no reason to spend my afternoons in the pediatric intensive care unit except for when we’re implementing CPOE, but the pediatric care unit has been my unit for six or seven years. Once a month, I spend an hour or two with the leadership of the pediatric intensive care unit. I’ll sit down and talk about what are those things that make them nervous. What are they worried about? What’s the next way a patient might get harmed? What can we do to make sure that doesn’t happen?

This is not at all about my day job. We do talk about information technology, but that’s not the purpose of the meeting. The meeting is to say, “Do you have enough needle containers? Is your housekeeper cleaning the floors properly at night? Do you have security if you need it if you have child in the unit who is threatened?” We talk about anything once a month. It’s my job to make sure they feel safe and that their patients feel safe. If there are things that we can do to make them feel more comfortable, it’s my job to make sure we do those things.

I have colleagues around Hopkins who do the same thing in other units. Over time, I’ve encouraged my directors to adopt units as well, so one of my directors adopted the blood bank. It’s his job to make sure they feel safe and they can do what they need to do. Another one of my directors adopted the Wilmer Eye Institute. These were areas where they had a personal interest and they adopted these places and get a chance to participate on a monthly basis on those things that make them special or nervous. It’s a way to remind yourself why you are here. That’s pretty important as we get separated from the mission a little bit when we’re putting in systems.

You mentioned clinical systems. What’s the status of electronic medical records there?

Many years ago, before my time, a number of people at Hopkins were fairly serious about building a homegrown electronic patient record. Soon after I became CIO, we did a major enhancement to it. A gentleman who works for me, Alan Coltri, who’s an amazing guy, decided there were a number of things we could do technologically to make our homegrown electronic patient record a more comprehensive solution.

Starting the early 90s, we began rolling out fairly comprehensive electronic patient record here at Johns Hopkins that ingested information from lots and lost of different ancillary systems. Believe it or not, I think it used a very early flavor of something that we now call Software as a Service. Alan developed this thing that he called a Book of Calls. This electronic patient record would place a call into another application and be able to absorb this service, therefore present to a care provider an integrated look at patient records, even though it wasn’t necessarily all being consolidated into one record or repository.

That system was enhanced over the past 12 or 13 years and, I think, and serves us very well. However, when we signed our contract with Eclipsys to deploy its entire portfolio of systems — beginning with CPOE and then moving into clinical documentation and then into the ambulatory record — it became clear that we were going to have some tension between these two environments. We didn’t want our care providers to be confused about where they should go to get the most accurate, timely, and complete information. We’ve made a strategic decision to move most, if not all, of our transaction-based activity from the Johns Hopkins Hospital into the Eclipsys suite of applications.

We have signed a development agreement with Microsoft to develop with them the Amalga product and use that as our repository, our longitudinal patient record across Johns Hopkins Medicine, because our two community hospitals run Meditech. Having all the Meditech data from those two hospitals, all the Eclipsys data, and then any other ancillary information that isn’t necessarily known to Eclipsys — our primary care sites, for example, use Logician — to have all that data resident in one longitudinal repository, so we can use it for not just comprehensive patient record if patient are seen across the continuum, but also for clinical research. We signed a contract with Microsoft last October and we are expecting the rollout of the first phase of the Amalga product in the fall. It will serve as a research repository as well as the early phases of our replacement of our electronic patient record.

IDNs used to insist that all their hospitals use the same clinical systems, but it seems that the emphasis in interoperability has made everyone realize that it doesn’t really matter what feeds the information as long as you can put it together on the back end.


Is that the market that Microsoft is going after with Amalga?

Microsoft made it pretty clear at CHIME a year ago and at HIMSS that they recognize that many hospitals can’t afford to throw out the investments they’ve previously made. It’s no longer acceptable. It used to be that you could put Meditech in and it wouldn’t be terribly expensive, so if you had to replace it with whatever the institutional will might have been, it wouldn’t have been a big loss. But that’s no longer the case. I think it changed a little bit when the accounting rules changed and you were given an opportunity to capitalize on all the internal resources associated with the design, development, and deployment of a system. 

When you look at the investment that hospitals are making in even some of the smaller information systems, the money is enormous. People are loathe to throw that way. Not just because of the financial investment, but because of the people’s time, energy, commitment, and some of the intellectual property that’s embedded within it. I don’t think we can afford to throw out stuff.

Microsoft enters the scene and says, “We know you’re not going to be able to replace all of the stuff you’ve got in your environment, but we think we have something that will level the playing field a little bit and allow you to keep that other stuff, but give you one common place to collect and present it.” For a place like us, it makes a whole lot of sense. I’m not sure if it works in a community hospital, but I think for a place like us, Amalga seems to make a lot of sense.

The HopkinsOne ERP project has to be one of the most ambitious I’ve ever heard of in healthcare.

Oh, you had to mention that. We’ve had a whole half hour and it’s been so pleasant … [laughs] We implemented SAP in January 2007 after about 3½ years of working at it. It was the first time that the university and the health system as a whole came together around one application. It was a rocky road in the early days. We invested a tremendous amount of money. We put a whole lot of time and energy into it.

When it went live, I would say that it probably served the hospital and the health system reasonably well. Where it fell short — and I think we’re making real progress — was for the research community who had been accustomed to being able to conduct business in a very simplistic way from the administrative point of view. They didn’t have a lot of overhead administratively. If they wanted to order supplies through their grant, it was pretty straightforward. You filled out a little requisition and your administrator processed it. The next thing you know, the right test tube and the right equipment showed up.

When SAP entered into the scene … one of the good things about SAP is it allows your users to be 100% empowered. But that turned out to be the bad news as well because these investigators didn’t have the time to master how you buy things, order things, and pay for things. They were much more interested in doing science. SAP introduced a whole new level of rigor that they needed to do just to be able to conduct their science. I think it was unanticipated by us as to how much of a burden that would really be.

We’ve spent the last 18 months trying to reduce that burden and better inform the work force as to shortcuts and ways to get information out of SAP that are not nearly as cumbersome as in the beginning. I think we’re making progress. People often say how late a system went in, but everyone remembers the things that didn’t work. I think that’s where we are. Memories are still very strong as to what didn’t work in the beginning. And even though we starting to make some progress, people’s memories and the pain is still a little bit fresh. So we’ve got to really prove that we are willing to listen and make a difference.

I’m curious what that project cost and whether you think there’s a chance its actually going pay for itself.

The total cost of the project, looking over the life of the project for the university and health system, is about $240 million. It’s a horrible number, but it does include, as I referenced earlier, when the accounting rules changed back in 1998, it gives you an opportunity to capitalize much of the full-time user involvement. We moved a lot of people from the business units into this organization that we named HopkinsOne and it reported up to finance.

This whole HopkinsOne team was about 150 people from Hopkins and, at some point, as many as 100 people from varying points. So, 250 people over a three- or four-year period of time, all of their costs being capitalized. Along with that, all the hardware, all the software. When you add it all up over the life of the project, it came to $240 million to be allocated out to the university divisions and the hospitals that are within the health system.

When you look at how large Hopkins is, you could certainly argue that’s not a huge investment if we’re a $7 billion corporation, but when you boil it down to the individual departments and divisions and their appreciation for that huge investment, many of them are thinking about buildings they could have built, the faculty they could have recruited, and programs they could have funded. The mission is what matters most to many of these people, so there’s still a little bit of angst associated with the fact that there was such a large capital investment.

Will we get a return on that investment? I think in large part we will. I don’t know if it will ever truly pay for itself. I think the guys in finance are certainly looking carefully at how that will play out. They system was implemented for three primary reasons. One was compliance, because as you know, the regulatory requirements are increasing. The whole regulatory climate is pretty intense.

The second was service. It was clear that we had many different information systems in that ERP space. We had users who were needing to travel between and among all the different systems. It was very cumbersome to do that. There was a belief, and I think there still is a belief, that by bringing all this together in one set of applications, people will be able to do a better job of hiring and firing, paying for travel, and buying things. I think we are starting to see improvements in many of those areas. The research administration is still a little weak, but I think in the other areas, we’re starting to see improvement.

The third reason for doing it was productivity. Therein lies some of the financial ROI. I don’t believe that we’ve started to see those productivity gains yet. I think we will, but we’ve got to spend some more time on business process redesign. We’ve got to spend some more time on training. Those are two areas where we did not invest enough time, energy and people before we went live. Training and business process redesign are critical and that’s where we’re redirecting a lot of our energy.

People in Human Resources are leading a training activity and I think are going to turn out a phenomenal product in a couple of months. They are really building a whole new strategy for training. Business process redesign … luckily, Hopkins has an organization that does that for a living. It’s called Operations Integration. We’re just embarking on business process redesign in a few areas. I think it will definitely help the satisfaction levels and the user adoption.

I’ll just mention, not related to SAP or HopkinsOne, that we’ve put in a new emergency department system. It went live about a month ago in our adult ED and two weeks ago in our pediatric ED at the Johns Hopkins Hospital. It’s the Allscripts HMED [HealthMatics ED] product. Before we went live, this particular time, we all got together and decided that we had to do business process redesign first. The only way to do this right was to make sure we studied all the workflow issues in the EDs and made sure that we redefined and redesigned them before we implemented new technology.

In my career, it was the first time a system came in ahead of schedule and under budget. That’s because there was amazing commitment by the users to really drive change as a part of this technology implementation and really look at the way we’re doing work. It really was another one of those amazing experiences where the system went in, people used it really well … there were definite speed bumps — there always are — but it really has been a success story and I think the technology is a small part of it. It really was because the users were passionate about redefining the way they do work.

When CIOs get in trouble, it’s often because of either CPOE or ERP, which is the business equivalent of CPOE. With those two behind you, what are your biggest challenges and concerns?

I think they’re behind us in that they are implemented, but I think the really big challenge is now related to getting bang for the buck. We’ve got to get value out of these systems. In the area of CPOE and clinical documentation, I think we’re starting to see that benefit. I think it hasn’t come without a whole lot of hard work and pain on the part of the care providers who’ve had to learn how to do all this differently, but I think our patients are getting safer. I think that we’re making far fewer mistakes. We’ve had amazing success with medication error reduction through the implementation of CPOE.

Over the years, we’ve invested so much time and money that I think we owe it to the institution, to the patients, and to the faculty here to really start showing the value of these investments. I think that’s where the rubber meets the road. I think that’s biggest challenge we have ahead.

The thing that worries me is the rate of obsolescence. These systems no sooner get implemented than you have to do the next release, buy the new hardware, or move the web services. You’re never done. Even though we all know we’re never done, it would be nice to take a breather once in a while.

There’s so much change. Change largely driven by our own demand for better, quicker, slicker stuff, but it makes it hard. I worry a little bit about fatigue. We put in a new operating room system release this past weekend, so I had a large team of people who worked all weekend. The previous weekend, we had some major network enhancements we were doing, so we had a whole army of people worked that whole weekend. Sometimes it’s the same people working weekend after weekend. 

I do worry a little bit about the fatigue that the staff feels because we’re a pretty high energy place and we have pretty demanding customers. Everybody needs a bit of down time and its getting harder and harder to really get away. Everybody carries a portable device. Everybody’s logged on most of the night, it seems, by measure of the e-mails I get in the early hours of the morning. People deserve some down time and it’s getting harder and harder to get.

If you look outside of what you do at work, what healthcare IT related projects or organizations, conferences do you think are worth your time and attention?

I’m a member of CHIME and I think the world of the CHIME organization. Together with John Glaser and a few other people, we have been able to teach the CIO Boot Camp a couple of times a year for the past maybe five years. That’s really been a terrific opportunity to give something back to the younger people who are coming up in our industry.

I think HIMSS has, over the years, has been strong and not so strong. I think now they are making a difference again and are looking at the right kinds of things. My only concern is that the annual conference is just darned big. It’s hard to take it all in and hard to focus. It bugs me a little bit that the competition for who’s got the jazziest booth is a little bit disappointing, but it is what it is. It’s one way to learn what is happening in the industry. I don’t usually get a chance to go every year, but going every couple or three years has been a good thing. There’s a lot of opportunity to learn there.

I think the folks at AMIA are great. I’m a member of AMIA, but I don’t get a chance to participate actively. We have some physicians here at Hopkins who participate at AMIA. I try to read as much as I can because I don’t get a chance to travel as often as I would like, as there’s a lot to do back at the home front.

I think our industry is getting a little bit better at providing material that’s meaningful. I do read your blog and I really do think that you have a lot of trusted contributors, or people who ate least are willing to be candid with you and share what is happening in their organizations. I tell so many people about your blog. I spoke at an investors meeting last week and, as part of my bio, the gentleman that introduced me mentioned that I won the HISsies award. People ask what that was and I told them about the blog. I said it was a great way for the investment community to know what’s going on in the information technology in healthcare.

How do we make privacy less of an issue when it comes to information technology?

I probably am in the minority about this one. I think it’s much ado about nothing, in a way. I really do believe that until we put healthcare in the hands of the consumer, we’re never going to get better at this. I do feel that the personal health record strategies of Microsoft and Google Health are a step in the right direction, provided there’s not some huge breach. I think that we have to get people to trust and I think the way to get them to trust it is to give them some kind of way to control their own destiny.

I think we need to convince people that there are risks associated in using technology in healthcare, but there are risks associated with everything we do every day and the benefits outweigh the risks. We need to be able to manage our eating habits and our exercise habits and our glucometer readings and our EKG readings, all those kinds of things, to see if we’re managing our health. I think we can do it through better use of technology.

What would I actually do? I don’t know. I would encourage people to use technology to manage their health and do it any way that they are comfortable doing it. But I don’t think that Google and Microsoft are parts of the evil empire. It’s all about the money at the end of the day, but I think they are also trying to make a difference.

I had this amazing opportunity to have breakfast with Bill Gates a couple of months ago. He invited maybe 25 people in Washington, DC to come and have breakfast with him. Half of the room was filled with people who had military uniforms on because I know Microsoft is doing a lot in the national defense space. The other half of the room was people from all walks of life. I was the only healthcare person in the room. He sat right there and said, “We’ve got to do something about healthcare in this country. We have to make a difference.”

He mentioned Hopkins by name. We’re doing some good things at Hopkins with our work on Amalga, but we’ve got so much more we have to do. What I said back was, “You’re darned right. You have so much to do and you have the resources to do it, so do it. Help us dream big.” I said, “We want to dream big, but we need help dreaming big because we don’t have limitless resources or the deep pockets that everybody thinks we have. We’re non-profit organizations trying to make a difference here and you can do it.”

He said he really wants to do it, or he and his company really want to do it. He’s stepping out of that role. Craig Mundie was there as well and said, “We hear you. We really want to make difference in this space.” I hope they are telling the truth.

If you look at that whole aspect of consumerism, are you planning for a different environment where the consumer is more in charge, where it’s more about health and not treatment? And will the paradigm change right about the time we get the basics of pushing orders and paper around?

I think they’re readier than we think they are. We all read the statistics about the fastest growing part of the demographic using the Internet, people over 65 or over 75. Certainly young people are absolutely ready. Some of us in the middle may not be completely ready, but I think that the paradigm is changing. People are doing much more of their business online. Why not do healthcare there as well?

I don’t think they yet trust Microsoft and Google. I think many people who are venturing into the space of electronic patient records or personal health records are doing by the tethered approach, where their payor or their Kaiser Permanente is helping them orchestrate that migration of information into a personal health record. But I think there is also just as many who are doing locally on their own PCs in their own living room and not willing to let it be any place else. But that’s at least a beginning and I think we should be encouraged by that.

If we can figure out how to do the right mash-ups to integrate information from personal experiences and behavioral experience and primary care physician offices and tertiary activity that goes on; if we can figure out some way to bring it all together for patients and allow them to use that information to create a body of knowledge about themselves, then allow them to create social communities where they can get the support they need or search capability where they get the education they need so they get a chance to learn stuff and do stuff by using technology — I do think we’ll get better adoption. Nobody wants to die of anything, so if we make it easier to figure out how to live with disease and how to improve outcomes at a personal level, I think people will develop a little bit of trust. I hope so.

If you look ahead and try to pick out what the most important technologies or the most important change of the next ten years, what would you say?

I guess if you asked me this question two or three years ago, I would have said the PDA-cell phone world. I think it’s going to become, or has already started to become, the way we do almost everything we do. It feels to me like we can connect and learn and do lots of things through these portable devices. I’m not much of futurist, but I guess that’s where there is still a tremendous amount of opportunity.

I think wearable computers is what they are. We’re wearing these very sophisticated devices on our belts and I think it will allow us to do even more in the years ahead. I don’t think any of us understood two or three years ago the power we would have in these small devices.

I was sitting with my 87- and 88-year-old in-laws for Father’s Day. My mother-in-law said, “How old is Tiger Woods?” and within about 30 seconds, I was able to tell them his birthday is December 30, 1975. She said to me, “Wow. You have a window into the world right in your palm.” That’s a pretty impressive opportunity for all of us. I think that’s certainly one amazing technology going forward.

I think in healthcare, the technology opportunities for diagnosis and treatment of disease are the ones more impressive. Today I had a chance to shadow somebody in our Radiation Oncology department and walk through the department, look at some of the amazing technologies they use to target treatment for cancer. You look around and you see a lot of sick people, but you see people who are so hopeful and optimistic about their futures. I think it’s because people do believe there is great promise in these medical technologies that are prolonging life. Life matters, and I think a lot of these young men and women that I saw this morning — an extra year or two with your children or grandchildren really matters and these technologies are providing hope. The young physicians coming out of medical school today are so excited about making a difference in some of these technological areas. So I’m very excited. I think the future has got a whole lot to offer.

Who do you admire in the industry?

John Glaser is a rock star. I more than admire him. I think he’s amazing. I think John Halamka, for a whole different set of reasons, is amazing. He probably doesn’t even remember what he’s been to me in my career, but I’ve called upon him when I needed some advice about certain things that were happening and he’s been very helpful to me as well.

From a technology point of view, I have tremendous admiration for Sam Palmisano at IBM. I think he’s trying to make a difference in an interesting set of ways. I think he’s been successful in some interesting ways that are not obvious to a lot of the customers around the world.

Judy Faulkner. I think Judy is an amazing human being who has stuck to her guns and made a commitment very early in her career that she was going to make a difference and she certainly made a difference. Outside of technology, I love Michael Bloomberg. I wouldn’t have been disappointed to see him run for President of the United States. I think he decided against that, but I think he’s also brilliant and has done some cool stuff.

Is there anything else you want to talk about?

I guess the only thing I would add that we didn’t talk a whole lot about is people. How are we going to nurture, grow, and respect the people who have to do this hard job we have in information technology? How do we make them feel valued? How do we treat them with respect and have a life?

My children are grown and married and have children of their own. I’m grateful that’s the case, because if I had young children at home, I don’t know when I’d see them. These jobs have become so consuming that I worry a little bit that for the young people who are growing up in healthcare IT, the demands are so great that they are making some bad decisions sometimes abut where to be at 6:00 at night. Instead of going to a Little League game, they’re at the office dealing with a tough problem. One side of me loves that — to see their dedication and commitment — but I worry that they are missing out on some important parts of their lives that they won’t be able to re-create.

HIStalk Interviews Michael Blackman MD, CMIO, Berkshire Health Systems

May 21, 2008 Interviews 1 Comment

Photo: Berkshire Health System

I read several articles about Berkshire Health Systems, Pittsfield, MA and their work with CPOE and other clinical systems. Michael Blackman is the CMIO there and is frequently quoted about clinical systems implementation and the value of CPOE. He agreed to be interviewed for HIStalk, which I appreciate.

Tell me about yourself and your job.

I’m an internist and med-peds trained. I’ve been at Berkshire pushing seven years at this point and have been CMIO for one. It was a new job for this organization.Berkshire Health Systems is two hospitals. The larger one is just over 300 beds and a teaching hospital. We have a few small residencies in medicine, surgery, pathology, and soon to be psychiatry, starting in the summer. Those are all UMass-affiliated programs. The smaller hospital is a critical care access hospital with 27 beds, 25 or 30 miles south of us. We also have 15 owned physician practices and  2,000 long term care beds in Massachusetts and some in Pennsylvania and Ohio.

We’re putting in a completely integrated record across that entire enterprise.

Did that project lead Berkshire to create the CMIO position?

We were doing so much in the space is that we needed more physician time than we had before. We needed a physician champion with a focus on getting the last pieces done.

What systems are you using and what projects are underway?

For projects, we have CPOE up and about 75% of our orders go through it. The goal is to push that to 100%. What we don’t have is eMAR, the electronic meds Kardex. It’s been a holdup for us getting CPOE pushed the rest of the way. We bought the systems up in a strange order, frankly, in part because of what was available at the time. We’ve had CPOE up in one form or another for almost four years.

Other big projects are getting the ED on CPOE and getting all of our outpatient practices up on the electronic record so they fully integrate with the hospital. Those are the biggest things at the moment. Also BMV – closed loop verification. How did I forget that one? It goes with the eMAR.

You’re all MEDITECH, right?

We are all MEDITECH.

How would you evaluate your success with it?

It works. I happen to like MEDITECH as a system. The pieces actually all really do talk to each other. The integration, certainly for an organization this size, is their problem, not ours. They make it work. We don’t worry about an upgrade and making sure that the orders from CPOE are still going to pharmacy the right way. We know that’s going to work and that makes a very big difference.

Most of your doctors are community-based, I assume?

Most are, but the hospital employs probably 80 to 90 physicians. That includes ED, outpatient, and hospitalists.

Is the majority of the 75% CPOE ordering coming from those employed physicians?

At the moment, it’s really the house staff and employees of the hospital. The reason is that we haven’t pushed it to anyone else. We’ve being waiting until we do eMAR. We definitely have some private physicians who use CPOE, but it’s them coming to us and saying, “We seen this and we really want to do it.” It hasn’t been me going out and saying, “OK, now you’ve got to get on.” We want to be sure they can go to one place and get everything they need before we do that. We want to get eMAR up and then we’ll take that step.

What is it they like well enough about CPOE to want to volunteer?

Some of them look at the hospitalists and say, “Wait a minute. They have these nice order sets they can just click through them and get their stuff in,” especially for specialties where the orders are fairly routine and standard. Orthopedics, for example, or OB. Admitting a pregnant woman for routine delivery is essentially the same every time you do it, so people that were really using order sets or felt they could … those are the groups that have stepped forward to say they want to do it. It will get trickier at the margins.  

The biggest challenge is always ED, ICU, and surgery. Will they like MEDITECH?

I think so. As is true with any system, none of them do everything you want them to do. The upgrade is always hopefully better than what you had. Even then, you find features, so, “Now that it can this, I want this as well.” While we’ve done rather well with the CPOE we have, there have been moments when we said, “We really need what’s in the next version.”

Our next upgrade will help us a lot in that regard, most notably in our ability to convey more context to people as they go through order sets. You think about order sets on paper – we use them a lot for teaching … “Here are the criteria for this.” It’s hard in our current system to present that information in conjunction with the order sets. The next version makes it quite possible to do that.

Is there enough CPOE value other than efficiency with order sets?

Order sets are faster than paper, but they’re still attractive for decision support, even if just allergy and drug-drug interaction and formulary compliance issues and cutting down on the calls from nursing and pharmacy to clarify orders. We don’t try to sell it because it to people as, “You should use this because it will make you more efficient” because we’re going to be wrong. It doesn’t always make you faster. It may make it safer or better, but not always faster. I think a large number of the vendors have done all of us a disservice by touting the fact that they think this thing is faster and it isn’t, always.What clinical decision support capabilities do you have turned on compared to when you first brought up CPOE? Most hospitals dial it back.

If you look at what we did originally, we said, “We have CPOE now and we should turn on all the decision support we have available.” Boy, was that a mistake. [laughs] We turned most of it off rather quickly. At this point in time, we have drug interaction checking, allergy checking at both the generic and ingredient level, and adverse drug reactions by class. We have a variety of rules around lab utilization, formulary compliance issues, and some financial rules.

We found that we were losing revenue from visits we could not bill for because there was no admit order on the chart. Somehow it got overlooked. They came up from the ER with holding orders and a continuation of those orders, but there was actually no order on the chart that said, “Admit to blank.” Without that, the payors were denying the bills. One of our rules for an inpatient is that you have to have an admit order before you can order medications or labs.

What devices are the physicians using?

People either use tablets or desktops. One of the issues we ran into as we rolled out tablets to the employed physicians is the lack of flat space to put them down on the units. People had a tendency to put them in front of their existing computer, which wasn’t the point. We were trying to free up computers for the nursing staff.

Did you encourage broad order sets but not personal order sets to avoid future maintenance and to reduce variation?

The process was really trying to keep them as evidence-based as possible using our existing structure of department-level order sets. We do currently allow people to save favorite sets. We don’t teach them how to do that, but a few have figured it out on their own. We’re looking at changing that as we move forward because the maintenance around personal order sets is an absolute nightmare.

On top of that, if you have evidence-based sets and you need to make a change in the drugs for some reason because of a change in the evidence or change in availability, we want to be able to push that out without worrying that some sets missed it. Depending on how people save their favorites, whether they built them on existing ones, that might or might not happen.

Have you done any metrics to determine what has changed since CPOE?

The good news is that our medication error rate has decreased. We’ve seen a definite drop in the med error rate every time we bring another group of users on CPOE. We’re looking at those errors and anxiously looking forward to how that changes when we get to eMAR and BMV. We think that will eliminate a good chunk of the remaining ones, with the goal of zero.

The incidental thing is that we saw an increase in the number of duplicate orders that had to be canceled by the lab. One of the things we didn’t pay enough attention to was, “What were we taking out of the system?” We took out the unit secretary from entering the lab orders and that human intervention of saying, “There’s already an order out for this” and how the lab functions. I’m not sure we weren’t writing as many duplicate orders, but they were just getting through to the lab. We put some rules in place to try to cut back on that and we’re about to re-study that.

I assume your biggest impact will be when you get BMV online. What challenges do you see with that?

We’re doing the eMAR and BMV together. We felt the workflow for nurses wasn’t appreciably different bringing them up together since we were training all of them at once and some of the efficiency came from BMV.We have a barcode packager, so everything has to go up to the floors in unit dose. We’ll have to repackage anything that doesn’t come in unit dose. We’re doing our best to keep the formulary as standard as possible. The other piece is the workflow one – making sure we check once a day or once a shift to make sure people are actually using the scanners and that they’re scanning the patient’s wristband and not some list on the wall.

Are checkguards against that built in?

We’re probably going to put a check digit on the wristbands or some of the labels so you won’t be able to interchange them.

Do you have informatics folks working with nurses?

We have a variety of people working with nursing, but it’s still me, going back and talking about some of these things. On our IT staff, we have several nurses who function as both analysts and liaisons to nursing. Plus, we tend to pull people in for these various projects from the respective departments and then backfill on the units.

What’s the plan for EMRs for the practices?

We’re going to use LSS, which is the MEDITECH-affiliated outpatient product, so we can get the real value of the seamless integration between the offices and the hospital. We have all of them up on billing and scheduling and it’s been that way for a couple of years. Now we’re ready to move forward in pursuing the clinical pieces so that if we make a change to the meds list in the office, we see it in the hospital and vice versa.

What’s the level of integration for allergies and updated information?

The answer is that it’s 100%. It’s the same allergy list, the same outpatient med list, the same problem list.

Does it handle medication reconciliation?

That’s something they’re still working on. We’ve done some things for med rec on the hospital side, mostly building reports that compare an electronically entered home medication list against the admission orders. We still drop the paper and the computers are lined up what’s a match and what’s not and someone reviews that to see what they want to continue and that the changes are correct. We have a physician and nurse review and sign it.But the biggest piece is that they look at that piece of paper and say, “This isn’t what I meant to do.” They don’t make the changes on paper, they go back and make the changes in the system and then reprint the report. We hope to eventually do all that electronically, but it’s not quite there yet.

Are you doing any interoperability projects?

I don’t know if you’re familiar with the eHealth Collaborative in Massachusetts, which was three pilot sites to do interoperability in the community. North Adams is 20 minutes north of us and they’ve done some things there and we’ve had discussion, but it’s not there yet what we can do to integrate the county. We haven’t done it, but we’ve definitely talked about it.

There’s a lot of MEDITECH in your part of the world, which should make it easier to share data.

Massachusetts is MEDITECH central. I think they have 70% of the market in Massachusetts or something like that.How well would you say that today’s systems align with contemporary medical practice?

One of the biggest struggles and the last piece for most people is physician documentation online. We haven’t done that yet, either.If you listen to the vendors and listen to the industry, there’s a big push to get as much stuff in structured data fields as possible. That’s great for reporting information, but it’s not how physicians tend to think. It also doesn’t lead to notes that really tell you what you want them to tell you.

If you take the structured notes at one end of the spectrum and the complete, dictated, full-text note at the other end of the spectrum … the other good piece about the structured ones is that they’re better for billing, but the free-text ones really tell you more about what’s going on the with the patient. I think the right answer is probably somewhere in between in making a note that gives you a good combination of structure where it’s appropriate and where you really need it for reporting, and allowing the free text to give you the full flavor of what the patient looked like so someone subsequently reading it can tell what happened. Often it’s fully templated and you can’t tell that.

The article that just came out in NEJM said that the urge to get information into a template hasn’t done the patient any favors because there’s no context.

The other piece about the NEJM article is that they said that people were committing clinical plagiarism, cutting and pasting large sections of notes that aren’t theirs without really reading them. This is a tool like anything else. You want to be able to pull certain things forward, but equally you want people to use the information effectively.

The best example I can give isn’t mine originally. You can pull enough information from the system that can create a template that starts with, “A 23-year-old female presents with left ankle pain.” You’ve got the age, the sex, the chief complaint, but there’s not a template in the world that changes that to, “A 23-year-old female Olympic figure skater presents with left ankle pain.” Those three words have dramatically changed the flavor of the patient and what you’re going to need to do and what the patient’s rehab course will look like. That little bit will make a tremendous difference to how people get their work done.

The other piece in this part of the world and the West Coast as well is pay-for-performance, PQRI, and a variety of other things that require capturing information in a way that’s reportable unless you have an army of people doing nothing but chart extraction.

Do you see any technologies coming up that could be useful?

