An HIT Moment with … Judy Kirby

An HIT Moment with ... is a quick interview with someone we find interesting. Judy Kirby is president of Kirby Partners of Altamonte Springs, FL (formerly Snelling Executive Search).

How would you characterize the healthcare IT job market and how do you it see changing over the next 1-2 years?

The healthcare IT job market is different than I have ever seen. I entered healthcare IT recruiting during the recession of 1992 and have witnessed its peaks and valleys. With the current economic crisis this country is experiencing, healthcare seems to be relatively stable, compared to other industries such as finance or automotive.

That being said, healthcare organizations have investments that have diminished and are struggling with shrinking reimbursement rates. According to Thompson Reuters, the median profit margin of U.S. hospitals has fallen to zero percent. There is a lot of financial pressure on hospitals and nearly half are operating in the red. Many see hope in the stimulus money that will be available for electronic health records. Right now, there is caution and uncertainty in most organizations. They have needs in their IT departments, but are being very, very cautious in hiring and we have seen the hiring time increase.

If the stimulus money for EHRs has the effect that some like Dave Garets from HIMSS Analytics predicts, there will be a shortage of implementation talent in the future. But that being said, as always, there will be positions that are “hot” and those skills that will be in abundance. Two years ago, we encountered many senior healthcare IT managers and CIOs who were approaching retirement age. They are now saying they will remain in the workforce longer and postpone retirement due to their dismal retirement portfolio performance. Healthcare IT positions, especially higher level positions, that were to open by the retirement of baby boomers will open up later rather than sooner.

There is good news, however. We recently did a survey of healthcare CIOs that showed 31% expect their organization’s IT departments will grow in the next year. 50% said their department numbers would remain the same, and only 19% predicted a decrease in their department staff levels. The survey also indicated that 39% of the respondent’s IT departments are currently actively hiring, 6% will hire in the next three months, and 4% will hire in the next 3-6 months. There are always numerous opportunities out there no matter what the current economic conditions.

The biggest effect the economy has had on our business is the number of possible candidates for positions who cannot relocate because they are upside down in their current homes or live in such a down real estate market that they can not sell their home.

You might think a firm such as ours would have experienced a downturn in the current economy. Just the opposite is true. We are as busy now as we were three years ago. 

What advice would you have for employees to both keep their current jobs and prepare for their next one just in case?

We actually are presenting at HIMSS on this same topic, “Know when to hold them and know when to fold them”, with Jon Manis, CIO of Sutter Health System. The advice for keeping your job is the same for preparing for your next move up on the rungs in your career ladder – you have to be invaluable to your organization and not just taking up space. We have heard from many CIOs they are using this recession as a way to “clean house”, so to speak. All things being equal, they will keep the employees who are doing the best job and have the best attitude. You can train skill sets, but you cannot train attitude, enthusiasm, or a desire to be successful. Those are the traits you need to exhibit.

This is also the time to update your resume. Do it before you are in need of a new position. Don’t list what you have done, but describe what you have actually accomplished in your position. It is much easier to keep track of these accomplishments on a regular basis rather than having to go back and try to remember after the fact. Quantify your results as much as possible. Plus, when having conversations with your boss, it is always nice to be able to talk about your successes.

How is the role of the CIO changing? What should CIOs be doing now?

The CIO role has really changed over the years from a “bits and bytes” individual to a true C-level leader. John Glaser, CIO of Partners HealthCare, and I did a presentation at the CHIME Fall Forum on this very topic entitled “Where are we going? Evolution of the CIO”. Put succinctly, the CIO has to be a true leader, just like any other C level position in the organization. It goes beyond just keeping the systems up and running. That is part of it and a crucial part that can get a CIO fired. But, the role is starting to go way beyond that as CIOs acquire additional departments and different responsibilities.

The CIO of today and tomorrow needs to be reaching out within their organization. They need to learn what leadership “looks like” and become more involved in working on business issues and contribute more than technology. They need to work with colleagues as peers and focus on understanding them and solving their problems. They need to fill domain knowledge gaps and skill gaps. And as we already stated, they never need to rest on their laurels, but focus on future accomplishments and how those accomplishments benefit their organization.

Management of a healthcare IT department requires the same skills as management of any other department. As more and more in the hospital domain becomes “application driven”, CIOs will shoulder more and more responsibilities. We have heard several CIOs mention recently that they have picked up oversight for other departments – even departments such as HR or marketing. You need to know your limitations, and know when and where to find true specialists to handle things you cannot. 

What will the effect of the stimulus package be on the job market?

It will be interesting to see just how the stimulus money does affect the job market. As you reported recently, Wal-Mart is entering the EHR market, and others will jump on the bandwagon to get those funds. The money will have some positive impact on those with strong implementation knowledge and for those in consulting. What the real impact of the stimulus package is will be difficult to predict until all the rules and regulations are ironed out. Any time the government is involved, your guess is as good as mine, but I do see it as a positive for those in healthcare IT.

We have talked with healthcare IT organizations that are already looking ahead to the stimulus monies and planning for the talent they need to embark on the projects that will attract these dollars. 

What kinds of roles and training are available for clinicians who want to get more involved with IT and informatics?

The roles are many and varied, depending on the clinical background. With EHR, lab, radiology, pharmacy, and informatics, depending on the background, there are lots of opportunities for the clinician who wants to be involved in technology. These include everything from a CMIO to nursing informaticist to builder and implementer. The individual needs to look at where they would like their career to take them long term, and then decide the best route to reach that career goal.

We are seeing more physicians and nurses in the CIO role. We are seeing a new position, CNIO (Chief Nursing Information Officer) develop in larger organizations. Consulting firms and vendors are utilizing these skill sets in their business models. As far as training, there are numerous masters’ programs out there and they provide a good education. If at all possible, while pursuing book learning, try to balance that out with hands-on experience. The two paired make a much better skill set than just a degree and no real technical experience. The employment world is a competitive place: degrees, experience, certifications, and a broad range of experiences do make a huge difference in how fast and how far you can move up the career ladder.

On a side note, we would like to mention we will have a name change this month from Snelling Executive Search to Kirby Partners. We feel this name will not create confusion as Snelling has. There are other Snelling personnel offices out there that focus strictly on administrative and temporary employment. Our people remain the same, and our niche remains the same. All we do is healthcare IT recruitment.

An HIT Moment with … Larry Pawola

An HIT Moment with ... is a quick interview with someone we find interesting. Lawrence M. Pawola, PharmD, MBA is Associate Dean of Academic Practice and Program Director, Health Informatics, Operations and Curriculum, at the University of Illinois at Chicago.

Describe the MS in Health Informatics at the University of Illinois at Chicago (UIC), what kinds of students are attracted to it, and what graduates are doing.

As one of the oldest programs in the industry, the HI/HIM programs at UIC have a long history of excellence, consistently preparing graduates who become leaders in the Health Information Management and Health Informatics professions.

The HIM program was established in 1965 and has graduated many of the top contributors to this profession. Coursework in health informatics was originally built in the early 1990s, with the Master of Science in Health Informatics degree formally established at UIC in 1999. We are by far the largest and one of the oldest health informatics graduate education programs in our industry. Our multidisciplinary program is housed in the Department of Biomedical and Health Information Sciences in the College of Applied Health Sciences, which is one of the six primary health discipline colleges located on our campus just west of downtown Chicago.

UIC, being one of only several universities having all medical disciplines on one campus, is recognized as a national hub of medical research, being designated by the Carnegie Foundation as 1 of 96 “Very High” Research universities, as well as consistently ranking in the top 50 of national universities in federal research funding.

The Master of Science program has been delivered in an online fashion for the last twelve years. Courses have been built to better understand the social and behavioral attitudes and issues that inhibit the effective use of information technology in healthcare organizations. Our faculty guides students to assimilate theory and apply it to everyday activities. Many times, the students work in groups, sharing their professional perspectives, as they discover new knowledge.

Our goal is to produce graduates who can assume higher-level staff, management, and other leadership positions in a variety of healthcare, supplier, payer, and consulting organizations; they will lead their organizations to achieve greater value from their systems investments. UIC’s HI/HIM alumni are highly coveted and have created an elite network of industry leaders. They have been hired by a number of leading healthcare providers, leading supplier companies, and consulting firms. Their achievements are recognized by their individual companies, organizations and agencies, as well as national industry groups such as AHIMA, HIMSS, and AMIA.

Keep in mind that our Master of Science degree is not our only online program. Our highly-respected BS in HIM is a blended program, offering students the opportunity to combine classroom instruction along with online courses. We also offer an online Post-Baccalaureate Certificate in Health Informatics that consists of three courses, as well as a seven-course Post-Master’s Certificate in Health Informatics that offers those with a graduate-level degree an excellent credential signifying they are highly proficient in the analysis, evaluation, implementation, and control of healthcare information systems and related technologies.

We are very excited about the launch of our new online Post-Baccalaureate Certificate in Health Information Management that will permit healthcare, business, and IT professionals to be eligible to sit for the RHIA certification exam. We will begin accepting applications for that program in late April.

Students from all of the health disciplines are attracted to our programs. We have physicians, nurses, pharmacists, medical and radiology technologists, therapists, technology and computer science professionals, engineers, and other professionals in our programs. Because we are online, students come from all over the United States and the world. Military personnel serving overseas, as well as professionals from India, China, Korea, and several other countries have participated in our courses.

Studies have indicated that there aren’t enough people trained in health informatics to advance electronic medical records. Do you agree it’s a problem and, if so, what’s the solution?

Yes, this is definitely a problem, but frankly, this has been a problem for a long time. The recent stimulus bill will set a number of activities into motion during the next few years, which will further increase the demand for informatics-trained professionals.

At UIC, we have been scaling our HI/HIM programs and preparing to educate even greater numbers of students while maintaining quality at all levels of instruction. Industry-experienced faculty have been hired in anticipation of increased enrollments and we have modified our student enrollment/registration, research, and advising processes to accommodate this growth. We emphasize quality and service, which are hallmarks of our programs. Furthermore, our courses continually change as the industry demands new knowledge and experience, so keeping an eye on what is needed for success is critical to maintaining an edge on what the industry requires.

People working in healthcare information technology must realize their customers are highly educated individuals who demand the best of customer service and response. Clinicians, for example, are trained to assess evidence as an essential element of any decision-making process. The ability to research an answer and support one’s conclusions and recommendations with evidence has become a critical skill set in today’s healthcare society. This is also a requisite skill set for people who support information technology and electronic medical records.

Having worked in this industry for almost thirty years, I, like others, realize the evolution toward electronic health records is a series of long-term projects that change culture, processes, attitudes, and jobs. Organizations need to grow into most effectively using EHR capabilities; these aren’t “slam-dunk” solutions. As a result, there will be a need for trained informatics professionals through the next 10 to 20 years and beyond.

While the government’s stimulus program may provide a jump start, the solution requires formal training and continued education over many years. The industry needs experience. Educational programs like UIC represent one of the tools of a total solution set required for the long term.

Are you seeing increased interest in your program because of economic conditions?

Yes, our enrollments have significantly increased during the last two years. We have more applications for our programs at this point in our summer and fall enrollment cycles than we have ever had before. I have talked to others here at the University of Illinois at Chicago and they said that the “hot areas,” such as engineering during the last major economic downturn back in the 1990s, have always been good arenas for individuals to reinvent themselves for new careers and employment when the economy begins to pick up again; health informatics is definitely "hot”.

This economic downturn is not any different than any past one. The current conditions have forced many workers to think about their futures, to assess new working careers, and to try something different. This is a definite opportunity to retool oneself to be eligible for a position that is in high demand in a growing industry, and will have a tremendous impact on all of our futures. With the new administration’s desire to emphasize electronic health records, the future is bright for individuals who have requisite skill sets in informatics.

What surprises me is the intense interest we receive from physicians, nurses, pharmacists, and other clinical professionals. In spite of having relatively stable employment through most economic downturns, a number of clinical professionals are students in our programs, partly because they not only desire to take advantage of opportunities in their current positions, but also to become educated to take on even greater responsibilities and leadership.

Though our program is not specifically meant to attract just healthcare professionals — in fact about half of our students come from backgrounds other than clinical — our curriculum emphasizes skills that will give everyone rounded backgrounds to be successful in healthcare. We need to remember that these are complex software systems and to successfully use them, a number of issues must be understood, dealt with, and solved. One does not need to be a clinician to be successful in our informatics programs and in the healthcare information technology industry.

Economic stimulus funds will likely change the healthcare IT industry. Do you have any predictions on what will happen?

I have talked with a number of consultants, supplier representatives, providers, and students during the last few weeks, and as expected, there is a wide variety of opinions. But in spite of the best of intentions, I don’t believe there will be a mad rush for systems in the next few months. Like other segments of the economic recovery plan, the stimulus is somewhat vague in many areas; wise providers will wait for some period of time until there is better definition of what demonstrates success under the stimulus. The plan will result in incentive payments for those providers who demonstrate meaningful use of their EHRs. We will see a last minute push to purchase and implement new systems as we get closer to deadline dates, with a resulting crush on experienced resources, and a cry to change the legislation and move the deadline.

Most everyone agrees there will be entrepreneurs developing and pushing their ideas as the best available solutions, so one needs to exercise caution as they purchase. Historically and generally speaking, healthcare organizations have had difficulty realizing value from their information technology investments. Because of the push for new systems during the next two years, and with many new users implementing complex functionality into resistant cultures for the first time, there is tremendous risk that money will not be spent wisely.

My advice for any organization is to conduct thorough planning and evaluation, make well-thought-out selection decisions, and understand how your business operations will be affected by new technology. Build on the available experience in the industry and seek high value and return from the investment you are making. While the money may be available and the “candy store” is now open, spending it wisely requires thought and careful effort. As I said earlier, these are long-term projects that require significant cultural, behavioral, and process modifications for every organization to achieve success.

Do you enjoy working in higher education after a long career as a management consultant?

Yes, very much. This is the right spot for me at this point in my career.

I spent over twenty years as a management consultant and have a plethora of stories about client situations and business travel difficulties. I have never regretted my many years in consulting at American Hospital Supply Corporation (remember it?) and with Dorenfest & Associates. I respect the people I worked with and learned much from them. I worked hard to achieve good results with my clients and always gained additional knowledge from each one of them. These experiences have helped position me to lead and grow this academic program.

Higher education is not without its own set of problems. With decreasing budgets and increasing competition for students, academia is very much like any other business. An understanding of basic business principles, such as strategic planning, marketing, and management is as critical to success in the academic environment as it is to any healthcare consulting or software business. My additional experiences as a consultant have taught me to appreciate these challenges, to be patient with the change process, and to respect others for their attitudes, personalities, and agendas. While a large university like ours may appear to be slow to change on any given day, comparing a snapshot of today to one taken a year ago will illustrate tremendous changes. My organization has smart, committed people. We have terrific students with the maturity and desire to learn. The Dean in our college and the campus administration support me, providing me with the opportunity to build something I truly believe in to be a leader in our industry. What more can I ask for?

HIStalk Interviews Jordan Shlain MD, Founder and Medical Director, Current Health

Tell me about what Current Health does and why you started it.

Current Health has always been kind of a medical home before the word medical home was even put into the nomenclature. I’ve always desired to have a practice which would make me, as a patient, want to join that practice. So I looked at the practice through the lens of the patient, not through the lens of,”I’m a doctor. This is how I want to practice," but, "I’m a patient, too, and if I was part of a medical practice, I’d want it to work like this". So I kind of engineered the practice to the viewpoint of the patient.

It’s very focused in competence of care and customer service. Just good old-fashioned service and follow-up with really good doctors and really good staff and the ability to coordinate complex situations simply and easily.

For a monthly membership fee of $50, which is $600 a year … I feel, we feel, our patients feel that’s infinitely fair … we are also fee-for-service on the other side, so we still don’t take insurance even if you come into our office or we make a house call.

That said, insurance is submitted anyway and patients are reimbursed for these visits. If you actually do that math on a $200 visit, where the reimbursement was $140, for example, the patient lost $60 because they didn’t get the whole money back, but they would have had a $40 co-pay anyway. So if they are net $60 negative on a visit to us, their co-pay may have been $40, in which case it’s a $20 difference and for the level of service that one would get. In general, our patients are willing to take that little hit.

At the end of the day, we believe, and our patients believe, that we are protecting their most important asset, which is their health. Our patients look as the practice as an investment in their health, not an expense on their health, because we take the long view and try to get them focused on prevention as well as crisis management.

That must be a different way of thinking for old school docs who weren’t trained to think about being patient-centered. Were you trained differently or do you just think differently?

I think I just think differently. I grew up the son of a surgeon. There is that paternalistic, “I’m the doctor and the doctor knows best” mentality that I saw growing up. I’ve always felt that, as a physician and a healer, and as a physician who appreciates the art of medicine as much as the science of medicine, that you can’t be, “I know what’s best because I went to medical school.” That’s not very humanistic.

I did spend a year through Harvard teaching a high school class in Kenya, in Africa, in the middle of nowhere at the age of 23. I became acutely aware that 90% of the world lives with no electricity and no running water. It’s the industrialized world that does. In order to be in touch with the basic human things: kindness, courtesy, respect, humility, listening … if you are a doctor who went to medical school, what I like to say is, if knew you were going to medical school, the you were pre-med in college. If you know you were going to medical school, you may have been science-oriented in high school. So you’re focused; your head’s down; you’re in the library; you’re studying things.

Then you go to med school and it’s head down. It’s four years there; it’s four years in college; it’s four years in high school. So you’re 12 years in and it’s heads-down. Then you do your training and it’s three to five more years of heads-down. You come out at age late 20s or early 30s and you’ve never breathed a breath of fresh air. You have been in the proverbial medicine box and you don’t know any better. All you know is what has been taught to you from the people above you. So you can see the DNA of paternalism in healthcare just gets passed down from generation to generation.

I attribute my thinking out of the box on this is that I lived in Africa for a year. I got a full break of one year living in the middle of nowhere, really, in the jungle. I got an opportunity to take a step back and decide what kind of doc I wanted to be. I wanted to be able to relate to anybody, irrespective on their socioeconomic condition. I wanted to be able to relate on a more primitive sociologic instinct. That’s requires you to put yourself in the position of the patient when you’re seeing them.

There will be doctors, I would assume, that look at this model, and just do it for the cash. They may or may not have more noble intentions.

That’s true. At the end of the day, it’s still not that much cash compared to what bankers and lawyers make. You’re not killing it. You’re not minting money. 

You have to be good. Its like the Four Seasons. If the Four Seasons, all of a sudden, starts having crappy service, people are not going to go there any more. They’re going to go to JW Marriott. They’re going to pick another hotel. A typical doctor who takes insurance can rest on their laurels. The insurance companies and the employers will feed them patients whether they are good or bad. There is no rating system on that.

Now, if you’re going to go outside the insurance world like we have, you have got to be good on a consistent, regular basis. So, if you’re doing it for the money, you’d better be good. You’d better be able to deliver on the promise you made to the patients and you better have good chops, so to speak. Clinical chops. You can’t just be nice. You also have to be a good diagnostician and a good follow-up doctor.

I do think a lot of people go into this with the idea that they’ll make a lot of money, but it means you have to work for it. It doesn’t just show up at your door. It doesn’t just walk into your office. Our brand is built on word-of-mouth reputation. Our patients are referring other patients. We’re getting highlighted here there, and everywhere. Its because I think we do a really good job.

I want to give you a softball question here, because I’ve seen your answer elsewhere, but I think it bears repeating. What’s wrong with the average patient-physician-insurance company relationship that’s common today?

All the incentives are all wrong. The insurance companies have an incentive to not pay the doc because its more money to them.

The fundamental problem is the patient walks into a doctor’s office, kind of with someone else’s credit card, and says, “I want this, this, and this”. They’re not paying for it. They are not accountable for it. “I want an MRI, doctor. I want a fancy blood test. I want all these things, but I don’t want to pay for it. I want somebody else to pay for it.”

So the fundamental problem right now is that there’s no price transparency, so nobody knows what anything costs, really, number one. Number two is there’s no accountability on the patient’s part to bear some of the cost of what they either consume or use. I fundamentally believe that insurance, as a construct and a principal, is a financial instrument. It’s not a healthcare instrument. Health insurance is no different than car insurance or life insurance. You put money in, and if something really bad happens to your car, your house, or your life, there’s money on the other side of that. 

Health insurance was never intended for, if you look at the old model, a sprained ankle or an eye exam or a physical exam or for minor surgery. You paid that by yourself, and if you hit your $5,000 or $10,000 deductible, you were covered. Therefore, car and home and health insurance should be and is personal bankruptcy protection. That’s what’s it’s supposed to be. It’s to protect you in the case of unforeseen catastrophic loss.

What the healthcare insurance companies are starting to do is say, “Hey, we’ll guarantee you a range of services in addition to financial risk mitigation”. People say, “Wow, I can pay a little bit extra and they’re going to give me this network of doctors”. The network of doctors that they have has no love for that insurance company. They are not working for the insurance company. They are working for themselves and for their small business, wherever that is. The insurance company continues to crank their reimbursement fee down and continues to throw more administrative stuff at them and it becomes a “How many patients can I see a day?” throughput problem for the doctor’s office to meet their payroll. It’s the cost of doing business.

And so insurance companies have been great at, ostensibly, taking a cottage industry where every different market had different price structures and said, “Great, everybody’s going to accept this reimbursement for this set of codes,” even though they never told you what you were going to get. So the prices came down, but then what happened is the transparency goes away and then the doctors are getting no appreciation from the patients because the patients feel they’re only getting seven minutes, and the insurance companies, because they’re not paying them what they think they deserve.

So you get all these doctors that are feeling unloved and frustrated. I contend that a frustrated doctor is a frustrated patient because doctors are human. There’s no way that doesn’t translate through. I know that because when I first starting doing medicine, I joined a HMO PPO practice. I was just getting really frustrated that I would spend an hour with somebody and solve their problem. The insurance company would then send me a letter a month letter saying, “That’s not a covered service. You’re not getting paid for that.” The patient already got the services.

I would get frustrated because I never knew what I was doing that I would get paid for. The patient didn’t care because they weren’t paying somebody for it. They didn’t know that I wasn’t getting paid and I wasn’t going to sit there and tell them that. I started talking about the business of medicine eight years ago and people were like, “Medicine is not a business. You’re a doctor. You care for people.” I was like, “Yeah, but I have a small office. I have a small business. I’ve people to pay and I have income to get and I’ve got to make them square".

I kind of got pooh-poohed about talking about the business of medicine for a long time. Nobody wanted to talk about it because there was this institutional inertia about doctors are caring people that don’t talk about business. Guess what? That’s now upside down and everybody’s talking about business. So, I joke and say, "It’s not easy being a trendsetter." But I had to endure being the whipping boy for, “That guy — look at him. He’s doing crazy stuff over there in medicine”. Now what I’m doing is the national rage. Everyone’s doing it.

As far as the insurance companies go, the biggest and the worst is probably the federal government. It doesn’t appear to be getting much better. The answer to every solution is just getting more people federal coverage. I don’t see much incentive to make it better when the answer is just get more people bad insurance from the federal government.

Great point. I really believe that there needs to be some system, so that somebody falls out of their job .. right now, we have an employer-based system with a federal-based age core system. I think there’s needs to be some mechanism whereby, if somebody loses their job, they should have some basic level of coverage. Again, it should be called insurance, where they are responsible for, even in a federal system like Medicare, which I don’t necessarily fully agree with, but you’re responsible for the first $2,000 and the government  picks up the tab after that. It’s going to make you a little bit more responsible, because at least you’re responsible for something. With Medicare, at least you’ve paid into it all your life, so there’s a different structure there.

What you’re talking about is a top-down approach. We, the federal government, will expand what we are currently doing to more people. We’ll make the DMV bigger for healthcare. DMV’s okay. It actually works, but you spend a whole day going to the DMV.

What I believe will happen is, much like in the UK but on a bigger scale, is you’ll have some federal program, and if you want to opt into it, you can. Then there will be another system of private medicine where you, the patient will become a consumer and me, the doctor has to become a conscientious provider that will try to solve your problems and be your advocate in a timely, responsible way. Not a, “I’ve got to see 30 of you today to make my nut.”

