HIStalk Interviews Dave Nesvisky, VP, Red Hat Healthcare

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

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

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

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

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

Summarize the offerings are that are available for healthcare.

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

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

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

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

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

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

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

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

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

What are the benefits to McKesson customers?

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

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

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

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

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

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

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

What about relationships with other vendors?

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

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

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

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

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

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

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

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

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

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

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

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

How much technical training is needed?

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

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

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

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

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

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

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

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

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

What’s you sense about open source healthcare applications?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How many employees does Red Hat have?

I think we have about 2,500.

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

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

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

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

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

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

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

I appreciate that.

Hopefully you got a shoe shine at HIMSS?

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

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

Anything else?

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

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

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

 
Photo: SF Business Times

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

Tell me about CalRHIO.

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

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

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

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

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

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

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

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

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

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

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

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

Describe what the CalPERS endorsement means.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How does CalRHIO snap into place with national efforts?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What interaction will you have with personal health records?

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

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

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

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

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

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

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

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

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

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

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

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

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

HIStalk Interviews Rick Skinner, Director, Navigant Consulting

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Should the boat show atmosphere of the HIMSS conference change?

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

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

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

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

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

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

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

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

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

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

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

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

Is there anything else that you want to talk about?

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

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

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

  

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

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

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

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

Tell me about your IT department.

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

That’s all McKesson, right?

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

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

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

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

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

How do you run things with regard to IT governance?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What are you looking at in terms of success metrics?

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

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

How are you going to implement the Oacis repository?

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

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

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

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

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

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

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

Who’s commercializing the Vanderbilt product?

It’s called ICA, Informatics Corporation of America.

That’s right, I know those fellows.

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

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

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

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

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

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

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

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

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

There’s a product called Novo out of Georgia.

Novo Innovations.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes. Ed Fotsch.

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

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

HIStalk Interviews Girish Kumar Navani, President of eClinicalWorks

  

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

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

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

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

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

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

What did you think of HIMSS?

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

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

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

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

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

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

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

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

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

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

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

Did you ever think it would get this big?

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

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

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

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

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

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

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

What’s the scope of the New York project?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How much of your business is replacement business?

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

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

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

Will ad-supported free systems have an impact?

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

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

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

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

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

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

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

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

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

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

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

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

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

Let’s start with Allscripts.

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

Misys.

Non-factor.

Even with iMedica?

No. Misys, non-factor.

Sage.

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

GE.

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

PracticePartner.

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

athenahealth.

Billing service. No competing EMR.

Nextgen.

Complicated, same as last time.

Epic. You admired them last time.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Anything else?

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

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

HIStalk Interviews Peter Pronovost MD PhD, Johns Hopkins University

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

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

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

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

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

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

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

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

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

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

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

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

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

Correct.

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

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

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

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

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

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

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

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

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

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

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

We gave them strategies, like standardize what you do. Create independent checks for things that are important, and when things go wrong, learn. So we said, “There are about eight different pieces of equipment that you need to comply with these CDC guidelines — caps, gowns, masks , gloves. Go store all the equipment in one place. Eight steps down to one.” And people really loved that.

We then said, as an independent check, docs, when you’re putting in these catheters, nurses are going to check to make sure you do it. So, nurses, we want you to assist docs and make sure that they do all these things. When we first said it, the nurses said, “Hey, my job isn’t to police the doctors, and if I do, I’m gonna get my head bit off.” And docs said, “You can’t have nurses second-guessing me in public. It looks like I don’t know something.” To which I said, “Welcome to the human race. You don’t know things.”

I pulled all the teams together and said, “Is it acceptable that we can harm patients here in this country?” And everyone said, “No.” So I said, “How can you see someone not washing their hands and keep quiet? We can’t afford to do that. In the meantime, you can’t get your head bit off, so docs, be very clear. The nurses are going to second-guess you. If you don’t listen to what they say, nurses page me any time day or night, they’re going to be supported. There’s really no way around this. We have to make sure patients get the evidence.”

When it was presented that way, the conflicts melted away, because issues became not ones of power and politics, who’s right and I’m a doc and you’re a nurse, but one of the patients.

Is it hard to assemble an inarguable body of concise items to create the list initially?

Let me tell you what our vision is. It does take some effort. It takes probably about a year and roughly $300,000 to produce a program. What that means is to go from a concept: “I want to eliminate MRSA”. To summarize the evidence; to develop practical ways to measure that in the real world that are valid and sound; develop the performance measures; to get a data base in place; to do what I call the technical work.

We view it very much like a form of pipeline. We have a process to say, “Let’s go from idea to program. We pilot test it at Hopkins, and then we launch it to the broader community.” It’s a very scripted process now. We’ve become more efficient at doing it, and we absolutely need to be, but we have a very clear program of how to translate evidence into practice. The concerning thing is that there’s no darned funding for this. NIH doesn’t fund this kind of work. AHRQ’s budget is so anemic that it can’t really do anything. So we end up with all these therapies that we know will work, but patients get them about half the time in this country.

So does the work that has to be done only have to be done once and then you can just basically pick it up and drop it in everywhere?

Generally, it’s so inefficient and so ineffective for every hospital to do their own programs; to do what I call the technical work. Now these programs require both technical work and what we call adaptive work, or culture change. The culture change is all local. So we summarize the evidence of the checklist and then we go into a hospital and say, “OK, given your own culture and resources, how do you make sure every patient gets this?” And they modify it a little bit, but the technical pieces, the evidence supporting the checklist, the way to measure if it works or not, so the data collection – are all standardized, as they should be. So those are the science pieces that are true that the central group develops. But once you develop them, there’s virtually, minimal, marginal costs to put it in a thousand or ten thousand hospitals.

Other than grant funding, wouldn’t there be other sources of funding, either private or that one hospital will get so much benefit that they’ll pay for it and share it?

Certainly there’s some philanthropy that people now have become interested this with the New Yorker article, but unfortunately there hasn’t been much federal funding in it. I believe insurers ought to be funding this because they get a windfall from this. There’s no doubt they reap substantial benefits.

This is a non-profit effort that you’re leading right?

I’m an academic doc at Johns Hopkins. Exactly right.

Nobody making money off this? Basically, you’re looking for somebody to cover the costs enough so you can roll this out, in essence, for free?

Exactly right. I’m an academic doc, so any grant I get’s just off my salary. No one’s making money off of this.

Surely you’ve gotten a ton of publicity?

There’s certainly been a lot of people that say, “Hey I’m interested in this.” We’re certainly working on a number of angles. There needs to be more than a vision. There needs to be a strategy for this that’s saying, OK, lets take pediatrics, let’s take emergency medicine, let’s take OB, let’s take surgery. Let’s make sure we develop a model that translates evidence into practice. We just have to find some financial support to make it happen.

I guess the cynic in me always says that healthcare’s pretty distinctly profit-seeking in most areas. If there’s no money to be made in better treatment …

I’ve had people who want to make money off of this hounding me. I’m getting called by everyone who’s saying, “You’re onto a goldmine here. You saved the state $200 million. It costs $500,000. That’s a great ROI. Let’s go make money on it.” I personally think that some of these things … This is a not-for-profit tool. The initial thing’s funded with public dollars, it ought to be public good that we put in broadly.

Most of my readers are information technology people. I know you’ve done other work other than just “‘the list”.

We did this kind of naively. I think there’s huge information technology potential. One is automating the checklist into the work process. We had a very hard time monitoring compliance with it because it was paper-based; people lose the forms. There’s enormous opportunity. I’m not an IT guru. That partnership, I think, we need to make stronger. We need to partner with IT people because this could be an automated checklist in a handheld or a variety of formats that is used at the point of care.

The other thing that’s information technology that’s striking is, when we go into these large hospitals and ask what their rates of infections are, virtually none of them have the data stored in a queryable database. Its pathetic. One of the things that we did in this Michigan project was we built a Web-based data entry. They put in each month the number of infections and the number of catheter days so we can calculate the rates. We made it scalable so you could click and see what the rate was in ICU 1, what the rate was in all of in all of your ICUs, what the rate was in your hospital, or your health system, or the whole state.

So we created some architecture to underly this. It was really simple. And hospitals loved it because, for the first time, they had the data in a real-time time, scalable database. It just shows how rudimentary our clinical information systems for data quality are in hospitals. Even a hospital like mine, University of Michigan, they’re not stored. We haven’t invested in a database infrastructure to do these things in a scalable way.

I’m just speculating, but lets say a big systems vendor came to you and said,’ We’ll underwrite five of your programs in return for the ability to distribute them either exclusively or not”. Do you ever see that happening, where a vendor would maybe fund some of your work?

I have. A couple of the big health IT vendors have come. I think that’s a great support. You can see that these things are easily built in to an information system. It’s crazy not to. Instead of having all these pieces of paper around, you click onto “Central Line” and here’s the central line checklist. I’m doing palliative care, here’s the palliative care checklist. So, absolutely, I think there’s great potential for that,

The data management, it sounds simple, but there’s very few hospitals, or any, frankly … I can tell you large systems that have won awards for reducing infections. When I say,”So what’s your infection rates?” they say, “I don’t know.” or “It’s stored on this piece of paper or Excel file.” We haven’t invested in data management for quality reporting and we desperately need to.

There are two key success factors for this project. One is that it was evidence-based so the interventions are for sound evidence. But two, that we had valid measures, that docs believed that data. This wasn’t marketing like so many quality improvement projects are, where it’s “Come look how great I am,” but the emperor has no clothes, or the data has no credibility because there’s no quality control. It’s seemingly poor quality and the inferences are probably incorrect, the inferences about whether care got better. Docs believe this because they say, “Yes, it’s standard definition. Here’s the data. You can look at how much missing data you have. Here’s the data quality.”

In many senses, we created a monster in Michigan because now there’s a hunger in these hospitals for a pipeline, but we don’t have the infrastructure to deliver the pipeline. The docs are saying they love this approach, “Peter, you’ve transformed the state”. The hospital CEOs love it. You have their docs, nurses engaged in quality. The results are good. They’re all excited. So what’s next? Could we do the same model for VRE or MRSA and for palliative care and sepsis and for emergency medicine and for pediatrics? We certainly could, but we don’t have financial support. We have the model to create this pipeline. We’re working on it. We just launched, funded by MHA, a safe surgery project that has the same model. We’re going be looking at safety in surgery with some checklists and things like that.

How many of these do you think there could be? Are there enough solid facts?

Hundreds. Think about it. Stroke care, headache care, acute MI care, arrythmia care, asthma care. Our brain can’t remember all these things, so the key is the medical community responded to that by making these 200-page eviddence summaries, but nobody thinks that way so they’re not used in practice. The simple checklist approach conforms with how we think. I don’t want to trivialize it because the reality is, to summarize 200 pages of evidence into five checklists that are worded into behaviors that are practical but yet scientifically sound, takes some trial and error.

That sweet spot is a big part of what our key to success is. It’s what our shop does well, is that all of our people are clinicians, but trained in research methods. We know both the biases and the evidence and the clinical realities and we try to hone in on that sweet spot. Inevitably we get it wrong and that’s why we pilot test it and revise. So what you serve up is ultimately very practical, very scientifically sound, and usable in a variety of types of hospitals.

The biggest problem in medicine is probably getting stuff out of journals to the bedside. Even if this was short term, it seems there’s a lot of opportunity to use this a vehicle to push out recent findings.

Exactly right. We could translate evidence into practice quickly. The investment, from what you see, is trivial. You can use it throughout the whole world. We have formed a partnership with the World Health Organization to help put these things out more broadly.

The implication is that if the list works, the doctors were doing it wrong up until they had that tool. So basically, are they acknowledging that they’re just overwhelmed and can’t do as good a job unless they have some reminders?

I think what we say is, sure, they were part of this. What we’ve done with this is created a system. So yes, they’re human. Their brain doesn’t remember everything like mine or yours doesn’t. So what you’re alluding to and what I saw was that our pre-condition for using a checklist is the humbleness to say, “I’m not perfect.”

Healthcare wasn’t there five years ago and perhaps some physicians still aren’t there now. What we’ve shown is, when you accept that, like in anything in your life, when you acknowledge a shortcoming, it’s very liberating. You say, “I could use this aid.” And we changed the system to make it easier.

That chlorhexidine that I told you about reduces infection risk by half. But most of the central line kits didn’t have that soap. The doctors and nurses didn’t know how to change the purchasing to get it. So I sent a memo to the CEOs at the hospitals in Michigan at said, “There is a soap called chlorhexidine that that cuts infections by half. It costs pennies. Please make sure its in all of your central line kits. I’m going to e-mail you back in a month to make sure you did it.”

I have no authority over them, but what I found was that, when we did focus groups with them, they all knew safety was a problem. They were all committed to doing things to improve it, but they didn’t know what to do and most of them were to scared to say so, because you don’t get to be a CEO without having answers, right? I said, “OK, I’ll make it easy for you. I’ll send you a task every month. A really concrete task to have you go do it.” One of the tasks was putting the soap in. Lo and behold, a month later, the whole state has this soap in.

You’re an anesthesiologist as a specialty. I still would argue today that the most dramatic quality of improvement that’s ever been done, in any area of medicine, was when anesthesiologist got together and said, “Look. This risk of general anesthesia in surgery in absurd, We’ve got to make it better”. How did that come about and are the same sorts of roadblocks that the anesthesiologists figured out how to get around going to have to be overcome again with the rest of medicine?

What allowed that discussion was that humbleness to say, “We make mistakes. We’re not perfect.” A big part of our work was getting docs to reclassify harm. Most people put harm in what I call “the inevitable bucket.” Things happen because you’re sick or you’re old or you’ve had a big operation or you’re really young. That “bad things happen” kind of colloquialism. What we did is to say, “No, I think a lot of that is in the preventable bucket. Let’s reclassify it.”

When we did these infections, docs said, “We’re at the national average and these are the people infected and there’s nothing we can do about it.” I said, “I don’t know if we can do something about it, but what I do know is that we’re not using these five central evidence-based things in all patients. Let’s out a system in place where every patient gets it and lets see how well these rates go. I may be wrong and they may stay exactly the same, but my hunch is most are preventable. So can we agree that this evidence is strong and we’re going to create a system where patients always get this evidence because we owe it to them.” Of course, docs agreed on that and the results were breathtaking. It really opened them to say, “Wow. Maybe most of these are preventable.”

You also mentioned the airline industry, where early pilots were free spirits who eventually saw the benefit of having conformance to accepted rules. Does the same psychological way that it took to get pilots to give up what they perceived to be their independence need be applied to equally headstrong physicians?

Exactly right. That’s the tension that we have. How much evidence do I need to give up my autonomy? We’re still uncertain about that. As an industry, healthcare is grossly understandarized, compared to that pilots have to use checklists or they won’t be flying. Healthcare is still very much like the Wild West or like Chuck Yeager in The Right Stuff, where we have this cowboy mentality and we’re just beginning to accept that standardization is a key principal to making care safe. We need to do that. I think we have, especially among the younger generation of physicians, broad acceptance that they need to standardize. What the field of quality has to mature is, “How much evidence do I need before I take away your autonomy or, at least, put some restraints on your autonomy?”

I think you did an article, study, or consultant work involving computerized physician order entry. And there were some sky-rocketing error rates that occurred after implementation. What was your conclusion from that, since I’ve got a lot of technology readers?

What we saw is after the implementation of POE, errors went up dramatically. Though I think that publication surprised healthcare workers, they really shouldn’t. We learned this from aviation and other industries, that any time you change a system, you may defend against some errors, but you will inevitably introduce new ones. This always happens. You’re going to create new risks.

I think healthcare approached POE perhaps naively in that they simply sought to replicate the paper world in doing work electronically. Even the forms are alike. We want to make it look the same way. What that does is, it introduces new errors that weren’t there. So you’re substituted handwriting errors for, what I call, choosing one for many. Most physician order entries have drop-down lists because we have ten different doses of morphine. We haven’t standardized those yet. It’s a huge issue. We need to.

So predictably, some people are going to click the wrong box when they do that. It’s guaranteed. It’s part of human nature. It’s cognitively predictable that they will click the wrong box. Or we’ll have other types of errors, so that you’re substituting new types of errors. We probably hadn’t reflected on how to defend against those enough. We’re focused so much on learning the technology, replicating what the paper workflow looks like, that we didn’t simulate or say, “I’m going to introduce these whole bunch of hazards and how am I going defend against that?”

And, much of the decision support tools that really would’ve benefited from these technologies weren’t part of the initial systems. They’re developed in later. That’s not to say I don’t believe in technology. I think POE is a great tool, and it needs to be done, but we have to do it wisely with eyes wide open. Like, anytime I put something in, I’m going to introduce new errors. Let’s try to proactively identify these so we can defend against them.

The second, the significant mistake, is that we under invest in training and support for these systems. Learning a system takes a lot of ongoing training and support and risk reduction. So, as in real-time I introduce and I see a new hazard, how am I going to fix this and defend against it?

One of the absurdities that I see with POE now is the amazing amount of waste and ineffectiveness of having every hospital home-grown their own decision support tools for these systems. So Hopkins, the main hospital spending thousands upon thousand of person-hours designing their own order sets and decision support tools. Those things take a tremendous amount of time and person-hours. If you add those up across the six thousand hospitals in the US that are doing this, the collective cost is outrageous. It would almost be like each air traffic control developing their own technology and system and not working together.

So somehow, I think, the industry needs to begin to say, we have to work smarter. It’s inefficient and ineffective for everyone to be doing their own thing for these tools because good decision support takes a lot of work. It’s just like the curriculum or good safety programs. We’re going to break the bank if every hospital has to invest hundreds of teams of people developing their own. But perhaps our inability to do that is emblematic of the cowboy mentality, that we can’t get the docs in one institution to agree, let alone talk among hospitals. It says how understandardized we are. You don’t want have every airline or every pilot developing their own checklist to say, “No, my checklist is ABCD. Your is this.” There’s an industry standard.

My audience is mostly executives and informatics people. Is there any message you’d like to leave them with as far as informatics and technology in healthcare and error prevention?

Sure. I think that the most important message is that no one group can do this alone. There needs to be greater partnership between clinicians, information technology, and methodologist or safety experts or measurement people, so that we can put programs together that could help clinicians use evidence in interventions and evaluate the extent to which they actually improved care. That’s going require the collaboration of all three of those groups.

HIStalk Interviews Denis Baker, VP/CIO, Sarasota Memorial Hospital

One of Denis Baker’s employees e-mailed and said I had to interview him, including a long list of reasons she enjoys working for him. I knew of Denis mostly because of Sarasota’s work with Eclipsys and CPOE and was happy to visit with him by telephone.

Tell me a little bit about yourself and about your job.

I started in healthcare during Vietnam as a Navy corpsman, thinking that I would end up on a ship or a Navy base someplace. Then, out of total ignorance, I realized that I was probably going to end up in the Marine Corps, which I did for short while, but fortunately stayed out of Vietnam.

I got into laboratory medicine and then became a med tech. I worked in a hospital in Portland, Oregon for ten years, in a chemistry department. They were implementing their self-developed lab system. So I got involved interfacing all of the instrumentation to the computer system. This would have been early eighties. Then they thought the computer system was going to support itself, so they were going send me back to the bench. So I jumped to another organization and supported an HBOC Star lab system for a couple of years there.

I ended up being the manager of the clinical systems. Then a new CIO came into the organization and created a new position of Office Automation and End-User Computing Manager, which is the worst title in the world that I can think of. Was it meant, basically, was supporting PCs. It was a four-hospital system back then. They had no centralized support. So I pulled together a good support group for training around PCs.

I left the organization in 1991 and then ended up working for an outsourcing company that has since disappeared, moved to Cincinnati, and worked as a director of IT at one of the suburban hospitals there. Then, ultimately became the CIO for the four suburban hospitals who were part of the system. The whole consulting company crashed. At about that time, the CIO that I worked with in Portland, Jim Turnbull, had since moved down here to Florida and there was a Director of IT position. So I moved down here in 1995. I was the Director of IS for five years. Jim left in 2000 to go to Denver Children’s. I was promoted to CIO.

Your background is as a clinical department end user. Do you think that’s a good background for a CIO to have?

I think it so, because I looked around early on at who the early CIOs were. It seemed to be most of them were promoted directly out of IT and really didn’t have any exposure to the clinical world. I think that has really helped me as the whole shift in the industry is gone to clinical information systems. I can talk the lingo with not only lab folks, but also nurses and other clinical folks. Physicians as well. I think that’s been a leg up.

I think the future for healthcare CIOs in particular is to have a clinical background, whether that’s nursing or one of the ancillaries. I think you really need to understand what happens in a hospital, not just producing bills.

Should the ultimate goal be to have a physician running IT or does it really require that?

I think that physicians bring a certain aspect to the job, but I don’t think they necessarily know how a hospital works. I think they know how their practice works and how they interact with the hospital, but I don’t think they absolutely know what nursing does, or any of the ancillary departments, and what they do.

What do you like most and least about being a CIO?

Most is seeing technology applied to operational improvement in the organization and moving healthcare out of the dark ages. We’ve been on paper for a hundred years and many people have said there are industries that are far beyond us in adoption of IT. With good systems and good implementations, it’s remarkable what you can change within healthcare with IT.

Do you think clinical systems are realizing their potential, or are those systems still a generation away?

My chief medical officer asked a similar question a couple of days ago. He compared it to the automobile industry, where the tires might last for five miles and then you’d have to replace them. He thought that maybe we’d moved now into maybe the thirties or forties as far as automobile technology in comparison.

But I think we’re really in the fifties. I think the systems work, but they don’t have all of the bells and whistles that the current car today would have. It’s going to be an evolving process. We’ve been at this, with the clinical information system, for twelve years and it seems like the work is never done. There’s always something changing and something new. New functionality or, typically, some new regulation or reporting that has to be generated out of your clinical system, so the work never stops.

You never stop implementing a clinical system once you start. That, I guess, one of the downsides. You asked me the pluses and the minuses. I think the downside is, it’d be nice to wrap up a project and move onto another one, but it just never goes away.

Nobody can afford to replace those systems every few years. How important is it for the CIO to establish a relationship with a vendor and stick with them?

Let me start from day one, with negotiations with the vendor. Obviously the vendor’s interested in sales, market value, and stock price, but I think you need to reach a common ground on what you’re trying to achieve. I’m not a big one for really tough, upfront negotiations. I don’t try to nickel and dime them, but I do want performance guarantees. I do want access to senior management. I do want them listening to us as a customer base as to where their systems need to go, and hopefully they’re listening to us. Because you’re right, this system we’ve had for twelve years — I would not want to be here to be the one to replace it. I would not want to go through that agony again.

A lot of places just trade Vendor A for Vendor B while the hospital down the street is trading Vendor B for Vendor A.

Once again, I think it comes down to personalities, and if you can develop a relationship with your vendor at a personal level and not slam your fist on the table every time there’s a hiccup, but thank them for when they help you solve problems … I think that’s the key to the partnership. I think some people get caught up in egos. They’ve negotiated some super-duper contract and the vendor, for whatever reason, is unable to deliver, and potentially the CIO or whoever negotiated is being held accountable for making it happen. So the knee-jerk reaction is, “Let’s go find Vendor B. That’ll work out much better than Vendor A did.”

How much are hospital executives involved in IT decisions?

Well, here, they’re pretty involved. The Chief Operating Officer, my new CEO that’s been here for about two and a half years – both of them have been involved in some pretty major IT implementations where they came from. I think they have a good understanding of technology and what the limits of technology are. Their caution to me and the organization is, “Just because you’ve got a problem doesn’t mean IT necessarily needs to solve it. We need to focus on our workflow and the operational improvement.” And then if there’s an opportunity for IT to get involved and ease that along, that’s probably the best course to take. I think all of my peers within the VP ranks have that same understanding.

How often is IT part of the strategic solution?

It’s hard for me to gauge at this point. We’ve had a new CEO for two and half years. Our Chief Operating Officer, he’s relatively new as well. I think the last thing they look for is an IT solution, but we’re still going through our version of Six Sigma or Lean Management or Process Control Management, whatever you want to call it. And then you take a look at, “OK,is there an opportunity for IT to get involved and help solve that problem?” So as we have a fairly new executive team, I think we’re still working our way through that.