It’s nothing in particular, but it’s mostly the things that focus on workflow. One of the things that a good chunk of systems today is that the workflow of how people get things done and think about things is sometimes missed. I’m not trying to suggest that you should simply take the current paper process and make it electronic, but there’s a thought process that goes about how you approach a patient and gather information together.

Perhaps looking at that better at work flows through screens … I actually had an IT physician we were talking about trying to reproduce a three-page, tri-fold flow sheet in the ICU. After we had a long discussion, he looked at me and said, “You know, perhaps now that we have all this information electronically, we don’t need the flow sheet in the same way we did before.”

I think that could be one of the changes – how do you look at the information differently and how do you best to reduce far more information out there than you can possible review? When everything was on paper and you had to get the five volumes of old medical records sent up, there was no expectation on anybody’s part that you actually read all five volumes. You may have peeked through to try to find what you were looking for, but nobody really expected you to look at it all.

Now that it’s all electronic and easy to get to, there is some weird belief that you’ve actually looked at it all, which you haven’t. So, how do we bring things that are important to people’s attention, the very complex decision like what do you put on the first screen to make sure people see? How do you alert them that there’s something in the system they should know about buried in that fifth volume of old charts that they never would have found before?

The other thing that will make a big difference is the electronic prescribing, especially on the outpatient basis. The lack of ability to electronic prescribe controlled substances is enormous. It has to happen. The question is what is the DEA going to require to make that happen? We’re working on a project around that now, so hopefully we’ll have some good news about that in the upcoming months.

What led you to leave medical practice and get into informatics?

I haven’t fully left the practice of medicine. I’m not doing as much clinical work as I would like, but I’m still seeing patients with the house staff and things like that. For me, it was an opportunity to make a bigger impact on how medicine is practiced as a whole and how we take care of patients as opposed to doing it one at a time. prior to medical school, I was a management consultant and a lot of that was information systems, so for me it’s turned full circle.

HIStalk Interviews Dave Nesvisky, VP, Red Hat Healthcare

May 12, 2008 Interviews 2 Comments

The Red Hat folks e-mailed right before HIMSS, saying they are big HIStalk fans and asking to run a "Mr. HIStalk Shoe Shine Booth" from their booth. Darned if they didn’t, too, with real professionals buffing and polishing the shoes of attendees who sat high up in an old-fashioned chair right there in their booth. I didn’t know much about the company, so an interview seemed like a good idea. I talked to VP Dave Nesvisky, who’s been in healthcare IT for many years.

Tell me a little bit about you and what you do.

I’m fairly recent with Red Hat. I was brought on in September of ’07. The intent was to have my past experiences brought to bear Red Hat to lead a vertical team. To be able to go deeper into lines of businesses is to actually have people that understand those businesses. I’ve been in healthcare IT, sales, and sales management for about the past eleven years. Prior to that, I was working in the public sector sales and sales management for fifteen years. 

I’m an old dog. I’ve been around 25 years in technology. I always joke with the young bucks in inside sales about selling 200 meg disk drives for $10,000 and mini-computers with a meg of RAM the size of a washer-dryer. They look at me like I’m talking about propeller aircraft and buggies and stuff like that. 

Now I’m in infrastructure. I’ve been in databases and middleware applications. So I’ve seen quite a few things; had some good experiences and some good relationships. I thought I could help out Red Hat and they obviously thought the same thing.

Summarize the offerings are that are available for healthcare.

Most people, when they think of Red Hat, they think of Linux. Actually, we have a tremendous range of offerings for healthcare.

Our MetaMatrix technology can extract data from clinical systems to provide a single, real-time view of patient data. This is a horizontal product designed to federate disparate data models. Whether the data is stored in flat files, relational models, other types of data stores, the data models can be pulled to this central point in MetaMatrix and you can create new data models using the existing data models. You can synthesize data and repurpose it for new applications.

We think the opportunity in healthcare in unbelievable when you think about all these disparate applications, all these ancillary systems and so forth; and the opportunity to pull these things together to give more complete and comprehensive information at the point of care. It has tremendous opportunity affecting patient safety and accuracy. What’s interesting about it is it is not a data warehouse, so it’s not storing the information in the second place. You don’t have the synchronization of data issues between the  source system and the second source. It really literally creates a virtual database and presents it to an application, but you can cache the information. If one of your source systems drops out for some reason, you have a contingency plan to get to it.

MetaMatrix is the crown jewel in our SOA platform, which also includes all the JBoss components, pieces of middleware, rules, web servers, portal development, and things like that. Dropping down below that is Red Hat Enterprise Linux, which has a lot of capabilities: virtualization, I-O management, and clustering, and also IPA, which is security to help with control and auditing for who has access to what systems and so forth. We’ve also added a  high performance messaging component that was co-developed with a lot of partners called AMQP, which is a high performance messaging standard which can be easily adapted to handle HL7 messages. It’s a big stack.

So how do you go about selling this to a hospital?

Obviously the dynamic of healthcare is most of the applications that are run by IDNs and hospitals are purchased ISV applications. There are hundreds and hundreds of vendors that provide the technology to healthcare, so a lot of our focus is around working with ISV partners. You’ve probably read about the things we’ve been doing with McKesson, GE, CPSI, and Sentillion. There are literally dozens of companies that are adopting our technology to their work.

When you start talking about MetaMatrix, it gets interesting. It represents a tremendous opportunity for ISVs to take advantage of the technology and pre-integrate some of their products and repurpose some of their existing applications to offer their customers this new, synthesized clinical view. It’s also an opportunity for health systems themselves to take MetaMatrix and, if they have a robust enough IT staff, to take advantage of this technology on their own.

Most of what I’ve heard about Red Hat in healthcare has been because of McKesson. What’s the scope of that relationship and how interested is the McKesson client base in using Red Hat products?

McKesson has adopted what we’re referring to as the Red Hat Enterprise Healthcare platform, which is Red Hat Enterprise, Linux, the JBoss SOA middleware, and the Red Hat Network Management. So it’s the complete stack of Red Hat open source infrastructure. It’s now the standard platform for McKesson Horizon Clinicals solution suite and certified for all scales of their delivery. So, it’s not just for small hospitals — it’s certified for use up and down the line for them.

What are the benefits to McKesson customers?

They probably used some proprietary Unix boxes by the vendors that you typically see. There’s a tremendous cost advantage moving to Red Hat Enterprise, Linux, and JBoss in a suite like this. If you think about it, all these capabilities that we’ve packed in — it’s all open source software. There isn’t a license fee associated with any of the software.

We charge an annual subscription that covers maintenance and updates, much like other software vendors charge annual support. The difference is proprietary vendors charge an upfront license fee, so it’s a big capital expense.

Our software is designed to run on commodity X86 and AMD hardware, so you can shop for the most bang for the buck from a hardware perspective. Because all of our various components are integrated, like the virtualization and the clustering and so forth, we can offer a one-stop shop for training to get administrators and other users trained on the system at one place, at one time, whereas they would have to have hopefully one person, sometimes multiple people, being sent to different training classes by different vendors for all these different components.

On top of that, because of the possibilities in virtualization, they can cut down on their server count tremendously. The cost of the servers goes down because you use fewer of them. People are thinking green these days. It decreases power consumption; it decreases cooling requirements; it decreases requirements around floor space.

You’re getting a tremendous capital expense advantage moving to Red Hat because you’re not having to spend as much on the hardware and the infrastructure software. You’re gaining even more over time in operating expense savings because of training and because of all the power, cooling, and space requirements that you’ve reduced.

The beauty of it is that people aren’t sacrificing anything in the way of reliability and security. In fact, most of the articles that have come out, and most of the studies that have been done, have shown that, from the security perspective, open source software is usually more secure than proprietary software The reason is everybody can see the code bugs; they’re detected early; they’re fixed early; the ramp time between a problem and vulnerability being detected and being closed out in open source is dramatically faster than a proprietary system. And from a reliability perspective, people are consistently impressed with the uptime they are getting with the systems.

There was a study done by Florida Hospital. You can see they’ve had tremendous experience with the reliability of Linux. They are drawn in by the cost savings, but gained high reliability and availability.

What about relationships with other vendors?

We have a number of Epic shared clients. We have a very good relationship with InterSystems. We frequently do information sharing and joint engineering work with InterSystems to optimize Cache’ on a Red Hat platform. We have a number of clients that are running Epic in their shops on top of a Red Hat platform very successfully.

We talked about McKesson, but GE PACS has actually been on Red Hat even longer. In fact, if you look at a survey of the PACS vendors out there, most of them run or at least offer the ability to run Red Hat Enterprise Linux.

Has anyone run the numbers to know how much money clients are saving?

Some of the numbers are staggering. I’m almost reticent to talk about them because they almost seem ridiculous, but I think we can very comfortably say people will have life-cycle savings in the order of anywhere from 35-40% upwards of 50% on infrastructure by going to a Red Hat platform over a proprietary platform. I think that’s a very comfortable number.

I see 40% time and time again. That’s a lot of money. The beauty of it is that it’s good for everybody. Obviously it’s good for Red Hat because they are using our technology, but it’s great for the client because if they’ve budgeted 40% more, lets say, that 40% can certainly be applied to other projects. It returns an investment pool of the client that they can then use on projects that they want to use it on.

It’s great for the ISV, Independent Software Vendor, because a lot of times they are trying to fit into a budget. By offering an infrastructure that costs that much less, rather than them having to discount their software aggressively to meet the budget of the client, they can roll in with an infrastructure that’s every bit as secure and reliable as what they had before. They can discount, not their product that they make their money on, but something that’s basically just a cost item for them. You know, the hardware and infrastructure. And if in fact it’s returning an investment pool to the client, that vendor actually has a better opportunity to sell them maybe an additional application or two with their investment. So it works out to everybody’s advantage.

Hospitals have always been capital-constrained, so if you can move costs into the operational bucket, that should be popular.

That’s the big thing. It’s an operating expensive because it’s an annual subscription for support of the software.

Is the retirement of the DEC/HP Alpha, which was big in healthcare, going to provide opportunities?

Yes. That’s a great opportunity for us. Those were tried and true, very reliable hardware, but it’s cycling out. That’s where our opportunity come up. They lease their hardware and when their leases are up, they look at, "OK, what’s the latest and greatest? What’s faster and cheaper?" And where they are making that look, we have a great at opportunity to introduce them to what we’re doing and save them shocking amounts of money.

It is sometimes a chicken-and-egg sort of thing with a lot of the vendors because the client isn’t looking for Red Hat because their vendor doesn’t support it yet. On the flip side, the vendor isn’t interested in adding another platform because their customers aren’t asking for it. So we’re working on bringing both sides together. 

A lot of our job right now is in education and explaining to people. Because they’ve come out of a very reliable environment with the Alphas and the HPs and so forth, they can’t afford to sacrifice reliability and security, so a lot of our job is explaining about open source and about Red Hat and giving them some proof points about reliability to get everybody comfortable with it.

How much technical training is needed?

It’s a very straightforward transition from Unix to Linux for the ISV applications. They make their migration in a very straightforward way.

Red Hat was #1 in value among CIOs in a recent survey, even beating Google. How do you use that to get people’s attention?

That’s exactly one of the points. Folks in healthcare want to know that it’s been done before. You talk about mission-critical applications; healthcare is the most mission-critical app. Hospitals don’t close. Things happen around the clock. They can’t afford to take a risk and I absolutely respect that. Demonstrating value and reliability that’s proven in other industries and within healthcare is really important. Having that CIO survey show that, four years running, we’re the most valued technology company, that says a lot. That resonates with them. They respect that.

Beth Israel Deaconess has gone with Red Hat. What’s their experience been?

Things are going every well for them. Dr. Halamka is a pretty vocal advocate of Red Hat Enterprise Linux. He’s got a great quote about finding an operating system without the virus of the month, without patches, without downtime created because of so much feature creep, and so forth. He was able to find that answer in Red Hat Enterprise Linux. He comes right out and says he’s getting the security, reliability, and cost reduction that he’s looking for. He’s going to be a speaker at an upcoming user conference that we’re having June 18-20 in Boston.

If a reader is interested in learning more about Red Hat, would the conference be appropriate, or is it geared to existing users?

I think it’s definitely a place for folks who are just starting to dip their toes into using open source in their environment. It’s definitely the place where you want to start. It’s where you can get all the information you need to have that happen and to really get some basic information abut open source, showing the reliability, showing that it’s a proven technology and not as risky as you might think.

It’s a good fit for both the business representative of a healthcare system as well as a technical person. Clearly a technical person would love it because they get exposure to some cutting edge technologies. We always trot out some new things there for people to look at. From the business side, it gives people the opportunity to ask the hard questions about, "How are you really using this?"

I always get a lot of questions about what’s going on in financial services because they have such high throughput and large-scale systems. We always have people representing these other industries that you can talk and share thoughts with.

What’s you sense about open source healthcare applications?

People are running open source and don’t even realize it, like Apache or Tomcat. They’re in everything. People are using open source all the time never thinking about it. It’s very reliable. Then when we raise the visibility of it up and say, "OK, these systems are going to run on Red Hat Linux" and they run them for awhile and they run great. All of a sudden, that opens the door to say, "We’ve had challenges with interoperability and other things. What else is out there?" 

They’re willing to take a look at projects like WorldVistA. Open Health Tools is doing some great stuff. I would like to think that Red Hat has a position of thought leadership in open source; that our opinion is valued in the community. When we go out and tell folks, "It’s ready for prime time," we can help guide people and take advantage of their open source applications.

You mentioned the SOA in healthcare. Everybody talks about it. Do you think that’s going to make a significant difference?

Yes. If you asked ten people, "What is SOA?" you’d get ten definitions, anything from web services all the way up to full-blown architecture. 

Every system in healthcare has some common elements that repeat from system to system. Whether it’s the core clinicals or what have you, there are always some components of it that repeat. The ability to take those repeating components or services and build new systems using them makes common sense.

The software we use is not a new concept. Its been around a long time. The difference now is, when you can take advantage of open source tools and look at the source code, you’ve got much better visibility into what you’ve actually built and the ability to share it. Before, people would build software, but it would be proprietary and enclosed. To be able to reuse that package, you had to guess what was in there.

With open source, you can look at it and understand exactly what it is, how you can repurpose it, and what pieces you need to change to take advantage of it. It gets you a huge head start on building new applications. It’s a terrific opportunity. Open source and open standards make the timing right for SOA to be a legitimate strategy for healthcare IT.

Most open source organizations don’t have the resources that Red Hat has to get that message out. Do you feel that Red Hat should advocate for them?

We do, because we believe in the open source model. There’s opportunities for the typical core ISVs that you see out there to take advantage of bits and pieces and embed it in their own applications. Just in the same way that McKesson is taking advantage of our technologies to build their applications.

I can foresee where some of these open source projects will move up the stack and take advantage of some of those components as they build the next generation of their product. I’m not speaking from absolute knowledge about McKesson’s strategy is, but in general, I see ISVs certainly taking a look at what’s out there. If it can accelerate their development cycle and allow them to deliver more software more economically, of course they’re going to do it.

The whole idea about open source is you’ve got lots and lots of contributors. You’ve got more people pouring their work into code than any individual company could possibly hire. You could big the biggest software company in the world and they don’t have as many developers as the open source world does. The whole idea is for large communities to come together and take  advantage of what’s been built.

How would you say the culture is different at Red Hat from the healthcare vendors you’ve worked for?

One thing that’s pretty funny. We have an internal e-mail address called Memo List. Basically it’s just freeform. In any other company, there’s such a tight control around sending e-mails, their legal this and that. This memo list — people are asking questions about recipes and where to travel. It’s like a freeform forum inside the company that goes on.

There’s a tremendous amount of commitment and passion around open source. This place — you eat it, breathe it, sleep it. That’s everything here — the community involvement. Open source -– very, very passionate about it. In fact, we run all open source products internally. Stupid me, I had a Mobile 5 phone. I came in here and I said, "Can I get push e-mail for this?" They looked at it like it was some kind of Satan or something. They wouldn’t support that Microsoft phone. They were going to perform an exorcism on it, I think.

There’s just this unbelievable, single-minded purpose around advocating open source. So when you get back to your question about other open source projects and open source products out there, I’m just speaking from my perception of the company, we feel this obligation to help anybody that believes in open source to help them be successful. Red Hat has got 80% of the paid Linux market. With that kind of market share and brand visibility, we think we can help these companies become influential.

How many employees does Red Hat have?

I think we have about 2,500.

As far as healthcare then, what’s your structure going to look like to operationalize this vertical market strategy?

I’m working hard to hand select sales reps that have been in healthcare. That’s always the first question when you go into sell something in healthcare: "How long have you been in healthcare?" and "What do you know about healthcare?" Customers play stump-the-band with you to make sure you’re legit, because I guess they’ve seen companies come in and out of healthcare before. They want to make sure you’re serious.

I’ve selected some people for the team that have deep roots in selling in healthcare. They’ve been in the business north of 20 years in healthcare IT. They know what they’re doing.

On the product management side, we’ve got a mix of folks. Some folks that have deep healthcare subject matter expertise and other folks that obviously have deep Linux and middleware and product-specific expertise. We’re cross-training each other. We’re trying to build both strength and knowledge in healthcare inside the company, and at the same time, cross-training these healthcare veterans with a depth of understanding of open source and the Red Hat product line so we can hopefully present the  best of both worlds to our clients.

Our solution architects, which are our technical folks, are typically doing the deep dives on technology with the clients. Explaining it, demonstrating it, and so forth. They all understand the technology very well. We’ve been spending a lot of time working with them; talking to them about healthcare and the unique requirements in healthcare IT; getting them in front of a lot of prospects and customers; letting them do a lot of listening to be able to a more relevant technology recommendation to them. The more they understand about healthcare, the better off they’re going to be and the better off everybody’s going to be.

Is there anything else that we should talk about or that you would like to mention?

I gave you the shout out that we’re HIStalk fans over here.

I appreciate that.

Hopefully you got a shoe shine at HIMSS?

I just had to walk by and talk it all in. It was kind of strange to see even my phony name up on a shoe shine stand.

Our Fake Inga was equally popular. People liked taking that five-minute break and getting a shine. It was great.

Anything else?

We’re delighted by the enthusiasm we’re receiving in healthcare. Frankly, the reason that pulled me into Red Hat is it just seemed like an absolute perfect fit. Here you’ve got this very reliable and secure and scalable environment that you can offer to an industry that’s always so cost-constrained at such a much more reasonable cost than what they’ve been used to paying. It just seemed like natural fit. And now, as we work with these ISVs, there’s obviously advantages to the as well.

The other thing that we didn’t really talk about, but that we’re very involved in, is working with standard bodies and groups that are working towards things. We are lending a point of view to that and encouraging those projects as well.

HIStalk Interviews Don Holmquest, MD, JD, PhD, President and CEO, CalRHIO

May 5, 2008 Interviews 4 Comments

Photo: SF Business Times

I couldn’t wait to tell Mrs. HIStalk that I had just spoken to a doctor, a lawyer, a PhD in physiology and endocrinology, and astronaut. Then, to casually mention that it wasn’t a conference call, it was just one man – Don Holmquest, president and CEO of the California Regional Health Information Organization. The timing of our conversation was fortuitous since CalRHIO just announced an agreement with California’s association of retired public employees (CalPERS) to endorse CalRHIO for its members. CalRHIO is not your typical RHIO – it’s statewide, well supported, and cautious about seeking a business model that will keep it operating once the grant money is gone. Thanks to Don for making himself available for the readers of HIStalk.

Tell me about CalRHIO.

We started out in 2005 with the intent of becoming a state-level health information exchange. That’s a term used in a study that we’re a part of that AHIMA is doing, so it’s a comfortable term to us. 

In California, we had the Santa Barbara local RHIO. There’s one down in Santa Cruz. Santa Barbara did a little bit of exchange. Santa Cruz has been doing for some time a push model of results and e-prescribing and other stuff. Those were clearly regional efforts. There was a sense that, for us to really get California involved in health information exchange, you needed a state-level organization.

We raised some grant money; spent most of it, frankly, doing base level consensus-building and education; and held multiple summits around the state and involved something like 60 organizations and about 1,000 people who participated in meeting and work groups. The end result of that was the creation of a non-profit California corporation and a board of directors of key executives from the various stakeholders. That entity is charged with going forward and creating this healthy information network. To my knowledge, nobody else is attempting that on a state level.

Is the work of CalRHIO mutually exclusive with the work of the local exchanges?

Absolutely not. Our position from the start is that we wanted to provide whatever we could to make life easier for local activities to develop and mature.

As we looked at it very carefully, we did a lot of interviewing of experts in the field, leaders, and vendors. I think it became obvious that the hardest thing is to pick the right technology platform and the financing.

That’s why we use the metaphor of a utility. If you try to take an undeveloped world and country and bring it into modern times, it would be nice if there was electricity out there for people to use. We are taking the problem of creating a good health information platform with all the right appliances and applications and privacy and security so that any region that wants to can use that as one of their building blocks.

There’s still plenty of work for the regions to do getting the local data providers to agree on data sharing, governance, developing the provider network, and so forth. We want to make it as easy as possible for these RHIOs to develop because, thus far in California, we’ve not had a lot of success in these regional efforts in getting to the point of achieving data exchange.

How many employees does CalRHIO have and what do they do?

We’re a pretty small shop. We’ve got about six people working on the core activity of building the platform that will do whatever we want it to do.

We do have one grant from Blue Shield to try and support some health exchange efforts in the safety net community. We have taken the money from Blue Shield and turned it around and made grants to three small safety net organizations.

For the most part, we have been working on trying to get the technology vendors selected and get the kind of endorsements it will take to make the business model work. That’s why you saw the CalPERS release recently. It took us quite a few months to get those guys on board. Once they finally understood what it was about, they did what they should do and what all purchasers should do, which is tell their health plans, “We want this for our employees.”

Describe what the CalPERS endorsement means.

What it really does is, from the most important perspective of all — the organization that has employees they value whose care they care about and whose cost they pay — it achieves that purchaser saying, "We want this capability for our members, we’re willing to pay for it, and we want you as our agent to support this and enable it." They are basically telling their health plans to sit down with CalRHIO and work out a deal.

Our health plans are not by any means the only payors we will look to for support. Anybody that makes use of our network and receives financial benefit will be expected to pay some appropriate share of the cost. If you look at an environment where you have hospitals using our network to distribute laboratory results or radiology results or whatever, then we would expect those hospitals to pay for that service. I can promise you it will be cheaper than what they’re doing now using faxes and printers and couriers.

Santa Cruz is doing push. In Delaware’s DHIN, they started with Medicity and Perot on the push part of it and will be moving to the information portal fairly soon. We decided to go the other way and start on the information portal and deliver that information to emergency rooms as a start. In that environment, the entity that benefits, in terms of better patient care and cost savings, is the purchaser, so that’s either a health plan or self-insured plan. If it’s an uninsured patient, then it’s between the hospital and patient who pays. If it’s a capitated medical group that has risk for emergency room services, they may be the entity that’s appropriate to pay for the information package that was delivered.

Some people would argue that the pay-for-use model discourages use and the philanthropic model makes more sense for a public good like an information exchange.

I wish it were possible. I don’t believe it is. We’ve not found a good example of where that’s worked. If you can show me anywhere in healthcare where a substantial body of services is being paid for by philanthropy indefinitely over the long term, I’d love to hear about it.

Frankly, I don’t see many states out there that have money to spend on this. Certainly the federal government has taken a position, for the most part, that health information technology is like plumbing and air conditioning – it’s part of the cost of doing business and, if you’re a medical group or hospital, you’ve got to pay for it.

I’d love to see that, but we don’t think it’s possible. We’ve got a state here with 37 million people and the eighth largest economy in the world and there’s nobody stepping up to do that. We had some early philanthropic support, and when you talk to them about doing something longer term, the position we’ve heard most often is that, “We’ve really enjoyed giving you seed money and it’s great what you’re doing, but you can’t keep coming back to us.”

The original projection was that CalRHIO would need $300 million to build the network. That cost is upfront before you can start collecting usage fees. Where will you get that upfront money in a tough credit market?

You’ve got to show a very robust business model. You’ve got to show that you have organizations that have contractually committed to paying for the information you deliver and you monetize that.

There are very smart people out there who know how to raise money for a good project. Lot of interest in things that are infrastructure in character, lot of interest in healthcare … it’s probably one of the few growing parts of our economy and, as you know, it’s going to grow for a lot of decades.

Everybody is interested in something that saves money. There are few strategies out there than you can go to, other than a health information exchange, that’s a pretty solid likelihood that you’re going to save money. I’ve seen PET scanners and MRIs and all sorts of procedures that folks have hypothesized are going to save money, and the feds will tell you that none ever do. But if you look at putting more information in front of a doctor when he needs it, there are some pretty solid studies that say you’re going to save money.

The Smart Health board member said those savings estimates for health information exchanges are overestimated, even though he wasn’t against the concept. Do you agree?

No. I know the man. I’ve been to some of their meetings. You’ve got to remember that this is a set of interviews occurring at the time of shutdown of one of the early regional RHIO efforts and I’m sure they’re all very disappointed about it. They tried hard to get people to see the benefit.

I think what that tells you is that it’s harder to show demonstrable benefit when you’re starting on a small scale, one project at a time. They’re trying to get one small region, maybe three or four hospitals and some other groups, exchanging data. It’s a lot harder to demonstrate savings and improve quality than doing it over 338 hospitals and 98,000 physicians.

So I think in that context is probably why that particular individual was making that comment. He’s a CEO, a very smart guy, and on the board of a big system here. If you read further in the article that quoted him, he still says it should be done. You can’t take just part of it out of context.

Back to the previous question, what kind of organizations would be interested in financing CalRHIO’s upfront costs?

This sounded a lot easier six months ago, nine months ago, but hedge funds, private equity groups … right now, there’s not a lot of deals on the street. There’s a lot of money out there that needs a place to go. If you offer a rather new opportunity with a solid business model and a solid need, I can tell you the advisors we’re talking to is that it’s easier to get more money than less.

We’re not looking for huge quantities. We’ve actually had conversations with people with that kind of money. Some are very interested in doing well by doing good, so those are the people we’re predominantly looking to. I’ve not found anybody yet who’s said that they couldn’t find that money. It’s probably a question of the cost.

Given David Brailer’s former and current job, I would think he’d be interested.

We know David pretty well. His office is about a mile and half away. He’s a good friend of many of our stakeholders. My sense is he’s largely focused on for-profit companies, particularly those that are moving toward a liquidity event of some sort, or are early stage and need that extra round of capital to go to the next level. Investing in a non-profit where your only return is interest – I just don’t know. If I were David, after all he’s been through, he might be very careful.

So you’re talking about servicing the debt, not offering equity?

Right. Let’s be real clear about what we’ve said about the $300 million. That is the pool of capital that will be needed, according to our very detailed planning, to get us to the point where revenues exceed expenses. So we’re looking at borrowing that high-risk, high-interest capital initially to kick things off. We start building on our Phase I delivery to emergency departments.

But at some point where we now have assets and revenues that meet minimum requirements, we will, as quickly as possible, turn to tax-exempt bond financing. We’ve had conversations with the financial advisors to those issuing authorities. They like to issue bonds for the right reasons. As soon as we can, we would move to that — pay off the high debt we got started on, then we would be run on tax-exempt bonds. Burning through, if you will, something less than $300 million, our projections are at that point that we will be self sustaining and will continue to pay that debt back. At some point we will be debt free and we will be sustainable.

How does CalRHIO snap into place with national efforts?

The national effort is laudable and it will be great when someone is seen in an emergency room in California and they’re from Missouri. It will be great if we can get their information from Missouri.

I would predict that the flow of information inbound or outbound across state lines is going to be a small percentage of the critical information that passes among communities in the state. California doesn’t have very many border cities where the community spans a state line – maybe Reno. So we think the first problem we want to solve is the needs of Californians who find themselves someplace they didn’t expect to be or sick when they didn’t expect to be and their information is available. If they happen to end up in New York and somebody there pings the national network and we can supply the feed for that, that would be great.

We see that as quite a bit further down the line. You’ve got to get California connected first. Youv’e got to stimulate the creation of regional communities if that’s how it ends up going. Quite honestly, I’m not sure every region will spontaneously create its own RHIO. It may be a task we have to take on. We have fairly substantial cities here in California that have no RHIO effort underway at all. We will probably have to go into that community and build the equivalent of a regional RHIO to get information up and running. If we can get the state connected, then we will clearly be delighted to push that information over the national network and pull in information.

It would seem that you have an advantage since local RHIOs are usually led by at least two strong competitors that don’t trust each other.

Absolutely, absolutely. If you take a multi-hospital system — and we’ve got some here in the state that have 30-plus hospitals, some with more than that — for them, if they can get into an information exchange environment that spans multiple communities, then that distributes the risks from various competitors because the benefits far outweigh any one competitor that might be out there. We think that’s a strong benefit.

At some point, presumably, with the Sutter system, Catholic Healthcare West, Tenet, Kaiser – those entities are competitors, but my belief is that ultimately these institutions will do what’s right for the patient. I know there are competitive issues out there, but at some point, the sheer good outcome from this will outweigh those competitive interests and at some point, hopefully, the public becomes educated about how important this is and simply is not going to tolerate those kinds of self-focused concerns.

Should information exchanges be a back-end utility without consumer involvement, especially with regard to privacy?

We sort of favor the consensus approach. We have a board that includes a little bit of everybody, including the most recent president of AARP. We have a lawyer on our board from a privacy advocacy organization. We have union representatives, hospitals, medical groups, IPAs, multiple hospitals, hospital associations, and health plans.

We think everybody that’s got a stake in this needs to be listened to, have an opportunity for influence. We will operate the fundamental utility, but it has to be governed by the appropriate policies. That’s the first thing we’ve done is that high level stakeholder governance body. The second step is to build the tool that you’ll need to get where you want to go.

Can data sharing projects succeed without an overhaul of state and federal privacy regulations?

It certainly would be easier if we had a more uniform approach to privacy. We’re prepared to live with what we’ve got right now. Standards aren’t perfect and privacy laws are imperfect and often inconsistent and that makes it difficult. We don’t think you can wait until all that is resolved.