What you’ll start to see it a lot of these boutique practices going off the grid, is what I say. Then what you’ll do is buy insurance like I have. I have a $10,000 deductible on my healthcare savings account and I have a family, so I put in $6,000, so I am responsible for the first $6,000, tax-free. The next $4,000, I’m responsible for the tax. And then, everything after $10,000, I’m covered.

In healthcare, as you probably know, things are either under $1,000 or they’re over $10,000. If you need surgery, that’s over $10,000. If you need a mole removed, that’s under $1,000. There’s not a lot of things that fall between $1,000 and $9,000. So, what you’re going to start to see, I think .. I just read an article this morning that they think the hockey stick of HSA adoption is 2013, especially with all these layoffs going on this year and next year. People want low monthly premiums because right now, they are paying $600 a month and getting crap. They are getting coverage. They are not getting delivery, but they’re being sold that they are getting coverage and delivery. It’s a slow process, but you’re going to see the top-down federal government approach and you’re going to see the bottoms-up approach from individual people like doctors, like me and my group, that will eventually say, “Hey, I can make the same amount of money as I was before and I have more quality time with my patients." 

If you are an internist today, you’re making $150,000 a year, which is probably the national average-ish. Maybe a little more, maybe a little less. You’re seeing 35 patients a day and you’re taking this many call nights per month, and you have this much charts and you have this much admin and you have this much staff. If I said to you, you can make the same amount of money, but you’ll have less patient load and you’ll have better outcomes because your patients will be buying into you because you’re spending more time with them; you’ll have less staff to do billing because you’re not doing billing. Would you trade the same amount of money with much less headache?

You know what the answer is? All day long. So you’re not necessarily seeing a doctor make more money. He has a better life for himself and he has more time with his patients. I think that’s the key. You can’t beat doctors into the ground and say, “Be a good doctor.” Doctors need to feel appreciated, and generally you feel appreciated when your patient sends you a bottle of wine and says, “Hey, thanks for taking me through that crisis, I really appreciated it."

Right now, doctors punt to hospital doctors and the crisis is like a hockey puck. Everyone’s punting the hockey puck to the next guy. No one’s quarterbacking any more. It’s like rugby. It’s like a hot potato game. In our practice, every hot potato is owned by the doctor and the doctor makes sure that hot potato gets cooled down in the right environment with the right people around them. That loops gets closed on why that potato got hot in the first place.

When you mention the high deductible plans, that implies a certain amount of responsibility on patients and hospitals get stiffed constantly from patients that are all for paying until they’re out and well again. Suddenly that’s the last thing on their list of things to pay and they never do. In your case, you require credit card to pay up front. Can you trust patients to be willing to pay when they get good service?

Here’s the thing. This goes back to a fundamental human trait. It boils down to the relationship. If I’m your doctor and you know I’m doing well by you and you trust me because I look you in the eye and what I say will happen happens. You know that I’m your healthcare guardian, so to speak. You don’t want to stiff me. I’m your guy or your girl. I’m your doctor. You can’t just find someone that you click with that easily in this world, let alone with your doctor.

So what we find is, if you spend time to develop those relationships with your patients, you don’t get that. They don’t want to stiff you because they know the next time they need you in a pinch, you may not answer the phone. “Go to the ER. Go see someone else. You haven’t paid your bill”. I won’t say it never happens. It happens rarely, though. Extremely rarely. In fact, one of our mechanisms to mitigate that is we have your credit card on file, so before you leave, it’s being paid. There’s no billing involved, That’s why you don’t have to hire all these staff to collect the accounts receivable. There are smart ways to do it.

Obviously, if  you’re seeing somebody that’s really sick at home, because we do house calls 24 hours a day, we try to bring the solution to you instead of you trying to beat your head against a wall trying to find it. I had phone call … she wasn’t even a patient. She was a friend of a patient who developed numbness in her fingers. Her eyes started seeing jagged lines. So she went to ER and spent eight hours. A bunch of people were there trying to get pills and food. They’re were faking it to the clinicians just to get some food at some ER in Oakland.

The doctor did a CT scan and said, “I think you have multiple sclerosis. Go see this neurologist.” So she called the neurologist and he’s not available for three months. She’s a mother of three. She now is freaking out that she may have MS. So then I get a phone call, “Can you help my friend?” I called her up, and the next morning, she was in my office for a blood test to just rule out autoimmune things. I e-mail the head of the MS clinic at UCSF and say, “I’ve got a priority here. Can you please see this woman?” He says, “No problem, I’ll see her on Tuesday.” She’s being seen as we speak right now. This all happened on Friday of last week. That’s just somebody minding their Ps and Qs, me that is, and making sure that this crisis is adequately managed by me. I’m not going to hand it off to anybody else. Then you’re playing the telephone game and the ball gets dropped.

If everybody takes their cash patients and calls in favors to get them seen, then doesn’t that just make that ED wait longer than it was before?

Not really. If she was my regular patient, I would have said “Don’t go to the ER.” I would have said, “Come and see me. Let me do some blood tests and get an MRI myself." She didn’t need to go the ER.

Right now, the ER is the clinic of last resort for everybody. What our clinic says is, “No, let us see you first. Let us make a house call so you don’t need to go to the ER.”

If you think about it, if you zoom out for one second, if I make a house call on somebody and I charge them $600 and I solve the problem, I can do an IV and a shot of this. So that’s one less person in the ER. So that’s good. They’re unclogging the system. If they had gone to the ER, somebody’s getting billed $3,000 because the cost of the system is $3,000. So the ER wins because it’s one less patient. The system wins because it’s a lot cheaper. The patient wins because they got treated right then and there, they paid $600, submitted for insurance, and they get $300 or $400 back, so it cost them $200 and they saved eight hours.

So I contend that the way we do it actually saves the entire system money and everybody wins. As long as I can prioritize, I’m not going to send every patient with a headache to the MS clinic, but she had signs and symptoms that sounded like it could be MS, there’s no reason why she should wait three or four months to get that diagnosis. This isn’t Canada. I use my juice, so to speak, my horsepower, when it’s appropriate, and I don’t misuse it. If I did, then nobody would take my calls. There are internal checks and balances in the system. If I’m an ass, nobody is going to take my call.

When I interviewed Jay Parkinson, he’s focusing on house calls for young patients in a tiny geographic area who have no chronic illness. How does your model differ from what he’s doing?

We take everybody, anybody. We don’t care. I think Jay Parkinson is pediatrician, so it doesn’t surprise me that he’s taking care of younger people, but I’m an internist. I have a partner who’s internist with a geriatric background. We have an ER doctor. We have a naturopathic doctor. We have a pediatrician and a family practice doctor.

I just got an e-mail a few minutes ago. There’s a 97-year-old lady who needs a doctor. No problem. I’m not going to take Medicare, but no problem, I’ll take care of her. If I was taking care of young healthy people all the time, that’s not interesting. That’s like MinuteClinic stuff. The intellectual exercise that is medicine is the art of medicine. Is getting a complex situation and trying to make it simple and make it manageable and help somebody through it. That’s where I get the most joy out of medicine.

I think Jay Parkinson is a stand-up, great guy. Don’t get me wrong. I don’t want to come off a disparaging Jay because we’re pals. We just have different viewpoints. I’ve been doing this for 14 years, in the trenches, learning, doing. I’m very well rooted in the realities of it all. It’s hard work to build small business and grow it in scale like we’re doing. There’s nothing easy about it. Every single day, you’ve got to be on and you’ve got to be available and you’ve got to be smart.

You mentioned MinuteClinic. Its interesting that some folks say, “We’re never going to get enough primary care practitioners anyway, so we might as well admit defeat and say that nurse practitioners and PAs can take care of almost everything that a PCP can. Let’s save doctors for something more important that takes more high-level thinking.” What are your thoughts on the hierarchy of medicine?

I think there is a place for MinuteClinic. I’m a associate professor of nurse practitioners at UCSF, so I train them. I do think there’s an important role for them. At a regular doctor’s office, if you come in for a cold. I’ll look at you for 7-10 minutes. I’m done in 10-15 minutes. Versus if you come in with high blood pressure and high cholesterol, I may get reimbursed the same amount from the insurance company … for every hundred patients a doctor cares for, the physician must interact with as many as 99 other physicians and 53 different practices.

My point is that the complicated patient requires me to read their chart before they get here. I’ve got to get up to speed on them. I see them, and then when they leave, there’s going to be a few more phone calls, e-mails, voice messages, and faxes going out about coordinating their care. So, the complex patient doesn’t require 15 minutes. It requires five pre-minutes, 15 minutes during, maybe 30 minutes. Whereas the code is 15 minutes all in. If you’re getting reimbursed roughly the same, then essentially, the MinuteClinics are cherry-picking the bread and butter of the internal medicine practice.

That said, if we start turning into a Canadian Lite, you’ve got to wait three months to see a doctor for a sore throat. Then, if the internist can’t figure out how to make their offices run better, then too bad. Then guess what? Let the MinuteClinic succeed. Let the nurse practitioners fill a limited role, but my philosophy has always been a really good doctor knows when they don’t know and they call in a specialist. An even better doctor can handle something that he knows and doesn’t punt to a specialist because its more convenient.

Does that make sense? There’s a ton of extra visits where a doctor says, “Go see a gastroenterologist or go see a specialist.” Not because they don’t know and it’s out of their league, but it’s off their plate now. “I could deal with it, but it’s going to take me an hour, but if you go see them, they’ll do the work up and  send me a report.” Then it’s going to take you, the patient, six hours of back and forth time and scheduling and who knows. 

We need to get primary care doctors back in the business of managing the business of managing most of the problems and not just punting to the specialist. That’s another reason costs are going through the roof. The hierarchy is internists or family practice doctors should be dealing with the whole range and they should have nurse practitioner or PAs working with them in a collaborative environment where the cost structure is such that you don’t have to have a MinuteClinic over there that’s a standalone PA in a box.

Imagine the system. You go see the MinuteClinic guy and they say you need to see a doctor. So that’s a two-step, vs. you go to the clinic where there’s a nurse practitioner and the nurse practitioner says, “This looks a little bit funky. Let me get the doctor real quick.” He comes in and sees you. That’s a one-step and you’re done and you’ve paid one fee, not two. So I think the organizational system, the way this is all set up, is a little bit chaotic. I think a good, coordinated approach like what we’re doing … and we don’t have nurse practitioners or PAs right now, but I don’t know that we won’t have them soon.

Do you see that every physician will just start off on their own and decide this model makes sense and try to do it, or will there be somebody that’s advising them?

There’s an organization now called the SIMPD. SIMPD.org. I’m on the board of that. There’s 200 doctors doing what I’m doing around the country. If you want to be one of us, we can tell you and show you how to do it. It still doesn’t speak to the fidelity of the process model, which is what Current Health is trying to develop.

Our goal is to open up different offices in different cities and say, “If you’re a traditional doctor and you want to make the same amount of money but work less and have more fun, then join us and we have the whole back end set up. You have your medical practice front end set up and we just plug the two together and then you don’t have any admin responsibilities anymore. You have doctor responsibilities. You can make the same, if not more." Our goal is to try and create a system where it’s easy to plug doctors into and they get all the benefits of the scalable back end, which isn’t just technology. It’s HR, it’s financial, it’s everything.

Is that kind of like doctor’s union?

If you say union, people go crazy, so I wouldn’t go say union.

A guild?

Yeah. It’s an affiliation of like-minded doctors trying to create a branded healthcare practice that is the same no matter where you go, whether its San Francisco or Los Angeles. You walk in the office, it feels just like the other one. Everyone’s treating you just like the other one. They’re all on the same electronic medical record. You’re credit card is already on file. You can e-mail your doctor or your nurse and there’s systems in place where it’s all the same.

Right now, if you go see me and then you go to the doctor in Flagstaff Arizona, he may have a whole completely different way of doing it. So you run into … there’s no standards. I’m trying to develop a set of standards that I think sets the bar really high for doctors and for patients.

You mentioned electronic medical records. Tell me about the technology that you use and how that helps you do what you do.

Right now, it’s nothing fancy. An electronic medical record is a hard drive somewhere else that you can access wherever you want. We have an Internet-based EMR, so from home, I can log on to my electronic medical record. If the patient e-mails or calls me about something, I can pull that up any time. It’s soon to be on our iPhone.

All I really care about is past medical history, problem list, medications and allergies. From those three little elements, I can figure pretty much anything out if someone’s calling me and I don’t know them very well or I haven’t seen them in a while.

I’m devising a  system that’s kind of in stealth mode right now, which is an entire … a lot of the electronic medical record systems from athena to eMDs to Allscripts, they have been designed top-up. They hire a couple of doctor consultants and ask, “How would you like it to work?” You get a system designed by engineers for what they think the doctors want.

I’m in the process of designing a system which I think maps to the processes of this practice in a way that once it goes … I’m getting the beta version on Thursday. They are presenting it to me. Then the patient, the staff, or the doctor can log in and everybody sees all the balls that are in the air that need to be caught before they hit the ground. I always say, in medicine, all day long, we open up loops and we have to make sure that they’re closed. It’s our responsibility.

In the existing healthcare system, doctors open up loops and it’s on the patient to close the loop. “Go see that specialist. Oh, you went to see him and the labs I drew two weeks ago they weren’t there? Oh, so now you need to go see him again." It’s my responsibility that when I say, “Go to that specialist,” my office gets those labs or those reports to that guy, confirms that they’ve been received. There’s lots of things that need to happen to make the system work well and no one is doing it. No one cares. It’s too much work.

But you’ve got a pretty big luxury that you don’t have to design a system intended to get you paid or to justify what you bill. If you look at the standard EMR, much less practice management, almost all of it is there just for billing and legal purposes, not to benefit the patient.

Agreed, which is why I’m a big fan to get out of that system. You don’t need it. Specialists need it because they do expensive things, but certainly I don’t believe that primary care doctors need to be doing that.

So is this product that you’re building going to be to connected to the network of folks that you envision practicing under your model?

Correct. I may even license it to other folks if they wanted to use it for their practices. Great, go for it, I’d license it to you. I may do that.

Explain how yours differs conceptually and what the benefits are to the patient and doctors.

I think that the way mine differs conceptually … first of all, its completely Web-based and a lot of these systems aren’t. It’s completely Web-based, but it places an equal emphasis on process than it does on data storage. Most EMRs are a repository for data, with very little forward thought into mapping patient flow and accountability from one loop getting opened to another one. It’s much more focused on doctor, staff, and patient accountability for what they need to get done for any particular problem. Its not like, “This is a hypertension algorithm. Do this, do this, do this.”

Everybody’s different. That’s the thing. You can create a system, but there’s always going to be exceptions. The way I look at it is create a higher level approach to all problems. All problems need to go through this pathway. Then you can customize those problems with a couple of tweaks, but it puts the onus that my staff can log on … there’s five things that they’re working on. I just handed the baton to them and now they’ve got it to the patient and the specialist before we can say this is all done and closed.

It’s a process package and a electronic medical records storage package. I think that’s the difference. Very few EMRs build in a lot of process. It’s just scan this in, file it there, you can retrieve it like that. You can graph this, big deal, they all do that now. I think EMR 2.0 is going to be a process EMR.

The government stimulus package throws a lot of money at EMR 1.0 and says what we’ve got is good enough, so we’ll just get a lot of them out there and figure out a way to get them to talk to each other.

EMR 1.0 is really expensive. I’m going to plow a considerable amount of money into it just to make it work, but then I can license this thing for $200 a doctor a month. My cost is roughly $150. The most recent EMR quote that I just got was $250 a month per person, so that’s $4,000 a year.

You can use Google for free. I can do online banking. They don’t charge me to do online banking. Why hasn’t the government created an EMR that’s just free? They’re pouring all this money into it. They should make an open source freebie. That to me is the wet dream. But sadly, there’s all these different people with their proprietary systems that want to make lots of money. They’ve got a lot of clients, and for a client to leave that system would cost more than staying in it. 

It  will be interesting to see what happens over the next five years. I think with the economy doing what it’s doing in its quasi-free fall, I think the lot of the little practices like mine … you can feel it, right? People are being far more careful of where they spend their money, which is fine, but at the end of the day, there are a lot more people that aren’t employed and those people have no health insurance and nowhere to go.

I tell people, “I don’t know you budget for food and clothes and all these other things, but you should put a line item for healthcare in your budget. One of the line items should be broken down into money I’ll spend on insurance and money I’ll spend on doctor visits". And that’s an aggregate number. It shouldn’t be, “I’m going to spend this much on healthcare and it only goes to insurance.” You’re giving money to the people that are just hogging it. That doesn’t make a system healthy. You’re feeding the pig and you’re starving the pig handlers. It’s upside down.

Are you concerned about building in capabilities for analytics, quality measurements, or any kind of compliance?

Absolutely. There have been all these studies that have come out recently that EMRs don’t make healthcare any better. They don’t make it cheaper and they don’t make it better. The problem with analytics — statistics, statistics, and damned lies — is one doctor’s got a bunch of young healthy patients, his statistics look great. If some other doctor takes all the sick other patients and you don’t have some multiplier or qualifier in there, and I don’t know how you could do that, I think there’s going to be a lot of misinformation with that.

The other thing is there’s no evidence — and you can quote me on this — for evidence-based medicine. If the bell curve is 80% of the people and you’re going to say 10% are outliers on that side and 10% are outliers on that side. We’re going to make the evidence for the 80% in the middle. Every time somebody walks into my office, they represent one person. They’re not 100 people. They are one.

I don’t know where they live on that curve. If I just lump them into that 80, there’s a 20% chance I’m wrong. Why would I do that? If I gave you an antibiotic and said there’s an 80% chance of working, would you take it to get rid of that sore throat? Of course not. You want 95% and the way you get to 95% is you sit and you talk to the patient and you understand their uniqueness in the context of the cohort. Then you make a treatment plan that is relevant and unique to them.

Are you saying that evidence-based medicine is an instrument of pseudo-rationing?

Yes, that’s right. You’ve said it better than me.

A philosophical question, but are we on the right track throwing all this money into electronic medical records and quality measures and pay-for-performance, or are we really barking up the wrong tree?

I think we’re barking up the wrong tree. It’s the carrot-and-stick tree. It’s like, do good and you will be rewarded, or do bad and you won’t.

You know what? If you give a doctor time and give them the ability to do what they’re good at doing, of course they’re going to have good outcomes. Nobody wants to have bad outcomes. You don’t go into medicine to not care for people. You go into medicine to care for people.

This goes back to, “You doctors are going into medicine for the money.” If I wanted to make money, I wouldn’t spend 15 years of my life making nothing and struggling to make $150-$200,000 by the time I’m 35. Are you kidding me, and $300,000 in debt?That just doesn’t fly.

That’s on the one hand. On the other hand, if the government says we’re going to nationalize healthcare, I’d say, “Hey, bugger off. Pay my med school bills. Great, but if you’re going to tell me what I can make as a salary … if I can’t do free market or do enterprise or if I work more I make more, then pay my med school bills and pay me the opportunity cost for all this time that I’ve spent to be your employee,” which is what they do in England. Medical school doesn’t cost any money, but you come out and you get paid by the NHS and it’s salary. You don’t pay to go to school. They pay you to go to school.

We have this system where you can’t just push one button and you fix it, but I fundamentally believe, if you get a core of new doctors … in my business, if I do well, I get more patients. It’s called a positive feedback loop by doing well. There’s enough online rating systems out there that rate me. Patients will say this guy’s great and then another one comes.

I’m just one little person. My whole practice is. But if we have good outcomes, we get more business and we grow. This is the free market way of thinking about it … the good guys do well because you can’t have a bunch of bad outcomes and have this thriving practice. 

In the insurance model, you can have bad outcomes all day long. If you’re a Blue Cross provider, people look up in the book and they see your name and they go to see you. There’s no forethought into that. Why would you not? Do you really care if they’re good or bad? Maybe you don’t believe what other people say. But if you’re popping down your own dollars to see this guy, they better be good. He better solve my problem. He better be helpful. If he’s not, I’m not going to see him again.

I’ve seen some pretty horrible doctors that had really good bedside manner and wore nice suits. The patients probably would have rated them very highly, and yet clinically, they were really marginal at best. Can patients be trusted to judge or use the judgement of others in making a medical decision, like they would to go see a movie or decide which restaurant to eat at?

A good question. Think about it. You go to see a doctor for a yearly physical. So there’s nothing to judge there. The doctor will see you. So if he misses the fact that you had a melanoma, that’s a black mark on that doctor. How did he miss that? I went and saw a dermatologist. They said, “You should have caught that a year ago,” but I had a physical six months ago.

So there’s a patient who will say, “Goddammit, how did that get missed?” Maybe they won’t, but if we don’t trust somebody to at least reflect … we get back to this paternalistic mode. If patients don’t know anything, then the doctor knows everything.

The other thing is, if you have problem and I say, "Go to the ER," you have horrible experience. Then you see me and I say, “Let me get you a room directly in the hospital and let me get the surgeon to see you there”, and then everything works out with you appendectomy, you’re going to go, “Wow, that was great.” It’s not just the bedside manner and the nice suit. It’s the experience of being under that doctor’s care in an illness and being under that doctor’s care in a prevention situation.

The bar in healthcare is so low right now. It is set so low, the insurance companies have beat the system down so low, that you only have to be good to look great. If you’re great, you look fantastic. You are, to the patient.

I’m not tooting my own horn, but I just pay attention. When I go home, I don’t turn my pager off and let someone else do all the work for me. If I have a patient that is in mid-loop and got a problem going on, I want to make myself available until that problem is resolved.

I don’t have 3,000 patients bothering me all the time. I only have a couple. You keep your practice down to less than 1,000 patients, then it’s instantly manageable. Once you get above 2,000, you’re punting to specialists and frustrated.

I’m fascinated by your father and your family. It seems like it must have been interesting being raised by a renaissance man and surrounded by that. I’m just curious, what is that like and how did that make you think differently than the average physician?

My father is truly a renaissance man. He has been a huge, huge inspiration to me, just for a guy that thinks out of the box. He was doing general surgery and then laparoscopic surgery came out; he was the first guy to do it. Everybody laughed at him and then he became the preeminent laparosocopic surgeon in the country. Everyone is just really motivated to succeed.

So, in a way, its been huge inspiration. He builds bridges from different disciplines that had been so eye-opening to me. I think his brain is wired like Leonard da Vinci’s, in a way I’ll never understand. But I think being a progeny of that and seeing it in action has been just inspiring. That’s it. A pure inspiration.

He practiced under a different model than you did, so what does he think of how you’re practicing medicine?

He loves it. He’s saying, “My son’s making more money than I did as a super successful surgeon.”

Some background is when I was doing the PPO HMO thing, I said to my dad, “I don’t like this. I’m going to get a MBA at Harvard or Stanford”. He’s like, “Over my dead body you are. You’re a doctor and you’re going to be a doctor.” I said, “Well, I’ve gotta do something different”. He said, “That’s fine”.

So I started doing the fee-for-service thing and all my peers are laughing at me. “What are you doing? You’re defacing and disgracing medicine. You’re charging money for things? What’s wrong with you?” I was like, “You charge money, but you bill the insurance company and only get a percentage. I charge the people and get 100%. Why are you laughing at me? Why am I the outcast here? What did I do wrong?” It’s clearly the doctors being jealous story.

He’s incredibly proud that I stuck with being ridiculed by my peers, but loved by my patients. Now, I’m being loved by my patients and my colleagues are going, “Wow, what is he doing that I need to do?” If you buckled to the peer pressure, I would have gotten out of this a long time ago. As he says, his buttons are bursting. So I guess I’m doing all right.

HIStalk Interviews Ivo Nelson, Chairman, Encore Health Resources

Ivo Nelson, founder and CEO of the former Houston-based Healthlink consulting firm that he sold to IBM in 2005, has started a new firm with the convenient acronym EHR (Encore Health Resources). He can be reached at ivo@encorehealthresources.com.

Is this a really great time or a terrible time to be starting a consulting business? 

That’s a great question. The answer is that I don’t know and I don’t think anybody else knows, either. When I first decided to start this business, I was not aware of how fast the Obama money was going to start coming into healthcare. It’s not the reason why we started Encore. It may turn out to be a great day for Encore. I just don’t know that right now.