Every CIO wants to run a world class IT operation, but hospitals don’t usually have large IT budgets. How do you choose your battles and stretch your dollars?

Number one, I’ve got a great staff. I have about a hundred people on staff. Being in Sarasota, Florida, it’s fairly easy to recruit good talent to this part of the world. We pay well. So I think that’s the first key, I guess, to making it a success.

I can only think of one project in twelve years that we’ve backed out of. Some of the projects may have taken us a little bit longer or cost us a little bit more than what we thought, but we’ve only had one complete failure in ten or twelve years, out of I don’t know how many projects we’ve been involved in. I think we’ve developed a reputation, as a division, for getting things done on time and relatively on budget. That lends some credibility, not only among my peers at the executive level, but also with staff; and also, even more importantly, with the physicians. If you get them involved in something and it turns out to be a success, you get less and less resistance as you move into other things to implement.,

If you look back two or three years, what projects gave you a lot of bang for the buck or made you glad you did them?

Probably the first one would have been what’s now the Eclipsys Sunrise Clinical Manger. It was created by a company called HealthVision, then called CareVision, the product. We were the first customer. We started to roll it out in 1998 to deal with nursing documentation and physician order entry.

At some point, the voluntary CPOE hovered at about 25%  and finally, nursing got tired of having to deal with the paper and electronic world. Our elected board then told our physicians, “OK, a year from now, it’s mandatory that you put your orders in.” Almost immediately, we saw the percentage starting to rise. We run probably about 80% entered by physicians, 10% verbal, and another 10% written or faxed in.

I think the whole CPOE and at least the beginning of the medication order process of transcription illegibility and so on – that went completely away. It created other problems, but at least it solved the illegibility and who actually ordered something.

Another project that took us a few years, but I think was ultimately a good decision … we needed an ERP system. We looked at Lawson and PeopleSoft and ultimately decided on PeopleSoft. That product has been rock-solid ever since we implemented it, even after the Oracle acquisition. In fact, we’re going through an upgrade to the HR side of this system right now. We had to engage some fairly expensive consultants to help us get it implemented and augment our staff. But I don’t lie awake at night worrying about PeopleSoft at all. It really helped with supply chain management, on the one side, and then we also had some issues with HR and payroll on the other. I think Peoplesoft solved both of those.

Anything on the infrastructure side that turned out to be a good investment of time and money?

Early on, as we implemented the electronic medical record, we were looking for a fairly robust network infrastructure. At the time, about the only thing was available was a technology called ATM. Implementation was good. It provided campus-wide network backbone capability up to gigabit speed. That served us well for a few years, until Cisco and the rest of the world got Ethernet up to speed.

Since then, we’ve gone with Cisco and that’s been rock-solid for us. Built in an awful lot of redundancy to make sure that the network never goes down and, knock on wood, it never goes down. Early on, the intent with the electronic medical record was to maintain all of the records on everybody forever. So we made an early investment with EMC and their technology. This would have been back in 1996 or 1997. We’ve been with EMC ever since. So from a storage perspective, expandability, once again, that’s worked out very well for us.

You made CPOE mandatory in 2003. What advice would you have for hospitals considering doing the same thing?

I‘ve looked at some of the organizations that have tried the voluntary route, but I think you can only do that for a certain period of time before you have to make it mandatory. Like I said, we coasted along for a few years with a 25% compliance and that was driving our nurses nuts. Having to check not only the paper chart, but the electronic chart for recent orders and so on. That’s going to cause quality and safety issues. So at some point, if you’re not making it with the voluntary, I think you better go mandatory.

You’re not going win them over with technology. They’re always going to complain about the time it takes to log on and how much longer it takes to place an order. But after a period of time, in our case ten years, they can look at patient information back to 1998. There’s nothing archived. Everything’s available and I really think they see that as a value in exchange for the whole CPOE piece, but it takes a while for you to build up that database for them to appreciate that.

Are you seeing any impact of the Stark relaxation and are you doing anything with physician office computing?

In a very minor way. We’ve had Siemens’ PACS system since 1996. I think three to four years ago, we implemented Siemens Magic Web, which is the online retrieval of images. They were able to do that within the organization. Obviously, they came to us and said , “OK, we want to see those images in our offices, and by the way, we don’t want to buy any equipment.”

So we were able to seed a few workstations out into some of our specialty physician offices; orthopedic surgeons and so on. That’s all they can do with them, look at our images. They can’t load it up with games and other stuff.

Physicians have the expectation that the hospital should provide them with an office EMR. We’re trying to figure out if our direction should be in that area. Obviously we’d have to charge some nominal fee. On the other hand, as my CEO reminds me, there’s a whole host of other companies out there like eClinicalWorks and so on that are offering ASP models that have relatively reasonable prices. They offer not only EMR, but also practice management.

So why, as an organization, should we get involved in that? The only challenge I have to that is that it would be nice to be able to have longitudinal medical history on our patients, whether they’re seen in an office or in the hospitals. I’m not sure how well some of those ASP offerings could be integrated into what we’ve got. So we’re kind of exploring that right now.

Are you seeing any impact of interoperability?

We’re the only not-for-profit hospital in four counties, surrounded by HCA, Universal, and HMA organizations,and they really have no desire to exchange data. I don’t think it makes sense, from a corporate perspective, for them to get into that. So we’ve really not been too successful in creating a RHIO environment here locally.

I tried to get some money out of the State of Florida. Jed Bush budgeted $10 million to get RHIOs off the ground. I made an application and one of the requirements was that it had to be with a competitor. I tried to make the argument that, in some cases, our physicians are competitors, but the state wasn’t going for that, so I didn’t get any of that money.

How would you say Sunrise is working compared to a year or two ago?

We did the 4.0 upgrade probably close to two years ago. That was probably some of the worst software I’ve ever seen. It took us probably eight months and I don’t know how many hundred patches and service packs to get all of that fixed. But finally, everything settled down and the performance came back.

Two months ago, we did the 4.5 upgrade. That’s was probably the easiest upgrade that we’ve ever experienced. That was real quality software. I think you could see the impact of John Gomez and his development team on the quality of the software they’ve produced.

With Andy Eckhert involved, do you think the direction of the company or its likelihood to success has changed?

Yes. Andy made a few visits here since we were one of the early adopters and I’ve liked the changes he’s made in the company. I’m not sure how successful offshore development is. I’ve never dealt with a vendor who has really relied on that quite a bit. I know they’re expanding their office in India to four or five hundred developers. So hopefully we’ll see, once again, a continued emphasis on quality software when that’s released.

Some of the other changes he’s made is decreasing sales staff and so on, and focusing more on support and development folks. The consultants that we’ve had involved in the 4.5 upgrade … the quality of the individuals, I think, has risen dramatically as well. As I understand it, they have to go through a three-month boot camp to learn the system before they’re ever turned loose on the customer base. I can remember years ago when a new hire would get hired on Friday and be assigned to us to fly in on Monday, knowing little to nothing about the system. They were just here as a body filler. But, like I said, the quality of individuals we’re dealing with now is much better.

Their future success in a having a broad clinical offering like the market wants is based on making Sunrise Pharmacy work. What are your thoughts on that?

I always thought that pharmacy really needed to be, not an interfaced system, but integral to the whole order entry process. Because they didn’t have that product five years ago, when we needed a pharmacy system, we went with McKesson’s Horizon Meds Manager. We had some transition issues with McKesson. So we implemented their system; we interfaced it with a bi-directional interface. That has its own uniqueness and causes its own problems. Now that Eclipsys has a pharmacy component, we’re going through an evaluation of, “OK, where’s McKesson right now? How would their new Meds Manager and Admin-RX compare to an integrated pharmacy module with Eclipsys?” So we’re going through that process this week, comparing and contrasting that.

One of the things I remembered about the hospital is you were one of the first, if not the first, to offer a turnaround time guaranteed time in the ED. Were there technology implications to that strategy?

Actually, no. That was all workflow. A new CEO came in two and a half years ago from Detroit. At least a couple of hospitals had implemented the thirty-minute guarantee. She walked in the door and said, “OK, we’re going to do that here” and turned to the ED folks and said, “Make it happen. Figure it out.” And it really had nothing to do with technology. It was all workflow and handoffs.

Now, somewhat after the thirty-minute guarantee was in place, we purchased the Eclipsys ED module, displaced boards and all that other stuff in there, and I think that helped. Now we’re on ED doing nursing documentation. And then finally, ten years later, asking the ED physicians to do order entry. Back in 1998, they screamed bloody murder, so we started someplace else. So it’s taken us ten years to get back to them. I’m anxious to get that piece wrapped up. But no, the thirty-minute guarantee had nothing to do with technology.

Tell me more about your department.

There’s actually three departments that report to me. I had more at one point, but right now I’ve got Information Systems, which is the pure technology stuff: the servers, the network, PCs, and all of that. There’s about sixty people there. The original project team that implemented SCM has been maintained as a separate department. They used to be all clinicians, with nurses, pharmacists, radiology techs, whatever. Perhaps less so today, but I wanted to maintain a real emphasis that there was a support department called clinical systems. It was responsible for, not only SCM, but now they’ve taken on the rest of the world: radiology, pharmacy, laboratory, all the ancillary systems as well. Their focus is more on the application side, with the IT department really worrying about the infrastructure piece.

We’re about 3.1 or 3.2% of the operating budget. Our routine capital is about $30 million a year and typically we get $5 to $7 million of that, This year, we’ve got $7 million, which is about a quarter of it. In fact, that was one of the attractions when I came down here. I came from an organization whose IT capital budget for four hospitals might be $1 million. When I came down here, my predecessor Jim Turnbull had gone through a planning process and gotten a commitment from the board to spend $50 to $60 million over seven or eight years. So that was a big attraction — being able to do things without scrimping on the basics. And I’ve been able to maintain that capital commitment board and administration. This is my third CEO. I’ve been able to continue the capital investment in IT for the last seven years since I’ve been CIO. So I feel pretty good about that.

With a large amount of money being invested, how do you decide where to spend it and how to justify the ROI that results?

I think I’ve been fortunate. We’ve really never been an ROI organization, which I appreciated as well when I first walked in here. It’s been focused more on what are the problems that the organization needs to solve. What’s the solution to it? How much does it cost? And then it goes into the budget.

I don’t have an IT steering committee. My IT steering committee is my CEO and she can be very direct at times. We had a JCAHO survey a couple of years ago. We ran into a couple of situations that IT could solve and she said, “Go make it happen.” And the real focus over the last eighteen months, if not more, has been on quality and safety. Now that we’re doing CPOE and eliminated the upfront transcription errors, how do we solve the problem of wrong meds, doses, and all that on the back end. That’s why we’re really focused on the barcode administration piece right now.

Are you worried that vendors seem to be moving toward hiring inexperienced employees right out of college?

I can’t say that I’ve seen that within Eclipsys. Most of the people that I’ve interacted with, all the way from implementation consultants to project managers, these people have got a number of years of experience behind them. I’ve seen the comments about Epic and the implementations and so on, but I cannot say I’ve ever seen that with Eclipsys. There always seems to be a requirement that either they have a clinical background and know something about how the department operates. And then they get educated in IT. And as I reflect on our original project team for SCM, that’s the approach we took. We attracted the best and brightest clinicians in the organizations and then took them through the IT training piece. That worked out very well for us. I think it would be very difficult to take some computer science graduate that just got out of school and teach them how a hospital works without a whole lot of supervision and good mentorship and/or project management.

Then we get into my concern about a company that is publicly traded is having to pay attention to what’s going on in Wall Street, and try to come up with, may be not the best model, but the most economical model, and hope that it actually works. I wish there were more healthcare IT companies that were privately owned. I see Wall Street as a huge distraction. A good example — I don’t know if you remember Transition Systems Inc.?

Yes. Eclipsys bought their decision support.

They missed the mark on one quarter. Their stock price dropped and then they got scooped up by Eclipsys. At the core, I think TSI was a good company. I think they had a Cadillac of decision support systems at that time. Through acquisition, good talent left.

That’s what I get tired of — the mergers and acquisitions. When we were looking for radiology systems, Siemens had a partnership with IDX at the time. They didn’t have their own good solution. So we went with IDX for radiology. Then that faded after about two to three years. IDX went to GE, and I can’t say I’ve seen a GE rep in the last two years since the acquisition. So this whole vendor churn and having vendors figure out how the new products that they’ve just acquired are going to integrate with what they’ve got seems like a huge distraction, not only on the front end of the acquisition, but on the back end on how are you going to make this stuff work.

What technologies do you see on the horizon?

I’m not sure I’ve got any original thoughts. I know there’s a lot of negative bias against it, but it occurred to me after Katrina, the paper records in New Orleans were gone and the only organization that seemingly did well at recovery was the VA. They took their backup tapes from their data center in New Orleans to Houston and, within a week, everybody in the nation had access to those records. I was trying to think, since I’m in the potential path of a hurricane as well, what would we do?

The whole idea with smart cards appealed to me. Downloading the CCR from our inpatient systems; providing read-write devices to our physician offices so they can populate it as well. The card isn’t so much the issue. The opportunity is having a redundant data center in Dallas or someplace where all the data is stored. But from a smart card perspective, not only has the core clinical data on that card to be read any place, its also available on some website somewhere. It provides a marketing opportunity for us with our logo all over the face of it. And then from an efficiency point of view, them walking in with their card, we swipe them, they’re registered, and they are done. Then they can go on to their appointment.

One of the issues that I’m not sure is unique to us is the length of time to identify the right patient, get them registered, and double check the insurance information. I believe that smart cards would solve that. Some of the discussions I’ve heard is, “Well, we should be downloading that to people’s cell phones.” Somebody’s always looking for the next technology and we’re really focused on trying to do smart cards this year, but we’ll see how well I do. It’s kind of a data concept, but I think it’s potentially could solve three problems for us.

One of your employees e-mailed me to suggest that I interview you and said, “As long as Denis is the big guy, I will work at SMH.” How do you command that kind of loyalty?

I’m honest with them, sometimes to the point of probably saying things that maybe I shouldn’t. Like most larger organizations, there’s rumor mills all over the place and I want to make sure that my folks hear from me what I think is going on and what the organization is actually doing. So I think, honesty and also being upfront and fair. We’ve had certain situations with employees that have not been popular decisions. So when I go back to explain, to the degree that I can, what the situation was and why that individual no longer works here, they appreciate the fact that I made the right decision. They understand it.

I give them quite a bit of latitude into the decision-making, particularly to my management group. An idea will be thrown out on the table, we’ll talk about it, and sometimes I’ve overridden the consensus decision from the management group, and I’ve tried to explain why I made that decision. I’ve had very little disgruntlement because of that.

Who do you admire in the industry?

I would say John Glaser at Partners. He was way ahead of his time when they started writing their own MUMPS software in, I think, 1988. They’ve always been ahead of the curve as far as development of their clinical systems and the fact that they self-develop them. They’ve got a staff of six hundred or something like that, but to take something massive like that on and be that successful at that large an organization is remarkable.

The same employee that e-mailed me that said that you’re a faithful HIStalk reader. Why is that?

I appreciate the insight. You’re one of my twice-weekly reads and the Brev-It e-mails as well. It gives me an insight into stuff that typically wouldn’t be available to me regarding acquisitions of vendors. Sometimes the rumors are interesting as well. I appreciate the fact that you wait for secondary validation that its true. It’s well written. I think you cover the industry pretty well. Obviously I think you have the trust of your readership. It’s a good read. I guess the other piece that I appreciate is that but you’ve always got the link. The article allows me to go out and find out more about it, so I don’t have to go someplace else.

Is there anything that you wanted to talk about?

I just received the invitation for the Most Wired survey again. I wish somebody would kill that. I’ve seen your comments. I share your sentiments about it.

I’ve talked to some of my peers that have been on the Most Wired list and asked them if they’re really doing some of that, and they said, “Of course not.” So I think somebody needs to audit some of this and put this to rest. Fortunately my CEO doesn’t have a whole lot of belief in it either, so she’s not holding me accountable to what some of the other organizations are doing. Not that there aren’t some good, innovative things going on out there, but having an unaudited survey of what you’re doing … the polling results are in from New Hampshire. Everybody thought they had the pulse on what they thought was going happen and then it changed overnight. So in that case, the pollsters were throwing out the numbers, but the voters really showed up and indicated what reality was. So I wish somebody would do that with the whole Most Wired survey as well.

HIStalk Interviews Mark Zielazinski, CIO of Children’s Hospital of Central California

You may remember Mark Zielazinski from his days as CIO at El Camino Hospital. He responded in 2006 to a reader comment about that hospital’s problems with its Eclipsys Sunrise implementation, which caused great organizational upheaval and nearly got the hospital shut down, according to newspaper accounts. We agreed to do an interview at some point. It’s taken awhile, but we finally had a chance to talk. Mark’s now CIO at Children’s Hospital of Central California. He was trying to get out of the office for a long Friday commute home when we connected, but was gracious enough to spend time with me.

Tell me a little bit about yourself and your job.

I am CIO at Children’s Hospital of Central California, which is the only rural children’s hospital in the United States. It’s actually a pretty big facility. We’re located just outside of Fresno, California, the central valley of California. I think we’re going to be 320-something beds next month. We’re opening up 28 more beds.

Describe your IT shop and how it’s structured.

We’re primarily a Meditech shop. We’ve been a Meditech hospital for 20+ years, so we were an early adapter of the Meditech system back in the mid-eighties, I think.

Beyond Meditech, we have the typical gaggle of supporting systems. We’ve got Picis in the OR. We have Kronos for time and attendance. We’ve got a couple of ancillary systems and KaufmanHall  products for budget and capital. This year we’re going to be replacing our Meditech ERP modules with the Lawson system for ERP. We’ll start implementation this summer and then go live sometime in ‘09. And then for the Meditech products, we’re just starting to do nursing documentation. We’re on the old Magic platform.

We’re doing some things with physicians in ambulatory order management and pharmacy in prescription writing. We’ll upgrade to Client Server in the fall. We’ll start the process this fall. I think that will be done just about the time we go live with the ERP system.

Most readers will remember you from El Camino Hospital. You had problems there with the Sunrise go live and pharmacy department problems on top of that. What lessons did you learn personally from that and what should other vendors and the industry learn?

We did a lot of things right there. I think we were on track with being very successful. I think they’re going to very successful right now. I know Eric Pifer’s there. I think that’s going to go well for him. He’s got a good environment to go from.

We went live in the first part of March 2006. I don’t remember the exact dates, but it was sometime in early 2006. We had missed our initial go-live, which would have been the middle of November 2005. The primary reason for missing was the fact that we couldn’t get our doctors educated. I think the training we had set up for them was about four hours total, in two-hour segments. We actually did it, but we could have done it a little better. We started paying the physicians to attend those classes. We paid them a fixed fee for the two classes. To get the payment, they had to go through and demonstrate proficiency. The lesson is that you have to pay them.

You get so much momentum. We had gone almost three years. We were in the process of building, creating, and moving when we missed our November date. So it was three and half years by the time we went live. I think one of things that’s got to happen is it can’t take that long. You’ve got to find a way to get that stuff to work in such a way that it doesn’t take three years to build a product and get it ready.

This was a place where we had the experience. El Camino had been doing physician-based order entry. They’d been doing nursing charting and documentation. We were doing all that stuff and it still took us a hell of a long time. The products vendors have, and I don’t believe Eclipsys has a monopoly on this problem, are really a tool set. They don’t have a very good set of schematics and plans and starting places for you, as an organization, to be able to drive with that tool set quickly to using it.

You hit the third thing on the head when you said we had department issues in pharmacy.  We really needed to have dealt with that prior to that change. That was a major league change for pharmacy. Even though we were using the pharmacy product, the old E7000 product, it was a pretty manual process without any kind of real automation to it. Even though it was SCM 4.0 and I know everyone talks about the fact that it was an interfaced product versus an integrated product, people have been using interfaced pharmacy products for years and years.

That wasn’t what the issue was there. We had a very serious problem and the pharmacy didn’t do a very good job of managing that. I take some of the hit for that, but I think the organization takes some of the hit for that as well. We ended up actually outsourcing the whole pharmacy management. Once that was done and in place, the vast majority of the issues that were affecting us at the time of go-live and about five months later when we actually did the outsourcing, it kind of disappeared. Not to say that there’s not still learning that’s going on.

Somewhere, I have documents from the original Lockheed-Martin system that ultimately became TDS. It went live in 1971 at El Camino. There was study done in ’75 and another in ’77. They’re really good studies talking about adoption. In six years post go-live of that system, they only had about a 40% participation by physicians. So it’s not something that happened fast back then.

Looking back now, with the benefit of 20:20 hindsight, should the plug have been pulled at El Camino because it wasn’t ready?

I think if we would’ve had the issues in pharmacy fixed, I’m not sure that would have had such a negative impact that it had. I don’t know that the system wasn’t ready at that point. I don’t know if we had made some of the pharmacy outsourcing decisions prior to go live; would we have said at go live, “We aren’t ready”, and would we have experienced the same problems. I don’t think we would have, so I think that was where that all ended.

But I think you’re right. We had a committee, a very large group that included the chief nursing officer, myself, and the chief financial officer, looking at that, making the decision and recommending to the board of directors whether we went live. The three of us made that decision. Primarily myself and the chief nursing officer made the decision to pull the plug on the November go live because we didn’t think we were ready. We had physician input on that committee. The committee was basically a group of 28 people that met as we were getting ready to go live on a very regular basis. Not just weekly, but multiple times per week. We made the decision and took it to the board of directors.

When you left El Camino, you went to Sensitron as the COO there. What did you like and dislike about working in that environment as opposed to a hospital?

I’ve been in the private sector and consulting or working for small companies before. I was employee sixteen with Superior. I was very early on with DAOU systems. I actually went through taking DAOU systems public. So I looked at the opportunity with Sensitron as, here was a start-up company. I’m at that time in my life — I’m fifty today — where I thought, “I could try that one more time”.

They were pretty good folks. They were a service provider for us at El Camino. I knew their technology. The CEO had left the hospital. The guys from Sensitron had come to me and offered me an opportunity to participate in that small company start-up thing. To me, it was one more opportunity for me to do that. I’m not sure how many time you can jump in, try to take something and see where it goes. So it looked like a great opportunity.

We never really got our funding set up appropriately. So for them to continue to carry me would have really put an undue burden on their ability to the R&D kind of work. While I was there, we were able to put out a new product. Sensitron does the wireless automation and collection of vital signs from the devices that you move around from room to room in the hospital. While I was there, we also came up with an ICU product that took information off of the stationary monitors in the ICU. So I was able to get a new product out and help them develop a new version of their existing product, and do some alignments with companies

We struck up a partnership relationship with a portable monitoring company. Then our money dried up. We didn’t have any more money coming in, in terms of investment money. And our sales weren’t keeping up with the payroll. I said, “Look, what we really need to do is continue to build our engineering group and our customer services group. Carrying my salary doesn’t make any sense, guys.” So I told them I was going to go off and do some other things, which is what I did. I went off and did my own consulting and then landed a job here at Children’s.

How would you compare your Meditech shop versus being at El Camino?

It is a little bit different. It’s a little tighter system. Looking at the Client Server version of the product we’re looking to go to and looking at the documentation features, there’s a lot of stuff that … quite frankly, I was surprised at how similar it was to some of the capacities in the SCM that I’d put out there. They’ve come a long way.

The last time I had ever worked on anything at all with Meditech was when I was back with Superior in the late eighties. So I’d been away from it for a pretty long time, but they are still pretty rigid in their product. Quite frankly, they’re pretty rigid in their relationship with their clients. When I got here, we didn’t have a plan to go to Client Server, but we had a strong desire to get to doing a lot more electronic documentation, and ultimately of getting CPOE. As I did my research for the first couple of months I was here, it was pretty clear to me that, in order to do that in a very reasoned fashion on a Meditech platform, you really have to be on a Client Server environment, not on a Magic environment. All of the big groups like St Joe’s and Christus and the guys who just went live in Colorado — they’re all on the Client Server platform.