Frankly, I think it will be easier to resolve when people can see why it’s important. Right now, patients find their paper records that were buried in paper silos are now buried in electronic silos. They’re worried about privacy and privacy is a huge problem with paper medical records.

When people can see that the health information exchange can protect their privacy, probably better than what they experience today, but at the same time, give them access to their medical records whenever they need them, wherever they’re scattered … I think it’s a question of time, this incremental process back and forth, back and forth – it’s iterative. One small baby step at a time, get smarter, get better.

We take an approach that we are not going to be a standards-setting organization. We’re not even going to be a strong enforcement organization. In order to connect to an important data source and have to deal with interfaces that are non-standard, with HL7 versions that are far from up to date — we will do it. We will encourage people to be as up to date as possible and use the current standards, but our job is to get that information and move it into the appropriate format and get it flowing to where it should be. Over time, I think we will move to some consistency.

To your original question on privacy, we are going to take as conservative approach as we possibly can. We don’t want to foul even the most conservative of requirements. We can talk about opt-in, opt-out, and the advantages and disadvantages of each. We are going to be using basically an opt-in on an event-by-event basis so that every time that a patient is seen and there’s an interest or need in getting their information, the providers will not even be able to search for it until they have the consent of the patient to search for it.

Once a list of what their information is and where it’s located is obtained, we will again get their consent before we pull information from each of the sources. They could say "this is fine, this is fine, but don’t get my information from this facility – it’s not relevant or I’d prefer to keep it private." That lets you get started while the whole country comes to some sort of equilibrium about what’s the balance between access and privacy.

I assume there’s break-the-glass capability for emergencies.

Assuming that’s what the law permits, and of course HIPAA does, absolutely. You can’t function in an emergency environment if you can’t get past the patient who’s comatose or unconscious or irrational or whatever. Yes, absolutely — we’ll have the break-the-glass option.

One shaky information exchange could have a breach that would cause headaches for all of them. Is there a need to have them become covered entities or to be overseen by some third party to ensure standards?

The simple answer is yes. We would be comfortable with that.

We’ve been using the metaphor of being a utility, but frankly, one of the characteristics of a utility that we’re comfortable with is oversight, accountability, and regulation. We’re going to be moving data around and getting it from other RHIOs. It would be great if we had high confidence that they have met the appropriate level of performance and reliability.

We kind of think that health information exchanges do need to measure up. That having been said, if you look at AHIC or HITSP or CCHIT that’s talking about certifying exchanges. We’re comfortable with that, although I certainly hope we don’t do something that makes it less likely that we’ll get viable exchanges going. It’s hard enough the way it is.

Frankly, for me personally, I really think that we win when we get state level RHIOs getting information flowing in their states without any extra burdens on them. The national exchange is going to be great benefit, icing on the cake, really wonderful — but it won’t happen until we get a lot of state level RHIOs out there up and running.

How important was your choice of technology partners to the overall strategy?

Somewhere between very important and critical, obviously. If you pick the wrong technology platform or company or strategic partner, you’re asking for trouble.

We looked long and hard and we did something that was pretty unusual when we did our RFP. We asked for various vendors to give us three things: give us the technology – that’s what everybody is used to doing. #2 was, "Tell us what the business model is that, with your technology, would lead to a sustainable endeavor." And #3, "Where do you get the money to get it started?"

So you had to have technology, you had to have a business model, and you had to have a financing model. Frankly, that was very hard to pull out of vendors. It’s expensive for them to develop that kind of proposal. Many of them don’t have the resources or the experience and many of them said “We’ll bring you this wonderful technology and all you have to do is write a check for it.” That’s a little too simplistic for us.

We think,"If you’re so smart, come to us with a way that your model that actually will lead to the people of California having an exchange that’s very successful." We found Medicity and Perot and they believed they could do it, and so far, they’ve been doing it.

What interaction will you have with personal health records?

I think that remains to be seen. First we’ve got to figure out what a personal health record is. There’s lots of ideas about that. They sound wonderful. I would love to have one. Every time I try to create one for myself, I run out of time and interest.

We don’t think they will be practical until somebody other than the patient is putting the information into that record in a reliable way. Of course you have to permit the patient to interact with it – add stuff, comment on stuff, and correct stuff. It will be challenging to figure out what that is.

I think the interesting thing is that the health plans are very interested in these as competitive features, competitive benefits for the plan. We think we will be interacting with these personal health records — first, probably, in the context of one or more health plans who have that as one of the features they offer. So, we will all learn together how to do this. But again, you get back to the same problem. It’s a health information exchange, you have to identify the patient, you have to find the information, you have to move it to where it’s supposed to be.

What have we learned from RHIOs that failed without ever exchanging a single byte of information?

The number one lesson is that it’s not easy, that it’s not sustainable from philanthropy or even government grants. That will help you get started, but what we believe is the right way is to focus first on the business model.

Getting something up quickly that’s exchanging information is a lot of fun. You can show it to people and people get very excited about it, but that’s not necessarily scalable. We think it makes you lose focus what the real issue is – the reason we’ve had so many RHIOs fail is that the business model is very difficult to build, implement, and perfect. That’s where your focus has to be.

To get to that business model, you still have to have that stakeholder consensus, stakeholder support. You’ve got to have the right message. You’ve got to get everybody you’re going to depend on on your side. That’s why we went to the third largest purchaser in the United States, CalPERS, and said, “Let us tell you what we’re proposing to do and see if we can get you to endorse it and, in fact, support it with your own dollars.”

From your vantage point, what’s the state of healthcare and healthcare IT?

[Laughs] Have you got a couple of hours? I remember when Uwe Reinhardt gave a talk some years ago and said, "If you look at the United States in terms of healthcare, we’re really two countries. We’re a very wealthy country with the best healthcare in the world, but at the same time, we’re a Third World country where a huge number of people get far worse care than they’d get in Cuba and maybe even Nigeria."

It’s our own Secretary Leavitt who says, “We don’t have a healthcare system, we have a healthcare industry.” It’s a mosaic of the best in the world and the absolute absence of good care. In that environment, what you’ve got is really good healthcare information technology and very old healthcare information technology and, in the case of many, many physicians, you’ve got zero health information technology.

One of the things that’s so important about a health information exchange is that, in our opinion, the electronic medical record in the average physician practice will be greatly enhanced when you can enhance the information flowing into it. The most valuable information in a physician office electronic medical record is the stuff that comes in from the outside. Otherwise, it’s just your own reflections and the stuff you put in there to remind you the next time you see the patient. I think once that kind of information is available, it will be far more attractive to physicians to go ahead and move into the modern world and get some electronic information technology.

I think we’re probably still seeing overkill in what we see going into physicians’ offices. Not that all that decision support and so forth isn’t useful, but it’s too expensive for the average doctor. We have a huge, hospital-owned practice here in Silicon Valley. Their CIO tells me that not only did their electronic medical record cost an average of $50,000 per doctor, but that’s about what they spend every year just to keep it upgraded and to operate it. That’s not going to work for your average doctor. 

As the CEO of the healthcare foundation here in California said in one talk, people are out there trying to get doctors in their offices to use convection ovens when what they really need is a toaster. We need something simple and inexpensive. It needs to be supported in an ASP model, automatic upgrades, doctors need to not have servers in their offices, not have to deal with IT issues. It’s hard enough to practice medicine and get your bills out and pay the staff. The health information exchange will make that a much more valuable tool for doctors.

HIStalk Interviews Rick Skinner, Director, Navigant Consulting

April 7, 2008 Interviews 3 Comments

Many people will remember Rick Skinner from his time as CIO at Providence Health System. One of his Navigant colleagues suggested that I interview him since he’s been in the industry a long time and adding, "I’ve yet to see him get stumped with any healthcare IT question that has come his way." Thanks to Rick for taking the time to chat.

Photo: HIMSS Analytics

Give me some background about yourself and your job with Navigant.

I am a career healthcare IT type. I’ve been in this business for 25 years. I’ve spent most of my career being a CIO at various places. The last one was the Providence Health System out on the West Coast,  a large, Catholic-sponsored system from LA up to Alaska. After having been there for quite some time, I decided to see what the other side of the world was like.

I went to work with Steve Heck, a good friend of mine who was, at the time, the president of First Consulting. He convinced me to come work for him and I did that for a couple of years. I ran First’s outsourcing business, which certainly taught me a lot about the bottom line and the balance between scope, costs, and service. 

What attracted me to Navigant is that it’s definitely not an IT services firm. It’s an organization that helps healthcare organizations achieve their business goals and value. IT is a tool, or a means, to do that. I was attracted to come to Navigant to be the second employee in a start-up healthcare IT practice, because of just that philosophy.

After my time as a CIO, after my time running an outsourcing business, I wanted to be part of an organization that really was business- and value-oriented, rather than one that was enamored of technology. I think that’s where I am.

Some folks will remember The Hunter Group, which Navigant acquired.

There are very few people left from The Hunter Group, but we do an increasing amount of work in performance improvement. We don’t do it in quite the same way as The Hunter Group used to do it. Our clients aren’t typically in as dire straits as those that engaged The Hunter Group. 

I think the parallel is still there, as the healthcare industry, in particular hospitals, are projected to lose ground financially over the next few years. Many of our clients — most, actually — are looking for ways to preserve and/or improve their financial performance. They want to use all the tools available to them from IT to finance, to supply chain, to you name it.

We have, as a client told me last week, a reputation for being direct, to the point, and providing actionable advice. In the last eight months, we’ve been seeing more and more clients interested in that kind of engagement.

What did you like or not like about consultants when you were a CIO making the decision to engage them?

The thing that I disliked the most about engaging consultants or professional services firms — not all went through this, but many did, and most of the larger ones did — is what I call the get-to-know you dance. It seemed to take forever to get from, "I’ve got a problem and I need some help. Can you help me?" to a signed engagement that put the right skills in the right proportions to work in my organization.

I see it today in some firms. It takes forever to do that. It wastes everybody’s time. So what I ended up doing was finding those few folks who I got to know, or who knew me, and we didn’t have to go through that at the front end of every engagement. That’s what I try and do as a consultant — to cut to the chase instead of a 70-page PowerPoint proposal. A simple three- or four-page letter of engagement that says precisely what our understanding is of the client’s needs and what we commit to doing.

How do you fight the battle of needing to generate new business vs. doing what the customer paid you to do and moving on? 

Consulting firms are in the business to make money and that requires new engagements. However, you’ve got to specify the business that you’re in. At Navigant, we have very purposefully stayed out of the outsourcing business. And so far, stayed out of the implementation business, because we did not want to be like everybody else, trying to swim upstream from doing a strategic plan, to doing a systems selection, to doing the implementation for the system, and then to try and run the system for the client.

On the other hand, with that kind of business philosophy, it means that we have to work a lot harder to have a lot more clients than we would if we had a $5 million outsourcing deal on the table all the time. So, it’s just what you’re interested in and the kinds of services that we want to deliver.

I know you are a fan of formal project management office and so am I. For folks who don’t know if they have one or not, which I still believe there are those who think they are doing project management but really aren’t, what would be the bullet list of things you would say, "If I find these things, I’ll know a hospital is doing project management correctly?"

It’s interesting you should ask that question because we just finished working with one client and are in the midst of working with a second client who are in exactly that boat. That is, having something called project management, but at least in my evaluation, they really aren’t doing project management; more managing it with a project management office. 

What I look for is, one, the whole work intake, front-end process. If that’s going on through multiple decision-makers at multiple levels, rather than eventually coming to a single committee or individual that can prioritize for the enterprise, then I don’t think they have effective — in this case, not project management, but commitment management.

Secondly, if I see an organization where the project managers, whatever they happen to be called, come from many different parts of the organization and they each manage projects in their own way, using their own methodology. I don’t see the sharing of expertise and the economies one can get from having full-time project managers, especially for larger projects, who have had the opportunity to develop the kind of skills necessary to manage projects that are tremendously different than the skills necessarily to run a day-to-day operation.

What are your thoughts about the goods and the bads you’ve seen when CIOs, for whatever reason, decide to start roping in little pockets of IT that were actually doing pretty well for their departments and bring them into the central IT fold?

I think it’s a balancing act. I learned most of my lessons from observing IT in other industries. If you look at what everybody always looks at, financial services, it went through this cycle from trying to corral everything that did IT into a corporate IT department and dictate standards, process, and so forth across a far-flung, diverse organization. That worked OK for a while, but pretty soon it was a constraint on the ability of the organization to innovate, change quickly, respond to market pressures, and so on.

And so, in that particular industry, some of that decision-making, some of those resources were apportioned back out into the business units. I think the same thing is going on in healthcare. Actually, has gone on. I think I could point to at least two different iterations of that cycle in my time in healthcare IT. But what I see going on currently is, for those organizations who haven’t consolidated infrastructure in particular, but those parts of IT that really benefit from economies of scale and from discipline management, I would call it — I see those organizations trying to do that and I think it’s a good thing.

On the other hand, I see — especially in larger organizations or organizations with diverse entities — discovering the need to empower their customers, their customers out in the hospitals, in the physician practice, or whatever, in order to get the kind of responsiveness and buy-in and value out of the technology.

The best organizations I see balance both. They’ve got a pretty centralized control, if you want to call it that, for infrastructure and even mainstream applications function, but then they’ve got IT people out with the customers whose job it is to make sure the customers needs are met, to be the account rep for IT. I see them all working fairly well in organizations.

Do healthcare organizations really want IT innovation and is that within the capability of the average hospital CIO?

I think healthcare organizations want some innovation, but you’ve got to remember that the operation of a hospital is, and probably should be, 99% routine. Nurses should be taking care of patients according to some protocol or process, not each one making it up as they go along. And so hospitals, in particular, are really oriented towards getting as good as they can at doing the same thing over and over again.

I understand variation in patients and so forth, but in order to change with the times, they’re required to — if not as quickly as in other industries — start to adjust. For instance, the whole move to ambulatory provision of services. If you’re not thinking about how you can provide it in a lower cost environment at a more convenient point for the patient, then somebody else is going to come in and do it for you.

So having said all of that, with respect to CIOs and innovation, I can tell you when I was a CIO and found myself answering a question with, "Well, its going to take three years to get this system in and then this other system. And then we have to write the interface." And to have given a 10-minute answer someone who says, "I’ve got a business problem. Can you help me?" the light bulb went on in my head that said, "Sure, most of this is very complicated. It’s very large scale. It takes time," etc, but if you don’t develop the little skunk works R & D lab that can respond pretty quickly — not to everything,  but at least to some of your customers’ requests — your customers are going to forget about you by the time you get to the big picture solution.

Why do you think it is that CIOs tend to worry a lot about their jobs?

First of all, it’s a high-risk job. There’s no question about it. Other than the chief operating officer, nobody in any organization has a broader scope of responsibilities. Whether it’s in terms of customers, or number of moving parts, complexity, whatever. So that’s the first point. Its just a tough, high-risk job.

Secondly, it’s a job that’s constantly changing, and in particular in healthcare, it’s gone from, "Just keep the billing system running. Do that plus put in these electronic health records" and now, "Oh, by the way, you’re spending too much even though we agreed to it back when you started the projects." So now you’ve also got to cut your costs. 

The environment and the job itself changes fairly significantly over a short period of time. I think that there are a lot of CIOs who didn’t manage properly expectations. In some cases, it wasn’t their fault. Or, had trouble meeting expectations, whether that was because of poor management or expectations were wrong to begin with.

And then third, the expectations themselves change midstream. I see this particularly with respect clinical systems implementations. What the organization thought they wanted when they approved the project or program and what they really want three years down the road are two completely different things.

Lots of money, energy, and resources are being spent on clinical systems and yet I’m not seeing many results or even hope of results. Hospitals are just glad they can call it done, move on, and not really reap any value.

Again, I look at other industries for lessons. I really liken what we’re seeing now with clinical systems to the ERP craze in the nineties in other industries. That everybody in manufacturing or retail thought, "Wow, if we could just get rid of all these systems we’ve got. Get one system that’s going to control everything from resources to manufacturing, to customer service, we could make a real difference in our operation. "

And you know the story of everybody that bought SAP and Oracle and spent a zillion dollars on consulting firms to help them put it in. Most of those organizations had a disappointing outcome. They spent hundreds of millions of dollars, and in many cases, more than they had expected.

But you look now, ten years later, most of those other industries and the organizations within them could not have made the productivity improvements — In some cases the customer service improvements –- without the IT infrastructure, in particular, the ERP systems that they struggled to put in in the nineties.

So I see a parallel there. I see that eventually IT support to the process of delivering healthcare is going to be a requirement. Otherwise, we’ll never be able to meet the cost and quality demands of the market. On the other hand, these projects are going to be more expensive, take longer, and be riskier than most organizations recognize. It’s only those organizations that do recognize it, manage it well along the way, and then insist on demonstrable results that I think are really going to get the benefit.

What percentage of hospitals would you say fall in that category of doing it right?

I don’t think very many. How many people have actually done it? In my opinion, I think there is maybe 10% who have slammed through this maze and emerged out the other end with a set of operational clinical systems that have been around for a while. So that’s a low number to start with. Then if you look at the number of those who can point to demonstrable business benefits, it’s an even lower number. That’s perhaps, not because the benefits aren’t there, but its because nobody bothered to implement a methodology to document them.

I’m not seeing the clinical system "haves" and "have nots" diverge very much, either in patient care or quality.

I don’t either, although, this is the perennial long-term/short-term kind of question. If you’re an organization that thinks that clinical systems will eventually be required and that you’re not going to be competitive without them; and you know that it’s a five- or ten-year cycle to get them all installed, figure out how to use them, change the way you work in order to take advantage of them, and so on; then can you afford not to start down that path, knowing that if you don’t, you can’t catch up because of the long lead time?

Or do you see the market as what you said — that there’s no real benefit to doing this, that nobody’s shown yet and so why should we go chasing off after this and why don’t we save our money and let it shake out? And then, if there does appear to be benefits — people are realizing it — we’ll be able to quickly get to where we need to be. 

I see the first philosophy of, "Gee, everybody else is doing it. If we don’t get started, we’re going be left behind, even though we don’t have a clue what it’s going to do for us in the short term."

So even though the benefits may not be what you expected, taking the leap of faith gets you in the game?

It does, but again, I think there’s some middle ground. And that’s my or our philosophy — that you should plan for benefits. You should measure those benefits and, to the extent you can, you should demand them.

My recommendation — although not many people back me up on, it to be honest — is that you ought to just set the benefits in business metrics. If you think that having electronic documentation is going to make your nurses more productive, then you ought to demand that nursing productivity goes up, as measured by a solution or whoever, over the next three years. Or, if you think that having electronic records in your employed physician practices is going to make patients want to come to your docs, then you ought to set a goal for increasing your market share for physician patients.

But people don’t tend to do that, at least in healthcare. It’s, "Well,if I can’t point to a real cause-and-effect relationship between putting in System A and getting Benefit B, then I’m not going to hold anybody accountable."

You work working with McKesson to establish a usability lab at Providence. Why don’t you think healthcare software vendors have done a better job in designing applications that you don’t have to give a nurse a 100-page manual and pull them off the floor for two days to even get them started?

I think people get overwhelmed by the complexity of healthcare and the variation in practice. I’ve had it happen to me. I’ll tell you a short story.

When I was a CIO at Providence in the early nineties, we we’re going to take a system that was in one hospital on one side of Portland, Oregon and replicate it in a second hospital on the other side of Portland, Oregon. Ten miles apart — separated by a river, granted — but still part of the same organization.

Well, in order to be able to have a "standard system," we put together a team of people who came up with a million dollars’ worth of customizations for that system in order for both hospitals to be able to use the same system. Like a fool, I paid for that million dollars’ worth of customizations and, five years later, I’ll bet you there was not more than ten cents’ worth of those customizations that were still in use.

And I tell that story, and I remember it vividly, because I think that’s the holy grail that we all go chasing down. There doesn’t seem to be any such thing as "good enough" in healthcare. It’s got to be perfect.

It seems like we’re also terrible at standardization. A nurse on the pediatric wing does it differently and a nurse in the ED doesn’t believe that’s vaguely sensible. Even within a department, you can’t get consensus. Is that ever going to end, or is that unique to healthcare?

I think it’s unique to healthcare in that we’ve tolerated it. I think what will make it end is kind of the same thing that made it end in other industries, where making a car went from doing it in your back yard the way you wanted to do it, to doing it in on an assembly line. It’s the pressure of the marketplace.

Granted, I’ve been saying this for 20 years and it hasn’t happened, so you can take it with a grain of salt, but I still believe that at some point, the marketplace is going to demand higher quality and lower cost than healthcare in the United States is currently delivering. When that happens, we won’t have any choice but to re-engineer the way we deliver care to make it more standard and to make it sufficient rather than perfect.

I see a little of that starting. When we get called in to do performance improvement kinds of engagements, it used to be that, "Well, we want to improve our performance, but don’t touch the clinical stuff. Tell us how to cut money in HR or supply chain or whatever, but don’t mess with the clinical stuff." And now, many organizations are saying, "You know what? We have to change the way we work or we’re never going to lower our costs or increase our quality to what the market demands."

Some of the medical tourism hospitals have taken a different approach, with ISO certification and a guest experience emphasis. Are there lessons to be learned from outside our borders?

I think there are. Certainly the insurance companies are learning those lessons. They’re learning that they can please their customers, the member, and still save money by utilizing hospitals that have standardized on process. Granted, now they’re operating on a lower cost area, which helps. But who have also focused on, to use the Starbucks term, "the customer experience."

In particular, hospitals are going to have to get that message, because with technology the way it is today and moving this way for the last 20 years, there’s not many things that you need a hospital for any more.

The HIMSS leadership survey indicated concern by IT leaders about declining reimbursement and resources. What are you seeing?

I think that the concern that the leadership study showed is right on. As I mentioned before, we get involved in performance improvement engagement, not just from an IT perspective. And everything we see, the clients we talk to, all think that we’ve hit the high-water mark in terms of reimbursement and things will get worse from here.

Hospital margins will go down. Certainly you can’t depend upon investment income at the moment. So that’s played out for the IT leader. Most CIOs are somewhere in the midst of the most expensive, most risky, and potentially most disruptive IT projects their organization has ever taken on — clinical systems. And in those engagements — not in all, but in many health systems — they tend to run too long and cost more than anybody thought they would to start with.

And then the piece that we really see people starting to pay attention to is the impact on operating budget. Conventional wisdom is that, whatever your operating budget is today, if you’re not running clinical systems, that’s going to go up and go up dramatically once you implement all these clinical systems. Many people believe, me included, that you can probably add a full percentage point to the size of the IT operating budget as a percentage of overall spending. That percentage point comes right off the hospital’s bottom line. So there’s an inherent conflict there for CIOs.

And if you’re a consultant, is that good or bad news for you?

I think for us at Navigant, it’s good news, because we’re not an IT consulting firm. We’re trying to help our clients mange their business and accomplish objectives.

So if I see, and I’ve had a couple of incidents of this recently, that a health system is saying on the one hand to us, "Look, we’ve really got to get a handle on expenses. Reimbursements are going down. We don’t think we can grow market share. Our only prayer is to reduce our costs so we can maintain a reasonable operating margin" and then, in the next breath they say, "Oh yeah, by the way, we’re going to spend $100 million on electronic health records, but we’re not sure what the benefit is. I guess that will raise our costs, won’t it?"

So there you’ve got a dilemma for the organization. Its not a dilemma for us, because we advise them, if that’s where they are, that they should either document the benefits that they’re going to get and make sure they get them or they shouldn’t be doing it.

Should the boat show atmosphere of the HIMSS conference change?

I’ve been going to HIMSS for a long time. I walk onto the show floor whatever the day is it opens. I walk from one end to the other and it’s like, "I’m done". I’m overwhelmed. I just don’t know where to start. Then I go back to something else.

Having said that, I think it’s that way in any industry. A vendor fair/show is all about visibility for the vendors’ products and I don’t think this is going to change. As vendor margins go down, they’ll put less money into it, if that happens. But I think its serves a purpose, so I don’t get too worried about it one way or another, to tell you the truth.

If you look ahead three to five years out, give me a handful of trends that you think we’ll see in healthcare IT.

First and foremost, simply a continuation of investment in, and trying to optimize to use of, clinical information systems. I know that’s pretty broad.

Secondly, I think we’re going to see a whole lot more emphasis to the outpatient or ambulatory environment. I’m not just talking about physician EMRs, but ambulatory surgery centers, all kinds of out-of-the-hospital provision of care that we’re just staring to see now.

Third, I think we’re going to experience a bunch of horror stories around simple operations. Actually, that’s an understatement. They’re not simple — complex operations. What I mean by that is, all of a sudden, we’re going from having an IT or customer environment that’s not exactly happy, but tolerant of six-hour downtimes, a day and a half outage, slow speed — to one that just can’t afford any of that. I don’t think that we’ve paid enough attention or invested enough in the infrastructure to keep up with it. So I think we’ll see a number of stories about bad things happening when you don’t have the operational efficiency to really run these mission-critical systems.

Last, I don’t know how to quantify this, but I think we’re going to see a whole sea change in leadership within healthcare IT on the vendor side and on the CIO side. We’ve had people like me around for the last 10 or 20 years in some capacity or another. Many of those people won’t be here five years from now. We’ve got a whole new set of leaders that are just now starting to fulfill their promise and that will be very exciting to watch.

You took me right into my next question which was, during that next 3-5 years, who do you think the most influential people will be in healthcare IT?

This isn’t really answering your question, but I think the most influential people in healthcare IT are going to be non-IT people. The business people. Whether it’s the CFO or the CEO — in the next few years, they are going to be engaged in IT things to a far greater extent than they ever were before, just because they have to be. 

IT is one of their biggest capital investments; it’s one of their most mission-critical functions. So all of a sudden, like it or not, they’ve got to pay attention to IT. And because they’re paying attention in a way they haven’t in the past, I think we’re going to see their influence a lot more than it has been. I think that’s good because, after all, they’re running the business.

If you look at the vendors and consulting services firms that are out there, what advice would you give them to be prepared for what you think is coming?

I think that the old school of vendors and consultants — the typical large, global, partnership-oriented consulting firm, on the one hand, and the large, complex, multiple-business unit healthcare IT vendor — both of those are at risk. We see it today with the emergence of Epic, Meditech, and, before it was purchased by IBM, Healthlink. Those with a simpler, more direct, more customer-focused business model, I think, are going to make some headway in the market.

Is there anything else that you want to talk about?

I suppose only one other point, and that is for those of us that have made a career out of healthcare IT — I’m struggling with this personally — how to help make this transition from IT being a separate black box, so to speak, disconnected from the organization in a lot of ways, managed in a different form that the rest of the organization, etc. — how to transition IT into the mainstream of healthcare, the same way that IT is in the mainstream of retail or financial services or what have you.

I believe that’s where its going. I believe that’s our philosophy at Navigant. But I also think that those of us who have been in this business for a while have some obligation to try and help it get there in the least bloody manner possible.

HIStalk Interviews Frank Clark PhD, VP/CIO, Medical University of South Carolina

March 24, 2008 Interviews 3 Comments


A reader heard that MUSC was implementing the Oacis clinical data repository/EMR along with McKesson’s Horizon clinical systems and asked me to find out more. CIO Frank Clark was quick to offer to let HIStalk’s readers know what’s going on in his organization. Some interesting projects, as it turns out, of which the Oacis implementation is certainly one. Thanks to Frank for letting me call him at home to chat.

Tell me a little bit about your organization and what kind of projects are happening at MUSC.

We are a freestanding academic medical center. Our mission is education, research, and patient care. We have about 800 physicians and another 300 residents and fellows. We operate three hospitals – two adult facilities, a children’s hospital, and a psychiatric hospital, for a total of about 850 beds.

Of course, we have the big outpatient clinics where the College of Medicine faculty hone their clinical skills and stay current. It’s probably a $1.6 billion operation enterprise-wide.

Tell me about your IT department.

IT has 250 FTEs. Most of those are centralized within the Office of the CIO. The combined clinical and academic operating budget is probably $35 million. The capital budget ebbs and flows, depending on the projects. We’re in the throes of a big clinical implementation of advanced point-of-care clinical systems within the hospitals, about two years into that and another year to go.

That’s all McKesson, right?

Pretty much. We’ve been a best-of-breed organization. When I came in about five years ago, we had a lot of stuff in place. We couldn’t rip it out and start things over from ground zero. We’ve got systems like Cerner lab, IDX radiology, and Agfa PACS. 

We made a decision for McKesson as a preferred vendor. In fact, on Wednesday, we signed a large revenue cycle contract with McKesson . They have a new product, a new ADT, registration, and patient accounting product. We’re implementing their document imaging technology in the business office and also in medical records.

You have a PhD in mathematics. That’s got to be a difficult academic accomplishment. Do you find that’s a good fit for what you’re doing today?

I think I do. I’ve always been involved in computing, very early on as a user and more recently as a provider of services. I’ve always used computing in my academic career and in teaching. My PhD was in applied mathematics, so it had a nice fit for computational analysis.

I started out in an academic career and sort of drifted over into providing IT services. Then the CIO role become an established C-level position, so I moved into that.

How do you run things with regard to IT governance?

Governance is essential to good IT service and a good IT environment. It was one of the first things I set about to establish when I came in here. With any organization, the first thing I’d put in place is a well-defined IT governance structure.

We have various committees that represent different factions of the organization — the clinical, the education, the research, the infrastructure — and we structure that and have it well-documented and then get buy-in from the leadership. I think the key to that is constituting those committees and councils with the right people, people who have an interest and a passion and have the time and who are going to participate in the settings. That really forces stakeholders to take ownership and responsibility. It doesn’t put all the responsibility on IT.

Often issues will come up and people will automatically say, “That’s an IT issue”. Because it has some computing faction to it, people just want to default to IT. The governance really forces users to look at workflow and process and management issues. More often than not, it’s not a technology issue. It comes down to poor workflow, poor process, poor management. So it really pushes back. It doesn’t let people dump on IT. It really forces people to take ownership. It brings people’s common interest and needs together, and looks at technologies.

