HIStalk Interviews Joe Boyd, Chairman, Encore Health Resources

Joe Boyd is chairman of Encore Health Resources of Houston, TX.

Tell me about yourself and about Encore.

I have been in the industry for just about 30 years. I started my career with EDS on the payer side, working on mainly government-type healthcare — Medicaid, Medicare, and Defense Department-related payer side. I went from there to GTE, and then from GTE to Peat Marwick, all still focused on the payer side of healthcare.

In 1990, I joined Perot Systems and switched over in that point to the provider side. I ran the healthcare division of Perot Systems in the early 90s, from around 1994 until 1997, and then took a general management role for all of North America, which included healthcare. That period with Perot Systems is where I got to know Ivo and a number of the other folks who were the seed group that made Healthlink what it was. 

I left Perot Systems in 2001 and started to do consulting on my own, mainly focusing on working with small to mid-sized companies and largely in healthcare, working with the leadership teams to build the companies. One of the first clients I worked with was Ivo at Healthlink, so Ivo, Dana, and I started working together in 2002.

At some point relatively early, I took the chairmanship there. I was there through the sale to IBM, so I was involved in that process and then stayed on and helped them a little bit after they became a business unit inside of IBM.

When Dana and Ivo decided to create Encore, I was paying keen attention to what they were up to. Early this year, Dana approached me and asked me to join them in an advisory role. I spent most of the year getting up to speed on what they were doing and seeing how they’ve grown. In the last few weeks, they asked me to take the chairmanship role and essentially work with them through a growth period that feels very similar to the growth period I worked with them on the Healthlink side back in 2002 through 2005. That’s how I got here.

Why was the change made and what’s Ivo going to be doing?

It was an opportunity for Ivo to focus on the two things that he likes to do most. One of them is to continue to provide strong input into the vision of the company. I garnered a commitment out of him to continue in that kind of role. Also, to work with our clients and to leverage the relationships that he has in the industry. He’ll be doing a lot of the same things he was doing, but just a lot less involved in some of the day-to-day kind of activities associated with running the company.

What does a chairman actually do?

I’m not sure I can answer that question in the general sense, but what I do in Encore is that I’ve been very focused so far on helping them determine what things they need to put in place to support the kind of growth that they’ve had.

This company has grown from $4 million in revenue the first year to about $20 million last year and we’ll finish close to $43 million in 2011. When I got involved in early March of 2011, we had 125 employees. We have 250 employees now. We need to do some things to focus on supporting that kind of growth and making sure that we can continue to grow and take care of our clients as we have that type of growth. 

I’ll be helping strategically with what the company is doing, working with them on making decisions to put the infrastructure in place to run the company well, and guiding them through the phases of being a small company to being a relatively large company.

Ivo had told me that with Healthlink, he decided at the $100 million revenue mark to turn it over to someone else because it would have taken more money and different expertise to keep it growing. Do you anticipate a similar outcome at a similar point in Encore’s growth?

I don’t think there’s a dollar amount that is important there. I also think that the experience of the management team this time around is such that we can support growing a lot bigger than that. There’s not a magic plan that says that we can only grow to a certain size. I feel very comfortable in this team’s ability to be able to continue to grow and to grow aggressively.

People who start consulting companies often grow them, sell them, then start a new consulting company. What attracts someone to want to run a consulting firm instead of a product company?

I think that there’s a challenge this time around, particularly with Encore, to be more than just a pure play consulting company. One of the things that we focused on from the very beginning is looking at leverage solutions, where we can do two things by putting some methodology and some product in place.

One of them is to extend the knowledge that we have in the company to new consultants who don’t have as much experience maybe or don’t know the culture … a way to make that we have some best practices worked into what we’re doing. But secondly and more importantly is to be able to eventually have, particularly on the analytics side, products that have value independent of the consulting, particularly as clinical information becomes more and more important for decision-making with our clients.

I think we’ll see an evolution of the company to be a lot more than just a consulting company, and a company where revenues aren’t directly correlated to the number of people that you hire and the number of people you have in the company. I think the desire this time around is to have consulting elements to the company, but not be exclusively a consulting organization.

What kind of things do you anticipate that the company might get involved in?

There are two things that where we’ve already started and actually are well down the road on. One of them is a methodology that we call CoreQUEST, which is a discipline around the selection and management of everything from starting an EHR implementation through how you are going to use that kind of information to meet Meaningful Use requirements. If an organization is headed down a path toward becoming an ACO, how you handle that clinical information for decision-making, for what service lines are in which location, what disease management protocols we need to focus on in an area? Eventually if an organization decides they’re going to do their own insurance, how do they underwrite those kind of things? Really starting to use clinical information for decision-making.

There’s also a specific tool called CoreGPS that we’re using right now as a Meaningful Use product to help define how an organization is going to attest to having met Meaningful Use requirements. As the clinical information data becomes more robust, we plan to use that platform for other types of applications that would have use with our clients.

Do you see just growing organically, or do you anticipate that acquisitions will make sense at some point?

I think we’re open to either. From an intellectual property standpoint, we’re focused on building those kind of things organically with our folks and smart folks that we work with or clients, but we might be wise to look at an acquisition or two associated with those aspects of the tool.

When Encore started up, Ivo told me that he really didn’t care if it turned out to be a 30-consultant company as long as the client-base was 100% referenceable and people like to work there, but he would consider it a failure if it got huge and everybody made money but employees and customers weren’t happy. How do you think it turned out in the years since?

I think it’s a touchstone of the company. It’s the only company that I’ve ever been involved with where the beginning of every meeting – and this is true from a team meeting to a board meeting – begins with a discussion of one of the core values of the company, where we move around the room and everyone’s expected to talk about a place in the past week where there’s a good example of that core value being exercised. Then we circle the room again and talk about a particular area where we need to be working on those things.

One of the key components of that is exactly what you said — 100% referenceabilty. But that also extends to the type of people we bring into the company. It extends to what we’ve believe about the way teams should work together. It’s a key part of the way this company operates. The quality of the company will absolutely trump the size of the company at any point in this process. That’s a critically important part of the company.

Some people, probably me included, would say that Healthlink was a pretty special company until it got sold to IBM and they screwed it up. Not intentionally, but because their big company culture didn’t fit with an entrepreneurial consulting firm. Your competitors are being acquired by big companies. Has the dynamic changed?

From my perspective, there are not that many organizations on the field. When I was part of Healthlink, FCG was out there. There were a lot of other companies of a similar size. We were filling a niche that I think largely went away during that period.

What pitfalls did Encore have to avoid to get to this point and then which ones remain between where it is and where you want it to be?

I’m not sure there were pitfalls. There was certainly surprise at how fast the company grew. There was some surprise at how much the prior company brand really accrued benefit to Encore. Ivo told me at one point that he could have gone out and said, “We sell manhole covers,” and a client would have said, “Yeah, that’s great, but we need 15 people to help us with an Epic implementation.” There was a reputation that was built in from the start that I think created growth that they didn’t anticipate at first.

We stressed and we challenged our ability to recruit the kind of people that we want. We have never been willing to compromise the quality of the folks that we bring into the company. Aside from an acknowledgment that we need to spend some time and effort on making absolutely sure that we have the infrastructure in place that not only supports where we are today, but where we want to grow to.

I think that growth has been handled really well. To a large extent, this is probably the most mature startup you’ve ever seen. This is a group of people, including myself, who’ve worked together for 15-20 years. This team really knows how to run a bigger company and knew how to do it from the beginning. I feel like we’re well positioned. Even though we were surprised by the rate of growth, I think we’ve handled that growth very well.

Some clients might just want to deal with a bigger company, while others might just say, “I’m going to call Ivo. I don’t really care who else is out there – I want to work with him.” Do you think that’s unique to healthcare, and what’s the message for companies trying to figure out where they fit in the continuum from “tiny” to “huge conglomerate?”

I’ve been in healthcare for a long time and I also have been involved in other industries. I’ve also worked with some of the larger companies and some of the smaller companies. I think that healthcare — particularly the provider side — has been burned a number of times by large companies that came in and believed it to be similar to other transactional businesses. They don’t recognize that a lot of the makeup of healthcare is institutional and it’s built on longstanding relationships. It’s more collegial than a lot of industries are.

There’s been a tendency for some of those large companies to come in, decide it’s hard, and leave — and leave people in pretty difficult situations. There’s absolute value in knowing that a team is committed to this industry, not only that it’s an industry that they’re interested in, but it’s one where their relationships are more important than making a buck. That commitment to those relationships is critically important. It’s important to Ivo, but it’s important to Dana and to Tom and to myself and to the other leaders in this company.

You have a shockingly long list of current board and consulting activities. Why do you do all those things and how the heck do you find the time to get it all done?

When I left Perot Systems, I made a decision that I wanted to work with companies of a particular size. I also wanted to work in places where I could work with people I enjoyed and where I could make a large impact. I’ve let that guide who I get involved with and I’ve managed my time by limiting that at different points of time.

Right now I’m involved with three for-profit organizations and one not-for-profit. That’s about right for me right now. I’m not doing anything beyond that at this point. The CEOs of all three companies know each other. They’re working on things where I think there’s a lot of value between them. It’s not work when you’re having fun.

For people stuck in jobs they don’t like or that don’t have much of a future, they’re probably thinking, why not just take your suitcase of money and go sit on a beach somewhere? But almost never do people with that level of accomplishment do that. What’s it like to have that option but then to say, “No, I want to keep working?”

That was a soul-searching thing for me. I originally thought that I would do something that was more of a traditional retirement, but I kind of failed at that and decided that it was important to me to stay in touch with what’s going on, particularly in this industry. I did some work with non-healthcare clients. I’ve enjoyed what I’ve learned of a lot of those industries, but my passion has always been in this space. 

It may be that I’m just not a successful retiree. That may be the true answer.

When you look down the road a few years, what do you see as important issues in healthcare IT that people may or may not see coming?

There was an excellent article in The Wall Street Journal by Anna Wilde Mathews on the future of healthcare. She probably summed up my views better than I could possible have done myself.

In a nutshell, I think there are a couple of things. The changes going on in healthcare now have been politicized tremendously. I actually think they’re much more economically based than they are politically based. The requirement to fix a pretty badly broken financial system is going to drive the continued change. It will drive it in the same direction it’s going — quality of care and providing repeatable, successful solutions in healthcare is going to be critically important.

That’s going to drive a necessity to get a lot smarter about gathering consistent clinical data. It’s going to require good analysis of that data. And then really smart people — both client people and people who are external to the industry — working on ways to use that information to improve cost performance and to improve the quality of patient care. I think that’s going to happen. 

The distinction between the payer side of healthcare and the provider side of healthcare is going to continue to blur. Providers are more and more going to try to bring risk management concepts onto the provider side. I think that successful provider organizations are going to have to get sophisticated in managing risk.

The organizations that survive and thrive aren’t going to necessarily look like the organizations that exist today. They’re going to have to change and add some different types of capabilities than what they’ve historically had as part of the mix of what they have to worry about.

What’s happened in the industry right now is foundational. The analytics associated with consolidated clinical, financial, and claims data that position providers to make quality decisions on how to run their business is going to be super important over the next four to five years.

HIStalk Interviews Bobbie Byrne, VP/CIO, Edward Hospital

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

Tell me about yourself and the hospital.

Edward is a really the quintessential community hospital. We have 400 beds over two hospitals, one of which is behavioral health, and we have an acute care hospital. It’s the backbone of Naperville, which is a suburb outside of Chicago. We are making efforts to move into tertiary care and trying to bring tertiary care into the community so that we don’t have to have our residents going to the downtown hospitals.

We’re really so typical. We’re in the middle of America, in the middle of the suburbs. What we’re doing, I think, is reflective of what a lot of other people are doing. 

I’m a pediatrician. My husband says I got hit in the head with a computer and I’ve never been the same. I was practicing and made the connection between quality of care and automation of care, and that if we were going to stay on paper, then we would never have any data to figure out what we were doing well and what we were doing poorly. Maybe 10 years ago, I ended up moving into IT on a part-time basis at the beginning, and then with increasing depth. It’s always been about, “Get it in the system so that we can measure it and track it and improve it.”

You just chose Epic. What is it about their story that’s making them dominate all the new sales?

A completely integrated record – inpatient, emergency, and ambulatory, clinical, and revenue cycle. They are the only company that offers this. It is exactly what our envisioning session showed us that Edward wanted. 

I shouldn’t say that they’re the only company that offers it. They’re the only company that offers it with strength in all of those product areas. Very often when you’re making a decision, there’s some department that thinks that they’re getting screwed, and they usually are. There usually is some really significant weakness in one section of the product from any of the other vendors. In Epic, there just isn’t. Everybody feels like they’re getting a best-of-breed product, but they’re getting the integrated product that the organization needs. The only compromise was on the price. [laughs] That was the only negative.

Are you expecting a hard-dollar return on investment, or is it just a leap of faith that there will some quality and strategic alignment benefits that will make it net out in the long run?

My sarcastic response is that when electricity came into the hospital, were people expecting a hard-dollar return on electricity? I don’t know if they were. I don’t think they were. To me, the electronic medical record is becoming a utility. It’s the, “What is the implication if we do not put this in?” as opposed to, “What’s our return on investment for installing it?” I think in the Chicago area, it could be seen as a competitive disadvantage to not have Epic.

I assume that Epic was a lot more expensive than … well, I shouldn’t assume that, but in a lot of cases they’re a lot more expensive than the systems you didn’t choose.

The actual check that we send to Epic is a very small percentage of our budget. The difference in price between Epic and the other vendors on the software cost is, I think, pretty small.

Cache’ is expensive. That’s a cost that the other vendors mostly do not have. But the difference is in the people and in the requirements for implementation and the recommendations around pulling people off of the floors, sending them to training, having them come full time to the project. That’s really where the big dollars are.

It makes me wonder that if you use the Epic staffing and methodology, would the other vendors be giving you the same kind of outcomes that Epic is getting? I mean, is it really the product? I do think it’s a superior product, but is it really the product or is it the entire implementation methodology that makes the difference and the incredible success of Epic customers?

You’re in an unusual position in that you saw Epic as a competitor when you were with Eclipsys and now you’re on the provider side and have chosen them as a vendor. From your two perspectives, are they invincible, and if you were a vendor again, what would you do to mount a challenge to Epic?

At that time I was at Eclipsys, Epic and Eclipsys were formidable competitors. There were certainly deals that Eclipsys won and deals that Epic won. At the beginning of my time at Eclipsys, Eclipsys won more. At the end of my time, Eclipsys won a lot less, so there was a progression there.

I would say that at this point the only way to beat Epic is to find prospects where they’re not looking for a comprehensive system. One patient, one record, one bill is what we were looking for. If you have somebody who’s got that enterprise vision, single source of truth, I don’t know how you could beat Epic.

There would be huge time lag in building a new system. Where does that leave the pie of business that Epic might want vs. how much they’re going to get? People keep saying, “Well, the pendulum will swing back, it always does.” But what would it swing back to?

When I first got to Edward, we had this combined system where we had MEDITECH on the inpatient side and Allscripts on the employed physician group. People would say, “Well, shouldn’t we buy Epic?“ just because all the hospitals around had bought Epic.

I said, you know, if we’re really going to do that, maybe we should really wait for some transformational technology. Maybe we should wait for a pure Web-based solution. We should be looking for that really disruptive technology. Maybe an EMR that’s so intuitive it requires no training or something like that. That’s really what I was thinking that the hospital enterprise system really needed.

Athenahealth in the physician office is a disruptive technology. They have a completely different business model and they do things very differently. They’re not a standard electronic medical record. If we could have something like that on the enterprise scale — not specifically their business model, but something that is just as disruptive. That was the thing I was thinking would be able to beat Epic. And it would be good for our industry, right, to have some fresh technology.

With healthcare reform and with the need to understand the patient across the continuum of care, it wouldn’t be prudent for us at Edward to sit here and wait for some theoretical disruptive technology to come forward. We have to run our business. We have to do what’s right based on what we have today.

I suppose it’s possible that Epic might be able to be the disruptive technology. Typically it would come from something outside of healthcare or from a new company emerging on the scene, but maybe Epic will be the one to be able to provide us with this next wave. I certainly think they probably would have a greater chance of doing that then anybody. Well, I shouldn’t say that …

You’ve going to have a lot money invested in staff training, salaries, and travel. You’ve written in the past about IT turnover. How will you create a culture that makes those expensive employees want to stay?

We actually have very low turnover, which is why when I have any, it’s a challenge. We are not always able to compete on salary, of course. I don’t think there’s any not-for-profit hospitals who can compete on salary all the time.

We have a really strong culture that has a very nice work-life balance. We tend to promote from within whenever possible so that individuals have a career path. We are increasing the number of career paths, so that people feel like when they complete the projects, that they would have the next step and they can see that somebody has gone ahead of them and advanced at Edward. We try and be really accommodating when people say, “I like to work on these types of projects versus these types of projects,” we try and adjust based on that.

It’s just a really nice place to work. People are very nice. Individuals really like their co-workers. 

Those are the kinds of things that we do. We of course have work from home and provide the tools through all of your standard electronic communication so that people can work from home or work from anywhere.

I don’t fear the turnover as much as some people do. We will have some, I know we will. But we’re also then going to have an opportunity to get other terrific people into the organization. In the proximity that we are, we also live in a really nice community, so people like to live here and they like to work here.

Epic, both as an employer and as a vendor, tends to like to bring people in who don’t have much IT background. They almost seem to have an anti-IT bias, working around IT instead of with them. Do you see that as a challenge?

I don’t know that we’re going to have as much of a challenge. I believe that our IT department is really integrated into the hospital. We don’t have a big “us–them” kind of issue with our operational owners. I’m sure there’s a little bit of that everywhere, but I think the idea that we’ve always had to have a physician – and it was important to Edward to have a physician in the CIO position, because they really wanted to make that this wasn’t — that we were very connected to the business and very connected to the clinical workflows. We have former accountants who have moved over and have come into IT and vice versa, so we’ve had some people who’ve been in IT and then moved back into the business piece of it. 

This was a decision that was not an IT decision. I mean, everybody says that about Epic. This really was a complete grassroots, bottom-up user decision to choose Epic, so right now, people are feeling really collaborative and feeling really close together.

The majority of our project is not being staffed by consultants or IT people. We’re pulling people off the floor, sending them to training, and then they will be full time on the project. We will end up during the project having fewer IT people working on it than we will users;. There’ll be more users working on the project than IT people and they’ll just be working side by side.

You are a CCHIT commissioner. Do you think certification has done what it was supposed to do in reducing provider risk and do you think that role is still important?

Well, that may be the most controversial question.

If you think about certification, I’ll divide into two phases. One is the formation of CCHIT, which was to help increase adoption of health information technology by removing some of the risk on the buying side, and that CCHIT certification really meant something and that when if you were buying a CCHIT-certified product, it wasn’t going to be perfect, but you could be assured it was going to have some baseline interoperability security and functionality.

I do think that that changed very much the way that people purchased systems. For example, the days of the scripted demos to make sure that you could do long lists of specific feature-function ..  those days are gone, and mostly because if it’s a CCHIT-certified product, you can already pull out the long list of feature-function, security, interoperability items that you know the product can do. I really believe very strongly in CCHIT moving the market forward.

My concern is that certification for ARRA is a significantly lower bar than CCHIT certification was. There is absolutely zero requirement for anything related to workflow in the ARRA certification. An implementation doesn’t fail based on any particular nit of functionality. It succeeds or fails based on whether it fits the workflow of the user — the doctor, the nurse, the scheduler, the accountant, whoever is doing that.

For example, in the office-based setting, tasking between physicians and nurses is a huge workflow component. That’s part of CCHIT certification, not part of ARRA certification. But you know if the physician or nurse in the office can’t affectively communicate and task patient follow-up back and forth, the implementation is going to fail. 

I am afraid that we are going to hear a wave of stories of failed implementations of ARRA-certified products. I fear that we will have physicians and offices saying, “I bought a certified product. Why can’t it run my office? Why doesn’t it do these basic things in the office?” It may do it, but the certification doesn’t guarantee that you’re going to have a product that’s actually going to work for the environment that you’re buying it.

There’s that argument to be made that CCHIT-type certification is for the product and maybe ARRA is the certification of the implementation, which are really unrelated because you can do some pretty amazing things with some pretty crappy products and you can take a really good product in the wrong hands and turn it into a disaster. Do you see any influence of the Regional Extension Centers in trying to close that gap between what the product can do versus what the users try to make it do?

I think that it’s exactly the right idea, you know, put experienced people feet on the street in the areas that people are trying to implement. I have not seen a lot of real impact of the Regional Extension Centers. I think there’s a lot of regional variation. I know that some here are doing really great things and really helping, and then I think that some others are not.

I’m not saying it’s easy to get into these small doc practices and make it work. I think it’s really hard. I’m not so sure that the Regional Extension Centers have really checked the box or been successful yet as a whole.

Everybody who’s trying to predict the next hot trend thinks it’s going to be data warehousing and business intelligence based on electronic data that these electronic medical record systems will create. What are you looking forward to or planning for at Edward Hospital as far as what kind of data you’ll have and what you’ll do with it?

We’ve had a data warehouse for quite a while. I think it’s because we were running a different system in the inpatient as in ambulatory as in operating room. We really needed to have a data warehouse in order to get any kind of basic information to run the business.

I do think that that’s going to deepen, but I find it very interesting. The biggest thing we’re working on other than Epic is a clinical integration project. What I mean by clinical integration is clinical integration in the FTC definition, where groups of hospitals and groups of physicians who are independent come together to work on cost and quality metrics and then therefore can come together to contract with commercial payers. I think a lot of people will consider it a steppingstone to an ACO, perhaps not with Medicare, but with the commercial payers and with not quite as much risk as there would be in a full ACO. It’s a way to learn something about aligning physicians.

While we have this really nice robust data warehouse, the data that we’re looking to rely on from our independent physicians is billing data. I can’t believe we’re still doing this, but if we’re trying to say, “What can our independent physicians give us that will allow us to track our cost and quality metrics so that we can present to commercial third-party insurance companies that we really deliver better service,” the kind of data that they can give us is the claims feed. We’re looking ICD-9s and CPT II codes.

And you know what? I don’t feel great about it, but it’s better than having no data. I can’t expect these small physician practices to be … you know, they don’t have data warehouse, a business intelligence person. They can only give us what they can give us and that’s that.

I think we can be really hospital-focused and think about all of our big IT resource staff, but when it comes down to it, the majority of care is being delivered in the ambulatory setting by physicians. Even though physicians are becoming employed at a very rapid rate, there still are a whole lot more independent physicians out there delivering care. They have the data. Ten years after being in IT, I never thought I’d be back to a claims feed.

When you look at the important trends and challenges with the ones you see at your hospital and in the industry overall, which ones do you think are most significant?

If you have like five number ones, they can’t be number one? I think the pressure on declining reimbursement just impacts everything, because it’s across the board and impacts everything you do — new program expansion, investment in technology, investment in training, all of those things. It creates an enormous amount of pressure.

The increased patient-consumer empowerment. The idea that well, physicians refer a lot of patients to Edward and physicians are a very important customer of mine. There are times when the patients pick the hospital first and then they pick their physician, so they’re coming to Edward first and then they’re looking for an Edward physician. I think that that’s just going to continue to increase.