It’s part of the vendor dilemma, where they’ve got an old legacy product on the Magic side that they’re saying ain’t gonna go away for a while. The reality is that it’s really hard for a vendor to maintain multiple products like that. They’ve got to really get on board with something. I think ultimately they will get to that Client Server platform. I don’t know what’s going on in that market yet to see why they feel they’re going to keep managing both Magic and Client Server, but it’s a pretty bulletproof product set for us.

I think, on the ERP side, it’s pretty darned weak. In this organization, before I’d even got here, they had made the decision they wanted to get off of the Meditech ERP products. On the clinical side and the billing and accounts receivable side, I think it’s a really good product. The market share that they have speaks a little bit to that.

Tell me about your department’s operating statistics.

Historically, the budget runs at about 2.6 or 2.7%. Our fiscal year starts October 1. I came on board just in time to finish up the budget process. We are budgeted to be at about 3.2% this year. As I took the position, one of the things we talked about with the executive team coming on board was that I thought that an organization this size should be nearer 4% of the operating budget in terms of the group. At El Camino I was at 4.7% of the operating budget. So that seems right to me.

I have a director of applications, a director of technology, and the director of HIM reporting to me. I’ve also just hired a director for project management and a director … well, I haven’t hired it, but it’ll be an executive director role, physician liaison. I’ll probably to that either late this fiscal year or the beginning of next fiscal year.

In total FTEs in the applications and technology area right now, we’re about 44. By the end of this year, we’ll be at around 48. Into next fiscal year, we’ll probably be into the mid fifties. I don’t see us being larger than 60 people at the top end.

We’re pretty straightforward in terms of the capital budget. We haven’t done a very good job managing the replenishment of the physical infrastructure. So this year, we were about half of the equipment budget for the hospital on a capital basis, and the lion’s share of that is going into replenishing the physical infrastructure. We’re putting in new networking, new wireless, and getting us onto a program that says we’ll replenish the desktops and all that stuff.

We’ll start to roll out some mobile devices. We really haven’t had much mobile device work here, but we’ve got to get that in place if we’re going to electronic documentation. So we’re going add the C5s and some mechanism for putting up some other type of cards. I think that stuff is all happening.

The other part of the capital budget this year is for the Lawson project. I suspect we’ll be somewhere between 20 and 40% of the capital budget for equipment for the next two or three years. And then we’ll get to a point were we’re between 15 and 20% on an annualized basis. We’ll have a real serious replenishment program in place so that we don’t get stuck in this kind of environment again. The board is aware of and has bought into that process.

We’ve had our first IT steering committee earlier this week. They haven’t had an IT steering committee in about nine years here. The last IT plan was done in 1996. But there’s just some bread and butter kind of things that we have to get done and we’re working on.

You were a mobile device advocate at El Camino. How would you say overall the industry is doing in that whole mobile workforce area?

From what I can see overall, we’re typical healthcare — we’re behind the curve. Lots of other industries have taken over mobility a lot faster than we have in healthcare. I think the idea of a specific medical mobile device, like the C5 … I got to participate in that in a very big way, from the conceptual design phase. We were involved in that at El Camino. So I understand it, I believe in it firmly, but I also believe that there’s not silver bullet solution.

Some people are going to want to use mobile tablets. Some people are going to want to use mobile carts. That’s just a fact of life that we’re going to have to deal with here. I believe its true for about every hospital. But, I think, if you were to look out five or ten years from now, I think mobile computing will be the rule for the way access happens in a hospital. Whereas today, even at El Camino, where we deployed it very, very extensively, we still hadn’t gotten to 50% of the devices being mobile devices. El Camino will be one of the places that gets there the fastest, but it will probably be three or four years more where half or more of the devices are mobile devices. But I believe that is going to happen.

You mentioned voice over IP. We did the Vocera stuff. Here, we use VoIP phones. We don’t have a VoIP infrastructure fully deployed. We’re going to do that. I think that concept of personal communications is going to expand in hospitals. I’m a firm believer that and I think it’s got to happen in hospitals relatively soon, and that is, that we have to issue all of our employees some kind of communications access device.

I use the example of this. My youngest child just went to college. He was at California Polytechnic. In order for him to register for class at Cal Poly, he had to prove to them that he had a computing device that he was going to use. He couldn’t register for class until he’d gone through this process of proving to them that he had this computing device. We hire employees here at the hospital, we don’t have that same approach.

I think, at some point, that’s going to happen at hospitals. We are information providers. That’s what we do as an organization. When you really get down to it, we’re really information dependent workers. At some point, just like when we give you your badge, we’re going to give you some kind of computing device. You’ll be responsible for it and use it for all the interactions you have while you’re at work. I don’t know how far off that is, but I think its something that’s coming.

You were at a great location at El Camino for watching technologies develop. When you look across the technologies that might be promising for healthcare, what things do you like?

I like some of the devices that are bringing everything together. My phone, whether it’s a cell phone or a VoIP phone … that same device is going to be my computer. I think that’s happening. I think, in that device, its going to have this concept of personal recognition. So it’s a personal device. Rather than dialing a telephone number, you’ll just type in my name and it’ll get me via voice or via message. However you want to get me.

We’re going get more and more into monitoring people’s conditions. Do you remember Goldsmith’s book Digital Medicine? If you remember that first chapter, where he writes about a scenario, I guess it was the year 2015. The thing that was the most vivid to me out of that whole chapter that he wrote was the fact the guy who was the patient received his treatment diagnosis and everything without ever being either in a physician office or in a hospital. Pretty impressive. I think there are technologies that are coalescing to allow us to do that. They’re going to happen pretty soon. We’re at that tipping point for that stuff to happen. Its a combination of being able to monitor inputs and get information out of folks, without it being necessarily an invasive process, in terms of diagnosing things. Then having a mobile workforce that gets out to deliver care to the patients or the people, wherever they are.

Do you see that as a growing role for a CIO?

I think so. It’s really got to be more upstream and visionary. I haven’t done day-to-day operations for a long, long time. In fact, I’m not sure I’d be qualified to do day-to-day operations. It’s more of a vision, planning and really working with the executive team and the board to get a sense of what’s out there.

A lot of folks say we’re supposed to manage our vendors. One of the main roles of the CIO is to work and manage vendors and vendor relationships. I don’t think that’s a part of my job, but a bigger part of my job, I think, is kind of like what I did when I was with El Camino and Intel … building a partnership where we do interesting things together and bring that to the organization.

That process is what we went through to conceptually design the C5 and see it come out. I was pretty non-involved with the process and outcomes. I worked with the nurses and doctors, but I got them to work with designers and engineers and watch the output. I kind of guided it. I wouldn’t say I was completely out of it, but I wasn’t into the integral processes of that.

Nurses and doctors were just jazzed. There’s no other way to describe it. They were really jazzed that there was someone listening to them and trying to figure out things that they could do. I think that’s the role the CIO needs to play to facilitate those types of activities. Because once those people are jazzed like that about the technology and what’s happening, they start to think about how to change processes to make that stuff allow them to give better care, deliver quality and those type of things. Otherwise, if they’re not involved and jazzed by that process that way, they look at it as just another set of changes coming down on top of them.

When you think about how busy and how difficult it is for the clinicians with increasing activity and increasing volumes, they’re just getting creamed. The last thing they want is another set of changes. So somehow, you’ve got get them jazzed about that in order for them to say, “OK. I can see how this fits in. I can see how I can modify my normal work process to do it this way which will be better. It’ll be better for the patient. It’ll be better for me. Everyone will benefit.” You’ve got to figure out how to get them into that. That’s the role the CIO’s got to play.

What are the biggest problems and opportunities that CIOs face?

Trying to compete for what I believe is going to be a shrinking capital dollar. That’s going to be a huge challenge for them. Secondly, it’s going to be the political challenge of trying to change from simple vendor relationships to partnerships that allow real change to occur. The technology changes are not going be done from within the hospital. You’re going to have to bring technologies from outside the hospital, more likely from outside of healthcare, and apply them in a hospital setting and in a healthcare setting in such a way that brings success to the organization. These are huge challenges for a CIO.

Let’s get to know you better. I’ll give you an item and you tell me what you favorite of that item is. TV show: I watch football. I don’t watch TV other than sports. Sports team: Chicago Bears. Food: Veal chops. City: Verona, Italy. Music: Chuck Mangione. I’m a jazz guy, but I like his horn. Vacation destination: The Orient. I married a Chinese woman. My wife is Taiwanese. I love the Orient. HIMSS conference event: The keynote. Hobby: Bicycling.

Who do you admire in the industry?

Dave Garets. I’ve known him for a long time. Bill Childs and Bill Bria. Those are guys I really admire.

Is there anything that you wanted to talk about that I didn’t ask you?

I know there are a lot of folks I’ve talked with recently. The folks from McKesson are like, ‘What’s going on with Eclipsys?” I did a lot of work before Eclipsys was formed, I did a lot of work when I was at Superior with TDS. So I had a long experience with that company. When I was at Superior, each of the executives had a vendor they were responsible for. I’ve also had a lot of stuff that I’ve done with Cardinal. I guess the one thing that I would tell you about me that people probably don’t know; when I was at El Camino, IT was a big part of my job, but we were completely outsourced there. I was the only non-outsourced employee at El Camino in IT. IT, while it was a big thing, it probably only took about 35-45% of my time.

The remainder of my time there, I was responsible for materials management, all of our purchasing, central distribution, central sterilization. I did a lot of other stuff, which was very intriguing to me. I learned more about hospital management in 5-6 years I was at El Camino by having direct responsibility for that stuff. That was a lot of fun. I did some neat stuff and I learned about logistics distribution. I actually did some work with MIT. We had two graduate students with their teams come out to do work on our logistics stuff. I think we did a lot of neat things in information technology at El Camino. On the supply side, I think we did some even crazier and neater things. As far as I know, we were the first hospital in the United States to go from a six- or seven-day supply delivery schedule to a three-day supply delivery schedule. We did some neat stuff around that. I learned a lot of that stuff that I didn’t know that I’d ever get a chance to do. I really enjoyed that.

HIStalk Interviews Shaun O’Hanlon MD, UK Physician

Hi, this is Inga. Shaun O’Hanlon, MD works for EMIS, the largest supplier of EHR products to primary care docs in the UK. Mr. H and I were intrigued by his note: “I really enjoy reading your website. There are stunning similarities and differences between the EHR functionality in the US and that in the UK. There is undoubtedly room to learn as, underneath it all, we are all caring for patients.”

Thanks, Shaun, for providing some great insights. “Whilst” I had a bit of a struggle understanding the accent and the British-isms, it was a fun conversation that got me thinking about what we could learn from the UK model and what aspects we independent-minded Yanks would never embrace.

Give me some background information about you. 

I am a physician by background. I qualified from Cambridge in 1986 and I pursued a career in hospital medicine in cardiology. Then I decided to be a General Practitioner (GP), which is the UK equivalent of family practice. I spent 13 years being a GP in Guildford, just south of London, which I loved. My interest in healthcare informatics products started after working on a smart card project in 2000. Since then, I have been working for EMIS in healthcare informatics.

The company I work with today provides the GP EMR for 60% of patients in the UK, so it is a fairly prevalent system. Largely, it will do everything for EMR, management recall, appointment scheduling, and orders, all done through a single application. Billing is included, but in the UK it’s not that important. The economy is such that the government pays for healthcare through the National Health Service (NHS) and there is very little pay for services aside from some hospital ones. 99% of it is free. Well, not free – it’s paid for by taxes. [laughs] There is a secondary insurance market, used mostly for second opinions.

There is little competition for patients in General Practice because there is a match between doctors available and the number of patients. The government is generally reluctant to set up new practices. Since 1947, GPs have set up partnerships of five to 10 clinicians. That practice has a contract with the government to provide all General Practice services to their patients.

Can you give me UK Healthcare 101?

The practices are largely where they have been for many, many years. GPs have a geographic catchment area for patients. Although there may be several practices in one area, the competition is not widespread, as the government tries to match the number of doctors available to the number of patients. To set up a new practice, you have to have a pretty strong case and show local need. It is therefore fairly uncommon. The number of GP physicians is fairly stagnant.

We are now seeing some attempts to try to bring in private providers to improve patient access to healthcare. The number of doctors is relatively low and you have some big companies trying to provide an alternative model of providing care. Some of the bigger healthcare providers are trying to set up private clinics, as there is a perception that the GPs are stuck in their ways and innovation is needed.

Most GPs offer office hours from 8 to 6. Outside those normal office hours, service is provided predominantly by “out of hours” or emergency facilities. This is a problem for patients who are in employment, especially those who commute, and need to see their doctor early or late in the day. This has triggered a desire to find more innovative ways to provide care.

Patients are registered at a particular practice, which usually contains five to 10 physicians, equating to 6,000 to 12,000 patients per practice. Everyone who lives in the UK has one GP. The practice will provide all their primary care, including managing all their prescriptions, tests, and referrals. If you are on holiday, you can see someone temporarily, but your records will remain with your GP where you live.

So if I live in the country and commute to the city and need to see a doctor, I can’t see one in the city?

Right. Not very easily. A bit rubbish, isn’t it? They are considering creating a concept of dual registration to enable commuters to have a city doctor. The model now is one of a monolithic cradle-to-grave record. That has many advantages for continuity of care, cost containment, and quality care delivery. You begin to worry if you fragment a patient’s record, then you fragment care and may have dual care, redundant tests, and increased cost. In order to offer dual registration, you have to be able to share records around as well.

What is overall state of technology?

If you are a GP, every practice will have an electronic record on one of three or four available systems. That information will be held in a largely codified, structured manner. It will include a full medical history and all consults. It will include problems or diagnoses, all results, tests, prescriptions, and letters, resulting in a full, rich record that is fairly advanced in its structure.

The information is now transferable electronically between GPs in a structured format. If you move to a different location, then your record will follow you. What happens at the moment is that the record is held in a server in a practice or an enterprise with central service. When you move, your record transfers. There is a national standard that allows you to transfer the record around. We have a national messaging service that relays the messages from the practice database service to the receiving service. You request the records and you receive them the next day. A copy is extracted to the new practice. The patient’s complete medical record is sent and then imported in a coded format.

You indicated that there are stunning similarities and differences between EMR functionality in the US and UK.

A lot of my experience from that side of the pond comes from Canada. I find it quite difficult to talk about specifics because I haven’t been on the hospital side in US. But there are a lot of similarities around the need to share information. There is this conception that the GP performs one role and the hospital performs another role. The result is that information silos exist with pieces of paper — referral letters, outpatient letters, etc. — connecting them.

The other similarity, very macro, is that we are seeing increased focus on what patients want to know about themselves. Up until recently, this has been resticted due to technical issues. There also exists a kind of a high-handed attitude that patients can’t have their records by some clinicians.

We have brought the patient into the loop and now offer them access to their records, appointments, and electronic ordering of prescriptions. We have hundreds of thousands of patients using EMIS Access for just this every month. Projects like Healthvault will further enable this citizen involvement across the globe.

Suppliers are realizing that the real benefit of their data is sharing with other providers. People are sharing data between different systems. You need your applications to work together. Now that there is increased requirement to look at the lab system and radiology, interoperability has been become the core business that companies are beginning to focus on. We work hardest at determining how to share data and what data should look like. By sharing information everything works better. Everyone’s data is much richer when it is shared. Interoperability is the key to future EMRs.

To interoperate, you have to have standards. Unless you come up with agreed standards, you can’t have interoperability. Standards for coding data, messaging data, and viewing data.

EMIS has adopted SNOMED-CT as it does appear to be becoming the universal standard for record coding. We are working quite hard to understand SNOMED-CT because, whilst it is very advanced and offers granularity and breadth not found elsewhere, it is not a straightforward taxonomy, either for data entry or for reporting. So, new and innovative ways of entering data will need to be designed.

Message standards are now generally focused around HL-7. In the UK, we have adopted V3 XML, but our Canadian teams are now using V2 as well

Data display standards are equally important. Microsoft has been working with NHS and some suppliers like EMIS in defining a Common User Interface for healthcare applications. Their approach is to help establish a set of evidence-based standards for display and entry of healthcare data which is platform and location independent. The program is in its early days, but they are beginning to look at some of the challenges that SNOMED-CT and citizen records have on the healthcare user interface

Is the UK ahead of the US in terms of technology?

In certain areas, we appear to be in a luxurious position of having a national approach of how medical record and information should be used in the National Health Service and in Connecting for Health. We are mandating the use of HL-7 and are required to adopt these technologies and standard so we can share information between systems. It is putting us in good stead in some respects, but central control can be slow and laborious and does not always follow business drivers. If you don’t have an economy with that central control, the supplier sets standards based on business drivers, which can be more adaptive to the changing market.

Anyone would be well to learn from the issues that the UK has in providing a national EMR solution. There are a lot of lessons learned about standards and where they do and don’t work and how to go about implementing them

What is the state of adoption for EMRs in the UK?

Hospitals primarily use PAS, patient administration systems, PACS, and order systems. All have back-end billing systems to make sure they get paid by NHS. A lot of them rely on paper records for the medical record piece, although some use components of EMRs.

It’s a very mixed bag in terms of hospital adoption of EMR. Cerner is a big player and being employed, though it is going slower than they would have hoped due to implementation issues. Localizing the product has taken time and effort, as the requirements in a UK hospital are different than an American hospital. They are also going into sites with mixed technology and systems. That isn’t my area of specialty, so I can’t really comment further. iSoft also has a product called Lorenzo which is a single system for GP and hospital, but the full release has been delayed for several years.

How are EMRs funded?

It is all paid for by the government. In General Practice, they are provided through an NHS agency. The clinicians have a choice of systems, which was assured after a lot of pressure from the clinicians as the government didn’t want initially to offer that. The current situation is that the GP can pick the EMR solution they wish, so long as it fulfills a set of basic and interoperability requirements.

There is a also a big move to central hosting and enhanced data sharing across regions, if you like, so you can share between hospitals and physicians. What you call RHIOs — it is exactly like that, driven by the government. Some physicians think it’s a good idea, whilst some are concerned with losing control of their data. Others might argue it’s the patient’s data and that it is up to them who sees what information. The legal status is somewhere in between, that the doctors are the guardian of patient data.

Personally, I think the citizens have different expectations about their records. Most patients would be startled if they knew the hospitals couldn’t see the information that GP has, that historically it couldn’t be shared for technical and non-technical reasons. The non-technical reasons revolve around clinicians and administrators not wanting to mobilize data, sometimes for legitimate security reasons, whilst at other times, they are scared of someone seeing “their” data.

Some concerns are rational and some not rational. There is a need for putting solutions in place to encourage the sharing of data on terms they feel acceptable with. A patient can say, “I don’t want this one piece of information shared” and control who can see what. At the end of the day, the patient has to be able to see that. If you put in technology controls, then the clinician is the guardian and the patient controls who has the access. That has to be the way going forward. We need more control with the citizen and less with the clinicians whilst respecting that the clinician needs some controls because he is a stakeholder in the information, too.

Are physicians receptive to technology?

How you get clinicians to adopt EMR is a really interesting question. Before I went on the industry, side I tried to evangelize GPs about importance of coding data. I suspect 25 to 30% understood that and took it as a trigger for change. It has to be easy to do and have a business case behind it for it to be a success.

Prescriptions and repeat medications – the computer is very good for that. Appointment scheduling – no doubt that the computer helps. But what the government did over here was put part of the remuneration for the doctors based on how they are providing for the patients. Twenty percent of GP income is now around achieving targets for quality of care. For example, patients with heart disease have a certain level of cholesterol and blood pressure that the clinician should achieve to trigger the quality care payments.

The key is that if you see 10,000 patients, then there is no way you can collect the information required by the government on an ongoing basis without an effective EMR. All GPs now know it will pay to use an EMR package and, at the end of the day, it helps with quality of care. Once they realize how easy it is to enter data for disease management, they use it more.

The emphasis on chronic disease management was the big driver for adoption. Now that we are beginning to share the records, that will become the next business driver, I am sure. Some doctors complain it is check box medicine, but most recognize the improvements in care and data quality that have resulted. One very positive effect has been that there is now much more quality data on EMRs, something we gave been able to take advantage of and have used this data for some very high quality research. That has been an incredible falling out from all this.

Are citizens interested in having access to their medical history?

Very much so. I was recently looking at some stats. We have had 250,000 hits on our patient-facing service that is based on the EMR. Sending messages to doctors and ordering prescriptions online is now very popular. There are some issues that we have overcome around that, including privacy, but it is beginning to take off here in the UK. Our health portal is restricted to one part of the UK. You can log in and see your records provided you and your doctor are happy for that to happen.

How did you come across HIStalk?

[Laugh]s I got an e-mail from a person in our Canadian install. I read and found it an interesting mix of suppliers and users essentially talking to each other. In the UK, there isn’t a forum like HIStalk where you have senior suppliers and physicians sharing their knowledge. I think I learn a lot reading the e-mail that comes through. I don’t feel I can contribute much because I come from a different space.

Do you have anything else to share?

Our problems are complex and some need addressing on a national or international level. We have to have something to shoot for. The approach we’ve had involves citizen and doctor groups, as we have found there are a lot of concerns. Frequently they are unfounded, but we don’t realize they are unfounded until we analyze them in detail. If you told me 10 years ago I could log into my bank account online, I would have been horrified, but now I do it all the time. Suppliers and clinicians need a citizen view as well as a self-interest view.

HIStalk Interviews Jim Stalder, SVP/CIO, Mercy Health Services

Photo: Zenoss

A reader suggested I interview Jim Stalder, CIO of Mercy Health Services, Baltimore, MD.  I like interviewing CIOs because it’s a great way to find out what’s really happening in hospitals out there. Jim’s got a lot of technology interests, so some of our chat involves tools, which I think is interesting (he even provided links so I wouldn’t have to look them up). Anyway, thanks to Jim for spending time with HIStalk. I enjoyed it.

Tell me about your background and about your job.

I’ve been the CIO at Mercy Health Services for the past five years. I consider myself a midwesterner, even though I live outside of Annapolis right now. I was born and raised in Ohio, Minnesota, and Illinois. I went to Duke University and majored in electrical engineering.

I’ve always been interested in computers. I started tinkering with Apple II+ computers when I was a kid and got interested in electronic bulletin board services like FidoNet World back then and never really looked back. After Duke, I found myself at Anderson Consulting, or Accenture now. I was there for a number of years, doing a lot of large-scale database design and development work for telecom clients. Like a lot of the Anderson folks, there’s only so many 24 hour, seven days a week workdays that you can tolerate. The burnout rate is pretty high, so I looked for something different.

A buddy of mine had left Anderson and went over to a company called Digex, which was an up-and-coming web hosting and early ASP business that had some venture funding. I jumped ship completely from the large, 100,000+ person organization to the small Internet startup. I did that for a couple of years. Went through the fundraising aspect of things; went through an IPO; went though a couple of subsequent sales to some telecom firms; and ended up at a similar company called USinterNetworking, which one of the first true application service providers. We managed people’s salesforce automation tools and procurement tools, HR systems, and our data center in Annapolis and on the west coast. The subscription revenue based model. We didn’t produce our own software, but we hosted other people’s software and managed the systems for our clients. Did the same rocket ride there: fundraising, IPO, went through a bankruptcy …

That’s kind of the whole era in a nutshell, isn’t it?

Yes. That whole dot-com ride, I was right in the middle of, so it was a fun, interesting time. But then, after the bankruptcy, it was time for something different. I wanted to really get on the user side of things. I’d been a provider of technology for essentially my whole career, until about 5½ years ago. I really wanted to take what I knew about technology and how it could be provided and get on the other side and be a buyer and a user of it.

So it was kind of the right time, right place to get a job at Mercy, even though I had zero healthcare experience. The only time I had set foot in a hospital was when my children were born. I have three kids. Other than that, I came in cold turkey. It’s been an interesting ride for the last five years here at Mercy.

Tell me about your responsibilities there.

Mercy is a diverse organization, an independent, non-profit healthcare provider. We’re in Baltimore and we have a traditional community hospital downtown. We also have a long-term care facility named Stella Maris that’s about 30 miles north of the city. We have probably about 35 physician practices in and around Baltimore. I sometimes say we’ve got one of everything. We’ve got a hospital, physician practices, and long-term care. So here at Mercy, the IT function is pretty much consolidated into the shop here. We provide network, telecom, and application services to those three different entities.

What surprised you about healthcare when you came in as a CIO from the outside?