I think it avoids duplication and re-duplication of functionality because it forces people to look at the inventory of stuff that you already have. Often, people just automatically say, “We need to go out and get a system for this.” More often than not, that functionality exists, so if it meets 85 or 90% of our needs, then we’re not going to go out and buy another system.

What would you say your most important or most pressing projects are right now?

These clinicals that I mentioned, which are nursing documentation, barcode administration, meds administration, and CPOE. We have a lot of research systems that are going on. We’re trying to really streamline and organize the research process. We do about $200 million in funded research and we want to try to scale that to $300 million over the next four or five years. So we’re working with those provosts of research, reorganizing that whole research support sector. Once they’ve identified their strategic imperatives, goals, and objectives, we will look at how we can use technology to assist them.

Going back to the governance issue, it forces people to not just look for technology solutions, but to identify what their strategic imperatives are and their goals and objectives. Then, from an IT perspective, we try to align our initiatives in support of those goals and objectives so we don’t get the cart before the horse. Often this happens — people tend to throw technology at it. It’s been my experience that if you’ve got a bad process and you automate it, you just it do it bad faster. I think that governance helps people to realize that technology is not the panacea or the magic elixir.

So if you’re with McKesson that means you’ve got Meds Manager, HEO, AdminRX, and HED, probably. Tell me where you are with those and what you’ve learned along the way.

Meds Manager is fully deployed. Expert Documentation, we’ve got half of those beds that I mentioned a moment ago. CPOE, we started the initial roll-out in April. AdminRX is probably, like Expert Documentation, about half rolled out.

I guess the vendor is not always right. They still have problems. You would think that as many implementations that they’ve had with these products that most of the issues have been worked out, but I guess that’s not always the case. The people on the ground, the McKesson people who are here on site, are often not the most knowledgeable or the most skilled.

What I’ve learned is that you try to identify within the organization, say McKesson — and it’s huge — it’s a difficult challenge to find the right person to get the right answer, rather than trying to work through the people who are here. I know McKesson doesn’t like that. They like for you to work through the team and the protocol, but we don’t do that.

We just had a team go to McKesson’s clinical brain trust outside Boulder. We send a team out there twice a year. They talk with the right people. So you establish names and contacts. These are the people that we go to when we have issues. That’s been my experience and it’s proven to be successful. That’s just the way I work. McKesson can like it or lump it.

If they’re not performing, we just don’t pay them. Of course, we’re a big McKesson client, so it doesn’t take long for the AR to build up. When it gets to be a million or two million dollars, they pick up the telephone and they call you. I say, “Well, look, when you start performing, I’ll start paying.” I think that’s one of the advantages of the single vendor. You’re doing so much business with them that you really show up on their radar screen. If you stop that revenue stream, it doesn’t take long to get their attention.

You’re hitting some big change management projects that involve a lot of clinical users. What kind of structure are you putting in place, on the informatics side, to get this done?

Going back to the governance model, big projects like this call for an overall steering committee. They’re at a high level, the 50,000 foot steering committee that makes the very big, broad decisions. For each of those products that you mentioned, there’s an implementation oversight committee or council that has people at the operational level. They look at workflow and change management. How is Expert Documentation going to change the way nurses deliver care?

We spent a lot of time before the implementation in thinking through that and talking with other organizations like Vanderbilt and Duke, organizations in our state — Spartanburg Regional and Anderson. These are community-based McKesson clients. Talking with counterparts — “How has that changed the way you deliver care and the workflow?” We’ve really paid a lot of attention on the front end to those kinds of issues.

What are you looking at in terms of success metrics?

Being an academic medical center, we have access to people who are very helpful, skillful, knowledgeable, and experienced in this area. A lady who is in the College of Health Professionals — we bought part of her time. She has worked with the nurses to identify metrics. She did a baseline on these metrics. Like how long does it take to do assessments and how long does it take to get vital signs into the chart?’ Now she’s gone back, once we got a sample size large enough, and done the post-measures.

We’ll do the same thing on trying to measure the reduction of adverse drug incidents. On CPOE, we’ll look at the reduction in lab orders like Chem7’s and portable x-rays. So, we have some well-established metrics that we are measuring. We will report those out. The same thing is true in the perioperatives, OR and anesthesiology. Measuring throughput. We’ve been able to move more people through the OR. Also, the anesthesia coding and charting. We’ve got a project to measure that as well.

How are you going to implement the Oacis repository?

Oacis has been in here since 1994 or 95 and its predecessor before that. Don Simborg started that company many, many years ago. So they’d been in here a very long time. We have a number of very knowledgeable Oacis users as well as IT people. We know Oacis probably as well as anybody, collecting data and the ODR, the clinical data repository, since ’95. That’s thirteen years of clinical data.

It’s rather elegant. The commitment I made when we signed the McKesson contract was that if the McKesson Physician Portal, which is their physician viewer, was not superior to the existing product, we wouldn’t change it out. So about a year ago, we began to look at installing the portal and we got our physicians to look at it. They said, “No, this won’t work.” It won’t work in an academic setting because most of the work is done by the house staff. A resident might have to cover 80 patients, so its not like a community-based physician who comes into the hospital and has one or two patients. The portal is great for them. I had installed the portal in a community-based setting and it worked well.

I thought it had matured and evolved over time, but when we looked at it a year ago, in my judgment, it hadn’t evolved much. So we came to the conclusion that it would not work. It just so happened that Emergis Oacis had a new release, a Java-based release of the viewer and the repository, so we stuck with it. We’ve rolled it out and it will be our enterprise-wide clinical viewer. We import Expert Documentation information into it. Physicians can launch CPOE out of it. So, it’s kind of a single sign-on type environment.

So you are responsible for doing the back-end integration with the Horizon database back into Oacis?

Yes. We’ve worked with Vanderbilt. Vanderbilt did it. It’s not a strategy that’s strikingly different from what is being done at Vanderbilt and Duke, which are both McKesson clients. In fact, Vanderbilt developed the McKesson CPOE. It was called WizOrders and McKesson licensed it. Vanderbilt has installed most of these products that you alluded to a moment ago — Meds Manager, Expert Documentation, barcode administration. They have a homegrown product that’s similar to Oacis called StarCharts/Star Panel. It’s something they developed there. It’s very similar. So they had cracked that nut as far as importing Horizon stuff into it, so we worked closely with them and emulated what they’ve done.

Do you think this will get people’s attention to look at Oacis as an alternative?

Yes, I think it will. In fact, my counterpart in Greenville, Doran Dunaway of Greenville Hospital System, which is one of the largest hospital systems in the upper state — he’s very keen on it. I don’t know whether he’s signed the contract. He looked at the Vanderbilt StarChart/StarPanel, which is being marketed. He looked at a number of different products. He came to the conclusion that it was as good as anything around.

Who’s commercializing the Vanderbilt product?

It’s called ICA, Informatics Corporation of America.

That’s right, I know those fellows.

They’ve got an install in Bassett Health in Cooperstown and it’s being used over in Memphis and it’s a nice product. We looked at it long and hard, but when our caregivers looked at it they said, “This is good, but what we have is equally good, so why would we change it out? If it was vastly superior then we could do it, but what we have is good.”

You’re right, I think the Oacis product is one of those jewels in the rough. It’s widely used in Canada and Australia. Texas Southwestern Medical Center uses it. A lot of people jettisoned it in the nineties –- Atlantic Health, University of Chicago pushed it out. I guess we were on the threshold of doing it until we looked at the McKesson portal and it wasn’t a good fit for academic medicine in our judgment.

As a matter of fact, we signed the contact with Emergis to put in their data warehouse. That’s a Sybase product. We’re in the process of bringing it up. It will be a true research warehouse. In the past, we’d gone against our transaction systems to extract data, but we’ll pull stuff out of our production systems and put it into this warehouse. The schema is optimized for research.

You’ll be able to take your data that’s historic, since you’ve got all that longitudinal data, and move that over to the warehouse?

Absolutely. We’ll pull out all thirteen years, extract it out, put it into Star schema, and optimize it for research.

That’s interesting. What kind of projects do you think will come out of that?

Any of the principal investigators of clinical trials, research … as I said, we do about $200 million now and we hope that the warehouse is going enable us to grow that in scale. Most of it is NIH-funded research, but we do a lot of clinical trials. I think it will make it easier for the researchers to get access to patient data and financial data. We’ll use it for outcomes, accreditation reporting, and CMS.

It will be the gold standard, the system of record. We hope that we can terminate the existence of a lot of these pop-up databases. We’ve got a myriad of them and hopefully we can consolidate it all into the warehouse so we’ll know that any information that leaves this organization came out of that repository, that warehouse, and hopefully it’s accurate and consistent.

Other than Oacis, are there any other applications or vendors that you’ve run across that you think, “Wow, the average hospital has probably never heard of this product or this company, but it’s really cool and it’s doing a lot of good for us.”

There’s a product called Novo out of Georgia.

Novo Innovations.

Yes, Robert Connely. I think Robert is a smart guy. He used to be with McKesson. I think that product seems to be on a very strong trajectory. They seem to be really winning business.

Any kind of tools or anything you’ve found made a big difference or fixed a major problem?

No. I think it’s difficult for these niche players to break in because of the really big players like McKesson, Cerner, Eclipsys, Epic, and GE-IDX. I  think more and more organizations are going to move towards preferred vendors because most of these big players now have a fairly robust suite of products, both clinical and financial.

It’s going be difficult for these small players to continue to exist in the major product areas. In the small niche areas, they’ll continue, but for basic HIS kind of stuff, I think its going to be difficult and for standalone labs systems or standalone PACS. We see the integration of radiology and PACS. All these big players have that product now, so I think it’s going to be difficult for some of the small players to continue.

The HIMSS leadership survey seemed to indicate pessimism about funding, capital, and IT resources. Are you seeing any effects?

The housing market is in a rut, but people will continue to get sick and continue to need care. All the predictions show that by 2017 we’re going be spending $4.3 trillion. I don’t see that dissipating.

We seem to be doing OK. Our margins are very respectable. As I said, we just opened the new adult hospital. So I don’t see that healthcare sector being impacted by this so-called bad economy or recession. I think the demand for healthcare will continue to grow. People will continue to get sick and need the service. I don’t see the pessimism, unless it’s a spill-over from the general mood of the country.

Do any vendors stand out as either very well positioned or struggling?

I think Epic is in a good position because of their work with Kaiser. As you know, with the relaxation of Stark, hospital systems are going to do more with community-based physicians. Those organizations that have a suite of products which allow them to do that, I think, are going to be in an attractive position.

All the big players are scrambling to integrate the outpatient and the inpatient. I think that world is going to change. In the community-based setting, it’s always been bifurcated, but the model is going to be more like us. More like the academic medical centers, where you have a closed staff model; and more like what we’re trying to do with Oacis and the viewer is to have an enterprise-wide clinical environment, where a caregiver can access a patient’s information and it’s transparent to them as to where this information was gleaned, whether it was captured in the clinic or whether it was captured in an acute care facility.

With the relaxation of those laws, I think hospitals are going to be able to woo physicians and say, “OK, if you will bond with us, if you will only admit to us through this ASP model, we’ll provide an electronic medical record. We’ll house your data. It will be your data." I think that’s an issue that will have to be resolved — who owns this data. Hospitals will be able to say, “We’ll host this and you won’t have to outlay any cost”. So it think those vendors that are positioned to do that, and I think Epic is because if all that work with Kaiser, I think they’re going to be in an enviable position. I know McKesson is scrambling to try to close that gap. That’s true of Cerner, GE IDX, and others.

Anything else important going on in your world that we can talk about?

We are just trying to finish out this clinical implementation and start the revenue cycle because that’s where the money is. We’re trying to capture more of the money and collect more of the money. It all goes to the bottom line and provide the margins to fund other kinds of things.

One of the big buzzwords was PHR. A lot of the big players are moving into that, players like Microsoft and Google. McKesson has RelayHealth and, I’m sure Cerner and others. Medem, I don’t know if you’re familiar with them …

Yes. Ed Fotsch.

They look very attractive and I think they’re well positioned to do that. My understanding they have partnerships with Google and Microsoft. I think they are going to begin to gain a lot of this market share. That will be a big initiative to us — driven by marketing — trying to have more of what people want and that is online services: read the bill, pay the bill, do some pre-admission/pre-registration scheduling, online consultation with physicians.

We don’t have a lot of referring physicians, but we do have some physicians who have a special case, a transplant or whatever, and they need to move their patient into the center here. How do we push information or pull information back to those referring physicians? Also, as consumers take more control of their healthcare, they will want these health records stored somewhere. So I think that’s going to be a big push over the next few years.

HIStalk Interviews Girish Kumar Navani, President of eClinicalWorks

March 17, 2008 Interviews 25 Comments


interviewed Girish Kumar Navani of eClinicalWorks nearly two years ago and wanted to find out what’s changed since (you might want to read that interview first for perspective). You’ll notice from his industry assessment and predictions that he’s an extremely sharp businessman and modest leader. What the company is doing would be big news in any industry, but shaking up healthcare IT like eClinicalWorks has done is unheard of (well, maybe other than Epic and Meditech, which he happily acknowledges).

His major point is that smart businesspeople can run a highly profitable company while keeping customers happy and focusing on the long term instead of next quarter’s profits. When he says the company will be doing $500 million a year in ten years, I don’t even question it.

Don’t skip reading just because you aren’t involved in PM/EMR systems. I’m not either, but there’s plenty to learn no matter where in healthcare IT you work.

Thanks for talking to me again after our interview two years ago.

It’s great to read your blog. I promised you at that time that I was going to start reading your blog and I did. You’ve grown in popularity faster than anything that I know of. People are reading your blog everywhere. I had a large customer talk to me last night and he says, “So, you’re talking to HIStalk tomorrow,” and I said, “How do you know that?”

I think you should take tremendous pride. I can’t name the customer yet, but this is a group that has got hundreds of hospitals in the country and they read your blog regularly. They think it keeps them up to date on health IT and they find value in it. I do too. It’s great.

What did you think of HIMSS?

I have general opinions about conferences. I think we attend them because if you don’t, people spread rumors otherwise. I personally don’t care too much about conferences. Conferences used to be great to go and get customers that you wanted talk to. Now conferences are becoming more for networking. But with the advent of the Internet, you really don’t have to be in a location to network.

I think HIMSS was busy. I think a lot of hospital guys liked it because they felt it was worthwhile for them to be there and meet either with their existing customers or potential customers. I had dinner with Wal-Mart one evening and a few others, so I found the conference useful. It’s changing for sure and not just HIMSS. Almost every conference is changing with more and more people gathering information online versus waiting for a show.

I agree, but the attendance numbers keep going up. Did it seem bigger to you than last year?

It was a great location. Orlando always attracts people. Location has a direct correlation to how people get attracted to conferences. I think Orlando helps tremendously because you have families coming there and it’s a great time of the year. I don’t know if I noticed it was bigger, but Orlando is such a big convention center that sometimes you get lost. I like the location a lot.

eClinicalWorks has really taken off since we talked two years ago. Tell me what’s changed.

We have about 625 employees now and Westborough, Massachusetts continues to be a strong place. At our headquarters, we have over 425 people. We opened an office last year in New York City for the New York project. That’s going well and we have about 30 people there. We have an office in Atlanta and we have support and sales people that work out of their homes.

Revenues last year — we did $60 million and actually pushed a contract out into this year because I didn’t want to sign that $3 million contract in December. That’s the difference between being a private company vs. a public company. Imagine my customer saying, “I’ll sign by December 31 if you can give me something” and their surprise when I said, “I really don’t mind, actually, if we sign it on the 6th of January.” $60 million was our target and we did that, so I was content.

Our profitability continues to be good, with net profit margins around 30 to 32%. We have zero debt, zero liabilities, zero investors. All our payables our current and we pay them off in 15 days. In a way, the business has grown very big, but I still run it like a cash business. That makes it really easy to run the company. We don’t play the games of writing off R&D to depreciate just to make the books look good. We write it off and pay it off as we can.

The financial strength of the company, or at least the balance sheet and income statement, has become a bigger asset now over three years ago. Three years ago, we were about an $18 million company. Then we went to $25 or $26 million, then $40 million. Those were good years where we could show growth, but you always have to answer to customers and your $18 million is still a bit smaller than maybe you’d like for a large customer base. At $60 million, and $75 million minimum this year, we feel we’re able to handle and convince even larger customers about the strength of our company and our balance sheet.

Customer growth has been phenomenal. We have not slowed down in that regard and I don’t want to, either. [laughs] We are managing the growth, but as I have said to you before, we’re managing it by not slowing down. Very, very good numbers on training and implementation and support, which still makes up a very high part of our company. Over 68% of our expenses are from those departments and rightfully so. Rather than spending on sales, I spend in the areas that matter the most, which is to take care of our customers. That strategy has worked out well for us in both the short and the long term.

They key now is that Starbucks experience, as they say. It doesn’t matter how many stores they open, it’s the cup of coffee for every small customer that walks in. To grow very large, we’ll need to do all the little things right. To grow big, we need to grow small or stay small. That holds true not just in customer size, but in how we take care of every customer who puts their trust in us.

Did you ever think it would get this big?

[Laughs] I think it’s a journey. We don’t want to look back because if we did, most of us would be surprised that we’ve come this far. We were surprised in a positive way, but at the same time, none of us underestimates that we could have done this.

It’s both the feeling of being very confident that it could be done, but at the same time, gratitude and satisfaction and all the things that go with achieving success in the old fashioned way – organic growth, no acquisition growth, building the product that you sell, taking care of your own customers and not trying to grow them from another customer base. There’s a lot of pride you get from doing those things. From that perspective, there’s a lot of pride within the company and all the individuals that have been here and that continue to do work every day. That’s very, very obvious. I think we’ll say the same thing ten years down the road when we’re a $500 million company.

You’ve said that your supply chain background has made a difference.

I would say so. If you look at supply chain in retail, the success of that business may be because of how well it runs from a sale to replenishment and distribution. I think in the world of the Internet, the same thing applies, because pricing pressure is there and will always be there with the increased availability of price.

We know we’ve caused that. eClinicalWorks has been a great instrument for making price differentiation in ambulatory. You can actually dictate that if eClinicalWorks is at that price point, I can’t pay five times that amount, nor three times. Price will continue to be a pressure in terms of ambulatory solutions and a company that is going to do well and still have high profitability, which means you can take that and invest it in your future growth years, you need a company that is very well run, both in terms of process and also an organization in teams.

I believe that the background of looking at in that way, as an ongoing continuous improvement cycle, is one big reason why eCW continues to do as well as we do. We take a small one-doctor, two-doctor, or five-doctor group and make them go through a process. Then, we take a big project like New York or Massachusetts, where we are 185, and we break that down into a supply chain. Or if I go take a 120-doctor group, I break them down into a process and we implement them as well. So, there is definitely the learning that we’ve had in following a protocol of handoffs that are seamless, to go from sales to project management to training to support to getting feedback and replenishing your entire core process, is a big differentiation, no question.

We aren’t hierarchical at all. We are more laid out to be like an assembly line in how we work. We work in teams, we have team leaders. At any one time, I see that as a solar system. I see the team leader being the nucleus of that solar system, around which the team members revolve,  but nowhere would you ever find a team leader trying to say “I’m better than the people underneath me.” He or she coordinates a lot of what happens, but at the end of the day, we see ourselves as very different and that’s one of the reasons we’re so successful.

What’s the scope of the New York project?

For the first eight years of eCW, we always focused on speed. Make it faster. Take away clicks here, make it more intuitive, make the learning cycle shorter for your end users. We did that very well with our product.

It’s not that we don’t focus on that aspect of our company or that we don’t need to still improve, but what New York taught eCW, by working with the Department of Health, the focus was not about just speed and adoption, it was around quality improvement.

I recall an incident sitting with the assistant commissioner of New York City at a dinner table, with five eCW folks and him and his team, literally right after the contract was signed and we were going to plan out the deployment. The commissioner asked us a question: "Tell me what you would consider to be the success and failure of this project?" I said, "I think if physicians don’t adopt the EMR and use it every day, I’d classify that as a failure." We went around the table and everyone said the same thing in different words.

He said, "I disagree. If at the end of this project we cannot demonstrate that we improved the quality of care, i.e. we did not improve hypertension or control blood pressure and get diabetes under control and look a those 10 different values that the city measures themselves on, we will have a failure."

That statement was an eye-opener to me and to many in that room. The vision of that project was not just get it implemented. It was, "After the implementation, prove to me it’s going to improve quality." They worked with us for a year because it was part of our contract with the city. We’ve been doing joint development with them. Whatever we develop we will make part of our commercial release and every customer will get it.

Their leadership in understanding quality measures, decision support, and how that whole thing works and making that part of our product cycle will be part of our version 8.0, which will be launched in the next four weeks. It’s going to be revolutionary in its concept and adoption. In a year, I’ll want to see what the measures of improvement were.

We’re looking at it differently and maybe that’s the right way to look at it. New York is not just about implementing an EHR, it’s about demonstrating that you can improve quality of care. Then, it’s all about expanding that to connect into the local RHIOs. There’s another level and degree of integration that’s big in the city – connecting with their school health program, with their immunization registries. You’re now talking about a truly digital healthcare system.

The Piper Jaffray stock analyst said he’d heard about implementation backlogs and support problems.

Investment analysts have agendas that sometimes go beyond the obvious. I spoke to him at the show and disagreed with him because he’d never bothered to speak to any eCW employee or customer, so it’s very coincidental that something is written without due diligence.

The facts are the facts. We took Massachusetts and finished in 13 months when we were asked to finish it in 18 months. We started New York and are finishing that at least on schedule. In January of 2007, we took 14 to 16 weeks to implement. We ideally wanted it to be 12 weeks because that’s the template we like. Today we are at 12 weeks and we can actually do it in eight weeks if the customer really wants to do it and they have some sense of urgency to get their hardware in place.

In reality, we are in real-time mode. You sign a contract with us today, we start your implementation 24 hours from today. We follow a template and we implement it. We expanded our support system to 24 hours the middle of last year and it was so well received that everyone in our user group commented about it. We introduced real-time chat at the beginning of Q4, which was very well received.

I think there was a clarification posted by the analyst afterward, where he clarified that after speaking to me and some of the sources, that he felt that the information that he had reported was not complete. I think we’ll leave it that — there’s no validity to that statement.

Last time, you were amused that customers always wanted a server under their desk instead of an ASP. Has that changed?

It’s changing, but it’s not changing overnight. What I’m finding that centralized hosting is becoming more common. Maybe we’ll host it, maybe a data center, maybe a hospital. So the hosting is becoming more acceptable.

Software as a service, which we’ve been doing since 2003, continues to grow for eCW and is growing rather well. I still think, though, at the end of the day, physicians still believe that the data they have, as long as it’s the same system, they will be more comfortable with it. We have other solutions that we offer, like remote disaster recovery, so we’ll actually back up their data in their data centers in case they every need to use that service. Both the client-server model and the SaaS model are growing well. On the other hand, things like patient portals seem to be mostly hosted by eCW. Rarely will a customer ask to host a portal themselves.

What’s the overall status of EMR adoption after Stark relaxation?

We are still seeing growth in a big way. I’ll give you some numbers. We did $60 million last year. We did $11 million in the month of January. February was not slow either. We’re seeing real growth in terms of numbers, in terms of physicians, and implementations are good.

I think you’re seeing a slightly different curve. Youv’e got the early adopters and are moving into the mass adoption market, with more questions and more due diligence. That’s good for the market. It won’t get adopted overnight. Nobody expected it. It’s moving along at a steady clip.

Some vendors are getting more business than the others. There seems to be the delineation between the ones that can implement and have very satisfied customers and the gap continues to widen. We at eCW think that Q1 is going to be significantly higher than Q1 of 2007. The same held true for us in Q1 2007 over Q1 2006.

When Stark laws were relaxed, there was definitely the apprehension that it might help the inpatient vendors more than the outpatient vendors. As we see our traction, it’s becoming increasingly obvious that CIOs of health systems and hospitals do delineate legacy inpatient vendors and modern, web-based systems for Stark relaxation for outpatient. You have seen a continuous momentum about leading hospitals following that trend. You will see us make some significant announcements in the next quarter in the same regard.

How much of your business is replacement business?

We continue to see a very high replacement for practice management for our unified product. One product, one client, one web-based system, one application server. We’re seeing a very significant demand for private physician groups wanting to go with unified products. There seems to be a tremendous replacement of legacy PM systems in that market, so that trend is almost universal. It would be very rare for a private physician group to buy just one and not both pieces.

On the other hand, when you’re going to the hospital-employed group, interfacing to existing systems like IDX or Meditech or Siemens and Cerner like we do, replacement is not common in terms of practice management. They tend to keep the PM system or the system that they’ve used in the past for patient registration and patient accounting.

On the outpatient side, there is a significant demand for the unified product. For EMR, we saw when Amicore went away, PenChart, we got some customers out of it. We actually have a full-blown program that can migrate Amicore into eClinicalWorks. We’ve had some traction in doing conversions of Amicore customers or PenChart into eCW, but in terms of EMR to EMR, it’s not very common still. I think we’ll hear about it here and there and see some opportunities, but it’s not as rampant. There’s still momentum in the market for new implementations.

Will ad-supported free systems have an impact?

It doesn’t sit by my business model to try and do that type of solution for building an advertisement-based EMR. It doesn’t sit by my principles of how we run a business. At the end of the day, you need to be able to have predictable growth revenue so you can staff up accordingly. It can’t be seasonal. You need to be able to predict your SMS and your ASP revenues and continue to grow the company.

It’s tough to grow it the way the advertisement model might dictate. Somebody might question me since Google does it. I think it would be tough, especially considering that you have a product of the caliber of eCW available at the price point it is. You’re not making a significant investment, especially if you’re using an ASP. The pain you’re avoiding is software costs, and at eCW, an EMR for 250 bucks a month or EMR plus PM for 400 bucks a month really doesn’t make too much of a difference whether you do advertisement revenues or you don’t. I don’t believe in the model.

You mentioned Google. What did you think of the Google and Microsoft PHR announcements at HIMSS?

There is definitely a big buzz in the industry that something needs to be done regarding personal health records and employer health records. We definitely have a perspective. As it’s been written, although we haven’t written a press release, Wal-Mart has selected eClinicalWorks. We will be integrating with employer-based records there as well. In the coming months and years, PHRs will have a purpose. What mode they take or which company operates them is anybody’s guess right now.

You’ve got EMR companies that are doing patient portals and there’s a value proposition there for the EMR companies and the physician to do it and their patients can have access to their personal health records. Then, the portal can deposit that health record in any PHR system of their liking to share it with the proper entity. I think there will be intermediaries that will help – it could be Google it could be Microsoft,  it could be Dossia, it could be any of the ones that will eventually interoperate around a personal health records system.

But I also think that the big traction within that market, the patient portals, will continue to accelerate. Physicians want to have a way to communicate with their patients and that value proposition is strong. We’re seeing that with our patient portal product. I see the patient portal of eClinicalWorks plugging into not just one PHR, but multiple PHRs.

When we talked two years ago, you said the end of the line was near for the old-school EMRs. Were you right?

I think definitely so. You’re seeing that. The legacy ones have hardly any market traction. Some of them have tried to morph themselves into other companies. Many of them are essentially figureheads with no real market traction.

I predict that, over the next year, you will find desperation among public companies in ambulatory EHRs whose stock value is not doing well, in terms of pricing, giving way anything and everything. That’s going to be fascinating, because as I’ve always mentioned to you, we’re here for the long term. I see eCW and its current management being around for at least 10-15 years before we hand it over to the next generation.

I see this market being tremendously appealing. You’ll see even successful companies desperate over the next four quarters. Will it weaken their companies in the long run? I think so. We’ll keep investing what we need to in R&D this year because we have the cash, we have the profitability, and we don’t have Wall Street expectations to meet. We’ll keep plowing money back into where we need to, which is to develop newer products. 

Those we compete with will struggle in terms of being able to make that commitment because earnings per share is now at a premium. You’re trying to focus on just one single fact, which is shareholders instead of customers. We’ll see that and I think we’ll both keep watching that trend over the next 12 months.

Last time, I named some companies and asked you to give me some adjectives. Can we do that again?

[Laughs] I don’t mind doing it, but it was tough last time.

Let’s start with Allscripts.

Desperate. Company that has grown via acquisitions struggling to develop new products.



Even with iMedica?

No. Misys, non-factor.


The only business they’ll have is where their practice management is existing. Open market traction, open market competition, usually won’t compete. Non-competitive. We don’t see Sage as much at all. Very, very small places.


Diminishing. Less of a factor in 2008 than they were in 2006.


With the acquisition by McKesson, they’ll show up in the McKesson accounts. How well they’ll do is still open. You’ll never see them in the non-McKesson accounts.


Billing service. No competing EMR.


Complicated, same as last time.

Epic. You admired them last time.

Respect twice. As I said to you before, if over the next 15 years we can do what they did, we’ll be thrilled.

Epic may be the only company that’s been a game-changer in an established market. eClinicalWorks would be right up there in that category. What do you think the lessons are for ambulatory or inpatient vendors?

I’ll give you two parts to the answer. It is increasingly known that to be a big player in healthcare, you have to be a long-term player. There are two companies that have proven that – Meditech and Epic. Both successful and with a large customer base. They proved that you need to be around for 20 to 30 years and be able to make decisions that are in the long-term interests of the customer vs. the short-term interests of Wall Street.

In the capitalist market on the Street, it’s ruthless for software companies. You’re running every 12 weeks trying to close the quarter. I’ve lived on that side. I used to be at Fidelity Investments and I started a subsidiary of a publicly traded software company. I learned my lessons as to what we should and what we shouldn’t do. It’s increasingly obvious that you need long-term relationships in healthcare. You also need to be able to plan a strategy of development which is years out.

I’ll give you an example about the patient portal. When people thought it was not going to be a big part of any our product roadmap, we kept investing in it, we kept developing, we kept putting money into it. While people were trying to find a partner or a third party to bolt on to sell just so they could be competitive, we kept innovating and building our own product line. Today, the tight integration that exists between the portal and the eCW EMR has become one of our big strengths. It took us two years, maybe even three plus years, to get there.