Any final thoughts?

I have to tell you I’m super-excited about what we are doing here. I feel like the entire time that I was at Eclipsys and the entire time I was at CCHIT, I was working towards this really comprehensive, patient-focused electronic system. I’m now getting to implement it. I’m pretty excited about it.

HIStalk Interviews Dave Lareau, COO, Medicomp Systems

David Lareau is chief operating officer of Medicomp Systems of Chantilly, VA.

Tell me about yourself and the company.

I was in Baltimore in the late 1980s and had my own practice management reselling company. One of my customers in 1990 came to me and said, “Dave, we’re real happy with your services, your billing system — we want to start looking at EMRs.” I said, “What’s that?” He said, “We think they’re going to be the thing of the future. Would you help us look at them?” 

We set up a process where once a month they would come into my office and I’d bring in a vendor. After a few months, they said, “Nope. All this makes us data entry clerks. It’s all template-based. We hate it, can’t use it. Thanks. Here’s what we need you to find.”

A couple of years later, maybe ’92, I happened to see Peter Goltra and his team at Medicomp and I was intrigued. I thought, “This sounds like what those guys were talking about. Let’s bring them in.” They looked at it and said, “That’s exactly the way this stuff needs to work, but it’s just ugly as hell.” It was a Unix-based system, the old green screens and stuff dropping down. They said, “If you put a decent user interface on that and integrate it with a billing system, that would really be something.”

I talked Peter into letting my little company do that. I eventually came home to my wife one day and said, “Honey, I just found what I want to do with the rest of life. Can we move to Virginia? I really want to work with this company. I love what they’re doing. I think it’s the thing of the future.” I figured at that point, yeah, 10 years from now everybody will have an EMR. You know how it was in 1992. 

I joined Medicomp. I found that they provide clinical content for documentation and patient care that thinks and works the way a physician does. It’s just simply that. We’ve been doing that ever since, with changes along the way in response to the markets, technology, etc.

You said you had to find Medicomp. I always got the feeling that both the company and Peter Goltra aren’t as widely recognized as they ought to be. Is that low-key approach intentional?

The low-key approach is somewhat intentional. We provide a really critical component to about 10 to 12 different vendors in the space. That’s growing all the time.

We leave it them to do a couple of things. Differentiate themselves from each other. And, we want to make it clear to the marketplace that if you want an EMR that uses our content, you need to go to our customers, not to us. 

We’re very low-key at industry events. We really only concentrate on going to industry events like HIMSS and MGMA, where we’re there primarily to support our customers, who are EMR vendors, and educate their potential customers about the benefits of an EMR that uses MEDCIN.

The other way we stay in the background is when a new vendor decides to license our technology and put it into their product, we leave it to them to time the announcement to let their installed base know. As you know, once somebody announces a change in direction, even if it’s a good thing – which we think implementing our MEDCIN engine and Quippe is — it still tends to freeze what is then perceived as a legacy product, and these people need to maintain that revenue stream.

For readers who don’t know, describe the MEDCIN engine and how it’s used.

MEDCIN at its core is a clinical knowledge base that has about 280,000 clinical concepts in it. For the most part, they are pre-coordinated. The purpose of the engine is to present the relevant information to the physician at the point of care given a specific clinical scenario. 

For example, there are 293 concepts in MEDCIN whose relevance is scored for a patient with asthma. In that case, adding more concepts to MEDCIN doesn’t do anybody good. We can focus on the relevant items given almost any clinical situation, which is what makes it valuable for a providers treating a specific patient for a specific problem or a set of problems at a specific point in time.

What’s nice is is that it thinks and works like a clinician, and then all those concepts are mapped to ICD-9, ICD-10, SNOMED, CPT, LOINC, RxNorm, and all the 44 Meaningful Use criteria. All the nonsense — from the doc’s point of view — is taken care of in the background. The engine presents to the physician the things that they would care about for a patient with that condition.

We came up with that in 33 years of working with physicians saying, “OK, here’s the presentation. What would you want to be in your note? What will you want to look at? What kind of lab results would you want? What are potential orders? What would you do for the review of systems? What history? What physical?” It presents the things that real docs who are treating patients every day tell us they would want. We’re not trying to tell them what to do – we’re presenting to them what they said they would do.

Describe where your content comes from.

We have at any point about 20 to 30 active clinical consultants. We tried in the mid-80s having medical MDs on staff and nurses on staff to do that, but we found that when we brought guest experts in — consultants to help us build the data engine — all they did was argue with each other over, “You were trained here, you were trained there. I wouldn’t do it that way, I wouldn’t do it that way.”

We ended up saying, OK, we’re going to be clinical knowledge management engineers. Let’s engineer an editing system, where we can bring these people in and we have editing facilities. Now with the Web, you don’t have to do it locally, but when we did, we had an editing facility in Martha’s Vineyard, we had one in New York, whatever’s convenient. We’d typically bring somebody in for two or three days at a time. Some of these guys come in regularly, some come in every six months, some once a year for a week or so.

We sit with them and say, you’re seeing a patient with asthma. What would you normally expect to have to think about or address? They’ll say wheezing, difficulty breathing, is the wheezing episodic. What do I see in the lungs? Auscultation. Family history. Do they have exposure to dust mites? What’s the spirometry? What’s the O2 sat? Do they have any other conditions, maybe nasal polyps?

We say, is they’re anything else that might help you differentiate asthma from something else that we should put in the asthma – we call them indices – in the asthma index that you’d need for rule-out? So there’s things in there that have both a positive and a negative correlation. 

We put those in, and then we’ll go back and say, now for each one of those things, wheezing … somebody comes in wheezing, it doesn’t mean they have asthma. Means they might, but what else might it be? Let’s built out the index for those things.

You do this in an iterative process over years. We’ve ended up with about 293 items in the asthma index, one of which is wheezing, which has 260-some links of its own to diagnoses other than asthma. You can attack it from either point. This is iterative. Then we’ll have pulmonologist come in and say, we just did this recent work with somebody who was a specialist in asthma. How does this intersect with other things that you see? Does it raise the risk factors for pneumonias? 

It’s iterative. It’s one of the reasons why it’s so hard to replicate this with a template system, because we’ve been at it so long. Everybody says you can’t take nine women and have a baby in a month. That’s sort of what we’re dealing with here.

Does the MEDCIN engine have competition other than templates and text-based literature look-ups?

In terms of what we do and the way we do it, no. But in terms of competition, there’s tremendous competition all throughout the marketplace for our approach and any other approach. We define competition as anything that causes somebody to say, “Hey, your stuff looks great, but I don’t really need it.”

You can fake some of this activity for a single-problem patient with loads of templates, but eventually it doesn’t scale up when you start to have multi-problem patients whose conditions progress over time with clinical sequelae, complications, comorbidities, etc. Nobody really does or is close to doing what we do, but as long as people think that there are reasonable alternatives … sure, we have competition, and now you’re hearing about Watson’s going to do this and Zynx has protocols and Wolters Kluwer is getting into the market. 

One of the things that we do that those folks don’t do is we actually have the concepts for documentation linked to E&M, linked to all the other stuff designed for use at the point of care. It’s not a knowledge resource — it’s a documentation and patient care resource. In that regard, there’s really nobody else that I know of that does what we do.

Explain the advantages of Quippe and why physicians like using it.

When we first started designing this stuff, we were a little bit limited by the current technology at that time, by the state-of-the-art of user interfaces, and that kind of stuff. We made the decision in 1997 to make the knowledge engine its own component without a UI. When some of the browser-based technologies and some of the performance stuff for cloud type services came along in 2002 to 2005, that enabled us to think about a completely new way to deliver two things to the user at the point of care: deliver the content and give them control over the presentation of it.

What we’ve managed to do with Quippe is take 25 years — from 1978 to about 2003 — of clinical content development and what would now be looked on as rather primitive user interface options, and bring a bunch of docs in here and say, “We can deliver any of this content anywhere you want in millisecond time. What is it you really want, and what control over it do you want at the point of care in a user interface?

We had docs come in here over a period of about two years, probably 10 different sessions, and just say “Give me what I want to know when I need to know it. Give it to me in a format that I can control, that can learn from me as I go along, adapt to my needs, and not fix me into a template, but actually push the information to me that I want to see for any condition I treat without me having to go and find it or ask for it.”

Quippe is a note-like user interface that has all this data behind it ready to serve whatever action the clinician takes and give it to them on almost any device. Right now tablets are the hot new thing, but it doesn’t have to be that way.

How is it different selling to vendors rather than end-users? You had a significant presence at HIMSS, including sponsoring HIStalkapalooza. You have to develop interest by the user, but through their vendors.

There’s two ways to do it, and we have to do a little bit of both. Going with MEDCIN and Quippe as your platform is a major strategic and management decision. You have to get the interest of probably the busiest people at HIMSS, who are the CIOs, the CEOs, the clinical people of the vendors who are there to do business with their potential customers. They’re not there to talk to me. We have to get their attention and we have to prove to them that we can provide value. 

One of the reasons we do the iPad giveaways at HIMSS that we just did at MGMA is to show these vendors that we can provide to them something that I can train their customers to use in 20 minutes on a busy show floor. They look at that and say, “Wow. That means I can scale up. I can get implementations up. The docs seem to love it. Tell me more about Medicomp and MEDCIN.”

It’s a two-pronged strategy. We’ve got to appeal to the end user, but we’ve got to also get the attention of the busiest people at HIMSS and MGMA.

I knew nothing about documenting an encounter or using an iPad, but it really was just that easy to use Quippe. What response did you get and are getting at conventions where you just sit people down cold in front of it and say, “Here you go?”

They can’t believe it. It looks so easy they think we’re faking it, which is why we have to put it in their hands. 

I don’t know anybody else that puts software with the complexity underneath it and power in a user’s hand on the show floor at HIMSS and just says, “Have at it.” That’s a very powerful message and one we’ll continue to use over the next couple of years. 

That all comes from those docs coming in here. Every time I had an idea for the user interface or somebody here did, the docs said, “No, no, no. Just give me what I want and get out of my way because I already know how to treat patients. I already know what a note looks like. I know how to document. Just give me the information I want and a format I’m used to looking at it.”

That’s really all that we do. There’s a tremendous layer of technology underneath that, but MEDCIN is like the wizard behind the curtain of Quippe, except there’s really something there, not just some guy pulling strings. The only way to prove that is to put it in somebody’s hands and let them do it.

Like the iPad it runs on, that’s an Apple-like strategy to replace complexity with elegance, but let the user do what they need to do efficiently.

Exactly. One of those light bulb moments for me was I went out to visit the end user of one of our customers about five or six years ago. She was not happy with how much the user interface that we had in the old VB6 days slowed her down. She was vocal about it, but she made some really good points. She gave me a lab coat and said, “You’re an intern for the day. You’re following me around. Let’s go see two patients.”

We went into see one. Lights were on, computer, etc. She did what she did using the software of one of our vendors, who will go unnamed. She went to document and do all this and do all that. At the end of that and said, “Did you see how excruciating that was? Let’s go in to the next patient.”

She pulled up the shades so that light came in. She unplugged the computer and pulled out a pad. Saw the patient, did what she did, gave the patient a prescription, walked out, and she said, “I already knew how to do everything. Without your technology, it took me 11 minutes. With your technology, it took 15. Don’t slow me down. Get out of my way.”

I came back to the guys and I said, “We’ve got to kill the idea of fixed templates. We got to kill the idea of checkboxes on forms. We got to come up with a different model for this. What do physicians know? They know medicine, they know what they’re thinking, and they know they have to produce a note. Let’s marry all that together.”

As it turns out, our engine was almost perfect to serve up that sort of solution. We brought the docs in here and said, “Help us do this.” They just kept saying simplify, simplify, simplify. That’s how we did it. That’s what makes it possible for us to teach people to document on an iPad on the show floor in 20 minutes.

That gets into the area of EHR usability, which is, along with ICD-10 and Meaningful Use, is a hot topic. What is Medicomp doing to address those?

A couple of things. Back in 1997, when the National Committee on Vital and Health Statistics decided to set up a standards committee, we were very involved in that. One of the big decisions they made in maybe 1999 or 2000 was ,”We’re going to set reference terminology standards for the exchange of information between systems. We’re not going to dictate user interface terminologies. We think those have to adapt to users and it’s not going to be the same for everybody ,so let’s establish standards.”

In July of 2003, they said that LOINC, RxNorm, and SNOMED were going to be some of the voluntary standards for this. We immediately said everything we do from now on is geared at making sure we maintain that layer of usability and map to all these standards in the background. We probably added 30% to our staff, we added consultants, and we just started cranking out those mappings, just doing them reiteratively over and over again.

When we saw that ICD-10 was going to happen eventually, we prepared for it. We’re now implementing that. We did the same thing for E&M, which is another kind set of coding mappings back in 1999, 2000. We continue to do all that mapping in the background.

We adopted Virginia Saba’s clinical care classification system for nursing and built a nursing engine and documentation index that integrates with the physician index that we’ve been talking about, so that nurses and allied health can both treat the patient based on the same information in the note, but their documentation overlaps in some cases, but is very different in other cases. That’s what’s getting us now into the enterprise market more deeply.

So you think you’ll have an inpatient clinical documentation system for nurses?

We do have it. I expect that we will make … as I said, we let other vendors make the announcements. I’m virtually certain we’ll make an announcement of a major vendor in the next six months and possibly two by the end of next year. They don’t announce until they’re almost ready to deploy. I think it’s going to stun people.

These are vendors that are committing to retool their product to have your version of the MEDCIN engine as the front end?

Yes. We found an interesting thing. We did a project in Asia about three years ago. I went to Asia and I demo of Quippe in English and they said, “Forget about that. Let’s see it in Mandarin, in simplified Chinese. When will you have that done?” We hadn’t even started and that wasn’t my intention. What would be acceptable? They said, “If you can document 95% of what you do in Chinese, that’ll be fine.”

We pulled the MEDCIN index out for the top 500 diagnoses, all the index records for those, plus 200 other areas of our clinical hierarchy that weren’t represented in the 500. We merged them all together and it came 10,104 of our 285,000 items. We got translations for those done in less than three months for positive and negative. I went back and did a demo — 98% of everything came out in Chinese.

That was pretty cool, but when we started dealing with the enterprise vendors and they said, “You know Dave, we’ve got existing content that covers most of what anybody does” – this is two different vendors independently – and I said. “How many others do you have?” They said just over 10,000.

How weird is that? It pretty much told us that even in a large population, 10,000 to 15,000 of our elements constitute 97 to 98% of total data occurrences, but the struggle that the continue to have to add items, they continue having to map them. The more items you add without some intelligent way of presenting them, the more templates you have to build and maintain over time. 

The big vendors, for the most part, are coming to the conclusion that they do not want to be in the clinical content business. There’s a couple of big exceptions, one located in the Midwestern state south of Chicago.

You’ve been good at predicting the future and being ready for it. Where do you go from here looking down the road a few years?

We have to be ready for a couple of things. Whether anybody likes it or not, if you’re a clinical provider and you’re treating a patient, you have to be prepared to deal with what we think of internally as the coming data tsunami. Once these HIEs are in place and once these standards are in place and people are required to send this as LOINC or RxNorm or SNOMED or ICD-10, and I’m treating a patient and they’re under my supervision now – maybe I’m their caretaker under an ACO model — I’m responsible for that data coming in. I’ve got to be able to make some sense of it.

I might have a patient with the classic big three in America — hypertension, obesity, and diabetes — plus two other things. Maybe today I just want to deal with this.  I’ve got to find the relevant information in there, because I’m probably going to be held responsible for it, and I’m probably going to be held responsible for whatever I do and making sure that patient, once I treat them, if I admit them to a hospital or I discharge them from ambulatory care; if we got to outcomes-based reimbursement, I’ve got to take that data in, treat them, and keep them from coming back.

All of our tools are built to enable that. That’s one of the reasons we got into integrating the nursing care. If somebody gets discharged or somebody comes in even to an ambulatory practice with an open wound, I’m going to be responsible if they show up with an infection coming back. I’ve got to teach them hand hygiene, I’ve got to teach them wound care, I’ve got to teach them signs of infection. I’ve got to do all that. That’s why we built that stuff and then integrated it, because whether it happens or not – and I think it will, I think it’ll take longer than people think – we’ve got to be ready for that data tsunami that’s coming.

We also have to be ready to make it possible to scale up – and I’m including implementation and training and updates of software – quickly as medical knowledge changes and get it deployed out to the places where care happens, which is why we started building our cloud-based model about six years ago. Whether or not ACOs push integrated care, information is going to increasingly be … you’re going to need to be able to integrate it quickly, absorb it, find what you want, treat the patient successfully, and manage them on an ongoing basis.

We’re building all of our tools as if we have to do that. We also know from our experience, now with about 100,000 people using MEDCIN everyday, that training consists of, “You’re new here. Let me show you how I use this.” They get about 20 minutes of training, it’s done, and they’re on they’re own. That thing had better push the information they need to them. It better be intuitive. It better be easy to use, maintain, train, deploy.

That’s what we’re focused on. It’s a lot, but it’s really one problem. Giving them the information they want when they want it so they can do what they need to do and not require massive support to do that.

Any concluding thoughts?

We think there are going two be major challenges. How do enterprises handle data and account for their outcomes? How do you get the tools to do the individual clinicians on the front lines to do their job, which is patient care, and take care of all of that other stuff in the background? That’s what we’re trying to do.

HIStalk Interviews Michael Weintraub, President and CEO, Humedica

Michael Weintraub is president and CEO of Humedica of Boston, MA.

Tell me about yourself and the company.

Humedica is a business that, in addition to incubation phase and the launch of the business, has been around for roughly five and a half years. We formally launched the business in 2008.

Our vision is around population health business intelligence solutions. The founders of the company, the members of the team, and I have been working within and around health informatics, health analytics for anywhere from 20 to 30 years. I’ve been in this space for about 30 years and have always been passionate around the need to get our arms around health information to drive value and change in the industry. That’s what this company is all about.

Our focus is in moving from electronic data to liquid access to information and doing that across the continuum of care longitudinally. Our view is that there are a lot of solutions out there that are brought to the industry, but there was a need for an organization that’s focused passionately and exclusively focused on bringing together all the disparate clinical financial and operational data across the continuum of care. That includes hospital information, and importantly, ambulatory clinic data in multi-specialty medical groups. Pulling that information together in a centralized business intelligence analytic way that allows a chief medical officer, VP of quality, CMIO ,and others in the organization to get their arms around the population that they treat across the continuum of care. That’s what we’ve been aiming to do since the beginning. That’s our focus, our vision and our mission. So far, so good.

Your timing must have been fortuitous. Not too many folks were interested in population health management back in 2008.

I’ve always said that it’s 51% luck at a minimum. You know the old saying about, “It’s heavily perspiration and a bit of inspiration.”

I’ve been working with claims-based information for quite some time and saw what the opportunity was with that data, as well as the limitations and the future need. I’ve always said with a smile on my face that when we started this company, Obama was a senator. If you watch the trends out there, we had a hunch of what was coming together.

Earlier in my career, I spent 10 to 15 years working with clinical data in the provider setting before EMRs. I was involved in companies that were successful when it was about chart abstraction and at grabbing that information using medical record coders and doing analytics on abstracted information. For me, it was the coming together of a distinct need around clinical information earlier in my career and then seeing the movement in technology and the availability of information as we moved from chart-based data to then, “What can you do with electronic data on the claims side?” to then coming full circle to, “What if that data actually was electronic?”

When we started the business, EMR penetration was somewhere in the high single digits. We saw what was happening in the industry with some of the leading EMRs starting to really accelerate. We were watching the technology and regulatory movement and thinking about the opportunity. If you think about what’s happened in the industry, health reform has really driven technology and EMR penetration based on the incentives and the ultimately the disincentives if you don’t have an EMR. Health reform has been a driver to technology adoption.

On top of that, from a regulation and finance perspective, i.e. healthcare reimbursement, there’s a real focus on operational efficiency and clinical effectiveness as key drivers,  more so than ever. Based on regulations and finance as a key driver and technology, we saw this coming.

The healthcare industry is really looking more and more like it needs to manufacture value at an operational level. The financial system, risk-taking, and reimbursement are all moving more and more into an alignment that – and perhaps I’m an eternal optimist of an entrepreneur — but I really believe that there’s an efficiency and effectiveness requirement as it relates to outcomes and the need to truly measure quality and cost. That starts from moving the needle to looking at data to truly transforming that data into information and ultimately into insight to drive action.

My 30 years in healthcare have all been focused on building – once upon a time we called it decision support tools, now we call it business intelligence tools – building analytics that leverage the transactional data that moves through the pipe and taking it to the next level. I think the DNA of an informatics and analytics company is very distinct, and that’s been our focus. We leveraged what we saw happening at the technology level and a regulatory and financial system level.  

We can all discuss and debate how long that will take to change and what the slope of that curve will be, but I’m optimistic more than I’ve ever been that the drivers are in place to force the focus. I think that the macroeconomics are such that sustainability is on people’s minds, more than ever before as the national spend on the healthcare industry … 20% of GNP is not out of the question anymore. The question becomes, what is sustainable? Are we getting to a true tipping point that creates the motivation for change?

Hopefully the regulatory drive and the changing economics create the focus. I’m sure it will take longer than we all want and I’m sure there will be a lot of bumps in the road, but for me, I felt that the opportunity was there to build Humedica into the kind of company that I felt could drive the value. The need is there.

The company was initially called HIT, Health Insight Technologies. When Obama and others started using that term more and more, we realized that that name would not survive, hence the focus on human medical, or Humedica, to understand to the patient experience in the healthcare delivery system across a continuum of care and be able to study it at the population health level.

A lot of companies offer business intelligence tools, including some big ones. Who are your main competitors and how are your solutions different?

I say this as a member of the healthcare industry, not criticizing it from the outside-in, that I believe that there’s a significant level of sorting out and confusion occurring now. The focus up until now and continuing for the next several years will be EMRs. Do I have the right one? Should I switch to a different one? Do I have one? Do I need one? How do I get one? There’s a huge focus on EMRs.

Certainly the next phase after EMRs is, “What do I do with the data?” There’s a big difference between transacting with the data at the point of care versus doing the analytics that we do. The industry right now is in a period of sorting out. There’s a bunch of major buckets of firms out there that all touch and talk about analytics.

What’s interesting is clinical analytics and business intelligence was a concept that was not anywhere near as strategic as it is today. The good news about health reform is it has made this strategic. The bad news about it is it’s made it so strategic that there’s a sorting out occurring that’s causing the provider industry to sort out what it does about this.

If you look at the buckets of firms that all touch this, there are EMRs, and more and more of the EMRs are saying, “Don’t worry, we’ll get to this.” We believe that there’s a distinct difference between a specific EMR, whether it’s touching some of the data or more of the data in a provider, but many providers have multiple EMRs, whether it’s within the inpatient setting or inpatient versus outpatient. Cutting across and pulling it all together is a very different value proposition.