I think what was surprising about it initially was the complexity. Clearly the complexity in healthcare is unlike any other organization, as I’ve come to realize. In fact, someone asked me the other day what was my learning curve coming here to Mercy. I said, “It’s been about 5½ years and I’m still learning every day.” It’s a ridiculously complex environment.

So that was the biggest surprise. I really underestimated the diversity of applications, the diversity of functions of the various departments. I’ve come to appreciate the uniqueness that everyone requires to do their job in each of the different areas here. One of the things that surprised me was the state of the applications as a whole. The software vendors as a industry in healthcare, I think, traditionally are a few years behind that of other areas. They’ve rapidly been catching up, but when I came on board five years ago, Web-based apps were nowhere to be found, where it was fully becoming the standard elsewhere.

What talents did you have to develop to become an effective CIO and how did you go about doing that?

When I was at Digex and USinternetworking, my roles were product management, strategic development, some business development, and some M&A activities. I’d always had a technology background and a technology bent to what I was working on. So the aspect of trying to come in and understand what was unique about the technology here was relatively straightforward, but a lot of the culture and the dynamics of how different groups interact was definitely one of the more challenging things I had to learn.

Anderson was huge, but you really worked on a project basis, so there might be a couple of hundred people on a project. Digex and USI were at the early stages, just a few people, but they peaked at maybe 1,000 employees or, in one case, 1,500. Coming in to Mercy was a whole different dynamic. We’ve got 3,500 employees all performing significantly different functions, so getting up to speed with what everyone was doing was definitely one of the more challenging aspect of things.

You’re a Meditech customer. A lot of CIOs seem to enjoy the complexity of running, not only complex healthcare applications, but ones that are best of breed, because that usually means you get a bigger budget and bigger staff. Are you happy where the organization is with Meditech?

Well, in general, yeah. We’ve been a Meditech Magic user for coming on 13 years now, I believe. Meditech is a very stable, reliable application for us. I say it’s the jack of all trades, master of none. Actually it’s the master of some, but it doesn’t do everything that we want do from an end-user perspective. Our users often try to look for something different.

We’ve got this hybrid model going on here now where Meditech is still our core, but we’ve got a lot of bolt-on applications around it. For labor and delivery, we’re using GE’s Centricity product that we’ve bolted on and interfaced onto Meditech. We’ve just chosen Picis for a new perioperative system that we’re beginning the implementation of. We’ve got Allscripts for an ambulatory EMR system that we’re rolling out and we’ll interface some components, probably lab and radiology results, back into Meditech. That rollout has been going particularly well.

When you came into healthcare, you said there were things that surprised you. I would think looking at an application using healthcare-focused technologies like Cache’ and MUMPS and sold by a privately held company, you might think, “‘What the heck? Somebody explain this to me.”

When I came into the organization, the changes that were being made weren’t widely advertised. So, my first day was being introduced to the rest of the IT team. As a result, I also got introduced to some of the applications. One of the guys sat me down in front of Meditech which, as you know, Magic was a character-based application, similar to a VT-100 mainframe app. I remember thinking, ‘What have I gotten myself into?’ because where I had come from, I was used to the newer, Web-based applications, whether we were hosting them for clients or whether we were implementing them for clients. Everything was about the Internet or Web-based. And fat client was some of the things we’d done, but certainly not day-to-day. So, I felt like I was thrown back in time for a little bit. That was quite surprising. The other surprising thing was that the IT offices were, as they are traditionally are in hospitals as I’ve since come to learn, in the basement next to the morgue.

So I’m thinking to myself, “What am I doing?”’, but it all quickly came that I learned to really enjoy it. These past five years have been the most fulfilling, career-wise, than any other previous roles that I’ve had.

You mentioned your Allscripts ambulatory EMR. What kind advice would you give to others who were undertaking that sort of project? 

Mercy is a little unique, I think, compared to some other organizations. Mercy employs a large number of our physicians, and so our rollout model has really been to our employed physician base. Frankly, it makes things a little bit easier. They’re all part of the same Mercy family and they’re already greatly interested in sharing information with each other, so Allscripts makes it all that bit easier for folks.

But the advice I have for the ambulatory side is, what we’ve done is basically gone practice-by-practice, versus the big bang approach. We’ve probably got about 25-30 practices under our belt, and probably have about 10-15 more to go before we consider ourselves complete for our employed physician base. What we’ve really done is put folks on-site in the practice for the first two weeks of the rollout to do some hand-holding with the staff, do some hand-holding with the physicians, and get then comfortable and have someone right there, immediately available for questions. Sometimes some of our staff may even actually go into the exam room with the physician to help answer questions and consulting, getting things done.

So that phased-in rollout, that’s been very smooth for us. We’ve spent a lot of time training the staff in the traditional training environment. We do so with the physicians when we can, but obviously that’s a little more challenging. But the nice thing about Allscripts in particular is that most of our users have found it to be very intuitive. I’ve been very impressed with them. Its one of the more intuitive applications from a healthcare standpoint that I’ve come across.

Are you on Touchworks?

Yes. Version 10, and right now, in the process of converting to Version 11.

You’ve done some work with application virtualization.

We’re past the experiment stage, but we’re still doing some trials with it. We’ve got a few folks on our team here who have used Altiris in the past. Altiris was recently purchased by Symantec. It’s fantastic. We use it for our trouble ticketing system, for our application distribution system, our PC and server imaging. We’ve got our whole biomedical medical preventative maintenance ticketing system in there, so our clinical engineers get alerts when preventative maintenances for equipment are up and coming and they use that to document what they’ve one.

One of the nice features about Altiris is that it has a software virtualization piece. There’s a lot of talk about server virtualization with things like the VMware, which another thing that we’re doing, but this client-side virtualization is particularly interesting. So, we can run applications that may have conflicts with another application, but on the same PC, in this virtualized layer.

A couple of our applications at our long-term care facility don’t play nicely with another app on the PC, and so what we’ve been able to do is virtualize it isolate this application to run in its own memory space and avoid conflicts with the other tools. It’s as simple as clicking on an icon to launch it and then, when you’re done, it disappears from memory and the PC goes on with its normal activities and its previous configuration and the other app that conflicted with that other app can run with no problem. So, one example is, just as a test, we’ve been able to run Office 2003, Office XP, and Office 2007, as an example, all on the same PC and all at the same time. That’s the power of this thing.

You license this by the desktop and basically you just install it? There’s  not a lot of configuration that has to be done?

You can download the Altiris software. I think I have this correct – individuals who want to experiment with it for their own personal use, all the tools are up on the Altiris Web site that you can  download for free and trial it. Basically, what you do is you get your machine set up in the pristine state that you want it to be, and then you run a tool that looks at how the application that you want to virtualize installs itself. It remembers all the registry changes, all the files that are installed, and creates a separate executable, a separate layer that you can turn on and off with a very small client that runs on your desktop.

Sounds pretty cool.

It’s pretty straightforward to use and it’s pretty powerful. It doesn’t work with everything, but we’ve been able to work with a lot of different applications.

What we hope to able to do is create an application self-service environment. So, ignoring licensing issues for a minute, if a person needed Microsoft Visio today, they have to call the help desk, log a ticket, and then one of the technicians will push out, through Altiris, a Visio package that we’ve done and install itself on the person’s desktop and they’re good to go. That works pretty well, but, in an ideal world, the user will be able to go to a self-service software portal and install the layer that runs Visio and really end up not installing anything on the PC. Essentially, they just download this layer and, when they need it, they activate it; and when they’re done, it turns itself off.

And so, you can imagine from an IT standpoint, we’d no longer have to deal with software installation issues. We’re really dealing with flipping a layer on and off and keeping the desktop pretty static. We’re not there yet, but that’s where we hope to get. And the nice thing is that, then let’s say somebody’s PC blows up. All we really have to do is get them a new PC with a base image on it and there’s no additional installation of software required, in theory. They can really just have these application layers on that client and turn them on and turn them off as they need them. The whole process of installing all the software is gone. We’re not going to get there for a while, but for some key application that people need quick access to, this is a fast, easy way to get it done.

Tell me what kind of IT issues you’re seeing or what kind of successes you’ve had in general.

We’ve been doing a lot over the past six months to revamp our governance process. Like everybody else, we’ve got too much going on. We’ve got a lot of demand for new applications and luckily Mercy has been, financially, doing quite well to be able to afford those applications. But as a result, there’s obviously only so much talent, time and expertise for that. The team has to get all these things done. Juggling the priorities has been a big challenge for us.

About six months ago, we bought a product that then was called E-Project, but now is called Daptive. It’s part project management and it’s part portfolio management for projects. We chose one that will do both because we’ve got some of our project managers who are really deep in Microsoft Project and use that extensively, but we wanted to keep that compatibility and we wanted to have a way to keep track of projects at a detail level.

We didn’t have a great way of doing things at the portfolio level, so we wanted some tools that we could expose to our executive sponsors to say, “Here are the ten things that we’re working on now for you, and there’s the twenty things we’ve got queued up. They’re on your wish list.” We spent a lot of time the past few months getting all of our projects and all the attributes about these projects, whether they’re ongoing, or ones that are funded but not started yet, or ones that are wish list items and someday may be items that we’ll do in to this application, now we’ve got about probably 500 different projects in there, 75 or 80 that are going on right now; and the other ones on hold or on the wish list queue, depending on funding.

We hope to get all this stuff and the rest of the attributes about these products cleaned up, and then in the New Year, begin to expose this Web-based portal out to all these executive sponsors and use that as a vehicle to better communicate with them, “Here’s what we know that you want. Here’s what we’ve got teed up and that we’ve all agreed to as the timeframes for project XYZ. Let’s make sure we communicate with each other about. Is this data accurate? Does it meet your expectations? Or is there something else that you though you wanted to do or have that’s not on this list?”

What are the most important projects?

Clearly the ambulatory EMR project with Allscripts is a big one. It’s one of our corporate priorities. Our perioperative system with Picis will be a two-year project, certainly in earnest over the next year. We’re in the process of finishing up an electronic medication administration point-of-care system with CareFusion, purchased by Cardinal recently. That’s where our nurses are at the bedside, barcoding the unit dose medication, barcoding the patient’s wristband, making sure it’s the right med and the right time. That’s in the process of finishing up. That’s been a very important patient safety initiative we undertook about a year ago.

What’s the department’s staffing and budget?

We’re about 75 people, just over 2% of our operating revenues go to IT. From the networking side, we’ve got the network team that’s also responsible for data center and telecom. We’ve got a help desk, a traditional service center. We’ve obviously got folks managing our data centre and our servers. They’re our engineering team.

Clinical engineering is part of IT here at Mercy. We integrated those guys probably about 2½ years ago. We found that IT was involved in all the bio-med projects and vice versa. Essentially, all the clinical equipment is coming out on the network now.

We’ve got a small project management office of about six folks. Now I say small, but it’s kind of funny. I was in a meeting with several other CIOs  from various hospitals in Maryland and I mentioned that fact, and I think people were very curious how I was able to get six project managers approved. I can’t imagine not having a team of dedicated PMs that can go out and herd the cats for all the complex projects we’ve got going on. And then, of course, we’ve got a team that’s the traditional business systems analysts and clinical analysts.

A big help for IT and how we relate with the clinical folks, is we actually have four nurses on the team who are part of the clinical analyst team. They’re nurses with a deep technology twist to them, and they able to not only talk technology with the rest of the team and with the vendors, but they’re able to talk to the clinical staff quite well.

If you look at the concerns you have, either for your department specifically or for the hospital, if you’re looking out, say, three years, what worries you the most?

A couple of things. One, we’re in the process of building a new patient tower, so we have an 18-story building today, it’s about fifty years old, that’s pretty much at its end of life. We just broke ground a couple of months ago on a new facility just one block to the north. So, trying to figure out how to plan and budget for 2-3 years in advance for all the technology they want to put in place in this new tower is challenging. Everybody’s got a different idea of what they want to have done. We’re not fork-lifting all the operations from the current tower to the new one. We’re going to have some clinical functions on both towers. And as a result, its going to be hard to revamp all the processes, but clearly some process re-engineering is going to be part of this move and trying to layer in some new technologies that people want to implement as part of this move are certainly things we think about quite a bit.

While we have Meditech as our core, the fact that we have added on these other systems is certainly challenging. Obviously as we add more disparate applications into the environment, how we manage those, how we attach them, how we support them, how we interface them, how vendors get access to them, how we monitor them – that just gets more and more complex. Best-of-breed is a great approach for folks who have mastered change management as an organization, but we’re not 100% there yet. So, I think if we continue to go down this best-of-breed approach, we have to get a lot better internally at managing the change that comes with all the different applications.

I saw that you’re an advisor for an open source software company. What areas within healthcare IT will be influenced by open source how long will it take?

That’s a good question. The open source software company you referred to is Zenoss. We use Zenoss for our enterprise systems management here. All of our servers and our network equipment is managed through Zenoss in a nice common dashboard front-end. Wey hope they extend that to a lot of our bio-med equipment and other areas over time.

I think open source has applicability in most areas of healthcare. Some people think of open source as, “Hey great. I’ve got the source code, I can make any modification I want to it” and other people think open source is, “Just another piece of software out there that I can hire somebody else out there to support and manage for me”. So I don’t really look at open source as fundamentally different than most of the other software that is out there. It really just depends on how deep your shop is at being able to customize the environment, customize that particular application.

We don’t have a lot of developers here at Mercy. We’re more integrating off-the-shelf stuff, but I think if there was some open source software application that could meet our needs in a particular area, we’d be certainly ready, willing and able to take a look at that. Support of that open source app, we’d have to figure out, do we hire a third party to do it, or do we staff up internally and train folks on how to do it.

You’re one of few CIOs who has a Facebook page, so I know you like cool applications. What kind of stuff have you run across that my readers should check out?

Grand Central is a great tool that I’m slowly rolling out as my main number. Once you get into the details of Grand Central, its really amazing – all the customization you can do. Most people, in this day and age, will have a home phone, a cell phone, an office phone, and sometimes a pager. You can do some interesting things with Grand Central. For instance, if I’m going on vacation somewhere, the primary way people will get a hold of me is to my cell phone, but I may have coverage problems or I may not have it with me. So with Grand Central, in about 10 seconds, I can say, any calls coming into my Grand Central number forward to the vacation house’s number. Now that phone will ring anytime someone calls me. That’s just one of many tools you can leverage Grand Central for, so it’s a great way to let people to get a hold of you when they need to.

Another tool I don’t know what I would do without is Jott. Basically, I’ve got it speed dialed on my cell phone, so when I’m driving home at night and have an idea or a thought or something I want to track … in the previous days on my Treo, I’d sit there while I’m driving and try to type in on my notes page my thought, or something might call their voice mail and leave themselves a voice mail message. With Jott, you call up a number and it recognizes your caller ID from your cell phone, so it goes to your account, and you leave yourself a message; it gets transcribed, essentially in real time, and sent back to you in the form of an e-mail. So when I get back to my desk, I’ve got my thought, my note sitting there waiting for me. I’m a great fan of David Alllen and the GTD methodology, if you’re familiar with that. One of the things about getting things done is that you need to get things off your mind, off your conscience, get it down where you know you’re going to look. So Jott drops it right in my e-mail, which is something I’m in every day, and allows me to keep myself organized.

The other big thing I don’t know what I would do without is Mind Manager from Mindjet. It’s a mind-mapping tool. So, I use that for basically everything. Outlining any kind of documentation that I’m working on or strategic planning or meetings I’m going to have with folks all get outlined in there. Also, on top of Mindjet’s Mind Manager is a tool from a company called Gyronix called Results Manager that sits on top of Mind Manager and allows you manage your to-do list, for lack of a better term. So I might have 20 or 30 different maps of all these different ideas of all these things that I want to do, whether its personal or work-related. Results Manager will comb through them all and present them to me through a simple dashboard all those things that I’ve told myself that are a priority or important that I want to get done. Mind Manager helps keep me organized, and then Results Manager really helps me get the things accomplished that I want to get done. Frankly, I used to just use Microsoft Outlook tasks for everything, but there’s only so far that takes you, because you really can’t nest things and do hierarchies. You have to have one level of items and maybe apply different categories and notes, but if you really want to organize things and move them around and reposition them, Mind Manager’s the way to go.

What kind of hobbies interest you when you’re not at work?

My wife says I’m on the computer all the time when I’m at home, which is probably true. I’ve got three kids, all in elementary school, so I help out coaching their sports teams. They’re playing basketball right, now so that’s definitely an interest. It’s more than a hobby, but something that takes a large part of my time. I used to be wannabe chef. I considered actually going to cooking school for a long time and changing careers, but IT was much more interesting to me. I don’t cook or bake as much as I used to, but I still enjoy doing it when I find the time.

I’m a big fan of music. I’ve got music playing all the time. Whether it’s at work or at home. I’m a big fan of Rhapsody, which allows me to, for one price, play an unlimited set of music, look at different styles and different artists, and pick up some new tunes. You had a post where you were talking about Love, so I listen to them. I’d not heard them before and I was like, “Wow. This is fantastic.” So, that’s a band I’m listening to now. I really enjoy the ’80s tunes for the most part. I’ve been a big fan of collecting a lot of obscure acoustic eighties music. If you need any acoustic Duran Duran or Def Leppard, I’m your guy. [laughs]

Interesting Information from Jim

Department staffing

Business/Clinical Analysts (20)
Project Management (7)
Clinical Engineering (9)
Server Engineering (8)
Logistics (4)
Service Center (17)
Telecom/Data (5)
Information Architecture (3)
Process Manager (1)
No outsourcing of any function currently.

Average tenure is 6.7 years. Half of the team has a healthcare background.

Other Projects Requiring IT Involvement

Security:  IP enabled video cameras are the new standard at Mercy. Obviously, now another device on the network that requires management and storage (a lot of storage!) Check out www.vidsys.com for an interesting vendor merging IT and security.

Point of Care Testing:  More and more POC devices are network enabled (wired and wireless). These devices need to managed, patched, secured, and replaced (frequently).

Wayfinding/Signage: Signage is moving digital. Check out http://www.cisco.com/web/solutions/dms/index.html for some interesting tools we are starting to look at as we consider signage and wayfinding for our new patient tower. Cisco’s DMS is a network-based, set-top box solution with centralized content management.

Patient Entertainment: We haven’t pursued this yet, but will probably be looking to implement hotel-like amenities in our new patient room. Movies on demand, Internet access, meal selections online, etc. are all coming to a hospital near you.

Smart Beds: The day is coming (has come for some) where even the patient bed is a device on the network. I can see a Patient Command Center running Zenoss, where bed rail up/down status, 30 degree bed elevation in the ICU status, patient location, late medication alert, etc. all monitored via a central control center. We use Zenoss for server and systems monitoring today, but why not extend it to patient centric functions – particularly since it is an open source product!

Links to tools Jim mentioned

Jott
Grand Central
Mind Manager
Gyronix
Zenoss
Daptiv
Altiris

HIStalk Interviews Laurent Rotival, SVP/GM of Enterprise Solutions, GE Healthcare

Regardless of how you feel about how multi-national conglomerates have changed healthcare IT, you must at least acknowledge GE Healthcare’s size and influence. GE Healthcare, formed in 2000 and headquartered in the United Kingdom, replaced the old GE Medical Systems Information Technology (GEMS-IT) and brought medical imaging, patient monitoring, and drug research into the fold to form a $17 billion business unit (over ten times Cerner’s size, to put that into perspective). The company’s IT profile was raised with its 2005 acquisition of IDX for $1.2 billion.

I don’t hear all that much about the company’s plans, so I was pleased to have Laurent Rotival volunteer to be interviewed (or, more precisely, to have one of his executives suggest it with his subsequent approval). To have a top leader of the industry’s largest vendor agree to be interviewed by an anonymous blogger … well, I was surprised and delighted to take him up on the opportunity. Thanks to the folks at GE Healthcare who made the arrangements.

Tell me a little bit about your background and your responsibilities at GE.

I’ve been with GE for about twelve years. I’ve just joined this role. I’m senior vice president and general manager of what we call the Enterprise Solutions business that includes five product lines. The most notable one is Centricity Enterprise, with the Carecast line or LastWord. We have Centricity Perinatal, Centricity Perioperative, Centricity Anesthesia, Centricity Laboratory, and Centricity Pharmacy. So, it’s basically the clinicals.

Vishal Wanchoo, who’s the CEO of GE Healthcare IT, has two other business units. One of them is called Imaging Solutions, which is run by Don Woodlock. That’s our RIS/PACS solutions, and with the recent acquisition of Dynamic Imaging, it includes that product as well. And then the third business is called the Clinical Business Solutions. Actually, that’s the integration of two businesses. They were separated before. One is called Practice Solutions that was focused on selling EMR solutions for physician practices, smaller physician practices and distributive physician practices. And then the business side is what used to be Flowcast or the revenue cycle management solution, again for physician practices and standalone hospitals. That’s run by Jim Corrigan. That’s the total entity, so I’m one of three business leaders under the GE Healthcare IT umbrella.

I’ve been here one year. Before that, I was the CIO of GE Energy Services, which is the service arm of the GE Energy business, which is based out of Atlanta. It’s about a $9 billion service business that basically takes care of all the support services that follow the sale of the turbine from installation all the way to its life cycle management.

Prior to that, I was the CIO of NBC in New York. And prior to that, I was the CIO of GE Oil and Gas based out of Florence, Italy, which was also an acquisition, a state-owned Italian business that GE had bought that went through tremendous growth. From what I recall, from a $900 million business to a $5 billion business while I was there. I think they’re reaching to $10 billion now, so that’s quite a neat story.

What about your personal background?

I went to Brown University. I have a bachelor’s and a master’s degree in Material Science and Solid Mechanics. Loved that. Prior to that, I’m what you might call a United Nations brat. I was born in Kinshasa, Zaire, now called the Democratic Republic of the Congo. I spent thirteen years in Africa and lived in Chad, Malawi, Niger, Ivory Coast, and Congo of course. I also lived in France, Switzerland, Italy, and Romania prior to graduating from high school.

I used to have lots of hobbies. [laughs] Not too sure anymore what my hobbies are, but I do have three young kids, married, living in Seattle and absolutely thrilled to be in the Pacific Northwest. I sort of accepted this job sight unseen, but I was not disappointed by this region. It’s a very beautiful place and I’m getting into all kinds of outdoor sports kind of things, like hiking and skiing and those types of things, which seems quite natural around here.

GE moves executives around a lot around their vertical markets. You’re a healthcare outsider. What’s your assessment, being fairly new to it and seeing it as a CIO who’s been in other industries?

You know, its fascinating and daunting at the same time. What’s fascinating from a technology standpoint is that healthcare is going through a lot of the same struggles and transformations that other industries have been part of.

What is not the same is the extraordinary impact technology can have in a positive and a negative way on the processes and workflows that we impact. And I think that’s quite a thrill, but also very intimidating in my position, because clearly not having the clinical background, ramping up as quickly as I can, of course, with the help of our clinical leaders here at GE Healthcare IT, not to mention the CMOs and our customers.

But I have to say, I guess it’s a bit of a dichotomy. You have this tremendous opportunity to upgrade the technology, to bring in new solutions that have the potential of significantly improving the quality and cost of the operation. The flip side is the risk associated to those conversions are probably greater that I’ve seen in any industry I’ve been part of, and so it’s something to be taken very seriously. That’s probably what makes this job one of the most exciting jobs I’ve had in my career — because of the impact you can have.

Also, when you work in gas turbines or in broadcasting or oil and gas pipelines or automotive plastics – you know you’re part of something important, but its all about money and cycle time and inventory turns and things of that sort. Where here, it’s neat to be able to go home and know that you have a real personal impact in everything you do every day. It adds a personal and maybe even an emotional dimension that is probably wasn’t as strong in other roles that I’ve had. I find that’s actually an extremely positive thing.

GE buys most of its applications instead of building them. Do you think that’s a good strategy as far as the customer is concerned?

That’s a good question. Actually, what’s interesting is what we’re doing with this business is a bit of a shift on what you’ve just stated.

There’s no doubt that the GE Healthcare business has been built by acquisitions. So, the GE was not in the space. I mean, they had some nominal departmental applications that were extensions of the diagnostic equipment that is the bread and butter of GE Healthcare, but very small activities in software. You could argue even that GE, especially under Jack Welch, never thought of software as necessarily a core competency.