The reason I can’t predict what is going to happen is that we’re faced with conflicting agendas. We’ve got CFOs out there that are putting a screeching halt on capital investment because of the bad economy, and yet we have an infusion of capital coming from the government to help fund IT projects. I don’t think there’s anybody in the industry right no that can predict how that’s going to play out. So as a businessman who’s staring a company, I have just have to fall back on the experience that I’ve had and just do what’s right, basic blocking and tackling and take what the industry has to give us.

Surely you made a fortune when you sold out to IBM. Why do you want to do this all over again?

This is just what I do. That’s kind of like asking a lawyer why he practices law, or asking a doctor, “Why practice medicine?”

When I left IBM, I took 3-4 months off and just kind of chilled out. I took the kids to school, cooked meals at night, watched regular TV shows. I even played some golf. It was a needed break from having been a global road warrior for a lot of years.

I’m 53 years old. I’ve still got a lot left in me. I just absolutely love surrounding myself with great people. I love working with clients. This business of starting up a consulting firm and building it gets my blood flowing and it gets me excited. It’s just what I like to do. I think everybody dreams of doing what they love to do. I’m following my dream.

When you went with IBM, did you think you would do something like this again at some point?

When I left IBM, it truly was … I just needed a break. I really just needed some time to get away from the business for a little while. I would recommend anybody that hits it as hard as I was hitting it for as long as I was … to take a time out just for a few months. Kind of a sabbatical of sorts.

I had no intent, really, on starting another company. Not that I was opposed to it, it just wasn’t something that I had a plan to do. I didn’t really have any plans. I had gotten some advice from friends of mine who had gone into semi-retirement. They said, “Do nothing for awhile. Allow the fog to lift. Allow your head to clear and then start making important decisions about the future.”

Those were some very wise words. I think once I had a chance to really sit back and reflect and decide what I wanted to do here in the next stage of my life, my call was answered.

When you look back at what Healthlink was when it was independent and then afterwards when you sold it to IBM, what are your thoughts on how it changed? Is it something you are proud of or something that you wished you hadn’t done?

I have no regrets at all about selling Healthlink. Healthlink was at the right time at the right place.

At the time that we were building a privately held company, we kind of hit a wall of sorts. We were trying to penetrate the federal government business. We were in the process of going global. We opened an office in London. I was working at Australia Asia Pacific for the next move and it struck me that this next step in the company … and all companies kind of go through steps.

We’d hit $100 million in revenue and needed to take a big move to take the company to the next level. We were not capitalized to be able to do that adequately. On top of that, we had investors in the company that expected to get a return on their investment. We put those two things together.

The logical thing was to look at a partner, someone we could partner up that already had a global presence, that already had a strong federal business and needed the United States domestic business that we had built a good market share in. IBM was a good fit because they had acquired PWC some years back but did not acquire their healthcare practice, so they had a gaping hole in healthcare and Healthlink was able to fill that.

So, to answer your question, I really had no regrets. It was the right time. I think it was the right company and I think we’ve helped IBM have a stronger footprint in the healthcare business.

Healthlink was among the two or three highest regarded consulting companies out there. Did those folks fit into the IBM culture? I can imagine a lot of them turned over.

There’s people that are born to work in small companies and there are people born to work in big companies. So the kind of tradition that we saw at Healthlink was pretty much what you’d expect. People not comfortable working in a larger company, they are going to have a lot more process and bureaucracy than a smaller company is going to have. A different kind of culture.

I don’t think anybody can fault IBM for not being a great company. It’s an institution. But there’s some people that … whether its IBM or Oracle or Microsoft or General Electric, it doesn’t really matter. People have to find their home where they feel comfortable. So the Healthlink people that felt pretty comfortable at IBM still are there. Some of them didn’t and they left.

I did some analysis and it’s frankly not that much different from what we would have seen or any consulting firm would have seen otherwise. There’s a natural, pretty high turnover in consulting firms because of lifestyle issues and all the traveling you have to do. So we’ve seen between 15-20% per year. Over a course of three or four years, you’re going to almost turn over your whole company whether you’re getting acquired or not.

So that’s a long-winded answer to the retention issues and how that relates to the culture of Healthlink versus the culture of IBM. My analysis shows that there is slightly higher turnover at IBM, but not as much as what people think.

Now that you’ve done it both ways as a big enterprise and as a start-up enterprise, what are the business goals for Encore and what kind of culture do you build?

Encore is owned by two people. Those are the two founders, who are myself and Dana Sellers. We don’t have any expectations. If I had a bunch of investors or if I was publicly traded, they’d never accept that as an answer because they want to see a very strict business plan. They want to see you hit the goals that you set.

I’m perfectly happy with having an expectation that says we’re going to hire really good people and we’re going to do great work for our clients and the growth is going to be whatever the market has to give us. If this is a 30, 40, or 50-consultant company in five years and we’ve got 100% referenceability and we’re considered the place to work in the industry and every time I talk to a consultant they tell me how much they love working for Encore, I consider that to be a grand slam home run.

If it’s 500 people and we’re not providing great services to clients and we’ve got people quitting because they hate working for Encore but we’re making a ton of money, I’ll consider the company a huge failure. Dana and I, we really just want to build a really good company that clients can be proud that we’re working for them and our consultants can be proud to say that they work for Encore.

It seems like all of the old-schoool companies that were at that level — Healthlink, Superior, FCG, maybe JJWILD — were bought up. Is that good or bad for coming back with what may look like a Healthlink in an environment where there aren’t many more Healthlinks?

Well, I think it’s good for Encore because there’s a hole in the market that those companies left. It’s what I call the trusted advisor. Our clients really like to be able to have a 1-800-Ivo or 1-800-Dana that they can call and just say, ”I need help with this” or “Can you do this for me?” And they know that when we tell them that we’re going to take care of it, that we’re going to take care of it.

We’re not a no-name, no-face, resume-pushing company that’s just out there trying to shove consultants down their throats. We really are looking out for their best interests. That’s all about relationships and that’s all about the trust and confidence that you build over a whole lot of years having done it a lot of times for clients. So that’s the hole out there right now, those types of companies. It’s a gap that we hope to fill. I think it’s a huge advantage for us and hope that we can live up to that.

A lot of what you and the others did along the way is either acquire somebody or be acquired. Is that anything that you even care about at this point?

As we were growing at Healthlink, I acquired a number of boutique firms. The way we got the name Healthlink was through a merger with another consulting firm called Healthlink. Before that we were called IMG, Insource Management Group.

All of those acquisitions tended to work out pretty well for us, but it was not always easy. Having been acquired and watched other similar companies get acquired, too, I think it’s extremely difficult to take a people company like a consulting firm and have cultures meshed with a technology company that’s more asset-based. It’s a very difficult thing to do. So that’s one thing to consider — it’s hard to pull something like that off and have that be a win for everybody involved.

That said, for Encore, we have no intention of selling the company. I can make that very clear. I think it takes not just years, but decades to build really great companies. This is a company I’d like to see built the right way and I’d like to see it last a really long time. If it will last forever, that would be perfect, but that’s naive to say that a company can last forever. But if this has got a 15, 20, 25 or 30-year life span, I think that would be a great thing.

I don’t want to overanalyze the situation, but since you’re not motivated financially, is this your wanting to leave a legacy and proving that you can do it again?

The short answer is no. I hope I’m past that. I’d probably as soon be in the back office, frankly. Dana is really the CEO of this company. I’m the chairman. She will run the company. She is one of the greatest operators that I’ve ever worked with in my professional career. I’ve got tremendous confidence in her and her ability to manage the company. 

This is nothing more than me doing what I love to do. If it leaves a legacy, I think that’s OK, but I’m not sure what you really get out of that. When I’m hopefully up in my 80s or 90s and I pass away, the people that are going to come to my funeral are going to be my family. It’s not going to be clients. It’s going to be people that are close to me personally in my personal life, my kids and my sisters and a handful of friends probably that I have. That’s a legacy.

You say, "What kind of legacy would I want to leave?" and it would be a legacy that’s more related to being a good father to my children and being a good husband to my wife. That kind of stuff. Not anything I do professionally.

Do you think you’ll end up working with some of the folk that were consultants at Healthlink again?

I hope so. I mean, there’s a bond and sense of camaraderie with people that worked at Healthlink that I’m proud of. People who feel like they worked for a really good company. To have that caliber of person back to be a part of Encore would be something I’d be proud to have.

Are you getting a lot of calls now that the announcement has been made?

I think it’s around 350 resumes that have come in. That’s a by-product of a lot of people that would like to come back and people that knew of us in the industry, clients. Also, it’s not that great of an economy, so you’ve got people that are looking for a job.

I don’t think we’ll have any problem at all hiring great people. Great people are looking for companies like this to work for. They like the family feeling that they get. An analogy I had a client used for me once was, "Being in business with you guys is like going to the corner grocery store, where I go in and, I’ve forgot my wallet, and Joe the cashier says, no problem, you can bring it later today. Pick up a couple of loaves of bread and some meat. Walking out, he says, how’s your son? I heard he had his wisdom teeth taken out last night. Is everything OK? Yeah. Everything’s fine, Joe. See you tomorrow. Sorry I forgot my wallet."

That’s the feeling that they get. People like that feeling of culture when they’re in a company. They feel better about that than if they feel like they are walking into a Super Wal-Mart where nobody cares.

What kind of consultants will you be hiring?

I hate to sound too generic, but we’re really looking for really good people. We tend to go after experienced people more that inexperienced people. It’s not the kind of company that hires people out of college and sends them to a program to get up to where they can be consultants. We hire them once they are already proven at what they do.

We also have a bias for hiring people that have a lot of direct industry expertise. We had a couple of hundred nurses at Healthlink, doctors, pharmacists — people who had walked in the shoes of the client. They can really relate to the client’s issues more than they can the process issues. So, we’ll be more inclined to go after those types of people.

Encore will have a different focus than at Healthlink. Healthlink was much more enterprise-wide, process-oriented IT consulting firm. At Encore, we’ll be focused more on the data. There’s a huge number of implementations that are going on, transaction systems being implemented, whether they are Cerner or Epic or MEDITECH. Very few organizations have really thought through how they are going to manage the information side, the by-product of huge amounts of data they are going to have to organize that they haven’t had in the past.

We’re going to help these organizations get value out of their IT investment. It will be more of an information focus. Then we’ll provide them with the relevant skill sets of people to get this.

When you say working with data or using what information they are capturing, what kind of engagements would you say would be typical for what you are envisioning?

We’d like to walk into, say, an operating room on an OR department and be able to work with leaders there and say, “Are you getting these five key reports to be able to manage your business? Are you operating to these 10 metrics that are considerably best in class for an OR?” Then, work with them on the gap analysis between where they are now and where they need to be without any bias as to whether they need to buy any new technology.

The best engagement for us would be the client doesn’t have to buy any new technology at all. They just take what they have and they introduce better operating results as a result of getting better information, better processes. So that’s the type of a project that we’d take. We’d also do that for an emergency department. It’s a little different than looking at the entire enterprise and saying you’ll do clinical transformation. I think that has been proven to not work very well for these organizations. So we’re kind of parsing it up, taking it in chunks and then bringing the relevant expertise to be able to do that.

It’s also quite different form the usual small company that grabs a couple of Epic consultants and starts billing them out like crazy. Whether it’s already been selected or its already been planned, you want to ride that middle between system implementation and strategic planning to optimize the use and look at the outcomes.

Yeah, I think that’s good way to say it. There’s a large number of consulting firms out there right now that I wouldn’t even call consulting firms because I don’t think they do consulting. They do staff augmentation. The body shops. They shop resumes. That’s really a different business than really going in and working with the client on a solution.

Some of those same people would be great in Encore because they may have a tremendous amount of understanding and expertise of the application, whether its Picis or Epic or Cerner. But we combine that with people who have strong process or information capabilities and then throw them at solving a problem for the client. Hopefully, that’s why we’ll get hired — to help solve those problems. Not just to be a headcount in their organization.

It seems that’s the hardest thing for a consulting firm to do — to arbitrage what they can pay a consultant versus what they can bill them out for and try to add value without becoming a commodity.

Exactly. The key word that you used there is commodity. We’re always going to run into clients that are asking, “Can you provide me with a person that’s got this kind of expertise?” If they are a client that we’ve been working with in the past, we’ll be happy to try to do that, but by and large, we really want to be in the solution business. We really want to go in and help solve problems for clients.

I agree, it’s a harder business to be in. It takes longer to build your credibility when you’re in that business. You don’t get a quick hit with some client calling up and saying, “Hey, You’ve got these five Epic people" and so you’re throwing them over the wall and you’ve got instantaneous revenue from doing that. It’s slower and it’s harder to build and it looks harder to build a company this way, but it’s lasting, built to last. That’s the kind of model and company we want to be.

Do you think stimulus money will create a lot of new companies and will yours get lost among 20 new ones people just throw together?

I don’t know. I wish I did know. I’ve never really worried much about the competition. I think being in this business is kind of like playing golf. You really want to take where you are, whatever your handicap is, and when you go out and play, you want to do a little better than you did the last time. Who I’m playing with is not relevant to me.

I would encourage and hope that people who have the entrepreneurial spirit and have a way they can go build a company, do that. I’ve loved being an entrepreneur for most of my life and I respect and encourage other entrepreneurs, but it really has nothing to do with Encore and how we’re going to build our business. The stimulus package is convenient based on the timing of starting Encore, but its not the reason why we started Encore. Five years from now, it certainly will have nothing to do with Encore.

Healthcare IT had always been in flux, but it’s arguably more so now than ever. What people or organizations do you think might emerge as the leaders in what ever the next phase is?

I’m not so sure about people. Clearly Epic has shown tremendous success. In the last five years in particular, I’ve spent a substantial amount of time in the global markets, I’ve seen Cerner finding a lot of success in the global markets. MEDITECH has continued to be a Steady Eddie in the market. I think they have been able to continue to progress their products and seem to have happy clients out there.

Those three in particular are the ones that seem to have been the winners in the more recent past as we’ve seen clinical applications proliferate across the industry. I think on a go-forward basis, those companies that can really solve the information problem, that can take their transaction systems and help their clients really produce information for better decision making and better process, are going to be successful.

I think those that are poised to address the global marketplace are also going to be successful. Because a lot of the rest of the world is kind of where the United States was maybe back in the late 90s, but they are a lot more sophisticated because they have watched the Unites States and they watched the UK make mistakes, they can learn from as they move forward with their healthcare IT initiatives.

You probably have had more of an international vantage point than just about anybody in the industry. How important, both for Encore and for the industry in general, is it to look globally and not just domestically?

If the goal is to be able to consistently grow your company, I think it’s a big advantage.

One of the things I’ve learned having worked around some of these companies within this industry and outside this industry is that they have a difficult time servicing the global healthcare marketplace because they are too siloed around particular geographies. At Encore, we designed the company to go global from the start. So if we send somebody to Dubai or Singapore or Beijing, it’s the same to us as if we are sending someone to New York or Kansas City or Los Angeles. We have to he attentive to HR issues, to labor laws, and additional administrative processes that we have to go through.

From a skill set perspective, it’s really not all that different when you go across the world. There’s a huge gap in expertise overseas. So the United States, amazingly, may become a resource tool. They may be outsourcing for us for the expertise they need for the healthcare IT implementations, at least for the next probably five years, as they’re starting to build up their own teams of people.

HIMSS says the stimulus bill will make it hard to find skilled resources, especially for vendors who wait too long for the downturn to end. Are there enough skilled people or will they have to sacrifice quality just to get a body in the door?

I hope not. I think there will be an increase, but I don’t think it’s going to be as much as what some of these folks are predicting. One thing that all of our clients out there are going to have to be attentive to is that this is going to create a tremendous amount of hype, particularly from the software vendors and outsourcing companies that have a lot to gain — and consulting firms, frankly — that have a lot to gain from hospital CEOs, CFOs or COOs who are sitting there watching the news or sitting there listening to documents coming in from the American Hospital Association or whatnot, that this is going to be a big deal for them. So we don’t know yet. There’s not enough level of detail in what’s coming out on the stimulus package.

I think to have clear enough understanding of exactly how the hospitals are going to need to respond to this or need to be compliant to get the money. A lot of them are going to be focused on what’s minimally required to get the money, which may not require a huge amount of resources or technology. We just don’t know yet. It could go anywhere from being moderately more than what we see now to being a tsunami of labor that is going to be required to get everybody up to a Level 4 HIMSS Analytics standard, depending on how ultimately "meaningful" gets defined.

I have a wait and see attitude right now. As we talked about earlier in the discussion, my focus is on really hiring good people that are going to manage the services that are our core business well regardless of what happens with the stimulus package. Those companies who over-respond too specifically to what the stimulus package has to offer are going to have big problem in three or four years.

Hospitals always seem to have the problem where they buy technology, but turn into a bitter customer because they don’t have the commitment or knowledge to do anything useful with it. Do you think the stimulus package will just encourage more of that?

I think that’s a big concern. I would advise people to read the John Glaser article that you had. I think he talks specifically to the fact he nothing really has changed in terms of how you get value from the IT. So just because there’s a bunch of money getting poured into the system doesn’t mean that the focus on quality; that the focus on making sure the processes are aligned; the physician adoption is there; all those things we’ve learned really haven’t spilled a lot of blood and broken a lot of bones over the last 15 years with these EMR implementations. None of those lessons have changed. They are still there. I would certainly hope it encouraged all of the hospitals to stay focused on doing it the right way.

What the industry is going to look like in three to five years?

I would take whatever the industry pundits say and divide by two. That’s what we’ll see.

I think this is an industry that moves slower than people have ever wanted it to move. Anytime I tried, to steal a Wayne Gretzky quote, "to skate where the puck is going to be," I’ve always had to slow down some and realize the decision processes and change processes — they just don’t happen very fast in healthcare. It would be great if we had something that Obama did or a massive change in the healthcare system to make it more efficient. I think that would be great. I’m not expecting that anytime in the near term.

So, three to five years from now, I think we’re going to see more of the same of what we see now, and hopefully some incremental improvements to how the system works because of initiatives that have come out of Obama’s administration. I am not going to predict that we’re going to see massive levels of healthcare reform. I think this country will be challenged with that level of disruption in how this process is working. I’m not saying that I wouldn’t support massive healthcare reform or that we don’t need massive healthcare reform. I’m just not predicting that’s what is actually going to happen.

Anything else we should talk about or that’s on your mind?

Anything that you wanted to ask that you didn’t ask?

I don’t hold back, so if I thought of it, it came out of my mouth. I’m always curious about how the whole arrangement with IBM worked out. It’s none of my business, but I’m curious when you’re IBM and you grab this company Healthvision and say ,“I love you, now change".

I’m a little bit of an anomaly in that I was there for three years and three years is far longer than how long most  entrepreneurial CEOs last in big companies.

I can honestly say that IBM provided me with some unique opportunities that I had a hard time finding at Healthlink or anywhere else. They put me up in the very senior team of people. To be able to see how a $100 billion company operates is fascinating. They sent me all over the world. Some of that was healthcare related; some of that was just around helping IBM become more of a global company.

It was a great mind-expanding and challenging, enlightening experience for me. But my roots are really in being an entrepreneur. In healthcare, it’s just 10 times easier to deal with the hospitals when you’re in a smaller company than when you are with a big company, The hospitals prefer it, frankly.

A lot of them got burned paying $280 an hour for some kid right out of college to create credenza-ware. All these people bought strategic plans and IT assessments and all this advice but just never did anything with it. Every place I’ve worked paid these people to come in, we asked their opinion, and then we ignored their advice because it was too much trouble to actually do.

I think there’s a been a lot of lessons learned. I hope there’s been a lot of lessons learned. I don’t think these big enterprise clinical transformation projects, $20 million consulting gigs — I don’t think those things really delivered value back to the clients. Encore services will break things down into manageable components. Let’s just go do this in the OR and let’s use a similar philosophy in the ED. Let’s look at revenue management and medication management. There’s ways to parse it out. You still have this common thread that connects them. So in time you get the enterprise changed, it’s just done incrementally — a more practical, pragmatic, doable, get-results approach.

Sounds good.

I hope!

Look at it this way. It’s a hobby for you at this point. You don’t have to starve. So at least you’re only risking your ego if it fails this time.

It might be my ego, but it’s a lot of these people’s jobs. I care a lot about that.

Wouldn’t it be hard for a consulting company to actually fail if they make a fairly good effort?

I think when we were in Healthlink, I felt that way a lot of times.

Really? You can’t scale the business as you go? It seems like since you don’t have a huge capital investment other than people capital that the risk would be lower. You don’t have high fixed costs other than salaries.

There’s kind of an economy of scale there. I think where you get up to where you’ve got 40 or 50 consultants, there’s less risk. Frequently what happens with a lot of these consulting firms is, until they have close to 100 consultants, they generally have three or four clients that really make or break them. There are a lot of times, if a one client were to go south on me, I felt like the company was going to be at risk.

That can happen. The CEO changes. She walks in and says, “Who are these consultants? Get rid of them”. Overnight, you may have 10-20 people billable somewhere that are gone. The easy thing is you just let them go. When you’ve built a culture that has got a family feeling to it and people know that they are cared for, it’s not such an easy thing to do.

I guess the thing is maybe keep the projects a manageable size where you do have your eggs spread out among a few baskets, where one client can’t hurt you that much and you spread the risk among smaller projects.

Smaller projects or more clients. I remember going into one client once and going to five of the different executives with a transition program and saying how they needed to get rid of us and hire their own people to do the stuff our people were doing. The reason why is, I told them frankly, “I’d rather have you as a long-term client than all of a sudden somebody realizes you’ve got more consultants than you need and we get hurt from it. So let’s manage this in a responsible way. By the way, you’ve got too many consultants here. It should be staffed by your own people”. They were very appreciative and they turned into a good long-term client of ours. Hopefully, they’ll be a good client for Encore.

I guess that’s the question I didn’t ask you, but since you bought it up, how many consultants are you going to start with? Do you have a number in mind to hit that peak, that higher efficiency?

I really don’t. Like I told you earlier, we’ll take what the market has to give us. If that’s 20 or 30, that’s great. If it’s 50, that’s good. We’ve been doing this long enough, so we understand how to manage the projects, the utilization in the bench to try to keep the company profitable as we’re building a client base out there. We’re taking one step at a time.

Have you had a lot of calls of that kind where people say, “Wow, glad you’re back. How about helping us out?” 

We’ve had about five of the CIOs so far call up. They aren’t necessarily big projects. They’ll say, “Can you come out here and talk to me about this?” I’m encouraged by that. Those are five projects that you get right off the bat.

In a small company when you are starting up, you don’t always have a skill sets of people that meet the need. Let’s say three customers of the five work. You’ve got three customers. That’s the hardest thing about a startup is getting those first initial core clients out there that are willing to take  risk on you. I’ll never forget the first clients I had at Healthlink and I’ll remember them forever. I feel like I’ll owe them forever because they gave me a chance when nobody else would.

Have many of those have called you?

I would say half of them have retired. [laughs] As a matter of fact, I have. A couple of them have called. Interestingly, one of those clients did retire and one of the projects that came up for us was an interim CIO job at an academic medical center. We called him up and said, “You want to come out of retirement and come do this work?”, and he said, “Yeah”. So what goes around comes around.

The word on Encore won’t have really gotten out very far by the time this runs. I bet you’ll get a lot of calls, if nothing else, just to say, "What are you up to? What are you offering?" You know everybody in the industry, right?

I don’t know everybody in the industry. The industry changes all the time. New people coming in, old people going out. It’s always a grind just getting out into the industry and getting to know people. Our business is a relationship business, so it takes me hiring people who have good relationship orientations. That’s what helped make me successful and that’s what has made Dana Sellers successful and frankly that’s what made Healthlink successful. We were able to build that team of people that could be trusted in the marketplace.

HIStalk Interviews Glen Tullman, CEO of Allscripts, 2/5/09

The recent Allscripts survey basically asked physicians if they would accept free EHR money. Does the overwhelmingly positive answer really mean anything?

I think it does. What is interesting about the recent survey is how it breaks out. Physicians have said that they would like money – even a small amount of money would create a very substantial stimulus toward not only adoption, but utilization.