But there are EMRs that are all suggesting, “We’ll get into this over time.” I believe that they have their hands full right now. It’s like Y2K for the EMRs. There’s so much activity. I don’t believe the providers can wait for that to be developed, nor do I believe that software firms — as opposed to analytics and informatics firms — have that as a distinct competency. There are claims-based firms out there that do analytics with claims, and many of them are now repositioning as population health, ACO, etc. but there’s a distinct difference in looking at this information for population health with claims versus clinical data.

There are firms out there that are systems integrators and data warehousing firms like Oracle, IBM, Accenture. They end up oftentimes being more our partners than our competitors for a variety of reasons. There are regulatory reporting tools that touch on population health, but they’re more focused on regulatory reporting. There are application-specific firms that provide clinical data that are very narrow and specific in application. There are health and information exchanges and vendors as well that are pulling all the data into a common pipe as opposed to doing the analytics. We are starting to partner more and more with many of the firms in each of the categories. There are business process outsourcing firms that are now building clinical process redesign competencies, again partnering with us more so than competing.

We were the first to purely focus on clinical analytics. I believe we have years of lead time from a development perspective and from a competitive advantage in that regard. Competition is good. It creates a focus on best-of-breed and advances the capability on behalf of the industry. But there is no single firm out there that is distinct with and purely focused the way we are, but there’s certainly a buzz where every major firm and lots of boutique specialty firms are all positioning and or repositioning as population health and ACOs. I’ve seen many of the firms eventually complementing with us, collaborating with us right now more so than competing.

Allscripts is now a Humedica partner. What competitive advantage led Allscripts to that decision?

It’s a tremendous and terrific partnership. It was driven by the leadership and boards of the respective companies. Many Allscripts customers have multiple EMRs, and Glen Tullman, CEO and Lee Shapiro, the president, and I have a very common vision on the need to move towards an analytics and informatics foundation. Allscripts has branded Humedica within their business as they go to market as, “Clinical analytics powered by Humedica.”

When they saw our offering, they saw best-in-breed capability that they felt would create value for their customers and our mutual customers. What we saw was an opportunity given the accelerated movement of the industry in focusing on this. They’ve got an inside and outside sales force combined of 600 people and growing. What we saw was an opportunity to go to market faster, better, more effectively and more efficiently.

We’ve been working on that partnership for several quarters. I believe you’ll see the fruits of that over the next one to two quarters in a very significant manner as we start growing some mutual customers together based on our products and their sales channel. It’s been phenomenally successful thus far.

What are clients doing with your real-time capabilities?

There’s one product on the market and there’s one product in development. In the inpatient setting, the product is being used for clinical surveillance. In the hospital setting from a CMS perspective, regulation is such that 30-day readmissions and preventable readmissions complications will not be reimbursed. From a clinical surveillance perspective, tools are up and running in a hospital setting and key therapeutic areas.

The product in development has the capability to provide real-time surveillance in a clinic or ambulatory setting focused on proactive patient management in chronic ambulatory areas, stratifying risk and focusing on a Patient-Centered Medical Home, which more and more of our multi-specialty medical groups and clinics are focused on.

Your recent financing around raised your total a pretty big number, over $50 million. How have you invested that money?

The first round of capital was used in the formative stages of the company’s development, the first three-plus years to devise, develop, and deploy what we believe is a world class product portfolio for the provider market and to get validation from our customers in that regard. We believe that’s a huge competitive advantage and a sustainable barrier vis-a-vis the competition.

As we’ve gotten that validation, a few months ago in KLAS’s market research 300-page report, we received the highest rating of any business intelligence firm, with a rating of 91.8. A new category was created, essentially a clinically powered category where a solution has clinical capability, based on their discussions with our customers. All our customers in that report said they would buy again.

The first round of capital was really focused on building the most innovative capability possible. The second round of financing is focused on commercialization in a very significant manner. We currently have customers in roughly 20 states, but our ambition is significant. We want to bring this offering to the market at large. That meant a sales force, field organization,  customer organization, managing our channel partners, which includes Allscripts as well as the American Medical Group Association. That round of capital was meant to exploit the capability and partner with a provider market in a broader way to accelerate bringing this to market and managing a growing client base.

You came from Leerink Swann. What experience did you gain there that will help you build Humedica?

Leerink Swann is an investor in the company and provided the organizational platform that we were able to incubate this business. I was there for a short period of time, only about a year and a half. The majority of my career has been focused specifically on entrepreneurial activities such as this one. Leerink clearly has an exclusive healthcare focus and they’ve provided tremendous value as an investor and a board member as well, but it provided the platform where we were able to incubate this business, pull together a team, and spend about a year to a year and a half prototyping and thinking hard about how to bring these solutions to the market.

Where do you want the company to be in 5-10 years?

We’re at an important point. We have a partnership with Allscripts, which is a leading EMR. We also have a phenomenal long-term partnership with the American Medical Group Association, which has members in almost every state in the country and its membership treats one on three Americans. What we would like to be is the de facto leader in bringing health informatics insight at a population health level to the provider industry as they get their arms around their organizations managing cost, quality, and risk and compete.

The pressure on these providers is significant. They’re making significant investment in technology and now they’re ready to harness, we believe for the first time, all of this information to study and enhance and improve their operation as they bring world class care to their customer, the patient. That’s our vision.

We’re very, very excited about what’s happening in the industry. The activity level is at an all-time high. We think 2012 is going to be a mainstream year, where clinical informatics and business intelligence become a significant initiative for more and more providers in the US.

HIStalk Interviews Dave Souerwine, President, McKesson Provider Technologies

David A. Souerwine is president of McKesson Provider Technologies.

Tell me about the impact of the just-announced Better Health 2020 program on McKesson’s IT investments and portfolio.

I know you’re pretty conversant in this space, obviously, so I’ll tell you some things you probably know. If I was asked that question by a less-informed person, I think I’d give it some broader perspective.

There’s a huge amount of focus that a lot of people give to HIS/CIS, or what a lot of people call core hospital systems. A lot of what we announced in MPT was around products in those two areas. But more broadly, what McKesson has been attempting to do over a long period of time is to create an entire technology portfolio that’s second to nobody in the industry. We’re now very focused on trying to develop products and services that will best meet healthcare reform and all the various regulatory requirements that are hitting not only our hospital customers, but because of the blurring of settings of care, also for physicians, for long-term care, for home care.

We have a large payer business. We have a large connectivity business, both in clinicals and financials. We have a connectivity business in pharmacy, which a lot of people know, but a lot don’t. We handle about 90% of all the pharmacy transactions in the country on a daily basis, so it’s a huge volume business.

The announcements that you’re now familiar with and that some of your readers started to comment on yesterday wrapped underneath a broad McKesson Technology Solutions banner that we’re calling Better Health 2020. You can interpret the 2020 as either a decade from now, where we’re trying to help customers in a very uncertain environment navigate to the best financial and clinical endpoints they can, or you could also interpret as good vision, 20/20. We think we’ve got a good sense of where the market’s leading and progressing and what we need to do to help our customers get there.

The broad agenda, Better Health as a corporate communications platform, refers to better business, better care, and better connectivity. Those are the three broad planks. I’m sure you’ve undoubtedly seen either our employee letter or our customer letter, which are pretty similar. Underneath that, we went on in those letters to describe four areas that we believe are critical success factors.

The first one is the ability to improve patient safety and deliver better clinical and financial outcomes through fully integrated core clinical and revenue cycle IT systems with a highly competitive total cost of ownership.

The second one is a reduction cost of operations, which includes pharmacy automation, supply chain analytics, and performance management.

Third is better care coordination through connectivity across the healthcare ecosystem of diverse stakeholders and IT systems.

The fourth is the ability to manage increasing complexity and risk, bundled payments, and structural relationships, because our view is there’s a lot of experimentation that’s currently going on in payment solutions, but the risk is definitely shifting towards the provider and potentially hospitals. Our customers are going to have to survive on Medicare levels of reimbursement. There’s a shortage of personnel. They’re going to have to take costs out continually. We have to have a lot of assets helping them manage through that complexity and risk.

On Better Health 2020, the other major part of that announcement was a commitment that we have across our technology businesses. It’s not an investment in Paragon or Horizon or any particular application. It’s a commitment across all of our technology assets to invest a billion dollars in research and development over the next two years, which is a really big commitment in this area.

We are sunsetting no products. We have several products outside our core clinical suite. At one time, we had renamed a lot of our imaging products under the Horizon banner. We have several that now reside in a performance management business and in our analytics capability that are called Horizon. Over the next few months, which we already had underway before these decisions were made, we’re renaming them under the McKesson brand name, just so that there’s not confusion in the marketplace related to Horizon core clinicals.

The changes that we made in strategy were just around that core clinical suite, which we put into hospitals. It’s about 30 different products that we sell under that Horizon brand name. Those are the ones where we’re making a strategic shift away from Horizon to Paragon, but nothing is being sunsetted.

In fact, I’ve gotten several questions, including from my own employees, about the relative investment. We’re continuing next year to put more into the Horizon clinical suite than we are into Paragon. There’s still a big amount of money that’s being spent beyond Horizon. We want to leave our customers with options. If they want to stay on Horizon, they certainly can. If they want to switch to Paragon now, they can. If they want to wait and assess how that roadmap develops over the next 30-36 months, they can. That product will be around for a long time. We’ve made no firm decisions on end dates or sunsetting in any way, shape, or form.

You mentioned a reduction in total costs for customers. I got the impression that there might be some bundling of McKesson offerings under an umbrella that will collectively reduce costs.

I’m not sure what that reference is to. We would tell you that we believe with certainty that the total cost of ownership for Paragon as a hospital HIS will be less than Horizon and will be less than Cerner and will be less than Epic. There’s nothing that’s changed internally in terms of corporate structure or movement of products between or amongst divisions that would create any kind of bundling. The customer still has the ability to choose solutions that are right for either gaps in their current portfolio, or if they want more capability from one vendor, we would portray that we have the broadest selection. You can get connectivity, population management, risk management, care coordination, analytics, and your HIS from one place, which is McKesson Technology Solutions.

The billion dollars in R&D that you said was collective across all the platforms. How much more is that than you’re spending now?

The reason we positioned it that way is there’s a huge commitment that the corporation is making. It’s larger than what’s been spent in the past, but I want to draw the distinction that it’s not an incremental billion, it’s just larger than it’s been in the past. It encompasses McKesson Provider Technologies, RelayHealth, and our health solutions payer and physician business. It’s all the technology components.

That said, the majority of that expense will be in MPT. MPT includes six business units. The Paragon business unit. Health Systems Enterprise Solutions, which encompasses the legacy as well as Horizon Revenue Cycle and also the Horizon Clinicals business. It’s our enterprise imaging business, which is out of Vancouver. It’s pharmacy automation, which is out of Pittsburgh. It’s Health Systems Performance and Analytics, which is a separate business unit that we stood up at the end of last year to help customers get a cost efficiency and reduction. And then we have a managed services business, which includes hardware, outsourcing, and remote hosting that cuts across all of those offerings for MPT. It’s not a homogenous thing, it’s actually six business units that we put under the Provider Technologies banner.

Is the billion dollars double what it’s been, or something less? I’m trying to get a feel for the magnitude of increase.

It’s not double. It is an increase.

Sorry, I interrupted you there.

Within MPT, I would tell you that the five key messages that came out of the change from yesterday are the commitment in R&D underneath the Better Health 2020 banner . Within MPT, we’re planning to converge our revenue cycle core clinical solutions around Paragon’s Microsoft platform. We’ll significantly increase the investment in that platform. We’re finding it increasingly difficult and not in the best service of our customer needs to continue to develop two very complete clinical and revenue cycle systems. They’re on two very different platforms.

All the Horizon stuff is on Java and Oracle, so it has a higher total cost of ownership. The evolution of that product was around very fully functionally rich products in an environment where a lot of hospitals were making decisions on a best-of-breed basis. We’re finding today almost all customers are making combined decisions to get to an integrated clinical and revenue cycle platform. The decision was largely around how do we get more focus on our investment to reach product endpoints that will serve the needs of the customer better.

You know through a lot of the comments on your own blog that we have struggled with the Horizon upgrades and some of the product commitments over the past five years that we’ve made to the marketplace. We just believe we’re going to get to a fully integrated, lower total cost of ownership, fully functional solution for customers that’s completely competitive in the market with the Paragon solution as the basis rather than continue to invest in two completely functional HIS/CIS.

There’s been some question around when we say converge, are you really putting the platforms together? No. The convergence is really around taking the best capabilities from Paragon and the best capabilities from Horizon and creating one integrated system with a lower total cost of ownership than what we have today.

The third key message from yesterday was that based on that decision, we have stopped development on Horizon Enterprise Revenue Management, which was a separate R&D project that’s about seven years old, maybe eight. It’s been going on for a while. That was just based on we believe with the capabilities Paragon has today, plus some fairly minor enhancements, that we can get a capability that’s integrated with a lower total cost of ownership in a shorter period of time than we’d have gotten customers there under the Horizon architecture. We haven’t shifted away from next-generation revenue cycle, we’ve just shifted to putting it on Microsoft architecture. Most of the products under Technology Solutions, about 70% of capability today, is also on Microsoft architecture, so we’re just trying to get synergies and better integration points across all of our solution set and that will become a higher percentage in the future.

The fourth thing that we’re trying to make very clear, particularly to our Horizon customers, is that we remain fully committed to the Horizon base. There’s a huge amount of work to be done there, including getting those customers to be ICD-10 compliant and then getting them through the various stages of Meaningful Use, which we are continued to be committed to do. We’re not sunsetting anything. We will actually spend a huge amount of resource developing those capabilities and getting our customer base upgraded over the next three or four years.

The fifth message is that we’re more confident than ever that we’re in a position to get our customers through Meaningful Use and will better position them than we believe anyone else in in the market, in terms of capabilities from one company, to get our customers through Stage 3. We believe that with our R&D focus now shifting to what’s next, that we’ll be able to continue to invest and improve deployability and support for them today and much enhanced capabilities in the future.

The CIOs that I talk to say time and again when I ask them, “Why are you buying Epic?” — and cost doesn’t seem important to them — it’s because it’s the only vendor with a single patient record that not only crosses ambulatory and the inpatient sides of the house, but also has top-ranked modules on both sides. Can Paragon deliver that?

We believe so. There’s a detailed roadmap. Paragon today is probably a lot more capable than people realize. It’s been best in KLAS for the last five years. We suspect it will win shortly for the sixth year in a row. It has a really high customer acceptance and rating. It scales up, so they also have larger customers today.

We went through a lot of work over the last year to make sure that we had line of sight so that features and functions and just general capability, including technology, that was going to be necessary to be able to claim that this was competitive with Cerner and Epic’s capabilities in this space. We think we will get there. By the time anybody starting today would be able to convert to Paragon, even if they made an immediate decision, the emergency room and ambulatory features of Paragon will be completed. It’s very capable today.

If a customer wants imaging capability or automation capability or analytic capability or health information exchange capability, we can attach McKesson solutions directly to Paragon to do that. They have a very high attachment rate of our other solutions, and those will continue to be more integrated into Paragon as time progresses .

Is anything actually being created from scratch? It sounds like there’s some porting of functionality from Horizon to Paragon and adding some modules. The criticism of McKesson is that they never build anything, they just keep tweaking the same old stuff except for the example of HERM, which was a pretty expensive failure, at least other than the intellectual material from it that you can port to different technologies. Are you building brand new, from-scratch products?

Two different answers to that question. One is that a lot of the individual application modules inside of Horizon Clinicals were variations in products that had been purchased and put into the Horizon Clinicals suite. I think that’s where the perception comes from that we don’t build anything from scratch. Some of that stuff was built, but a lot of it was purchased and put into that suite.

The development of the current version of Paragon started 11 years ago and all those applications were natively created. That stuff was built. There’s been nothing that’s been purchased. It’s been built in a way so that it’s on one database. It is fully integrated. It’s what I’m sure you over and over have heard Horizon customers asking for — how do we get to true integration and how do we get lower total cost of ownership and how do we get to an easier upgrade path?

Our customers can download whatever upgrades they need from a capability that we have internally called Download Central. They put it into their test environment, they test it until they’re satisfied with it, it moves into production. It’s not an invasive process. It doesn’t require a lot of support people to be on site. You know the experience on the Horizon side is quite different from that.

I wanted to point to you too that when I was flying back from Colorado, I saw a comment, I don’t know if it was from you or one of your readers, but the HERM decision was not around the failure of that product. We actually believe we could have gotten to a successful solution, but with the capabilities and rev cycle that we already have inside of Paragon, we didn’t see a reason to continue to rewrite the Horizon version of that product.

For the people that were affected by that decision, there is a redeployment process inside the company that started with the announcement yesterday and goes through next week. There’s openings in many different parts of our technology businesses and we believe that we’ll be able to redeploy many of those people into other areas of the company.

Just like always happens, when jobs are open and an employee wants to move from Charlotte to Alpharetta or vice versa, or they want to relocate from Colorado to Alpharetta or vice versa, there’s a relocation policy that does that if they apply for an open position. We would consider them. The downsizing happened because of the strategic decision to just focus on the one platform, but that does not mean that the people that have good capabilities that want to stay with the company will be displaced.

Do you have a feeling for the specifics of how many people will be RIFed out and how the total headcount will change?

There was a public filing, which we’re required to make, that talked about how 174 people were displaced on that team. That’s how many were actioned that first day.

We have more than that many openings in our technology businesses. It’s going to be a matter of their level of interest, if they decide to stay, whether they’ve got requisite skills to fit into those areas. We have onsite hiring managers form the businesses with openings to talk to those people starting next Tuesday. We believe that we’ll be able to redeploy many of them.

From a timing perspective, it’s somewhat late in the Meaningful Use game and Epic pretty much owns the high-end market and seems to be quickly moving down the scale to the smaller bed ranges that most people thought they would never bother with. When do you think the results of these changes, both the product changes and the packaging changes to get them in front of additional prospects, how long will that take and what will the competitive landscape look like?

The technology roadmap that we’ve created is a 30-month development. The Paragon product has gotten progressively better continually over time, so a lot of the customers that made decisions made them at a time when we didn’t even have HEO or we didn’t have an order entry system for physicians. They bought it, it came out on time, it’s gone in, the adoption rate of the physicians is very high. Same thing with a lot of the other modules. The emergency room integrated module will be GA’ed around the end of our fiscal year, which is March-April of 2012. Ambulatory is about a year and a half out.

Logically, by the time customers could make decisions, either new customers or decisions to switch, when they got onto the full suite of products through the implementation cycle, those modules would be completed and ready. There’s a really solid track record of developing and delivering on that platform.

In terms of how the market’s going to evolve, I think most of the clinical decisions have been made. I certainly wouldn’t take anything away from Epic. We know what their success rate has been and they’re well respected in the market. We would also tell you, though, that we believe our analytics capabilities, especially as we head into Meaningful Use 3 — and we don’t know if there will be stages beyond that — our capability for health information exchange, our health management, population management, are some of the aspects that we think are going to be central to both later stages of Meaningful Use and health reform are capabilities that McKesson has that our competitors do not.

It’s a balance. There’s lots of Epic customers today that have our analytics. There’s lots of Epic customers that put in Epic and have Horizon Lab, because it’s a really robust system. They don’t offer imaging, so if you want radiology or cardiology, we’re going to be your best bet in this space. It’s a mixed bag. They clearly understood the dynamic of ambulatory and physician side of the market ahead of what other people did and did a really good job in capitalizing on that, no doubt about it.

You mentioned that lot of customers have already chosen their dance partner and spent a lot of money to be in an early stage stage of implementation. A strong selling point that you’re emphasizing is total cost of ownership, and people have questioned whether these hospitals can really afford Epic and Cerner long term. Do you think that to be successful you’ll need to take customers back from them based on price?

I think total cost of ownership is going to become an increasing issue as we go forward. You’ve got a lot of factors coming into play at the same time. We’ve got a really crappy macroeconomic environment, which in my view, whether you believe there’s going to be a double-dip recession or whether that’s already occurred, I don’t think anybody is optimistic about a strong recovery anytime soon. There will continue to be a lot of pressure on capital availability and deployment. You’ve got a shortage of personnel. You’ve got all of these health reform changes and regulatory changes coming at these hospitals. It will be difficult for them to navigate.

The modeling, the data collection that we’ve done shows that an ongoing clinical decision rate will continue in the market, if you look at all 5,000 hospitals, at around 3.5 – 4%.  It will continue to be 150 to 200 decisions a year in clinicals. Financials are likely to accelerate once people get beyond Meaningful Use 3 and ICD-10. A lot of customers are continuing to use whatever financial systems or revenue cycle systems they have in place because they’re focused on clinical, but there will be a point coming soon where they’ll be making a different financials decision, a lot of times in convergence with whoever they’ve decided on for clinicals.

What goals do you have for MPT in the next five years?

It’s really goals for MTS. I wouldn’t answer for MPT. I think the big shift, a lot of which has been driven by the market, is five years ago or maybe even three years ago, if you were talking to one of my predecessors in MPT, they would have told you that MPT is a hospital software company. I don’t think anybody can be segment specific. The blurring of the settings of care, all of the vendors are going to have to be a lot more aware of what the patient and clinician experience is wherever it is that either the clinician is delivering care or the patient is receiving it.

There’s going to be some mixed models. Who would have thought that Walmart would be getting into direct care? Who would have thought that payors would be purchasing physician practices? I think there’s going to be that experimentation over time and some form of consolidation. Our goal across the technology businesses is to deliver the most capabilities that we can to support what all these customers are going to need as health reform evolves.

I couldn’t for a minute tell you that McKesson or I have the answers. We don’t have a better Ouija board than anybody. We’re just trying to stay as close as we can to the trend. Accountable care is another great example. Whether or not accountable care organizations in the legal entity sense actually end up developing or not, customers are going to need the capability of accountable care just to meet health reform. We believe we’ve got most of that capability that they’re going to need today and it’s just going to get stronger in the future.

An HIT Moment with … Ramsey Evans, CEO Prognosis Health Information Systems

An HIT Moment with ... is a quick interview with someone we find interesting. Ramsey Evans MBA, is president and CEO of Prognosis Health Information Systems of Houston, TX.

What’s on the minds of small hospitals these days with regard to operational challenges, healthcare IT, and Meaningful Use?

Executives at small hospitals are thinking about the same issues that their counterparts at larger hospitals are struggling with: financial challenges associated with shrinking reimbursements; the relentless need to improve quality; and, of course, the rush to achieve Meaningful Use in order to qualify for government incentive funds.

However, the obstacles faced by healthcare providers and patients in rural areas are vastly different than those in urban areas. Rural hospitals are smaller in size, have limited assets and financial reserves, and a higher percentage of Medicare patients due to their populations being older than urban populations.

The desire to achieve Meaningful Use is exacerbating a frustration that hospitals have been struggling with for years — the time and money that it takes to implement EHRs. It’s the No. 1 headache out there, but it is especially vexing for rural hospitals as they simply don’t have the same financial and human resources that larger providers have. Our Web-native technology enables rural and community hospitals to move from signing to implementation to the realization of Meaningful Use in less than 120 days, which translates into a significant time to value as well as the lowest total cost of ownership.

The big-hospital market has shaken out to just two or three vendors that regularly sign new customers. What’s the competitive landscape in the smaller hospital market?