What has changed over the last fifteen years, however, is that there is practically no technology that we have in our portfolio, whether it’s in healthcare or outside of healthcare, which is not differentiated by the software products and the software technology that we associate to those products. So I think in the healthcare space, we’ve made a number of acquisitions.

We’ve created a business that in 2000 was just under $400 million and we’re closing in on $1.7 billion this year. A lot of this was through acquisition, but a great deal of it actually was organic growth and, of course, on almost all the platforms that we’ve acquired or inherited, we’ve followed an evolutionary path to enhancing them, rather than re-writing them from scratch.

What we’re doing in the Centricity Enterprise space is actually taking Carecast to that next generation, which we call Centricity Enterprise 6, which we just launched a few months ago. Actually, it was one of the first major releases of the new product in this business in at least three years as far as I can tell. What we’re doing is grounding ourselves and reinforcing the very strong position that this business has been able to build over at least 25 years. And then what we’re doing in parallel to that is starting to build a state-of-art tech stack for the Intermountain partnership. A set of applications that will extend the Centricity Enterprise 6 platform, and then ultimately over a long period of time, overtake it.

We’re very sensitive to the risk our customers are facing as we re-write a platform. I think it’s dangerous, sometimes. On the one hand, you’d love to write from a clean sheet of paper because you have no constraints and you can usually develop a new application faster. But then when you look at the risks associated for one of your existing customers to actually convert from what becomes a legacy platform to the new platform, you find yourselves getting into some significant risks.

So the approach we’re taking, that might take a little bit longer, is to reinforce the foundation that our customers depend on every day for the same values and benefits and risks that I mentioned earlier. Then, incrementally add on some cutting-edge components, which ultimately will add up to a completely new footprint. We believe that that’s a path that presents less risk for our customers, protects their total costs of ownership, and ultimately takes them from a legacy architecture to a state-of-the-art architecture.

GE’s healthcare IT acquisitions were mostly middle of the pack, not the best or those with the biggest market share. Is that contrary to the overall GE strategy?

I think GE has multiple strategies. I’m not sure there is a single strategy for acquisitions, but then again, I won’t speak on behalf of all my colleagues across the company.

You know, the #1 and #2 thing was very much something we were aligned to in the Jack Welch days. But as you want to grow as a business, you can’t afford to just go for #1 and #2 because then, by definition, you don’t have that much growth left.

So the approach we’re taking now is to try to position yourself, not always necessarily with the absolute best technology, with the absolute best customers and partners. And one of the things we found that was extremely valuable, and is proving itself out every day and every week that we work here, is the customers that we have in the Carecast installed base, organizations like UCSF and Wake Forest and University of Virginia and so on, are really exceptional. And as you look at developing that next generation platform, what’s more important is not to have the best technology today, but to have the organizations that are the most distinguished in practicing care so that they can influence us as we build this next generation software.

So we actually think that we have a ton of room to grow and, because to some degree, you could argue this is the silver lining in not having the absolute best dominant technology, is that we’re not quite as anxious about leaving some of it behind.

Someone once said, “No company has ever benefited from being acquired by GE.” Your reaction to that?

Well, in my personal experience, I mentioned the oil and gas business. So this is a state-owned organization, somewhere around the $900 million range; a strong supplier of a certain type of technology but without a dominant position. Today, they’re probably a $6 billion or $7 billion business. Not only the company and the employees have benefited. The city of Florence, Italy has benefited because it has only depended on tourism and now they’ve got a global giant right there in their back door. Which, by the way, is not a pure American brainwashed entity, it’s actually a very Tuscan Italian company that’s part of the GE company. I think that was a fantastic story.

Now you know sometimes, if companies are too small, they can kind of get steamrolled. That happens. I won’t say we haven’t had our fits and starts. But in my experience, companies have done pretty well. I mean, NBC, the RCA acquisition in the eighties — NBC Universal is certainly an impressive outfit today.

There’s no doubt there’s complexities. When you look at GE Healthcare IT, there are a number of entities. It’s well published and reported that we have become part of this business. Sometimes change takes time. Coming up with technical solutions to integrate everything in a seamless fashion is not easy when most of the products weren’t meant to work together to start with. But, we’re making good progress there. You start with the culture; you line it up with the financial and the common set of metrics, and then you start attacking the more complex parts, which is bringing all the products together and delivering on the promise of the very rich portfolio of technologies and products we have.

Healthcare IT has two camps, the conglomerates like Siemens and GE and McKesson on one side and the “we built everything” group on the other side like Cerner and Epic. How do you think that will play out?

I won’t comment on our peers’ strategies, but what I can certainly say about ourselves is that we feel very confident that there is not only value in the individual components of our organization, whether it’s Centricity EMR or the Centricity Enterprise business from the Carecast side, but we truly believe that these solutions have got to work together.

I think there are two dimensions. There are solutions that should be fully integrated, ideally intrinsically,like the clinicals. We believe there are tremendous benefits from a patient safety standpoint, from a workflow efficiency standpoint, to have the clinicals integrated. But then at the same time, for solutions like imaging integrated with Centricity Enterprise, we believe that it is our responsibility to provide a seamless integration of those solutions, but they don’t need to be intrinsically sharing the same database or the same back-end data storage or data management solutions. It become more of a connectivity play. We have not made these acquisitions or invested in these programs to pretend that they are integrated or to put some lipstick on them and hope that nobody notices.

I think GE culturally has a tradition of being very transparent, which of course a lot of people can use against us because we’ll tell you pretty much what it is, and whether it works or doesn’t work. But we are committed, and if you look at the resources we’re dedicating to integrating the portfolio, we believe that integration is critical. Now compared to some of our colleagues who have built their own applications, I think they’re doing a fabulous jobs and it’s simpler to integrate. By definition, they’re built to be integrated.

The flip-side is that I don’t think its going to be as easy for them to integrate the complete continuum of care from not only the software standpoint, the data management standpoint, the clinical decision support standpoint, but especially all the device connectivity and the integration from a total workflow standpoint in the space and the environment the physician or the clinician themselves is surrounded by. Not just a software company, not just a hardware company, but actually working through the total space in which the clinicians are working. That’s where GE Healthcare is trying to position itself.

How close do you think we are to that picture where the traditional lines of demarcation like being FDA approved or having sensors that actually touch patients, or whatever it is, separate IT companies from bio-medical equipment companies?

I don’t have the answer to that. But I can tell you that is a big question. It has very significant implications for all of us, especially in the IT industry.

The key to success, and this is certainly what we’re pursuing, is rather than trying to demonstrated absolute integration on a seamless basis across all these technologies and all these disciplines, we want to create an environment where we have a technology stack and a technology framework that makes it easy to integrate all the things that you know today, and also to integrate all those things that you don’t know you require in the future, but you will acquire and that it will make it significantly easier than it is today.

So all the investments we’re making today are based on open architecture and open tech stacks, so that as you invest in our products, whether you start at the departmental end or you come to the enterprise end, as you continue investing in them, it will not only be easier to integrate GE technologies, but it will be easier to integrate any technology. Where the regulatory impact to all this is — I unfortunately don’t have the answer to that, but I’m sure we’ll all experience that over the next 10 or 15 years.

Do you strive to be #1 or #2 in the inpatient and the ambulatory EMR product segment?

That’s certainly what we strive for, but we want to do this correctly. We don’t look to growing at breakneck speed without having the quality and the support and the services. I had a business leader I admire who used to say, ‘You have to earn your right to grow’. And you can’t just grow because you have a lot of money or you have a lot of capacity or you have a lot of engineers.

We recognize that we have some work to do to improve the quality of our products and our services. We’re making very significant investments as we speak — to the service, the engineering, and the support side — to ensure that we are ready to grow. We’re GE and we have every intention to grow and we have every intention to be market leaders. That said, we don’t want to do it at the expense of delivering high quality products that serve our customers as we promised they should.

How is the $1.2 billion GE paid for IDX being realized?

The IDX portfolio was a very rich portfolio of products and customers. I described to you the three major business units we have. All those business units are doing very well and the business is growing. Certainly from a financial standpoint, the performance is very positive.

What’s particularly valuable about the realization of the IDX acquisition is that GE Healthcare needed a very strong information technology backbone to integrate all the various products and solutions that it offers. And what IDX had been able to bring was not only strong ambulatory products, but particularly the Centricity Enterprise side, is the platform we’re going to use to provide that core centerpiece of information management for the hospitals and the large IDNs. So we recognize we’ve got some gaps, but we’re making some significant investments jointly with Intermountain and a number of our other development partners.

The continuum of care is vital. There’s not a single healthcare organization that I meet with – certainly in our customer base, and even potential prospects – who doesn’t stress the essential importance of having a fully integrated IT backbone to run your operations, not only on a day-to-day workflow basis, but also on a retroactive advanced decision support capability, to be able to analyze how to improve care and how to tighten up the tolerances on how care is being delivered across different physicians, operations, hospitals, etc.

So I think that’s where the real return on investment is going to come, where we’re going to be able to not just deliver and implement a Centricity Enterprise inpatient or outpatient solution, but when that solution will actually allow our customers to fully integrate all their diagnostic equipment, all their labs, all their practices, and do it in a seamless way. So that’s the bed we’re in. When we reach that point, the $1 billion plus will be a small cost in the context of the rewards we’ll be able to get not only as a company, but for our customers.

When does the work at Intermountain come out from under the covers?

It started 18 or 19 months ago or so. There was a ramp-up of resources prior to the IDX acquisition in 2006. And as we acquired IDX and started integrating the business after the first quarter of 2006, we were at about 100 resources. We’ve been fully staffed for about three or four months. We’re a little over 310 or 320 resources, not only at Salt Lake City, but also in a couple of other GE sites.

We’re going to be releasing the first major parts soon. Not releasing to the market, but implementing them within Intermountain, the first major phase of the program, which will be focused on the emergency department. So we’re very excited about that. We’re targeting that for the end of the first quarter or beginning of the second quarter next year.

So the team is heads-down working on that, and we’re designing and developing the specs for the next two generations of the product and we’re very excited about it. So, it’s going very well. I think there was a little bit of silence for awhile because the team was really getting its sea legs. We had acquired IDX, and we bought in the Carecast business. As we were looking at the exceptional partnership we had with Intermountain, we also recognized that there were some luminary customers within the installed base that IDX brought in. We wanted to make sure they could participate and help enhance what is designed to become a transformational, next generation platform.

We talked about the acquisition integration, getting the cultures aligned, understanding what’s in conflict and what’s not in conflict. So that perhaps delayed us a little bit, but the result is that we’ve never been in a better place when it comes to our partnership. Our customers are excited about it. And, we’re having a pretty impressive set of collaboration across half a dozen large, very respected healthcare organizations, with Intermountain, of course, at the core. So it’s very exciting. We’ll have some cool things to show at the beginning of next year.

Do you think the end result will be targeted at large organizations like those ones you just referred to, or will it be something that the average community hospital can use?

It’s targeted for the average community hospital. We’re architecting it so it can be run completely on commodity hardware. So, it’ll be completely available to scale up to the Intermountains and the UCSFs of this world, but it also has the capability of running off Linux boxes and a fully open tech stack. Pretty much a state-of-art technology stack, which will provide not only a very low cost point and a low TCO, but also provide tremendous opportunity for integration, not only our products, but also third party products.

As we all know, and I certainly know from my 10+ years as a CIO, there is no such thing as a homogenous portfolio of applications in any organization. So I think that’s the other element we’re trying to address here. You’ve got to have something that can work easily with other technologies. I think that will be a differentiator as well.

When do you think you’ll have the first fully commercial sale of the end result?

We’re not looking for a big bang, “Here’s the GE-Intermountain EMR, ready for sale with a nice ribbon.” We’re basing everything on the Centricity Enterprise 6 platform, which we released earlier this year. And the way we’re looking at it is to implement it on a modular basis. So what we’re recommending is that you implement Centricity Enterprise 6, and then we are building all the engineering integration requirements so that, as modules come out, whether it’s for ED, whether it’s for a flow sheet, whether it’s for a PDA, whether it’s for other types of services that we’ll be releasing over time.

Basically, every year we’ll be releasing different components. You’ll be able to enhance the Centricity Enterprise 6 platform with those components. And over time, and it all depends on the appetite and the rate at which an organization wants to consume these things, you will find yourself having the center of gravity of your application will be increasingly the new tech stack rather than the old tech stack. But it really will be up to the client organization to decide at what rate they want to absorb them. So we’ll start releasing some things next year.

You will be marketing it to new customers, correct?

Absolutely. But in 2008 and 2009, the output of the GE-Intermountain partnership is not going to be a full, complete, 360 EMR solution. I mean, we’re building this, we’re very focused on starting with ED. We’re going after ambulatory. We’re going after certain infrastructure components. We’re going to sequence it that way.

This is sort of the internal debates we’re having these days. What are we focused on first? What will we focus on afterwards? Where are we strong? And so, to a degree, we think we have the best of both worlds. We have a very strong orders and CPOE solution with Carecast. We recognize that there’s some areas of improvement, but we also have departmental products that compliment it well.

I thought one of the braver, more honest things I’ve seen a vendor do was when GE responded to the KLAS nursing adoption study and pretty much said, ‘Look, we admit it. We and our competitors haven’t really done a good job of giving nurses the systems they need.” What actions resulted from that?

It was a hard decision, but we certainly didn’t want be rewarded by trying to sugar-coat it. GE has a strong culture of transparency.

We’re trying to get our customers upgraded to the latest release of our product. There are a number of features in the latest release of our product that actually mitigate some of the issues that were identified in that report. But we’re also putting a very strong focus on nursing workflow. We’re taking advantage of a lot of the best practice methodologies and the operational rigor that GE can bring here to ensure that we not only interact with our nursing client communities in a productive way, but we also translate their requirements and their requests into actionable product requirements that will be built out and integrated into our future releases.

It’s a tough situation to be in, because clearly nurses are among the largest population of our users, probably without any competition. And at the same time, we would obviously prefer to have better solutions for them. But I feel good considering the resources we’ve invested in this business. Just to maybe give you a sense of the kind of resources we have in development today compared to the resources this business had in the IDX days, the Centricity Enterprise business or the Carecast had about 250 engineers when we acquired them. We’re now in the range of about 620 or 630 engineers dedicated to this one product.

So the exciting part is that if you combine the clinical expertise, the software expertise, the domain expertise that the IDX team has, and you combine that with the rigor and the operational excellence and the focus on execution that GE brings, and you add on top of that the significant resources to actually walk the talk, it’s not just a question of gathering the requirements, but its doing something with them. I think the prospects are very positive and optimistic.

What we’ve also done from an organizational standpoint is a CxO kind of client forum called the Physician Advisory Group, then the CIO group. We’ve added a Chief Nursing Officer Advisory Group. That was one of the things we did early last year. We have a chief nursing officer internally. We’ve been hiring more experienced professional nurses into our organization. So I think there’s a very strong culture so our nursing users have very strong advocates internally and we’re including them now in what was already a good communications process with the CIO and the CMOs or CMIOs. Now we also have the CNOs included in that. It’s making a huge difference in helping us understand how to continuously improve our products.

If you look at the broad spectrum of healthcare IT, which areas would you say are most popular right now?

One is a tremendous focus on clinical workflow. The software industry has had a tendency to always think in modules or components of modules and has always focused on the connectivity side and the automation side and the paperless aspect. Everybody has been talking about paperless and eliminating the paper artifact. I think a lot of organizations have taken care of that and are less focused on paperless and more focused on ‘How do I really optimize and maximize the efficiency and the quality of my workflows?’, which of course doesn’t always work naturally with the way IT solutions are architected.

I think the other aspect is driving evidence-based medicine; making sure the data is available, so it’s not just gathered after the fact through some kind of manual reporting, but that every transaction, every encounter with the patient captures data on a standardized basis. And as you look at the work we’re doing with Intermountain, literally leveraging knowledge terminology, management, setting up standard databases, and setting up clinical data models, ensuring that the data is captured at the moment of the transaction or the encounter with the patient, which then allows you obtain a very, very rich database that then can be mined for analysis and for discovery of how to improve care.

The other thing that we’re doing, of course, is including in the workflows best practice care. So I think that is something else that we’re hearing more and more about. How do we keep our physicians and our clinicians fully up to date on the latest developments in healthcare? How do we help them as individuals who have a tremendous amount of pressure both transitionally and from a responsibility standpoint to be aware of the latest developments, the latest adverse interactions, the latest discoveries on how to practice care and how to address certain types of concerns?

Through the software we’re developing, we believe we have a unique opportunity, not just as GE, but as a partnership with other organizations like Intermountain healthcare; organizations like UCSF and others, to take the best practices that they’ve developed and make them available, not only to large institutions, but particularly to community health hospitals and others. And so that’s what we’re targeting going forward.

HIStalk Interviews Eric Rosow, Chairman and CEO of Premise

Photo: Hartford Courant

I was certain I knew Eric Rosow of Premise when he introduced himself as a new HIStalk sponsor, but I couldn’t place him. Finally, I remembered: I had seen his presentation at the 2002 HIMSS conference in Atlanta called “Real-time Executive Dashboards and Virtual Instrumentation: Solutions for Healthcare Systems”. It was one of a handful that I thought were interesting enough to cull out for further review, the idea that a feed of information and instrument sources could, like a car’s dashboard, provide an array of information needed to keep the vehicle operating efficiently and going in the right direction.

Patient throughput and its underlying components (patient assignment, bed managment, housekeeping, and patient transportation) have an enormous impact on hospitals that I’ve seen first-hand: ED waits, patient satisfaction, staff satisfaction, and even clinical outcomes (another great HIMSS presentation from years ago was from CareScience, which dealt with bed assignment and the clinical variation that occurs when nursing units get patients whose needs are vastly different from the average patient on that unit).

Hospitals need the kind of measurement and transparency that products like Premise’s can provide. Many (most?) of them have the expensive symptoms of poorly managed patient throughput. No wonder Premise has enjoyed growth of over 2,000% in five years.

Tell me about yourself and about Premise.

First, I have to say that I feel like I’m talking to an underground celebrity. I really love your blog. It’s just so refreshing and humorous and insightful and thought-provoking. It looks like at the rate you’re growing, it could blossom into a great vehicle for communication.

I’m a geek by definition, in some respects. I’m an engineer by training. I went to Trinity College here in Hartford, Connecticut. I majored in mechanical engineering and then got my Masters in biomedical engineering.

My Masters program had an internship, so not only did I get my degree in biomedical engineering, I also spent two full years at St. Francis Hospital and Medical Center in Hartford. That’s really where I fell in love with applied technology in healthcare. After graduating, I got to row with the US team for a couple of years, which was a great experience to see other parts of the world. I then went back to Trinity and taught for a year. It’s very true that you have to learn something to teach it.

After that, I joined Hartford Hospital as clinical engineer, where I was immersed in front lines of healthcare delivery and the role that technology can play in addressing those challenges. I did a 13-year stint at Hartford Hospital and was the director of biomedical engineering for the last seven. I served on the capital committee and was involved with the technology assessment of major projects, including enterprise-wide monitoring and re-engineering engagements.

It was the reengineering initiatives in late 1990s that led to the opportunity to develop what we now call our bed management platform. Hartford Hospital was faced with a number of challenges. A top initiative there was to find, build, or buy enabling technologies to help streamline capacity management/bed management. They had looked at different solutions on the market, but felt there was need for better communication and better integration of clinical information. That provided the opportunity to co-develop the Bed Management Dashboard.

I love the sport of rowing and helped started a rowing team in our town. Through that experience, I learned to value the passion, the teamwork, and the commitment that can come with a high-performing team. I think that experience fostered the entrepreneurial DNA that must have been in me. Or, the lack of a fear gene – I’m not really sure which [laughs] that resulted in us creating this crazy thing called Premise.

Premise is an interesting ride. It wasn’t just, “Let’s go off and create this thing called Premise.” It started out as two guys in the basement, myself and a long-time friend and colleague named Joe Adam. We met as high school lab partners. We were the yin and yang of complementary skill sets. In the early days, we were more of a consulting firm. Over time, we evolved to apply our applications to product-focused and decision support and business intelligence, ultimately to workflow applications. That was the next generation of Premise, in the late 90s, where we evolved from consulting and data acquisition and data presentation and focused on how we could apply those tools and visualization dashboard metaphors to really impact healthcare. For me as a biomedical engineer, it was such as great intersection of connecting devices and communications with workflow and safety and efficiency initiatives.

Hospitals used management engineers a lot a few years back to find and fix process problems. Did that work and are they using them enough today?

One of the ways I got engaged in developing the bed management dashboard was that I was one of first non-GE employees to go through GE’s Six Sixma quality training. Whether it’s management engineer or TQM or CQI or Six Sigma, I think the goal of trying to make informed decisions based on data and trends is what will always be required in healthcare, particularly given the challenges of aging nurses and baby boomers, the perfect storm that’s happening with capacity demand.

Hospitals respect the science of management engineering in day-to-day operations, but saying and doing it are two different things. In our focus area of capacity management, there’s a huge opportunity where information technology can play a huge role in improving that. Specifically, in things that IT is really good at – providing transparency across the organization, analyzing variation, looking at historical trends like where are peak discharges and admissions by time of day, day of week, time of year – and most importantly, streamlining communication among stakeholders.

MRSA is an example of where, when we developed our application, it was really important from the get-go to provide that type of clinical information so that caregivers could take the precautions they needed to and not put patients at risk, particularly if they’re in a semi-private room.

How big a problem is patient throughput in hospitals?

It’s amazing to me how ubiqitious it is, not only in large hospitals, but small hospitals, and not only here in the US, but internationally. We’ve been fortunate to work with a lot of great thought-leading hospitals, places like Cleveland Clinic, Mass General, MD Anderson, and even recently at a kickoff for our first international application at Singapore General Hospital. Places like that who have lived through the SARS epidemic have an even greater appreciation for the challenges when it comes to emergency management. The day-to-day issues include ED wait times, the metrics around diversion, people who leave without treatment, satisfaction indicators, not only people coming from what we call portals of entry, like ED and ancillary areas, but are transfers from other hospitals.

The challenge I’ve seen is that ED backups or diversions and OR and PACU backups are symptoms of a much broader patient flow challenge. Studies have been done that show that ED wait time isn’t necessarily tied to volume or ED staffing, but the visibility of upstream bed capacity. That’s the challenge in hospitals from 100 to 1600 bed hospitals throughout the world. The opportunity to create virtual capacity by better utilization of existing beds is important, especially when we’re seeing bricks and mortar and cranes helping to build out capacity, but at a cost of half a million to a million dollars per bed, plus several years to do that. That’s the real benefit.

It’s looking at the right metrics. The bed turns in a year or in a given time period is a key operating metric that all hospitals need to monitor in real time to better manage their operation.

What are the symptoms that your hospital has a throughput problem and do executives recognize them?

Certainly diversion, excessive wait times in ED, people who leave without treatment, operating room cancellations or delays or backups in PACU. Corresponding derivative effects of that are upset physicians, caregivers, and surgeons who have to cancel or delay their cases due to lack of ICU or stepdown beds for patients to go to after the surgery. Also the challenge of what we call the shell game, where patients are placed on off-service units. An orthopedic patient who’s had their hip done that morning may go to a medical floor. That creates a whole host of challenges. Those units are not trained to manage an orthopedic patient and they are often placed in a temporary holding state. Medications and meals may play catch-up as the patient moves from one holding area to another. You create work for the organization because you’ve got a bed that was occupied that has to be cleaned and prepared for another patient to come in.

There’s great efficiency if you can get them to that right level of care the first time. We’ve seen hospitals that have done more than 40 intra-unit transfers per day. You’re just not getting the throughput you need because of poor visibility across the enterprise. In our experience, capacity management in many hospitals is reactive and decisions made round a diversion, cancellations, and delays are made without good, real-time information that can support these decisions. That’s the biggest value that Premise is focusing on – increasing that visibility and decision support.

Can throughput problems be fixed without an actively managed patient transportation program?