I don’t know if you would have made that decision in a publicly traded company. You would try to partner just to get some deals done. Way down the road, you might never realize that decision was made with such short-term goals and focus that you essentially sacrificed your long-term sustenance because of it.

I think the same thing holds true for some other products we will announce in this year alone. Last year for eCW, we built a foundation for our services side, where we have 24-hour support, more trainers, more project managers, more people on the interface teams so we could do everything we needed to in terms of services. 2008, for me, is the year for product innovation.

We’ll start off with Version 8 right off the bat in the next four to six weeks. We’ll come out with the next version of the portal and you’ll see eCW on smartphones and voice integration before the year is out. I don’t see too much revenue coming out of those products this year, but we still continue to invest in them because we think that’s the right strategy for us as a company because I’m looking 15 years out.

Ask the CEO of a public company if he or she is thinking 15 years out today. The answer is no. You’ve got that dilemma and I think it’s increasingly true in healthcare that the product is used for such a long period of time that product innovation is fundamental to success. So is growing a thriving company, investor-free, debt-free so you don’t have to make decisions with external entities involved.

I might go so far as to say that as a company, I have the luxury of never having to go to an external board meeting. I never get questions from people outside on why eCW made this decision vs. making that decision. The board is the five principals in the business and that’s it. We discuss and challenge each other on what we need to do. It’s a whole different paradigm to running a business when you have that much flexibility and agility.

It is increasingly difficult for publicly traded companies to meet expectations and still continue to invest in their future in terms of product innovation. It will be one of the reasons you’ll find that in our industry, Epic and Meditech and eCW will do better over the next five to 10 years than others.

And then there’s a perspective as a company CEO. I’ll use a sports analogy. I love sports. If I told you that a 21-year-old golfer showed up at Augusta National in 1997 and was asked what his odds were for winning that Master’s and he said, "I’ll do my best and we’ll see at the end of four days." And he goes on to winning it by 12 strokes and scores 18 under par. I don’t think you and I would still remember him for one bit unless the guy actually proved that he could win 13 other majors after that and 65 other tournaments. You remember Tiger Woods today for who he is. He’s been consistently able to do what he did in 1997.

That’s the spirit of a privately traded company. You focus on how you’re going to leave a legacy behind, both of a positive reputation and change, and execute for the next 10 or 15 years, year in and year out. You just make very different decisions when you think of the corporate world that way vs. what am I going to do at the end of June and the end of October and the end of December in terms of my earnings.

I see the world increasingly different for the two sides and that’s the reason you’re seeing poorly performing publicly traded companies being bought by private equity firms. That trend is not actually common in healthcare yet, but it is very common in other places. The only challenge we face in software is private equity firms like to buy companies with guaranteed revenue streams and they like to turn it around. In healthcare, companies tried to take the position of all the license fees upfront, without much focus on ongoing, recurring revenues. That hurts that model of private equity.

eCW has always focused on recurring revenues being a driver for its bottom line. The situation today is that my recurring revenue stream from existing customers balances my fixed operating expenses. You just keep moving on and innovating and coming up with newer products. I just think we’ll make it very difficult this year to compete, both in terms of functionality, product spread, pricing, and reputation with all the large customers that pot their trust, but more importantly, all the small customers that put their trust in eCW.

You’ve reached a point where you could do anything you wanted financially. Is there anything else you plan to do?

eCW is my hobby. Other than my family, that gets a lot of my time. the only other thing I do is spend my time thinking and working at the company.

My goal is in 15 years to leave a legacy behind of a very successful software company that did it in different ways than were discussed. I don’t think I’ll do anything else, at least in the short term. I’m 41 years old, so I’ve got a long way ahead. 15 years from now, I might have other hobbies and interests, but right now it’s eCW and I think it will stay that way for a long time.

Anything else?

Watch for some news to come out over the next three months. It’s going to be spectacular, both in terms of product and customer traction ongoing. You’ll definitely say,"Here’s the changing of the guard."

We’re looking forward and 2008 started us very well. We had a company event that we do once a year for all employees. The message I left them with was that we’ve talked about growth since 1999 – can you manage the growth, how much can you grow. What I told them was that the G word is out. It’s A and F, but not for Abercrombie & Fitch, but for accountability and focus. Have the responsibility for your own actions, that’s accountability, and have the focus to execute what you do every day. If you do it, the company will continue to grow. The market is very large and the product is very well received. We’ll just keep doing what we’ve done for the last nine-plus years.

HIStalk Interviews Peter Pronovost MD PhD, Johns Hopkins University

February 11, 2008 Interviews 6 Comments

Peter Pronovost

I was hopping mad when I read that an obscure HHS group had put an end to Peter Pronovost’s US projects involving using simple checklists like “Wash your hands, wear a mask” to remind physicians to help prevent hospital infections, especially since those projects continued in other countries and absolutely saved lives when used. The project’s data collection, even though it did not involve identifiable patient information, was claimed by the Office of Human Research Protections to violate patient consent requirements (notwithstanding the fact that the project was funded by AHRQ, the government’s reseach and quality agency). A fabulous article in The New Yorker is worth a careful read before proceeding here. Peter is the medical director of the Center for Innovation in Quality Patient Care and a professor in the Department of Anesthesiology/Critical Care Medicine at Johns Hopkins University’s School of Medicine. Thanks to Peter for explaining the project to HIStalk’s readers. This is some of the most exciting work I’ve heard of in the elusive task of getting proven research into practice quickly and inexpensively.

Let’s start out some background about you and your work.

I’m an intensive care physician and anesthesiologist. I did a PhD in clinical research and, because I had free tuition, I did a joint degree in health policy and management, really focusing on quality of care. My emphasis has been on bringing more robust clinical research tools to quality improvement. In other words, the belief in that if you’re going to make inferences that care is better, they have to be accurate and truthful and do that in a very practical way.

I’m trying to find the sweet spot between what’s being scientifically rigorous and what’s practical. That’s sometimes no easy feat. We’ve been looking at very practical ways or applied research ways to improve quality of care. The way we do this is that Hopkins is our learning lab. We package programs that we think can improve quality of care. We implement and measure them at Hopkins. If they work, we make them in a scalable way and share them with the broader healthcare community, in this case, with the State of Michigan.

We packaged a program to reduce catheter-related bloodstream infections. The results were just phenomenal. We nearly eliminated these infections — saved the state over $200 million a year, a tremendous number of lives. So I think the model of doing rigorous quality is key.

One of the things that we’re struck with is that biomedical research in this country needs to be broadened. It’s a bit too myopic in that we view science as understand disease biology or finding effective therapies, but then whether we use those therapies or how to delivery those therapies safely and effectively is “the art of medicine”. We’re not really looking at that. What we’ve been doing is to say, “Let’s apply the same rigor of science to the delivery of care so, at the end of the day, we can say whether care is better or not.”

Obviously, a lot of folks will want to talk about your “list method.” What was your reaction when you heard that HSS Office of Research Protection decided that it was unethical and said that the program had to stop?

Shocked. I had submitted it to our IRB, who reviewed it and said, “This is quality improvement, not human studies research,” because we’re not collecting any patient-identifiable information. When they came back to say, “No, you should have had this”, it was quite chilling. I don’t know if you saw their latest statement where they seemed to say, ‘You can go ahead and do Michigan now, but if you do any of the quality improvement work and you collect data, that’s research”. The implications of that for any kind of management effort are just profound.

Every hospital does some sort of ongoing quality studies, chart reviews, audits …

If you read their statement, it would seem that all of those qualify as research.

Nobody’s ever heard of that office. Is their ruling final or can HHS come in and say, “You’ve overstepped your limits”?

This hasn’t been played out yet, so I think they’re still sorting out what’s going to happen.

Wasn’t it true that your original work was funded by AHRQ?


So you’ve got one government agency paying you to do the work and the other one that says it’s got to be stopped.

Exactly right. Go figure. And you have the Secretary of Health and Human Services, who publicly said that he is for value-based healthcare purchasing, efforts to improve quality and reduce cost – exactly what this program did. This program is like the poster child for what he’s advocating for.

It makes you wonder whether the government’s role is really protecting people. If you asked one of those patients, I’m pretty sure they would say, “Yes, please use the list.”

Exactly. It’s Mom and apple pie. So, who knows. I think the field erupted with concern with OHRP. There’s so many e-mails to Secretary Leavitt or Congressman saying, “This is absurd. What are we going to do about this?”

Let’s hope that reason will win. Tell me how you came upon this seemingly simple idea of consolidating information into a list.

I’m a practicing doc and, most evidence summaries in medical care, like these long 100-200 page guidelines that are exquisitely detailed and summarize the evidence, but they present them in what’s called a series of conditional probabilities or if-then statements, like, “If a fever, yes, if white count, OK.”

The problem is nobody uses them. I read a book by Gary Klein called Sources of Power, where he looked at how people in ICUs and firefighters and fighter pilots think under pressure. What he says is that no one thinks in conditional probabilities. They stick their head in the data stream and they see patterns. I reflected on that and I said, no wonder we never use these things. It’s not how our brains work. Our brains can only have one conditional probability at a time.

I was studying the aviation world and safety and how they made their progress with with checklists and said, that’s it, we need a checklist. OK, let’s take this 200-page guideline and summarize it. Given the data from our telephone numbers, the most numbers of things we can remember are five, plus or minus two. That why our telephone numbers are seven digits.

I said, OK, let’s take these guidelines and pull out the five, plus or minus two, strongest interventions for reducing infections that have the lowest barrier to use, and word them as behaviors. Behaviors are easier to fix than wording things in vague statements. We pilot tested at Johns Hopkins. The results were quite dramatic and we packaged it in the program and the result is history. The results are so dramatic.

I’m sure there’s more to it than, “Here’s a piece of paper with some stuff on it”. How do you operationalize the list and can you replicate that into other types of interventions?

Absolutely. Summarizing a list is one thing. Getting people to use it is a whole other. That requires a behavior change. We worked on giving people strategies to say, “OK, now that you have this evidence, how could you make sure every patient gets this evidence in your hospital?”

We gave them strategies, like standardize what you do. Create independent checks for things that are important, and when things go wrong, learn. So we said, “There are about eight different pieces of equipment that you need to comply with these CDC guidelines — caps, gowns, masks , gloves. Go store all the equipment in one place. Eight steps down to one.” And people really loved that.

We then said, as an independent check, docs, when you’re putting in these catheters, nurses are going to check to make sure you do it. So, nurses, we want you to assist docs and make sure that they do all these things. When we first said it, the nurses said, “Hey, my job isn’t to police the doctors, and if I do, I’m gonna get my head bit off.” And docs said, “You can’t have nurses second-guessing me in public. It looks like I don’t know something.” To which I said, “Welcome to the human race. You don’t know things.”

I pulled all the teams together and said, “Is it acceptable that we can harm patients here in this country?” And everyone said, “No.” So I said, “How can you see someone not washing their hands and keep quiet? We can’t afford to do that. In the meantime, you can’t get your head bit off, so docs, be very clear. The nurses are going to second-guess you. If you don’t listen to what they say, nurses page me any time day or night, they’re going to be supported. There’s really no way around this. We have to make sure patients get the evidence.”

When it was presented that way, the conflicts melted away, because issues became not ones of power and politics, who’s right and I’m a doc and you’re a nurse, but one of the patients.

Is it hard to assemble an inarguable body of concise items to create the list initially?

Let me tell you what our vision is. It does take some effort. It takes probably about a year and roughly $300,000 to produce a program. What that means is to go from a concept: “I want to eliminate MRSA”. To summarize the evidence; to develop practical ways to measure that in the real world that are valid and sound; develop the performance measures; to get a data base in place; to do what I call the technical work.

We view it very much like a form of pipeline. We have a process to say, “Let’s go from idea to program. We pilot test it at Hopkins, and then we launch it to the broader community.” It’s a very scripted process now. We’ve become more efficient at doing it, and we absolutely need to be, but we have a very clear program of how to translate evidence into practice. The concerning thing is that there’s no darned funding for this. NIH doesn’t fund this kind of work. AHRQ’s budget is so anemic that it can’t really do anything. So we end up with all these therapies that we know will work, but patients get them about half the time in this country.

So does the work that has to be done only have to be done once and then you can just basically pick it up and drop it in everywhere?

Generally, it’s so inefficient and so ineffective for every hospital to do their own programs; to do what I call the technical work. Now these programs require both technical work and what we call adaptive work, or culture change. The culture change is all local. So we summarize the evidence of the checklist and then we go into a hospital and say, “OK, given your own culture and resources, how do you make sure every patient gets this?” And they modify it a little bit, but the technical pieces, the evidence supporting the checklist, the way to measure if it works or not, so the data collection – are all standardized, as they should be. So those are the science pieces that are true that the central group develops. But once you develop them, there’s virtually, minimal, marginal costs to put it in a thousand or ten thousand hospitals.

Other than grant funding, wouldn’t there be other sources of funding, either private or that one hospital will get so much benefit that they’ll pay for it and share it?

Certainly there’s some philanthropy that people now have become interested this with the New Yorker article, but unfortunately there hasn’t been much federal funding in it. I believe insurers ought to be funding this because they get a windfall from this. There’s no doubt they reap substantial benefits.

This is a non-profit effort that you’re leading right?

I’m an academic doc at Johns Hopkins. Exactly right.

Nobody making money off this? Basically, you’re looking for somebody to cover the costs enough so you can roll this out, in essence, for free?

Exactly right. I’m an academic doc, so any grant I get’s just off my salary. No one’s making money off of this.

Surely you’ve gotten a ton of publicity?

There’s certainly been a lot of people that say, “Hey I’m interested in this.” We’re certainly working on a number of angles. There needs to be more than a vision. There needs to be a strategy for this that’s saying, OK, lets take pediatrics, let’s take emergency medicine, let’s take OB, let’s take surgery. Let’s make sure we develop a model that translates evidence into practice. We just have to find some financial support to make it happen.

I guess the cynic in me always says that healthcare’s pretty distinctly profit-seeking in most areas. If there’s no money to be made in better treatment …

I’ve had people who want to make money off of this hounding me. I’m getting called by everyone who’s saying, “You’re onto a goldmine here. You saved the state $200 million. It costs $500,000. That’s a great ROI. Let’s go make money on it.” I personally think that some of these things … This is a not-for-profit tool. The initial thing’s funded with public dollars, it ought to be public good that we put in broadly.

Most of my readers are information technology people. I know you’ve done other work other than just “‘the list”.

We did this kind of naively. I think there’s huge information technology potential. One is automating the checklist into the work process. We had a very hard time monitoring compliance with it because it was paper-based; people lose the forms. There’s enormous opportunity. I’m not an IT guru. That partnership, I think, we need to make stronger. We need to partner with IT people because this could be an automated checklist in a handheld or a variety of formats that is used at the point of care.

The other thing that’s information technology that’s striking is, when we go into these large hospitals and ask what their rates of infections are, virtually none of them have the data stored in a queryable database. Its pathetic. One of the things that we did in this Michigan project was we built a Web-based data entry. They put in each month the number of infections and the number of catheter days so we can calculate the rates. We made it scalable so you could click and see what the rate was in ICU 1, what the rate was in all of in all of your ICUs, what the rate was in your hospital, or your health system, or the whole state.

So we created some architecture to underly this. It was really simple. And hospitals loved it because, for the first time, they had the data in a real-time time, scalable database. It just shows how rudimentary our clinical information systems for data quality are in hospitals. Even a hospital like mine, University of Michigan, they’re not stored. We haven’t invested in a database infrastructure to do these things in a scalable way.

I’m just speculating, but lets say a big systems vendor came to you and said,’ We’ll underwrite five of your programs in return for the ability to distribute them either exclusively or not”. Do you ever see that happening, where a vendor would maybe fund some of your work?

I have. A couple of the big health IT vendors have come. I think that’s a great support. You can see that these things are easily built in to an information system. It’s crazy not to. Instead of having all these pieces of paper around, you click onto “Central Line” and here’s the central line checklist. I’m doing palliative care, here’s the palliative care checklist. So, absolutely, I think there’s great potential for that,

The data management, it sounds simple, but there’s very few hospitals, or any, frankly … I can tell you large systems that have won awards for reducing infections. When I say,”So what’s your infection rates?” they say, “I don’t know.” or “It’s stored on this piece of paper or Excel file.” We haven’t invested in data management for quality reporting and we desperately need to.

There are two key success factors for this project. One is that it was evidence-based so the interventions are for sound evidence. But two, that we had valid measures, that docs believed that data. This wasn’t marketing like so many quality improvement projects are, where it’s “Come look how great I am,” but the emperor has no clothes, or the data has no credibility because there’s no quality control. It’s seemingly poor quality and the inferences are probably incorrect, the inferences about whether care got better. Docs believe this because they say, “Yes, it’s standard definition. Here’s the data. You can look at how much missing data you have. Here’s the data quality.”

In many senses, we created a monster in Michigan because now there’s a hunger in these hospitals for a pipeline, but we don’t have the infrastructure to deliver the pipeline. The docs are saying they love this approach, “Peter, you’ve transformed the state”. The hospital CEOs love it. You have their docs, nurses engaged in quality. The results are good. They’re all excited. So what’s next? Could we do the same model for VRE or MRSA and for palliative care and sepsis and for emergency medicine and for pediatrics? We certainly could, but we don’t have financial support. We have the model to create this pipeline. We’re working on it. We just launched, funded by MHA, a safe surgery project that has the same model. We’re going be looking at safety in surgery with some checklists and things like that.

How many of these do you think there could be? Are there enough solid facts?

Hundreds. Think about it. Stroke care, headache care, acute MI care, arrythmia care, asthma care. Our brain can’t remember all these things, so the key is the medical community responded to that by making these 200-page eviddence summaries, but nobody thinks that way so they’re not used in practice. The simple checklist approach conforms with how we think. I don’t want to trivialize it because the reality is, to summarize 200 pages of evidence into five checklists that are worded into behaviors that are practical but yet scientifically sound, takes some trial and error.

That sweet spot is a big part of what our key to success is. It’s what our shop does well, is that all of our people are clinicians, but trained in research methods. We know both the biases and the evidence and the clinical realities and we try to hone in on that sweet spot. Inevitably we get it wrong and that’s why we pilot test it and revise. So what you serve up is ultimately very practical, very scientifically sound, and usable in a variety of types of hospitals.

The biggest problem in medicine is probably getting stuff out of journals to the bedside. Even if this was short term, it seems there’s a lot of opportunity to use this a vehicle to push out recent findings.

Exactly right. We could translate evidence into practice quickly. The investment, from what you see, is trivial. You can use it throughout the whole world. We have formed a partnership with the World Health Organization to help put these things out more broadly.

The implication is that if the list works, the doctors were doing it wrong up until they had that tool. So basically, are they acknowledging that they’re just overwhelmed and can’t do as good a job unless they have some reminders?

I think what we say is, sure, they were part of this. What we’ve done with this is created a system. So yes, they’re human. Their brain doesn’t remember everything like mine or yours doesn’t. So what you’re alluding to and what I saw was that our pre-condition for using a checklist is the humbleness to say, “I’m not perfect.”

Healthcare wasn’t there five years ago and perhaps some physicians still aren’t there now. What we’ve shown is, when you accept that, like in anything in your life, when you acknowledge a shortcoming, it’s very liberating. You say, “I could use this aid.” And we changed the system to make it easier.

That chlorhexidine that I told you about reduces infection risk by half. But most of the central line kits didn’t have that soap. The doctors and nurses didn’t know how to change the purchasing to get it. So I sent a memo to the CEOs at the hospitals in Michigan at said, “There is a soap called chlorhexidine that that cuts infections by half. It costs pennies. Please make sure its in all of your central line kits. I’m going to e-mail you back in a month to make sure you did it.”

I have no authority over them, but what I found was that, when we did focus groups with them, they all knew safety was a problem. They were all committed to doing things to improve it, but they didn’t know what to do and most of them were to scared to say so, because you don’t get to be a CEO without having answers, right? I said, “OK, I’ll make it easy for you. I’ll send you a task every month. A really concrete task to have you go do it.” One of the tasks was putting the soap in. Lo and behold, a month later, the whole state has this soap in.

You’re an anesthesiologist as a specialty. I still would argue today that the most dramatic quality of improvement that’s ever been done, in any area of medicine, was when anesthesiologist got together and said, “Look. This risk of general anesthesia in surgery in absurd, We’ve got to make it better”. How did that come about and are the same sorts of roadblocks that the anesthesiologists figured out how to get around going to have to be overcome again with the rest of medicine?

What allowed that discussion was that humbleness to say, “We make mistakes. We’re not perfect.” A big part of our work was getting docs to reclassify harm. Most people put harm in what I call “the inevitable bucket.” Things happen because you’re sick or you’re old or you’ve had a big operation or you’re really young. That “bad things happen” kind of colloquialism. What we did is to say, “No, I think a lot of that is in the preventable bucket. Let’s reclassify it.”

When we did these infections, docs said, “We’re at the national average and these are the people infected and there’s nothing we can do about it.” I said, “I don’t know if we can do something about it, but what I do know is that we’re not using these five central evidence-based things in all patients. Let’s out a system in place where every patient gets it and lets see how well these rates go. I may be wrong and they may stay exactly the same, but my hunch is most are preventable. So can we agree that this evidence is strong and we’re going to create a system where patients always get this evidence because we owe it to them.” Of course, docs agreed on that and the results were breathtaking. It really opened them to say, “Wow. Maybe most of these are preventable.”

You also mentioned the airline industry, where early pilots were free spirits who eventually saw the benefit of having conformance to accepted rules. Does the same psychological way that it took to get pilots to give up what they perceived to be their independence need be applied to equally headstrong physicians?

Exactly right. That’s the tension that we have. How much evidence do I need to give up my autonomy? We’re still uncertain about that. As an industry, healthcare is grossly understandarized, compared to that pilots have to use checklists or they won’t be flying. Healthcare is still very much like the Wild West or like Chuck Yeager in The Right Stuff, where we have this cowboy mentality and we’re just beginning to accept that standardization is a key principal to making care safe. We need to do that. I think we have, especially among the younger generation of physicians, broad acceptance that they need to standardize. What the field of quality has to mature is, “How much evidence do I need before I take away your autonomy or, at least, put some restraints on your autonomy?”

I think you did an article, study, or consultant work involving computerized physician order entry. And there were some sky-rocketing error rates that occurred after implementation. What was your conclusion from that, since I’ve got a lot of technology readers?

What we saw is after the implementation of POE, errors went up dramatically. Though I think that publication surprised healthcare workers, they really shouldn’t. We learned this from aviation and other industries, that any time you change a system, you may defend against some errors, but you will inevitably introduce new ones. This always happens. You’re going to create new risks.

I think healthcare approached POE perhaps naively in that they simply sought to replicate the paper world in doing work electronically. Even the forms are alike. We want to make it look the same way. What that does is, it introduces new errors that weren’t there. So you’re substituted handwriting errors for, what I call, choosing one for many. Most physician order entries have drop-down lists because we have ten different doses of morphine. We haven’t standardized those yet. It’s a huge issue. We need to.

So predictably, some people are going to click the wrong box when they do that. It’s guaranteed. It’s part of human nature. It’s cognitively predictable that they will click the wrong box. Or we’ll have other types of errors, so that you’re substituting new types of errors. We probably hadn’t reflected on how to defend against those enough. We’re focused so much on learning the technology, replicating what the paper workflow looks like, that we didn’t simulate or say, “I’m going to introduce these whole bunch of hazards and how am I going defend against that?”

And, much of the decision support tools that really would’ve benefited from these technologies weren’t part of the initial systems. They’re developed in later. That’s not to say I don’t believe in technology. I think POE is a great tool, and it needs to be done, but we have to do it wisely with eyes wide open. Like, anytime I put something in, I’m going to introduce new errors. Let’s try to proactively identify these so we can defend against them.

The second, the significant mistake, is that we under invest in training and support for these systems. Learning a system takes a lot of ongoing training and support and risk reduction. So, as in real-time I introduce and I see a new hazard, how am I going to fix this and defend against it?

One of the absurdities that I see with POE now is the amazing amount of waste and ineffectiveness of having every hospital home-grown their own decision support tools for these systems. So Hopkins, the main hospital spending thousands upon thousand of person-hours designing their own order sets and decision support tools. Those things take a tremendous amount of time and person-hours. If you add those up across the six thousand hospitals in the US that are doing this, the collective cost is outrageous. It would almost be like each air traffic control developing their own technology and system and not working together.

So somehow, I think, the industry needs to begin to say, we have to work smarter. It’s inefficient and ineffective for everyone to be doing their own thing for these tools because good decision support takes a lot of work. It’s just like the curriculum or good safety programs. We’re going to break the bank if every hospital has to invest hundreds of teams of people developing their own. But perhaps our inability to do that is emblematic of the cowboy mentality, that we can’t get the docs in one institution to agree, let alone talk among hospitals. It says how understandardized we are. You don’t want have every airline or every pilot developing their own checklist to say, “No, my checklist is ABCD. Your is this.” There’s an industry standard.

My audience is mostly executives and informatics people. Is there any message you’d like to leave them with as far as informatics and technology in healthcare and error prevention?

Sure. I think that the most important message is that no one group can do this alone. There needs to be greater partnership between clinicians, information technology, and methodologist or safety experts or measurement people, so that we can put programs together that could help clinicians use evidence in interventions and evaluate the extent to which they actually improved care. That’s going require the collaboration of all three of those groups.

HIStalk Interviews Denis Baker, VP/CIO, Sarasota Memorial Hospital

January 29, 2008 Interviews 4 Comments

Denis Baker

One of Denis Baker’s employees e-mailed and said I had to interview him, including a long list of reasons she enjoys working for him. I knew of Denis mostly because of Sarasota’s work with Eclipsys and CPOE and was happy to visit with him by telephone.

Tell me a little bit about yourself and about your job.

I started in healthcare during Vietnam as a Navy corpsman, thinking that I would end up on a ship or a Navy base someplace. Then, out of total ignorance, I realized that I was probably going to end up in the Marine Corps, which I did for short while, but fortunately stayed out of Vietnam.

I got into laboratory medicine and then became a med tech. I worked in a hospital in Portland, Oregon for ten years, in a chemistry department. They were implementing their self-developed lab system. So I got involved interfacing all of the instrumentation to the computer system. This would have been early eighties. Then they thought the computer system was going to support itself, so they were going send me back to the bench. So I jumped to another organization and supported an HBOC Star lab system for a couple of years there.

I ended up being the manager of the clinical systems. Then a new CIO came into the organization and created a new position of Office Automation and End-User Computing Manager, which is the worst title in the world that I can think of. Was it meant, basically, was supporting PCs. It was a four-hospital system back then. They had no centralized support. So I pulled together a good support group for training around PCs.

I left the organization in 1991 and then ended up working for an outsourcing company that has since disappeared, moved to Cincinnati, and worked as a director of IT at one of the suburban hospitals there. Then, ultimately became the CIO for the four suburban hospitals who were part of the system. The whole consulting company crashed. At about that time, the CIO that I worked with in Portland, Jim Turnbull, had since moved down here to Florida and there was a Director of IT position. So I moved down here in 1995. I was the Director of IS for five years. Jim left in 2000 to go to Denver Children’s. I was promoted to CIO.

Your background is as a clinical department end user. Do you think that’s a good background for a CIO to have?

I think it so, because I looked around early on at who the early CIOs were. It seemed to be most of them were promoted directly out of IT and really didn’t have any exposure to the clinical world. I think that has really helped me as the whole shift in the industry is gone to clinical information systems. I can talk the lingo with not only lab folks, but also nurses and other clinical folks. Physicians as well. I think that’s been a leg up.

I think the future for healthcare CIOs in particular is to have a clinical background, whether that’s nursing or one of the ancillaries. I think you really need to understand what happens in a hospital, not just producing bills.

Should the ultimate goal be to have a physician running IT or does it really require that?

I think that physicians bring a certain aspect to the job, but I don’t think they necessarily know how a hospital works. I think they know how their practice works and how they interact with the hospital, but I don’t think they absolutely know what nursing does, or any of the ancillary departments, and what they do.

What do you like most and least about being a CIO?

Most is seeing technology applied to operational improvement in the organization and moving healthcare out of the dark ages. We’ve been on paper for a hundred years and many people have said there are industries that are far beyond us in adoption of IT. With good systems and good implementations, it’s remarkable what you can change within healthcare with IT.

Do you think clinical systems are realizing their potential, or are those systems still a generation away?

My chief medical officer asked a similar question a couple of days ago. He compared it to the automobile industry, where the tires might last for five miles and then you’d have to replace them. He thought that maybe we’d moved now into maybe the thirties or forties as far as automobile technology in comparison.

But I think we’re really in the fifties. I think the systems work, but they don’t have all of the bells and whistles that the current car today would have. It’s going to be an evolving process. We’ve been at this, with the clinical information system, for twelve years and it seems like the work is never done. There’s always something changing and something new. New functionality or, typically, some new regulation or reporting that has to be generated out of your clinical system, so the work never stops.

You never stop implementing a clinical system once you start. That, I guess, one of the downsides. You asked me the pluses and the minuses. I think the downside is, it’d be nice to wrap up a project and move onto another one, but it just never goes away.

Nobody can afford to replace those systems every few years. How important is it for the CIO to establish a relationship with a vendor and stick with them?

Let me start from day one, with negotiations with the vendor. Obviously the vendor’s interested in sales, market value, and stock price, but I think you need to reach a common ground on what you’re trying to achieve. I’m not a big one for really tough, upfront negotiations. I don’t try to nickel and dime them, but I do want performance guarantees. I do want access to senior management. I do want them listening to us as a customer base as to where their systems need to go, and hopefully they’re listening to us. Because you’re right, this system we’ve had for twelve years — I would not want to be here to be the one to replace it. I would not want to go through that agony again.

A lot of places just trade Vendor A for Vendor B while the hospital down the street is trading Vendor B for Vendor A.

Once again, I think it comes down to personalities, and if you can develop a relationship with your vendor at a personal level and not slam your fist on the table every time there’s a hiccup, but thank them for when they help you solve problems … I think that’s the key to the partnership. I think some people get caught up in egos. They’ve negotiated some super-duper contract and the vendor, for whatever reason, is unable to deliver, and potentially the CIO or whoever negotiated is being held accountable for making it happen. So the knee-jerk reaction is, “Let’s go find Vendor B. That’ll work out much better than Vendor A did.”