A similar shakeout is underway in the smaller hospital market. Vendors are realizing that it takes special product offerings and service to meet the needs of the rural and smaller community hospitals. Some of the large vendors are trying to bring their systems into the smaller hospitals, but they are finding that the solutions and the service model just don’t mesh with the way critical access and smaller rural community hospitals operate. Simply repackaging their monolith systems into a smaller box with a slightly faster implementation is not what’s required for this unique market.

Realizing that smaller hospitals simply cannot afford the multi-million dollar, client-server based systems that take years to implement, we focus on disruptive innovation. In his seminal book The Innovator’s Dilemma, Clay Christenson explains that a disruptive innovations improve a product or service in ways that the market does not expect, typically first by designing for a different set of customers in the new market and later by lowering prices in the existing market. His follow-up book explains how the disruptive innovation concept could play out in healthcare by delivering capabilities formerly only available to large providers with huge budgets to smaller providers that can then leverage such solutions to improve care delivery. That’s what we are trying to do.

How advanced are your client hospitals in their use of your clinical documentation, ordering, and clinical ancillary applications?

Our clients don’t have the same level of complexity as large tertiary hospitals with a range of specialties such as cardiology, oncology, and pediatric departments or Level Four trauma centers. So IT system utilization is in line with their charter. But they still have to provide quality care  and document it.

They should be able to leverage an EHR that will enable them to do that as well as larger hospitals. That’s really the issue we are addressing. Take a look at the inequities. According to the National Rural Health Association, Medicare patients with acute myocardial infarction who were treated in rural hospitals were less likely than those treated in urban hospitals to receive recommended treatments and had significantly higher adjusted 30-day post AMI death rates from all causes than those in urban hospitals.

Our system can help to close this digital divide. Our “clinical visual pathway” makes it easy for nurses and physicians to deliver the best care by simply following a visual map that walks them through standard best practice scenarios while treating a patient.

How are your customers and you as a vendor affected by the push toward alignment with physician practices and the developing ACO market?

With our target market of rural, critical access and smaller community hospitals, we haven’t seen much focus today on ACOs. These smaller providers traditionally focus on defined requirements, instead of those that are in a constant state of motion such as the ACO requirements were in the past several months.

With defined ARRA regulations for Stage 1 and defined incentives, leaders at these hospitals have been keenly focused on identifying a way to meet the requirements. With the final ACO rules recently published, though, these hospitals are likely to begin to add ACOs to their list of challenges and it will start to become a concern.

What’s the future of interoperability among hospitals and practices?

There is an ever-increasing interest in evaluating both hospital and physician EMR systems at the same time. Providers in rural communities understand that there is real value in sharing records, as patients frequently receive care from various providers across a region. And providers really want all of this sharing to be seamless. They want to make it possible for patients to go from facility to facility and simply have their medical information follow them.

To make good on this notion, we are working with a number of our hospital clients to help support the West Texas RHIO, where eight hospitals across a region are accessing records via a shared EHR. The RHIO enables clinicians to access patient records at any of the hospitals, such as when a patient shows up in an emergency room or is transferred. As such, doctors and other clinicians can provide care with access to complete information, which, in turn, enables them to make the best care decisions and save lives in the process. 

This arrangement makes it easy to create a virtual health information exchange. That’s because authorized physicians can retrieve patient records from any of the hospital databases once they are verified with user name and password. In contrast, most emerging health information exchanges across the country involve competing organizations, usually with different records systems, creating a network from scratch to share certain patient information. It’s just an example of how innovation can make it possible for healthcare organizations to go beyond what was possible with the formerly dominant technologies.

An HIT Moment with … Nick van Terheyden MD, CMIO, Nuance

An HIT Moment with ... is a quick interview with someone we find interesting. Nick van Terheyden MD is CMIO of Nuance Communications.

IBM is hyping Watson after what amounted to one big commercial for it on Jeopardy!. Does it really have immediate usefulness in healthcare?

Anyone who watched Watson outperform its game show counterparts in the original Jeopardy! challenge would agree that its potential in healthcare is both evident and enormous. As with many new technologies, however, there is still much to be done. In fact, it is quite likely that some of the applications for this technology have not even been imagined yet. But either way, it is clear that Watson represents a springboard to revive the initiatives behind artificial intelligence and its application to medicine.

While our vision for this is clear, getting there will involve many additional components and steps that were not part of the Jeopardy! challenge. If Watson is to enter the medical setting, it must first be integrated into the clinical workflow, offering caregivers more complete clinical knowledge that is contextually relevant and immediately available at the point-of-care.

What makes Watson better than the many other analytic tools out there?

Traditional expert systems use forward and backward reasoning, which follows rules from data to conclusions and from conclusions to data. Creating a system around these principles requires detailed logic statement construction and understanding, and needs to include every aspect of the domain knowledge. The process is time consuming and difficult to achieve and maintain in domains with large knowledge.

Watson, however, uses natural language processing, a wide range of search methods, data association, and statistical linking to create hypotheses from data. In the Jeopardy! challenge, Watson was able to consume data and create a knowledge base that exceeded the reigning champions in general knowledge.

In healthcare, we can load Watson with large quantities of clinical source data and rank patient-specific information against a vast matrix of values and identifiers. These observations can then be used to create a ranked list of clinical knowledge relevant to that one unique patient.

Nuance and IBM are working with Columbia and University of Maryland to determine where Watson can contribute to healthcare. How will that process work?

Actually, Nuance entered into a three- to five-year research partnership with IBM and will employ a combined staff of some 30 to 50 dedicated experts, researchers, and engineers from both companies. IBM and Nuance continue to explore ongoing clinical research with a range of partners, including Columbia and University of Maryland. These clinical sites are highly important in capturing the active clinical perspective and to ensure that what ultimately is introduced to the clinical setting aligns with what is needed for successful adoption.

How will Nuance’s speech recognition and Clinical Language Understanding (CLU) be integrated with Watson’s analytic capabilities?

Nuance’s speech recognition and Clinical Language Understanding (CLU) technologies can enable natural interaction and exchange with Watson, and will ultimately eliminate the need for keyboard interaction. Additionally, Nuance’s CLU technology will help to assign additional detail to knowledge that Watson consumes and preprocess patient data making the Watson responses more relevant and accurate.

You’re presenting at RSNA. Can you provide a preview of what you’ll be talking about?

I am excited to be presenting at RSNA this year. I will provide an update on Watson in healthcare — particularly as it relates to the world of radiology — covering key aspects of the underlying technology and what differentiates Watson from other reasoning engines and expert systems. I’ll outline some of the Watson use cases currently under consideration.

HIStalk Interviews Scott MacKenzie, CEO, Passport Health Communications

Scott MacKenzie is CEO of Passport Health Communications of Franklin, TN.

Tell me about yourself and about the company.

I’ve been CEO of Passport since 2009. I worked originally with Electronic Data Systems as a programmer in healthcare. I’ve worked with Cerner, NDC Health, and McKesson. I came to Passport in 2009, so I have a lengthy background in healthcare, always in healthcare technology.

At Passport, our focus is on patient access and payment certainty. With patient access, our focus is on the front end, or the onboarding part of the process when the patient is entering the healthcare system, be it the hospital or the physician’s office. Understanding the demographics, understanding their benefits, making them aware of their responsibility, and trying collect if possible.

Also, looking at the order and understanding if you need to run medical necessity, if you need to make them aware of advance beneficiary notification, if you need to run pre-certification. It’s really a focus on the front end of trying to get everything as clean as possible to avoid denials, avoid rework on the back end, and to make the patient aware of their responsibilities so there’s no confusion later on.

Around payment certainty, obviously getting that patient payment where appropriate and also payment certainty in terms of using that information to drop a clean claim if it’s covered by a third party. 

That’s our focus. We’ve been around since 1996 in that market. We’ve got almost 2,000 hospitals and over 6,000 physician organizations that work with us.

Several companies offer a similar roster of services. What interests your customers about Passport instead of one of your competitors?

I think the biggest difference with Passport is we have worked to be the experts at what we do. This is what we do. For example, we look at the content going to the payers and coming back from the payers. We have teams of people that actually study that. We normalize that information and put it in the right format for the provider so they know what to do.

If you look at the flagship product at Passport, One Source, it began with taking that payer response and putting it on a Web site where the provider could look at it. It would be the response regardless of which payer you are dealing with. If you’re dealing with Blue Cross Blue Shield, Aetna, Cigna, Medicaid, or Medicare, it all shows the same way with the same fields.

As you know, there are standards, but is still a lot of variation in terms of how the payers respond within those standards. We spend a lot of time normalizing that information, normalizing those responses, and really getting the provider what they need to make the right decision relative to the patient’s benefits and the patient’s responsibilities. We specialize in understanding and analyzing this information.

We can also understand and analyze it and put it into an HIS system. We co-exist with the HIS system that the provider has chosen and put that information in there so they don’t have to do a lot of rules or a lot of rewriting to try to re-codify that information based on one payer’s response being different from another payer, for example.

We’ve also written a Software as a Service package that covers the whole workflow of patient access and also the back-end revenue cycle tied to that. We’re really focused on making it exception-driven, trying to drive the workflow to get the best results and to hold the staff accountable in terms of checking the right things, making sure that it’s a quality registration, and it’s a quality claim as well. Having that software available is something that differentiates us from what  you might think of as traditional clearinghouse.

Do you often find patients mis-categorized as self-pay, or those who produce an insurance card but really don’t have coverage?

We check the demographics. If they’ve given information around their name, birth date, and address and it doesn’t all check out, we can say, “This does not look like the same person as what’s been presented.”

There’s a significant number of folks where the initial coverage they present is not correct, but we are able to find the correct coverage, maybe secondary coverage or maybe alternative coverage. There’s also a number of self-pays where we run through a coverage determination process and we find coverage. Perhaps the birth date was put in incorrectly or the name was misspelled. We’ll go through algorithms where we try to find common spellings of different names.

There are also situations where for some insurers, you’ll get a higher hit rate if you don’t send certain information. For example, don’t send the middle initial if it will give you a response that the patient isn’t found or isn’t covered.

Where are hospitals with the ability to quote prices and accept patient payments at the point of service?

I think it’s still relatively small, but I think that’s one of the highest growth areas.  It’s being driven by the fact that it’s revenue leakage. Once that person leaves, your collectability drops. What I’ve read is about a 50% write-off rate plus up to 20% cost to collect. There’s a significant haircut once that person leaves the office.

It’s also driven by the fact that people are responsible for a higher portion of their payment. You see these high-deductible health plans, you see employers shifting more to the employee. It used to be no big deal if we wrote off part of that. Now, it’s significant. We’re seeing a lot of activity. Most of the for-profits are doing it. I think most of the non-profits are looking at it and are in the process of implementing or at least considering it. I’m guessing 20% of the market does more than just the co-pay. But it’s a very high-growth area for us and a very high-growth area in the market as well in terms of estimating the additional payment and collecting it.

Do you think the lack of penetration of point-of-sale pricing is because of technical reasons, or is it that people struggle with the idea of paying upfront for routine healthcare services?

I think it’s the second piece. Healthcare has been an entitlement for a long time. You have a lot of non-profits that have come to exist to provide healthcare. It’s very difficult for them to have those hard conversations in terms of the patient’s responsibility.

I also think a lot of people feel they’re entitled to healthcare, that it’s different than getting your car fixed. I understand in the emergency room that care has to be given, but if it’s an elective surgery or an elective process, it’s totally appropriate to have to pay for that. Personally, I like knowing what my responsibility is because I usually get the bill. I’ll wait until the third or fourth bill to find out what the actual collection amount is. Knowing that upfront allows people to plan as well.

But like you say, it’s like in any other industry for more and more people to be accountable for their cost of care. Also, for them to understand the price of what they’re doing. It’s one of the levers that we can use to drive down the cost by people being smart consumers, so I think it’s good for the system as well.

Do see any possibility that that will move even closer to the patient, where instead of getting a bill after their treatments, the provider says something like, “I’m going to give you this shot, but here’s what it costs” and maybe the patient says, “Well, no, it’s not worth that.”

I do. I know there are some companies that are out there trying to do it.

The problem right now is that a lot of providers are uncomfortable giving their lowest price. Maybe they’ve guaranteed certain insurers certain prices. There are a lot of concerns around pricing transparency.

I do see a lot of movement in the market in terms of companies that want to do that. I think more and more consumers are interested in that. A lot of our clients use our payment estimation product for people who call in. There are people who are medical shoppers. Our employees, for example, can choose a high-deductible health plan where if you spend intelligently, you can keep the money left over in your healthcare account. That’s your money. That causes people’s behavior to be different, where people do ask, “How much is this going to cost?” The provider needs to be able to respond. 

I do think that will become more common. It’s still a small portion, so I don’t want to over-represent it, but I do think it’s a growing portion of the population who wants to understand the cost of that care before it’s provided. More and more providers want to be able to give that to them. I read an article that Walmart is looking at becoming more active in the provider community. That will be interesting to see how they change it as well.

Hospital charges are mostly funny money. They often don’t even know what something costs – they just made up some charge years ago and increment it every year by some percentage increase. Would Passport ever be involved in hospital charging?

We don’t do anything in terms of helping them to create a charge, but we pull their historical information so that they can understand what they’ve charged historically for that procedure. Then they can load rules in terms of, “Here’s how much I would charge a self-pay patient for that.” We help them give an estimate for a call-in, walk-in, or if they’re doing another procedure and the patient wants to know what it’s going to cost. It actually prints it out on a PDF. The hospital can hand this to the consumer and they can ask them for payment right then and there if they’d like to.

We definitely do that today. That’s generally driven by norms in the market, as opposed to, as you said, building up a cost-based structure. It’s more based on market norms in terms of what they’ve been charging for that similar procedure based on their third-party agreements and based on other self-pays. That’s definitely something that we support.

I think probably everything’s been said about version 5010 that ever needed to be said but do you have anything interesting to add to that whole debate?

No. We’ve got a number of payers live now, but there’s a huge amount that still are not. It’s going to be interesting to see how all of this occurs.

A lot of work has gone into it. At this point, we’re past the point of investment. We’re really at the implementation stage. We see a lot more activity happening right now. More providers are testing and more payers are coming out with it. It’s a huge amount of work. There’s so many things going on with 5010 and ICD-10 and the Affordable Care Act. Hopefully they’ll result in benefits down the road.

If Accountable Care Organizations take off like everybody seems to think, what will the effect will be on your business?

The biggest thing will be that at the point of eligibility or at the point of accessing the health system, it’s not only going to be, “Are you covered?” but “Are you covered here?” and, “Are you covered here, and under what pricing mechanism?” 

Depending on how this all finally rolls out, you may find that when you go to a particular provider, the answer is “Yes, you can have services here, but here’s the differential on terms of the payment that will be made for this.” I think it’s going to add an additional dynamic to the eligibility process:  “You’re covered, you’re covered for this procedure, but you may or may not be covered at this location.”

I think there will also be more dynamics in not just getting you in for that procedure, but setting up the logistics for that procedure for follow-up.  Such as, “We’re going to do this knee replacement, but while you’re here, we need to set up your physical therapy and make sure we follow up with those appointments so we provide the standard of care that we’re committed to as part of the ACO.”

The onboarding process will become more rigorous. That’s an opportunity for Passport. It’s going to make our transaction more important.

Everybody’s jumping into the ACO waters because the government says it’s a good idea and they’re afraid someone else will do it first. Is the IT support available to let them be successful?

I think it’s going to have to evolve. For things that people are committing to or looking at, there are capabilities in systems, but those capabilities have to be turned on or implemented.

There will be cultural changes that have to take place totally separate from the technology. There’s been such a wave of new technologies over the past few years that I think the footprint’s in place, but a lot of people who’ve turned on this technology just got it on. They’re going to have to do additional things in implementing it and in terms of what they track to support the ACO.

A lot of the technology that’s out there didn’t originally consider this concept of a commitment across a spectrum of care. I think there’s probably some upgrades to some of the systems that will have to occur, with additional investment or additional tweaking. But we’re a lot better prepared than we were five years ago.

Any final thoughts?

Healthcare has always been dynamic. If  you look at what’s going on now with ICD-10, 5010, and the Affordable Care Act, there’s a lot of transitions occurring. Those challenges are opportunities for technology to help.

My goal, and I think the goal of all technology suppliers, is how can we make our technologies support these changes and have the least impact to providers? That’s going to be the challenge we’ll all face in the next few years. Is technology going to support the ACO movement? I think it’s the responsibility of the technology suppliers to invest in their technologies, to upgrade their systems to support these things. The changes aren’t going to stop. Having flexible technologies and having people who are engaged in making that technology stay current with the changes will be important.

I also think that engaging the patient is going to become more and more important in terms of standards of care, the patient being accountable for care in terms of coordination. I hope you’ll see a lot more around patient engagement and people taking more of an active role in their care. That’s another way we can improve people’s health and reduce cost to the system.

An HIT Moment with … Stuart Long, President, Capsule Tech, Inc.

An HIT Moment with ... is a quick interview with someone we find interesting. Stuart Long is president of Capsule Tech, Inc. of Andover, MA.

What’s new in the world of medical device connectivity?

I think the biggest change is that more and more hospitals understand the need for device integration and have moved on to the realization that clinical workflow improvement is a significant factor. This means that when hospitals are evaluating connectivity, that they are not only looking at the technical components, but are really investigating whether the solution fits the way the nurse works. They realize that doing so not only ensures successful adoption, but ensures that the benefits of device integration are
truly realized. 

We’re seeing actual data from our customers indicating their clinical staff gains as much as one-fourth of their time back to bedside caring of their patients. This is significant. I also think this is why you see the role of CMIOs and CNIOs increasing in the industry — understanding the importance that IT plays in the evolution of improved clinical care. They are leading the way at bridging the gap between IT and clinical and ensuring that the technology not only fits technically, but clinically as well.

Why is vendor-neutral device connectivity important?

There are hundreds of devices throughout a hospital. There are dozens of receiving systems that want data from those devices. Without a vendor-neutral solution, hospitals end up with vendor-dependent solutions that only solve connectivity for one device or one system and can significantly drive up the cost of deployment, management, and upkeep. The result of this type of connectivity is multiple points of integration that are nearly impossible for the hospital to manage and that offer no flexibility to add,
change, or upgrade their devices or IT systems. As connectivity evolves, there will be even more points of integration to manage.

Vendor-neutral connectivity is the optimal way for a hospital to ensure that their architecture is as clean as possible, that it minimizes points of integration for easier management, that it helps manage costs, and that it offers the flexibility and scalability to allow hospitals to add and change devices or IT systems as needed.

However, we consider this basic vendor neutral connectivity. Customers want to connect more devices, but they also want a visual status display at the bedside. They want a solution that allows them to validate and send vitals from the bedside in lower acuity areas such as med-surg. They want to expand their solution to do more advanced connectivity, such as reporting and analytics, that could result from the collection and comparison of all collected data. 

Many of our customers understand the burden of managing many third-party applications on a PC not originally intended for this type of use. They tell us with FDA being a priority, “We want you to own it cradle to grave.” This way there’s no ambiguity as to who owns what. The point of demarcation between what is our responsibility and what is the customers is crystal clear.

Our product is a medical grade platform that delivers basic connectivity and enables connectivity across the hospital, fits into workflows, is dedicated to connectivity management, and is field-upgradeable. Customers can realize the benefits of improved patient care, workflow efficiency, and patient safety today and grow without having to overhaul their solution to add features and applications later.

Are we at a point where our ability to collect medical device data exceeds our ability to do anything useful with it?

There is always a need to automate the basic charting process. Manual vital sign collection and charting is simply a waste of nursing time. Even if the only goal for a hospital is to implement the basic connection of devices to systems to automate this charting process and improve patient care at the bedside, this in and of itself justifies the implementation.

However, I think the industry is in the early stages of the next big growth cycle for device connectivity. Clearly the connection to the EMR is still the biggest driver for connectivity today, but there are many applications that have been emerging over the past few years that require not only the discrete device parameters, but also the alarms and waveforms from devices. Some of the emerging drivers are decision support, remote surveillance and monitoring, mobile devices, alarm management, and device-to-device
interoperability.

There are definitely many current and future uses for all this device data. The challenges are in being able to process, format, and ultimately serve up the data to these applications. We are experts at doing this. Providers also need and want to get more useful data to help improve decision making. In fact, there is already much progress on the BI and analytics aspect of healthcare.

Do you have examples of providers that have demonstrably improved patient outcomes by using medical device data integration?

Yes. The key benefits of medical device connectivity are improved workflow efficiency and patient safety. Our customers have documented amazing progress in this area and reported improvements in the amount of time vital signs are now available in the patient’s record.

One customer nearly eliminated the delay of vital signs to the patient record, going from six hours to just seconds. Another customer recognized an annual savings of $265k in reduced waste previously caused by vital sign delays. Another reported a 23% reduction in documentation time post medical device connectivity. Ultimately, this translates to more time in direct care activities and supports improved patient care and satisfaction. This leads us to the results of one customer that reported a 61% Gallup improvement in their nursing satisfaction pertaining to their job.

Patient safety is positively impacted by medical device connectivity as well. Charting errors are reduced and patient data errors are avoided. Accurate vital signs are available in the EMR and accessible to physicians and clinicians, which improves patient care coordination. One of our customers is linking near real-time vital signs with their early warning system and using it as patient surveillance to track deterioration of the patient status and the need for rapid response intervention. They are also using the benefits of device connectivity to monitor the potential for sepsis in lower acuity environments.

Exact metrics on errors and omissions are hard to come by since hospitals are sensitive to report this information. However, we are seeing our high reliability customers more willing to study this metric so they can continuously improve and initiate actions to create a safer environment for all their patients.

What changes do you predict over the next few years that will affect your products?

The largest changes will be related to improvements in clinical workflow and the use of data. This includes the collection and management of alarms and waveforms and the ability to integrate smart pumps. Closely related to all of this is the industry shift from collecting data based on the patient’s location to a workflow, whereby the data is directly linked to a confirmed patient ID.  All of these areas are huge challenges for hospitals. 

We have been working with our customers and our device and information system partners to solve these needs. There are a lot of technical details to sort through to make it happen and a lot of testing that needs to be done end to end. But that work has
started and connectivity will, in my opinion, be rapidly changing in the years to come.

HIStalk Interviews Patrick Hampson, Chairman and CEO, MED3OOO

Pat Hampson is chairman and CEO of MED3OOO of Pittsburgh, PA.

Tell me about yourself and the company.

I was a business major in management. My mother was a hospital administrator and my brother was a lawyer who litigated against physicians, so I chose the middle ground of working with physicians. I started a practice management franchise back in 1987 and expanded that into revenue cycle management.

In 1995 when we got our first capital raise, I started MED3OOO. I’m the chairman and founder of the company. Historically during that period of time, I was lucky enough to be befriended by John McConnell, who was the CEO and founder of Medic, and was able to invest and be on the Medic board. Then the same thing with A4 Health Systems. Conversely, John McConnell’s on my board. I think you could say it’s incestuous to some extent.

A lot of people, including the ONC folks, are talking about the usability of physician software. How are MED3OOO and the industry in general doing in that area?