Clearly it’s a continuum. I’ll go on record as saying that you can’t fix throughput with any technology solution. It’s a holistic approach looking at as-is, the to-be state, gap analysis to configure a solution to manage that continuum. The way we look at it is that you’ve got a circle – a portal of entry, bed assignment, bed management. Then, you need the transportation on site to move the patient and/or assets and other equipment to their room and level of care. Communicating all the activities throughout the length of stay to discharge, when a housekeeping event occurs and the room and bed are cleaned. We were originally focused on clinically driven bed management and evolved to environmental service functionality. Our newest module, Transportation Dashboard, provides that visibility across the transportation team as well.

Are hospitals getting better at discharge planning?

I think they’ve had to. As more information becomes available, it becomes easier to plan. The challenge we’ve seen is this notion of hiding beds. People can only make decisions only based on timeliness and accuracy of the data they have. Patients may leave the hospital at 10 in the morning, but that event may not be broadly visible across the organization. If you’re looking only at one ADT system, it could appear that that patient is still up there occupying that bed. That’s the type of mis-information that can create a cascading effect of backups. That continues to be a challenge in terms of visibility in discharge planning and overall patient flow.

Hospitals often think that bed turnover is a housekeeping issue. Is it?

No, I absolutely don’t think so. I often think one of the most rewarding aspects of our solution and the clients we’ve worked with is vindicating and supporting what a great job the housekeeping departments actually do. Because housekeeping departments may not have all the tools and data to support the job they do, they can be the easiest to blame. By providing metrics such as response time to a cleaning request and bed turnaround time, and doing that both on a shift and employee basis, Premise can really empower an organization to see where the bottlenecks can be in their patient flow process. In general, they’re not with housekeeping.

Can census levels be predicted?

I think hospitals can predict some of them. Certainly if you’ve got scheduled procedures, you can see what’s coming up. You can look at histograms and historical trends and control charts of what patterns have been historically for different regions of the country. There is a growing capability with some of the business analytic tools to look at what patterns have been and to use that going forward.

Having been at Hartford Hospital on 9/11, a tragic day for this whole world, the ability to look at patients that were in the hospital that day … there were only three open beds that morning and calls were coming down from state and federal authorities. There were two questions: how many beds do you have available right now by type and how many can you have available in one, two, and three hours from now? Without technology to augment your hypothesis, it would be almost impossible for many hospitals to answer that question. Hartford was able to free up over 140 beds that day to make room for anticipated casualties from New York City, which tragically never came.

What’s the ROI on your products?

There are different pain points for different organizations. Many we’ve worked with have looked purely at their ability to increase admissions without increasing their bed compliment or increasing their staff. Going back to virtual capacity and making better use of the beds they have. Other ROI elements can tie in to reduction in diversion, reduction in OR delays and cancellations. We’ve developed quantitative and qualitative ROI metrics that may or may not apply to a particular hospital’s geography or challenges.

We’re seeing more and more organizations view patient flow as a strategy, not just a problem. It’s critical, it’s real time, it’s strategic. The ability to increase efficiency and therefore profitability is why inpatients are such a high profile. It also plays an important role in patient and staff satisfaction. Chief nursing officers and other leaders use tools that help manage beds and and patient flow as a recruiting tool that makes it a more desirable place to work. All the years I’ve worked with nurses and physicians, they want to do the best job possible and take care of patients like they’ve been trained to. When you have such a potentially out of control system with patients not appropriate for their population, that can create anxiety and risk. Getting the patient in the right bed the first time is critical.

What vendors are competitors to Premise and how would you compare your offerings to theirs?

Certainly the market continues to mature. The vendors we typically see are Tele-Tracking, who I have a lot of respect for; Navicare; Statcom as a pure play vendor as well; and certainly Awarix is a really impressive company and obviously McKesson thought so as well. Those are the pure play vendors we see most often. The large healthcare IT vendors have some functionally. We see ourselves as complimentary to them. We can work in concert with the big HIT or ADT vendors out there. It’s good for the market that we’re all raising the bar, all bringing features and functions to bear as strategy that allows hospitals to better utilize their beds.

In terms of differences, our architecture is open, flexible, based on industry standards. We’re a Microsoft technology platform. We’re unique in the clinical functionality we use to match the patient’s clinical attributes to their level of care. If a patient presents with chest pain and tuberculosis and MRSA, we might need to find a bed with a patient monitor and negative pressure capability in that room. We used to joke that if you have a Yankee fan and Red Sox fan, you may not want to put them in the same semi-private room during the playoffs.

There’s all kind of attributes that may not be readily apparent. Some hospitals have to track gang affiliations. You don’t want to put rival gang members in semi-private room. This ability to complement ADT demographic data with specific attributes, like monitoring infectious disease, is really important to optimize the patient flow experience.

We want to have a highly intuitive look and feel and an easy-to-use user experience. We have patent pending technology called our Intelligent Workflow Engine to optimize and load level how tasks are assigned, particularly in the area of bed turnover, environmental service/housekeeping, and transportation tasks.

I do think it’s not just about technology. You don’t just double click the install button and it’s done. We measure the as-is state and the to-be state based on desired outcomes, and then gap analysis. We bring subject matter experts, a number of clinicians who are nurses with backgrounds in clinical patient flow, project managers, and technical specialists to make sure that when we go live with client, we tune that application to align with their desired workflow. For that reason, our solution may not be right for everybody, but for those it is, it will fit like a glove when we’re done.

Deloitte recognized Premise for outstanding growth of nearly 2300% over five years, one notch behind Google. How did you create that growth and how do you manage it?

We’ve certainly been excited to have grown the way we have. We joke internally that we were right behind Google in terms of statistics, so we love that “lies, damned lies, and statistics.” [laughs] We have great people who have a lot of experience in building companies and also focusing on what’s important. Our goal isn’t to grow, it’s to have 100% referencability. People here are exceptionally passionate. We say we have a company, but we have a mission to make a meaningful difference in healthcare. Hiring the right leaders, the right skill sets and, most importantly, the right culture and chemistry is key to any high performing organization.

In some cases, we’ve been better served by hiring people from outside of our industry. We recently created a chief technology officer position and, after an extensive search, hired a person from the digital media space, somebody familiar with innovation, user experience, and time to market, unencumbered by the traditional healthcare IT world. That has been an advantage for us to innovate. We also made a decision, for the first time, to take on a round of investor money. Through that process, we’ve got a very strong board of directors and thought leaders who have been wonderful advisors and strategists and also mentors to me and other members of our team. One gentleman in particular, Joe Zaccagnino, was the former CEO of Yale New Haven Health. He brings a tremendous insight into the challenges going forward in hospital management and administration.

You said when you hired Craig Gavina as CTO that innovative consumer technologies have healthcare potential. What are some of them?

Certainly as we look at different forms by which information can be displayed. Form has to fit function. We don’t want to be too ahead of curve, but we want to be responsive to what’s out there. One thing we say here at Premise is NEHITO – nothing every happens in the office. We want to make sure we understand what is the most effective way to deliver information, through touch screen interfaces to PDAs to iPhones, as well as traditional vehicles.

The other thing that’s exciting to me as a biomedical engineer is the convergence of other medical devices and applications with patient flow. We have relationship with Stryker,where their next generation smart bed, or iBed as they’re calling it, can communicate bed parameters. For example, are the side rails up, are the brakes on, is the bed at a low height. That information can be critical to another hospital challenge, falls and fall risk and the ability to integrate that type of information into an application like our patient flow system. The same applies to scheduling and resource management. We have a history of form fitting function.

We do what’s right for the customer, and by having a lot of what I call Chuck Yeager accounts – hospitals that push the envelope of this company in a good way to make sure we’re thinking ahead but also grounding our thinking in what will work and what won’t. I know from my experience at Hartford Hospital that things that don’t work the first time often don’t get a second chance. Applications that are innovative and functional and, at the end of the day, will get used.

I love to read books and ideas from thought leaders. One of my favorite authors is Guy Kawasaki, who describes himself as Apple Computer’s evangineer, someone who wants to change the world and has the technical ability to do it. That’s what I see that at Premise. We’re excited to have this technical ability to influence how patients move through organization. We’ve had housekeepers come up to use with tears in their eyes and hugging us, thanking us for being able to show what a great job they do in helping that organization improve their patient flow.

Where does the company go next?

We see a tremendous challenge of continuing to focus and build on the base we have. The opportunity we have to extend into the ability to tie into other devices, staff scheduling, analytics – the market will see a lot more functionality on reporting and analytics. We will continue to be opportunistic as we see challenges and synergies that are presented. We don’t want to boil the ocean – we want to focus on what we do really well. We see the benefits and value of RFID technology.

At Singapore General, we’ll see the integration of advanced RFID technology into our patient flow platform. Technology that can not only show the location of a patient, of staff, or an asset, but also be able to measure physiological signals of those patients, like core body temperature. In Singapore, that can be a useful tool to for precursors or outbreaks of infection or disease states like SARS or avian flu.

Who do you admire in the industry?

I think people like Michael McNeal, who I know you interviewed a while ago. What he’s doing with Emergin is really exciting, how he’s looking holistically across multiple vendors and providing that glue, middleware that can tie information and devices together to enable companies like Premise to add value quicker. Outside the industry, I really admire Steve Jobs and the elegance of what Apple has done and continues to do. I’m one of the heretics here at Premise that carries the iPhone and MacBook running Windows applications. I hold that as the standard to try for in terms of elegance, ease of use, and functionality.

Also, Bill and Melinda Gates and the incredible work their foundation is doing for global health with access to vaccines and drugs and research to develop health solutions that are affordable and practical. I’ve been an Apple evangelist since college, but I’ve always admired Bill’s ability to scale his vision and organization through the vehicle of Microsoft and especially the standards and rigor of the Gates Foundation. It has always been my goal to create social value through my profession and now through Premise. I’ve been in the healthcare profession my entire career because I can think of no better industry to devote one’s time and energy to. Their leadership by example has been a tremendous catalyst for others to contribute, like Warren Buffett, to such an important initiative — global health and the challenging inequities in the world.

Any other thoughts?

The patient flow is a strategy and looking at logistics and analytics is a platform to look at the core processes of delivery. That’s what we’re really focused on doing.

Our success to date has been a combination of our company’s humility. We don’t think we know it all, but we have have great advisors and customers to guide us through a dynamic market. I think it’s due to our passion, a desire to innovate, and our commitment to realizing that vision that has made this place, while at times challenging given the growth we’ve experienced, rewarding. Everybody who works here wakes up every morning excited about what we’re contributing to healthcare. It’s not for everyone, I wouldn’t want anything else. I’m really proud of this team. I don’t want to sound like an infomercial, but I really mean that. It’s a great experience we’re building on and I really appreciate the opportunity to talk with you and I appreciate all the great work you’re doing with your website.

A doctor I worked once with made a great analogy. Why do people buy drills? What they’re really buying is holes. I love that analogy. What is it you really do? What we really do is provide workflow automation, but what we really provide are analytics and real-time information. That’s what people need. We are never going to be a replacement, nor do we want to be, for the big HIT vendors. What we want to be is a decision support tool and real-time dashboard that can work in concert with ancillary systems to make the best, accurate, timely decisions so that the patient gets to the right place at the right time. That ties into patient safety and a whole host of other benefits.

HIStalk Interviews Tanya Townsend, Director of IT at Saint Clare’s Hospital

Every CIO’s dream is to start fresh with a new hospital in a new market with all-new employees, choosing technologies from scratch and building the necessary infrastructure right into the structure. Tanya Townsend had that opportunity. The level of automation in most small hospitals is modest, but Saint Clare’s Hospital in the Village of Weston, Wisconsin, is a 107-bed digital hospital, thanks to some cooperation with Marshfield Clinic and parent organization Ministry Health Care.

The all-digital characterization generates a lot of industry interest, so thanks to Tanya for sharing the story with HIStalk’s readers.

Tell me about yourself and your job.

I am IT director for Saint Clare’s Hospital in Weston, Wisconsin. I’ve been here three years now, so I was involved with project about a year before it opened. We are the first and only all-digital hospital in state of Wisconsin, a very remarkable and unique experience and I’ve been part of that since the beginning.

If I walked the halls of Saint Clare’s, what would I see that’s different form the average hospital?

First and foremost, it would be lack of paper chart and a lot of paper-pushing of the paper chart. So, for example, on our nursing units, based on our design for an all-digital hospital and knowing we didn’t have to worry about having a central communications station where that paper chart is generally stored. We started to rethink how we were going to provide care and do business with this new model in mind.

We actually decentralized nursing unit and put all of our nursing staff closer to patient. Now we have alcoves outside all of the patient rooms where documentation can occur, otherwise our document is completely mobile and wireless. Documentation can occur at the bedside as well.

We also implemented voice over IP wireless phones so all our communication can happen either via the computer or phones, tied into our nurse call system. Everything is very mobile and everything is real-time action. It’s a different model for communication and lot more of a decentralized approach, closer to the patient and then hopefully more family-friendly as well.

How do you define an all-digital hospital?

That’s a great question because I’m finding out, as we start sharing stories with other so-called digital organizations, we all have a little different definition of what exactly all-digital means. Going into our guiding principles, we certainly had a lot of different ideas of what we wanted the all-digital approach to be. One was that we didn’t want a paper chart and to worry about storing or maintaining a paper chart in a long-term format. That was the first piece – understanding how you’re going to get rid of any paper coming into your facility in the first place.

It’s also about optimizing information flows across the continuum and building in decision support and patient safety into all of the different systems as much as possible. That means implementing systems such as CPOE and clinical documentation with decision support at the bedside. Not neccessarily just about scanning paper on the back end.

One of the biggest problems CIOs have is change management. What opportunities did you have starting from scratch?

That was actually a unique opportunity. We were a brand new facility – we weren’t even a replacement facility, in a new market and a new area. Everybody coming into the facility was brand new. We all came in with open eyes, the sky was the limit, with a sense of camaraderie and collaboration from the very beginning, both business as well as IT, starting with the senior leadership level. The senior leaders built this vision, and upon hiring everybody into the hospital, everybody was part of that same vision. Very open minded, a lot less of “we’ve always done it that way.” We set expectations right at the beginning, even with the recruitment process.

Other pieces are building the culture of what we wanted to accomplish, so this idea of decision support, best practices, patient safety – it was at the core of every one of our processes that we built. It was also part of the initial process before the hospital opened – building our culture and process flows. We formed multidisciplinary teams for year before hospital opened, forming process flows. It could be as simple as registering a patient or as complex as medication reconciliation. We have 8,400 pages of process maps, all available digitally and used for both training purposes and process improvement purposes..

It really is an evolution. They’re not just one-time static documents. Any time we want to improve a process, we go back to the process maps and they get continuously updated.

How did you create the process maps?

We have a project manager. We use a project management methodology and we had a project manager to help facilitate those sessions. We had simulations and walkthroughs, and since then have a process improvement manager who will update the process flows and facilitate the sessions sessions. Our quality department is absolutely integral as well. They usually identify the areas we want to look at for process improvement activities. They’re available on our Intranet and we built them with Visio.

What systems do you use and why did you choose them?

Where we had the opportunity to really start fresh, we also knew from a cost savings opportunity as well as efficiency, and what we needed on this campus was a lot of collaboration, with both Ministry Healthcare and Marshfield Clinic present on this campus. Rather than reinventing the wheel, we took a look at what was available to us within both organizations that we thought we could fit in here. We looked at the tools that then did a gap analysis of where the holes were that we needed to identify solutions for.

We came up with two core systems. One of the was GE LastWord, now called Centricity Enterprise, and we’re in the process of converting to that. The other is the Marshfield Clinic application, which is now called Cattails MD. They officially got their CCHIT certification. 90% of all our documentation for our medical record is found in those two core tools.

The OR and ED are two very niche areas that typically require their own set of documentation. In the OR, we are partnered with Picis. They do our OR and anesthesia documentation for pre-op and intra-op. In the ED, we recently went live with MedHost for ED documentation. We also have the GE perinatal product, formerly known as QS, in family birth center. The other gaps was progress notes. How were we going to handle hospital progress notes? We had hunch that we were probably not going to get physicians to type their progress notes. It was one thing to ask them to do CPOE, but we weren’t sure we were going to get them to type progress notes.

Also, the different types of paper forms that are typically found in a medical record  chart that we don’t have solutions for – anatomical drawings, for example. There’s some forms that get approved through the medical records committee every month. And, documents coming in from outside facilities. We knew that patients would be coming here and transferring their care who might have some paper coming with them. We needed to find a way to acquire that into the record. We partnered into Marshfield Clinic. Since they do their own development, we could partner with them and decide on solutions for that.

With Marshfield Clinic, they developed a system called Digital Ink over Forms. That’s a tool that allows you to use a tablet style PC, pull up a form, and complete it with a stylus on the tablet. It digitizes your handwriting or whatever you did on the tablet. That’s our solution for progress notes as well as those different types of forms like the anatomical drawings. We have a scanning solution also developed by Marshfield Clinic for scanning those paper documents that will make their way into the facility.

How does the Marshfield Clinic’s homegrown EMR application work?

It’s actually been in development for the last 20 years or so. It was a system developed by physicians, for physicians. Marshfield Clinic is physician-run group. A lot of it was just a unique opportunity for us to say, “These are the gaps are on the hospital side, can we partner together to help with that collaboration across the continuum”, which is where you often have handoff issues, between ambulatory and hospital and back. That’s where a lot of handoff errors can occur. How can we partner together so that our systems are integrated across the platforms? So they’ve done a lot of very remarkable things, a very powerful tool.

We use it differently in the hospital than they do on the ambulatory side, but we share a problem list, medication list, and allergies. That was a key requirement for patient safety, that we have a medication list that would cross the continuum between ambulatory and hospital and back. The developed a very powerful medication reconciliation processes called Medication Manager. That’s also for patient prescription-writing as well.

Like I mentioned, the scanning solution is embedded right within their system. We have all our radiology and PACS images integrated with their system that allows dictation. And, one of the most unique functions is the Digital Ink over Forms that allows you, with your tablet and stylus, complete forms digitally or electronically. I’m probably missing a bunch of things it does. One of the reasons that Cattails is certified is that because it certainly meets all the standard criteria that commercial vendors already have as well.

What kind of user devices are in place?

Our core tool is the Fujitsu tablet, primarily because of that Digital Ink over Form documentation opportunity where we can use it with the stylus pen and complete the forms digitally. It’s mobile and wireless, of course. That’s our core clinical device. Each provider gets a tablet, whether a nurse or physician. The physician typically gets their own assigned to them and can take that from the clinic to the hospital and can roam freely throughout the campus using their personal tablet. On the nursing units, we have a pool of devices that they check out for the day and that’s their clinical tool they use throughout their shift.

How’s the battery life?

We have docking stations outside all those patient alcoves that I mentioned, so there’s lots of opportunity to sit and charge up. We also have the COWs that they can charge up on. If you’re operating wirelessly, continuously, it’s probably about four hours.

What kind of IT infrastructure was created for the hospital?

We’re completely Cisco, using the voice over IP technology as well of all of our wireless mobility. We’re using the tablets on wireleess, phones on wireless, wireless IV pump … lots of devices sitting on our wireless infrastructure. One of the concerns that I often get asked is about downtime and how to avoid any systems from going down, it both wireless as well as wired. We have multiple categories of redundancy, both on the wireless side as well as wired. Redundancy with different paths going to our data center so that if one of those ties is severed, the other would be up, entirely seamlessly. That’s another goal of the all-digital strategy, to make sure you have 99.9% uptime.

Is your data center on campus?

Actually, no. We have several data centers to house all of these different systems. They’re in Marshfield, Wisconsin, which is about 45 minutes away from Weston. We have a local data center as well, but our core main servers for both the Marshfield Clinic application and GE are in Marshfield.

So you’re running their systems and don’t have to run a separate instance?

Correct, which goes back to that we looked at the tool already available to us that made sense to us to adopt.

What about your wireless infrastructure?

We run 802.11g. We are running into the issues of the A-B-G compatibility with different devices that were available at the time. For example, our wireless phones operate only at the B level, so we have a little bit of issues with the access points being drained with too many devices on the access point, all at the same frequency at the same time. We’re upgrading our wireless infrastructure to separate out that traffic, which is again where it came in handy to have several areas of redundancy for an access point.

Do the B-devices slow everyone down to B-speed when they connect?

It drops the whole thing and we’re living that. Because the phones are almost always connecting to an access point, they limit the number of connections to each access point to try to streamline some of that traffic. The hospital opened and we learned that lesson.

What lessons learned would you have for IT departments moving into a new facility?

A lot of it was on the wireless side, to do the appropriate site assessments. That’s the trickiest thing, to put as much traffic on the network as you think you’re going to have to try to get those correct assessments. That was the tricky piece, especially trying to do that before the furniture was placed. Once you occupy the building, there’s all sort of findings with the wireless piece. So that’s a lesson learned – once everything is occupied, you probably want to do a few more assessments.

We had all kinds of interesting things happen. TVs, for example. We almost didn’t have TVs on our opening day because it was the same time as Hurricane Katrina and they were stuck out in the ocean somewhere. You never know what you’ll have to plan for.

In terms of disaster recovery, as much as you plan for avoiding an outage in the first place, you still have to be prepared because the inevitable will happen and did. Three months after opening, we had one of those unexpected WAN outages and we were essentially an island over here. The good news is that we had a good backup downtime electronic medical record system that we could access in that event, but not everybody was as familiar yet. It was one of those things that you have a procedure for, but you don’t necessarily walk through as often as you need to. That was another lesson learned.

How does the downtime EMR work?

We have a lot of our information stored in there. Even our niche systems like Picis in the OR and perinatal QS in the family birthing center and MedHost in the ED, all of those systems feed a summary document or quite a lot of patient information to the Marshfield Clinic Cattails system. That’s essentially our core repository. That information is then replicated, both in their data center as well as another offsite data center located in Madison, Wisconsin. That’s replicated near real time. So, we have the ability to access that through the Web in the event of an outage. Even if Cattails is down, we can still get to it.

Or, if the WAN is down, we have a satellite on the roof directly connected to this location in Madison so that we can pull up all of our patient information over the Web. It is just view-only at that point, so our downtime procedure is that you’re viewing information, but any new information that’s being captured, you go to a downtime process of paper. Imagine that. We do have paper. [laughs] That’s part of the downtime procedure process – identifying what are those core paper forms that you need to keep on standby.

IT in 107-bed hospitals is usually unsophisticated because of financial constraints. Can comparably sized hospitals accomplish what Saint Clare’s did?

That actually was part of the analysis. We did say, “Let’s try to leverage what we have available to us”, but we did a feasibility study and other vendors were looked at. For some of these systems, the vendor wasn’t too interested in us and we couldn’t touch the ballpark figures. That’s where it really made sense to leverage what was available to us. From a cost savings perspective, that was phenomenal.

What’s your IT staffing?

I have 21 FTEs on my payroll, but there’s a lot of sharing and collaboration with the parent organization. Saint Clare’s is the hospital proper, but it shares this campus with three other entities: MMG Weston, which is the family practice group also owned and operated by Ministry Healthcare, and I’m the IT director of that as well. Then we have the Marshfield Clinic Weston Center, which is over here, and then Ministry and Marshfield Clinic formed the joint venture on the campus called the Diagnostic and Treatment Center. That provides ancillary services for the entire campus – lab, radiology, cath lab, rehab, etc.

I’m over just MMG Weston and Saint Clare’s Hospital. At Marshfield Clinic, there isn’t a local director. They’re supported by the Clinic. Diagnostic and Treatment Center does have a local project coordinator, but we provide services to them. While I have 21 FTEs, resources are shared throughout those parent organizations because we are sharing systems, so I get services from them as well.

Can you prove the value of the technology in terms of cost or patient outcomes?

That was a little bit tricky for us. We didn’t personally have the before and after picture. In terms of looking at our guiding principles, which was to avoid a medical record filing room and storing charts, there was quite a bit of cost savings upfront. Same with PACS. We don’t have a radiology film room, everything is digital as well. A lot of avoidanace in the first place, but then we start to look at our outcomes and successes, that’s where we can try to do some benchmarking in comparison to our peers. We’ve been doing a lot of that. For the true use of CPOE, we’ve pretty much met compliance with all the mandates for best practice and quality outcomes.