We have seen the success of utilization incentives with the recent Medicare CMS program for electronic prescribing. In fact, in our electronic prescribing unit, we are seeing increases in subscribers on the order of 30% a month, so it’s a dramatic pickup. But what the survey really said is that smaller physician groups are more in favor of an up-front stimulus and larger groups are more in favor of the longer term incentives for utilization. So, small groups want help getting over the hurdle to buy an electronic health record, and larger groups, who have in many cases already bought it, are looking forward to the incentives for utilization.

Why should the government pay for specific tools rather than results, like they pay road companies to improve highways rather than just buying them bulldozers?

Well Inga, I think you’ve captured what is the essential argument on Capitol Hill, where I was yesterday. That is, there is a lot of push-back on whether or not physician groups should be given direct incentives versus incentives on utilization.

The government and most people consider the e-Rx program — the 2% credit for utilization of electronic prescribing and then a 2% penalty, in other words, a carrot and a stick — as being very successful. That is what the bill that is currently sitting on the floor looks a lot like. That said, the current bill does give the Secretary about $5 billion to provide direct stimulus and potentially direct incentive to physicians.

So, there are two different versions: a $20 billion House bill and a $23 billion Senate bill. We’re not sure which bill will be pushed forward, but it looks like in either case, the Secretary will have immediate discretionary funds in the order of $5 billion to award to existing channels or in new programs. Those can be used for loans, for some of the existing grant programs underway in states, and lastly, direct incentives to physicians.

However, our view is that the direct physician incentives will be targeted most likely towards primary care, toward rural physicians, and toward physicians in under-served areas, as opposed to the general physician population for the reason you just suggested — that is, some people are asking why physicians need the government to buy them tools.

Allscripts offers a free e-prescribing tool, yet your own survey indicates that the majority of physicians don’t e-prescribe. What’s the guarantee they’ll use a taxpayer-subsidized EMR in ways that will benefit patients or reduce costs?

Again, what we have seen is that if you reduce the hurdle for adoption and then provide incentives for utilization, we do see an impact that’s coming. That is what we have seen with the successful CMS e-prescribing program.

I think the idea — and again, that is what gets to the debate — to the extent you can provide incentives for utilization, we believe that’s a very compelling reason why a physician would want to use an electronic health record. 

Our view is that a blended model of some incentives for adoption, especially for those groups that might otherwise have trouble paying for an electronic health record — that includes smaller groups, that may include primary care physicians or rural physicians — incentives will help that group of physicians, which comprises a very large number of physicians in this country, get on the electronic health highway. And ultimately that is a benefit to all of us in terms of quality and also in terms of cost reduction.

A recent Harvard survey showed that only 17% of Americans think more government money should be spent to increase the use of healthcare IT, ranking it last of all the spending options. With all of healthcare’s problems, why is IT the one to address first?

Our view is that you can’t address many of the problems in healthcare without information. So for example, you will hear people talk about comparative effectiveness — which treatments are more effective than others. The only way you can get to that decision is to have vibrant information that comes from electronic health records.

Similarly, we all know and we have all seen the statistics from the Institute of Medicine and other studies that there are billions of dollars wasted. Those dollars are wasted in terms of tests that shouldn’t be done, those dollars are wasted in terms of the 7,000 Americans who die each year from preventable medication errors, and the million and half Americans who are injured from medication errors. All those are enormous costs and those could be prevented by electronic health records and electronic prescribing.

I think it would be as if you were to say you want to improve the banking system and you want to reduce the lines at the old tellers windows we used to wait in, but you don’t want to use computers to do it. It’s inconceivable that you could improve the banking system without using computers that allow you to pull out money from your account when you are in a foreign country using an ATM. We have to get healthcare to the same standard that every other industry is up to in terms of information technology.

I think the public looks at the more immediate problem. It doesn’t look at the infrastructure problem. It says, “We have people without healthcare, how do we help them?” and they haven’t always made the connection between how technology can help.

How important is a national connectivity infrastructure for creating EMR demand by patients and doctors?

I think connectivity goes hand-in-hand with electronic health records. In fact, that is really why we call them electronic health records rather than electronic medical records. What we want to be careful of is replacing today’s paper silos in healthcare with electronic silos. What we need and what the current legislation requires is interoperable healthcare records. Allscripts has always been a leader in that area. That’s what we need. It’s very important.

You might recall that when computers first came out, people said that we would reduce the amount of paper that we used, and yet the amount of paper that we used actually grew. But once computers were connected through the Internet, all of a sudden we saw everything, from the number of letters sent by the US mail, to all kinds of transactions, even holiday cards and holiday gifts, starting to be sent electronically. Why? Because of that connectivity. A computer is a tool, just like an electronic health record is a tool.

The ultimate goal is getting our physicians in the US — who are the best physicians in the world — getting them the best information at the right time so they can make better decisions. EMR is simply a tool to make that happen. You got to get that tool connected to other tools to make it effective.

Stark provisions encouraged some hospitals to align with their physicians through technology purchases. How would the hospital-physician dynamic change if HITECH passes?

Well, you are still going to see the passage of HITECH will frankly give hospitals more money to support programs like the Stark relaxation. Today our surveys tell us that somewhere between 10 and 15 percent of docs are getting Stark-funded electronic health records and similarly, 10-15 percent of hospitals are participating in Stark.

We think that number is going to continue to grow. Hospitals understand that they need to be connected to the physicians who in many cases give them the referrals that are its lifeblood; that is their business. So they want to be connected. We think relaxing the Stark regulations was a positive move by the government, and we think that is going to continue to grow, and it’s likely actually going to accelerate based on the funding that comes from HITECH.

We should all understand that a year ago, we had an industry that was nicely growing. It has a number of very solid companies that are growing and that are competing. The level of competition is increasing. That is good for healthcare, that’s good for physician buyers, and even good for each of us like Allscripts and its competitors. That was a year ago. Today we have exactly the same dynamic, with the addition of anywhere from $5 to $23 billion. So almost wherever you put that, wherever that goes into the healthcare IT arena , it going to be very helpful to all the companies in healthcare.

People always try to make a comparison. Will this help you more than another company? We are talking about an immediate $5 billion injection. Five billion dollars is more than the entire size of the ambulatory healthcare industry, so you are saying we are not just going to get the industry grow, we are going to give it a stimulus of $5 billion, almost 2-1-/2 times the size of this industry. So it almost doesn’t really matter. Everyone in the industry is going to benefit from the HITECH bill, and the fact that the initial Secretary will have $5 billion to spend almost immediately is going to be very helpful to existing EHR users and to new adopters as well.

How do you anticipate it will help existing EHR users?

Well, first of all, the provisions as they currently stand, and having been on the Hill yesterday, I can tell you literally hour by hour some of these are changing, and being debated, and being marked-up. But the existing provisions would allow existing users of an electronic health record to upgrade that health record as part of their investment and get credits for it. And depending on which version you’re looking at, some of the versions actually give preferential treatment to organizations that have already adopted an electronic health record.

Are CCHIT-certified products a requirement to get funds?

What the current legislation says — and first of all, CCHIT requirement and having a certified system is absolutely critical, absolutely key in funding that will come through this bill. What the government has said is they are not certain that CCHIT is comprehensive enough or covers everything the government wants. So the current bill recommends that over the next 12 months that the government build upon the good work that CCHIT is doing, but continue to study and come back with guidelines that can be government recommended guidelines on what should be included in electronic health records covered by this legislation.

That said, the government also said but that, in the interim, we don’t want things to stop, so we are going to give the Secretary discretion to spend additional dollars on CCHIT-certified systems. So CCHIT certification is critical.

Every physician who buys ought to be buying a CCHIT system. There are more than over 50 of them out there. That’s a minimum standard. I think the government is saying if we are going to spend taxpayer money, we want it to go further, especially in the area of interoperability. The government is worried that they might spend any money on systems that don’t connect. They want to make sure that if they are going to spend money that it’s smart use of the government’s money; that it is going to be on systems that will connect. That’s one of the places that, as you know, Allscripts excels.

Will there need to be a privacy compromise to get HITECH passed?

Right now there are some privacy provisions that are troubling to the industry in general. We are big supporters of the current HIPAA provisions and other provisions that protect patient privacy, because at the end of the day, we are all patients and that is important.

That said, the current bill extends those privacy provisions which would increase the costs, for example, for electronic health record vendors. At the same time, there are a few provisions in there that actually impose a stricter requirement on the user of an electronic health record in terms of verbal disclosures and the like, than people on paper. We are working with folks drafting the bill to say, “Privacy is important, the standards ought to be the same whether you’re using paper or electronics.” The net-net, once again, the overall benefit to the industry of the bill outweighs any of the potential downsides of this bill.

Assuming the government decides to subsidize EMRs and demand increases, where will vendors get the experienced staff needed to implement and support them?

I think it is incumbent on vendors to do two things. One, at Allscripts we are working very, very hard to make the implementation process, the conversion process, easier than it’s ever been before.

You mentioned our free electronic prescribing product, the National ePrescribing Patient Safety Initiative (NEPSI.) As you know, that requires no human intervention to implement, so if a physician goes onto our Web site, he or she authenticates, which is a very detailed process. Once they are authenticated and put in administrative information, within as little as 30 minutes they can be writing prescriptions. There is no separate training required. It’s completely intuitive; it’s just like Google. Everyone gets it. From that perspective you don’t need more staff.

Now electronic health records are not there yet. But we, along with some of our competitors, are working to make these more intuitive and require less training. However, as we talk about the electronic stimulus package, should this package go through and to the extent it accelerates electronic health records use, that will drive employment in the industry.

What impact will Tom Daschle’s withdrawal have on President Obama’s healthcare reform agenda?

I don’t think there is any question that Tom Daschle was respected on the Hill. With any government program, there are two things you need: you need a plan, and that plan can be well thought out or sometimes not. And then you need someone who knows how to get it done, get it passed, to get it accomplished and executed on Capitol Hill.

The Obama administration has been very clear on their plan, which makes substantial use of electronic health records. But, Daschle was seen as someone, given his experience, who could get it executed on the Hill. From that standpoint, I thought he was an experienced person; he was also a person that President Obama had a personal relationship with.

Replacing Tom Daschle is going to be a challenge, but they are there are qualified candidates and I am confident the Obama administration and the vetting team will find them. I also think President Obama has been very clear that he expects to sign this bill very quickly, based on the signing yesterday, for example. Some of these bills are getting signed in very short periods of time, with limited debates and limited amendment. I think we see the government working very quickly to execute on President Obama’s agenda and to demonstrate to the economy that things will get better.

Are you being vetted for the Secretary post and would you tell us if you were?

(Laughs.) I am not being vetted for the Secretary post. But if I was, I probably couldn’t tell you. But I am not. I am very focused on Allscripts and I think the best place I could spend my time is to help physicians in this country, the best physicians in the world, get the right tools to deliver high quality care and do that at an affordable cost.

What will the industry look like in five years if HITECH passes?

I think President Obama’s dream, his vision, and what would be best for all of us is to have physicians not just using electronic health records, but using electronic health records as part of an interconnected healthcare system that allowed them to get the right information at the right time for better care.

We talk at Allscripts not about healthcare, but about connecting to health. The real idea is to try to keep people healthy, to proactively treat them using these electronic tools, and to deliver better healthcare. In this country, we spend more than any other in the world, and yet today our healthcare isn’t number one. Almost without saying, if you assume that our physicians and nurses are the best in the world — and most people acknowledge that — then you have to start to look and ask why is we can’t deliver this. It is because of the inefficiencies in the system.

When we think about the next five years, we are excited about the prospect that physicians will be using tools that bring them into the current times. And we are excited to be a part of that.

The latest I heard is something will be signed in the next couple of weeks – is that your understanding?

Not only is that my understanding, having spent the day with staffers and the leadership of both the House and the Senate, President Obama has made it very clear that that is his expectation to sign by Presidents’ Day. Speaker Pelosi has said she would cancel that holiday if they needed the time to work on this bill. The expectation was very clear.

If you look at what happened with the bill passed yesterday, essentially there was some debate as there is now between the House and Senate version. The Senate said, “If you want this passed today, pass it with our version.” There was agreement and it was passed and signed. We expect that the healthcare bill, the HITECH bill, will go through with very little amendment and adjustment and that it will be signed very quickly.

Anything I left out that you want to share about the whole process?

I’d say two things. There is an almost surreal debate going on with some of the analysts in the industry who are saying will we get $23 billion or we might only get $20 billion. Other people are saying this may not help because you may only get $5 billion. I must remind people that 12 months ago, we weren’t getting any billions. A billion is still a lot of money in our book. This is going to be a very, very strong stimulus to this industry and that is number one. The clear message is that this is a strong stimulus to the industry.

The second message is to physicians is that being on one of these systems sooner is going to help you participate in this whole stimulus game.

And the last piece of that is that this is a very, very unique opportunity for us collectively to fix healthcare. We at Allscripts hope that the industry does take advantage of this opportunity to do just that, because we know the power of information technology. We’ve seen it in every other industry in terms of improving quality and reducing cost. Now it’s time to bring power and promise to healthcare.

The most important question here: favorite interviewer: Jim Cramer or Inga?

Actually, I think both of you are wonderful.

An HIT Moment with … Andrew Kapit

An HIT Moment with ... is a quick interview with someone we find interesting. Andy Kapit is CEO of CodeRyte.

CodeRyte is successfully attracting investor interest and increasing staff, both unusual in this economic environment. What are you doing differently from those companies that are shrinking instead of growing?

CodeRyte first identified a real pain, chose the right technology to cure that pain, and then executed it in a scaleable way. Investors have learned a lot since the 1990s and the technical due diligence process during our most recent funding shows that. It wasn’t just that CodeRyte developed a powerful NLP-Computer-Assisted Coding engine — it was how we did it that has enabled us to create investor and market confidence.

CodeRyte then built a solid based of clients by working diligently to appropriately set expectations, exceed them, and then provide the highest possible level of client service. When bringing a disruptive and sticky technology to the market, it is of crucial importance to let your clients know that you will stand by it and be there for the long term.

CodeRyte developed a strategic platform that builds on itself. By automating medical coding, CodeRyte is really providing structure to the language of medicine. Every medical record that passes through the coding engine, as nearly one hundred million have, adds to the knowledge base and enables us to provide increasingly greater granularity to the structure of clinical information in the report.

We started off with radiology and pathology, the diagnostic specialties of choice. With that linguistic foundation the technology can now code across the full spectrum of medical specialties. This brings me to the final reason CodeRyte has been able to build a successful investor and customer base: the technology leverages the expertise of our users.

CodeRyte is built around several fundamental tenets, one of which is to empower the experts, to allow them to help create the intelligence of the engine and then to create the “explainability” so they can not only become comfortable with the output but also understand how the engine arrived at its answers.

The CodeRyte team combines technological brilliance with a deep and abiding understanding of the complexity of healthcare — at the macro and micro levels. Engineers working with medical coders, subject matter experts and physicians have all created something that is truly relevant to the current and future of healthcare, which is what investors look for — relevance and the ability to execute.

But that’s only the beginning. That’s what gets today’s investors to the table. Once you have satisfied the basic criteria (real market pain, strong management that can execute and a scaleable solution), then investors want a real and meaningful upside — which is where the company’s ability to describe its mission in a meaningful and value-generating way comes in.

CodeRyte fundamentally believes, along with many, that we need machine readable, interoperable, and structured output. It is only by creating that type of output healthcare can enjoy an industry architecture that successfully aligns the flow of information and money and reinforces efficient, quality care – over the long term.

What we don’t believe, however, is that we should force physicians and other allied health professionals to create that structure. Not only will it reduce the quality of our source data for research and discovery but it also disrupts physicians’ intellectual workflow. CodeRyte’s technology can already, to a limited degree, automatically structure the output — without forcing physicians to change the way they provide and document their care.

You’ve worked in executive roles for providers, investment banks, and now vendors. What is your analysis of the healthcare IT market now and what changes do you predict over the next 1-3 years?

It is not just that healthcare is broken; more importantly it is that American healthcare is not scalable. I believe that every new patient coming into the system will be more expensive than the one before. To make the necessary changes we, as an industry and country will have to commit to doing the right thing — even at the expense of the some of the entrenched processes, technologies, and companies. This cannot be a self-serving, short-term thinking revolution as it has been in the past.

In short, predictions for the next few years of the HIT market depend largely on what questions are asked and addressed in the near term. If all we ask is "how do we get everyone covered" then we’ll end up bankrupting the system and ruining the quality of healthcare’s outcome. If, however, we ask "what architecture and infrastructure will allow us to best improve access and quality and what do we have to destroy and rebuild to get there?", then with hard work and true innovation, we can create a world-class healthcare system that will not only cost less but provide much better outcomes for the country — at the expense of some of the companies that have been winners at our expense over the last many years.

The government tries to fix what it can see, which is primarily CPT and ICD codes –- codes that have been polluted from clinical purity through the process of coding to get paid. The incentives for clinical improvement are through the filter of a system that financially rewards based on more procedures, not improved outcomes. The entrenched vendors support solutions that will benefit their bottom line — no doubt assuming that they will help in the process. Now, however, we have to be willing to look at the actual architecture of the system in order to make enduring progress. My fear is that with the crisis at hand a new and energized government will try to tackle the most visible problems — which will make the situation worse. Without fundamental change, we will only be piling on more expensive process, as we historically have done, without creating an ending.

What makes today different from the past is that there are new and truly disruptive technology companies and people running them who are not committed to the status quo. If the new administration is willing to ask the right questions, involve new people with innovative ideas, and is willing to create a new industry architecture, then and only then will we be able to enjoy the healthcare system we deserve. If, however, we stay with this basic model, then we will get the system and outcomes deserved by the incumbents to the system — and that would be a true shame.

Outside the possibilities of a new administration, the impact of primary care reform efforts cannot be understated. The legislation that recently passed in Massachusetts, aiming to make primary care more attractive, is another example, from a completely different angle, of how we can affect the actual architecture of the healthcare system. By legislating for loan forgiveness, home purchase help, improved reimbursement, and more, we can make primary care attractive again and quell many of the healthcare systems endemic problems — proper disease management, reliance on emergency rooms and more — earlier and more effectively.

Are providers doing everything they can to maximize the payment they’re entitled to through accurate coding?

No. And it is even worse than the question suggests.

In our travels around the country, we meet providers who intentionally down-code out of fear. They down-code because they are afraid to get audited, afraid that the system will not be reasonable. They are afraid to stand out and afraid that the fact that their patients are ‘sicker’ means that their higher codes will make them stand out. They are afraid — period. The truly ironic shame is that this adversarial culture not only reduces the morale of the physicians, it forces the data to be more flawed than it needs to be. The current flow of healthcare’s information and money do not support the gathering of life-saving data and high-quality outcomes. The data is systemically and systematically flawed.

Think about it — the most complex series of events most people endure in their lifetimes are reduced to three-, four- or five-digit codes – whatever follows the path of least resistance. These codes determine what’s likely to get paid and most easily treated, but never account for the actual patient. What’s best for them, what diagnosis is most accurate, what treatment they should pursue, what options they should consider — the list is endless. What is truly important in today’s system is what those codes are being used for — reimbursement. Not treatment. Not the most appropriate care. Not the patient at the heart of it all.

Physicians have these well-trained powers of observation and, with the full color of their narrative, describe what is wrong with us and what they are going to do about it. In that language are rich and complex concepts — some of which are negated, historical, related to a family member, or are equivocal because more information is needed. Does all of that valuable information get captured in the medical coding process?  Not even a fraction of it. The information captured in the record accurately reflects the actual health of the patients. The information healthcare uses to evaluate the quality of care and outcomes is inaccurate — out of fear and is both measuring and rewarding the wrong things.

Without truly capturing what is going on during a patient’s full episode of care, physicians are not only short-changing themselves, but the system is being hurt at the same time. There is no true discovery without having access to and being able to analyze all of the information. The people who can and truly want to make a difference are crippled by the inaccurate and limited information available to them.

What are your thoughts on ICD-10?

ICD-10 is an important and overdue advancement for the United States. It’s necessary to meet the needs of an increasingly complex, diverse, and electronic medical environment. By implementing ICD-10, the industry will advance from the use of a classification system in need of modern information to one that accurately reflects advances in diagnosis and care.

That said, it’s amazing that our great and competitive country is almost 20 years behind other parts of the world in this regard. Countries that are already using ICD-10 have access to important information about diseases that are being missed in the U.S. And why? It goes back to what I stated previously — there are some entities within the system that are so heavily invested in, and exert so much control over healthcare that without their "approval" the system is frozen. Big changes that would mean improving the system are put off in favor of the established status quo. If we let those few players control our destiny, then we are destined to get the healthcare system they deserve.

Furthermore, the pushback ICD-10 is receiving is not based on its utility or value, but rather the technical cost of the change. This is yet another example of how unscalable U.S. healthcare has become. If we continue to as we have, the problem will only get worse, and then at what cost?

Stepping off my soapbox, we need information. Good, granular, and specific information. The current coding system prevents that. ICD-10 will help, though it is not the complete answer. ICD-10 will give the healthcare industry a better chance to improve the way it handles documentation and coding operations and, at the same time, elevate the power of biosurveillance and pharmacovigilance.

The overwhelming scope of the disruption stemming from ICD-10 cannot be understated. The switch represents a change from 17,000 codes to more than 155,000. Given the diversity in size, specialty, and payer mix within the healthcare industry, the complications of the change are nearly impossible to properly measure. But so, too, are the new codes’ possibilities in terms of technology adoption, research, and discovery.

What makes you happy about running CodeRyte and what gives you satisfaction away from work?

There are so many things that I love about CodeRyte and being its CEO that it’s hard to list.  But, I’ll try …

The more than 100 people at CodeRyte are incredible. Given what we do, we have extremely talented people from myriad backgrounds — talented engineers, nationally recognized NLP experts, certified professional coders, driven sales executives, dedicated account managers, and others who have gravitated to CodeRyte out of a strong desire to revolutionize healthcare. Their passion, attitude, and intelligence are inspiring and exhilarating to work with.

What binds us is that we are all aligned around a common vision — CodeRyte and its technology can truly help revolutionize healthcare. Now we just need a seat at the adults’ table in order to show the industry that there are ways to achieve what they all believe to be impossible. I’ve said for years that we’ve been seated at the kids’ table while we’ve built and imagined the future possibilities for this company, its technology, and other HCIT vendors. The frustration of getting the ear of the change-agents is truly like tilting at windmills. We have the answer; it is just that the windmills don’t always want to listen.

You know that look when you give a child the present they have been waiting for? Well, that’s one of my favorite things about running CodeRyte — the look on our clients’ faces when we deliver on our promises. Increased productivity. A lowered cost to collect. Faster turnaround times. Appropriate revenue capture.

I also love the challenge of doing that which people say can’t be done. In the beginning, for example, we were told physicians know how to code, so why would they use an NLP coding application? Physicians should not have to assign codes — it takes away from their patient-facing time and should not be their area of expertise. Our application helps the physicians by allowing them to focus on delivering quality care and gives them back their day.

Away from CodeRyte, my priority is my wife and children. The importance of a work-life balance cannot be underestimated by the CEO of a company that aims to revolutionize an industry as important as healthcare. The time I give to one always takes away from the time I can give to the other. This means that for now my passion is balancing — giving the most I can to building CodeRyte and loving my family.

An HIT Moment with … C. Peter Waegemann

An HIT Moment with ... is a quick interview with someone we find interesting. C. Peter Waegemann is CEO of the Medical Records Institute.

People often compare HIMSS and the Medical Records Institute, often on the basis of their respective conference (the HIMSS annual conference and TEPR). How would you characterize the difference and do you see HIMSS as a competitor?

HIMSS and Medical Records Institute (MRI) have very different goals and points of view. Both started about 25 years ago. HIMSS developed into a very successful “mainstream” trade show with an attached membership organization. MRI’s conferences have emphasized the education component and helping providers to understand the consequences of EMRs and HIT.

For MRI, the main goal was to promote EMRs and to stimulate and provide leadership in standards development. I was instrumental in the initiation of standards organizations such as ISO TC 215, but when MRI felt that there was a lack of meaningful results, it supported ASTM International’s, relinquishing its leadership to HIMSS, which took over technically. While HIMSS has been a strong supporter of ONC, HITSP, and CCHIT, MRI has pointed out the negative influence these efforts have had on HIT developments. 

In summary, MRI has been the counterpoint to HIMSS in terms of strategy.