I don’t know anybody that’s like MED3OOO, for two reasons. One, we’re in the physician practice management business, so basically we were born and raised as operators. Whether it’s an Allscripts system or a Sage system or our own systems, we know what we want these systems to do to better manage a practice.

Conversely, we’re also system-agnostic, so if the physician group or the hospital who has employed physicians already has a system, we’re able to use their systems. It’s like BASF — we don’t make things, we make things better. We use their systems to improve how they run their physician practices, or if it’s an independent group, how we run the practice. 

Separately, we have InteGreat, which is our proprietary, Web-based PM system. If we’re talking to physicians for the first time about EHRs, it reduces the barrier to the sale. We let them look at all the EHRs and then hopefully they’ll pick InteGreat, but if they don’t, we’re fine with them picking one of the other vendors and we’ll install it and service it and manage it for them.

How do you separate those lines of business within the organization?

MED3OOO has three lines of business. The first business is physician services. That has three components. One component is where we manage a physician’s group, whether it’s hospital-owned or they’re independent-owned, on a turn-key basis. We do the accounting, the finance, the administration, the billing, the collections. We do the managed care contracting. Usually those are long-term contracts, but it’s turn-key.

Separately, we actually own physician practices in some states where you’re allowed to own them. We have large physician groups that are actually owned and operated by MED3OOO.

Third, we have the revenue cycle management. I think we’re one of the largest private RCM companies in the US. That all falls under physician services.

Separately, we have an ACO division, which is accountable care, and that houses our IPA business. In California, Illinois and Florida, we’re a TPA and we manage large IPAs. Some of our IPAs are taking global risk and some of the IPAs are taking professional risk, so now that the word ACO has come about, we’ve been taking reimbursement risk on patients and quality for quite a few years. We have our own systems for that.

The third division is the technology division. It can either be agnostic and utilize the non-proprietary systems like Allscripts, Sage, or GE, or we’ll sell our own proprietary system, which is InteGreat PM, EHR, and data warehousing. It’s really the physician’s choice. As you know, physicians like different bells and whistles, depending on their specialty. But we try to stay agnostic as much as we can, even though we believe the product that we built with InteGreat has much more capabilities than some of the older legacy systems.

I’m glad I asked you that question because I didn’t realize the scope of what you do. Are you the only company offering physician systems that actually owns physician practices and performs TPA duties?

I think we’re the only company out there that has all three of those divisions, which is  kind of interesting because the market’s now come to us. Again, there’s a lot of hospital groups, there are a lot of hospitals, there are a lot of physician groups that now want to … you know, they’re worried about getting into the ACO business. If you think about it, we can walk in and we already have the risked-base experience because we’ve been doing global risk for 10 years for our clients. We have the technology, because we’re a TPA. Then we have the electronic health records, whether it’s the system that they’re using or developing a community model, and we have data warehousing. So we’re pretty much a plug-and-play for folks that want to go to the next step and partner with someone to become an ACO.

How big is the company?

In 2012, our run rate will be about $200 million in revenues. We have 14 operating centers across the U.S. and about 2,500 employees.

Wow, it’s huge. I’m sure there’s going to be a lot of folks other than me who are going to do a little double-take when they read that. There are potential acquirers out there looking at revenue cycle, different kinds of companies, and you’ve got several sweet spots. Are you getting a lot of interest from folks who see your very large footprint and are interested in participating with you in some way?

Where we get a lot of interest is from companies that want to invest in MED3OOO and then for it to go public. We’ve been in business since 1995.  I have been on public boards, Medic being one of them. Historically, because we are privately held, we’ve been able to pretty much put all the capital back in the company, so we’ve been able to build internally. We already have population health management. We have predictive modeling. All the tools that we need to manage our physician practices or our own risk-based IPAs — we built these things internally, so it’s not vaporware. It’s things that really work in the field of fire, not selling a product and then running off to the next client.

Recently, it’s kind of exciting for us, but we signed the state of Florida to do their children’s Medicaid services. That’s not only a nice contract for us because it’s across the whole state of Florida and it’s a state contract, but they’ve also signed us to build a continuous quality of care modules, which no one else in the industry is trying to do because they might have the software expertise, but they don’t have the operating expertise to actually build it so that once it’s up and ready to go, then it works at the point of care.

I know that you’re a big user of Quippe and jumped on that pretty quickly. How important is that and its acceptance to the strategy on the EHR side?

Quippe’s pretty important because the thing it does that others – I think we’re one of the first to use it – but it’s template-free documentation. The way it’s set up, you don’t have to build templates. It really thinks like a physician. You can really fly.

I think why that’s important is it feels like the market is now down to where it’s the one doctor to the 25-doctor practices. Most of the larger groups have already been saturated with technology. We think there’s a big difference between putting systems in onesy-twosy practices than there are for these large clinics that have tons of infrastructure, they might have their own CTOs, they might have a training group.

The smaller practices don’t have that. You really need to have something that’s low-cost, that’s easy to use, and at the same time, moves the way the doctor moves, not have the doctor move the way the vendor built the system. Last but not least, it’s also cloud-based with our technology, so we don’t need a VPN or network, so it also keeps the pricing down for folks.

You mentioned the small to mid-sized practices. How much of the practice market are you seeing that’s being driven by hospitals that are choosing single-vendor offerings, like from Allscripts or from Epic or whoever, and then subsidizing those offerings to their affiliated physicians?

I’d say the majority of cases, from I can see. The hospitals are choosing their select vendor. We’ve got a lot cases where we have hospitals and we’re not the main vendor for their employed physicians. I’d also say that if you’re a large group, an independent physician group, the problem that you have is that you’re in a marketplace where you want to connect to all the other physicians that affiliate with your hospital or your practice group. In most cases, we might go into a market and there’s 600-700 physicians on staff and they have all the different systems you’d every want to know.

We’re a little different as, again, we’re agnostic. We can work with that hospital system, that group system, or we can help them connect with the marketplace where you’ve got 16-20 different vendors out there that have already sold systems. I think the Web-based technology for us is important, too, because the majority of systems out there are legacies. You’ve got a few Web-based systems, but there’s going to be over time a large capital cost for the folks to get off the legacy systems because they’re just not going to be able to do what they need to do easily. We believe that InteGreat is pretty well positioned for that second phase in the market.

There are people that predict that the small practice is an endangered species, and especially with all the emphasis on technology and affiliations, that it’s going to be tough to survive. Do you see that happening, and how do you see the technology needs either helping them go away or helping them not go away?

I think that the industry is cyclical. In 1995, back when we were first named MED3OOO, you had companies like PhyCor and MedPartners and you had hospitals and everybody employing physicians. From 1995 to 2007, they lost a lot of money on their employed physicians. The physicians weren’t happy, the hospitals looked at the P&Ls of physicians and weren’t happy. 

I think you’ll still see employment models strategically in certain areas like Pittsburgh, for example. Highmark and UPMC are battling, so there’s more competition there. What we see more of is hospitals and/or large physician groups and/or IPAs trying to figure out different methods to align with physicians versus just employ them.

In some states like California, you can’t have a non-compete. Even if you pay the physician a lot of money for his practice, they can go six doors away and reopen a practice or go to someone else. We think the smartest move that people are making is just figuring out different ways to keep the physicians to align with them, not necessarily just use the employment model.

You mentioned the ACO market in general. How do you think hospitals and practices will address that need to collaborate and integrate their delivery, especially with IT?

Right now today, ACO to me means “awesome consulting opportunity.” Everybody is running around, everybody wants one, but very few really know the details. The government just came out with their new set of regulations and I’m not aware of any of the pilots in the ACO realm that have made any money. I think the jury is still out.

Do I think there’s any need for a different reimbursement model that’s based on quality and based on access to care? Sure. But is it the ACO model? I’m not sure but – this is a sales pitch for MED3OOO – if somebody wants to become an ACO, now again, what do you need? You need heavy technology on the reimbursement side, the payer side. You need ways to align physicians and hospitals. You need expertise, somebody that’s actually handled global payments. We believe we’re the best partner, whereas the hospital or physician group to make him successful in whatever the new ACO world is.  It’s just not having it, and so it’s not being a vendor. You have to be a partner to make this really work for a hospital or a physician group.

As a developer of systems, what are the challenges that you see with managing population health?

Right now we have about 2% of the U.S. population in our data warehouse. Getting data is easy. Sorting data and making sure that it’s viable data is much more difficult. then doing it on a real-time basis so that people have that data at the point of care.

But in our world, population, health management, predictive modeling — these aren’t new terms. We’ve been doing it for five years and doing it successfully with our groups. It’s more of an issue of access to the data. Will the states continue to fund HIEs and deploy them so that everybody can share data? With the economy, will that funding continue? And if it doesn’t, what’s the solution were everybody can share data?

The government did a great thing by saying everybody had to be interoperable, but that’s a technology term. It still doesn’t mean that you have to share data. I think this will shake out in the next three or four years, but it’s those that have the data and then those that know that it has to be processed before it’s usable are the ones that will have a leg up.

You mentioned interoperability and HIEs. What customer demand are you seeing for that and what are your strategies in those areas?

InteGreat is certified for Meaningful Use, and interoperability is one the components of Meaningful Use. We’ve got two things. We’ve got the EHR that has Meaningful Use and interoperability, but separately, the data warehouse will let you extract data from disparate systems. Then we can turn that data into actionable information for the physicians.

You need to have a strategy that has different parts, because if you’re a vendor, all you care about is selling your system. If you’re in management, you care about what systems you’re using, but you also care about what system the other 60% of the market is using and how you get access to that data. That’s where we made an investment 10 years ago into the data warehousing piece. I  you think about it, because we are a large user of Allscripts and NextGen and Misys and Sage and InteGreat, we got the data warehousing so we could manage our own disparate systems. Now it’s a plus, because in these communities, we can manage the disparate systems that are in that community and an HIE can’t do that. An HIE can connect them, but it’s really not a place to house data and then turn it into information.

Every executive makes bets about what’s going to happen in the future, making company decisions today that won’t realize fruition for years. What are some of the bets you’re making about what the industry is going to look like down the road?

I’ll be really different. I don’t think we’re making a bet. I think what we decided years ago is that the industry is cyclical, so we wanted to have expertise in technology. We wanted to have the expertise in management and operations. We wanted to have the expertise in data. 

When these markets shift, for example, you might assume that if everybody’s employing physicians, the revenue cycle management business would be less. But if hospitals are employing physicians, that practice management piece accelerates, because they usually don’t know how to manage physicians. What we’ve decided to do is have the components, and then as the industry shifts, two of our components, two of our divisions might be on fire right now. I think just four years ago the IPA market was kind of flat — there wasn’t anybody developing new IPAs. Now the IPA market has become the ACO market and everybody wants one, but very few have the tools and the knowledge on how to really do it. While physician employment might be saturated or systems might be saturated, the knowledge base in our ACO division … it’s tough to keep up right now.

Any final thoughts?

You’re going to have to get to scale, whatever you do as a company. I truly believe that if you want to make a difference — where it’s quantifiable, you’re making a cost improvement and a quality improvement on the clinical side — you really need more. You can’t just be a vendor. You’ve got to provide people with a stepping stone and a map to get to disease management and population health management. There are a lot of people today that are just starting and are not sure where they should start. I think we would be good partners for them, because we’ve been doing it. That’s the core of the company and we’ve got all the tools and services, but more importantly, we actually do it for a living. We’re not a vendor to most of our physician clients or hospitals.

HIStalk Interviews Farzad Mostashari MD ScM, National Coordinator for Health Information Technology

Farzad Mostashari MD, SCM is National Coordinator for Health Information Technology of the US Department of Health & Human Services.

Has HITECH spurred EHR adoption to the level anticipated?

I think so. I think the EHR marketplace had been kind of growing, but slowly. After 20 years, we were at 20% EHR adoption. Then, with the passage of HITECH, I think it is undeniable.

You talk to practically any provider out there and they have either acquired, they are shopping for, or planning to get an EHR. The ice has broken run a very real way. The survey results from last year found that among primary care providers, it went from 20% to 30% in one year for having a basic EHR. I expect this year to be 40%. Next year, 50%.

That is pretty remarkable. As the Secretary put it, HITECH has been successful at “lighting the spark” that is now ignited in terms of getting this modernization of healthcare to happen. I think it had its intended effect.

Now for the long term, this is not a one-year or six-month or 18-month story. The longer test of HITECH will be: are we able to serve as a foundation for healthcare that costs less, that has higher quality, that is more patient centered and safer? We are going to have a little bit longer time before we can answer that definitely. But so far we, are hitting the milestones.

What do you think? Do you think HITECH has had its intended effect on EHR adoption?

Yes, it has had an effect, but what has been the benchmark? Was there a specific goal on the onset as to where we would be in Year One, Year Two, Year Three? There is still is obviously a lot of resistance out there for one reason or another.

Healthcare doesn’t change very quickly. It can take four years to get one hospital to go through an implementation. People who have done actual implementations of EHR know how hard it is to get one hospital to move. We did not say,” If we hit this number, we are successful. If we do less than that, we are unsuccessful.” But, I think by any metric, the early indicators are extremely positive.

Usability is one excuse that providers use for not adopting EHR. Is ONC doing anything to try to do to improve usability in the marketplace?

I think it is more than an excuse. I think that there really is a frustration on the part of many providers with usability of the systems they purchased. I was recently at my reunion for my residency class in internal medicine. Someone came up to me and said, “Thank you for what you are doing, but the EHR that we have is really lousy.” And I said, “I am really glad I didn’t choose it for you!” [laughs.]

That is one difference between the approach we took in the States versus what the UK did. They said, “We are going to do the procurement. We are going to choose the systems and that is what you are going to use.” We said no, providers are going to choose what system is right for them. I love that market-based approach.

The only problem is that providers consistently say, “I didn’t know what I bought until three months after I bought it. I didn’t know what the usability of the system was really going to be, because all I saw was these demos I had from people who knew their way around the system and knew spots to avoid.”

I do think usability is a serious issue for us — vendors, doctors, academics, and the government — to tackle together. The right question that you asked was, “What do you think you can do about it?” I think it starts with having some baseline expectations around user-centered designs, around user-based testing.

I hope we’ll have some common sense, consensus-derived standards for what are some aspects of usability that you actually can measure. I think if we can bring that to the industry and to providers, we will have done a great service.

Would that involve making usability a requirement in certification?

No. I think the first step is simply just to say, “This is how you would measure usability,” and vendors are free to test their products against this. There will be more transparency. People, when they are purchasing systems, they can say, “What is your usability on this or that metric?” and incorporate that into their decision-making. This is something we will have to monitor and adapt as we go along.

We are very aware of the policy balance between the protection of the safety of the patient, certainly, and responding to what we are hearing from providers that usability being a major sore point for them, but not stifling innovation and not saying, “You shall do design this way,” which is a sure way to not get the innovation that we want.

As the bar continues to be raised in Stage 2 and Stage 3, what happens if providers aren’t able to meet those requirements? Does the money not get spent? Does the stick not get used?

What we heard from the Policy Committee and the vendors and providers was that people are going to need more time in Stage 1 before they do step up. We have heard that. We agree with the logic of the Policy’s Committee recommendations on that. Under that scenario, people would have 2011, 2012, and 2013 at Stage 1 before they would have to move up to the Stage 2 requirements.

One of the things that we are going to be doing in rule-making is around what Stage 2 is going to look like. If you look at what the Policy Committee recommended, it is going to strike the same sort of balance we struck in Stage 1. Where Stage 2 requirements are ambitious, they do they move the ball forward, but they maintain connection and continuity with what went before. So, it is not a dramatic departure from what Stage 1 is. It is more evolutionary than revolutionary in terms of what Stage 2 is compared to Stage 1.

Our goal is for it to be achievable, but ambitious. I am sure will hear plenty of feedback as to whether we hit the target.

When is the last time you used an EHR?

Wow. I have had the great fortune of seeing a lot of different EHRs, but the last one was when I was in New York City, when we were not just using them, but actually helping create more usable public health than prevention-oriented functionality in the systems that we worked with there.

Was that with a variety of systems, or was that when you were implementing eClinicalWorks?

We were implementing eClinical, but also Epic at the Institution for Family Health and NextGen, so working with a number of different products to particularly implement decision support quality measurements.

Much of the country is critical of the Obama Administration and many feel that perhaps there’s been failure there. What is your opinion?

I am very proud of the work that we have done on HITECH and in this administration. I think a lot of what we have done sets the foundation for doctors and hospitals to provide care that is safer and more effective, and that is more affordable and more patient-centered. I have no second thoughts about the rightness of the approach this administration has taken on this issue that I am working on.

I also want to make clear that I think the Affordable Care Act is greatly underappreciated, in terms of how beyond what it does for prevention and beyond what it does for coverage. There are really, really fantastic aspects of the Affordable Care Act that people don’t know about and just don’t understand — around care delivery, around giving options for providers who want to deliver care differently and have different payment models.

There is a lot of attention focused on the ACO regulations that just came out. I think there is widespread opinion that they are greatly improved, and I absolutely agree. There are a whole host of different payment models that are enabled. Also, the Innovation Center, that can test different models and roll the out to the rest of Medicare.

I just think people think the Affordable Care Act is just about insurance, but it is about so much more than that. There’s a lot of good stuff there.

When you met with the HIT standards committee, you urged them to move forward on the HIE piece of it. Are you encouraged that we are moving forward?

I think we are, absolutely. I think the message was heard and they made recommendations for moving ahead on standards that are not going to be perfect, but will be good enough, and we will continually improve them. I felt that unless we move on moving data — not just structuring it within systems, but actually having standards for how that information gets transported — we are going to be me missing a big opportunity.

This is the most important question of all. In the last couple of years, Dr. Blumenthal earned HISsie awards for Industry Figure of the Year. If you should win it for 2011, are you going to accept your award in person at HIStalkapalooza?

I would be happy to.

HIStalk Interviews Charles Kennedy MD, CEO, Aetna Accountable Care Solutions

Tell me about yourself and your job.

I’m the CEO of Accountable Care Solutions. This is the part of an Aetna that deals with building ACOs on a national basis. I’m also an internist and have had a variety of roles over the years in informatics, health information technology, comparative effectiveness, and research. I also sit on the HIT Policy Committee, which developed the Meaningful Use regulations.

What do you see as the biggest challenges facing the HIT Policy Committee?

Right now, I think there’s probably three challenges I would point to.

The first challenge is that the number of physicians who have gone through the self-attestation process to say they’ve met the requirements for Meaningful Use is substantially lower than what CMS had forecast. At the Policy Committee, we’re keeping our eye on that. As things evolve, we need to may come up with some nuances that allow more physicians to qualify.

The second big challenge is when we developed the regulations, they were largely based off the existing technology, which is electronic medical records, At times, electronic medical records in and of themselves are insufficient to get the kinds of quality and cost improvements that we want to get from technology deployment. Translating the technology deployments to measurable value, I think, is the next big challenge the policy committee faces.

Thirdly, I would point to the technical challenges. Clinical ontology, semantic interoperability is still very uncommonly found in any of these solutions, and in my view, it’s foundational to getting value — or the kind of value that we want to get –from HIT deployments.

Do you see any threat that Congress will pull back some of the HITECH money?

I’m not aware of any threat. Health information technology has generally enjoyed broad bipartisan support, primarily because if you’re going to try and attack the cost equation, HIT is one of the few tools that doesn’t involve benefit reductions or eligibility reductions or some other unpalatable — especially politically unpalatable — approach. I think the House and Senate still very much want to see it successful and I think we’ll stand behind it.

What is Aetna’s perspective on accountable care organizations and how do the Medicity and Active Health Management acquisitions play to that?

Aetna looks at accountable care solutions as the best business model and operational structure to deliver high-quality care efficiently. Because in order to make that successful, you have to have a structure where physicians can operate, work together, and achieve the team-based approaches to managing the patient, which is so common in clinical care today. ACOs gives you a structure.

You have to have alignment of the incentives. It is very difficult to deliver healthcare efficiently when you’re getting paid on a volume basis. ACOs have the right kinds of incentives around gain-sharing, which makes it much more likely that physicians will be rewarded for high value of care rather than volumes of care.

Health information technology is foundational to ACO successes. If you think about many of the things that ACOs are doing, there’s not that much that’s completely new. Many of these things were tried in the ‘90s and had varying degrees of success, but what’s different this time is health information technology. I was in the industry out in California when many of those IPAs and medical groups and capitated agreements were formed. One of the most important predictors of success was the level of IT sophistication for the group accepting financial risk for a set of patients. I believe that the tools we have today are far better than what the best tools of the ‘90s could offer, and I think that gives us a strong chance of making ACOs successful.

Along those lines, to what extent do you think the ACO model will encourage or even require greater levels of interoperability, business analytics, and population management tools, and how well do you think today’s provider information systems can meet those needs?

All of those needs — analytics, applications which support the care process, knowledge bases which allow you to apply the best in medical thinking to each individual patient within the context of the care … is an absolute requirement. The challenge is primarily a data challenge.

Most of the data that is found today is derived from claims data, which has inaccuracies. It has timeliness issues, and it may not always reflect the actual clinical care process. When you get into the realm of clinical data, you find that much of the information is in textual reports. It may be sent in a structured message, but the pieces of information you need to derive from that structured message are often free text. 

Without that clinical data being in a discrete form that we can run algorithms against, that we can data mine, we can write reports against … until that happens, we’re going to be limited by the depth and breadth of the data available to it. That will cause significant challenges in getting the value from health IT that we would like to get in order to make ACOs work.

I really look at from the perspective of we must improve the quality, breadth, and depth of the clinical data and allow that to be fed into engines, repositories that you can apply mathematical operations to. That’s the challenge.

Ours is very much a collaborative business model with the providers, hospitals and physicians. As we see hospitals and physicians needing to take on a certain amount of risk in managing the populations that are associated with an ACO, Aetna’s business model is one to say, how can we provide our intellectual property knowledge to help hospitals and doctors figure out how to do that truly in a collaborative way, as opposed to it somehow being taken offshore or taken back to a big company like Aetna where it’s all being managed by us. That’s absolutely not our model in any way, shape, or form.

What people are trying to achieve in the structure where clinical care can be delivered more efficiently and effectively, that structure must deliver a better foundation for the care management process to be executed. One way is to actually buy practices. We’ve seen various health plans do that. That’s not our approach, because we believe the delivery of care is sufficiently different from the IT tools, the risk management, the actuarial functions, and all the things associated with what a traditional health plan does. We believe those businesses are sufficiently different that it doesn’t justify acquiring practices. Our model is a collaborative model.

It seems the accountable care model may be affecting the viability of the small independent physician practice and maybe even physician autonomy in general. Do you see that being an unintended consequence?

There will certainly be opportunities for physicians to align themselves with larger organizations. Many will choose to do so for the reasons you are citing. They’ll need help with information technology. They’ll need help with reporting and analytics. They’ll need help with risk management. These are all functions that an individual or small group practice simply doesn’t have the bandwidth or the infrastructure to take on.

However, again with our partnership model, we believe we can preserve the look, feel, and operations of an independent practice, but through technology, bring them all the capabilities they need to be successful in an ACO world. We don’t think it’s an inevitable result, but we believe there will certainly be organizations who go down the integration path and look to individual and small group physician acquisition as a way to get it.