How much are hospital executives involved in IT decisions?

Well, here, they’re pretty involved. The Chief Operating Officer, my new CEO that’s been here for about two and a half years – both of them have been involved in some pretty major IT implementations where they came from. I think they have a good understanding of technology and what the limits of technology are. Their caution to me and the organization is, “Just because you’ve got a problem doesn’t mean IT necessarily needs to solve it. We need to focus on our workflow and the operational improvement.” And then if there’s an opportunity for IT to get involved and ease that along, that’s probably the best course to take. I think all of my peers within the VP ranks have that same understanding.

How often is IT part of the strategic solution?

It’s hard for me to gauge at this point. We’ve had a new CEO for two and half years. Our Chief Operating Officer, he’s relatively new as well. I think the last thing they look for is an IT solution, but we’re still going through our version of Six Sigma or Lean Management or Process Control Management, whatever you want to call it. And then you take a look at, “OK,is there an opportunity for IT to get involved and help solve that problem?” So as we have a fairly new executive team, I think we’re still working our way through that.

Every CIO wants to run a world class IT operation, but hospitals don’t usually have large IT budgets. How do you choose your battles and stretch your dollars?

Number one, I’ve got a great staff. I have about a hundred people on staff. Being in Sarasota, Florida, it’s fairly easy to recruit good talent to this part of the world. We pay well. So I think that’s the first key, I guess, to making it a success.

I can only think of one project in twelve years that we’ve backed out of. Some of the projects may have taken us a little bit longer or cost us a little bit more than what we thought, but we’ve only had one complete failure in ten or twelve years, out of I don’t know how many projects we’ve been involved in. I think we’ve developed a reputation, as a division, for getting things done on time and relatively on budget. That lends some credibility, not only among my peers at the executive level, but also with staff; and also, even more importantly, with the physicians. If you get them involved in something and it turns out to be a success, you get less and less resistance as you move into other things to implement.,

If you look back two or three years, what projects gave you a lot of bang for the buck or made you glad you did them?

Probably the first one would have been what’s now the Eclipsys Sunrise Clinical Manger. It was created by a company called HealthVision, then called CareVision, the product. We were the first customer. We started to roll it out in 1998 to deal with nursing documentation and physician order entry.

At some point, the voluntary CPOE hovered at about 25%  and finally, nursing got tired of having to deal with the paper and electronic world. Our elected board then told our physicians, “OK, a year from now, it’s mandatory that you put your orders in.” Almost immediately, we saw the percentage starting to rise. We run probably about 80% entered by physicians, 10% verbal, and another 10% written or faxed in.

I think the whole CPOE and at least the beginning of the medication order process of transcription illegibility and so on – that went completely away. It created other problems, but at least it solved the illegibility and who actually ordered something.

Another project that took us a few years, but I think was ultimately a good decision … we needed an ERP system. We looked at Lawson and PeopleSoft and ultimately decided on PeopleSoft. That product has been rock-solid ever since we implemented it, even after the Oracle acquisition. In fact, we’re going through an upgrade to the HR side of this system right now. We had to engage some fairly expensive consultants to help us get it implemented and augment our staff. But I don’t lie awake at night worrying about PeopleSoft at all. It really helped with supply chain management, on the one side, and then we also had some issues with HR and payroll on the other. I think Peoplesoft solved both of those.

Anything on the infrastructure side that turned out to be a good investment of time and money?

Early on, as we implemented the electronic medical record, we were looking for a fairly robust network infrastructure. At the time, about the only thing was available was a technology called ATM. Implementation was good. It provided campus-wide network backbone capability up to gigabit speed. That served us well for a few years, until Cisco and the rest of the world got Ethernet up to speed.

Since then, we’ve gone with Cisco and that’s been rock-solid for us. Built in an awful lot of redundancy to make sure that the network never goes down and, knock on wood, it never goes down. Early on, the intent with the electronic medical record was to maintain all of the records on everybody forever. So we made an early investment with EMC and their technology. This would have been back in 1996 or 1997. We’ve been with EMC ever since. So from a storage perspective, expandability, once again, that’s worked out very well for us.

You made CPOE mandatory in 2003. What advice would you have for hospitals considering doing the same thing?

I‘ve looked at some of the organizations that have tried the voluntary route, but I think you can only do that for a certain period of time before you have to make it mandatory. Like I said, we coasted along for a few years with a 25% compliance and that was driving our nurses nuts. Having to check not only the paper chart, but the electronic chart for recent orders and so on. That’s going to cause quality and safety issues. So at some point, if you’re not making it with the voluntary, I think you better go mandatory.

You’re not going win them over with technology. They’re always going to complain about the time it takes to log on and how much longer it takes to place an order. But after a period of time, in our case ten years, they can look at patient information back to 1998. There’s nothing archived. Everything’s available and I really think they see that as a value in exchange for the whole CPOE piece, but it takes a while for you to build up that database for them to appreciate that.

Are you seeing any impact of the Stark relaxation and are you doing anything with physician office computing?

In a very minor way. We’ve had Siemens’ PACS system since 1996. I think three to four years ago, we implemented Siemens Magic Web, which is the online retrieval of images. They were able to do that within the organization. Obviously, they came to us and said , “OK, we want to see those images in our offices, and by the way, we don’t want to buy any equipment.”

So we were able to seed a few workstations out into some of our specialty physician offices; orthopedic surgeons and so on. That’s all they can do with them, look at our images. They can’t load it up with games and other stuff.

Physicians have the expectation that the hospital should provide them with an office EMR. We’re trying to figure out if our direction should be in that area. Obviously we’d have to charge some nominal fee. On the other hand, as my CEO reminds me, there’s a whole host of other companies out there like eClinicalWorks and so on that are offering ASP models that have relatively reasonable prices. They offer not only EMR, but also practice management.

So why, as an organization, should we get involved in that? The only challenge I have to that is that it would be nice to be able to have longitudinal medical history on our patients, whether they’re seen in an office or in the hospitals. I’m not sure how well some of those ASP offerings could be integrated into what we’ve got. So we’re kind of exploring that right now.

Are you seeing any impact of interoperability?

We’re the only not-for-profit hospital in four counties, surrounded by HCA, Universal, and HMA organizations,and they really have no desire to exchange data. I don’t think it makes sense, from a corporate perspective, for them to get into that. So we’ve really not been too successful in creating a RHIO environment here locally.

I tried to get some money out of the State of Florida. Jed Bush budgeted $10 million to get RHIOs off the ground. I made an application and one of the requirements was that it had to be with a competitor. I tried to make the argument that, in some cases, our physicians are competitors, but the state wasn’t going for that, so I didn’t get any of that money.

How would you say Sunrise is working compared to a year or two ago?

We did the 4.0 upgrade probably close to two years ago. That was probably some of the worst software I’ve ever seen. It took us probably eight months and I don’t know how many hundred patches and service packs to get all of that fixed. But finally, everything settled down and the performance came back.

Two months ago, we did the 4.5 upgrade. That’s was probably the easiest upgrade that we’ve ever experienced. That was real quality software. I think you could see the impact of John Gomez and his development team on the quality of the software they’ve produced.

With Andy Eckhert involved, do you think the direction of the company or its likelihood to success has changed?

Yes. Andy made a few visits here since we were one of the early adopters and I’ve liked the changes he’s made in the company. I’m not sure how successful offshore development is. I’ve never dealt with a vendor who has really relied on that quite a bit. I know they’re expanding their office in India to four or five hundred developers. So hopefully we’ll see, once again, a continued emphasis on quality software when that’s released.

Some of the other changes he’s made is decreasing sales staff and so on, and focusing more on support and development folks. The consultants that we’ve had involved in the 4.5 upgrade … the quality of the individuals, I think, has risen dramatically as well. As I understand it, they have to go through a three-month boot camp to learn the system before they’re ever turned loose on the customer base. I can remember years ago when a new hire would get hired on Friday and be assigned to us to fly in on Monday, knowing little to nothing about the system. They were just here as a body filler. But, like I said, the quality of individuals we’re dealing with now is much better.

Their future success in a having a broad clinical offering like the market wants is based on making Sunrise Pharmacy work. What are your thoughts on that?

I always thought that pharmacy really needed to be, not an interfaced system, but integral to the whole order entry process. Because they didn’t have that product five years ago, when we needed a pharmacy system, we went with McKesson’s Horizon Meds Manager. We had some transition issues with McKesson. So we implemented their system; we interfaced it with a bi-directional interface. That has its own uniqueness and causes its own problems. Now that Eclipsys has a pharmacy component, we’re going through an evaluation of, “OK, where’s McKesson right now? How would their new Meds Manager and Admin-RX compare to an integrated pharmacy module with Eclipsys?” So we’re going through that process this week, comparing and contrasting that.

One of the things I remembered about the hospital is you were one of the first, if not the first, to offer a turnaround time guaranteed time in the ED. Were there technology implications to that strategy?

Actually, no. That was all workflow. A new CEO came in two and a half years ago from Detroit. At least a couple of hospitals had implemented the thirty-minute guarantee. She walked in the door and said, “OK, we’re going to do that here” and turned to the ED folks and said, “Make it happen. Figure it out.” And it really had nothing to do with technology. It was all workflow and handoffs.

Now, somewhat after the thirty-minute guarantee was in place, we purchased the Eclipsys ED module, displaced boards and all that other stuff in there, and I think that helped. Now we’re on ED doing nursing documentation. And then finally, ten years later, asking the ED physicians to do order entry. Back in 1998, they screamed bloody murder, so we started someplace else. So it’s taken us ten years to get back to them. I’m anxious to get that piece wrapped up. But no, the thirty-minute guarantee had nothing to do with technology.

Tell me more about your department.

There’s actually three departments that report to me. I had more at one point, but right now I’ve got Information Systems, which is the pure technology stuff: the servers, the network, PCs, and all of that. There’s about sixty people there. The original project team that implemented SCM has been maintained as a separate department. They used to be all clinicians, with nurses, pharmacists, radiology techs, whatever. Perhaps less so today, but I wanted to maintain a real emphasis that there was a support department called clinical systems. It was responsible for, not only SCM, but now they’ve taken on the rest of the world: radiology, pharmacy, laboratory, all the ancillary systems as well. Their focus is more on the application side, with the IT department really worrying about the infrastructure piece.

We’re about 3.1 or 3.2% of the operating budget. Our routine capital is about $30 million a year and typically we get $5 to $7 million of that, This year, we’ve got $7 million, which is about a quarter of it. In fact, that was one of the attractions when I came down here. I came from an organization whose IT capital budget for four hospitals might be $1 million. When I came down here, my predecessor Jim Turnbull had gone through a planning process and gotten a commitment from the board to spend $50 to $60 million over seven or eight years. So that was a big attraction — being able to do things without scrimping on the basics. And I’ve been able to maintain that capital commitment board and administration. This is my third CEO. I’ve been able to continue the capital investment in IT for the last seven years since I’ve been CIO. So I feel pretty good about that.

With a large amount of money being invested, how do you decide where to spend it and how to justify the ROI that results?

I think I’ve been fortunate. We’ve really never been an ROI organization, which I appreciated as well when I first walked in here. It’s been focused more on what are the problems that the organization needs to solve. What’s the solution to it? How much does it cost? And then it goes into the budget.

I don’t have an IT steering committee. My IT steering committee is my CEO and she can be very direct at times. We had a JCAHO survey a couple of years ago. We ran into a couple of situations that IT could solve and she said, “Go make it happen.” And the real focus over the last eighteen months, if not more, has been on quality and safety. Now that we’re doing CPOE and eliminated the upfront transcription errors, how do we solve the problem of wrong meds, doses, and all that on the back end. That’s why we’re really focused on the barcode administration piece right now.

Are you worried that vendors seem to be moving toward hiring inexperienced employees right out of college?

I can’t say that I’ve seen that within Eclipsys. Most of the people that I’ve interacted with, all the way from implementation consultants to project managers, these people have got a number of years of experience behind them. I’ve seen the comments about Epic and the implementations and so on, but I cannot say I’ve ever seen that with Eclipsys. There always seems to be a requirement that either they have a clinical background and know something about how the department operates. And then they get educated in IT. And as I reflect on our original project team for SCM, that’s the approach we took. We attracted the best and brightest clinicians in the organizations and then took them through the IT training piece. That worked out very well for us. I think it would be very difficult to take some computer science graduate that just got out of school and teach them how a hospital works without a whole lot of supervision and good mentorship and/or project management.

Then we get into my concern about a company that is publicly traded is having to pay attention to what’s going on in Wall Street, and try to come up with, may be not the best model, but the most economical model, and hope that it actually works. I wish there were more healthcare IT companies that were privately owned. I see Wall Street as a huge distraction. A good example — I don’t know if you remember Transition Systems Inc.?

Yes. Eclipsys bought their decision support.

They missed the mark on one quarter. Their stock price dropped and then they got scooped up by Eclipsys. At the core, I think TSI was a good company. I think they had a Cadillac of decision support systems at that time. Through acquisition, good talent left.

That’s what I get tired of — the mergers and acquisitions. When we were looking for radiology systems, Siemens had a partnership with IDX at the time. They didn’t have their own good solution. So we went with IDX for radiology. Then that faded after about two to three years. IDX went to GE, and I can’t say I’ve seen a GE rep in the last two years since the acquisition. So this whole vendor churn and having vendors figure out how the new products that they’ve just acquired are going to integrate with what they’ve got seems like a huge distraction, not only on the front end of the acquisition, but on the back end on how are you going to make this stuff work.

What technologies do you see on the horizon?

I’m not sure I’ve got any original thoughts. I know there’s a lot of negative bias against it, but it occurred to me after Katrina, the paper records in New Orleans were gone and the only organization that seemingly did well at recovery was the VA. They took their backup tapes from their data center in New Orleans to Houston and, within a week, everybody in the nation had access to those records. I was trying to think, since I’m in the potential path of a hurricane as well, what would we do?

The whole idea with smart cards appealed to me. Downloading the CCR from our inpatient systems; providing read-write devices to our physician offices so they can populate it as well. The card isn’t so much the issue. The opportunity is having a redundant data center in Dallas or someplace where all the data is stored. But from a smart card perspective, not only has the core clinical data on that card to be read any place, its also available on some website somewhere. It provides a marketing opportunity for us with our logo all over the face of it. And then from an efficiency point of view, them walking in with their card, we swipe them, they’re registered, and they are done. Then they can go on to their appointment.

One of the issues that I’m not sure is unique to us is the length of time to identify the right patient, get them registered, and double check the insurance information. I believe that smart cards would solve that. Some of the discussions I’ve heard is, “Well, we should be downloading that to people’s cell phones.” Somebody’s always looking for the next technology and we’re really focused on trying to do smart cards this year, but we’ll see how well I do. It’s kind of a data concept, but I think it’s potentially could solve three problems for us.

One of your employees e-mailed me to suggest that I interview you and said, “As long as Denis is the big guy, I will work at SMH.” How do you command that kind of loyalty?

I’m honest with them, sometimes to the point of probably saying things that maybe I shouldn’t. Like most larger organizations, there’s rumor mills all over the place and I want to make sure that my folks hear from me what I think is going on and what the organization is actually doing. So I think, honesty and also being upfront and fair. We’ve had certain situations with employees that have not been popular decisions. So when I go back to explain, to the degree that I can, what the situation was and why that individual no longer works here, they appreciate the fact that I made the right decision. They understand it.

I give them quite a bit of latitude into the decision-making, particularly to my management group. An idea will be thrown out on the table, we’ll talk about it, and sometimes I’ve overridden the consensus decision from the management group, and I’ve tried to explain why I made that decision. I’ve had very little disgruntlement because of that.

Who do you admire in the industry?

I would say John Glaser at Partners. He was way ahead of his time when they started writing their own MUMPS software in, I think, 1988. They’ve always been ahead of the curve as far as development of their clinical systems and the fact that they self-develop them. They’ve got a staff of six hundred or something like that, but to take something massive like that on and be that successful at that large an organization is remarkable.

The same employee that e-mailed me that said that you’re a faithful HIStalk reader. Why is that?

I appreciate the insight. You’re one of my twice-weekly reads and the Brev-It e-mails as well. It gives me an insight into stuff that typically wouldn’t be available to me regarding acquisitions of vendors. Sometimes the rumors are interesting as well. I appreciate the fact that you wait for secondary validation that its true. It’s well written. I think you cover the industry pretty well. Obviously I think you have the trust of your readership. It’s a good read. I guess the other piece that I appreciate is that but you’ve always got the link. The article allows me to go out and find out more about it, so I don’t have to go someplace else.

Is there anything that you wanted to talk about?

I just received the invitation for the Most Wired survey again. I wish somebody would kill that. I’ve seen your comments. I share your sentiments about it.

I’ve talked to some of my peers that have been on the Most Wired list and asked them if they’re really doing some of that, and they said, “Of course not.” So I think somebody needs to audit some of this and put this to rest. Fortunately my CEO doesn’t have a whole lot of belief in it either, so she’s not holding me accountable to what some of the other organizations are doing. Not that there aren’t some good, innovative things going on out there, but having an unaudited survey of what you’re doing … the polling results are in from New Hampshire. Everybody thought they had the pulse on what they thought was going happen and then it changed overnight. So in that case, the pollsters were throwing out the numbers, but the voters really showed up and indicated what reality was. So I wish somebody would do that with the whole Most Wired survey as well.

HIStalk Interviews Mark Zielazinski, CIO of Children’s Hospital of Central California

January 21, 2008 Interviews 1 Comment


You may remember Mark Zielazinski from his days as CIO at El Camino Hospital. He responded in 2006 to a reader comment about that hospital’s problems with its Eclipsys Sunrise implementation, which caused great organizational upheaval and nearly got the hospital shut down, according to newspaper accounts. We agreed to do an interview at some point. It’s taken awhile, but we finally had a chance to talk. Mark’s now CIO at Children’s Hospital of Central California. He was trying to get out of the office for a long Friday commute home when we connected, but was gracious enough to spend time with me.

Tell me a little bit about yourself and your job.

I am CIO at Children’s Hospital of Central California, which is the only rural children’s hospital in the United States. It’s actually a pretty big facility. We’re located just outside of Fresno, California, the central valley of California. I think we’re going to be 320-something beds next month. We’re opening up 28 more beds.

Describe your IT shop and how it’s structured.

We’re primarily a Meditech shop. We’ve been a Meditech hospital for 20+ years, so we were an early adapter of the Meditech system back in the mid-eighties, I think.

Beyond Meditech, we have the typical gaggle of supporting systems. We’ve got Picis in the OR. We have Kronos for time and attendance. We’ve got a couple of ancillary systems and KaufmanHall  products for budget and capital. This year we’re going to be replacing our Meditech ERP modules with the Lawson system for ERP. We’ll start implementation this summer and then go live sometime in ‘09. And then for the Meditech products, we’re just starting to do nursing documentation. We’re on the old Magic platform.

We’re doing some things with physicians in ambulatory order management and pharmacy in prescription writing. We’ll upgrade to Client Server in the fall. We’ll start the process this fall. I think that will be done just about the time we go live with the ERP system.

Most readers will remember you from El Camino Hospital. You had problems there with the Sunrise go live and pharmacy department problems on top of that. What lessons did you learn personally from that and what should other vendors and the industry learn?

We did a lot of things right there. I think we were on track with being very successful. I think they’re going to very successful right now. I know Eric Pifer’s there. I think that’s going to go well for him. He’s got a good environment to go from.

We went live in the first part of March 2006. I don’t remember the exact dates, but it was sometime in early 2006. We had missed our initial go-live, which would have been the middle of November 2005. The primary reason for missing was the fact that we couldn’t get our doctors educated. I think the training we had set up for them was about four hours total, in two-hour segments. We actually did it, but we could have done it a little better. We started paying the physicians to attend those classes. We paid them a fixed fee for the two classes. To get the payment, they had to go through and demonstrate proficiency. The lesson is that you have to pay them.

You get so much momentum. We had gone almost three years. We were in the process of building, creating, and moving when we missed our November date. So it was three and half years by the time we went live. I think one of things that’s got to happen is it can’t take that long. You’ve got to find a way to get that stuff to work in such a way that it doesn’t take three years to build a product and get it ready.

This was a place where we had the experience. El Camino had been doing physician-based order entry. They’d been doing nursing charting and documentation. We were doing all that stuff and it still took us a hell of a long time. The products vendors have, and I don’t believe Eclipsys has a monopoly on this problem, are really a tool set. They don’t have a very good set of schematics and plans and starting places for you, as an organization, to be able to drive with that tool set quickly to using it.

You hit the third thing on the head when you said we had department issues in pharmacy.  We really needed to have dealt with that prior to that change. That was a major league change for pharmacy. Even though we were using the pharmacy product, the old E7000 product, it was a pretty manual process without any kind of real automation to it. Even though it was SCM 4.0 and I know everyone talks about the fact that it was an interfaced product versus an integrated product, people have been using interfaced pharmacy products for years and years.

That wasn’t what the issue was there. We had a very serious problem and the pharmacy didn’t do a very good job of managing that. I take some of the hit for that, but I think the organization takes some of the hit for that as well. We ended up actually outsourcing the whole pharmacy management. Once that was done and in place, the vast majority of the issues that were affecting us at the time of go-live and about five months later when we actually did the outsourcing, it kind of disappeared. Not to say that there’s not still learning that’s going on.

Somewhere, I have documents from the original Lockheed-Martin system that ultimately became TDS. It went live in 1971 at El Camino. There was study done in ’75 and another in ’77. They’re really good studies talking about adoption. In six years post go-live of that system, they only had about a 40% participation by physicians. So it’s not something that happened fast back then.

Looking back now, with the benefit of 20:20 hindsight, should the plug have been pulled at El Camino because it wasn’t ready?

I think if we would’ve had the issues in pharmacy fixed, I’m not sure that would have had such a negative impact that it had. I don’t know that the system wasn’t ready at that point. I don’t know if we had made some of the pharmacy outsourcing decisions prior to go live; would we have said at go live, “We aren’t ready”, and would we have experienced the same problems. I don’t think we would have, so I think that was where that all ended.

But I think you’re right. We had a committee, a very large group that included the chief nursing officer, myself, and the chief financial officer, looking at that, making the decision and recommending to the board of directors whether we went live. The three of us made that decision. Primarily myself and the chief nursing officer made the decision to pull the plug on the November go live because we didn’t think we were ready. We had physician input on that committee. The committee was basically a group of 28 people that met as we were getting ready to go live on a very regular basis. Not just weekly, but multiple times per week. We made the decision and took it to the board of directors.

When you left El Camino, you went to Sensitron as the COO there. What did you like and dislike about working in that environment as opposed to a hospital?

I’ve been in the private sector and consulting or working for small companies before. I was employee sixteen with Superior. I was very early on with DAOU systems. I actually went through taking DAOU systems public. So I looked at the opportunity with Sensitron as, here was a start-up company. I’m at that time in my life — I’m fifty today — where I thought, “I could try that one more time”.

They were pretty good folks. They were a service provider for us at El Camino. I knew their technology. The CEO had left the hospital. The guys from Sensitron had come to me and offered me an opportunity to participate in that small company start-up thing. To me, it was one more opportunity for me to do that. I’m not sure how many time you can jump in, try to take something and see where it goes. So it looked like a great opportunity.

We never really got our funding set up appropriately. So for them to continue to carry me would have really put an undue burden on their ability to the R&D kind of work. While I was there, we were able to put out a new product. Sensitron does the wireless automation and collection of vital signs from the devices that you move around from room to room in the hospital. While I was there, we also came up with an ICU product that took information off of the stationary monitors in the ICU. So I was able to get a new product out and help them develop a new version of their existing product, and do some alignments with companies

We struck up a partnership relationship with a portable monitoring company. Then our money dried up. We didn’t have any more money coming in, in terms of investment money. And our sales weren’t keeping up with the payroll. I said, “Look, what we really need to do is continue to build our engineering group and our customer services group. Carrying my salary doesn’t make any sense, guys.” So I told them I was going to go off and do some other things, which is what I did. I went off and did my own consulting and then landed a job here at Children’s.

How would you compare your Meditech shop versus being at El Camino?

It is a little bit different. It’s a little tighter system. Looking at the Client Server version of the product we’re looking to go to and looking at the documentation features, there’s a lot of stuff that … quite frankly, I was surprised at how similar it was to some of the capacities in the SCM that I’d put out there. They’ve come a long way.

The last time I had ever worked on anything at all with Meditech was when I was back with Superior in the late eighties. So I’d been away from it for a pretty long time, but they are still pretty rigid in their product. Quite frankly, they’re pretty rigid in their relationship with their clients. When I got here, we didn’t have a plan to go to Client Server, but we had a strong desire to get to doing a lot more electronic documentation, and ultimately of getting CPOE. As I did my research for the first couple of months I was here, it was pretty clear to me that, in order to do that in a very reasoned fashion on a Meditech platform, you really have to be on a Client Server environment, not on a Magic environment. All of the big groups like St Joe’s and Christus and the guys who just went live in Colorado — they’re all on the Client Server platform.

It’s part of the vendor dilemma, where they’ve got an old legacy product on the Magic side that they’re saying ain’t gonna go away for a while. The reality is that it’s really hard for a vendor to maintain multiple products like that. They’ve got to really get on board with something. I think ultimately they will get to that Client Server platform. I don’t know what’s going on in that market yet to see why they feel they’re going to keep managing both Magic and Client Server, but it’s a pretty bulletproof product set for us.

I think, on the ERP side, it’s pretty darned weak. In this organization, before I’d even got here, they had made the decision they wanted to get off of the Meditech ERP products. On the clinical side and the billing and accounts receivable side, I think it’s a really good product. The market share that they have speaks a little bit to that.

Tell me about your department’s operating statistics.

Historically, the budget runs at about 2.6 or 2.7%. Our fiscal year starts October 1. I came on board just in time to finish up the budget process. We are budgeted to be at about 3.2% this year. As I took the position, one of the things we talked about with the executive team coming on board was that I thought that an organization this size should be nearer 4% of the operating budget in terms of the group. At El Camino I was at 4.7% of the operating budget. So that seems right to me.

I have a director of applications, a director of technology, and the director of HIM reporting to me. I’ve also just hired a director for project management and a director … well, I haven’t hired it, but it’ll be an executive director role, physician liaison. I’ll probably to that either late this fiscal year or the beginning of next fiscal year.

In total FTEs in the applications and technology area right now, we’re about 44. By the end of this year, we’ll be at around 48. Into next fiscal year, we’ll probably be into the mid fifties. I don’t see us being larger than 60 people at the top end.

We’re pretty straightforward in terms of the capital budget. We haven’t done a very good job managing the replenishment of the physical infrastructure. So this year, we were about half of the equipment budget for the hospital on a capital basis, and the lion’s share of that is going into replenishing the physical infrastructure. We’re putting in new networking, new wireless, and getting us onto a program that says we’ll replenish the desktops and all that stuff.

We’ll start to roll out some mobile devices. We really haven’t had much mobile device work here, but we’ve got to get that in place if we’re going to electronic documentation. So we’re going add the C5s and some mechanism for putting up some other type of cards. I think that stuff is all happening.

The other part of the capital budget this year is for the Lawson project. I suspect we’ll be somewhere between 20 and 40% of the capital budget for equipment for the next two or three years. And then we’ll get to a point were we’re between 15 and 20% on an annualized basis. We’ll have a real serious replenishment program in place so that we don’t get stuck in this kind of environment again. The board is aware of and has bought into that process.

We’ve had our first IT steering committee earlier this week. They haven’t had an IT steering committee in about nine years here. The last IT plan was done in 1996. But there’s just some bread and butter kind of things that we have to get done and we’re working on.

You were a mobile device advocate at El Camino. How would you say overall the industry is doing in that whole mobile workforce area?

From what I can see overall, we’re typical healthcare — we’re behind the curve. Lots of other industries have taken over mobility a lot faster than we have in healthcare. I think the idea of a specific medical mobile device, like the C5 … I got to participate in that in a very big way, from the conceptual design phase. We were involved in that at El Camino. So I understand it, I believe in it firmly, but I also believe that there’s not silver bullet solution.

Some people are going to want to use mobile tablets. Some people are going to want to use mobile carts. That’s just a fact of life that we’re going to have to deal with here. I believe its true for about every hospital. But, I think, if you were to look out five or ten years from now, I think mobile computing will be the rule for the way access happens in a hospital. Whereas today, even at El Camino, where we deployed it very, very extensively, we still hadn’t gotten to 50% of the devices being mobile devices. El Camino will be one of the places that gets there the fastest, but it will probably be three or four years more where half or more of the devices are mobile devices. But I believe that is going to happen.

You mentioned voice over IP. We did the Vocera stuff. Here, we use VoIP phones. We don’t have a VoIP infrastructure fully deployed. We’re going to do that. I think that concept of personal communications is going to expand in hospitals. I’m a firm believer that and I think it’s got to happen in hospitals relatively soon, and that is, that we have to issue all of our employees some kind of communications access device.

I use the example of this. My youngest child just went to college. He was at California Polytechnic. In order for him to register for class at Cal Poly, he had to prove to them that he had a computing device that he was going to use. He couldn’t register for class until he’d gone through this process of proving to them that he had this computing device. We hire employees here at the hospital, we don’t have that same approach.

I think, at some point, that’s going to happen at hospitals. We are information providers. That’s what we do as an organization. When you really get down to it, we’re really information dependent workers. At some point, just like when we give you your badge, we’re going to give you some kind of computing device. You’ll be responsible for it and use it for all the interactions you have while you’re at work. I don’t know how far off that is, but I think its something that’s coming.

You were at a great location at El Camino for watching technologies develop. When you look across the technologies that might be promising for healthcare, what things do you like?

I like some of the devices that are bringing everything together. My phone, whether it’s a cell phone or a VoIP phone … that same device is going to be my computer. I think that’s happening. I think, in that device, its going to have this concept of personal recognition. So it’s a personal device. Rather than dialing a telephone number, you’ll just type in my name and it’ll get me via voice or via message. However you want to get me.