Why is Medical Records Institute set up as a for-profit organization rather than a non-profit like HIMSS? Is there much of a difference and are other healthcare membership or conference organizations set up similarly?

HIMSS, having gotten the not-for-profit status early on, has been a huge, profitable organization that is well funded, with reserves in the millions. MRI is the small, independent organization that has always been more interested in making a difference than making money. MRI felt that it could be more effective in its mission unfettered by a Board and the complications of a not-for-profit organization.

What is MRI’s point of view on the state of EMRs and best use of any healthcare IT money that’s made part of an economic stimulus package, particularly in light of the National Research Council’s report about the unmet technology needs for improving patient care?

MRI has repeatedly stated that the progress in the field of EMRs is shameful and argued that this cannot be blamed on such myths as lack of physicians’ interest (see this article). 

Unlike other organizations, MRI is not driven by the prospect of big money for the industry. MRI welcomes the prospect of funds to improve the quality of care with technology solutions, but it is one of the rare voices that warns that the expected savings may not occur quickly, that the infrastructure is not ready, and that (as in the past) wrong avenues appear all too likely to be pursued. 

In its letter to President Obama, MRI  asked for orchestrated efforts to determine the necessary healthcare infrastructure changes in order to achieve electronically enabled healthcare. In other words,  rather than rushing into a big spending spree, a national effort needs to be funded that openly addresses all the hypes, explores various and perhaps unpopular strategies, and develops effective ways to spend this money safely and efficiently.

Why did MRI develop an interest in cell phones in healthcare?

MRI has a long history regarding cell phones and mobile technologies. Almost 10 years ago, MRI joined the Mobile Healthcare Alliance (MoHCA) to coordinate cell phone activities in healthcare and I served as chair of MoHCA. Several years ago, MoHCA’s Executive Director joined MRI as Vice President. It has been natural that we followed that industry and recognized its potential value to healthcare.  

There has been a re-emerging wave of mobile phone applications for healthcare. With over hundred companies, this is big and will be disruptive to providers and other stakeholders. MRI calls it the “mHealth revolution”. For this reason, the Center for Cell Phone Applications in Healthcare (C-PAHC) was formed in 2008. 

Mobile devices and applications will be instrumental in the success of many health IT goals, such as documentation at the point of care, success of personal health records, integration of personal health records into EMR systems, disease management, and many more. Most of all, mobile technologies represent the breakthrough opportunity for EMR interoperability and implementation among many other applications. MRI supports the formation of the new, independent, not-for-profit mHealth Initiative Inc. and will encourage its efforts toward accelerating mHealth and its benefits nationally and internationally.

What predictions do you have for the healthcare IT industry over the next 1-3 years?

MRI sees four major drivers for the next three years. The first is, of course, the new Administration and whatever comes out of its efforts.

The second is the “mHealth revolution”, addressed above. Expect, for example, that in 2012 more than 50 million people will have their PHR on a mobile phone and will send information in advance of any visit to a provider. 

The third driver will be the interoperability standards through ecosystems (Microsoft, Google, mobile phone, etc.) that will enable true continuity of care. Expect most of these developments to come from industry innovation, not from traditional standards bodies.  

The fourth driver will be the Internet/consumer movement.

Overall, there should be more progress than in the last 10 years toward a safer, more efficient and cost-controlled healthcare system. 

An HIT Moment with … Michael O’Neil, Jr.

An HIT Moment with ... is a quick interview with someone we find interesting. Michael O’Neil is founder and CEO of GetWellNetwork, Inc.

People may think of GetWellNetwork as an TV entertainment service for hospital patients. How do you describe your company?

GetWellNetwork was founded on the principal that patient engagement is a core strategy for performance improvement and a critical puzzle piece in the elusive search for service, quality and safety improvement in healthcare. GetWellNetwork provides technology, as well as process and skills training, to effectively actively engage patients in the care process. 

Today, we are leading this emerging HIS segment called Interactive Patient Care (IPC). Every day, we are humbled to work alongside leaders at the Adventist Health System, Catholic Health West, Children’s National Medical Center, Christiana Care, Henry Ford, Thomas Jefferson University, and Poudre Valley Health System, the 2008 Malcolm Baldrige National Quality Award Winner. Their commitment to patient-centered care energizes and inspires our work. It matters, and it works.

We developed a patent-pending workflow engine called Patient Pathways. Patient Pathways leverage existing clinical workflow and HL7 interfaces as triggers to directly engage patients in the care process via their in-room television.

For example, a physician entering a Coumadin order via CPOE triggers a Medication Teaching & Pain Assessment Pathway via GetWellNetwork. Consequently, the system prompts a patient while watching the Oprah Winfrey Show, provides critical education on this high-alert medication through an interactive video, and then tests the patient on comprehension through a series of on-screen questions. The Pathway concludes by documenting the education results back into the EMR and alerts clinicians in real-time if the patient fails to complete the education. In another example, a Discharge Pathway guides patients through a series of activities, including a patient checklist and the ability to order discharge medications from their bed.

In summary, GetWellNetwork is a patient care tool, automating and hard-wiring critical service and quality tasks for nurses and providing an exceptional, personalized care experience for patients and families.

And yes, GetWetNetwork patients can also watch movies, send instant messages, surf the Internet, and play video games until they break every record imaginable. So we do entertain patients as well. Entertainment can be quite a powerful healing tool for patients and families.

Hospitals are struggling with reduced utilization and lower payments. How can you help them?

Alongside our hospital partners, we are measuring the application’s impact on HCAPHS scores, Core Measures, and preventing "Never Events" such as falls and hospital-acquired infections via patient engagement. As the transparency of service and quality data increasing rapidly, pay-for-performance systems and value-based benefit design are gaining significant traction. Top performing hospitals will continue to attract the best physicians, best nurses, best staff, and best patients. 

Over the past 18 months in particular, our hospitals are seeing exciting movement in their HCAPHS and Core Measures where we have implemented a focused Patient Pathway. In addition, we are also seeing encouraging indications regarding patient engagement on reducing cost per case. In 2009, we are investing quite significantly in research regarding the efficacy of patient engagement on outcomes, with heavy participation from our client community. It’s an exciting time.

Early in-room applications had facilities challenges, such as replacement of TVs, concerns about suitability of keyboards or other peripherals, and the need to rewire patient rooms. What’s required to install your products?

As one of the first companies in the Interactive Patient Care market (since 1999), we were among those applications the facing  the facilities challenges you mention. Through significant blood, sweat, tears (READ: lots of mistakes, frustrated early clients, and significant R&D expense), our engineers and supplier partners have created proprietary and cost-effective ways to implement Interactive Patient Care. Today, we are relatively infrastructure (wiring) agnostic and can run the system in old buildings on coaxial cable alone and, of course, on Ethernet where available. In both cases, digital video streaming and full Internet browsing has been integrated into the application. 

As for peripherals, today we offer a pillow speaker device that interfaces with all major nurse call systems and a fully-sealed keyboard for under $40/unit. This year, we will be launching a next generation keyboard that will finally make Internet through a patient room television as elegant as being on your laptop or desktop at home or work.

You’re working with Florida Hospital on their "Hospital of the Future." What elements of that do you think are important?

Late in 2008, we were chosen by the Adventist Health System as the exclusive provider of Interactive Patient Care throughout their organization. Since then, several facilities have contracted for GetWellNetwork, with one of them being Florida Hospital, where projects including their new Ginsburg tower as well as the Disney Hospital for Children @ Florida Hospital. 

The top three elements of success with Interactive Patient Care are 1) executive sponsorship to provide strategic outcomes priorities; 2) integration with EMR (they use Cerner, which we successfully interfaced with at Christiana in ’08) to provide triggers for our Patient Pathways and a place to document patient activity for compliance automation; and 3) nursing engagement. 

When nursing leadership embraces Interactive Patient Care as a tool vs. a task, the impact is powerful on their service, quality and safety initiatives on the floors. Florida Hospital is highly engaged and committed to setting a new standard in patient-centered care. We of course are thrilled to contribute to their vision for patient care.

Are hospitals getting better at involving patients and family members in their care?

Yes, they are. But, it’s hard work, takes a genuine commitment and accountability, and does not happen without strong leadership. On November 17, 2008, the National Quality Forum published their National Health Priorities and the first one listed was patient and family engagement: ‘PRIORITY STATEMENT: ENGAGE PATIENTS AND THEIR FAMILIES IN MANAGING THEIR HEALTH AND MAKING DECISIONS ABOUT THEIR CARE.’ So, hospital leaders are listening and they are acting. 

Of course, this does not happen overnight, and the technology, applications and interfaces are perhaps the easy part of the equation. Interactive Patient Care is a commitment, and when hospital leaders make the commitment, their patients and families are winning. Hospitals are experiencing fairly spectacular improvements in satisfaction, quality, and operations measures that have been difficult to move the needle on in the past.

Lastly, keep up the great work on HIStalk … it’s simply terrific! Thanks for having me.

An HIT Moment with … Michael Christopher

An HIT Moment with ... is a quick interview with someone we find interesting. Michael Christopher is CTO and senior development analyst with Healthcare IT Transition Group.

Healthcare Transition Group has an interesting mix of reference, educational, and consulting products. Give me a short summary of your offerings.

When we put together this new version of our company three and a half years ago (we had been set up as a straight consulting operation for about ten years before that), we had all this on-the-ground expertise in healthcare IT, software development, and capital development, but we wanted to start creating scalable products. Billable hours are about the least scalable business model on the planet, next to maybe cattle ranching.

The kinds of research and analysis we had been doing for clients seemed to fit nicely into packaged business intelligence products, comprised of documents, tools, and video of us splainin’. Consulting had always been mostly about learning and teaching, and now the videos teach what we’ve learned from all those gigs. And instead of paying us $20k over several months, our customers can order a package for a few hundred bucks and have it now. It’s way more scalable and frees us to go out and find fresh heroics to get up to. So far we’ve done "BI Packs" on real-time adjudication, getting ROI from HIT, funding, and various topics related to maximizing reimbursement, including one on the new Denial Engines.

To support that, we began to grow a media side. We had been doing the HIPAA Transition Blog since the birth of the HIPAA era, so we renamed it HIT Transition Weblog and developed some related channels. We started doing lots of Webinars and developed a complete media studio.

Then it was time to leverage our NPI and NPPES (National Plan and Provider Enumeration System) chops and all that new computing power to expand into data products. We had done NPI remediations, working with the official enumerator Fox Systems and others, so we knew some ropes that maybe hadn’t dawned on everybody yet. Like greasing your 837s to glide through adjudication and maximize reimbursements by updating your NPPES record with every legacy identifier you’ve ever used (taxonomy codes, UPINs, Medicare PINs, OSCARs, license numbers …) 

You’ve written extensively on funding for RHIOs and other IT projects. What are some creative ideas that most people haven’t figured out?

Taken together, our backgrounds are split between in-the-trenches HIT implementation, software development, and capital development. I owned a software company in the early ‘Naughties that built finance and constituent management applications for the human services sector, so then I got to do it all at once, develop the software, implement it, and the raise the money for the company (and for our customers, too). A large part of my finance side has been with nonprofit organizations, as executive director, director of development, or marketing VP, and as a consultant in fundraising. So RHIO made immediate sense to me and I started following it very early on. Marty Jensen, our COO, suggested the initial study. We did the first deep analysis on RHIO business models and funding sources based on the RHIOs’ own data, and updated it a little over a year later. We’re considering whether and when to revisit that research in light of changes in mission at the federal level.

What we found and reported was actually shocking. Nearly all RHIOs are constituted as nonprofit organizations under the IRS "charitable" rubric. Logical, since they are in the business of doing public good. But only two of the fifty RHIOs we studied had developed private foundation grants. All but one in our sample said they plan to be self-sustaining through earned revenues, but more than 80% said they expected to rely on grants into the foreseeable future.

Doh! Where do they expect the money to come from? One word: Government. No, three more words: And Big Hospitals. Private philanthropy is responsible for the vast majority of the money for public projects in this county, a 180 flip from Europe and elsewhere, where government has that task. So it made no sense to us: here was this nascent public good looking only to government and its members for its survival while leaving vast quantities of philanthropy untapped. RHIO leadership still seems frightened of the word "fundraising." That’s what drove us to create the Health IT Grant Resource Directory. As far as we know, it’s the one resource that will take you directly to the prospects for private involvement in health IT funding.

I recently sat on a panel with Jack Anthony of Beacon Partners and Cheryl Austein-Casnoff of HRSA to hopefully give the industry some guidance on health IT funding in light of the new Administration. They asked me to talk about strategies, so I picked two: the "Study/Meet/Case" method of capital development (don’t Google it, I made up the name) and vendor Grant Assistance Programs. The latter is where a vendor develops the fundraising/grant writing resources on behalf of its customers so they can buy their systems.

You are doing some interesting work to make actionable data available to providers for billing and for targeting service opportunities. What products have resulted and what ideas do you have for the future?

Two product lines here: NPIdentify Desktop Provider Directories and CarePrecise Data Services. NPIdentify is available as a free download and it looks like it’s starting to go viral. The idea was to put state-by-state NPPES data in a fast, cool application that would fit on your own computer and that your average non-technical office manager would find user-friendly. But since just anybody can download it, NPIdentify is being used across the industry in practice management, health plans, marketing, and even scientific research. You would not believe the customer list. We figured out that we can sell ads (hint, hint) for mad money.

The newest line, CarePrecise, is just now starting to roll out in tests. It will leverage our provider experience, software and data management, and research assets to offer not only provider data sliced and diced for various systems and applications, but also to pull business intelligence out of it. Let’s say you’re planning a clinic expansion. What specialties will thrive there, and which will shrivel? Where should you site a new group practice based on a given stable of specialties? Or if you want to reach a particular underserved population, we can map where they live. We’ll be rolling these out as standard products over the coming months. One product, CarePrecise Access is already available. It’s the complete, huge NPPES database in a form you can easily manipulate on a laptop in Microsoft Access. Way cool for people who want to develop their own products.

Give me some predictions on the healthcare IT industry for the next 1-3 years.

When the numbers start flooding in on IT-driven patient safety and more effective care that go hand-in-hand with cost reductions and revenue increases, we’ll see a rapid expansion in our industry like little else that’s gone before. I would be the first to agree that there’s plenty of evidence here already, but it has yet to begin steering the provider zeitgeist like it will in a year or two.

We need to make better arguments for health IT. Actually, we need to learn how to argue all over again. Health IT has never enjoyed the same focus as that new MRI, and now that could be changed. Sitting in the hospital basement all morose about how we’re being treated like the light bulbs never got us anywhere. We need to organize, bone up on regional strategic initiatives in healthcare, get to know all the players and make them know us, and hit the ground. I want to see a poster that says "HIT Workers Unite: Take It To The Suites!"

I think if I say the "I Word" one more time, I should have to wash my mouth out with soap. But the babble of interfaces and other short-sighted proprietary interests are still the huge barrier to adoption of HIT. Systems that can talk to one another fluently should be the simple, no-excuses objective. Cooperation, or coopetition, needs to be the deep green valley for all our roadmaps in this space. Everything we build needs to plug into what everybody else is building. Whether you are an open source fiend or not, I think that open sourcery, and especially FOSS, is drawing the maps right now, and you really have to look at them.

The NHIN seems to be stirring awake with the recently announced SSA application. RHIOs won’t look the same in a few years, but there will definitely be a network of essentially egalitarian, provider-agnostic information exchange that starts winning goals (i.e., reducing medical errors, containing costs resulting in expanded access to care, and boosting profits across the board) on a game-changing scale within three years. And there will also be rapid growth in proprietary exchanges — possibly faster than the community-based RHIOs — as we watch the technology fragmentation get sorted out. We might see those perceptions of maturity shift enough within a year to start looking for a few hockey sticks on a two- or three-year horizon. I’d like to promise more, but our most recent RHIO data suggest that the dollar size of the RHIO vendor space is still in pancakes.

What’s it like working for a small, agile company and what do you do for fun?

I never want to work anywhere else! … unless the money’s right. Seriously, at HITTG we can be basically autonomous, sprouting new stuff that we see as a need in the industry whenever we like. And when we get opinionated about something, we can just say it out loud; I don’t need to scream at anybody (although that can be fun!), I just make an animated cartoon when I need to vent about HealthVault and the patient privacy folks. Or I draw a comic. Now that we’re shifting to these really scalable products, I can also see a heavier consulting load, and maybe we, too, like our friends in the financial industry, can become as obscenely wealthy as we were truly meant to be.

Never been to the Googleplex, but we’ve decided that our corporate culture must be a lot like Google’s, only a little bit more compact for now.

HIStalk Interviews Jonathan Bush, CEO, President and Chair of athenahealth

You’ve been in front of the media a lot lately. Cynics might say that you’re looking for a piece of the action of what Obama wants to spend on healthcare IT or trying to keep your competitors from getting it. What’s the real story?

The truth of the matter is, I don’t want anyone to get the shiny brass toy. Shiny brass toys are bad. The reason for the sudden burst of exposure is less about trying to get our share of the shiny brass toy fund than it is to try to stop the shiny brass toy fund.

The Bush Administration started with PQRI and pay-for-performance. The Obama Administration, in our opinion, should actually take the $50 billion and put it into pulling more quality data out the other end of the sausage maker, rather than mucking up the gears of the sausage maker by giving out specific EMRs.

I don’t want the Obama investment in healthcare to end up looking like the Congressional investment in General Motors, which is to say I don’t want really, really bad, dead things that ought to die sooner to be kept alive longer by a well-meaning federal government. I want software companies to die as quickly as is humane.

If the federal government gets in there and starts handing out free subsidies, then the providers of the world have to say, “Well, gee, I know it sucks, but if it’s free, does it suck that much, or maybe I should give it one more swing?” That’s what scares me to death. That’s why the interview with Wall Street Journal and with Fox and anybody else who will talk to me, including you. To make sure the Obama folks hear us saying, “Please don’t kill the emerging technologies by subsidizing the established and dying technologies in order to have something to do.”

Is the track record of doctors and hospitals who have already implemented the available technology good enough that we should be subsidizing more of the same?

The hyperbole is almost ringing as you ask. You’re the ultimate insider and I know that you know that the answer is no.

The folks who have installed this stuff are experiencing negative ROI. That’s why the RAND Institute came out with the study that showed that it’s 19% slower to have an EMR. There’s no pay-for-performance revenue to cover that 19% slowness. None of the supply chain is connected to EMRs, so all the laboratories and specialists and X-ray machines and PET scanners and mammogram machines aren’t connected to EMRs. There’s an incremental administrative cost in keeping the EMR current by typing results into the chart from these other sources of medical information.

Everybody knows in their heart of hearts that without a massive increase in pay-for-performance … it’s not really even performance at this point, it’s really pay-for-data … without a massive increase in pay-for-data in hopes that will prime the pump and we’ll figure out how the data maps to performance later. I’m sitting here looking at a row of plastic white yachts in Boca Raton and I’m thinking, “What is the definition of a yacht? A hole in the water into which one pours money.” I think of EMRs a lot like that … data yachts.

You mentioned the RAND study, which Cerner paid for at least part of. It seems they’re getting their money’s worth since Obama’s people are citing that big cost savings number like it’s gospel.

Wouldn’t it be tragic if the guys who went out early to buy this stuff got screwed? And the guys who follow along to buy the negative ROI stuff get a neutral ROI because the "I" is zero because the federal government showed up?

I don’t believe that the federal government should be involved in shiny brass object purchases. It’s like the difference between management and governance on boards of directors. The goal of the board of directors, or of the government, is to set the rules of the road for the CEO. In life and society, the goal of government is to set the rules of the road for companies. If the government intervenes and actually becomes a participant, there’s all kinds of adverse skewing that’s going to go on.

Certainly this is a world class case in point. If we end up with a Marshall Plan for EMRs, we will subsidize the approach to this that has not worked, that is certainly, among the readers of your site, clearly known to be a failed approach. We’ll keep those established players, those dominant buffoon gigundo companies, alive a little bit longer. It really feels like subsidizing General Motors. Who else would help save America from having access to cars that nobody wants?

I really feel that way about these big EMR, clinical, software-only business model companies. Nobody wants them. They’re being told that they should have them, but in their hearts, if you look at their Id, they don’t want them.

What’s nice about athena, and many other companies that are emerging, there’s a turn of companies that have actually triggered the Id. It’s good for society, and by the way, deep inside, I want it anyway. That’s what you want. That’s what the market does – it defines those things.

Should the government be in the business of pushing a specific, prescriptive technology rather than just saying, “Here are the quality and cost standards. You find the tools and methods that allow you meet them”?

You just said it. The fact that your question is phrased like the answer speaks of the irony of the mode we’re in. These are some of the most brilliant, well-meaning folks I’ve seen in the federal government in a long time. If they show up and put a fork in a lot of great innovation, it would be tragic. 

I don’t think they will, honestly. I don’t think that the folks that I’ve spoken to, who are close to Obama and close to Daschle, are going to go with a Marshall Plan, “Please buy expensive shiny brass objects so the economy will be bigger.” I haven’t heard that from the folks in healthcare.

It could go either way, so we’re still very nervous and trying to get people to hear us even though we’re so tiny.

People say healthcare is behind all these other industries, especially the financial industry, which was probably the heaviest technology-using sector before it fell. Is healthcare fundamentally sound enough that now’s the time to automate what it is today?

There’s another question, which is, "What’s the right business model when you do load up on automation?" Never mind the status of the technology. What about the business model that drives the innovation of the technology?

In the financial services space, for example, in banking, nobody buys software to manage their checking account. They go to a bank and the bank provides software as part of the whole bank account experience. It’s a service. The fact that they’re increasingly enabled by software is a pleasant side effect and not the point of the business. Similarly, the Depository Trust Corporation, which settles trades for equities … they don’t sell the software. They provide it for free to all the different traders and entities that settle stock transactions. There’s huge software there, but they don’t sell you the software and say, “Good luck coordinating with everybody else.” They provide you coordination and you use software to make it easier for them to provide you with that coordination.

You mentioned the financial services sector. Very few players in the financial services sector are buying software. Most of the consumers in financial services, all of us that experience financial services software, aren’t buying the software and setting it up. Someone else is doing that and we’re using it and paying for it with our use. That’s what healthcare needs to get to. Athena’s there, but the rest of the world isn’t, and the world will get there.

I don’t even care if athena doesn’t make it. I really don’t. I really care that the model gets to a place that’s scalable, that can map to results. I honestly think we will be part of it and so it’s easy to say such things, but I really think that, most important is that we get out of this very Soviet idea of everybody has to do things according to our national standard and all of the software products will do at least sitting with our national standards.

Let go of all of that and say instead, "What results get you the most money? OK, I will deliver those results and will be morphing myself left and right to get there."

What did you think of the HIMSS recommendations to the Obama administration?

I didn’t read them yet. I just got an e-mail from HIMSS and all it said was, “It’s not February, it’s April, be sure to be there,” so I don’t know what they are. Tell me what they are.

$25 billion for certified, interoperable EHRs to bring everybody to Stage 4 of the HIMSS Analytics model …

Crap is my answer. Crap. I want to go back to the … wasn’t it John Glaser who had the three tracks? Track 1 is a little bit of money for anybody who buys an EMR. Track 2 is more money for people who can provide data. Track 3 is a ton of money for people who can provide clinical results. It made me say, "Aha, they are getting out of the muck of which tools and toys people use and saying, you guys figure it out, this is what we’re going to pay for." That made a lot of sense to me.

The idea that HIMSS is saying, “Oh, we need you to help us get tools and toys” betrays the boat show nature of the HIMSS community. “Hey, we need these big, shiny boats and we need these engines and I really gotta have this really important radar array.” No you don’t – you just have to get to the dock on time. Stop thinking of it terms of the toys and tricks and tools that you need. They’re thinking about it in terms of the inputs rather than the outputs. When I hear people talk about toys rather than results, my cynical genes act up.

The government talks about quality and software as the answer, but much of the complexity and R&D for software has to go into meeting the government’s own arcane reimbursement requirements. Is there an irony that the government wants patient care systems, but by its own financial practices, ensures that few development dollars will be left to build them?

No question. That’s the ultimate irony. But, of course, the irony within the irony is if it were really good software, they’d figure out how to handle that documentation in the background so the doctor could get back to care.