How does the partnership model work and who pays for it?

We have a variety of ways of working with delivery systems. They generally fall into three buckets.

The first bucket is what I’ll call a clinical integration focus. Let’s say you’re a hospital and there are 500 physicians in the community who admit to your facility. What we’re finding in the marketplace is that many hospitals are interested in a clinical integration strategy, because they recognize the benefits of having the physicians more closely aligned with their facility as both benefits from the hospital as well as in improved care process.

One approach that we use is to simply say, we will work with you in a collaborative fashion to allow physicians in your community … so this would be to market and sell a Medicity-style solution, which could include health information exchange, it might include an electronic medical record. Through our ownership of Active Health, it could include analytics and reporting as well. What it allows us to do is to offer a seamless set of tools that allow the community physicians to begin to operate as a virtual ACO with a very light footprint. This is not massive EMR implementations, this is not any kind of rip-and-replace type of approach. This is a lightweight, small-footprint approach to allow health information exchange to occur.

Once you do that, there are significant benefits from both the quality perspective as well as an efficiency perspective in simply getting everyone connected. That’s one way we would start interacting with them. We generally charge for those services, but we have very competitive rates and services may be paid for either by a sponsoring organization or by the end users themselves.

The second approach is what we call a population-based approach. This approach is for organizations that do not want to form an ACO yet, but want to take some steps toward forming an ACO. Two combinations that we commonly use in this style are the employees of the hospital. Frequently a good-sized hospital will have 5,000 or more employees. We use that population as a way to deploy some initial tool sets generally centered around chronic disease management and patient empowerment.

Let’s say you have a hospital with 5,000 employees. We might deploy a part or all of the Medicity solutions, connect all of their various systems, and expose that information — to the patients, the employees — and incorporate it as part of a disease management program. We’re typically paid for these services as well, but these services create a financial benefit in terms of lower utilization of healthcare costs, healthier, more productive employees, and so the hospital can realize a net gain from the deployment of these services. Further, it’s really good way for the hospital to be able to see the employer’s perspective of what their healthcare service offerings might look like, and that can be helpful if you want a commercial health plan itself as an ACO.

The third model is a private label health plan. In these types of circumstances, what we’re doing is we are enabling a delivery system to have their own health plan, powered by Aetna. They go to the market, they use their name, their local market reputation. We provide the same types of services that we do today, but the difference is that it’s done under the direction of delivery system in consultation with us and allows for complete transparency. The delivery system sees direct results from the cost initiatives and those flow directly to their bottom line through all of the members that are associated with their private label health plan. It’s very powerful from a transparency perspective and drives the delivery system’s interest in the using more data, more analytics to become more efficient and as competitive as they can be in the marketplace.

From your comments on the HIT Policy Committee as well as Accountable Care Organizations, it sounds as though the EMR systems of individual practitioners aren’t as important as they once were, becoming more of a tool to feed the network, the analytics engines, and population management tools. Do you think that will change the healthcare IT industry?

I think the healthcare IT industry has largely grown up around the customers that they served. When physicians were largely in solo and small group practice, the EMR industry tended to sign the larger organization because they have the capital and infrastructure to be able to adopt an EMR. Most of the vendors have struggled to profitably serve the solo and small group segment.

Now that we’re seeing more and more physicians become acquired by hospitals or in some way, more tightly aligned with systems, I think you’re going to see the EMR industry change. The organizations that are going to become more employed are the ones that are doing health information exchange, because that’s what’s going to be more important to ACOs and integrated delivery networks, as well as organizations that are very sophisticated with their data management capability. Here I’m talking about semantic interoperability, clinical ontologies, and similar ways of being able to use the data in a way influence the care process.

I do think you’ll see a bit of a shakeout. I really have no idea when. I think those with the more sophisticated data management capabilities will be the winners.

When the smoke clears after Meaningful Use, healthcare reform, and Accountable Care Organizations, how do you think the healthcare industry will look compared to today?

I’m going to give you the optimistic answer, which is I hope that the healthcare industry has transformed from an industry that rewards participants based on volume to one that rewards participants based on the value of the services that they provide.

I would expect that ACOs will become commonplace and will become successful and will allow patients, through the use of health IT, to take better care of their chronic disease. 

I hope we begin to see more effective chronic disease management. Chronic disease is responsible for 60-70 cents on the dollar of our healthcare expenditures. If we can begin to use the data that gets generated through the Meaningful Use deployments and digest it and turn it into a form that is actionable both by the individual physician as well as the individual patient, I think there’s a reasonable chance to think that people will get their diseases in better control and that will help us keep healthcare costs more manageable.

Any concluding thoughts?

As a society, we’ve been very concerned about healthcare reform.  I think part of that is because it so big and so complex and so important, But I think we are starting to see preliminary signs in the industry that healthcare reform may in fact work, and may in fact give us better quality care at a lower price. I see reasons to be optimistic about the future in healthcare.

HIStalk Interviews Jacob Reider MD, Senior Policy Advisor, ONC

Jacob Reider MD is senior policy advisor of the Office of the National Coordinator for Health Information Technology of Washington, DC.

Tell me about yourself and your new job.

I’m a family doctor from upstate New York. I’ve been involved in health IT for a couple of decades. I started off as a medical educator in the Department of Family Medicine at Albany Medical College and moved on to leadership roles in health IT there and at Albany Medical Center, obviously in Albany, NY. Left there and joined a group called CapitalCare Medical Group, which is the large primary care group in Albany, doing EHR implementation.

There’s a sort of funny story to that one. Early in our EHR implementation, I posted this thing to this new communications platform called a blog. I started blogging in 1999. In about 2004, I put this post up about usability, which was a word people thought I made up, and how the usability of the EHR that I was using was missing the mark. About six months later, the president of the EHR vendor that I was complaining about contacted my boss and indirectly asked me to take down the post, because it was apparently costing them sales. That was Misys Healthcare, and the guy was Rob Kill, the former president of Misys Healthcare. I told my boss that last time I checked, this was a free country and I didn’t really have any intentions of taking the blog post down.

Then I actually started a dialogue with this guy, Rob Kill, and eventually he hired me to help them look at themselves in the mirror and try to improve the user experience of the EHR product. That may be answering your question about my background, because I eventually moved on from CapitalCare to Misys Healthcare, where I was medical director. Then we merged with Allscripts and I was CMIO of Allscripts for the last handful of years.

Then started interacting with folks from the government, and started to go back to my roots of idealism and thinking I could help solve really big problems. Got enticed to join Farzad’s team, because I was really inspired by the work that folks here are doing and the people who are here, who are just great folks who have the right vision and passion for getting things right. Sorry if I sound like a TV commercial.

What is your title and area of responsibility?

My title is senior policy advisor, which sounds very government. I tried on Luke Skywalker and Jedi Master, but so far we’ve got senior policy advisor on my business cards.

How much of the problem to get physicians and clinicians to use systems is because of usability issues?

Are you familiar with the NIST draft usability publication that was put out about a week ago?

I didn’t read it, but I heard it was out.

In that document, NIST calls out some fairly good evidence that user experience / usability is a barrier to broad EHR adoption. That’s not my opinion – that’s been stated by NIST in the publication. That was my callout in 2004, that these things were not optimal to use. I like to think of usability as kind of a milestone on the continuum of user experience. I’ll burden you with a little bit of my view of the world.

As a very basic component, if we think about any new technology, new tool, new anything, you’ve got at the basic end, functionality. Does the thing do what it was intended to do?  It’s something functional.

Beyond functional, you’ve got reliable. Does the thing do what it’s supposed to do every time? An example of functional is a Model-T car. It works, but Model-T cars came with toolkits because they broke, so they weren’t reliable. EHRs years ago – I can vividly remember that the system would go down at midnight every night for backups for four hours. They weren’t reliable. They were functional, perhaps – they did what they were intended to do – but they weren’t reliable.

I think we’ve nailed functionality, we’ve nailed reliability, so as the maturity of any new technology evolves, you evolve up the continuum, so you get functional, reliable, and usable. Usable implies that you can accomplish tasks efficiently; you can do things in an intuitive way. NIST’s document does a great job outlining how you can quantify usability. There’s an argument that it’s subjective, but I think they’ve documented that it’s quantifiable.

Beyond usability, you’ve got meaningful, so it does stuff that’s important. And then pleasurable, that it does stuff elegantly. Apple is a great example of a company that has reached the maturity pinnacle of pleasurability and not just usability, functionality, and reliability. Longer than I intended to blab about, but does it make sense?

People tend to react emotionally to the term usability, thinking it means somebody else designing their screens or taking away their competitive advantage, but in fact there is a usability science that has its own body of literature and its own professional groups. How do you take emotion out of what people think usability means and turn it into something that can move ahead constructively?

I think it’s about using terms carefully. Often I’ll talk to people about what I just described, because we can measure each of those components. I also talk about best practices, so as we think about the industry, we can think, “What are the best practices?”

I think the NIST document outlines best practices that are not just from our industry. If you want to design an airplane or an iPad or a coffee pot, there are methods that you use, and one of those methods is called user-centered design. As you mentioned, there’s a whole field that’s devoted to this. If we talk about using the right method and using the right processes, very frequently that disarms some of the emotional response and we can start to talk collaboratively.

That is what everyone wants to do. I don’t think anybody’s opposed to better usability. You’re not going to hear a user or a vendor or anybody from the government say, “We’re opposed to that.” It’s just The question of who should do what as we look to lever or accelerating that evolution of usability as it has evolved well, obviously, in the consumer electronics space.

How do you see your role specifically and ONC’s role in general affecting usability of software?

There are two areas that I’m really focused on as we move forward. One is clinical decision support and the other is usability. I actually think they are tightly linked. If you look at some of the great design literature from professionals like IDEO, who do a lot of innovation design, and Neilsen Norman Group, these are folks who were involved with the original Apple product and many other things that you’re familiar with.

You see how the design actually guides the actions of the user. A really well-designed door handle guides what I do. I think clinical decision support is not about alerts and reminders and hitting docs over the head with two by fours when they do things wrong. It ‘s about guiding care providers to more easily do what’s right and less easily do what’s wrong. Usability and CDS in that way – and that’s why I’m blabbing about this – fit together really nicely.

My role is to listen to the market, to end users, to eligible providers, to hospitals, and to vendors, and learning about all of these perspectives. Right now that’s the place that ONC is. We’re listening. We’re listening to the experts.

This report that NIST produced just a week ago is open for public comment. We’re very interested in the reaction to that document. It’s in the 30-day comment period and they’ve got a Webinar coming up. The more feedback they get — and by extension, we get –about that, the better, so we can learn more about what other folks think ONC’s role is in terms of facilitating the evolution of user experience in health IT.

Why hasn’t there been a market for usability, where somebody comes up with a more usable product that takes business away from less-usable products?

I think there are a couple of answers to that. We talked about Apple a little bit. In many cases, Apple Is a great example of great usability, great user experience, etc. Raise your hand if you owned or have a friend who owned the Newton. Did you have one?

I did not.

But you remember them, right?

I do.

Apple, of course, had some failures, too. If you look at that company, they’ve been through 30 years of fairly rapid evolution. They’ve succeeded in the long run because they’ve iterated over and over and over. Steve Jobs talked about how he just picked himself up and tried and tried again. Three decades of evolution from Apple that’s created that. And of course, the replacement cycle of a Mac or an iPhone is much more rapid than the replacement cycle of a $50 million electronic health record.

I think part of the answer to your question has to do with the maturity of the market. The market hasn’t matured as we know, with maybe 50% of this market is now penetrated, which means it’s still a young market. We’re not nearly as mature as the consumer electronics market. The other is the replacement cycle is slow, so you don’t have folks saying, “Oh, I can do that in three clicks in one system and 17 clicks in another, therefore I’m going to buy System A.” It’s just not as easy to rip and replace as it is your iPhone.

In your writings, you’ve said that usability guidance is what’s needed, not guidelines or set requirements. How do you see ONC positively affecting usability?

This summer, ONC, NIST, and FDA had a usability workshop. Along with the release of this document from NIST, the federal government will have have a wiki, where we’re going to invite participation from all communities and collaborate so that we can all openly discuss what the opportunities are.

If you’re asking me, “What’s ONC going to do next?” I can say honestly that I don’t know the answer, because what we’re trying to do is be intentional and/or deliberate about what we do next, why, and how, so that this isn’t something that anybody in the market perceives as reactive in any way. What ONC does will be product of dialogue and not something that we just pull out of the seat of our pants.

If we understand the concept that usability can be measured, do you see it either becoming a certification criterion or there being government-sponsored publishing of usability scores of software?

I can’t really answer that question. Sorry.

I did forget to ask you one important question. When did your job start?

I started here on October 3. I’ve been here, gosh, almost three weeks, and it’s flown by in a millisecond.

Any final thoughts?

The NIST document is a good thing to link to. 

The dialogue is important. Even if you solicited comments and you said something pithy and got your readers to throw in feedback, we would definitely pay attention to that – what people are saying on HIStalk about this topic. If you link to that and say, “Hey, what do people think about the NIST document and what’s the reaction to it?” That would be very interesting to us.

HIStalk Interviews Jeremy Bikman, Chairman, KATALUS Advisors

Jeremy Bikman is chairman of KATALUS Advisors of Alpine, UT.

Tell me about yourself and the company.

It’s kind of an old tale. I was raised in Canada, born in the US. Got sick of the taxes, the cold, and the Medicare and socialized medicine and decided to come down to the States and go to school.

I got involved in the Internet back in the 90s and got into some startups, got into some bigger companies, and then got recruited in KLAS by Ralph Reyes, who was one of the original founders of KLAS. Just a fantastic guy. I’d been there seven years and then moved on to re-start KATALUS.

KATALUS is a company I started back in 2001. I shut it down after a couple of years to go to KLAS and then just re-started it about 13-14 months ago. You can think of KATALUS as a management consulting firm. We work mainly with executives of the different organizations, be it healthcare vendors, private equity firms, or even hospitals.

With the vendors, it’s really strategy that’s the main thing we think about. Maybe the vendor is entering a new market. It could be a company coming to the US. We have a Japanese client that’s trying to work in the US. Anyone who has been in healthcare for a long time knows everybody wants to try to work in the US, so we have these firms that are trying to work in the US and we help them every step of the way. 

Some from the US are trying to go to Asia or trying to go to Europe. We work with them. Some are trying to turn around their businesses, some are trying to understand the profile of the customers. We work with them.

With private equity, it’s mainly helping them make the right the investments. Due diligence on M&A. Try to look at their portfolios. 

For hospitals, that’s probably the easiest one. We’re the gophers for hospitals and executives. Not necessarily on technology that they’re going to implement right now, but things out in the future. Right now, it’s Meaningful Use, ICD-10, 5010, and other things like that they have to worry about. But there are things further out in the future. They say, “I know in a couple of years I’ll have to deal with that.” It could be cloud computing, it could be something else. We get them information.

That’s a broad set of activities. Are you planning to grow in to the size that will support all those, or will you focus on current opportunities and change as time goes on?

That’s a very good question. With any company that’s growing, you have to make sure you’re not drinking your own Kool-Aid and make sure you’re administering your medicine. You have to zero in and focus.

Our main focus is on the vendors. We don’t do a ton with hospitals, and when we do work with them, it’s pretty easy because we’re just the gopher for information.

Most vendors are trying to do the right thing. That’s one thing that I learned even back when I was at KLAS. There’s different levels of execution, but most are really trying to do as good a job as they possibly can.

More of our focus is around how well they understand their client base, especially the larger vendors. They have a really hard time understanding. They bought so many different companies, except for a couple like Epic that builds as opposed to buys. Maybe to understand that profile of their customer base. They’ve bought a lot of different companies, and some of those customers, some of those hospitals are having very rough experiences and some are having fantastic experiences. They need to understand how that is impacting their bottom line and how is it impacting their top line. That’s where a lot of our focus is right now.

On the other side, with the private equity firms and the vendors, there’s so much M&A activity. We’re getting a lot of requests to do due diligence on different markets, due diligence on different technologies and vendors that they’re looking at. If I had to look at the two biggest areas we’re working right now, it would be those two I just described.

What parts of the KLAS business model do you like or don’t like and how do you intend to be different at KATALUS?

We’re nowhere near the same. KLAS will rank vendors, put out reports. We don’t do any vendor rankings or put out research reports. That’s not really who we are. We take a side.

When I started with KLAS, they were really quite small. When they hired me, they weren’t even sure how long I was going to be there or how successful I could be because of how small they were. It really was Kent and Ralph and some other individuals there, like Adam.

There was such a great opportunity. There really wasn’t much competition. As we moved into new areas like PACS, medical equipment, and HIE, it really took off. 

I left after being there seven years because there were so many times where I had vendors and hospitals specifically say, “OK, Jeremy, I know you can’t take a side, I know KLAS can’t take a side. But what can I do here? You know. You’ve seen everything about these vendors and you’ve talked to so many of their hospitals out there. You know what I should do.” And the answer had to be, “Well, we’re independent. Go look at the data.” You couldn’t take a side. 

After being there seven years and growing the company 700% — I ran the research division, sales, and strategy there — it just got to a point where I wanted to expand and do more than what KLAS’ mission was. KLAS’ mission is good. They want to rank vendors and they try to keep them as honest as possible.

That’s the reason I left. There was more to do. Where KLAS stops, we pick up the baton, so to speak, and keep running.

KLAS can obviously improve their transparency. Any vendor in market research in general needs to be very, very transparent. It’s tough, especially when you’re ranking so many different vendors and products. So they certainly could improve in their transparency. I know that’s a goal of theirs to do. But they do have really good people and they really are trying to do the absolute best that they possibly can.

There is no perfect vendor. There is no perfect data. There are no perfect reports. There are always errors. There are always mistakes. There’s always human bias that makes it into different data points. I understand the vendor side now being a vendor, being a buyer of KLAS data, Gartner data, HIMSS Analytics, etc. You have to look at it and say, “All this data that’s coming through — I can’t just treat it as the Bible.”

I don’t think KLAS or any other market research firm intends their reports to be the Bible. But unfortunately, too many users of it say, “Oh, it says it in this report that this vendor is Number One or this one is Number Three. That’s it — that’s our ranking as well.”

What framework or instinct do you us to distinguish between a company that’s doing things well versus a company that isn’t?

It really goes back to the management team that they have. There is an old saying in the investment world that, “A fantastic management team can take any idea and make it go north, while a mediocre management team can take the best idea and go south.”

I’m sure you’re familiar with Novell. If you try to compare Novell to Microsoft, Novell’s technology in most cases is hands down quite a bit better than Microsoft’s. Why is Microsoft so dominant? The difference was a much more dynamic, stable management team than you saw at Novell.

The same thing with Epic. Epic’s technology is the same as Meditech’s, in reality. What’s the difference? Epic keeps promises. Their technology isn’t interoperable. There’s obviously big limitations if you want to do real hardcore data analytics within Epic’s framework. How do you get to the next phase? Is Epic built technologically to get to that next step where healthcare is going to get to in 10 years? True interoperability has to be the case. 

Interoperability is not Epic’s strong point, but given how strong their management team is with Judy and Carl, I’d have to think that they’ll be able to get there, but we’ll see. They have a big row ahead of them, I think 10 years out, that healthcare is going to go back to being best-of-breed. Even 10 years it’s integrated, best-of-breed; integrated, best-of-breed. We’ll see what happens.

The one thing Epic has that may alter that cycle is they’re so expensive, so switching costs are high. It may be that people live with Epic longer than they would have lived with a Meditech that didn’t really cost so much. The two issues that are most interesting to me about Epic are that and their succession plan. Can the company do as well when Judy decides to go live on an island someplace?

That’s a great question. I don’t think there’s been an answer for it. When you have an organization where you don’t even know what people’s titles are from the outside, it’s really hard to know.

The good thing for them is that they’re private. They don’t have to answer to anyone except their own customers, although Epic has found a good way to dictate to their customers as well. It’s a fascinating model. I have one hospital executive that calls a company like Epic a benevolent dictatorship. They’re dictating to you and they hold on to you, but you’re also having pretty good results.

That’s a big case with what Epic’s doing in Europe, where they’re having to focus on the Netherlands. You have to have the IT savvy that’s necessary, but also a budget to be able to be able to afford an Epic.

That’s an interesting point that you raised — can people uncouple from it? I think eventually if it goes to true interoperability — which I have to think that healthcare’s going to go the way of every other industry out there where systems have to work together and have to work together well — no one vendor can do everything. If Epic doesn’t migrate to the trend that has evolved in healthcare, then I think there’ll be some innovative healthcare company or some other technology company will help you uncouple.

It could be dbMotion with what they’re doing, or a Microsoft Amalga replicating data, where they have now have all the data and you can start just plugging on top of it, almost like a desktop browser, different applications that are going to best suit that department, not just what makes the CIO happy or the board happy.

If your theory about the return of best-of-breed turns out to be true, can those vendors hang on until customers using Cerner and Epic and Meditech decide to come back? Will there be any vendors left for those customers to come back to?

What got me thinking about it, two years ago, I was talking to hospital. It was a big Siemens Invision site, academic, multiple facilities. I was asking the CIO, “What are you going to do?” She said, “Well, we’re not going to go to Soarian. We’re actually going to go to Epic. But Jeremy, I’ll tell you right now, if I could do what I want to do, it would be interoperable best-of-breed. I know what’s going to happen. I’ve seen it 30 years now, that everything is fully integrated, but it’s not necessarily the best thing for each clinician. It’s the best thing under the environment and under the parameters with which the government and other people are saying it should be, but that’s other people saying it. That’s not all of us hospitals saying, yeah, that’s the best thing. Jeremy, I’m going to go with Epic now, but in 10 years if I had to bet money, I won’t be Epic in 10 years. I may be Epic for my CDR or in med-surg, but I may be this vendor over here – Picis here, SIS there, and Thomson Reuters, and who knows what, and they’re working together.”

That’s what I see happening. This is an Epic hospital saying it. I came out of the high tech industry before I got in healthcare eight, nine years ago. I just can’t see healthcare constantly staying that much apart from everybody else with the technological trends.

But your point about is any vendor going to be around … I think so. I’ve been impressed with Flagler Hospital going with Allscripts. You’re going to get some independent hospitals. With real strong leadership, they’re going to say, “We could go this direction to go with fully integrated Cerner or fully integrated Epic. You know what? We like what Allscripts is doing. We like what McKesson is doing over here.”

The one good thing about having an Epic or an Apple in other industries, it forces everybody to say, “We just can’t act like we’ve done before.” I have to believe with innovation, like in other industries here, you’re going to have some vendors that are going to get crushed and they’re going to be absorbed and gone. There’s no doubt about it. There’s going to be others that are going to continue to innovate. 

I like what NextGen is doing with buying Opus. It will be interesting to see whether Athena jumps in because Jonathan Bush has done some amazing stuff there – of course, he’ll be happy to tell you about it as well. That’s what I see happening.

Has Epic shaken those companies you mentioned out of the doldrums they were in that allowed the market to validate and choose Epic so predominantly, at least in the larger hospitals? Or will they need to be replaced with a new layer of entrants to do what they can’t?

Yes and yes. I think some of the ones that I’ve currently mentioned had to be shaken out.