For turnaround times on order sets, we’ve done some benchmarking. For delivering antibiotics stat, we’ve been able to turn that around in about five minutes. In a paper world at some of our peer facilities, it’s probably one and half to three hours.

The CPOE side was most controversial area. Lot of organizations are skeptical and taking a wait-and-see attitude. All of our order communications is as fast as the stat antibiotics. We’ve seen cost containment. We’ve been able to drive the doctors to use the formulary. They are 99.6% compliant.

The biggest result of all goes back to our guiding principles – optimizing the flow of information across the continuum. Having somewhat of an integrated system record, even if it is a best-of-breed vendor approach. Making sure none of our patients would be harmed due to lack of access to available information. By collaborating with Marshfield and sharing tools, have been able to avoid that.

Those are the types of things that we’re capitalizing on now and that process will continue. That certainly was a part of why Ministry and Marshfield looked at this campus as a unique opportunity and put quite a bit of effort into it, because it was an opportunity to look at how can we do this from the ground up and apply some of those lessons learned, good and bad, to rest of the organization as we continue to develop an electronic health record strategy.

My advice to others is to develop your strategy and stick to it. Get buy-in and understanding from senior leadership. The vision must be accepted at the senior leadership level. CPOE is not easy to implement. Make sure everybody is committed to vision, but adaptable. It’s a continuous evolution.

Where do you see yourself in ten years?

Hmm. Geez, I just don’t know. [laughs] Continued growth and development. Probably still in healthcare IT – this is definitely my passion. So, I can’t say for sure where exactly, but I’ll be doing something similar.

Your formal medical informatics training sets you apart from most IT leaders.

It’s absolutely been a plus. It’s been a weird development, I guess. I actually started out in health information management, more on the medical records documentation side. As I was finishing up and about to start in that career is really when the whole electronic medical record future started to pick up. I though I’d keep on going, continue to not only work, but also develop my career on the IT side because that’s where I could see myself was development of the electronic medical record and continued process improvement of our healthcare industry through the power of technology.

It wasn’t necessarily what I planned on in the very beginning, but absolutely where I want to be now. It has been extremely beneficial for me not only to have the technical training, but also have that healthcare background so I can communicate effectively and collaborate with my peers on the clinical side of the business, but also can effectively manage the IT technical component.

What do you do when you’re not working?

Who’s got time for that? [laughs] That’s an interesting question, probably another lesson learned. While it’s very fun to tell this story now, it’s been quite a journey to open an all-digital hospital, even if was from the ground up. It’s an incredible amount of effort and work. While it’s been extremely beneficial and a wonderful opportunity, it also was extremely busy. We found the eighth day of the week many times. It’s been such a great team-building experience. This will probably be one of those things that I’ll always look back as such a great experience and great friends for the rest of my life. Not a whole lot of time for everything else in life. But now that hospital is open and we’ve gotten into a little bit more of an operational mode, we’re going to get out and do some more fun things.

HIStalk Interviews Jon Phillips, Managing Director of Healthcare Growth Partners

I like to do a high-level business update about the healthcare IT industry once or twice a year. My go-to guy is always Jon Phillips of Healthcare Growth Partners, LLC. Jon is careful with what he can and can’t say (unlike me, he won’t just gleefully blurt out sensitive information to the whole world) and if you check his track record from previous interviews here, he’s done very well in his analysis and prognostications. I always enjoy chatting with Jon and appreciate his taking time to share his thoughts with HIStalk.

Characterize the M&A market so far this year.

This year, we’re looking at well ahead of recent years in number of transactions even than the markets of recent years, which have been pretty active. What we’re seeing is activity in the sub-200 million dollar range. You haven’t seen much in huge deals going on, but seeing a lot in the middle market and sub-middle market. That bodes well for continued strong M&A activity in the space over months and years to come.

The big difference this year, and there are probably three that I would consider somewhat bellwether transactions or maybe four, is where you have financial sponsors making significant plays into the healthcare IT space. One of those, obviously, is Francisco Partners acquiring Dairyland. Two is Battery Ventures acquiring Quovadx. Three is Vista acquiring Sunquest, Four is potentially Insight and the Bessemer guys acquiring Netsmart, and five could be Primus acquiring HMS.

You’ve had a lot of financial sponsor activity in the healthcare IT space this year. That means a couple of things going forward. I think that these companies under new ownership are going to see some shifts in strategy. Not all of them, but some of them are certainly going to see shifts in strategy.

Take Sunquest, for example. Now that the CPR piece has been decoupled and Sunquest has been pulled out of Misys, all of a sudden you have a business that looks very different than it did six months ago. The growth opportunities are different. You have an organization that most likely will look to acquire new assets to augment their existing position and to grow in new ways.

For each of these financial sponsor deals, you’re going to see aspects of that. They may seem like small changes at first, but over time, you’ll see more and more. Quovadx bought Healthvision. My bet is that they’ll look to buy other things as they go forward. I think you’ll see acquisition activity and interest from these new kids on the block.

The pressure that will put on the other strategic players in the market, the traditional acquirers of choice like McKesson and Cerner and GE, they’ll start seeing more competition in situations where they’re looking to buy things. If you’re a small company, it’s great for you, because instead of having one or two people to talk to, now you have a lot of people to talk to. A small company can be more bullish about exit opportunities than you’ve been able to for quite a long time.

What’s hot and not in healthcare IT?

If we went back three months before the dislocation of the credit markets, I would have said that the hot opportunities are companies that are meaningful size with strong EBIDTA performance and a conservative investment platform for investment sponsors. Dairyland, Sunquest, HMS – organizations like that four months ago were on fire. You’ve seen a little bit of a slowdown because sponsors can’t put as much debt on them as they’ve been able to earlier in the year. There still will be a market for them because when a company gets to the 30 to 50 million dollar size with strong EBIDTA performance, but you’ll see some compression in the value that people can put forward on them.

In terms of what I see as hot, if you look at where the venture investment is going into, I’d drop it in three categories and there’s not a lot of change. There’s still a lot of interest in revenue cycle. Part of the challenge is defining what revenue cycle is. There’s a lot of interest in solutions that address revenue cycle challenges. More financings will be announced of companies in technology business and services businesses that are focused on fixing bits and pieces of the revenue cycle. The large majority of them fix bits and pieces. You don’t have anybody who’s going soup to nuts. Still, those point solutions can still deliver a lot of value to customers and that’s what’s driving investment VCs.

The other areas with a little more froth in the market come back to some things that are geared toward consumer-facing solutions, things that help manage information or care in consumer-directed or higher deductible type health plan environments. There’s some strong interest there.

Others get back to clinical content and clinician collaboration tools. Figuring out different ways for clinicians to work together and to exchange thoughts and ideas and being able to capture and then present back out the resident knowledge. That’s another area that’s pretty hot.

One that I’ve heard more about, and it will be interesting in how it plays out, is the whole remote care, telemedicine, home monitoring, and different ways of to deliver care into non-institutional environments. I’d stay that’s still a little bit earlier on in terms of the froth, but you’re starting to see people get more excited about that.

What do you think about Health 2.0?

I always tend to be a little bit skeptical of buzzwords. Some of the solutions that are out there, like the clinical content solutions that I was talking about, there are some really cool things that people are working on, When you think about the applicability of these technologies, or not even technologies but business models and care models, to the existing healthcare environment – you start getting pretty excited about that. Just different ways to give people a platform to work together and access knowledge that they wouldn’t otherwise be able to access.

We’re all in this to try to improve healthcare overall. You gotta think that by bringing more of that knowledge to bear, you’re going to be able to improve healthcare overall. I still think there’s a lot of noise around it and I’m not sure how all the business models will play out, but it’s definitely exciting.

We are seeing a lot activity on the interoperability and portal side. I’ve been a big fan for a long time. I’ve never run a hospital IT department, but solutions that let me manage my application migration myself on my schedule, not being forced to make changes because of interoperability requirements, those types of solutions strike me as being able to bring a lot of value. I characterize those as different aspects of Health 2.0 solutions that are clearly provider-facing, not consumer-facing, but you recognize that there’s a lot of data and information that’s already out there and tools that help you access that. They’re going to drive improved outcomes. It’s not necessarily a direct causation relationship, but the more information you have … think about clinicians. They are very smart people. Give them more information and tools to work with and they’ll use that and you’ll see that in healthier patients and better outcomes.

Private equity has gone crazy since we talked last in January. Explain how it works and how it has affected the industry.

Different private equity funds are going to have different approaches to how they like to build businesses. Some like to buy things cheap and fix them. Some buy pretty good companies and make them a little bit better. Some buy really good companies and help them be really good on a larger scale. So, you have these different approaches to the private equity marketplace.

Funds have acquired businesses in the healthcare IT space. Their focus is to generate a return in a reasonable timeframe. They may be willing to have a longer-term hold, longer than two or three years. Francisco Partners turned around their Lynx investment very quickly on a relative basis, but the investment was performing so well that it was the right time to do it and they got an incredible outcome from Picis on that exit.

These guys have made investments and the way they will make money is by really two ways. One is organic growth, the other is inorganic growth. They can augment those returns because they put debt on the company to start off and get leverage on their investment. But, the reality is that these guys need to figure out how to grow these businesses to get the kinds of returns they want to get. Companies that may have been a little more passive historically will probably get more aggressive in management and personality.

The direction for these companies is to be more aggressive toward growth. You also will see ongoing acquisition activity, especially in companies that are under $50 million in revenue, as these businesses look to add on pieces and capability so that they can take their organic growth rate, say 10 or 12%, and augment that with acquisitions and move that up to 20 or 25%. That really helps them get the returns they want to get.

At the end of the day, to get the returns they need, have to have some kind of exit. It can be an IPO, like athena. They can sell to strategic, like Francisco Partners selling Lynx to Picis for a strategic exit. Or, they can sell to another private equity firm. They have different approaches and sizes, so a smaller fund can always grow a business up and then sell it to a bigger fund. What you’ll see is a good amount of activity as these businesses position themselves for growth. Then will see those folks making the call to find a bigger home and see them making those decisions as well.

What’s the track record of private equity owners with respect to making R&D investments, keeping customers happy, and not flipping the company at the first opportunity?

I think some of the private equity folks will actually be better owners than the historical ownership, not to knock the historical ownership. The private equity owners are going to be very focused on how to grow the business. You can go buy stuff, but you also have to be able to sell more to new and existing customers. These guys are smart enough to realize that you can’t sell stuff to customers who don’t aren’t happy with what you’re giving them.

I’ve had conversations with a number of folks involved in both investors and management of these companies, and what you’re hearing about is a renewed level of focus on customers. Customers can actually be better off. When you think about it, when a strategic acquirer buys a business that’s in the same line of business of something they already have, one of those customer sets will have a migration path. They won’t want to support both customers on different platforms indefinitely. A strategic acquirer will have to manage a customer transition.

The financial acquirer wants that customer to be happy and to buy more things from me so that I can both grow in terms of selling new stuff, and on the maintenance side, I don’t have people who say they don’t want to fool with me any more and I’ll find another vendor because your product is behind and you’re not giving me decent service and a reason to stick. My argument would actually that these private equity owners can result in good things for customers.

The folks that will have the toughest time are organizations that have gotten used to operating in a certain way. You have folks coming from outside of healthcare IT, and some ways that’s good and in some ways that’s bad. Healthcare IT as a market has a lot of very unique characteristics. If you don’t understand those characteristics, you can really fall flat on your face.

There are some evolutions have occurred in other IT markets that haven’t hit healthcare yet. Some will never hit healthcare, some of them will hit healthcare and some of these folks bringing some outside perspective can bring value by saying, “This is how it played out in Market X.”  If you think about your business in different ways as a vendor, you might find ways to make customers happier and grow your business.

So I think that for customers overall in the near- and mid-term, it’s a good thing. The downside is the next round of exits, because you know they’re going to sell at some point. You hope they become strong enough when they do get sold, they’re not getting sold into a situation where somebody’s just buying them for the footprint and moving you off that system and onto something else.

Give me a grade for each of these publicly traded companies in terms of market share, image, management, and return on shareholder equity:

McKesson

In terms of market share, they’re absolutely getting an A because of their footprint. In terms of customer retention, I’m not sure what grade I’d assign, but what I’m hearing more of is that they’re having some customer losses. Historically, McKesson has been unbelievable in being able to hang on to customers. Traditional wisdom is that they didn’t try to find that many new customers. They weren’t trying to fight the ground war in getting new business hospital by hospital. I hear they’re starting to do more of that with some of their new capabilities that they have on board.

The Awarix deal that the did this summer … that they’re getting pretty aggressive in using that as an entry point. Awarix is a workflow tool for patient management hospital-wide, so it pulls information from disparate systems and presents it on flat screens that you have around the house. At a glance, you can understand things about census, room availability, where the bottlenecks are. It’s a patient throughput tool, very cool. McKesson is using that to push into new hospitals. They haven’t done a lot of that, so I’d give them an A in terms of what I’ve heard on that front. I’d probably give them a B in terms of customer retention because they’re losing more than they have in the past.

Eclipsys

At this point, I’d give them a B overall. They would agree that it’s taken them a little longer than they expected to right the ship. But, I also think that they still occupy a pretty interesting position in the market. They have strong capabilities. Organizationally, they’ve made the changes they needed to make to push things forward. I’d almost give them an incomplete. The judgment is still out.

Cerner

I still rate Cerner as being an A overall. Everybody you talk to, you ask them who frightens them in the marketplace, and everybody’s going to say Cerner. People can throw stones at different parts of their products and capabilities, but the reality is that Cerner, for better or worse, has defined the hospital information system landscape in a way that’s favorable to them.

Cerner’s question going forward comes back to where do you find growth going forward? When you’ve built up to be as big as they are, where do you go? I would expect that they wrestle with that internally. I’d give Cerner an A. Everybody knows about them, even outside of healthcare IT. They’re still the company to beat.

GE Healthcare

I’m going to stick with GE at a B-. I think they’re getting their arms around the assets they have, but every time they get their arms around the assets they have, they go out and buy something else, like Dynamic. When you look at where they fit, I’ve certainly heard good things about product development, but broadly I don’t feel like they’ve taken advantage of the footprint as well as they could have.

They have this incredibly strong brand, they’ve bought a lot of companies, but I would argue that, of the companies they bought, I don’t know how many you’d say were better off for having been bought by them. You can’t go through the list and say, wow, they bought that company and they really turned it into a massive business. You saw that on occasion, but they haven’t done a great job at taking advantage of the pieces they’ve put together.

Perot

I know less about them, but I would say that I’ve been surprised at some of the things they’ve done. I’d probably put them, honestly, closer to a B- or C. They’ve bought some things, but then lost one of the big contracts recently. I understand why people are in the outsourcing business because there’s huge opportunity there, but I haven’t heard that many, if any real success stories, in outsourcing. It’s an interesting thought, but then in practice, it just doesn’t seem to work that wall. It comes down to how different than other industries healthcare is, with a more complex mix of stakeholders. Aside of a few case studies, I don’t that they have a lot of folks saying, “Wow, I’m ecstatic about my outsourcing vendor.”

Quality Systems

They continue to stick to their knitting and I think they’re doing really well. I’d give them an A for focus. Anecdotally, I would give them somewhere between a B and C for delivery. I don’t know that that’s their fault, but they have so much opportunity out there that it’s tough to deliver.

The biggest risk Quality Systems and Allscripts and eClincalWorks and folks like that, that the more successful you are on the sales side, the more risk you’re taking on because you’re signing people up and it will take time to implement them. The longer that delays, you start digging a hole for yourself. It’s hard to argue that they’re doing the wrong thing based on the business they’re doing. From customer perspective, I get a little nervous about how long I’ll have to wait to get my system.

Sage Healthcare

I follow them a little bit. I think they’re probably a C to a D. Not through all the fault of their own. They stepped into a tough situation. They’re an example of an organization that stepped into healthcare most likely thinking it had some real similarities to other small and medium business, and they’re finding that the physician business is a challenging market.

Medical Manager had a great footprint, but those customers didn’t get a lot of care and feeding. When customers aren’t expressly unhappy but at least not happy and there’s a technological inflection point like the EMR hitting your sector, you’re in trouble. Your customers are going to go and you’ll lose more than you keep. That’s what they’re running into.

Misys

I think their new focus is good. I’d give them a B with little bit of an upward trend. They have this great asset in terms of the physician installed base. They just need to make sure they don’t run into the same issue that Sage is running into. If they can keep their customers happy enough so they don’t see them walking away. As customers go through technology replacement cycle, I want to make sure I’m on the winning end of a disproportionate share of my customers as they make those choices. They’ve got a fair amount of risk in front of them, but the focusing will help them out.

Mediware

I thought it was good to seem them start to focus more. The real question is, can they really figure out how to get some growth back? They have some interesting assets, but have to put them on a C on growth side until the most recent quarter. It’s good to see that most recent deal they did was focusing back on blood bank. It’s a good thing to reinforce what you’re good at and they’re good at that. They have an upward trend in front of them, but the jury is out.

Allscripts

Boy, up until the most recent quarter, I probably would have tagged them with an A based on what I was hearing in the marketplace. They were going a great job in getting big wins and were a really tough competitor. That doesn’t change with one quarter’s results, but you get a little concerned when a company operating in this great sector of healthcare stumbles. You wonder, is it due to growing pains, and if so, then look at them getting whacked 20% on stock price, then buying that’s a great buying opportunity. Otherwise, if it’s something fundamental, you get a little nervous. I’d probably give them a B, but I’d keep an eye on them because it could be opportunity to get in at the right price, but you have to see if the quarter was an aberration and not a trend.

Siemens

I’d give them a C. You get the sense that they’re buzzing around a lot, but you don’t get the sense that much is happening. They’ll have to continue to wrestle with whether this is a market they’re committed to long term. The answer has consistently been yes, but you keep asking the question because you’re not seeing them just rip it in the marketplace.

What do you think about big acquirers like InfoLogix, Nuance, and MedAssets?

I don’t know much about InfoLogix.

Nuance is really focused on strategically to be willing to be aggressive to build out a strong position. As a banker, you love to see that, but being a strategist as well, you wonder how all the pieces fit together at the end of the day.

MedAssets is especially interesting to me because they’re really a non-traditional player. Given the fact that they’re going public and they’re going to have lots of money and lots of margin and footprint, they could be a really big competitor for folks. I think it’s just a question of what they want to do. Do they want to focus on revenue cycle, or get into broader information systems in hospitals?

Given that they can touch so many hospitals, if I’m sitting in the competitive intelligence department of McKesson or Cerner or one of those places, I’d keep a very close eye on MedAssets. I’d want to know what those guys are doing. They’ve been pretty creative and can they certainly could continue to be creative.

In terms of other players, you’re going to see more and more offshore organizations looking to buy entry into the US market. Indian companies and other Asian organizations looking to take advantage of the labor force that they have and looking at the US market and trying to find targets that have a labor component that they could offshore.

When you think about situations with labor requirements, where you have systems that you can deploy that have labor associated with them. Revenue cycle is a good example of this. You can put the technology in place, but if you don’t have people to run after the claims or other aspects of it, you’re leaving money on the table. I think what you will see is a continued push by offshore organizations to find US targets where they can get some of that offshore arbitrage.

Are Microsoft and Google serious about healthcare or posers?

They’re serious about it, but I also think that they consistently underestimate the complexity of the market. A lot of people do. Microsoft has certainly done some interesting things with the businesses they’ve bought in the space, but they have to figure out where they’re going to fit and who they want to be. Are they going to be an enabler or in the application space? You look at them and they’ve got brand and reach, so they should be able to do things in healthcare.

I tend not to get too excited about some of the big healthcare initiatives these guys put out there. On the PHR side, I spend a lot of time around PHR businesses. It would be great if everybody had a personal health record and they all do it with Microsoft HealthVault, but you think through the challenges of how you get information in there. You don’t want to type it in, but because of privacy issues, you don’t want to have someone do it for you because who knows where the information will end up. You have challenges on the personal side of healthcare that won’t be resolved for awhile. For Microsoft and Google, I think they absolutely have huge opportunities and they recognize there’s a lot of money to be made in the space, but they will have to go through a bunch of iterations to get there.

There were rumors going around that Google was going to buy WebMD. Let’s say they did. What does that really do? How many people do you know who are using WebMD for more than a basic reference tool? The consumer market is tough. You haven’t had people have a lot of success there for a reason. As fragmented and challenging as the provider market is, it’s far simpler than consumer side.

If someone wanted to invest in early-stage companies but doesn’t have the $1 million it takes to be an accredited investor, what are their options?

It tends to be pretty tough. To get into a private equity fund, you must be accredited, and even then it can be pretty tough to get into private equity funds. The other part, in terms of direct investing, you still have the issue of being accredited.

I spend a lot of time thinking about that. One of the great opportunities in this space is that there’s such grassroots knowledge out there that it would be great to capture that and to let people invest and to be able to get return for the fact that they know what’s going on. Mechanically, it’s tough.

One of the challenges is that, in the early stage of healthcare IT investing, it’s a pretty small universe of funds that will do that. You and I know some of the characteristics that will make these small companies successful, but from an investor perspective, you have a whole raft of risks. If you’re not living and breathing healthcare technology, you’re not comfortable with a lot of those risks. You don’t see a lot of funds that have made plays in early stage healthcare technology because a lot of them made bad investments and lost money. It’s hard to find funds that are interested in doing that, much less putting your own money to work.

If I can figure that out, I’ll let you know, because I think there’s a great opportunity there in working with early stage companies. It’s not formulaic, but there’s a lot of common problems companies have. We see it in our client base. The challenges aren’t that different between companies. So there’s some benefit you can add just having that knowledge, saying let’s figure out how to apply it and help those companies grow and the best way to do that is as an investor.

How about the practice management market? Any projected winners?

I still think on the practice management side that you’ll continue to see a divergence, guys who will be software-focused and those will be services-focused. So not just services in terms of the subscription model for software, but bringing a broader set of services to the physician practice.

Take athena vs. Quality Systems. Athena uses a lot of technology and maybe they’re a technology company, but they’re really providing services, whereas Quality Systems is a technology company. In terms of who will win, I come back to that scale is incredibly important in the physician market. There are a lot of companies that have 200 or 500 docs, but you have over 200,000 practices. It can be a high cost of sales to go after those practices and try to convert them. Scale will be a big differentiator. Product will continue to differentiate, but a bigger company with a weaker product will still probably have a leg up over a smaller company with the best product out there.

Do you still like Teletracking, DR Systems, and the handheld vendors?

I do. When I come across a company that is bringing a fresh perspective and making money while they’re doing it, I love to see early stage companies that don’t have a lot of revenue that have cool technology because some of those guys are going to make it. The difference between making and not making it is picking the right strategy.

When I look around, I’m still a fan of the privately held businesses that keep plugging along and doing their thing, focusing on being the absolute best at what they do and not necessarily saying they have to do everything for everybody. Lots of companies that fall into that category. Those are businesses that you like to be around. You go through the KLAS rankings and see how many companies are out there and how many of decent size with really happy customers. That’s pretty cool. If you look at the top-ranked vendors, you get pretty excited when you see them serving customers well and growing their business and making money.

Instead of saying I like specific kinds of companies, I like companies that have strong technology and really happy customers who are really using the product. There are a lot of technologies out there where they get a couple of customers who aren’t really using the product. All the stuff we’re trying to change broadly – if people won’t use the technology, it’s still worthless.

What is athenahealth’s IPO telling the market?

To people who are either owners or employees of healthcare businesses, the capital markets are pretty interested in stories that help them. Jim Cramer said he’s a fan of any company that addresses the cost problem of healthcare. That’s a pretty blanket statement and a lot of people believe that. The stock came out at 18 and is over 40 today. Athena is trading with the expectation that it’s an option on improving efficiency in healthcare.

It’s nearly impossible to justify that price based on the fundamental performance of the business today. But, if you look forward, athena is a leader in a market that has a massive amount of opportunity, and as such, people are saying they’d rather in invest in Quality Systems in 2001 than in 2007. If you can communicate your business model and deliver numbers, there’s money to be had to fund it.

What’s the best M&A deal of the year so far from the buyer’s perspective?