We’re going get more and more into monitoring people’s conditions. Do you remember Goldsmith’s book Digital Medicine? If you remember that first chapter, where he writes about a scenario, I guess it was the year 2015. The thing that was the most vivid to me out of that whole chapter that he wrote was the fact the guy who was the patient received his treatment diagnosis and everything without ever being either in a physician office or in a hospital. Pretty impressive. I think there are technologies that are coalescing to allow us to do that. They’re going to happen pretty soon. We’re at that tipping point for that stuff to happen. Its a combination of being able to monitor inputs and get information out of folks, without it being necessarily an invasive process, in terms of diagnosing things. Then having a mobile workforce that gets out to deliver care to the patients or the people, wherever they are.

Do you see that as a growing role for a CIO?

I think so. It’s really got to be more upstream and visionary. I haven’t done day-to-day operations for a long, long time. In fact, I’m not sure I’d be qualified to do day-to-day operations. It’s more of a vision, planning and really working with the executive team and the board to get a sense of what’s out there.

A lot of folks say we’re supposed to manage our vendors. One of the main roles of the CIO is to work and manage vendors and vendor relationships. I don’t think that’s a part of my job, but a bigger part of my job, I think, is kind of like what I did when I was with El Camino and Intel … building a partnership where we do interesting things together and bring that to the organization.

That process is what we went through to conceptually design the C5 and see it come out. I was pretty non-involved with the process and outcomes. I worked with the nurses and doctors, but I got them to work with designers and engineers and watch the output. I kind of guided it. I wouldn’t say I was completely out of it, but I wasn’t into the integral processes of that.

Nurses and doctors were just jazzed. There’s no other way to describe it. They were really jazzed that there was someone listening to them and trying to figure out things that they could do. I think that’s the role the CIO needs to play to facilitate those types of activities. Because once those people are jazzed like that about the technology and what’s happening, they start to think about how to change processes to make that stuff allow them to give better care, deliver quality and those type of things. Otherwise, if they’re not involved and jazzed by that process that way, they look at it as just another set of changes coming down on top of them.

When you think about how busy and how difficult it is for the clinicians with increasing activity and increasing volumes, they’re just getting creamed. The last thing they want is another set of changes. So somehow, you’ve got get them jazzed about that in order for them to say, “OK. I can see how this fits in. I can see how I can modify my normal work process to do it this way which will be better. It’ll be better for the patient. It’ll be better for me. Everyone will benefit.” You’ve got to figure out how to get them into that. That’s the role the CIO’s got to play.

What are the biggest problems and opportunities that CIOs face?

Trying to compete for what I believe is going to be a shrinking capital dollar. That’s going to be a huge challenge for them. Secondly, it’s going to be the political challenge of trying to change from simple vendor relationships to partnerships that allow real change to occur. The technology changes are not going be done from within the hospital. You’re going to have to bring technologies from outside the hospital, more likely from outside of healthcare, and apply them in a hospital setting and in a healthcare setting in such a way that brings success to the organization. These are huge challenges for a CIO.

Let’s get to know you better. I’ll give you an item and you tell me what you favorite of that item is. TV show: I watch football. I don’t watch TV other than sports. Sports team: Chicago Bears. Food: Veal chops. City: Verona, Italy. Music: Chuck Mangione. I’m a jazz guy, but I like his horn. Vacation destination: The Orient. I married a Chinese woman. My wife is Taiwanese. I love the Orient. HIMSS conference event: The keynote. Hobby: Bicycling.

Who do you admire in the industry?

Dave Garets. I’ve known him for a long time. Bill Childs and Bill Bria. Those are guys I really admire.

Is there anything that you wanted to talk about that I didn’t ask you?

I know there are a lot of folks I’ve talked with recently. The folks from McKesson are like, ‘What’s going on with Eclipsys?” I did a lot of work before Eclipsys was formed, I did a lot of work when I was at Superior with TDS. So I had a long experience with that company. When I was at Superior, each of the executives had a vendor they were responsible for. I’ve also had a lot of stuff that I’ve done with Cardinal. I guess the one thing that I would tell you about me that people probably don’t know; when I was at El Camino, IT was a big part of my job, but we were completely outsourced there. I was the only non-outsourced employee at El Camino in IT. IT, while it was a big thing, it probably only took about 35-45% of my time.

The remainder of my time there, I was responsible for materials management, all of our purchasing, central distribution, central sterilization. I did a lot of other stuff, which was very intriguing to me. I learned more about hospital management in 5-6 years I was at El Camino by having direct responsibility for that stuff. That was a lot of fun. I did some neat stuff and I learned about logistics distribution. I actually did some work with MIT. We had two graduate students with their teams come out to do work on our logistics stuff. I think we did a lot of neat things in information technology at El Camino. On the supply side, I think we did some even crazier and neater things. As far as I know, we were the first hospital in the United States to go from a six- or seven-day supply delivery schedule to a three-day supply delivery schedule. We did some neat stuff around that. I learned a lot of that stuff that I didn’t know that I’d ever get a chance to do. I really enjoyed that.

HIStalk Interviews Shaun O’Hanlon MD, UK Physician

January 1, 2008 Interviews 5 Comments


Hi, this is Inga. Shaun O’Hanlon, MD works for EMIS, the largest supplier of EHR products to primary care docs in the UK. Mr. H and I were intrigued by his note: “I really enjoy reading your website. There are stunning similarities and differences between the EHR functionality in the US and that in the UK. There is undoubtedly room to learn as, underneath it all, we are all caring for patients.”

Thanks, Shaun, for providing some great insights. “Whilst” I had a bit of a struggle understanding the accent and the British-isms, it was a fun conversation that got me thinking about what we could learn from the UK model and what aspects we independent-minded Yanks would never embrace.

Give me some background information about you. 

I am a physician by background. I qualified from Cambridge in 1986 and I pursued a career in hospital medicine in cardiology. Then I decided to be a General Practitioner (GP), which is the UK equivalent of family practice. I spent 13 years being a GP in Guildford, just south of London, which I loved. My interest in healthcare informatics products started after working on a smart card project in 2000. Since then, I have been working for EMIS in healthcare informatics.

The company I work with today provides the GP EMR for 60% of patients in the UK, so it is a fairly prevalent system. Largely, it will do everything for EMR, management recall, appointment scheduling, and orders, all done through a single application. Billing is included, but in the UK it’s not that important. The economy is such that the government pays for healthcare through the National Health Service (NHS) and there is very little pay for services aside from some hospital ones. 99% of it is free. Well, not free – it’s paid for by taxes. [laughs] There is a secondary insurance market, used mostly for second opinions.

There is little competition for patients in General Practice because there is a match between doctors available and the number of patients. The government is generally reluctant to set up new practices. Since 1947, GPs have set up partnerships of five to 10 clinicians. That practice has a contract with the government to provide all General Practice services to their patients.

Can you give me UK Healthcare 101?

The practices are largely where they have been for many, many years. GPs have a geographic catchment area for patients. Although there may be several practices in one area, the competition is not widespread, as the government tries to match the number of doctors available to the number of patients. To set up a new practice, you have to have a pretty strong case and show local need. It is therefore fairly uncommon. The number of GP physicians is fairly stagnant.

We are now seeing some attempts to try to bring in private providers to improve patient access to healthcare. The number of doctors is relatively low and you have some big companies trying to provide an alternative model of providing care. Some of the bigger healthcare providers are trying to set up private clinics, as there is a perception that the GPs are stuck in their ways and innovation is needed.

Most GPs offer office hours from 8 to 6. Outside those normal office hours, service is provided predominantly by “out of hours” or emergency facilities. This is a problem for patients who are in employment, especially those who commute, and need to see their doctor early or late in the day. This has triggered a desire to find more innovative ways to provide care.

Patients are registered at a particular practice, which usually contains five to 10 physicians, equating to 6,000 to 12,000 patients per practice. Everyone who lives in the UK has one GP. The practice will provide all their primary care, including managing all their prescriptions, tests, and referrals. If you are on holiday, you can see someone temporarily, but your records will remain with your GP where you live.

So if I live in the country and commute to the city and need to see a doctor, I can’t see one in the city?

Right. Not very easily. A bit rubbish, isn’t it? They are considering creating a concept of dual registration to enable commuters to have a city doctor. The model now is one of a monolithic cradle-to-grave record. That has many advantages for continuity of care, cost containment, and quality care delivery. You begin to worry if you fragment a patient’s record, then you fragment care and may have dual care, redundant tests, and increased cost. In order to offer dual registration, you have to be able to share records around as well.

What is overall state of technology?

If you are a GP, every practice will have an electronic record on one of three or four available systems. That information will be held in a largely codified, structured manner. It will include a full medical history and all consults. It will include problems or diagnoses, all results, tests, prescriptions, and letters, resulting in a full, rich record that is fairly advanced in its structure.

The information is now transferable electronically between GPs in a structured format. If you move to a different location, then your record will follow you. What happens at the moment is that the record is held in a server in a practice or an enterprise with central service. When you move, your record transfers. There is a national standard that allows you to transfer the record around. We have a national messaging service that relays the messages from the practice database service to the receiving service. You request the records and you receive them the next day. A copy is extracted to the new practice. The patient’s complete medical record is sent and then imported in a coded format.

You indicated that there are stunning similarities and differences between EMR functionality in the US and UK.

A lot of my experience from that side of the pond comes from Canada. I find it quite difficult to talk about specifics because I haven’t been on the hospital side in US. But there are a lot of similarities around the need to share information. There is this conception that the GP performs one role and the hospital performs another role. The result is that information silos exist with pieces of paper — referral letters, outpatient letters, etc. — connecting them.

The other similarity, very macro, is that we are seeing increased focus on what patients want to know about themselves. Up until recently, this has been resticted due to technical issues. There also exists a kind of a high-handed attitude that patients can’t have their records by some clinicians.

We have brought the patient into the loop and now offer them access to their records, appointments, and electronic ordering of prescriptions. We have hundreds of thousands of patients using EMIS Access for just this every month. Projects like Healthvault will further enable this citizen involvement across the globe.

Suppliers are realizing that the real benefit of their data is sharing with other providers. People are sharing data between different systems. You need your applications to work together. Now that there is increased requirement to look at the lab system and radiology, interoperability has been become the core business that companies are beginning to focus on. We work hardest at determining how to share data and what data should look like. By sharing information everything works better. Everyone’s data is much richer when it is shared. Interoperability is the key to future EMRs.

To interoperate, you have to have standards. Unless you come up with agreed standards, you can’t have interoperability. Standards for coding data, messaging data, and viewing data.

EMIS has adopted SNOMED-CT as it does appear to be becoming the universal standard for record coding. We are working quite hard to understand SNOMED-CT because, whilst it is very advanced and offers granularity and breadth not found elsewhere, it is not a straightforward taxonomy, either for data entry or for reporting. So, new and innovative ways of entering data will need to be designed.

Message standards are now generally focused around HL-7. In the UK, we have adopted V3 XML, but our Canadian teams are now using V2 as well

Data display standards are equally important. Microsoft has been working with NHS and some suppliers like EMIS in defining a Common User Interface for healthcare applications. Their approach is to help establish a set of evidence-based standards for display and entry of healthcare data which is platform and location independent. The program is in its early days, but they are beginning to look at some of the challenges that SNOMED-CT and citizen records have on the healthcare user interface

Is the UK ahead of the US in terms of technology?

In certain areas, we appear to be in a luxurious position of having a national approach of how medical record and information should be used in the National Health Service and in Connecting for Health. We are mandating the use of HL-7 and are required to adopt these technologies and standard so we can share information between systems. It is putting us in good stead in some respects, but central control can be slow and laborious and does not always follow business drivers. If you don’t have an economy with that central control, the supplier sets standards based on business drivers, which can be more adaptive to the changing market.

Anyone would be well to learn from the issues that the UK has in providing a national EMR solution. There are a lot of lessons learned about standards and where they do and don’t work and how to go about implementing them

What is the state of adoption for EMRs in the UK?

Hospitals primarily use PAS, patient administration systems, PACS, and order systems. All have back-end billing systems to make sure they get paid by NHS. A lot of them rely on paper records for the medical record piece, although some use components of EMRs.

It’s a very mixed bag in terms of hospital adoption of EMR. Cerner is a big player and being employed, though it is going slower than they would have hoped due to implementation issues. Localizing the product has taken time and effort, as the requirements in a UK hospital are different than an American hospital. They are also going into sites with mixed technology and systems. That isn’t my area of specialty, so I can’t really comment further. iSoft also has a product called Lorenzo which is a single system for GP and hospital, but the full release has been delayed for several years.

How are EMRs funded?

It is all paid for by the government. In General Practice, they are provided through an NHS agency. The clinicians have a choice of systems, which was assured after a lot of pressure from the clinicians as the government didn’t want initially to offer that. The current situation is that the GP can pick the EMR solution they wish, so long as it fulfills a set of basic and interoperability requirements.

There is a also a big move to central hosting and enhanced data sharing across regions, if you like, so you can share between hospitals and physicians. What you call RHIOs — it is exactly like that, driven by the government. Some physicians think it’s a good idea, whilst some are concerned with losing control of their data. Others might argue it’s the patient’s data and that it is up to them who sees what information. The legal status is somewhere in between, that the doctors are the guardian of patient data.

Personally, I think the citizens have different expectations about their records. Most patients would be startled if they knew the hospitals couldn’t see the information that GP has, that historically it couldn’t be shared for technical and non-technical reasons. The non-technical reasons revolve around clinicians and administrators not wanting to mobilize data, sometimes for legitimate security reasons, whilst at other times, they are scared of someone seeing “their” data.

Some concerns are rational and some not rational. There is a need for putting solutions in place to encourage the sharing of data on terms they feel acceptable with. A patient can say, “I don’t want this one piece of information shared” and control who can see what. At the end of the day, the patient has to be able to see that. If you put in technology controls, then the clinician is the guardian and the patient controls who has the access. That has to be the way going forward. We need more control with the citizen and less with the clinicians whilst respecting that the clinician needs some controls because he is a stakeholder in the information, too.

Are physicians receptive to technology?

How you get clinicians to adopt EMR is a really interesting question. Before I went on the industry, side I tried to evangelize GPs about importance of coding data. I suspect 25 to 30% understood that and took it as a trigger for change. It has to be easy to do and have a business case behind it for it to be a success.

Prescriptions and repeat medications – the computer is very good for that. Appointment scheduling – no doubt that the computer helps. But what the government did over here was put part of the remuneration for the doctors based on how they are providing for the patients. Twenty percent of GP income is now around achieving targets for quality of care. For example, patients with heart disease have a certain level of cholesterol and blood pressure that the clinician should achieve to trigger the quality care payments.

The key is that if you see 10,000 patients, then there is no way you can collect the information required by the government on an ongoing basis without an effective EMR. All GPs now know it will pay to use an EMR package and, at the end of the day, it helps with quality of care. Once they realize how easy it is to enter data for disease management, they use it more.

The emphasis on chronic disease management was the big driver for adoption. Now that we are beginning to share the records, that will become the next business driver, I am sure. Some doctors complain it is check box medicine, but most recognize the improvements in care and data quality that have resulted. One very positive effect has been that there is now much more quality data on EMRs, something we gave been able to take advantage of and have used this data for some very high quality research. That has been an incredible falling out from all this.

Are citizens interested in having access to their medical history?

Very much so. I was recently looking at some stats. We have had 250,000 hits on our patient-facing service that is based on the EMR. Sending messages to doctors and ordering prescriptions online is now very popular. There are some issues that we have overcome around that, including privacy, but it is beginning to take off here in the UK. Our health portal is restricted to one part of the UK. You can log in and see your records provided you and your doctor are happy for that to happen.

How did you come across HIStalk?

[Laugh]s I got an e-mail from a person in our Canadian install. I read and found it an interesting mix of suppliers and users essentially talking to each other. In the UK, there isn’t a forum like HIStalk where you have senior suppliers and physicians sharing their knowledge. I think I learn a lot reading the e-mail that comes through. I don’t feel I can contribute much because I come from a different space.

Do you have anything else to share?

Our problems are complex and some need addressing on a national or international level. We have to have something to shoot for. The approach we’ve had involves citizen and doctor groups, as we have found there are a lot of concerns. Frequently they are unfounded, but we don’t realize they are unfounded until we analyze them in detail. If you told me 10 years ago I could log into my bank account online, I would have been horrified, but now I do it all the time. Suppliers and clinicians need a citizen view as well as a self-interest view.

HIStalk Interviews Jim Stalder, SVP/CIO, Mercy Health Services

December 19, 2007 Interviews 2 Comments

Photo: Zenoss

A reader suggested I interview Jim Stalder, CIO of Mercy Health Services, Baltimore, MD.  I like interviewing CIOs because it’s a great way to find out what’s really happening in hospitals out there. Jim’s got a lot of technology interests, so some of our chat involves tools, which I think is interesting (he even provided links so I wouldn’t have to look them up). Anyway, thanks to Jim for spending time with HIStalk. I enjoyed it.

Tell me about your background and about your job.

I’ve been the CIO at Mercy Health Services for the past five years. I consider myself a midwesterner, even though I live outside of Annapolis right now. I was born and raised in Ohio, Minnesota, and Illinois. I went to Duke University and majored in electrical engineering.

I’ve always been interested in computers. I started tinkering with Apple II+ computers when I was a kid and got interested in electronic bulletin board services like FidoNet World back then and never really looked back. After Duke, I found myself at Anderson Consulting, or Accenture now. I was there for a number of years, doing a lot of large-scale database design and development work for telecom clients. Like a lot of the Anderson folks, there’s only so many 24 hour, seven days a week workdays that you can tolerate. The burnout rate is pretty high, so I looked for something different.

A buddy of mine had left Anderson and went over to a company called Digex, which was an up-and-coming web hosting and early ASP business that had some venture funding. I jumped ship completely from the large, 100,000+ person organization to the small Internet startup. I did that for a couple of years. Went through the fundraising aspect of things; went through an IPO; went though a couple of subsequent sales to some telecom firms; and ended up at a similar company called USinterNetworking, which one of the first true application service providers. We managed people’s salesforce automation tools and procurement tools, HR systems, and our data center in Annapolis and on the west coast. The subscription revenue based model. We didn’t produce our own software, but we hosted other people’s software and managed the systems for our clients. Did the same rocket ride there: fundraising, IPO, went through a bankruptcy …

That’s kind of the whole era in a nutshell, isn’t it?

Yes. That whole dot-com ride, I was right in the middle of, so it was a fun, interesting time. But then, after the bankruptcy, it was time for something different. I wanted to really get on the user side of things. I’d been a provider of technology for essentially my whole career, until about 5½ years ago. I really wanted to take what I knew about technology and how it could be provided and get on the other side and be a buyer and a user of it.

So it was kind of the right time, right place to get a job at Mercy, even though I had zero healthcare experience. The only time I had set foot in a hospital was when my children were born. I have three kids. Other than that, I came in cold turkey. It’s been an interesting ride for the last five years here at Mercy.

Tell me about your responsibilities there.

Mercy is a diverse organization, an independent, non-profit healthcare provider. We’re in Baltimore and we have a traditional community hospital downtown. We also have a long-term care facility named Stella Maris that’s about 30 miles north of the city. We have probably about 35 physician practices in and around Baltimore. I sometimes say we’ve got one of everything. We’ve got a hospital, physician practices, and long-term care. So here at Mercy, the IT function is pretty much consolidated into the shop here. We provide network, telecom, and application services to those three different entities.

What surprised you about healthcare when you came in as a CIO from the outside?

I think what was surprising about it initially was the complexity. Clearly the complexity in healthcare is unlike any other organization, as I’ve come to realize. In fact, someone asked me the other day what was my learning curve coming here to Mercy. I said, “It’s been about 5½ years and I’m still learning every day.” It’s a ridiculously complex environment.

So that was the biggest surprise. I really underestimated the diversity of applications, the diversity of functions of the various departments. I’ve come to appreciate the uniqueness that everyone requires to do their job in each of the different areas here. One of the things that surprised me was the state of the applications as a whole. The software vendors as a industry in healthcare, I think, traditionally are a few years behind that of other areas. They’ve rapidly been catching up, but when I came on board five years ago, Web-based apps were nowhere to be found, where it was fully becoming the standard elsewhere.

What talents did you have to develop to become an effective CIO and how did you go about doing that?

When I was at Digex and USinternetworking, my roles were product management, strategic development, some business development, and some M&A activities. I’d always had a technology background and a technology bent to what I was working on. So the aspect of trying to come in and understand what was unique about the technology here was relatively straightforward, but a lot of the culture and the dynamics of how different groups interact was definitely one of the more challenging things I had to learn.

Anderson was huge, but you really worked on a project basis, so there might be a couple of hundred people on a project. Digex and USI were at the early stages, just a few people, but they peaked at maybe 1,000 employees or, in one case, 1,500. Coming in to Mercy was a whole different dynamic. We’ve got 3,500 employees all performing significantly different functions, so getting up to speed with what everyone was doing was definitely one of the more challenging aspect of things.

You’re a Meditech customer. A lot of CIOs seem to enjoy the complexity of running, not only complex healthcare applications, but ones that are best of breed, because that usually means you get a bigger budget and bigger staff. Are you happy where the organization is with Meditech?

Well, in general, yeah. We’ve been a Meditech Magic user for coming on 13 years now, I believe. Meditech is a very stable, reliable application for us. I say it’s the jack of all trades, master of none. Actually it’s the master of some, but it doesn’t do everything that we want do from an end-user perspective. Our users often try to look for something different.

We’ve got this hybrid model going on here now where Meditech is still our core, but we’ve got a lot of bolt-on applications around it. For labor and delivery, we’re using GE’s Centricity product that we’ve bolted on and interfaced onto Meditech. We’ve just chosen Picis for a new perioperative system that we’re beginning the implementation of. We’ve got Allscripts for an ambulatory EMR system that we’re rolling out and we’ll interface some components, probably lab and radiology results, back into Meditech. That rollout has been going particularly well.

When you came into healthcare, you said there were things that surprised you. I would think looking at an application using healthcare-focused technologies like Cache’ and MUMPS and sold by a privately held company, you might think, “‘What the heck? Somebody explain this to me.”

When I came into the organization, the changes that were being made weren’t widely advertised. So, my first day was being introduced to the rest of the IT team. As a result, I also got introduced to some of the applications. One of the guys sat me down in front of Meditech which, as you know, Magic was a character-based application, similar to a VT-100 mainframe app. I remember thinking, ‘What have I gotten myself into?’ because where I had come from, I was used to the newer, Web-based applications, whether we were hosting them for clients or whether we were implementing them for clients. Everything was about the Internet or Web-based. And fat client was some of the things we’d done, but certainly not day-to-day. So, I felt like I was thrown back in time for a little bit. That was quite surprising. The other surprising thing was that the IT offices were, as they are traditionally are in hospitals as I’ve since come to learn, in the basement next to the morgue.

So I’m thinking to myself, “What am I doing?”’, but it all quickly came that I learned to really enjoy it. These past five years have been the most fulfilling, career-wise, than any other previous roles that I’ve had.

You mentioned your Allscripts ambulatory EMR. What kind advice would you give to others who were undertaking that sort of project? 

Mercy is a little unique, I think, compared to some other organizations. Mercy employs a large number of our physicians, and so our rollout model has really been to our employed physician base. Frankly, it makes things a little bit easier. They’re all part of the same Mercy family and they’re already greatly interested in sharing information with each other, so Allscripts makes it all that bit easier for folks.

But the advice I have for the ambulatory side is, what we’ve done is basically gone practice-by-practice, versus the big bang approach. We’ve probably got about 25-30 practices under our belt, and probably have about 10-15 more to go before we consider ourselves complete for our employed physician base. What we’ve really done is put folks on-site in the practice for the first two weeks of the rollout to do some hand-holding with the staff, do some hand-holding with the physicians, and get then comfortable and have someone right there, immediately available for questions. Sometimes some of our staff may even actually go into the exam room with the physician to help answer questions and consulting, getting things done.

So that phased-in rollout, that’s been very smooth for us. We’ve spent a lot of time training the staff in the traditional training environment. We do so with the physicians when we can, but obviously that’s a little more challenging. But the nice thing about Allscripts in particular is that most of our users have found it to be very intuitive. I’ve been very impressed with them. Its one of the more intuitive applications from a healthcare standpoint that I’ve come across.

Are you on Touchworks?

Yes. Version 10, and right now, in the process of converting to Version 11.

You’ve done some work with application virtualization.

We’re past the experiment stage, but we’re still doing some trials with it. We’ve got a few folks on our team here who have used Altiris in the past. Altiris was recently purchased by Symantec. It’s fantastic. We use it for our trouble ticketing system, for our application distribution system, our PC and server imaging. We’ve got our whole biomedical medical preventative maintenance ticketing system in there, so our clinical engineers get alerts when preventative maintenances for equipment are up and coming and they use that to document what they’ve one.

One of the nice features about Altiris is that it has a software virtualization piece. There’s a lot of talk about server virtualization with things like the VMware, which another thing that we’re doing, but this client-side virtualization is particularly interesting. So, we can run applications that may have conflicts with another application, but on the same PC, in this virtualized layer.

A couple of our applications at our long-term care facility don’t play nicely with another app on the PC, and so what we’ve been able to do is virtualize it isolate this application to run in its own memory space and avoid conflicts with the other tools. It’s as simple as clicking on an icon to launch it and then, when you’re done, it disappears from memory and the PC goes on with its normal activities and its previous configuration and the other app that conflicted with that other app can run with no problem. So, one example is, just as a test, we’ve been able to run Office 2003, Office XP, and Office 2007, as an example, all on the same PC and all at the same time. That’s the power of this thing.

You license this by the desktop and basically you just install it? There’s  not a lot of configuration that has to be done?

You can download the Altiris software. I think I have this correct – individuals who want to experiment with it for their own personal use, all the tools are up on the Altiris Web site that you can  download for free and trial it. Basically, what you do is you get your machine set up in the pristine state that you want it to be, and then you run a tool that looks at how the application that you want to virtualize installs itself. It remembers all the registry changes, all the files that are installed, and creates a separate executable, a separate layer that you can turn on and off with a very small client that runs on your desktop.

Sounds pretty cool.

It’s pretty straightforward to use and it’s pretty powerful. It doesn’t work with everything, but we’ve been able to work with a lot of different applications.

What we hope to able to do is create an application self-service environment. So, ignoring licensing issues for a minute, if a person needed Microsoft Visio today, they have to call the help desk, log a ticket, and then one of the technicians will push out, through Altiris, a Visio package that we’ve done and install itself on the person’s desktop and they’re good to go. That works pretty well, but, in an ideal world, the user will be able to go to a self-service software portal and install the layer that runs Visio and really end up not installing anything on the PC. Essentially, they just download this layer and, when they need it, they activate it; and when they’re done, it turns itself off.

And so, you can imagine from an IT standpoint, we’d no longer have to deal with software installation issues. We’re really dealing with flipping a layer on and off and keeping the desktop pretty static. We’re not there yet, but that’s where we hope to get. And the nice thing is that, then let’s say somebody’s PC blows up. All we really have to do is get them a new PC with a base image on it and there’s no additional installation of software required, in theory. They can really just have these application layers on that client and turn them on and turn them off as they need them. The whole process of installing all the software is gone. We’re not going to get there for a while, but for some key application that people need quick access to, this is a fast, easy way to get it done.

Tell me what kind of IT issues you’re seeing or what kind of successes you’ve had in general.

We’ve been doing a lot over the past six months to revamp our governance process. Like everybody else, we’ve got too much going on. We’ve got a lot of demand for new applications and luckily Mercy has been, financially, doing quite well to be able to afford those applications. But as a result, there’s obviously only so much talent, time and expertise for that. The team has to get all these things done. Juggling the priorities has been a big challenge for us.

About six months ago, we bought a product that then was called E-Project, but now is called Daptive. It’s part project management and it’s part portfolio management for projects. We chose one that will do both because we’ve got some of our project managers who are really deep in Microsoft Project and use that extensively, but we wanted to keep that compatibility and we wanted to have a way to keep track of projects at a detail level.

We didn’t have a great way of doing things at the portfolio level, so we wanted some tools that we could expose to our executive sponsors to say, “Here are the ten things that we’re working on now for you, and there’s the twenty things we’ve got queued up. They’re on your wish list.” We spent a lot of time the past few months getting all of our projects and all the attributes about these projects, whether they’re ongoing, or ones that are funded but not started yet, or ones that are wish list items and someday may be items that we’ll do in to this application, now we’ve got about probably 500 different projects in there, 75 or 80 that are going on right now; and the other ones on hold or on the wish list queue, depending on funding.

We hope to get all this stuff and the rest of the attributes about these products cleaned up, and then in the New Year, begin to expose this Web-based portal out to all these executive sponsors and use that as a vehicle to better communicate with them, “Here’s what we know that you want. Here’s what we’ve got teed up and that we’ve all agreed to as the timeframes for project XYZ. Let’s make sure we communicate with each other about. Is this data accurate? Does it meet your expectations? Or is there something else that you though you wanted to do or have that’s not on this list?”

What are the most important projects?

Clearly the ambulatory EMR project with Allscripts is a big one. It’s one of our corporate priorities. Our perioperative system with Picis will be a two-year project, certainly in earnest over the next year. We’re in the process of finishing up an electronic medication administration point-of-care system with CareFusion, purchased by Cardinal recently. That’s where our nurses are at the bedside, barcoding the unit dose medication, barcoding the patient’s wristband, making sure it’s the right med and the right time. That’s in the process of finishing up. That’s been a very important patient safety initiative we undertook about a year ago.

What’s the department’s staffing and budget?

We’re about 75 people, just over 2% of our operating revenues go to IT. From the networking side, we’ve got the network team that’s also responsible for data center and telecom. We’ve got a help desk, a traditional service center. We’ve obviously got folks managing our data centre and our servers. They’re our engineering team.

Clinical engineering is part of IT here at Mercy. We integrated those guys probably about 2½ years ago. We found that IT was involved in all the bio-med projects and vice versa. Essentially, all the clinical equipment is coming out on the network now.