I talked to a CTO of a hospital who came out of a different industry. He said it’s amazing how much stuff we put up with with the vendors. How many vendors treat us this way? In any other industry, if a vendor missed a go-live by 3-4 months and their system went in and didn’t talk to other systems, it would be gone. That vendor would never work with us again. It would be over with. Can you imagine Walmart putting up with this? Walmart is really more of an IT shop than a retail shop, and they wouldn’t. 

I think Epic is shaking people out of the doldrums. Not technologically at all, but from a culture perspective of, “If we say we’re going to do something, we do it.” Of course it helps that Epic’s very good at self-selecting. They obviously have brilliant marketing and sales people on that self-selection. They understand that sometimes the best sales are the one you walk away from, or the one that you manipulate.

With Microsoft getting into it, I think it’s helping that Amalga is a different type of technology. With Microsoft’s girth in healthcare, they’ll spend millions of dollars before they actually turn a profit. They can sit and be patient and make a few things happen. Some other ones like NextGen, Athena .. I think Allscripts, too, is doing some really good things. Of course Cerner’s been very successful. 

It is going to be a mix of those vendors that are in healthcare and some that may come out. It will be interesting to see if somebody else jumps in. I’m going to have to imagine somebody is going to.

You talked about the companies that have strong management as their best predictor of success. I always hear and like the phrase, “Bet on the jockey, not on the horse.” Do you think that’s true also of hospital IT departments, where it isn’t so much what they have to work with, but which CIO or other leaders are running the show?

Without a doubt. If you look at UPMC, everyone keeps wondering, when Epic is going to come inpatient? When you talk to the different executive leadership over there, they’re not. They like what’s happening. They have obviously a lot of money. They have very strong leadership in Dan Martich, Dan Drawbaugh, and others and they say it’s working: “Epic out here in the outpatient world, Cerner in the inpatient world. We’re getting the best of both worlds. We’re making it work with dbMotion.” They’re really pushing the needle on that.

You’ve seen it happen. When a hospital is struggling, they get new hospital leadership, including new CIO to come in. You look at the results two or three years later, they’ve turned things around. Their negative margins are now at least marginally margins on the positive side. They’re utilizing technology in a very great way. It comes from the leadership. It really does. There’s tons of examples. 

It’s so trite, but it would be so easy to say, “If we just went with Epic, or if we just went with these systems, we’re going to solve our issues.” I don’t think even Judy would say, “If you implement this one, then that’s what’s going to solve everything.” I doubt Judy would say, “This hospital, it’s 600 beds, it’s in our sweet spot, but their CIO’s weak, they’re not really committed.” They’ll probably say, “Come back when you’re worthy.”

Any concluding thoughts?

It’s just consistently the question, and that The Innovator’s Dilemma, according to Christiansen — it’s going to hold true here. Epic is shaking out the big vendors, and my suggestion to them would be, “Watch out for the guys coming from below.”

If you look at other industries, Xerox got outflanked by Canon. Microsoft’s being outflanked in other industries by Google and other ones. Facebook’s coming up. The same thing’s going to happen to get Epic outflanked. 

Epic’s on top of the world right now and so is Cerner. You have these other guys coming in, and I don’t even know who they are yet. They could be Athena — they’re still small, still outpatient. They could come out with the absolute world leader inpatient system and their customer service level is just through the roof and, slowly but surely, they start chipping away and it’s pure cloud-based and then maybe Mark Benioff with Salesforce buys them and decides, “Hey, we’re going whole hog into it.”

The main thing is people need to be consistently looking for innovation and technology. I hope some hospitals start taking risks a little bit, although they’re not paid to take risks.

HIStalk Interviews Deborah Peel MD, Founder, Patient Privacy Rights

Deborah Peel MD is founder of Patient Privacy Rights.

Give me some brief background about yourself and about Patient Privacy Rights.

I never expected to be leading this organization or ever even thought about that. In my younger days, I practiced full time as a psychiatrist and Freudian analyst for a very long time, until it became clear that things were happening in DC that would make effective mental healthcare impossible. Namely, that there were lots of different ideas being floated; for example, the Clinton healthcare initiative. There was a part of it that was going to require everyone’s data from every physician encounter be recorded in federal database.

Fast-forward to the HIPAA privacy rule. That’s what really convinced me of the need for a voice for consumers, because there really wasn’t any. What I’m talking about there is, of course, the change in 2002 that happened under everyone’s radar except for – and this is the is the laugh line – when the 3,000 Freudian psychoanalysts in the nation noticed that consent was eliminated.

In 2004, I started Patient Privacy Rights because there was no effective representation for the expectations and rights that the majority of Americans have for how the healthcare system is going to work. Namely, that people don’t get to see their information without consent. Since founding PPR in 2004, we’ve still been the national leading watchdog on the issues of patient control over information and even internationally. Our power has come because when we came to DC, the other people that were working on privacy, human rights, and civil rights recognized that because of my unique position as a physician and deep understanding of how data flows, that I knew what I was talking about. 

We very quickly got a pretty amazing bipartisan coalition of over 50 organizations. That enabled us to put these issues and problems on the map.

We had some incredible successes in HITECH. Virtually all of the new consumer protections came from our group, including the ban on the sale of PHI, the accounting of disclosures, segmentation, the new requirement that if you pay out of pocket for treatment you should be able to block the flow of that data to health plans and health insurers. We were the ones that worked with Congressman Ed Markey on getting encryption, required stronger security protections, and worked with Senator Snow to get meaningful breach notice into the rules.

All of this work lead to the first-ever summit on the future of health privacy this past summer in DC. The videos and the entire meeting can be seen or streamed online.

If somebody said you had to choose between accepting healthcare IT as it is today or going back to purely paper-based systems, which would you choose?

We’ve never been in favor of going back to paper. Our position has always been there is tremendous technology for privacy and we can have far better control of our information if we implement smart, privacy-enhancing technologies and architectures.

We’ve never been in favor of going backwards, although I do have say, we now know about WikiLeaks and now because of the strong breach notice requirements, it’s appalling how abysmal the security is of electronic records. Actually, it’s looking a lot like paper records are far easier to keep from getting into the wrong hands because there’s only one of them and they’re locked up in a medical records department most of the time.

We wouldn’t make that choice. What we’ve always tried to do is promote systems that give everybody – except the data thieves and data miners – what they want.

I don’t detect any citizen groundswell about the state of healthcare privacy, just organizations doing an occasional biased survey that concludes that the public is extremely concerned or implies that they would be concerned if only they were informed. Is advocacy needed when there have been no events to get the public up in arms?

The public has two minds about this. All the polling shows that they are extremely sensitive about who controls their records and they believe that they should have the control. On one hand, that’s what they believe.

On the other hand, the polls also show they’re extremely concerned about breaches. Large majorities recognize that all these things are going to get broken into. There’s knowledge in some ways and fears about electronic systems. But the key thing is industry and the government have really not recognized how many people are, in Alan Westin’s words, “Health privacy intense.” He’s the guru of polling in health privacy.

At our summit, he presented 20 years of data. The slides are up there for anyone who wants to see. When the polling comes to views about privacy and control of information in the healthcare sector, his findings have been consistent over 20 years — 35 to 40% of the public is privacy-intensive about health information. About other information, it’s 25%. This is a really significant minority.

Even though the public is not yet marching on Washington with pitchforks — and obviously I’m saying that in a joking way — the issues about privacy are simply going to continue to grow. What the industry has really ignored — and I particularly know about because of the patients that I’ve treated for 37 years — is that people will act in ways that endanger their health in order to keep information private. Millions and millions of people. These are not good outcomes. The public knows that electronic systems are far less safe and secure than paper systems.

This is something that has to be faced. There will be people who will choose not to see doctors, who will omit information, who will ask doctors to change diagnoses, who will refuse to get tests, and so on. These are figures from the 2005 California HealthCare famous study that one in eight people does something to try to protect their privacy.

Even earlier figures from HHS in 2000 are troubling. They found that 600,000 Americans a year refuse to get early diagnosis and treatment for cancer because they know the information won’t stay private. Two  million a year — or at least that year –refuse to get early treatment and diagnosis for serious mental illnesses for the same reasons. They know that the information won’t stay private. The same is true with millions of people that refuse to seek treatment for sexually transmitted diseases.

These are not good things. If you look at the military, the Rand Corporation did a survey – I think the book was called Wounded Warriors — that the lack privacy in the military is one of the important reasons that people won’t get treated. There’s 150,000 Iraqi war vets with post-traumatic stress disorder and we have the highest rate of suicide in the military in 30 years. Actually, just this year, we turned the corner that more members of the military killed themselves than were killed by an enemy.

You’ve really, really got to take seriously the fact that people that desperately need help for illnesses and diseases that are very treatable are refusing to get them because the consequences of the information not staying private are too threatening. It’s about two things, mainly – jobs and reputation.

The survey measures their perception, but does their perception reflect reality?

What I’m talking about is the reality — the actual numbers of people who act. My point really is, yes, the polling is off the charts on what the public feels, but the data is in. It’s not just about feelings. It’s about actions people take to protect themselves and their families from job discrimination, reputational damage, insurance discrimination, and the rest.

But it still was self-reported, right?

Well, yes.  These were figures from HHS surveys and from a California Healthcare survey.

As a psychiatrist, your privacy concerns are mostly related to discrimination with regard to employment issues or insurance. Going back to the public’s perception, are there enough occurrences where that’s actually happened that could not have happened with paper medical records?

This issue of discrimination and health information leaking out of the health system is not new because we have health IT. Literally, I learned about this when I hung out my shingle in 1977. The first week I was in practice, a couple of people came in and said, “If I pay you cash, will you keep my records private?”

I was blown away by that. I’d never heard of that in medical school or residency. Nobody talked about that, but these were people who had suffered harm. Again, jobs and reputation. So I said, “Well, sure.”

It’s a very significant issue. Many mental health professionals actually give patients Miranda warnings. If you use a third-party payer, anything you say and do can and will be used against you. Many health professionals will work with people to try to find a fee that they can afford so that they don’t have to have their futures or their children’s futures wrecked.

If patients were allowed to control who can see their medical information, would you be comfortable as a physician making treatment decisions based only on what they want you to see?

As a practical matter, patients still can and do control a lot of what we see and know. I trust what I hear from patients at least on a par, if not more, than what I find in medical records. The history is everything. People are going to withhold information or even lie about it if they don’t trust you. You have to earn patient trust. You get the best information when patients know that you’re really going to protect them and keep their information out of the hands of countless, endless third parties.

I think this is something that physicians and other health professionals – some, anyway – are not going to see coming. As everyone gets their electronic health record – and hospitals are going to get blamed for this too, not just physicians and the practitioners – when they begin to realize how far-flung their data is … that was another thing that came up at the Health Privacy Summit. There’s not even any kind of a data map that can show people all of the places their data goes. It doesn’t even exist. The data gets so far afield. When people see this, they’re going to blame the doctors and the hospitals. That’s not a good thing.

Decisions are made outside the practitioner’s control about who gets that data. At least some EMR vendors believe they own the patient data and can sell it even though that fact may not be clearly stated to patients.

We’ve been pretty actively pointing out that kind of thing. I’m not a lawyer, obviously, but doctors really don’t have a right to sell patient data. That’s one of the reasons we got a ban on the sale of health information into the stimulus bill. Obviously it hasn’t stopped the particular business model of so many electronic health record companies so far, but that was one of the reasons that our coalition worked to ban the sale of PHI without consent.

But as you see, what’s in the federal law and what turns up in regulations is not always the same. That’s a serious problem. I think those contracts will eventually be found to be illegal, just like many health insurers. You probably know about this. You used to get doctors to sign contracts with them with gag clauses, where they weren’t supposed to tell their patients about certain kinds of treatment alternatives. Of course those turned out to be illegal, but that didn’t stop the insurance industry from using them widely for a very long time.

People read about their financial information and Google searches being available to third parties. Do you think they are getting desensitized to the idea that privacy is something they should expect?

No. I think they’re getting more and more rabid about it. You’ve seen lots of pushback, not just in this country, but even more so in Europe, where they have much tougher data privacy and security protection. Google got bit on Buzz. Facebook ended up getting a lot of blowback from their users who believe that they have control over their information. A lot of the controls on Facebook and Google imply that.

I often talk about how people say young people don’t care about privacy. Wrong. I’ve got two teenagers. What’s the premise of Facebook? Some people are my friends and can see things, and others are not.  If you want to think about it this way, it’s an early consent tool. You’re in, you’re out. That’s the new premise of Google Plus, that new circle of friends thing. You have different people that get to know different things about you.

But people really do want control over who sees and uses their information. They feel this very strongly. VCs and other people have begun calling us up and asking what we think about things, because they realize there really are going to be markets for products and systems where people know that they can trust what happens with their information and it doesn’t go anywhere they don’t want it to go.

If you’re one of the good guys in the privacy and confidentiality debate in healthcare, who are some bad guys?

It’s not so easy. It’s not just good and bad.

First of all, there’s a vast number of people who are simply not informed, or they’re well-intentioned and they just don’t know what’s going on. There’s a lot of them. A lot of things happen for that reason.

I also think a lot of the reason we’re stuck with these data-leaking systems is because initially, a lot of the administrative kind of software was imported from other businesses. If you think about this, other businesses don’t have to respect individual privacy in the way that they healthcare system does.

In fact, the difference about healthcare from all other commercial areas — where as you say, we can’t seem to control our data at all – the strongest rights we have to control information are in healthcare. They come from the legacy of Hippocrates. The requirement to get consent is in every ethical code for health professionals from time immemorial. We have extremely strong rights to health privacy despite HIPAA.

One of the slides that I always show is a direct quote from the HIPAA regs that talk about HIPAA is intended to be a floor, and in no way to preempt best practices or stronger privacy protections in state law and medical ethics. Well, what happened to that? HIPAA was never intended to wipe out or preempt state law or anything else.

We’re seeing some movement some beginnings of more movement in ONC to begin to try to put in place the kind of technologies that are a matter of law, like the need to segment mental health and addiction information and certain other kinds of sensitive information — genetic, STDs and so forth. They’re finally starting to spend a little tiny bit of the $29 billion on the things that matter the most to the public.

Publicly visible, high-profile advocates tend to polarize people who either see them as selfless crusaders or shameless limelight seekers chasing personal gain. How do you see your image in healthcare and who agrees and who doesn’t agree with what you do?

In the beginning, I was cast as a very polarizing figure. Everyone saw me as trying to interrupt the $29 billion dollar gravy train, although it didn’t exist until recently. I had some active reporters essentially trying to attack me as a Luddite and stuff. These were people that didn’t even read or listen to what I was saying. It was polarizing in the beginning, but many people really are of good intent.

I think there is a much more mature understanding of the importance of privacy now, as evidenced by the list of top government officials that participated in the first summit on health privacy and the industry people that participated. We had a past chairman of HIMSS,. We had Lisa Gallagher, HIMSS privacy and security officer.  Wes Rishel from Gartner was on the panel. We had top people from this nation, from outside of this nation. We had top government people, top industry people, and advocates and privacy experts in academics who were all taking the question seriously — can we build a system with privacy that’s effective and that works and is reasonable? Can it be done?

There were no catfights on the panels or anything, because everyone there believed this is really an important issue that needs to be addressed. I would say that summit is evidence of me being perceived as – I think at this point – less a polarizing figure than a convener for the people that really want to move this whole effort forward in an effective, responsible, thoughtful way that does not leave the public out and that incorporates what the public expects and what they have longstanding rights to.

Any concluding thoughts?

For me, what’s been really difficult has been the fact that even though the administration — both this one and the previous one — wanted to be inclusive and wanted to have public input, the kinds of financial commitment and staff commitment it takes to actually participate in these government private efforts does not allow the kind of input that’s needed from privacy advocates and experts and academics.

Just speaking for myself and getting back to your point about seeking the limelight for some kind of gain, I have to tell you that I’ve never taken a salary for this. In fact, my family and friends have sacrificed lots of money, lots of time, lots of their own personal efforts to me and to Patient Privacy Rights to enable this to happen. In terms of gain, for me, it’s an honor to work for the public, the people of this nation, for privacy. But in terms of any kind of financial gain, it’s certainly been exactly the opposite.

We are hoping to build on the momentum that started at the summit. We’re going to be putting together several work groups and we’re going to make this an annual event. Patient Privacy Rights is also going to create a new privacy brain trust with leaders in this country and internationally to weigh in on what we can to help move things forward in a constructive way. This nation needs a big counterweight to the many interests that want data without consent, including for-profit research entities, the government, those that sell data, and business analytics kinds of tools with patient data.

This nation and the world needs a group of experts who can provide the kind of credible information on those policy and technology to counter a lot of the one-sided infomercials that come from industry. There’s a real need to hear all sides, so people are coming together under the umbrella of the summit to be able to work together and to have an even more powerful voice than just Patient Privacy Rights and me. It’s a wonderful thing because it isn’t just me who cares about this.

HIStalk Interviews Michael O’Neil, CEO, GetWellNetwork

Michael O’Neil, Jr. is founder and CEO of GetWellNetwork of Bethesda, MD.

Tell me about the company and about yourself.

GetWellNetwork is a company I started about 10 years ago after a personal cancer experience. We are really focused on one thing — helping hospitals engage their patients and families more effectively in their care. We truly believe that if we do that effectively, the outcomes will improve. This is a company focused on patient engagement. We’ve been doing it for a very long time.

Do you think patients want to be engaged or are they surprised that hospitals would treat them differently beyond just offering a TV in their room?

It really has been evolving pretty significantly over the time that we’ve been doing that. I think the tidal wave of information access for just general consumers — be it for a car you buy or a grocery store you shop in or the healthcare you receive — is so powerful now. To say it’s getting easy would be an overstatement, of course, but we are encouraged every day by how much patients are digging into the information that we provide and want to be involved in their care.

Most of the industry started as modest entertainment providers for antiquated hospital TV systems. How did you come up with the idea of taking the basic on-demand movies and Internet access product and turning it into a two-way communications and education medium?

We let the data dictate our direction. We did have that same core on-demand functionality early on in the company. We were watching the data come across. To be honest with you, the utilization was very low. Your question about do patients really want to be involved … early on, they really weren’t accessing the kind of information that we felt was important to them.

At that point, we were not integrated into the EMR and core systems. We didn’t proactively pull patients in — we let them come in themselves. We really began to change the game five years ago and created a workflow engine called Patient Pathways that lets us take triggers from existing systems and processes and invite the patient into the care process. It has changed radically the impact that we’re seeing.

From the hospital standpoint, the patient is a captive audience for education delivered directly to their rooms. Are hospitals finding that to be effective?

Yes, they are. All of the folks who read HIStalk and are part of this community are pretty bent on the fact that these hospital partners of ours are ferociously measuring whether or not any solution or process they try to implement is changing some of the measures of their care. For us, the measures that we look at are probably fairly natural ones. Does the patient’s perception of the care improve if they’re more involved? What do their HCAP scores look like? You know, pre and post-implementation of this kind of solution.

What do the quality metrics look like? The patients fall less because they’re more informed and involved and educated about the fact they’re at risk for fall. We are measuring data ferociously with our hospitals because they demand it and because we’re genuinely interested in whether or not this thing has efficacy. It’s been a really powerful last two or three years.

Are you seeing impact from healthcare hot topics like Meaningful Use, Accountable Care Organizations, and healthcare reform?

It has been such a powerful catalyst for our whole little industry segment. About a year and a half ago, KLAS picked up patient interactive as a segment, then Gartner picked it up. I would love for us to take credit for that, but we don’t.

We were yelling as loud as we could that patient engagement is a core strategy for performance improvement years ago. We found some incredible hospital provider leaders to take this thing on with a lot of risk. Over the last two years with all these things, Meaningful Use and value-based purchasing and accountable care, patient engagement has become front and center, something they have to do. It has been a great catalyst for us for sure.

Going back to the entertainment category, home TVs have turned into devices that handle everything from broadcast programming to video on-demand and Internet streaming. Is there a large penetration of systems like yours in hospitals, and for those hospitals that don’t have them, are patients disappointed at what’s available to them from their hospital bed for their five-day average stay compared to what they have at home?

Yes. What you just said is coming. The expectations of the consumer, the kind of technology and information access and empowerment in whatever they happen to be going through in a hospital course … there is increased demand to have the kind of access in any environment that consumers have at home or at work or at school. That is certainly is one thing that’s going on. Secondly, the technology to do the kind of things that we do. People expect it now. It’s certainly been a different ramp than it has been in the past.

Hospitals have finally started to take patient satisfaction more seriously. Are you seeing that drive your business?

They are. I applaud these hospital leaders. They’ve been pushing a rock up a very steep hill with wind blowing at their face for a long time. Transforming the patient experience that has been on people’s plates for a decade, but hasn’t always resulted in measured success.

Too often, this notion of patient-centered care was on a poster in a lobby, but there weren’t really solutions to hard wire the patient’s activation into the heart of the care process. That’s really what we’re after.

When we first started the company, the marketing folks at the hospital and the CEO would buy the solution and then throw it into the unit and hope that it would stick. Today, it’s completely different. It is the chief clinical officer, a CMO or a CNE alongside their technology counterpart the CIO, who are saying, “We’ve been charged to do performance improvement. We know patient engagement is an element of that. Let’s go find a solution to help do this in the organization.” It’s really changed 180 degrees for us.

Hospitals I’ve worked at looked at solutions like yours, but always decided they were a tactical “nice to have” that never bubbled to the top. Are hospitals finding that outcomes and the potential for process improvement make your product more strategic?

What you just said is exactly how we lived in this company for about four or five years. To see this kind of thing is to like it. It’s very visual. It’s very high-touch. It’s very patient friendly. We always joke in this company that we’ve never had a bad meeting. 

The fact is, we might have a great meeting and people like the stuff, but to your point, it would be number 12 on a list of 20 things to go invest time in and resources and money in. Too often, we would lose to no decision.

To your question directly, over the last 24-36 months, we are taking all the inbound requests for, “We have budgeted for a patient engagement solution. We look forward to having you come share the work you’re doing”  We lead every single time with, “You’re at 25, not three hospitals that are actually seeing a success. You won’t hear perfect, but you’ll hear that we’re moving the needle on these specific things we go attack.” That’s how we walk through it now.

The bad thing about your success is that you probably have more competitors than you had four or five years ago. What’s your message to tell prospects that your system is better than that of your competitors?

We are attracting competitors. We actually welcome that in one major respect. When we first started the company, we were competing with some of the traditional kinds of hospital TV companies. You asked the question earlier about that kind of functionality, and frankly, we really don’t care who the hospital buys their TVs from. It’s really not about that.

Today, more and more, we’re seeing competition from some of the large EMR companies who have seen this segment begin to grow and are coming at it as an appendage to the EHR and EMR. We’re more focused on how we compare and contrast ourselves with that approach. We feel pretty strongly that patient engagement is more important than just being an add-on to an EMR.

With the 10 years of data and experience and technology we have, we feel pretty confident walking into an environment and saying, “I know you’re going single source for lots of different solutions. When it comes to engaging your patients and families effectively in their care and working in partnership with your nurses, we think we’re doing the very best work in the world in that particular thing.”

Do you consider GetWellNetwork to be content provider or a technology provider?