I’m reminded, amazingly, of athenaClinicals, where the documentation experience has nothing to do with the codes. We handle the codes. The doctor does what they do and if the doctor’s documentation experience doesn’t map passively-aggressively through modules of clicky-click to the right level encounter, we say, “By the way, you’re at a Level 3, did you feel this was a Level 4?” and the doctor might say, “Yes, I did feel like it was a Level 4.” And then the system will say, “Does that mean you did these other things that you didn’t click on?” and the doctor could say, “Yes, I did.”

That’s much less regulatory risk than the doctor is exposed to with a paper chart that no one can read. In fact, if the doctor is clicking on object-oriented data exclusively for the purpose of hiding from the OIG, that’s a crime. That’s a national waste of clinical resources. It’s athena’s job, and only athena’s job, which annoys me, to get that out of the way. We will handle the paperwork for the OIG and Medicare and Medicaid and we will make sure you are in the straight and narrow, that nothing in spirit or in documentation is inappropriate. We will keep you from doing something inappropriate. Among the inappropriate things we’ll keep you from doing is wasting your time away from patients being passive-aggressive with the federal government when you could be treating patients.

We have actually taken out malpractice insurance because we want to be in the same spot as the doctor.

You must feel pretty good about the Best in KLAS announcements.

I love KLAS when we’re at the top and I have questions about their methodology when we’re not (laughs). I get skittish when someone asks me to endorse KLAS when we’re at the top because I know that someday we won’t be and it won’t be for the right reasons. In the mean time, yes, I couldn’t be happier.

The majority of your implementations involve getting doctors paid. How would you explain that to someone who thinks the effort should be directly on patient care?

If I were more mature, I’d say, “Tell me more about this impacting patient care directly. Show me the regression analysis between your vision of what that means and healthcare quality.” Then I’d let them dangle because they don’t know. Documentation of standards for evaluation and management levels is driving much more of the quest for clinical quality than people admit. If I were really sophisticated, I’d be able to let somebody see that for themselves and have a major change of heart.

To me, where we actually are, as opposed to where EMRs tell us to be, and where various keynote speakers with all these things about access to care and total cost and total quality tell us to be … where we actually are, the practical, tactical details of where we are right now, is we don’t know what we ordered and we don’t know what happened to what we ordered. If we can answer those two questions, where every doctor in America knows exactly what they ordered and they know exactly what happened to those orders, the impact on real, genuine Institutes of Medicine-level clinical quality is tremendous. Tremendous. But that’s not even in the discussion right now.

At athenahealth, I’ve got 549 providers who are on athenaClinicals. For those providers, I know exactly what they ordered and I know exactly what of those orders never happened, never turned into a result. The number are devastating. It’s like over 50% of what a doctor orders never turns into a result for that doctor. Who cares that stuff the OIG wants to see if 50% of what a doctor ordered evaporates right after he orders it? That’s much more significant financially and clinically. No one talks about that because standalone EMR software can’t answer that question.

Revenue cycle management is suddenly the hottest thing in the industry, which is good for athena but also brings in new competition. Is that good or bad?

Obviously it would be great if there was no such thing as a free market and nobody decided to go build a competing solution to athenaClinicals and Collector, but that would keep us from running as hard as we are. I have the emotional maturity to acknowledge the benefit of the fact that there will be other competitors someday.

My sense is that the people at American Express are able to struggle through acceptance of the fact that there is also Discover, Mastercard, and Visa. I’m OK with the idea that there will be other revenue cycle management networks in the country someday. I’m ecstatic that they’re not out there today, but I’m accepting of the fact that it’s OK for the world that they be there someday.

I don’t want to be so arrogant as to say, “I want competitors.” To hell with that. I don’t. I wish everyone would suddenly get amnesia about how well we’re doing and not come in here. I accept that it’s good for the world that they won’t get amnesia and they will come in and they’ll push our price down and push our quality standards up. That’s OK.

Athena stock took a dip in the fall, but has rocketed back like there was no economic crisis. What’s different about athena that has let it avoid taking a price hit?

I don’t know. We did have an investor day and the timing of the recovery, back in the 30s of our stock, mapped very closely to that investor day. I’m assuming that by getting athena … we’re a very small company, relatively speaking, amongst public companies with a very small number of shares, again relatively speaking … so bringing 80 key investors in for the day and seeing who we really are and what the DNA of athenahealth is and what it promises, those 80 people could get hungry and really treat our stock with respect.

If we were bigger, it would be harder to get the whole wide world to treat our stock with the respect that it deserves, but luckily we’re small, so the elite of the investment community have said, of course, long term, Obama not Obama, Daschle not Daschle, in the end, regardless of the short signals, athena is a way to a good future and that’s got to pay off. I was ecstatic about the result and it really was a function of the 80 people who showed up at the door.

What will you do with the messaging company you bought?

We build another product that looks like Clinicals and Collector, which is to say we build an integrated, percentage-of-revenue priced, fiduciary principled, patient-compliant service. We’re not there yet. Meanwhile, we’re selling 17 cents a reminder calls. When we get it right, it’s going to be a full-on … for a small percentage of your revenue, we’ll answer 100% of your phone calls and treat every single patient you have like a Russian prince.

Is that a change in practice where you will actually take on some of the patient-facing work for doctors as a service provider?

I don’t see it as so much a change in practice. Our job is to be the best in the world at getting doctors paid. Athena’s mission statement is to be the most trusted business service for medical groups in the United States. If you want to do that, when you do research on what doctors want and what they trust, it’s people who get them paid for doing the right thing. They hate people who get them paid for doing something that they later regret they did and they hate people who don’t get them paid.

Our hedgehog, to use a business school term, is to be the best in the world at getting clinicians paid. If our strategy is to get these guys paid and connecting with patients is a key part of getting them paid, it’s no change in strategy. It’s a change in tactics.

You said early on that you hoped to preserve the company’s culture as the company grows. Have you been able to do that?

I started with an immature notion of preserving the culture. What I’ve learned is that I’ve preserved key elements of the culture, but if I was wiser, what I would have said is that I don’t want to preserve the culture, I want to keep the culture current with the journey.

For example, I’ve become much less of the class clown. Watch that Wall Street Journal interview. I didn’t even recognize myself because I was so struck with the weight of the questions and she was so thoughtful … it’s a different thing from a blonde guy jumping up and down “saying look at me, look at me" because I’m afraid no one will pay attention to me, to, “People really are paying attention, make sure you don’t mess up this answer.”

That’s my journey. There’s a similar arc to the character of our whole culture at athena, of our personality as a company. I do want to preserve what’s important about our culture, but I think what I mean to say is I want to preserve the notion of being true to our culture wherever it may be at each stage of development. Write that down and find out later whether that was the beginning of the slippery slope to evilness. I don’t think it is.

I need to be more mature, more subtle, less desperate for attention, more secure as a CEO than I did when no one had ever heard of us. We want to make sure that each iteration of our culture as we grow has the same level of integrity. I’ll die before I let go of the culture we have right now. Will our people and will our CEO lose their career, lose their reputation before letting go of the principles that are appropriate for the hour? That’s what’s consistent.

What’s appropriate for the hour will change year over year. I’ve seen that. I’m witnessing it right now. But the integrity of sticking to those principles of the hour or of the year or of the decade is the maker or breaker of whether we get to keep playing.

An HIT Moment with … Ralph Fargnoli

An HIT Moment with ... is a quick interview with someone we find interesting. Ralph Fargnoli is president and CEO of Beacon Partners.

Many of the big consulting players have been acquired: FCG, Superior, Healthlink, JJWILD. The smaller ones seem to be hot properties now. What does that trend mean and what kind of consolidation is happening?

I look at the consolidation as an opportunity for an increase in market share. The larger firms were acquired by what I would call the mega-sized companies, i.e. CSC, IBM, and Perot, for their particular strengths that compliment or enhance existing service lines.

With most of the large firms off the market, the mid-level and smaller firms are hot because they, too, have the people and service lines to help the mega-firms gain healthcare market share and enhance service line offerings. With the shortage of experienced healthcare IT, clinical, and operational professionals, demand has made all of us an acquisition target.

What I see as a potential conflict issue is that most of the mega-firms have products and services that provide solutions, i.e. software, hardware, offshoring, and data centers, that can be a solution or answer to a client’s challenges. So the question is: are the provider organizations getting unbiased, not self-serving, recommendations based on what else they have to sell?

How is the mix of consulting services that clients want changing?

Provider organizations want help from consulting firms that have proven success and results. With the economy in a recession and unemployment increasing, clients will want to see projects that can translate to savings and improved cash flow moved higher on the priority list.

While IT adoption can be key to these projects, IT remains a tool. Many organizations can improve their results just by reviewing their operational work flows and improving the efficiencies of patient care.

How do you see vendors and consulting firms changing their businesses to weather bad economic conditions?

Vendors will cut employees and will look to consulting firms to fill the gaps when the demands outstrip their internal resource supply. As demand for project assistance increases or slows, consulting firms will adjust their workforce size accordingly. Firms like Beacon Partners will look to have a balance of employee consultants with well-vetted contractors.

Many of those in the vendor and consulting industries affected by layoffs will end up working for provider organizations as full-time or contract employees. In addition, vendors and consulting firms will look very closely at expenditures and cut back areas that are not essential. The good companies will do everything possible to make cuts other than employees. That means conferences and all their related costs, travel, sponsorships, and charitable goodwill may be cut.  

I believe that good firms will also do a self-assessment to determine their business plan moving forward to be prepared for the turnaround and the new administration’s impact on the healthcare industry.

What healthcare changes do you think the Obama administration will make and what will healthcare and healthcare IT look like in 3-5 years?

I think that President-Elect Obama will start the discussions early in his administration for universal healthcare based on the Massachusetts model. Senator Kennedy, who is ill and is fighting for his healthcare legacy, has already set the stage for the healthcare reform debate.  

President-Elect Obama wants mandated coverage of all children, but not adults, which the Kennedy and Massachusetts model promote. So far in Massachusetts, there have been positive results with increased insurance coverage, but there are issues regarding access to primary care and the cost of the program.

Unfortunately for the Obama administration, the economy is the top priority and will need all the government funding and attention probably for most of 2009.

The President-elect does see the adoption of healthcare IT as a way to save billions of dollars and reduce medical errors. The question is does it carry enough weight and create enough jobs to be part of the stimulus package expected to be pushed through Congress in early January 2009?

In three to five years, I see universal healthcare for all, a modified payment system based on preventative measures, quality and results. I am still a cynic that Washington sees things at the 50,000 foot level and the real challenges to reducing costs and improving care are at the day-to-day operational level, of which I am not sure anyone in Washington has a grasp.

The issues that surround healthcare reform go way beyond technology adoption. Most are a huge cultural challenge, and one that cannot easily be forced to change.

What should vendor and providers be doing while they wait for economic conditions to improve?

Anyone in business who goes through these economic cycles knows that you need to survive for the turnaround. Diversity of services and products is important, and in the healthcare industry, there is still opportunity to grow and prosper.   

As with any company that has gone through an economic growth cycle, in tough times, a thorough review of internal programs and people is a must.

For the software vendors, the last thing I would do is cut my R&D. The market will return and the better prepared they are, the more they will prosper and gain market share.

On the provider side, refocus efforts on operational improvement projects that can help clients reduce costs and increase cash flow and patient access to care. If they have IT projects started or about to start, I would recommend that they keep moving forward with them because the expected benefit may not be realized until long after the go-live date, which may coincide with the economic recovery, making their organization more competitive.

An HIT Moment with … Denni McColm

An HIT Moment with ... is a quick interview with someone we find interesting. Denni McColm is CIO at 74-bed Citizens Memorial Healthcare of Bolivar, MO.

Citizens Memorial won the Davies Award and has reached Stage 6 of EMR adoption from HIMSS Analytics. Beyond the industry recognition, what IT-driven changes have you seen with regard to patient satisfaction, provider satisfaction, staff turnover, expense, and clinical outcomes?

Across our service lines, we have over 40 publicly reported quality measures (hospital, home care, and long term care). Before Project Infocare, we were above the national average on only 39%, or 15, of those measures. Today, we are above the national average on 80%, or 36, measures. We’ve been recognized for quality with state recognition for both home care and long term care.

On financial measures, since we’ve implemented Project Infocare we’ve seen an increase in net revenue of over 35%, while only increasing our staffing by 4%.

What projects are you working on?

We are doing more training with staff on effective use of the EMR within the context of a patient encounter. For some users this comes naturally, but for most physicians and nurses using the computer during the visit effectively takes practice. We failed to do this well as we implemented and we are refocusing on it now. The training method is called MUSE and is offered by The Robertson Group.

We are also implementing a patient portal, expanding our HR suite of products, utilizing automated infection and quality measure alerting, building ambulatory quality measures into the workflow during a typical ambulatory encounter, bringing more providers on with speech recognition, and interfacing portable vital signs monitors and glucometers throughout the organization.

In 2009, we’ll also be implementing an EMR for our affiliated cancer center and for our Miles for Smiles mobile dental unit.

What system capabilities or tools would you say have had the most significant impact on improving patient care in your hospital?

The EMR, just for providing access to the information providers need to care for patients. CPOE in that it gives us a more direct line of communication from the physician to the caregiver and automated quality measurement extracted from the EMR.

What impact will economic conditions have on your IT department and the hospital?

Secretly, we hope it will slow things down for us, but the more likely scenario is that IT will be more in demand as the organization seeks tools to help become more efficient. I also think that part of the national economic stimulus will be directed into health care. Obama is already uttering the phrase “electronic medical records.” And, whatever form healthcare reform takes, IT will be needed to help adapt.

What makes you happiest and most excited about working in IT in a tiny rural hospital?

The opportunity to put IT to use making a difference in the quality of care and service my friends, neighbors, and family receive. And, the ability to pursue the projects that will really make a difference for care providers and patients. OK, deep down, I also love it that we are so far ahead in terms of IT adoption compared to so many large hospital systems, including the ones here in southwest Missouri.

An HIT Moment with … Steve Aylward

An HIT Moment with ... is a quick interview with someone we find interesting. Steve Aylward is General Manager, Health & Life Sciences, at Microsoft.

With Medstory, HealthVault, and Amalga, Microsoft is dabbling in some seemingly disconnected technology areas that have different audiences, but without hitting the home care area that Steve Ballmer focused on in his HIMSS 2007 address. What is the company’s healthcare strategy?

Let’s address the last question first: Microsoft is committed to improving health around the world through software innovation. Our goal is to advance a vision of unifying health information. We’re working in collaboration with a wide range of health and IT leaders across provider, health plans, and life sciences organizations in both the public and commercial sectors.

In order to improve care, health, and quality of life, it’s critical that people across the healthcare system have access to the right information at the right time. Microsoft is in a unique position to accelerate that transformation through our tremendous reach, with a platform that spans from the consumer to the enterprise, and the ability to develop cost-effective technologies that others can use as a platform for further innovation.

HealthVault and Amalga are pivotal products in our efforts to unify health information and make it readily available to the people making decisions about health — whether a family health manager, chronic disease patient, emergency department physician, researcher, or anyone else in the health system. HealthVault enables individuals to collect, store and manage their personal health information and use it with a wide range of health and wellness applications or share it with physicians to better manage a condition. Industry leaders like Aetna, Cleveland Clinic, Kaiser, and Beth Israel Deaconness are turning to HealthVault with the goal of providing patients, employees, and health plan members with the tools to improve their interactions with clinicians and their overall health and wellness. These organizations share Microsoft’s belief that putting the individual in control of their health information, and enabling them to share it, opens up new and cost-effective opportunities for improving health.

Relative to what Steve Ballmer discussed at HIMSS, when you visit www.healthvault.com you’ll see a lot of partners who have connected their applications and medical devices — many of which are used in the home. HealthVault account users can automatically collect and store data from their glucometers, blood pressure cuffs, pedometers, weight scales, and more into their HealthVault accounts. The individual can then choose to share that data with their physician, family members, or as part of an inpatient admission. This hits toward the home care area that Steve touched on at HIMSS.

Amalga helps healthcare organizations address the challenge of continuously aggregating, managing and effectively utilizing a growing amount of data from disparate sources — regardless of how many different systems the data is stored in. This enables healthcare organizations to bring together their data in one single view. Once in that single view, they can make better, more informed decisions across their clinical, financial, and administrative areas.

The bottom line is that most healthcare organizations have a sleeping infrastructure that needs to be awakened (wish I’d thought of that line myself, but I have to credit a customer). Microsoft is a large part of that infrastructure, with everything from Microsoft Office to Microsoft BizTalk Server to Microsoft SQL Server to Windows. It may not be a model most would think of first when it comes to solving healthcare issues, but we’ve taken our role of adapting horizontal software to an incredibly complex market very seriously. There are plenty of examples we can share, but I recommend that your readers visit www.microsoft.com/health for a glimpse as to what we’re doing across Provider, Health Plans, Life Sciences, and Consumer Health sectors. The video that Steve showed at HIMSS is also posted in the lower left corner.

Bad economic conditions are sure to hit healthcare providers hard with more uncompensated care and tougher lending markets. When IT costs come under the microscope, how can technology, including that provided by Microsoft, prove that it’s paying its way?

Those tough economic conditions are already here. As an industry, we are approximately less than two months behind the tsunami that the financial services markets have already experienced. Many of our healthcare provider customers are turning to us to brainstorm how IT can help them navigate through this difficult time. Those customers are seeing their overhead costs skyrocket as a result of manual, paper-based processes and manual workflows, and it’s extremely difficult for physicians to avoid costly, acute situations without all of a patient’s information at their fingertips.

The bottom line is that our customers are looking for technology solutions that drive top-line revenue, reduce costs, as well as enhance patient safety and the overall patient experience. Each of our solution areas are being defined in one of these main categories. Look at Penn State Milton S. Hershey Medical Center. They came to us wanting to reduce ER wait time and improve the overall experience for cardiac patients in the emergency department. They implemented Microsoft Visio (along with a solution from the Orlando Software Group) and were able to lower patient abandonment by three percent, reduce the average length of an ER visit by 22 percent, and lower the time to be seen for minor emergences into the 70 percent range.

What Microsoft products or services should hospitals and other providers know about but probably don’t?

I can’t even begin to count the number of healthcare organizations who’ve deployed products that aren’t being used to their full advantage. Microsoft Office is a great example of this. Many real-world processes already are documented in Microsoft Office. The interface is familiar and what many healthcare providers use at home. So, we’ve turned Microsoft Office into an application development platform that brings the ease and familiarity of Office to more complex enterprise solutions, helping to drive adoption and acceptance. This is what we call an Office Business Application.

There are so many examples of innovative things being done with Office Business Applications or Microsoft Office, and I wish I could share them all. But here are three that might be of most interest to your readers:

The Patient Safety Screening Tool (PSST) is an Office Business Application developed by Accent on Integration (our partner) and Microsoft, and piloted at Vanderbilt University Medical Center (VUMC) to reduce the rate of sepsis, an in-hospital acquired infection that is deadly if not caught early. The capability is designed around the Office tools (primarily Microsoft Office InfoPath, Microsoft SQL Server, and Microsoft Office SharePoint Server). For significantly less than they would have spent on professional services, VUMC has been able to prevent the deaths of several patients — in a matter of weeks rather than months or years. This tool has enormous potential to be used with other in-hospital acquired infections, such as those on Medicare’s “never events” list.

Secondly, we’ve worked to improve the patient experience by integrating Xbox and Windows Media Center with a clinical information system (CIS). This has enabled patients to use Xbox for the “fun stuff” like e-mail, IM, and gaming, but the CIS integration is key. It can enable the patient to understand more about their care team and what to expect during their stay. I know many of your readers have been skeptical of such technology uses in the past, but I think they were hung up on the inpatient e-mail capability (meaning “acute care patients, seniors, and the Luddites will never use it”). The real value of this is to better inform and educate the patient as to what to expect during their stay. It can also be of great value to family members who visit the patient and who confer with the care team.

The third example is something that we recently shared with the Microsoft Healthcare User Group involving Operational Excellence. One of the most prominent children’s hospitals in the U.S. (together with USC Consulting) has used our tools to improve the turnaround time on their lab results by 50 percent.

It’s important to note that with these applications, we’re doing similar work with Health Plans and Life Sciences organizations and moreover, we’re really taking a close look at how they connect with the entire healthcare ecosystem, including providers and patients.

Bill Gates scorned IBM back in the 90s, saying its demise was imminent because of IBM’s reliance on old, cash-cow products and outdated business methods. IBM pulled back from the brink and thrived. Now Microsoft is "the establishment" and gets that same kind of criticism from the next generation of upstarts such as Google, Apple, and open source vendors. Is there a sense of urgency to change the status quo, and if so, how?

I wasn’t at Microsoft in the 90s so it’s difficult for me to comment, but I will say this. We’ve grown now to more than 900 professionals who wake up every day focused on the need to improve healthcare around the world. That 900 includes physicians, researchers, scientists, developers, and sales and marketing professionals. We’ve put an incredible amount of energy into working with our partners and the community to create specific vertical applications on our platform for healthcare, as well as point solutions such as HealthVault and Amalga.

In my professional career, I’ve never been around people who carried such a sense of urgency to change the status quo. Probably Microsoft’s biggest strength that I’ve seen in my nearly three years here is our ability to be self-critical. We have the opportunity to take a step back and look at industry challenges, whether it’s patient safety, moving from paper to electronic records, or cutting costs that stem from inefficient processes. And we have the opportunity to really think about how our products can be used to solve these challenges. How can we work with partners to build an entirely new solution, such as the Patient Safety Screening Tool, on the Microsoft platform?

We try to be as hard on ourselves as many of your readers are. We’ll keep going after a problem or an issue until it’s solved. We want to be strategic partners to our customers. We understand their needs and we’ve brought people on board, such as physicians and researchers, who can work with us to provide even deeper insight.

Can consumerism in healthcare take hold in a down economy, and if so, how will Microsoft support it?

Even in a down economy, consumers are still demanding better care, a better patient experience, and more personal communication with their doctors. The “millenials” (those under 30) are changing the game very, very quickly. They’re coming out of school expecting technology to be there. Those same people are now entering the workforce and taking care of their parents’ health. They demand solutions that support IM, social networks, gaming, and instant access to information — from anywhere.

To stay competitive among peers, healthcare organizations need to meet these consumer demands. Microsoft is certainly playing a large role here with Windows Mobile, MSN and Messenger as examples. What we’re doing with HealthVault, for instance, is just the tip of the iceberg in terms of connecting consumers to their healthcare information. It’s the consumers’ data, and as an industry, we need to break down the barriers that have prevented them from accessing it. Everyone from vendors to providers, physicians, and payers need to come together and empower consumers to manage their data, engage with their health plans and physicians, and truly take control of their health.

An HIT Moment with … Liddy West

An HIT Moment with ... is a quick interview with someone we find interesting. Liddy West is a principal with West Consulting and is working on the VUHID project.

What is GPII, who’s involved, and why is it a non-profit?

Global Patient Identifiers Inc. is the company started by Dr. Barry Hieb and myself to manage the Voluntary Health Identifier (VUHID) project. Barry, who left Gartner’s healthcare consulting group in August to work on VUHID full-time, has been focused on this effort part-time for a number of years, beginning with the work he led on two ASTM International standards that describe how to achieve unambiguous patient identification and improved privacy of clinical information.

As a medical doctor and a computer scientist, and through his wide network of industry leaders, Barry has thoroughly vetted the VUHID concepts and design from both practical and technical perspectives.

And, to your question as to why we’re a non-profit, one of our basic beliefs is that a universal patient identifier can neither be mandatory nor managed by any government. Nor can it be commercial in that neither patients nor providers can be asked to pay for it. That is, we believe that such an initiative should take costs out of the system, not add costs.

Citizens push back hard every time someone brings up the idea of a government-sponsored healthcare ID number, yet a RAND study advocates spending billions to create such a system. What are the benefits of an ID number and why does it have to cost so much?

We wholeheartedly agree with many of the objections to creating a massive, expensive, government-controlled national identification system. And based on our estimates, it simply doesn’t have to cost so much! That’s the beauty of the VUHID approach: cheap to develop and operate, no big software engine or data base of identifiable patient information, and no government agency to oversee it (lots more details at www.vuhid.org).