We’ve got a small project management office of about six folks. Now I say small, but it’s kind of funny. I was in a meeting with several other CIOs  from various hospitals in Maryland and I mentioned that fact, and I think people were very curious how I was able to get six project managers approved. I can’t imagine not having a team of dedicated PMs that can go out and herd the cats for all the complex projects we’ve got going on. And then, of course, we’ve got a team that’s the traditional business systems analysts and clinical analysts.

A big help for IT and how we relate with the clinical folks, is we actually have four nurses on the team who are part of the clinical analyst team. They’re nurses with a deep technology twist to them, and they able to not only talk technology with the rest of the team and with the vendors, but they’re able to talk to the clinical staff quite well.

If you look at the concerns you have, either for your department specifically or for the hospital, if you’re looking out, say, three years, what worries you the most?

A couple of things. One, we’re in the process of building a new patient tower, so we have an 18-story building today, it’s about fifty years old, that’s pretty much at its end of life. We just broke ground a couple of months ago on a new facility just one block to the north. So, trying to figure out how to plan and budget for 2-3 years in advance for all the technology they want to put in place in this new tower is challenging. Everybody’s got a different idea of what they want to have done. We’re not fork-lifting all the operations from the current tower to the new one. We’re going to have some clinical functions on both towers. And as a result, its going to be hard to revamp all the processes, but clearly some process re-engineering is going to be part of this move and trying to layer in some new technologies that people want to implement as part of this move are certainly things we think about quite a bit.

While we have Meditech as our core, the fact that we have added on these other systems is certainly challenging. Obviously as we add more disparate applications into the environment, how we manage those, how we attach them, how we support them, how we interface them, how vendors get access to them, how we monitor them – that just gets more and more complex. Best-of-breed is a great approach for folks who have mastered change management as an organization, but we’re not 100% there yet. So, I think if we continue to go down this best-of-breed approach, we have to get a lot better internally at managing the change that comes with all the different applications.

I saw that you’re an advisor for an open source software company. What areas within healthcare IT will be influenced by open source how long will it take?

That’s a good question. The open source software company you referred to is Zenoss. We use Zenoss for our enterprise systems management here. All of our servers and our network equipment is managed through Zenoss in a nice common dashboard front-end. Wey hope they extend that to a lot of our bio-med equipment and other areas over time.

I think open source has applicability in most areas of healthcare. Some people think of open source as, “Hey great. I’ve got the source code, I can make any modification I want to it” and other people think open source is, “Just another piece of software out there that I can hire somebody else out there to support and manage for me”. So I don’t really look at open source as fundamentally different than most of the other software that is out there. It really just depends on how deep your shop is at being able to customize the environment, customize that particular application.

We don’t have a lot of developers here at Mercy. We’re more integrating off-the-shelf stuff, but I think if there was some open source software application that could meet our needs in a particular area, we’d be certainly ready, willing and able to take a look at that. Support of that open source app, we’d have to figure out, do we hire a third party to do it, or do we staff up internally and train folks on how to do it.

You’re one of few CIOs who has a Facebook page, so I know you like cool applications. What kind of stuff have you run across that my readers should check out?

Grand Central is a great tool that I’m slowly rolling out as my main number. Once you get into the details of Grand Central, its really amazing – all the customization you can do. Most people, in this day and age, will have a home phone, a cell phone, an office phone, and sometimes a pager. You can do some interesting things with Grand Central. For instance, if I’m going on vacation somewhere, the primary way people will get a hold of me is to my cell phone, but I may have coverage problems or I may not have it with me. So with Grand Central, in about 10 seconds, I can say, any calls coming into my Grand Central number forward to the vacation house’s number. Now that phone will ring anytime someone calls me. That’s just one of many tools you can leverage Grand Central for, so it’s a great way to let people to get a hold of you when they need to.

Another tool I don’t know what I would do without is Jott. Basically, I’ve got it speed dialed on my cell phone, so when I’m driving home at night and have an idea or a thought or something I want to track … in the previous days on my Treo, I’d sit there while I’m driving and try to type in on my notes page my thought, or something might call their voice mail and leave themselves a voice mail message. With Jott, you call up a number and it recognizes your caller ID from your cell phone, so it goes to your account, and you leave yourself a message; it gets transcribed, essentially in real time, and sent back to you in the form of an e-mail. So when I get back to my desk, I’ve got my thought, my note sitting there waiting for me. I’m a great fan of David Alllen and the GTD methodology, if you’re familiar with that. One of the things about getting things done is that you need to get things off your mind, off your conscience, get it down where you know you’re going to look. So Jott drops it right in my e-mail, which is something I’m in every day, and allows me to keep myself organized.

The other big thing I don’t know what I would do without is Mind Manager from Mindjet. It’s a mind-mapping tool. So, I use that for basically everything. Outlining any kind of documentation that I’m working on or strategic planning or meetings I’m going to have with folks all get outlined in there. Also, on top of Mindjet’s Mind Manager is a tool from a company called Gyronix called Results Manager that sits on top of Mind Manager and allows you manage your to-do list, for lack of a better term. So I might have 20 or 30 different maps of all these different ideas of all these things that I want to do, whether its personal or work-related. Results Manager will comb through them all and present them to me through a simple dashboard all those things that I’ve told myself that are a priority or important that I want to get done. Mind Manager helps keep me organized, and then Results Manager really helps me get the things accomplished that I want to get done. Frankly, I used to just use Microsoft Outlook tasks for everything, but there’s only so far that takes you, because you really can’t nest things and do hierarchies. You have to have one level of items and maybe apply different categories and notes, but if you really want to organize things and move them around and reposition them, Mind Manager’s the way to go.

What kind of hobbies interest you when you’re not at work?

My wife says I’m on the computer all the time when I’m at home, which is probably true. I’ve got three kids, all in elementary school, so I help out coaching their sports teams. They’re playing basketball right, now so that’s definitely an interest. It’s more than a hobby, but something that takes a large part of my time. I used to be wannabe chef. I considered actually going to cooking school for a long time and changing careers, but IT was much more interesting to me. I don’t cook or bake as much as I used to, but I still enjoy doing it when I find the time.

I’m a big fan of music. I’ve got music playing all the time. Whether it’s at work or at home. I’m a big fan of Rhapsody, which allows me to, for one price, play an unlimited set of music, look at different styles and different artists, and pick up some new tunes. You had a post where you were talking about Love, so I listen to them. I’d not heard them before and I was like, “Wow. This is fantastic.” So, that’s a band I’m listening to now. I really enjoy the ’80s tunes for the most part. I’ve been a big fan of collecting a lot of obscure acoustic eighties music. If you need any acoustic Duran Duran or Def Leppard, I’m your guy. [laughs]

Interesting Information from Jim

Department staffing

Business/Clinical Analysts (20)
Project Management (7)
Clinical Engineering (9)
Server Engineering (8)
Logistics (4)
Service Center (17)
Telecom/Data (5)
Information Architecture (3)
Process Manager (1)
No outsourcing of any function currently.

Average tenure is 6.7 years. Half of the team has a healthcare background.

Other Projects Requiring IT Involvement

Security:  IP enabled video cameras are the new standard at Mercy. Obviously, now another device on the network that requires management and storage (a lot of storage!) Check out www.vidsys.com for an interesting vendor merging IT and security.

Point of Care Testing:  More and more POC devices are network enabled (wired and wireless). These devices need to managed, patched, secured, and replaced (frequently).

Wayfinding/Signage: Signage is moving digital. Check out http://www.cisco.com/web/solutions/dms/index.html for some interesting tools we are starting to look at as we consider signage and wayfinding for our new patient tower. Cisco’s DMS is a network-based, set-top box solution with centralized content management.

Patient Entertainment: We haven’t pursued this yet, but will probably be looking to implement hotel-like amenities in our new patient room. Movies on demand, Internet access, meal selections online, etc. are all coming to a hospital near you.

Smart Beds: The day is coming (has come for some) where even the patient bed is a device on the network. I can see a Patient Command Center running Zenoss, where bed rail up/down status, 30 degree bed elevation in the ICU status, patient location, late medication alert, etc. all monitored via a central control center. We use Zenoss for server and systems monitoring today, but why not extend it to patient centric functions – particularly since it is an open source product!

Links to tools Jim mentioned

Grand Central
Mind Manager

HIStalk Interviews Laurent Rotival, SVP/GM of Enterprise Solutions, GE Healthcare

December 17, 2007 Interviews 6 Comments

Regardless of how you feel about how multi-national conglomerates have changed healthcare IT, you must at least acknowledge GE Healthcare’s size and influence. GE Healthcare, formed in 2000 and headquartered in the United Kingdom, replaced the old GE Medical Systems Information Technology (GEMS-IT) and brought medical imaging, patient monitoring, and drug research into the fold to form a $17 billion business unit (over ten times Cerner’s size, to put that into perspective). The company’s IT profile was raised with its 2005 acquisition of IDX for $1.2 billion.

I don’t hear all that much about the company’s plans, so I was pleased to have Laurent Rotival volunteer to be interviewed (or, more precisely, to have one of his executives suggest it with his subsequent approval). To have a top leader of the industry’s largest vendor agree to be interviewed by an anonymous blogger … well, I was surprised and delighted to take him up on the opportunity. Thanks to the folks at GE Healthcare who made the arrangements.

Tell me a little bit about your background and your responsibilities at GE.

I’ve been with GE for about twelve years. I’ve just joined this role. I’m senior vice president and general manager of what we call the Enterprise Solutions business that includes five product lines. The most notable one is Centricity Enterprise, with the Carecast line or LastWord. We have Centricity Perinatal, Centricity Perioperative, Centricity Anesthesia, Centricity Laboratory, and Centricity Pharmacy. So, it’s basically the clinicals.

Vishal Wanchoo, who’s the CEO of GE Healthcare IT, has two other business units. One of them is called Imaging Solutions, which is run by Don Woodlock. That’s our RIS/PACS solutions, and with the recent acquisition of Dynamic Imaging, it includes that product as well. And then the third business is called the Clinical Business Solutions. Actually, that’s the integration of two businesses. They were separated before. One is called Practice Solutions that was focused on selling EMR solutions for physician practices, smaller physician practices and distributive physician practices. And then the business side is what used to be Flowcast or the revenue cycle management solution, again for physician practices and standalone hospitals. That’s run by Jim Corrigan. That’s the total entity, so I’m one of three business leaders under the GE Healthcare IT umbrella.

I’ve been here one year. Before that, I was the CIO of GE Energy Services, which is the service arm of the GE Energy business, which is based out of Atlanta. It’s about a $9 billion service business that basically takes care of all the support services that follow the sale of the turbine from installation all the way to its life cycle management.

Prior to that, I was the CIO of NBC in New York. And prior to that, I was the CIO of GE Oil and Gas based out of Florence, Italy, which was also an acquisition, a state-owned Italian business that GE had bought that went through tremendous growth. From what I recall, from a $900 million business to a $5 billion business while I was there. I think they’re reaching to $10 billion now, so that’s quite a neat story.

What about your personal background?

I went to Brown University. I have a bachelor’s and a master’s degree in Material Science and Solid Mechanics. Loved that. Prior to that, I’m what you might call a United Nations brat. I was born in Kinshasa, Zaire, now called the Democratic Republic of the Congo. I spent thirteen years in Africa and lived in Chad, Malawi, Niger, Ivory Coast, and Congo of course. I also lived in France, Switzerland, Italy, and Romania prior to graduating from high school.

I used to have lots of hobbies. [laughs] Not too sure anymore what my hobbies are, but I do have three young kids, married, living in Seattle and absolutely thrilled to be in the Pacific Northwest. I sort of accepted this job sight unseen, but I was not disappointed by this region. It’s a very beautiful place and I’m getting into all kinds of outdoor sports kind of things, like hiking and skiing and those types of things, which seems quite natural around here.

GE moves executives around a lot around their vertical markets. You’re a healthcare outsider. What’s your assessment, being fairly new to it and seeing it as a CIO who’s been in other industries?

You know, its fascinating and daunting at the same time. What’s fascinating from a technology standpoint is that healthcare is going through a lot of the same struggles and transformations that other industries have been part of.

What is not the same is the extraordinary impact technology can have in a positive and a negative way on the processes and workflows that we impact. And I think that’s quite a thrill, but also very intimidating in my position, because clearly not having the clinical background, ramping up as quickly as I can, of course, with the help of our clinical leaders here at GE Healthcare IT, not to mention the CMOs and our customers.

But I have to say, I guess it’s a bit of a dichotomy. You have this tremendous opportunity to upgrade the technology, to bring in new solutions that have the potential of significantly improving the quality and cost of the operation. The flip side is the risk associated to those conversions are probably greater that I’ve seen in any industry I’ve been part of, and so it’s something to be taken very seriously. That’s probably what makes this job one of the most exciting jobs I’ve had in my career — because of the impact you can have.

Also, when you work in gas turbines or in broadcasting or oil and gas pipelines or automotive plastics – you know you’re part of something important, but its all about money and cycle time and inventory turns and things of that sort. Where here, it’s neat to be able to go home and know that you have a real personal impact in everything you do every day. It adds a personal and maybe even an emotional dimension that is probably wasn’t as strong in other roles that I’ve had. I find that’s actually an extremely positive thing.

GE buys most of its applications instead of building them. Do you think that’s a good strategy as far as the customer is concerned?

That’s a good question. Actually, what’s interesting is what we’re doing with this business is a bit of a shift on what you’ve just stated.

There’s no doubt that the GE Healthcare business has been built by acquisitions. So, the GE was not in the space. I mean, they had some nominal departmental applications that were extensions of the diagnostic equipment that is the bread and butter of GE Healthcare, but very small activities in software. You could argue even that GE, especially under Jack Welch, never thought of software as necessarily a core competency.

What has changed over the last fifteen years, however, is that there is practically no technology that we have in our portfolio, whether it’s in healthcare or outside of healthcare, which is not differentiated by the software products and the software technology that we associate to those products. So I think in the healthcare space, we’ve made a number of acquisitions.

We’ve created a business that in 2000 was just under $400 million and we’re closing in on $1.7 billion this year. A lot of this was through acquisition, but a great deal of it actually was organic growth and, of course, on almost all the platforms that we’ve acquired or inherited, we’ve followed an evolutionary path to enhancing them, rather than re-writing them from scratch.

What we’re doing in the Centricity Enterprise space is actually taking Carecast to that next generation, which we call Centricity Enterprise 6, which we just launched a few months ago. Actually, it was one of the first major releases of the new product in this business in at least three years as far as I can tell. What we’re doing is grounding ourselves and reinforcing the very strong position that this business has been able to build over at least 25 years. And then what we’re doing in parallel to that is starting to build a state-of-art tech stack for the Intermountain partnership. A set of applications that will extend the Centricity Enterprise 6 platform, and then ultimately over a long period of time, overtake it.

We’re very sensitive to the risk our customers are facing as we re-write a platform. I think it’s dangerous, sometimes. On the one hand, you’d love to write from a clean sheet of paper because you have no constraints and you can usually develop a new application faster. But then when you look at the risks associated for one of your existing customers to actually convert from what becomes a legacy platform to the new platform, you find yourselves getting into some significant risks.

So the approach we’re taking, that might take a little bit longer, is to reinforce the foundation that our customers depend on every day for the same values and benefits and risks that I mentioned earlier. Then, incrementally add on some cutting-edge components, which ultimately will add up to a completely new footprint. We believe that that’s a path that presents less risk for our customers, protects their total costs of ownership, and ultimately takes them from a legacy architecture to a state-of-the-art architecture.

GE’s healthcare IT acquisitions were mostly middle of the pack, not the best or those with the biggest market share. Is that contrary to the overall GE strategy?

I think GE has multiple strategies. I’m not sure there is a single strategy for acquisitions, but then again, I won’t speak on behalf of all my colleagues across the company.

You know, the #1 and #2 thing was very much something we were aligned to in the Jack Welch days. But as you want to grow as a business, you can’t afford to just go for #1 and #2 because then, by definition, you don’t have that much growth left.

So the approach we’re taking now is to try to position yourself, not always necessarily with the absolute best technology, with the absolute best customers and partners. And one of the things we found that was extremely valuable, and is proving itself out every day and every week that we work here, is the customers that we have in the Carecast installed base, organizations like UCSF and Wake Forest and University of Virginia and so on, are really exceptional. And as you look at developing that next generation platform, what’s more important is not to have the best technology today, but to have the organizations that are the most distinguished in practicing care so that they can influence us as we build this next generation software.

So we actually think that we have a ton of room to grow and, because to some degree, you could argue this is the silver lining in not having the absolute best dominant technology, is that we’re not quite as anxious about leaving some of it behind.

Someone once said, “No company has ever benefited from being acquired by GE.” Your reaction to that?

Well, in my personal experience, I mentioned the oil and gas business. So this is a state-owned organization, somewhere around the $900 million range; a strong supplier of a certain type of technology but without a dominant position. Today, they’re probably a $6 billion or $7 billion business. Not only the company and the employees have benefited. The city of Florence, Italy has benefited because it has only depended on tourism and now they’ve got a global giant right there in their back door. Which, by the way, is not a pure American brainwashed entity, it’s actually a very Tuscan Italian company that’s part of the GE company. I think that was a fantastic story.

Now you know sometimes, if companies are too small, they can kind of get steamrolled. That happens. I won’t say we haven’t had our fits and starts. But in my experience, companies have done pretty well. I mean, NBC, the RCA acquisition in the eighties — NBC Universal is certainly an impressive outfit today.

There’s no doubt there’s complexities. When you look at GE Healthcare IT, there are a number of entities. It’s well published and reported that we have become part of this business. Sometimes change takes time. Coming up with technical solutions to integrate everything in a seamless fashion is not easy when most of the products weren’t meant to work together to start with. But, we’re making good progress there. You start with the culture; you line it up with the financial and the common set of metrics, and then you start attacking the more complex parts, which is bringing all the products together and delivering on the promise of the very rich portfolio of technologies and products we have.

Healthcare IT has two camps, the conglomerates like Siemens and GE and McKesson on one side and the “we built everything” group on the other side like Cerner and Epic. How do you think that will play out?

I won’t comment on our peers’ strategies, but what I can certainly say about ourselves is that we feel very confident that there is not only value in the individual components of our organization, whether it’s Centricity EMR or the Centricity Enterprise business from the Carecast side, but we truly believe that these solutions have got to work together.

I think there are two dimensions. There are solutions that should be fully integrated, ideally intrinsically,like the clinicals. We believe there are tremendous benefits from a patient safety standpoint, from a workflow efficiency standpoint, to have the clinicals integrated. But then at the same time, for solutions like imaging integrated with Centricity Enterprise, we believe that it is our responsibility to provide a seamless integration of those solutions, but they don’t need to be intrinsically sharing the same database or the same back-end data storage or data management solutions. It become more of a connectivity play. We have not made these acquisitions or invested in these programs to pretend that they are integrated or to put some lipstick on them and hope that nobody notices.

I think GE culturally has a tradition of being very transparent, which of course a lot of people can use against us because we’ll tell you pretty much what it is, and whether it works or doesn’t work. But we are committed, and if you look at the resources we’re dedicating to integrating the portfolio, we believe that integration is critical. Now compared to some of our colleagues who have built their own applications, I think they’re doing a fabulous jobs and it’s simpler to integrate. By definition, they’re built to be integrated.

The flip-side is that I don’t think its going to be as easy for them to integrate the complete continuum of care from not only the software standpoint, the data management standpoint, the clinical decision support standpoint, but especially all the device connectivity and the integration from a total workflow standpoint in the space and the environment the physician or the clinician themselves is surrounded by. Not just a software company, not just a hardware company, but actually working through the total space in which the clinicians are working. That’s where GE Healthcare is trying to position itself.

How close do you think we are to that picture where the traditional lines of demarcation like being FDA approved or having sensors that actually touch patients, or whatever it is, separate IT companies from bio-medical equipment companies?

I don’t have the answer to that. But I can tell you that is a big question. It has very significant implications for all of us, especially in the IT industry.

The key to success, and this is certainly what we’re pursuing, is rather than trying to demonstrated absolute integration on a seamless basis across all these technologies and all these disciplines, we want to create an environment where we have a technology stack and a technology framework that makes it easy to integrate all the things that you know today, and also to integrate all those things that you don’t know you require in the future, but you will acquire and that it will make it significantly easier than it is today.

So all the investments we’re making today are based on open architecture and open tech stacks, so that as you invest in our products, whether you start at the departmental end or you come to the enterprise end, as you continue investing in them, it will not only be easier to integrate GE technologies, but it will be easier to integrate any technology. Where the regulatory impact to all this is — I unfortunately don’t have the answer to that, but I’m sure we’ll all experience that over the next 10 or 15 years.

Do you strive to be #1 or #2 in the inpatient and the ambulatory EMR product segment?

That’s certainly what we strive for, but we want to do this correctly. We don’t look to growing at breakneck speed without having the quality and the support and the services. I had a business leader I admire who used to say, ‘You have to earn your right to grow’. And you can’t just grow because you have a lot of money or you have a lot of capacity or you have a lot of engineers.

We recognize that we have some work to do to improve the quality of our products and our services. We’re making very significant investments as we speak — to the service, the engineering, and the support side — to ensure that we are ready to grow. We’re GE and we have every intention to grow and we have every intention to be market leaders. That said, we don’t want to do it at the expense of delivering high quality products that serve our customers as we promised they should.

How is the $1.2 billion GE paid for IDX being realized?

The IDX portfolio was a very rich portfolio of products and customers. I described to you the three major business units we have. All those business units are doing very well and the business is growing. Certainly from a financial standpoint, the performance is very positive.

What’s particularly valuable about the realization of the IDX acquisition is that GE Healthcare needed a very strong information technology backbone to integrate all the various products and solutions that it offers. And what IDX had been able to bring was not only strong ambulatory products, but particularly the Centricity Enterprise side, is the platform we’re going to use to provide that core centerpiece of information management for the hospitals and the large IDNs. So we recognize we’ve got some gaps, but we’re making some significant investments jointly with Intermountain and a number of our other development partners.

The continuum of care is vital. There’s not a single healthcare organization that I meet with – certainly in our customer base, and even potential prospects – who doesn’t stress the essential importance of having a fully integrated IT backbone to run your operations, not only on a day-to-day workflow basis, but also on a retroactive advanced decision support capability, to be able to analyze how to improve care and how to tighten up the tolerances on how care is being delivered across different physicians, operations, hospitals, etc.

So I think that’s where the real return on investment is going to come, where we’re going to be able to not just deliver and implement a Centricity Enterprise inpatient or outpatient solution, but when that solution will actually allow our customers to fully integrate all their diagnostic equipment, all their labs, all their practices, and do it in a seamless way. So that’s the bed we’re in. When we reach that point, the $1 billion plus will be a small cost in the context of the rewards we’ll be able to get not only as a company, but for our customers.

When does the work at Intermountain come out from under the covers?

It started 18 or 19 months ago or so. There was a ramp-up of resources prior to the IDX acquisition in 2006. And as we acquired IDX and started integrating the business after the first quarter of 2006, we were at about 100 resources. We’ve been fully staffed for about three or four months. We’re a little over 310 or 320 resources, not only at Salt Lake City, but also in a couple of other GE sites.

We’re going to be releasing the first major parts soon. Not releasing to the market, but implementing them within Intermountain, the first major phase of the program, which will be focused on the emergency department. So we’re very excited about that. We’re targeting that for the end of the first quarter or beginning of the second quarter next year.

So the team is heads-down working on that, and we’re designing and developing the specs for the next two generations of the product and we’re very excited about it. So, it’s going very well. I think there was a little bit of silence for awhile because the team was really getting its sea legs. We had acquired IDX, and we bought in the Carecast business. As we were looking at the exceptional partnership we had with Intermountain, we also recognized that there were some luminary customers within the installed base that IDX brought in. We wanted to make sure they could participate and help enhance what is designed to become a transformational, next generation platform.

We talked about the acquisition integration, getting the cultures aligned, understanding what’s in conflict and what’s not in conflict. So that perhaps delayed us a little bit, but the result is that we’ve never been in a better place when it comes to our partnership. Our customers are excited about it. And, we’re having a pretty impressive set of collaboration across half a dozen large, very respected healthcare organizations, with Intermountain, of course, at the core. So it’s very exciting. We’ll have some cool things to show at the beginning of next year.

Do you think the end result will be targeted at large organizations like those ones you just referred to, or will it be something that the average community hospital can use?

It’s targeted for the average community hospital. We’re architecting it so it can be run completely on commodity hardware. So, it’ll be completely available to scale up to the Intermountains and the UCSFs of this world, but it also has the capability of running off Linux boxes and a fully open tech stack. Pretty much a state-of-art technology stack, which will provide not only a very low cost point and a low TCO, but also provide tremendous opportunity for integration, not only our products, but also third party products.

As we all know, and I certainly know from my 10+ years as a CIO, there is no such thing as a homogenous portfolio of applications in any organization. So I think that’s the other element we’re trying to address here. You’ve got to have something that can work easily with other technologies. I think that will be a differentiator as well.

When do you think you’ll have the first fully commercial sale of the end result?

We’re not looking for a big bang, “Here’s the GE-Intermountain EMR, ready for sale with a nice ribbon.” We’re basing everything on the Centricity Enterprise 6 platform, which we released earlier this year. And the way we’re looking at it is to implement it on a modular basis. So what we’re recommending is that you implement Centricity Enterprise 6, and then we are building all the engineering integration requirements so that, as modules come out, whether it’s for ED, whether it’s for a flow sheet, whether it’s for a PDA, whether it’s for other types of services that we’ll be releasing over time.

Basically, every year we’ll be releasing different components. You’ll be able to enhance the Centricity Enterprise 6 platform with those components. And over time, and it all depends on the appetite and the rate at which an organization wants to consume these things, you will find yourself having the center of gravity of your application will be increasingly the new tech stack rather than the old tech stack. But it really will be up to the client organization to decide at what rate they want to absorb them. So we’ll start releasing some things next year.

You will be marketing it to new customers, correct?

Absolutely. But in 2008 and 2009, the output of the GE-Intermountain partnership is not going to be a full, complete, 360 EMR solution. I mean, we’re building this, we’re very focused on starting with ED. We’re going after ambulatory. We’re going after certain infrastructure components. We’re going to sequence it that way.

This is sort of the internal debates we’re having these days. What are we focused on first? What will we focus on afterwards? Where are we strong? And so, to a degree, we think we have the best of both worlds. We have a very strong orders and CPOE solution with Carecast. We recognize that there’s some areas of improvement, but we also have departmental products that compliment it well.

I thought one of the braver, more honest things I’ve seen a vendor do was when GE responded to the KLAS nursing adoption study and pretty much said, ‘Look, we admit it. We and our competitors haven’t really done a good job of giving nurses the systems they need.” What actions resulted from that?

It was a hard decision, but we certainly didn’t want be rewarded by trying to sugar-coat it. GE has a strong culture of transparency.

We’re trying to get our customers upgraded to the latest release of our product. There are a number of features in the latest release of our product that actually mitigate some of the issues that were identified in that report. But we’re also putting a very strong focus on nursing workflow. We’re taking advantage of a lot of the best practice methodologies and the operational rigor that GE can bring here to ensure that we not only interact with our nursing client communities in a productive way, but we also translate their requirements and their requests into actionable product requirements that will be built out and integrated into our future releases.

It’s a tough situation to be in, because clearly nurses are among the largest population of our users, probably without any competition. And at the same time, we would obviously prefer to have better solutions for them. But I feel good considering the resources we’ve invested in this business. Just to maybe give you a sense of the kind of resources we have in development today compared to the resources this business had in the IDX days, the Centricity Enterprise business or the Carecast had about 250 engineers when we acquired them. We’re now in the range of about 620 or 630 engineers dedicated to this one product.

So the exciting part is that if you combine the clinical expertise, the software expertise, the domain expertise that the IDX team has, and you combine that with the rigor and the operational excellence and the focus on execution that GE brings, and you add on top of that the significant resources to actually walk the talk, it’s not just a question of gathering the requirements, but its doing something with them. I think the prospects are very positive and optimistic.

What we’ve also done from an organizational standpoint is a CxO kind of client forum called the Physician Advisory Group, then the CIO group. We’ve added a Chief Nursing Officer Advisory Group. That was one of the things we did early last year. We have a chief nursing officer internally. We’ve been hiring more experienced professional nurses into our organization. So I think there’s a very strong culture so our nursing users have very strong advocates internally and we’re including them now in what was already a good communications process with the CIO and the CMOs or CMIOs. Now we also have the CNOs included in that. It’s making a huge difference in helping us understand how to continuously improve our products.

If you look at the broad spectrum of healthcare IT, which areas would you say are most popular right now?

One is a tremendous focus on clinical workflow. The software industry has had a tendency to always think in modules or components of modules and has always focused on the connectivity side and the automation side and the paperless aspect. Everybody has been talking about paperless and eliminating the paper artifact. I think a lot of organizations have taken care of that and are less focused on paperless and more focused on ‘How do I really optimize and maximize the efficiency and the quality of my workflows?’, which of course doesn’t always work naturally with the way IT solutions are architected.

I think the other aspect is driving evidence-based medicine; making sure the data is available, so it’s not just gathered after the fact through some kind of manual reporting, but that every transaction, every encounter with the patient captures data on a standardized basis. And as you look at the work we’re doing with Intermountain, literally leveraging knowledge terminology, management, setting up standard databases, and setting up clinical data models, ensuring that the data is captured at the moment of the transaction or the encounter with the patient, which then allows you obtain a very, very rich database that then can be mined for analysis and for discovery of how to improve care.

The other thing that we’re doing, of course, is including in the workflows best practice care. So I think that is something else that we’re hearing more and more about. How do we keep our physicians and our clinicians fully up to date on the latest developments in healthcare? How do we help them as individuals who have a tremendous amount of pressure both transitionally and from a responsibility standpoint to be aware of the latest developments, the latest adverse interactions, the latest discoveries on how to practice care and how to address certain types of concerns?

Through the software we’re developing, we believe we have a unique opportunity, not just as GE, but as a partnership with other organizations like Intermountain healthcare; organizations like UCSF and others, to take the best practices that they’ve developed and make them available, not only to large institutions, but particularly to community health hospitals and others. And so that’s what we’re targeting going forward.

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