We’re a technology provider. Most of our platform is based off this proprietary workflow engine. We have 273 live interfaces today across the country. We interface with bedside barcode systems and with RTLS systems and with EMRs and with the café cart in the lobby and the gift shops. We use all these other systems to trigger different events for that patient to engage and activate in. That’s really the technology that we have.

When it comes to content, we’re working with over 25 different content partners. We’ve aggregated tons of content, so that based on what we want the patient to engage in, we just need to make sure that we have the right content that we can put in front of them at the right time based on what the workflows are. It’s really more a technology company than it is a content company.

With the opportunities for education and hospital promotion and third-party ads, I would expect some natural interest in owning that content platform. Do you ever see that there would be a more exclusive partnership or an acquisition, either you acquiring or being acquired to actually control the content channel?

About three years, ago we spent a lot of time in R&D and decided to go attack a certain segment. We thought we could speed adoption by attacking a specific segment in a differentiated way. We did this in pediatrics.

One component of our four-component strategy was to exclusively partner with an organization to produce exclusive content for what we call GetWellTown. We partnered exclusively with KidsHealth, part of Nemours Foundation. They have subsequently produced a library of over 250 pediatric education titles for GetWellNetwork exclusively. It’s been a phenomenal partnership for them as well as for us.

I envision those kinds of things happening for us in different segments, to partner exclusively and/or acquire it if the right opportunity comes along.

GetWell@Home offers information via the Web, cable TV, and smart phones. There’s a lot of opportunity for non-hospital based chronic disease management. Do you think that’s a mechanism by which you’ll be able to get patients interested in managing their own health outside the hospital walls?

We do. I’ll tell you, it’s probably the most exciting thing going on here  on the development side right now.

We develop major new products in a task force model. Usually six or seven of our hospital partners are involved for about 18 months. Russ Branzell and the whole crew from Poudre Valley was heavily involved in our @Home task force. 

We recently launched with them at Medical Center of the Rockies and Poudre Valley Hospital. Our first patients haven been enrolled in GetWell@Home. They’ve done a powerful job in integrating the patient’s involvement, both from an acute standpoint at discharge and then following them home. Really inviting the patient to stay involved in the Poudre Valley Health System’s management of their care.

We never picture patients going to GetWellNetwork.com for their care. We are providing a platforms for those providers who have a trusting relationship to help patients navigate and keep them engaged throughout their journey. It’s been an incredible start this summer. We think this is going to be the most important thing the company’s done in the last five years.

In broadcast or cable TV, it costs a lot to run a specialized channel, but with satellite dishes, it costs very little. Do you see a point where the cost for a “channel” would be so low that you could add a channel specific to a diagnosis or a treatment, so that a diabetic patient could see The Diabetic Channel on GetWell@Home?

We’ve been thinking even more about that. We think not just about a specific channel on a certain diagnosis, but a specific channel for a specific patient.

We’re working a project right now. I can’t give you all the information, but you’ll be the first to know on HIStalk when you actually can announce it. We’re looking at not only using the Web, but also using cable TV delivery to be able to dynamically create personal video-on-demand TV channels for a patient to be able to track their health and to be involved. It will come in their living rooms even when they’re not on a computer.

We think the opportunity is so powerful to attack one of the biggest issues everyone knows, which is that transitions are just not handled very effectively for the patient or family. It’s no one’s fault. It’s just complicated, and we’re not doing a great job at that. We think we have an opportunity to engage people in a very unique way.

Do you think you’ll ever see the point where physicians can leave personal video messages for a patient or use your backbone as telemedicine virtual session platform?

The technology is available today to do that. The way it’s been started early on has been almost from the satisfaction standpoint right now, whereby we can make it very easy for a physician to have one more touch, if you will, with their patients or families. From a perception standpoint, the coordination of care is so, so powerful.

We definitely will move towards doing some more telehealth stuff down the line. We found right now that physicians, for the most part, aren’t yet ready to take that on. Technology won’t be the hurdle there. It really will be organizational readiness. I think it’s coming.

Where do you see the company’s future?

In two major directions. We spent the first eight years working inside the four walls of a hospital and inside the patient’s four- or five-day acute care stay. We see this as a true platform for patient engagement throughout their journey. We’re in the midst of building this platform that can really help providers in the accountable care model elevate the patient activation component of their strategy and really own the fact they can navigate people through them. 

In five years, we will be we will be working as much outside the walls of the building as we do inside.

The other thing that I think we’ll do pretty significantly is we have been asked about 12 or 15 times in the last year to consider doing some work internationally. We’ve held off on doing that just to make sure that we are fulfilling the promises that we’ve made here domestically. We seem to be getting a great handle around that now, so I think also in five years, we’ll be doing stuff around the globe, which we’re really excited about as well.

Any final thoughts?

What you guys do rocks. We read it all the time.  We can’t thank you for all the time and energy you spend doing what you do.

HIStalk Interviews John Gomez, CEO, JGo Labs

John Gomez is CEO of JGo Labs.

We haven’t talked for some time. Let’s start out with the obvious question. Why did you leave Allscripts?

There isn’t really a deep dark reason I left. There really isn’t a juicy back story. After almost eight years, I didn’t feel I could make the impact I wanted to continue to make and my career was pretty much at a standstill. I realized that I was becoming stagnant and I am not the type of person who likes to be stagnant. As much as it pained me, I decided that it was time for me to leave and pursue other opportunities.

During my time at Allscripts and Eclipsys, I had a tremendous opportunity to learn and stretch my abilities. I built an international business that started as four people and was break-even from Day One. Today, that business unit is tracking to be valued at over $100 million. I got to oversee and run our business development groups, product marketing, product support, and services organizations. I was able to work with some really bright and passionate product development people who I am truly proud of. I also got a chance to introduce some awesome concepts and innovations to healthcare information technology.

I do miss the people, the clients, and the products, but I am ready to try something different from an intellectual standpoint.

Name some of the innovations.

We released the first App Store in HIT, allowing third parties to access to our products through APIs. We provided copies of database schema to clients, thereby allowing them to access their data without having to confront industry standard obstacles. We also pushed hard to have a well-understood object level API. We centralized security and auditing. We did a lot of work on mobility. We redrafted our UI to be far easier to use and more powerful. Lastly, we introduced personalized workbenches and physician mobility products.

This was a lot of work, but we added substantial value to the companies’ respective product lines and enhanced capabilities for our respective customers.

Do you think the merger of Allscripts and Eclipsys was a good idea?

Yes. Both companies had offsetting strengths and weaknesses. Allscripts was strong in ambulatory and weak in acute. Eclipsys was the opposite. From a philosophical perspective, it did and does make total sense. The companies’ products gaps overlapped well and I know that there is tremendous work being done to continue fusing their respective offerings.

Any lessons learned from the merger or your time at Allscripts/Eclipsys?

So many I have actually thought about writing a book about it, kind of like a guide for executive leaders.

The biggest lesson is be product led. It is all about the product at the end of the day. If you build great products without compromise, client satisfaction, employee morale, and loyalty as well as the profits will follow. If you just focus on the financials and making the numbers, you’re not going to really deliver over the long term.

Steve Jobs, Jack Welch, Lee Iacocca, and Steve Denning all preached and proved that lesson, yet today way too many companies sell out to Wall Street and try to make a quarter happen rather than really standing strong and leading with their products and all the supporting infrastructure required to make that happen.

Think of it this way. If two companies met on the field of battle, all they would have is their products and their service and support teams. The victor would be the one with the strongest products, services, and support. All the other trappings are just that – trappings. Great products are the backbone of a great company.

What you would tell your replacement?

I don’t know the man, but from what I hear he is a good guy and has strong experience. My advice would be rather generic to anyone taking a role for an enterprise software company, not just my replacement at Allscripts.

First and foremost, learn the industry and lead. For him or anyone who wants to build great products in this industry — or any industry for that matter — I would tell them to learn the industry and challenges of the clients. Get on the ground and actively design your products. Don’t just delegate — lead the design and be part of the birthing experience.

Product managers are a good source of information, but ultimately the leaders of a company should be deciding on exactly how the product will function, wow, and thrill the clients. If you can’t log in, use, or install your products, move on to a new company and line of work. So my humble piece of advice: learn the industry and truly learn the products inside out.

Any other advice for Allscripts?

OK, I will add this, given my continued love of the entire Allscripts team. Stop telling people about your past and your car collection. No one cares and it just alienates you. Take the time to create a new chapter of shared experiences. You’re better off just asking others what they think and save the personal stories for a year from now when you have earned their trust and respect.

That said, I think my replacement, from what I know, is a great choice. He has overall been really well received and embraced. At the end of the day, people need to accept him as he is and for who he and give him a chance.

Allscripts filings indicated that you would be consulting for the company. What are you working on with them?

I think there is some confusion out there in regards to my relationship with Allscripts. The truth is that since my departure on May 31, I haven’t had any input into Allscripts products, strategy, or direction. There was some thought of me doing consulting for them, but we couldn’t come to terms.

Last time we talked, I quoted a reader who had called you "the Steve Jobs of HIT.” Now you and Steve have both resigned from the companies that defined much of your career to date.

I am truly no Steve Jobs and I doubt I could ever fill his shoes, or sandals as the case might be. I appreciate the compliment and understand the analogy, but honestly, I just love building great products. I truly believe that if you do great things, great things follow you. Love your teams, love your clients, and love your products. The rest will follow. The moment you realize you can’t love those around you and what you’re doing, it’s time to figure out a new path.

I would suspect that Steve has done most of what he has done out of love. That love translated to great products that changed lives and created fanatical followings and ultimately tons of margin and revenue. If there is any similarity between Jobs and me, it is that we are truly passionate about building great products people love to use and buy.

What are you up to now? A reader says he hears you and Jay Deady are returning to Allscripts.

I am not in talks of any kind with Allscripts to return. As far as Jay goes, he isn’t either, to the best of my knowledge. Jay and I do talk, and from what I can tell, he is loving life and leading an awesome company doing some rather great things for healthcare related to patient and resource tracking, called Awarepoint.

I started a small company called JGo Labs. Our mission is to build great leading edge products for HIT as well as in other industries. Our products focus on home healthcare. Specifically, gaming to start, predictive informatics and diagnostic decision support, and robotic aides. We also are taking all we know about building great products and working with some terrific companies in security and HIPAA compliance, mobility for healthcare, and some really interesting growth areas.

Given my passion for Apple, we are also working with a couple of hospitals on how to help them become more like Apple in terms of how they design their facilities, patient experiences, and workflows.

Any hints who you’re working with?

Sure, but I have to be a little cloak and dagger as we are bound by non-disclosure. Basically we have a series of companies reaching out to JGo Labs and asking us to help them build some really compelling products for HIT. By “build,” I mean design, strategize, evolve, and drive their ideas forward. We are very much like an IDEO or Dyson in regard to this, acting as a research lab and product design group for these companies.

At the moment, we are working on a very sleek and innovate HIPAA Compliance Appliance for one company, two very cool mobility platforms, a voice product, an AI-based documentation system, as well as some products related to workflow and process engineering. We are also in talks with the US Army regarding some advanced research that goes well beyond the current state of HIT offerings.

What about your own products? You’re a development guy.

JGo Labs is divided into two divisions. The Confab Group is doing consulting to other technology companies, their boards, and hospitals. The other division is The Manufactory, which we view as an old-world artisan studio where we craft our own products.

We are working on a very cool Xbox game for home healthcare using the Kinect technology from Microsoft. We are also working on developing technologies which bring concepts from outside healthcare to healthcare. Much of what we do is ask “what if.” For instance, “What if you could apply cross-sell and up-sell algorithms to helping clinicians?” or, “What if you could predict outcomes of a decision based on similar biological attributes and observations?”

It is very far-reaching and speculative in terms of our own products. But without risk, there is no reward.

I have no interest in continuing to work on EMR/EHR technologies as that is a crowded space with little growth. I really love the idea of working on those technologies that change the game on how we deliver healthcare. The stuff we are working on has huge potential returns and we are looking at it holistically in terms of assuring any product we release is a great experience for our clients.

We are actively working on these items today, but also trying to secure funding to accelerate their market entry. We won’t disclose our release dates, but we are trying to be as aggressive as possible. We would be happy to give you a sneak peek in the coming weeks.

What does Apple have to do with hospitals?

We started asking, “What would a hospital be if Apple designed the hospital and everything in it?” We are working with a couple of hospitals who are trying to improve their operations, margins, and patient/clinician experiences and trying to apply an Apple-esque approach.

For instance, collaboration is something that just doesn’t happen enough in hospitals. Not that it doesn’t take place, but it is cumbersome and disruptive. We are looking at a technology from a company called Blurts to see how micro-voice tags can be used to help drive better collaboration.

We are also looking at how people flow and interact with the healthcare experience and taking a lot of ideas from how Apple design’s their retail stores to route patient traffic, greet people, and interact with them and move them through the institution faster, thereby providing better returns for the hospital and overall higher quality outcomes across multiple metrics.

Your name came up with some kind of hacker convention. What was that about?

Defcon is one of the largest, if not largest, gathering of hackers in the world. I was asked to present on how to hack healthcare systems. I ended up presenting on how to hack not only your basic networks, but how you could change a diagnosis in an MRI or CT scanner or how you could literally kill a patient by hacking a medical device or rules engine. It isn’t that hard to do, and in this world of cyber-terrorism, I think that this is a serious exposure for hospitals.

Privacy regulations are not enough when you can literally alter data used by clinicians to make life or death decisions. If you compromise healthcare and shake people’s confidence in a doctor’s ability to safely treat patients, then follow that with a biological attack, even a small one, a terrorist would have one seriously successful attack.

What’s the value in telling hackers how to hack?

We aren’t showing anyone the specifics or teaching people how to do what we outline, just alerting people that it is possible. My hope and goal is to work with the Department of Homeland Security to help get ahead of this problem and help healthcare organizations address this issue. It is one of the reasons we are working with people like Corey Tobin, head of the Healthcare Solutions Group at Trustwave, on a really compelling compliance and security offering specific to healthcare that is ground breaking.

You implied that the EMR/EHR market is stagnant. Is everybody who assumes it’s the hottest thing going wrong?

It is a hot market, but that doesn’t make it a growth space. Growth is about developing products that create 20%-30% growth for a company year over year. Fundamentally, the EMR or EHR market isn’t going to yield that return or won’t long term. Eventually will be rather flat, or companies will need to expand to overseas markets, which most are not positioned to attack.

Let’s face it, we aren’t building a ton of new hospitals every year where you can go schlep your products or suddenly seeing tens of thousands of doctors every year looking for a new system. Given those factors, at least here in the US, and the fact that you have a hugely dominant vendor like Epic, well it isn’t really the place where you are going to see a lot of growth. There will be some growth and companies in these sectors will probably post some good numbers, but it isn’t going to be dramatic. You will see a bunch of services money from maintenance agreements, but I doubt anyone is announcing they are going after 1,000 new hospitals that just came into play.

What are your predictions for the healthcare IT market?

Analytics is going to be huge, but I don’t see any vendor today who really gets it. By “get it,” I mean that they are making it easy to integrate, don’t require millions of services hours, and that the system is intuitive and built on a platform that has the ability to meet future demands while providing just-in-time information.

Mobility is obviously hot. Regardless of what the old-timers think, it is going to be the future. Mobility apps will be hot, but are people willing to pay for them or are they part of the core offering from a vendor? I would heed vendors to figure that out. I see tremendous upside for niche vendors and would also see great opportunity for acquisitions of mobility vendors.

I think infrastructure will be hot. I mentioned security already, but also things like mobile device management and provisioning, medical device integration, disaster recovery, long-term storage and smart retrieval, and home healthcare and robotics.

Why home healthcare and robotics?

First, every human is a potential customer, so my bet is if you want to see awesome returns, you target home healthcare. Very few people are today, and those that are rarely get it. Secondly, it is a cool market that has a lot of need. I don’t think the PHR is the ticket to this market. I would focus on gaming and robotics. One is a mid-term deliverable and the other long-term. Both offer huge upsides to patients and clinicians, especially if integrated with mobility.

Somebody e-mailed me this week that you’re working on healthcare gaming, which surprised me.

I’ll explain briefly, because I am a little worried about having my idea stolen, especially by innovation-starved companies.

Overall, the concept is that you provide a means for people to have fun while getting treated. Take the negativity out of the experience. Make it convenient and clinically relevant.

I really want to talk more about this because it is so exciting and we are doing some great things, but I really can’t give more details.

At the mHealth Summit last year, Bill Gates said home health robotics was his prediction of the biggest growth area.

I really think that there is a tremendous upside for robotics in healthcare and we have not even scratched the surface. We are in talks with a company out of France that has designed a three-foot-tall, really cute robot. Cute is critical here, as we see the robot helping elders and special needs children at first, so the social attachment is really important.

The model is really compelling and the challenge is reducing manufacturing costs while expanding battery life. But I have no doubt that robotic aides and adjuncts will be commonplace in the long term, as there is no real daunting technology hurdle.

If you don’t like EHR as a hot sector, you probably hate revenue cycle.

People are going to upgrade their financial systems and evolve them, but I don’t think you are going to see a mass exodus to a bunch of new offerings. I think Athena is the Epic of financial systems and they will continue to see growth and grab market share. I think others will eventually level out, but I don’t think that suddenly someone will come out of the blue and own the market.

The reality is that people are trying to minimize churn and and not add to it with a huge rip-and-replace of their financial systems, putting the lifeblood of their organizations at stake without a seriously compelling reason.

Google bet wrong on PHRs.

The PHR is critical and offers tremendous benefits, but I think that the PHR as we know it is sad. A Web page that requires you to go somewhere and do something is silly in this day and age. Google’s idea wasn’t bad, it was just the wrong approach.

In today’s world, a PHR should be part of a mobile experience. You should be gather just-in-time information when the event occurs. If you feel dizzy, rate the dizziness now. You’re in pain, rate the pain now.

My point is that until there is a compelling PHR that is part of the patient’s experience at the time the experience occurs, the PHR as we know it has had its day and really isn’t the right model.

Maybe you should build one, not that the pioneers have had much encouraging success.

I would, actually. It could be fun. I see it as a space that needs to be totally rethought. Like I said, Google’s idea wasn’t bad, they just didn’t know what they were doing and were probably constrained by the need to tie it into the mother ship.

There is huge potential here, but you need to get off the Web and into the patients’ pocket. You also need to give the patient real value. Not having to repeat your meds to a doctor isn’t real value. If people think it is, they don’t understand value from a patient’s perspective.

What’s silly about the industry?

Complexity and lack of eating the low-hanging fruit.

We make things too damn complex. We spend too much time trying to please the clients and thereby make everything for everyone. As an industry, vendors need to learn what clients need, guide them to what is going to give the best return, and stop promising the world just to make the numbers. Be honest, deliver a great end-to-end experience, and loyalty and happiness will follow.

By lack of eating the low-hanging fruit, I mean that we as industry just don’t do the little and simple things that could provide huge upside. Look, I can send an appointment request from my iCal calendar app on my phone to someone across the world using Outlook. They get it and bam, it’s on their schedule. They accept, decline, or modify it, and I am updated seconds later. I know of no vendor who provides this out of the box. It is like 20-30 lines of code and it would be huge if, when you schedule your doctor’s appointment, it appears in your calendar.

Here is another one that is easy. Why can’t I integrate Facebook with my PHR? Why can’t a doctor send updates to his patient on Facebook via an EHR? Not PHI related, but general tips to his patient base, like, “Check your immunizations as we head into cold and flu season” or “I will be on vacation through end of month, for an emergency, contact…”

Why don’t most financial systems support PayPal for deductibles or online payment? There are just so many things that are commonplace across the world, yet in healthcare they just don’t exist.

Everybody says that, but nothing ever changes. Why?

Most executive leadership are sales guys who don’t understand products or product design or the state of technology. Same goes for product managers and designers. Most people I meet just don’t connect the dots, and it really isn’t that hard to do or that expensive.

Hell, to integrate Facebook, you need like 30 lines of code. I am sure people will freak at all this and say, “It’s much harder.” My advice is if you need to call someone in engineering to figure out if what I am saying is right, you shouldn’t be running a company. If your engineering is telling you it is massively hard, you’ve got big issues. It’s time healthcare started asking “what if?”

The inverse of that is “the shiny object” problem, where someone in a company sees a cool technical something or other and decides “man, that would be cool.” That is a big issue. Cool for the sake of cool is never a good idea. For instance, integration of instant messaging with a product seems like a good idea, but it’s not a great idea. The focus should be on integrating voice and video for collaboration anytime, anywhere, but somewhere along the line, someone in a company who sits at their desk all day thinks, “Why wouldn’t a doctor want instant messaging in their app? This would be so cool!” That is just stupid. It shows that the company doesn’t really understand the world of the clinician. IM might work for a billing clerk or office worker tied to their desk in a hospital, but not a clinician.

The point is, someone sees this shiny object, which is a cool technology for the most part, but has no real application to healthcare. Again, if an executive in a company — the CEO, COO, CFO — can’t distinguish between low-hanging fruit and shiny objects, they shouldn’t be running those companies. Investors should be very cautious, as should clients and prospects.

How should prospects or investors evaluate a vendor?

Everyone is an investor. I don’t care if you are a client, prospect, employee, or Wall Street investor. You are all investing. Start by really asking, “How is my money going to be used and how it is being applied by this company to get me a maximum return over the long term?” That means asking some not-so-obvious questions. How do you really decide on what goes into a product or not? Listening to our clients is not the right answer, and probably just a sales guy trying to make a sale.

How much training does your services team and support teams get per year on new products? If it isn’t 20-25% of their time, you are not dealing with a world-class company, just a company trying to make numbers. No way anyone is going to be really well skilled at implementing complicated HIT systems and not get a ton of training every year. I suggest you run for the hills or buckle in for a bumpy ride.

Show me the easy button. Take me through all the things that are going to make my life easy as a user of your products, a champion of your products, and investor in your products. Show me your roadmap and how you have made your deliverables in the past. Past does reflect the future, and you should ask how they deal with quality, make their dates, and keep their promises.

Ask to tour and speak to the development teams and support centers. Are they cool, excited, and work in really awesome environments? If not, well, sad people build sad products. Who is my dedicated account management team? If you are spending a ton of money with someone, you should be getting personal service. Heck, you get a cool concierge when you stay at a hotel for a weekend — you should get the same thing when your tossing several hundred thousand or millions to an HIT vendor and signing a multi-year contract at the very least, without paying a premium.

If you ever want to know how good a company is doing, check out the people working in accounts receivable. If they are totally stressed, working long hours, and ready to snap, it is a clear sign of unhappy clients. When you have to fight to get your money, there is always a reason.

Tell the vendor you want to be treated as an investor, not a damn partner. You really aren’t partners in all this — you as the client are an investor. You want the same accountability, diligence, openness, and hand-holding that public companies afford their investors. A company should never ever lose sight of the fact that their clients and prospects are not their partners — they are the lifeblood of their company and therefore should be treated like royalty.

I could go on and on, providing an insider’s view of selecting a HIT vendor. If people want, they can reach out to me and I would be happy to send them a list of questions and answers to look for and what that potentially could mean to them. No, I am not looking to charge them for it.