So, not only vastly cheaper to implement, but essential to making the healthcare delivery system more efficient. The RAND report (warning: PDF) estimates that savings running to tens of billions of dollars annually can be achieved if effective electronic clinical information exchange is implemented. Errors in current patient identification techniques estimated to be 8% or higher represent a major barrier to achieving these economies. And the benefits?

• The ability to accurately link patient records among participating providers for a dramatic reduction in duplicate registrations and more convenience for patients and staff.
• Reduced costs and medical errors. Fewer duplicate or unnecessary tests because patients are identified correctly and providers have access to clinical information from encounters across an HIE.
• Enhanced privacy protection. With VUHID, patients can elect to protect certain aspects of their clinical information based on data type and provider type.
• VUHID also reduces the risk of medical identity theft since no patient information is associated with the VUHID identifier.

He’ll blush to see himself referred to as the leading authority on the topic, but you’ll note that Barry’s work is cited no less than a dozen times in the RAND white paper.

We’ve only recently worked through the ROI model for VUHID and believe it will be vastly cheaper than the RAND estimates — by a factor of 500! In fact, one of our advisors who is involved with an emerging HIE project has reviewed our model and agrees that proposed VUHID pricing represents a “no brainer” decision for HIE executives based on savings and benefits described above.

How do you get around the inherent layperson fear of a government-controlled health ID number?

Again, it’s our intention to keep government out of it. We’re working with HIEs and EMPI vendors, taking a ground-up approach vs. a top-down, government-driven approach.

Now, if the government, state or federal, would like to sanction what we’re doing, we’d be happy to talk! Barry has presented VUHID to Rob Kolodner at ONC who is very supportive, but as you know, Congress specifically prohibited spending federal money on this effort several years ago.

We’ll continue to work with organizations such as HIMSS, NAHIT, IEEE, AMIA, JCAHO, Liberty Alliance, and the RAND Corporation, all of which have public statements supporting the need for more accurate patient identification methods. VUHID has good visibility with these organizations, as well as physicians’ groups, patient advocacy groups, and HIEs. We’re working to gain more traction as initial deployments are accomplished and real-world experience with the system is gained.

Some high-powered and well-funded groups surely have a strong opinion about the health ID concept. GPII is a tiny nonprofit. How will you get your message out and convince people that there’s no hidden agenda?

Well, as I mention above, we’ve been heavily involved in outreach efforts for some time. But, there’s a lot to do. This is really our biggest challenge, as we’re trying to raise funding to complete development and testing of the VUHID Web server, develop outreach and education programs, and build momentum with HIEs and EMPI vendors. Right now, it’s missionary work, with a little funding for technical work, getting the company set up and bare necessities (thanks again, Judy, for the grant from Epic).

As to hidden agendas, no one has ever come away from a discussion with Barry on this topic with any such suspicions. His dedication and our business model leave little room for doubt that we sincerely believe that this is the right thing to do and a necessary part of the infrastructure of a reformed US healthcare system.

Now that you’re out on your own as a consultant, what are the most interesting trends you’re seeing?

I’m seeing renewed interest in revenue cycle … or maybe that trend just comes back around every 10 years or so. But if you look at the age of the applications that are running the business side of most healthcare organizations, and the kludge of interfaces and bolt-ons that have been added over the years to keep them going … well, I’ve always thought there’s opportunity in this area. The current economic environment might just be the incentive for these organizations to finally take the risk on newer technology.

Also, I’m one of those people who believe that RHIOs or HIEs — whatever the acronym evolves to — are quietly taking hold, will persist and expand … with or without government mandate or funding. Maybe more successfully without government intervention! So, I believe systems integrators with infrastructure, tools, and the ability to “herd the cats” are companies to watch.

And relative to government, I do believe they’re here to stay when it comes to HIT. Many of the people I’ve talked to in Washington and here in Arizona who make or influence policy really do understand the benefits and challenges. The work of ONC has been important and hopefully will be continued under the new administration.

An HIT Moment with … Arnaud Houette

An HIT Moment with ... is a quick interview with someone we find interesting. Arnaud Houette is CEO of Capsule.

The future seems to involve having large numbers of pieces of medical equipment sending a nearly constant stream of telemetry data to whatever systems can receive it. What patient care improvement opportunities does that create?

You are correct that the numbers of devices, including telemetry, and the quantity of data from those devices has been increasing in recent years. We see this trend continuing for the foreseeable future. However, we believe there are other changes in the care environment that will actually impact patient care and the need for device connectivity more than the quantity of devices and the data they send. These include:

• More applications and systems that can take advantage of data that is collected and integrated, such as alarm notification systems and the integration of both data and alarms to ventilator management systems;
• Requirements for direct device to device interoperability; and
• Mobility. Perhaps the biggest technology trend we see that will impact patient care is with wireless devices and mobility. Mobility is actually forcing vendors to assess how patient context needs to be handled. When patients and their devices move, the data from the medical device can no longer be reliably tagged to a bed or room location. In our opinion, this leads to the need for positive patient ID and association of the medical device to a confirmed patient.

All of these changes will directly impact the clinician and the patient care process if not implemented properly. At Capsule, we are working on a solution that addresses such issues and will improve clinical workflow. We believe that patient care improvements will come from point of care solutions that properly associate patients to devices rather than devices to location. And we believe that access to all real-time data and alarms across the enterprise will result in improved real-time and retrospective clinical analysis, improved treatments and length of stay, and overall improved patient safety.

Are EMRs vendors ready to automatically accept electronic output from machines to save nurse time in documenting it?

Good question. Here I see a difference between the European market and the US markets. In Europe, a number of EMR applications automatically accept electronic device data without human intervention. The primary driver is efficiency of staff. In the US, however, most EMR implementations require a nurse to validate all data that has been automatically collected from the devices connected to a patient as part of the documentation process. Here the driver seems to be medical-legal requirements. I can see both sides.

There is, however, a class of data parameters from medical devices that could arguably not be subject to clinical interpretation. This class includes measurements of the device’s operation, such as respiratory rate, tidal volume, or infused volume; as opposed to physiologic measurements from the patient. These data are information from the device of what it has done, for which there is no clinical requirement for analysis or validation in order to ensure accuracy of the documented value. So one of the key questions here is not only can or will EMR vendors support this automated documentation (many of them can already), but will clinical users?

How important will home monitoring of patients become and what technology advances will be required to support it?

This is a very important market for device connectivity. Monitoring chronically ill patients in their home has both significant economic impact on the health system (keeping patients out of the hospital) but also wonderful health benefits for the patient themselves. The need and the health benefits are clear. What is not so clear is the business drivers. Telehealth has struggled with a well defined reimbursement model that will foster broad adoption. There have been some interesting “carve out” strategies by some healthcare organizations for specific illnesses, but nothing universal.

On the technology front, we are watching with great interest the Continua Health Alliance and the IEEE 11073 standard efforts. As in the hospital, we believe that adoption of these technologies will depend greatly on the fit with the clinical workflow and the usability of software. This is an area Capsule is investing heavily in right now.

Which hospital areas do you expect to have the highest demand for new data capture solutions?

The highest demand for data collection from medical devices is currently in the areas of the hospital with the highest acuity patients, such as the ICU, PACU, and OR. We expect these areas to continue to have high demand. However, we see increasing interest from lower acuity environments, such as med-surg or even ambulatory clinics.

One interesting way to analyze the need for automated data collection is to go beyond the current model, which tends to focus on the number of devices or complexity associated with each patient. Rather, we see the need to look at the number of devices or complexity associated with each individual nurse. Though the nurses in the med-surg environment are dealing with lower acuity patients with fewer devices, they are dealing with more patients, so they actually have a similar number of devices to manage and interact with.

It is easy to see how these areas would benefit from the adoption of technology that supports automated capture of medical device data. This is an area which we are actively pursuing — not only how to manage the data capture in these lower acuity environments with different work flows, but how to assist the nurse in managing all the devices and their associations with the right patients in all environments.

Surely a company like yours has had acquisition interest from some of the mega-companies whose products you integrate. What is the long-term plan for the company?

Tim, you know if we were having any discussions (which we are not), I couldn’t talk about them anyway. I admire you for trying; you are very good at your job …

As for Capsule’s long-term plans, we are focused on creating value by innovating on behalf of our customers and partners. We are in a unique position in the market from which to innovate. We have perhaps five times more installed, happy customers than all our competitors combined.  Our driver library is unmatched in numbers of devices we support (350+) as well as the quality processes we use to build them.  (We better have good processes as we have been doing this for more than ten years!) And, our product is a medical device. We are classified by the FDA in the same status as a cardiac monitor (510k Class two).  Oh, and let me not forget our vendor-neutral position in the market. It is from this unique business foundation that we will spring board to the next generation of products.

We have a number of products in development that are aligned with our EMR and device partners’ road maps to continue our market leadership in connectivity while also enhancing our partners’ product offering to the health care provider. We are also working closely with a number of thought leaders in the industry to develop new innovative solutions for positive patient ID and wireless device connectivity. I look forward to discussing these in greater detail as we get closer to launch.

Another opportunity in front of Capsule is geographic expansion. We are a truly international company. We literally have employees from nearly every region of the world — from Senegal to Australia, China to Ireland, to the US and France. It has been our mission to build an international company from the start and we see an exciting market opening beyond Europe and the US. The Middle East and Asia are two markets that hold great potential in the near future.

Marriage may come someday, but for the time being, Capsule is all focused on creating value for our customers by working with our partners to deliver the right products to improve workflow and make their lives easier.

HIStalk Interviews Susanne Madden, President and CEO, The Verden Group

Tell me a little bit about your background and about The Verden Group.

Primarily I come from the provider side of things. I’ve worked for hospitals and small group practices from surgeons to pediatrics. I spent a long time there. Then I went out as a kind of independent consultant in a lot of process improvement stuff for physician practices. I ended up at United Healthcare for a couple of years, focusing on managing the provider side of things, looking after the network and tracking of physicians, being somewhat of a physician advocate from within.

About two years ago, I left United Healthcare and established The Verden Group. The idea behind The Verden Group was twofold. One was to continue the consultant services that I had started a few years before that. The other was to try and bring together information in such a way that it would be usable for physician practices.

It seemed to me, from the United Healthcare side, that there really was a disconnect between what insurance companies were communicating and how they were communicating, and what physician practices, hospitals and obviously the providers of care were actually doing in terms of being able to see that information, understand that information, and act upon that information.

The Verden Group was born as a way to take information flows and make them usable by what should be the receiving party. What makes that so difficult is that most insurance companies simply post changes on their Web site. Those changes take the form of everything from updating medical policies to updating payments and administrative policies. Some of these just post a notification on their Web site and some of these Web sites are a thousand pages deep, so it’s very difficult for providers of care to really keep themselves updated with all of the different things that are changing but can’t find it on the site.

Even when they do look at, say, a newly posted policy, it’s very difficult for them to interpret what it actually means, how it actually breaks down in terms of how they are supposed to bill, how are they supposed to code things, and what they are supposed to be doing in terms of providing care.

What we do at The Verden Group is something called the Verden Alert system. Providers of care subscribe to this service. They give us their e-mail address, their specialty, and the insurance companies they participate with. From there, we match them up with all the changes for these insurance companies.

We track 186 insurance companies nationally, 75,000 Web pages that we’re actively monitoring every 24 hours to pick up any of these changes. We break them down into what specialties they actually belong to. The insurance company themselves don’t break down by specialty. It’d be really nice for me to go to an insurance Web site and look under cardiology and see everything that applies to me. Unfortunately, it doesn’t work that way because a lot of medical policies apply to multiple specialties.

So we take this information, massage it a little bit, break it out into the individual specialities, and then further break it out into categories: administrative change, clinical change, formulary change. Then obviously our subscribers only receive the information that’s relevant to them. So if you’re a pediatrician participating in Oxford, Cigna, Aetna, and United, you’re only going to get information relevant to pediatrics for those four insurance companies.

It’s really not much incentive for insurance companies to be too user friendly because if practitioners don’t take the time to look up these obscure changes, they’re probably going to have their claims rejected.

You got it.

Insurance companies could do this if they wanted to.

That’s exactly right. There’s two schools of thought on this. If you talk to anybody at the insurance company, they’ll say, “No, no, we’re committed to transparency and getting this information across.” And you look at it and say, “Well, if that was the premise that you were coming from, then why haven’t you figured out a better way to do it,” you know? 

We’re seeing pieces here and there. The insurance companies are doing things like rapid updates, where you can sign up to get e-mail alerts every time they publish their newsletter. Unfortunately, a newsletter may have data that’s three months old, letting you know that three months prior, in the previous quarter, they implemented a whole bunch of policy changes that are now showing up in your inbox in the form of denials on your explanation of medical benefits.

That’s really how insurance companies make money. If they don’t have to pass through the premium dollars, then they get to hold onto much more of it. There are some that say, “No, no, we’re working for transparency. We really want this to work better.” But at the same time, they have not organized themselves well enough to actually prove that is the case.

They’ll say things like, “We’re trying to keep costs down by posting it up on our Web site. It means we don’t have to mail things and that keeps the cost of healthcare down. It’s an efficiency tool as opposed to anything more sinister than that.” You look at that and say, “That may be true in one regard, but it also works to their advantage.” So it really is a double-edged sword.

When we launched the Verden Alert, we had some mixed responses. There were some insurance companies that called up to make sure to make sure we were tracking them. They wanted to make sure that they were part of the Verden Alert because, “We want to know more about your services and we want to be part of this.” There were others that really were very suspect and wanted information about what we were doing and why; how we were managing the policy information, that sort of thing. They really wanted to protect their own interests a little bit.

Every quarter, we rank insurance companies. We grade them in terms of transparency. What is their clarity of communication? What is the notification period? Are they making changes 30 days before they implement them, before the effective date? What’s the cost to the provider? Things like adding prior authorizations onto medical policies. That’s obviously adding costs for physicians. Moving around criteria, making it more complicated to actually get paid for services. We pick them up on points for that.

We started ranking insurance companies and, very quickly, we were seeing which insurance companies wanted to engage and say, “OK, how do we actually move the dial on our rankings? How do we do better because we want to be perceived as a company that’s good to business with?” And others that simply wanted us to go away.

It’s a little ironic that some of the insurance companies have invested a lot in information technology, but in the form of keeping things more secure than making it easier for people to use.

How similar, or not similar, is what you do to what athenahealth does?

Athena does it a little different. What they are tracking are claims. They are looking at lines of data with claim sets, what they pay, how quickly they pay, what percentage is disappearing down the rabbit hole, and the percentage you’re getting denied.

They’re really looking at it from the claims perspective only, which is very reactive in a way. Everything comes back to them after physicians and primary care have actually billed out those claims. They can modify their engines based on what comes back so they’re capturing the edits that way, but their ranking system is really based on this reactive data.

What we’re doing is getting a jump on the insurance companies and being proactive, in terms of saying, “OK, we are now looking at your policy decision-making, your strategic decision-making really, and we’re tracking how that’s playing out.” So in addition to our rankings and really being able to quantify what they are doing, we are also able to have a bird’s eye view in terms of how these strategies are playing out.

We see various insurance companies pick on specialties. We see which specialty is going to be targeted on or dragged in on for cost saving quarter-to-quarter. Last quarter, the ophthalmologists seem to get hard hit by a number of insurance companies that applied a bunch of medical policies and put in a lot of prior authorization stuff. The quarter before that, we were seeing a lot of stuff in oncology and cardiology, so they are very often the hardest hit anyway. There’s an awful lot of activity around those specialties.

We’re almost able to gauge what will happen the next quarter based on how they’ve done financially. You see the profits begin to tank in one quarter, so you think OK, next quarter we’re going to see a whole round of prior authorizations, notifications, referrals. All of these administrative burdens go into play because that means it will be more difficult for providers of care to utilize those services and actually have those members take advantage of those services and for them to get paid for it.

All of a sudden an insurance company institutes a referral process or a prior notification on that. You’ll find the person will get their treatment, but the person who rendered the care is not able to get reimbursed on that. They realize that there’s been a policy or procedure change and then they adjust themselves. But it means that the insurance company had that 30-45 day window of these services that they don’t have to pay for because they can point to the policy changes and say, “Sorry, that was effective on September 1st. You should have checked the Web site or known magically that there was some kind of change here.”

If you like, it gives you the opportunity to do something about it, such as actually engage with medical directors at these insurance companies to say, “This is a bad policy. We don’t want this to go on your site.” For example, the American Academy of Pediatrics is very active, but some of their users are Verden subscribers and they really love the fact that they can get this information ahead of time, give them the jump on things, so that they can go to these insurance companies and say, “Wait a second. What do you mean you’ve decided that developmental a screening is part of the E&M code and not separately reimbursable?”

So do you think insurance companies are basically fighting and winning a war with providers by out investing them on the technology side?

I think it’s a very unlevel playing field. I think physicians really haven’t invested in the technology that they need. They haven’t even invested in the processes that they need to keep up with the technology. So you have very well-capitalized, well-funded insurance companies that are able to take advantage of all sorts of Web technology and put a whole bunch of stuff on the Internet.

The typical practice has maybe four physicians in it. You have somebody at the front desk who has a high school education, who really isn’t terribly savvy about accessing information and being able to utilize things like online eligibility and verification or claims adjudication. There’s a real disparity between the educational level of the folks that are working in physician offices compared to other folks that are in these insurance companies.

With that nice capitalization obviously comes the best and the brightest. With physicians, its kind of like, “OK, we’re paying $10 an hour,” depending where you are in the country, for folks to meet and greet the patients and take care of some of these things. So you have a real disparity there.

I think insurance companies really use that to their advantage instead of them dealing with physicians and saying, “Look, we’re bringing out all this neat stuff. Let us come into your office and show your staff how to use it, or let us put forward unified platforms across insurance companies where there’s one way of doing certain things.”

It’s simply not there. Each company has built out their own ways of doing things and than expects physicians to comply. If you’re an insurance company doing what you’re doing, I guess you get real fluent at that. If you’re a physician and you’re participating with 10 or 15 different insurance companies and you need to do the same things 10 or 15 different ways, you begin to see how very complex it becomes. Even though there is a lot of fairly easy to use technology there, it really becomes very cumbersome on behalf on the providers of care trying to actually utilize and access those information systems.

So is there any hope for a small practice that has minimal staff, other than just not accepting insurance?

Ha. Well, that’s certainly one way to go, to just say, “We’re not gonna deal with this.” I think that there are more and more smaller practices that are really having to go down that road.

There are a couple of things happening. They are either becoming cash-only businesses and limiting the number of patients that they have; they are merging because they need to stay alive somehow; or they are really hitting the wall. We hear, particularly in primary care, that they can’t cut it between the reimbursement rates being as low as they are and then the high costs involved with managing all of these different plans. They really are isn’t any margin left for these physicians. That why we’re obviously seeing fewer and fewer doctors going into primary care more and more into specialties.

I think the hope, though, is being able to move the educational dial, so to speak, on physician practices. Finding ways of getting education in front of them so they can understand the world of managed care. That’s really where that huge canyon stretches. The doctor’s focused on providing medical care. The staff and the office are focused on meeting and greeting patients, getting patients in and out of the rooms. If you’re in the billing department, that’s about the only touch point that you have with the insurance company. So being able to get information in front of them in such a way that they can understand what’s going on.

Unfortunately, sometimes I’ll have conversations with physicians that’ll say, “Why do I need to know about medical policies? How does that affect me?” The single biggest thing that’s going to affect your reimbursement are these policy changes. They’re really unaware even of that.

They don’t read their insurance contracts. They just sign on the bottom line and say, “OK, I just have to take this plan. I’ll just sign the contract but I don’t understand it anyway. What’s the point in reading it?”

I think if there are great efforts made to really educate physicians about the business of medicine, then I think we can have a real groundswell that will help turn the tides. For the last 10-15 years, it’s been about how much the insurance companies could take out of the system. That’s really what it’s come down to. Being the middlemen that they are, they’re the ones that make all the profits of this deal.

Certainly there are some physicians and some specialties that are doing just fine, but if you look at healthcare across the board in the United States, obviously you don’t need to be a brain surgeon to understand how much trouble we’re in. The expenses that are attached to healthcare, predominantly, is attached to the profit that the insurance companies are making out of the deal. The premiums that people are paying aren’t being passed through to the providers of care.

So you have these providers of care that aren’t able to understand the business of medicine. They aren’t able to engage on a level that says, “Wait a sec. This doesn’t work. This is not what we want to see happen here.” And consumers aren’t able to engage on that level either. I mean, even if you just read your own benefits package, do you know what it’s telling you? Can you understand what is actually covered and what isn’t? Of course not, because it really is made as convoluted as it can be and, of course, the insurance companies retain the right to change these at any time, which is why there are all these policy changes.

We’re processing anything from 600 to 1,000 policy changes a month. Some months it’s double that, depending on whether it’s close to the end of the quarter or not. It’s a very dynamic environment where the insurance companies are constantly moving the goal posts. Consumers and physicians really can’t keep up, so the only hope is that can come in there is in the form of transparency and better education.

When we talk about things like consumer-directed health plans … as well as being adopted, it’s failing miserably. It’s being adopted so the employers can get their costs lower, but in terms of the people that are on the receiving end of those plans, they don’t realize they have $3,000 deductible before their benefits are going to kick in. They don’t have the $3,000 to meet those deductibles, so they are simply not acquiring care.

They’re not able to shop around because there isn’t pricing transparency with the insurance companies. One of their single biggest proprietary pieces of information is their fee schedule. So you can’t say, “If I go to the Dr. Smith down the street, it’s going to cost $200. If I go to Dr. Jones in town, it’s going to cost $100. Therefore, I’m getting something worthwhile by keeping that $100 in my pocket.” There just isn’t the transparency there between the physicians and the insurance companies and the consumers.

It doesn’t operate like anything else. There’s nothing else in any other industry to compare this to, this complete opaqueness that has occurred with the insurance companies. There’s no transparency in pricing; no transparency in contracting; no transparency in rules.

It’s really pretty under-regulated. It depends obviously on which state you go to, but here in New York State, they’re really not regulated in terms of being able to change their premiums and pricing any time they want.

There’s a bunch of things that need to happen for there to be some hope that the healthcare system can survive in its current form, but it has to come in the form of transparency. The only way it can be more transparent is by getting better information and better education out of the insurance companies.

Employees think they have healthcare, but what they’ve actually got is health insurance that pays less and less of the cost. If there was a total restructuring of the system where the insurance companies were left out of the picture or made less profit, could people afford healthcare even then?

I think we’ve seen the tipping point. We have finally seen the insurance companies kind of fall off a cliff, where they have gotten so overzealous with their pricing that their market has really shrunk.

Earlier this year, we heard Angela Braly, the CEO of Wellpoint, the biggest insurance company in the country, saying that they will not sacrifice coverage for profit. Basically meaning, “We will continue to price as high as we need to make good profits and we don’t care if fewer and fewer people are covered,” which really goes against the central philosophy of why the insurance companies are there in the first place. They are there to be able to cover people, so it really just shows you where the large, publicly traded insurance companies are at in terms of their culture.

But their membership has been shrinking and shrinking. United healthcare alone in 2008 has lost 750,000 members. That’s a huge number of premium-paying customers. And so it looks like the market is shrinking very severely for them, so they are coming out with a lot of these products that are really bare-bones products. The employers are saying, “Now I can still offer a plan to my employees, but at less cost to me and with greater costs sharing for them and higher deductibles, but I’m still able to offer that plan.”

People are really beginning to catch on that what they are now cost-sharing for, what they are now kicking in part of the premium on, and what they’re now having to pay these massive deductibles on, really gets them nothing for their money. So you have a real call in the consumer arena beginning to come in the form of, “We want options. We want the ability to purchase our own health insurance because it gives us greater control in terms of what we select for ourselves and what we’re willing to pay for.”

That said, there are so many people that can’t afford healthcare. The typical premium for an average family of four is close to $13,000 a year. If you have even just two parents working at $35-40,000 a year, that’s a tremendous amount of their income that’s going on just healthcare insurance alone. So I think the restructuring has to come in the form of paring it back to insurance. It’s no longer an insurance vehicle.

What we’re doing right now is paying insurance companies for the privilege of holding onto as much of our money as possible. What we need to be doing is saying, “This is an instrument that should operate like any other insurance.” You pay a modest premium for the unlikely event that you my end up catastrophically ill. If you want to pay additional, so you have things like well care covered, your annual visits, those sorts of things, you should be able to add that to the policy of that’s what you seek.

Certain states mandate that certain things have to be included in insurance companies that you may or may not use but you’re paying for. Insurance companies that are basically pointing to an underwriting cycle saying, “Yeah, we might be making massive profits this year, last year, and next year. But in five years, we might not be, and therefore, we need to really stock up on our reserves to make sure we can manage that.”

We need to start looking at: what is the purpose of insurance? What actually needs to be covered? How can people actually go about purchasing insurance for themselves that actually works for them? What are the products that need to be available and out there, and how can we understand what those products are?

Let’s keep it simple. Let’s not talk about benefits that have 10 tiers to them, where you have drugs that have four different tier levels. If your doctor prescribes you this, it will cost you $5, or if he prescribes you this, it’ll cost you $50. There’s just far too much complexity in it. It’s time to simplify it once again and bring it back to being a insurance instrument rather than the financial world that it’s become.

On that note too, a lot of insurance companies now are looking to becoming banks. Wellpoint has investigated having part of its company actually listed as a financial institution. They wanted to get into banking and the reason they want to get into banking is for HSAs, health savings accounts, because they realize if they control the money that is in those accounts and they can make a percentage on that, they can also charge for the management of those accounts. And then they’re also in charge of what they are actually going to pay the providers of care. So it means they lock up every single dollar potentially that is available in that healthcare pool coming from consumers to insurance companies.

You mentioned that few medical students are going into primary care. How can we fix the problem where doctors have to do more procedures to make more money?

I think that’s precisely what we’re seeing in primary care. It’s a thinking specialty. It’s not necessarily a doing specialty. Specifically, pediatricians. They’re having to see more and more patients faster and faster, just to keep the volume up to be able to meet the bills. But what they really are doing is this encounter base as opposed to performing procedures, being more procedure-based.

We really are seeing the death now of preventative medicine in the United States. Part of the shift has been because insurance companies found it a lot easier to be able to cut reimbursement to pediatricians, to family practitioners. They’ve really taken a lot of money out of that system. They’re not paying for those sorts of things. And so these doctors have a low incentive to go into these specialties in the first place. They have a much higher incentive to go into things like anesthesiology or cosmetic dentistry, those sorts of things you get paid for and you get paid handsomely.

At the same time, you have insurance companies putting dollars into things like disease management programs and pay-for-performance and quality measures. You look at that and say, it’s fine that you are quantifying and measuring these things, but unless you’re going to put money into those things, ultimately what you are doing is paying for catastrophic care. You’re paying for illness to be treated as opposed to preventing illness in the first place.

Some insurance companies seem to be waking up a little bit to that, but are still focused on the high-dollar specialties. They erode the preventative medicine as close to the bone as they could. It wasn’t just cutting the fat, it was actually cutting to the bone in terms of primary care while they pursued other initiatives in the specialty care.

They’re looking at oncology drugs and formularies and all of those sorts of things. It’s almost like they took their eye off the ball and didn’t realize that they really are game-changers in terms of how care is going to be delivered in the United States. If you’re not paying for certain things, then the delivery of that stops. If you’re not investing in preventative medicine, then the delivery of preventative care goes away. And that’s where we’re at.

Even if the insurance companies turned things around tomorrow, just looking at any of the data coming out of our medical schools in terms of physicians going into primary care, you’ve got this huge gap. It’s going to take at least a generation to fix. If we had folks going into medical school today that had decided they were going into primary care, they’d still have to go through the four years of college, internship, and all those sorts of things before they’re coming out into the world of owning our own practices and delivering that care back to society.

So there’s a real time lag that we should all be very rightly concerned about that the insurance companies have by dint of their policy-making and their strategic decision-making have actually created this situation for us. Part of the mission of The Verden Group is being able to track that strategy and see how its playing out and being able to get that information in front of medical societies and regulators and various other entities that we work with, to basically say, “Hey, you’re going down the wrong route on this strategy. If you’re going to throw million of dollars into measuring diabetes care but you’re not going to pay primary care physicians to actually spend the time educating the diabetic and following up on the treatment of that care, you’re going in two different directions at once and wasting a lot of money with that.”

That’s the neat thing with being able to work with these medical policies and these administrative policies. We’re getting a jump on the way things are going to play out in the next quarter, the quarter after that, and the next year, for example, based what we’re seeing in terms of where the revenue is flowing and how difficult it is for physicians to be able to provide care and get these services to people that need them.

So to answer your question, where do we go from here and can insurance companies really turn this thing around? I don’t think that they can. I don’t think that they should any longer be trusted to do that. They have driven the market. They have driven care in this country to a very precarious place.

It’s really time to take back that responsibility to stop continuing to pay hand over fist. For what? For payment of services? We can figure out a better way to pay providers of care. It doesn’t have to go through an insurance company that really has a vested interest in holding onto that money and making decisions that are going to be very contrary and the health of society at large.

What do you think the motivation of insurance companies is when they offer to subsidize electronic medical records or they offer personal health records and patient portals?

In many ways, they have to do that, in terms of being seen as progressive, to engage the consumer, to really show that they want to partner with the people that are in the business.

But electronic medical records are a really difficult thing for physician practices and providers of care to really implement well. Just having an electronic record doesn’t do much for you. It’s only the implementation and how it’s used. So unless you have the level of sophistication with the folks that are actually going to use the system, the systems themselves are relatively useless.

It comes down to: what’s the purpose of it? How is it going to be used? How easy is it to be used? Can it actually be fit into delivering care to the patients, or is it simply that something that the insurance company built that looks good, that gets them some kudos to show that they are being good responsible citizens, being part of this IT wave to make these things more accessible?

I think there obviously a lot of benefits to electronic records. Just being able to have your own personal history depending whichever physician you need to go to. There is a real value component there to being able to manage care more comprehensively. That’s certainly goes without saying.

But having an insurance company offer to implement and make available those electronic medical records raises a couple of questions. Part of it, too, is that physicians are very reluctant to want to participate in programs such as that, because what happens if you want to drop that insurance plan? The more insurance plans tie you up in their network, the less able you are to extract yourself from that, so you may end up making very large concessions such as lower and lower rates because now your medical record system in your office is tied to this insurance company. How do you break away from that?

You also then have a responsibility to abide by the insurance company’s demands in terms of how that information is used. What are you signing up for and what are you trading off in order to actually have that medical record in your office? So I don’t think insurance companies are the right people to be offering those sorts of things. I think they do it because there is a certain amount of goodwill that may occur with it.

But also, they need access to data. Right now they rely on claims data. That’s how they are getting their data. It’s very expensive for them to audit paper records. And so, when they are doing these pay-for-performance programs and looking at various things that way, they are really relying on the quality of the claims data that’s coming through.

We see that is really a problem too, because if you’re a doctor and you don’t know much about the business of managed care, and you’re just checking the box on a code but you don’t really know what that code represents, and you’re not keeping yourself up to date with coding and changes and how your CPT and ICD-9 code combinations should go along, pretty soon the information that you’re submitting to the insurance company that you’re getting paid on really isn’t representative of what you’re doing.

Further, you may not be billing for certain things because you know they are not paid for, rather than having to write them off every time. You just stop billing for them, such as developmental screening or visual activity screening, these sorts of things, so they don’t get captured. And so the insurance companies are grading you based on the quality of your claims data as opposed to the quality of your actual charting.

If they have access to that medical charting, they can link these physicians in, it gives them another source of data to pull from to really see what is actually being provided to patients. So that could be another angle to it in terms of what they’re doing and why they’re doing it. It doesn’t look like there’s too many insurance companies that are offering to make medical records available to physician practices anyway at this point.

What about the ICD-10 coding system?

I think the ICD-10 coding system is great in terms of getting to a greater level of granularity in terms of being able to really accurately pinpoint what those disease classifications are. It’s been around for a decade or more. I think England adopted it in ’99 or ’95 or something. It’s been around for a long time, but again, it comes down to education. I don’t think there’s been enough education around this so that offices are really going to able to accurately code and use them.

You’re going to find, I think, that folks are going to end up with a lot of denied claims, so it obviously benefits insurance companies, but a real problem for the physicians until they figure out why something is denied. If you call an insurance company and say, “Why was my claim denied? I need you to explain this to me,” all they will tell you is you billed with the wrong code. They won’t tell you what the right code to bill with.

From their perspective, they are saying, “If we tell you the right code that gets you paid, who’s to say that’s the actual code that you needed to use because that may run contrary to what the diagnosis was from that person?” So I understand the hesitation, but there isn’t a transparency there to basically state, “For CPT codes XYZ, these are the applicable diagnosis codes that go along with that.” That piece is missing. So how are these doctors officers really supposed to digest, absorb, and then use the ICD-10 coding?

If you have a good practice management system, you’re in luck, because a good practice management system used with technology can help you code better. If you punch in three digits instead of five, or five instead of seven, you know that there may be other options there and you can search through and pull up the right code. But again, there’s going to be this steep learning curve for physicians to do this.

Ultimately, though, I think it goes a long way to being able to capture with more specificity what exactly the diseases are, what exactly we’re seeing in healthcare and being able to record that more accurately. I think it’s necessary just for societal programs, being able to really pinpoint how chronic disease like diabetes or ADHD, these sorts of things.

We think we’ve got some good data, but again, it’s relying on what physicians have coded to date, so how detailed is it? How robust is that data? Adding ICD-10 to the mix doesn’t add anything by dint of just adding it. It’s really how is it going to be used? And if we don’t spend a lot of time and energy in educating physicians on how that should be used, then once again, we’re only getting halfway there. We’re not actually able to take advantage of what something like ICD-10 can do for us.

What technology should practices use that they typically don’t?

There’s a lot of tools out there that insurance companies make available, such as verifying eligibility. There are plenty of tools available where someone at the front desk can key in your number, pull it up, see what your benefits are. In a perfect world, that person would have a conversation with that patient about what their benefits are, what their deductible may be for the day, and really be able to utilize the information that they’re seeing.

We’re not seeing doctors’ offices take advantage of that, and part of the reasoning is they don’t participate with just one plan. If it was just one plan, it would be fine. But if you’re participating in 15-20 different insurance plans, you’re not going to learn 15-20 different systems. There are a few aggregators like NaviNet that have 10 or 15 different insurance companies. It may be a lot more by now, I’m not sure. But you have some aggregators where you can key in and it will pull it down from different insurance company Web sites.

I think if there were a much better job done in terms of having a consistent platform that all these insurance companies had to conform, rather than having one physician office having to conform to 15 different ways of doing something. I think we would see the adoption of technology uptaken an awful lot faster at these doctors’ offices.

We’re all human, right? You learn something once and you stick with what you know. You’re not going to take the time to actually learn how to do different, over and over, the same sort of thing done differently over and over again. And then to keep up with how all these things are changing – it’s really an enormous task, I think, for a lot of these doctors and their staff.

The technology is available, it’s just not in a way … again, it comes down to information, but also how this stuff is put together. It’s available, but it’s very difficult to actually adopt even in the simplest case of eligibility, because of the fact that there is just such variation across the spectrum of insurance companies you might participate with.

If you look ahead 5-10 years, what changes do you think will happen with regard to reimbursement in practices and what could change in healthcare that will have a technology impact?

Well, I’m hoping that, in five years, we’re going to take the insurance companies down and reshape the landscape. I think at this time we don’t have any other choices.

From a technological perspective, I would hope that within five years we would have these consistent platforms. We don’t even have a practice management system. There are 200 different types of EMRs out there. There are 500 different insurance companies in the United States. The variation and the degrees of variation are enormous. So I would say that in five years, anything could be improved.

From a technological perspective, we would have insurance companies and practice management software companies all being able to work off of the same platform so that these different pieces of these different applications can actually talk to one another and there’s a consistent way of being able to use it. Everyone knows Internet Explorer. You understand what you’re going to get. You know where the URL goes. You know how to get to a site. The same sort of thing. If there is that consistency across all the insurance companies, just being able to do the one repeatable exercise over and over and get the same consistent output, that would really go a long way to being able to remedy a lot of expense that’s in healthcare today.

Personally though, I would like to see things changing in a much more radical way. We talked a little bit about insurance companies actually being insurance companies again. Why have networks? Why is there a need for physician networks? There’s no benefit to that except the insurance companies are really figuring out who they are going to pay, what, and when, depending on your specialty, depending on the size of your practice, depending on the area of the country you are in. There’s an awful lot to manage for an insurance company and it adds a lot of expense. From their perspective, they are able to control the dollars a lot better.

Instead, get rid of the networks. Move more towards consistent platforms where consumers can have access via IT, via Web sites, to be able to see what are the fees that a doctor is going to be paid if you were in charge of your own healthcare spending; if those dollars are yours to spend.

For example, instead of an employer putting all this money into the insurance company, if it goes into HSA accounts and you get to spend that on your healthcare and you have an insurance plan that rides that. If you’re able to use technology to compare what insurance company is going to pay for, say, an office visit, a new patient visit to a dermatologist – you can see, using technology, what any dermatologist in your area is going to charge you for those services, then you can decide, “Am I go to the dermatologist that’s going to accept a $100 payment that my insurance company is going to pay, or I want to guy to the guy that came highly recommended but he’s going to charge $150 and I’ll pay $150 out of my pocket?”

To me, that’s where technology can really help us here. We do it with everything else. We go comparison shopping for everything from computers to even grocery items at this point. We can buy cars online. We’re able to compare all these things to see what the real costs that are involved in it, what people are charging, what you need to pay out to acquire certain products and services.

If there could be a better use of technology five years from now, I’d love to see something like that. Get the transparency in place with the insurance companies. Stop with the complexity of IT that’s being used to really keep costs high and keep physicians and consumers in the dark and really open it up so the health system can be more of a commodity than a luxury that it is for so many people today. It’s probably the most expensive service that they can possibly utilize.

Is there anything else you would like to mention?

As you can tell, I tend to have a somewhat diverse way of looking at the market. I think information technology is so important to so many things, but we’ve really cracked the code in terms of how that’s supposed to work. How it’s supposed to work with purchasing transactions over the Internet, those sorts of things.

Where we seem to not be applying ourselves very well is having consistency in our systems to costs in the healthcare industry. If we focused on that and, through it, forced a lot more transparency with the insurance companies, than I think we’ll really start seeing some tremendous changes in the healthcare industry. The costs don’t have to be what they are. They are what they are by nature of the complexity that we’ve built into the system. Information technology is a great leveler and a great simplifier of complexity in all other industries, so cracking the code in terms of healthcare and how to apply it to healthcare and make things a lot more transparent.

This is what we at The Verden Group are trying to do through our policy tracking and ability to actually get that information out to the different entities. Right now, we work with everyone from brokers to politicians to providers of care, to really highlight and show how the insurance companies are operating, what their policies are looking like. Start asking those questions, “Why?” as opposed to things that have happened after the fact and you take it on the chin and move on.

This is forcing much greater dialog at all levels of society. It’s not just between the insurance companies and the physicians. It’s not just between regulators, the insurance commissioners in different states trying to keep up with regulations. Now it’s putting all these things together and saying, insurance companies have invested a lot of time, money, and energy in making this as opaque as possible in order to reap as much profit as possible. So we can deploy IT for purposes of transparency and I think we’ll win the war on this one.

An HIT Moment With … Dan Nigrin

An HIT Moment with ... is a quick interview with someone we find interesting. Dan Nigrin, MD, MS is senior VP for information services & CIO, Division of Endocrinology & Informatics Program, Children’s Hospital Boston; assistant professor of pediatrics, Harvard Medical School; and affiliated faculty, Harvard-MIT Division of Health Sciences and Technology.

Mainstream applications always struggle with peds-specific logic. Does pediatrics really need to be that much different and are vendors doing enough to support it?

Yeah, pediatrics definitely requires specific functionality that, in the past especially, didn’t come "out of the box" for many systems on the market. Good examples include growth chart support, weight-based dosing, gestational-age based dosing, and for some centers like ours at Children’s Boston, being able to document interventions performed on fetuses while they’re still in utero!  

Overall, I think that vendors have made strides in many of these areas. For example, our Cerner system now includes good functionality for weight and gestational age-based dosing and decision support to go along with them, and the growth chart functionality allows for custom, disease-specific growth charts to be loaded by the client.

But we’ve still got a way to go. Case in point: in 1997 I wrote a Web-based application called GrowthCalc to allow specialists at our institution to calculate various anthropometric values on their patients. Today, over 10 years later, it’s still used on a daily basis at institutions around the world because nothing better is out there. It’s not that my work was that fancy or special; it’s just that it fills a niche that hasn’t yet been included in the EMR systems on the market.

What are the five most promising systems or technologies being used or considered right now at Children’s?

Five?  OK, you asked for it – I’ll move from the micro level, the patient, outwards to the hospital level, and then to the macro level, the region.

• Our MyChildren’s patient portal, which we are now rolling out to all of our patients. In addition to the usual stuff found in tethered patient portals (e.g. appointment requests, billing inquiries and online payment, demographic updates, secure clinician messaging), we’ve also seamlessly built in Indivo functionality to allow our patients to have a secure, portable, personally controlled health record (PCHR) that is automatically fed by our Children’s clinical systems. We’ve had discussions with eClinicalWorks, whose systems we are putting into our affiliated pediatric practice network offices, to likewise automatically feed those patient’s Indivo records with their primary care information. Most importantly, with the patient’s consent, clinicians within Children’s will have single-click access to the patient’s Indivo record from within our EMR environment so that, unlike most personal health records out there now, our clinicians will have ready access to the information that our patients are maintaining.
• Discern Pages. It was called Discern Desktop and new rumor is that it will be renamed again to Millennium Pages. This is a new Cerner technology and API that allows for custom HTML development to be done within the Cerner application environment. This includes support for Javascript, including Ajax, all while operating within a patient context, so you can easily query for patient data and generate your own interactive and rich UIs. We’ve already created several very promising proofs-of-concept, including one where we display our Philips bedside monitor information right from within PowerChart.
• iAware. Another new Cerner offering, this is an always-on system intended to be displayed at the patient’s bedside, likely in a critical care environment. Our intensive care unit clinicians had found it difficult to get a good overview of the patient when they had to click through various parts of the chart to find the bits of data they needed to synthesize the patient’s status. This new approach aggregates the key data elements, including vital signs, labs, meds, and inputs/outputs, and shows them in a very intuitive and graphically rich way. From a technology point of view, there’s nothing to it – we deployed it live in three weeks in our intermediate care unit – but from a clinician’s point of view, it’s priceless. It actually takes the data that we work so hard to collect electronically and presents it to clinicians in a useful way (what a novel idea!).
• MA-SHARE. Building on the success of the New England Healthcare EDI Network (NEHEN), which allowed New England payers and providers to exchange administrative transactions in a secure way, MA-SHARE (Simplifying Healthcare Among Regional Entities) is allowing organizations in the New England area to exchange clinical data. Our primary focuses right now are on exchange of CCD documents between organizations as well as the facilitation of ePrescribing in our region. This is a RHIO done right – a sustainable, beneficial model.
• Catalyst / i2b2 / SHRINE. Harvard University was recently awarded one of the NIH CTSA grants to further clinical and translational science across the country. A major focus of our proposal (now called Catalyst) centered on IT and its ability to tie together the various people and projects Harvard-wide. Using i2b2 querying tools developed at Harvard and now deployed at four major Harvard teaching hospitals (Beth Israel, Brigham & Women’s, Children’s, and Mass General), we also are working on SHRINE, which will allow us to execute clinical queries across these institutions. So investigators will soon be able (with IRB approval) to ask questions like, "How many patients are seen at each institution with disorder X who also have lab value Y and who are on medication Z?"  Powerful stuff …

Children’s has a notable informatics training program. What influence does their scientific work have on the practical side of the healthcare IT market?

The Children’s Hospital Informatics Program or CHIP is a biomedical informatics multidisciplinary applied research and education program that’s been in place at Children’s since the mid 90s. Although its roots were definitely in clinical informatics, it is now also a leader in functional genomics, public health informatics, and personalized medicine. What’s more, its members understand that all of these things are interrelated and that their true benefit comes when they’re not looked at in isolation. For example, the genotype is worthless without phenotype information to go with it.

Examples of ways in which CHIP’s work has had influence on mainstream healthcare IT include:

• Distributed querying. Some of the earliest work from CHIP included a system called W3-EMRS, which allowed queries for a patient’s data to be distributed across multiple organizations. It was implemented first as a pilot and then successfully used at Caregroup, when it was first formed to virtually integrate the disparate EMR’s that each institution brought to the table. Similar models are now used in several RHIO efforts. In addition, this distributed query approach is now the basis for SPIN, the shared pathology information network; and SHRINE, described above.
• Secondary re-use and mining of clinical data. We realized long ago that the treasure trove of clinical data being acquired by EMR systems was largely underutilized. In the late 90s, I developed the Goldminer system at Children’s, which allowed for much easier investigation of the data stored in our systems for clinical research. This was soon followed by work at Partners in the Research Patient Data Registry (RPDR), and which in turn led to the development of i2b2. i2b2 is now implemented in many institutions nationwide, and although open source, there are commercial vendors out there who specialize in its implementation.
• Public health informatics. We’ve done quite a bit of work using existing data sources for public health related functions. Aegis performs automated, real-time surveillance for bioterrorism and naturally occurring outbreaks. It is the syndromic surveillance system for the Massachusetts Department of Public Health, enabling real-time population health monitoring. HealthMap is another CHIP project that was funded by Google.org to gather and display information from news sources around the world about infectious diseases.
• Genomics. CHIP members pioneered the use of relevance networks in the analysis of both genetic and clinical information, and they literally wrote the book on using microarrays. They continue to lead the field.
• Personally Controlled Health Records. Indivo.

How did Indivo come about and what impact will it have on healthcare?

About a decade ago, researchers in CHIP developed the open source Indivo. It was actually called PING back then. It was, essentially, the world’s first PCHR. It enables patients to own complete, secure copies of their medical records. A good analogy is that it’s like a Quicken for healthcare.  

It is amazing to think how far Indivo, and the idea of putting patients in control of their health information, has come in that time. It still seems futuristic to some, but we expect PCHRs to be universally available and used in the very near future. There’s been a lot of buzz around PCHRs since Microsoft and Google announced theirs; what people may not know is that both companies’ deployments are fundamentally based on the Indivo model. There’s even a rumor out there that MS’s HealthVault actually contains some Indivo code under its hood. Both companies were present at our two Personally Controlled Health Record Infrastructure conferences we hosted at Harvard in 2006 and 2007.

As many people know, Dossia has also adopted the Indivo infrastructure, and in fact Wal-Mart just went live, offering our Indivo-based PCHR to 1.4 million employees and their dependents.

Indivo and PCHRs in general will have a major impact on healthcare. With PCHRs, patients will be able to aggregate and share almost all of the information in their medical records such as lab tests, medications, and clinical notes, which in the past has been largely inaccessible to them. We see this leading to improved communications and continuity of care with clinicians, and the ability to provide more complete and accurate information to health care providers than the current system allows.

We also see this as exciting for the biomedical research enterprise. With PCHRs, researchers may be able to recruit with patient consent hundreds, thousands, possibly millions of patients from all over the world for their studies, potentially speeding up the time it takes to bring research to the bedside.

While this is all very exciting, there is a lot of work to be done if PCHRs are to reach the full extent of their potential. In a recent New England Journal of Medicine article, my colleagues Ken Mandl and Zak Kohane call for attention and regulation as various PCHRs are developed and adopted. Without it, it’s possible that the tremendous benefits of PCHRs could be overshadowed by problems arising from the unethical and uncontrolled use of valuable medical information.

Which title have you found to be the best for impressing strangers: doctor, CIO, Harvard professor, or the guy behind the Defective Records electronic music label? How do you find the time to do all that stuff and which ones require wearing a tie?

The last, by far – the first three things are a dime a dozen! Seriously though, my music creation and record label stuff, and more recently software synthesizer development, are all great hobbies that I wish I had more time for. How do I do them all? Jack of all trades, master of none?? Oh, and about the tie – if you believe my friend and across-the-street colleague John Halamka, you don’t need a tie for any of ’em, just a black mock turtleneck!