I would probably say that the best one for the buyer is the McKesson Awarix deal. Awarix certainly wasn’t a $100 million business when they bought it, revenue-wise. McKesson was willing to make a strategic change in terms of what they were looking to do. They’re effectively rapidly going to market with that. It could be the most transformative and impactful of the deals.

What other industry segments are going downhill and likely to take some companies with them?

I think you’ll see a shakeout on the physician software side. I don’t think the segment is going downhill, but will see a shakeout there with all those CCHIT-certified vendors. You haven’t seen much consolidation there in a long time.

You’ll see that in the RIS-PACS marketplace. The aggregate enterprise value of Merge, AMICAS, and Emageon is less than $200 million. Each of them were valued at multiples of that not that long ago. Some of it’s the impact of the DRA, others because of company-specific things. A lot of people are still buying in that sector, but those guys have had a rough road. AMICAS is turning the corner, Emageon had a rough quarter. Merge is caught in challenges. The sector has been challenging, but it can’t be that challenging since GE bought Dynamic.

What changes would you predict for the upcoming year?

I think you will see sharper competition for new customers and for holding on to existing customers. It’s always been competitive and a highly fragmented market with a lot of small and large companies that run around. You can have a hospital systems vendor that can really make a go of it with three or four hospitals that they sign up from the start and bootstrap from there.

I think you’ll see a paradigm battle between best of breed and enterprise continue and probably heat up. Since so many hospitals have made large scale systems decisions and picked their big player, you will see a lot of fighting to capture the IT dollars around that big investment. The private equity investment … some companies that might have been a little more laid back will have pressure ramped up to deliver growth and profit. From a customer perspective, you might find that this next couple of years is a good time to be a customer, not that you didn’t have people fighting for your business before, but they’ll fight even harder.

I think you will see more of a focus on getting value from IT investments already in place. You hear a lot about healthcare technology investments, “We bought the system, but it’s not delivering even the soft ROI that we justified the investment with.”

This is part of why you’re seeing consolidation on the consulting side. People are realizing that consulting organizations are they’re bringing value in getting systems in place and some specialty firms actually help out with the adoption. That will be a bigger and bigger thing. If I’ve spent seen or eight figures on IT investment and it’s not being used, I have to figure out how to get people to use it. I can’t just throw it away and start over.

Given the issue with bond insurance companies, I think you will see capital constraints because of capital markets and operating pressure because of reimbursement trends from third-party payers and self-pay. You must be more efficient with the resources that you have.

The Huffington Post is a blog that raised $10 million in VC money. Is this a sign that exuberance is irrational enough for me to take HIStalk public?

I think if you took HIStalk public, you could expect a valuation that would be at a significant premium to the athena valuation. I would argue that you could go ahead and start interviewing bankers for this. I would say you’re worth somewhere around two billion dollars. [laughs] I’ll get a call from Jon Bush after this, asking, “Hey, are you saying I’m overvalued?”

People focus on return. In terms of what you’re building, you’re not just grabbing eyeballs and clicks. If people are looking at the information and the content that you’re bringing together … and this is in all seriousness … and you’re capturing decision-makers as they’re looking it and shaping their decisions, there’s a lot of value in that. Seriously.

You’re jumping off the $2 billion thing, but there’s a lot of value in the fact that you’ve got an audience who are really influential in the healthcare space. The challenge that you have … you’ve done a great job of monetizing it, because you’ve done a great job balancing it between making money without compromising the integrity of the commentary. The challenge in putting venture money in … I’m not saying that you’d ever compromise the integrity … is that the pressure goes up to find more revenue and be able to continue to grow that revenue line.

I think you’re doing the right thing the way you’re doing it, but I tell you what, if somebody comes along and offers you $10 million for it, you probably should think pretty hard about it. [laughs]

HIStalk Interviews Jay Parkinson MD MPH, House Call Doctor

Photo and site: Jay Parkinson, MD, MPH

I didn’t have much trouble tracking down Jay Parkinson. He’s ubiquitous for a guy whose medical practice is just a few weeks old. He’s been interviewed many times, has a blog, and apparently is coming soon to a TV near you, all because of his Medicine 2.0 – which is actually Medicine 1920s – making house calls, charging reasonable cash prices, and being available whenever his patients need him, all in the hip Williamsburg neighborhood of Brooklyn.

He insists that it’s not about the technology, which in his case is the PC tools everybody else uses (Google apps, e-mail, IM, etc.) He doesn’t even use an EMR system any more, having given it up because it didn’t meet his needs. So, the lessons to learn from Jay aren’t about use of cool technology, but more about practicing medicine the way he wants, addressing some of the challenges of the healthcare system along the way.

Tell me about your background and your practice.

I’m a 31-year old male. [laughs] I practice in New York City, mostly in Williamsburg and Brooklyn. I started the practice September 24 after two residencies, the first one in pediatrics at St. Vincent’s Hospital here in the West Village and the second one in preventive medicine at Johns Hopkins in Baltimore. Seems like it’s going pretty well for me.

Most people associate house calls with country doctors carrying little black bags, but you’re in New York City.

I still have my black bag that I carry. Just getting around the city is next to nothing. You take the subway, walk, or take the bus. In the near future, I’ll be buying a scooter so I can scoot around. Hopefully I can keep every house that I visit within a 15-minute travel time.

Describe a typical patient encounter.

It’s great because they submit all their information ahead of time, so I pretty much know what’s going on prior to the meeting. I know what to talk about, what points to hit, what things I can skip over that other physicians would concentrate on and waste time on. They spend 10-15 minutes giving me all their health information via an online form. It’s very streamlined, but I still spend about an hour and a half per visit, talking to them, having them show me their art work. It’s very laid back.

I’m not a very formal person. Everybody that I’ve seen has really enjoyed seeing their doctor rather than being in some sterile, foreign environment that everybody knows and loves as a doctor’s office.

What’s it like making house calls and what do you learn that an office-based doctor wouldn’t?

Somebody has asthma, maybe lives in a dirty warehouse loft, I can pick up the fact that it’s pretty friggin’ dusty or has mice. It just gives you a feeling for who somebody is. You can tell a lot by how they live, more from a mental health perspective. The United States is a pretty clean place so we don’t have a lot of sanitation issues or something, but it gives you a more full picture about the person.

What technology do you use to run your practice?

It’s very basic, freely available technology. I have a Macbook and an iPhone. IM programs, like ATM and iChat for the Mac. I just use regular e-mail, Gmail in fact, because it’s very powerful.

I use a website called Formspring for my online forms. It’s very simply drag and drop forms creation. Any form can be made in three minutes or so. It uses skip branch logic, so questions can appear or disappear based on responses to previous questions. I use that to get another diagnosis through a careful history, because an early question is a branch in the algorithm for proper history taking. I think it’s safer because doctors aren’t perfect and sometimes they forget to ask very important questions about something rare. If I can spend time asking these questions beforehand, I don’t have to be worried about always thinking about every little thing during my interview session with the patient.

I saw on the Web that you use the Life Record medical record system. Tell me how you chose it and how it works for you.

Actually, I have abandoned that, simply because it’s not very customizable and I thought it was going to be. So, I’ve abandoned that. But, I was fascinated by it because it has a lot of features that I think would be very valuable for a traditional office-based practice with multiple practitioners. Having access to records by iPhone on a Friday night at dinner is vital in some circumstances.

Now I use Apple’s version of Excel called Apple Numbers and have created templates for nearly every condition that I have. I can use them for a physical exam or generating an invoice. It’s really just using Apple’s iCal for scheduling synced to Gmail’s calendar. iCal and Gmail and iPhone are all updated at the same time in real time. It’s pretty basic stuff.

You’re an iPhone fan, I hear.

I love the iPhone. I think that’s amazing. Hopefully I will be able to put Apple’s Number files on my iPhone. I think they’re coming out in with developer’s kit for iPhone in February and I’ll be able to use my iPhone a little more intensely. I could only get to my records by iPhone with Life Record. He’s a great guy, the guy that developed it, and I’m sorry it isn’t specific for what I need.

When it comes to technology, you seem to be a geek, but you deal with artists and are one heck of a photographer. Where do you fall on the geek-doctor-artist continuum?

I’m definitely fairly geeky, I guess. I really like technology and gadgets. Right after the iPhone came out, I wasn’t going to wait in line forever down in Baltimore. I’m all things Apple. I did the iPod first day it was announced years ago. I designed my own website and can do programming. I don’t know CSS or anything like that. I’m not trained in any technology, I just kind of figured it out on my own.

You charge $200 a house call. Do patients find that competitive and can you make a decent living at that price?

Sure. Look, I have no overhead whatsoever. If I charge $200 a visit, $195 of that is straight profit. I think that’s a pretty good living. If I see eight patients a day, that’s $1600. Without having staff, an office, billers … it becomes a very easily doable practice. I definitely designed the business model looking at that. The concept of doing the housecall was a way to open a practice without putting $300,000 upfront. I started this whole thing for less than $1,500.

Would your med school classmates think this is weird, or are they looking for more satisfying practice models too?

Everybody that I’ve trained with has been extremely supportive. I just got done with an interview for the London Times. Obviously there’s something interesting about what I’m doing since now I’m making international news.

What I’ve created, not to toot my own horn, is pretty ingenious. It’s a Band-Aid to a gaping wound in a lot of ways, the fiasco that is the American healthcare system. 50 million people without health insurance – there are a lot of voices behind what I’m trying to do. I’m doing a good job, I guess, getting the word out about the plight of the uninsured and also seeing patients at the same time.

A few people have mentioned security and privacy issues because of the technology I use, but because I don’t deal with insurance companies and don’t submit any patient health information online to insurance companies or Medicare or Medicaid, I don’t have to follow HIPAA regulations. I’m considered a country doctor, which is kind of interesting.

On your website, you talk about how you search the market to find the lowest fees for specialists and other medical services you can’t provide directly. How do you do that and what interesting stuff have you found as a result?

It will blow your mind what I found out. I graduated residency June 30th. Since then, between June 30 and September 24, there’s a good three months where that was what I was doing, finding accurate contact info for physicians in New York City and calling them up and asking what they charge, putting the information into a database. A mammogram ranges from $175 to $750, both of them amazing facilities, but nobody’s regulating healthcare prices.

Also, there’s widespread belief in the healthcare industry that they shouldn’t be competing for cash-paying patients because there’s so few of them. 50 million isn’t that few at all, but there’s no free market in the healthcare industry. The vast number of people have health insurance and doctors aren’t competing for their business at all. Its so funny, when I tell radiologists or pharmacists or anyone who stands to benefit from me referring my cash-paying customers to, it’s laughable how they kiss my ass to try to get my business.

The ultimate goal here is to create more transparency in the healthcare pricing scheme. I’m trying to create that transparency on my own because the healthcare industry won’t do it because they profit from that.

How would you compare what you do with the retail clinics that are springing up everywhere?

Most of the time, it’s simply a profit-driven marketing scheme. I’m personalized service. You call me up, I go to your home, physically examine you, follow up by IM or e-mail or text messaging. I get to know you as a person. I’m not remotely competing with retail clinics at all. People who go there want something different than I provide.

From your viewpoint, what’s the most wrong and most right about the US healthcare system?

It depends on who we’re talking about. Older people and very poor people, there’s absolutely nothing wrong with it whatsoever. For people who have insurance, there’s not much wrong. People who don’t have insurance because they’re young and healthy and priced out of paying an average $10,000 here in New York for an HMO, there’s a lot wrong. It really just depends on who you’re talking about. It’s hard to generalize that way.

My patients are people who are concerned about having or not having health insurance. New York State has policies that ensures that everyone pays the same for health insurance. That’s great for sick and old people, but young people can’t justify spending $9,500 when they only make $45,000. That to me is a significant problem for the uninsured in New York State. It’s a great solution if you’re old and sick.

You just started this practice and here you are, four or five weeks later, you’re in newspapers and on TV. You mentioned in an interview that you’re getting unbelievable offers to do TV and books. What’s coming your way?

You name it, I’ve gotten it. It’s pretty insane. Keep your eye out, probably next fall, for a TV series from a producer of movies that the whole world has seen, She’s getting back into an original series. I’m starting to write with her in a week and we’re going to start developing a TV series together, not a reality series. The major networks are interested in this concept. We’re developing it so it appeals to everybody, but it deals with the healthcare issues that are afflicting America. That’s in the works.

I got a book offer on Monday, so I’ll be writing a book about the healthcare industry using examples from my life and practice. The London Times was today. I’ll be doing a big talk show soon and Steven Colbert on November 12. It’s kind of insane. They’re all coming to me. I don’t have a PR person. I’m doing everything myself. I haven’t put out a single press release.

Is is scary that people want you to comment on an industry that you’re brand new to?

No, not at all. Sure, I don’t have experience in private practice dealing with insurance companies, but I’ve worked and talked about the healthcare system for years, getting my master’s in public health. I worked with Sidney Wolfe in Public Citizen’s Health Research, Ralph Nader’s consumer watchdog group in DC. I’ve worked at the Maryland state department of health level. I worked with National Association of Firefighters as their medical consultant. I’ve done a lot.

I’m not like a normal doctor who finished a residency and sees patients. I intensely studied the healthcare system and figured out its strengths and deficiencies. I spent the last three months at Hopkins on quality of patient care, studying quality in the American healthcare system. Doing Six Sigma and Lean Kaizen in various departments in Johns Hopkins, trying to figure out where the patient problems lie, problems with reimbursement and unsafe practices that lead to poor outcomes. I’m not worried about being a spokesperson.

Do you think you’ll keep practicing with all these offers?

I wouldn’t mind doing part-time for both. One thing I don’t want to be is part of the industry. I’ve got plenty of offers to join companies and form alliances, but then you become part of the problem, like most doctors. The practice of medicine is very conservative and appeals to a conservative type of person. They don’t really teach you to think outside the box. They try to prohibit you from thinking outside the box.

A lot of people are getting hung up on the “doctor who makes house calls.” Really, there’s no difference in seeing a patient in their homes instead of in the office. I don’t have a laboratory, so I can’t do rapid strep tests. It’s a little difficult to do male urethral swabs, stuff like that. Female exams, I just don’t do, but I refer to someone.

There’s really no difference between a house call environment and an office environment. I draw blood as I need it and a car comes up and picks it up outside my apartment door each night. To me, it was just a business model to start a practice on the cheap. People are also hung up on the technology, but it’s the stuff that everybody uses in every other industry in America. It’s just not being used to communicate with doctors.

Most doctors don’t even want to get patient e-mails.

Congress just passed a 10% Medicare reduction on to physicians yesterday. The only way doctors are making money these days is volume. If you see 30 patients a day, at 6:00 you go to your computer and there’s 30 e-mails, God, I can’t charge for these just yet. Why would I entertain the possibility of receiving e-mails from my patients? I understand why doctors are averse to that.

The way I treat patients, I can see six to eight patients a day, and as I’m traveling, I can answer e-mails. I’ll receive forms in my e-mail from patients who want to see me in the next hour if I’m not busy. With an iPhone and a Macbook, its ridiculously easy to keep track of everything.

You obviously love New York.

I’m a big fan. It’s the center of human culture. Everything is right here. If you want to go see this really obscure movie, it’s playing down the street. If you want to see this amazing photography by the best photographer in world of all time, it’s coming to town next week.

A woman was visiting me from Ireland and said something that describes New York as a summary. She said, “The one thing I love about New York is that the answer to every question is yes. It might cost some money, but the answer is yes.” She asked if I’d been to Ireland and I said no. She said the answer to every question in Ireland is either no or maybe.

The architecture and infrastructure here is just awesome. You don’t have to have a car.

Will you stay there or go Hollywood? You could leave your practice after one month and be in the public eye constantly if you wanted, doing stuff that people only dream of.

I’m not to going to go Hollywood, at least not yet. It seems that way, doesn’t it? We’ll see what happens. If I can start some sort of system … I have ideas and I have people backing me to create something along these lines that can benefit more than the 1,000 patients I can see here.

You could easily be rich and famous.

You should see my apartment right now. [laughs] It doesn’t look like I’m rich and famous just yet. But It’s New York, where the answer to every question is yes. The opportunities for me are endless, I think.

HIStalk Interviews Robert Seliger, CEO and Co-Founder of Sentillion

Photo: Health Management Technology

Security and privacy in healthcare are obviously hot topics. So, when Sentillion decided to sponsor HIStalk a few weeks ago, I pressed my luck and asked for an interview with CEO and co-founder Rob Seliger. I knew the company was refocusing a bit and also introducing a new single sign-on application called expreSSO, so I offered as bait the chance to talk about that. When I got on the phone with Rob, he said he’d be happy to talk about anything and that we didn’t have to pitch product. Good answer.

When I hear either “single sign-on” or “CCOW”, I think of Sentillion first because they’ve been doing it for a long time. They’ve introduced some new products I wasn’t fully aware of, including the vThere virtualized client for remote access.

Thanks to Rob for the chat.

Tell me about Sentillion and how you came to create it.

Sentillion was founded in 1998, spun it out of the former HP medical products group. I have the simplest resume on the planet – paper route, HP for 18½ years, then Sentillion. [laughs] I was working on technology that integrated applications not on the back end, like databases and integration engines, but on the front end of care, looking at the user experience of the caregiver, whether using applications from the same or different vendors.

We determined that our technology would serve better as a glue, run as a neutral company. We built a business case, they agreed. We spun the IP out with myself and my co-founder in 1998. We did three rounds of venture capital, the last one in 2001, and have been growing the company every since.

We moved from general integration to specific applications used in identity and access management. What we’ve been able to do is create a whole suite of products that address identity and access management needs for healthcare and, specifically, hospitals.

We sell to provider healthcare organizations. We’re unique in that way. Our competitors sell to finance and banking and retail customers. We said that healthcare has special needs, workflows, idiosyncrasies, and constraints. We wanted to create technology that was purpose-built for healthcare. Fast forward and we have hundreds of thousands of caregivers in hundreds of hospitals in the US, Canada, UK.

Healthcare security, like IT in general, seems to fall well behind that of most other industries, with lack of consistent authentication rules across applications, applications that don’t support LDAP or other centrally managed security, and heavy help desk use for password resets. Is it getting better?

It is getting better, but slowly. There are reasons why stronger security technologies have not been broadly adopted in healthcare. The main reason is that they get in the way of delivering healthcare. I’m not a physician or nurse, but I have a tremendous respect of what those people do for a living, taking care of people as their number one job. Navigating security isn’t what they’re paid to do. Our customer base is some of the smartest, most highly trained people on the planet and they’re adept at finding workarounds to impediments to delivering care, including security.

Part of our process is leveraging the years of experience we have in the care business. How many other security companies can you name that have a chief medical officer? We hired Dr. Jonathan Leviss as our Chief Medical Officer because he had a passion to eliminate the obstacles between caregivers and the productive use of computers.

You’ve heard of the last mile problem, like with DSL, where you can’t get connected if you’re too far from the telephone switch. I refer to our situation as the last inch problem, that inch that’s between the caregivers’ fingertips and the keyboard they don’t use. We provide security solutions that make them more productive instead of less, while instilling better security practices across the organization.

People often say that healthcare is slow to adopt technology, yet you can look at the amazing equipment from imaging systems to robotic surgery that is used. I don’t see a fear of technology in healthcare, just an avoidance of technology that’s an impediment to healthcare delivery. Vendors often miss that. We work really hard to get that right.

What security priorities would you recommend to a hospital CIO?

My favorite thing to do if I’m allowed is to take a walk, particularly in care areas, and watch what people are doing, who they are, where the computers are, what they’re showing, and whether they’re attended or unattended.

UPMC implemented our solution years ago. They started deployment in the ICU. I was with an entourage of UPMC executives and I drifted back from the tour group because they were headed to a workstation that someone was using with single sign-on and single patient selection. I stood back and marveled at all the workstations that were not in use, but were locked. I asked UPMC when the last time was that all those workstations with no one around were actually locked. [laughs]

It’s kind of like the broken window theory of why neighborhoods go downhill. Good security isn’t just the things you do on your network with firewalls and antivirus software. It also has to do with what people can see. Show them that their information is being safeguarded and protected. How would someone feel being wheeled down the hall and seeing other people’s information on display? It could be their information as well. You must show personnel and patients that they’re doing the right thing.

You testified before Congress after the VA’s security breach. How would you grade their progress since?

The hearings were for the right intentions but for the wrong reasons. The breach that occurred with the theft of that laptop was benign. The information was not clinical and the thief who stole it didn’t know it was there. At the end of the day, it was a non-event. They didn’t get Congress to the point of understanding how to practice good security.

The VA has the same challenges as non-VA – security vs. usability, however people who work for the VA can be told what to do, which isn’t always true of community physicians in hospitals. The VA has its act together as well as anyone else. They’re continuing to make investments in practical security practices. They’re extending a pilot we did for deployment of single sign-on, which is the first step in a powerful direction for them.

The participation in that hearing was fascinating for me. It was literally like being in a TV show. Members of Congress were in seats elevated maybe 10 or 12 feet in the air, looking down at myself and my VA colleagues at a table. Each member of Congress took the opportunity to express a passionate opinion, not all of which were germane to the conversation at hand. Despite the hyperbole, they actually listened to what I said and what the VA said. They asked good questions. It was a remarkable discourse.

The hearings were well after 9/11, yet the halls of Congress, with minimal screening, are still very open to the public. It was a wonderfully reassuring about our way of life. It was wide open to people who wanted to come and listen and participate and not be overly encumbered with security.

I’ve done so much public speaking that I’m rarely nervous, but I was nervous. I would not want to be there for a serious transgression or offense.

If I looked at your laptop right now, what security measures would I find?

You’d find our product, Vergence, which is single sign-on and a bunch of other things. Virtually everybody here uses it. What do I like about it the best? I don’t have to remember my passwords for the system that approves expense reports, Webex, salesforce.com … the list goes on and on. What I like best is the sheer convenience factor. The screensaver periodically locks my workstation after about 15 minutes of unattended use. That happens whether I’m using it at home or in the office. We all use high quality passwords, mnemonics based on pass phrases, based on an elaborate sentence I can remember and choose some letters from it to make my password.

Unless you’re sitting in front of it, you wouldn’t see the display because of a 3M privacy protection screen. I was working on board financials on an airplane flight several years ago when the woman next to me leaned over, almost into my seat, and said, “You know how to use a spreadsheet.” I thought, “How long has she been watching me work on board financials?” Anybody who’s a road warrior in the company can have a privacy shield.

Security and privacy get confused. The woman looking over my shoulder wasn’t trying to hack our systems, but she was breaching our privacy as a company by looking at sensitive information. Both security and privacy need proper protection. The recent George Clooney story suggests that the concern is well founded that the biggest data access concern that healthcare organizations should have is what happens within their four walls. Too bad Palisades Medical Center isn’t a Sentillion customer, as this is not a good way to get one’s hospital in the news.

Are you happy with the progress that healthcare software vendors have made in making their products CCOW compliant for improving the user experience?

Interesting question. The general answer is no. We’ve put our heart and soul into the CCOW standard going back to the HP days. Standards in healthcare still have a fickle existence when it comes to vendors adopting standards and applying them thoughtfully and properly to their products and with the same interest as something that is purely proprietary.

Much of the venture capital we raised in the early days was spent giving market visibility to the CCOW standard. That helped to a point, but there are vendors to this day who have not implemented the standard or have done so in an incomplete way just to check off that they’ve done it, or done it in an elitist way, interpreting it in a way that’s good for their business interests but not as useful to the customer as a full implementation.

Often a customer will say to us, “You’re Sentillion, can’t you get Vendor X to do it correctly?” I keep looking for that sheriff’s shield or subpoena power to tell vendors what to do. [laughs] We’re just another vendor.

Our answer was that so much of what was conceived by us and others in the standard is extremely powerful, but if vendors won’t implement it timely or correctly, we need another way. We developed a technology called bridging that allows achieving the standard in a way that’s not invasive to the application.

The A-Ha was that the part of the application we can see and rely on is the user interface, as opposed to trying to inspect the application at a code level and hoping for an undocumented API or secret hook that we could latch on to. The user interface is tangible. Because that translates into a series of calls to the underlying OS, we created programs to watch for those calls. We can watch an application as the user is using it and see that they selected a patient. We can get that and send it to other parts of the application to automate patient selection, but without having the CCOW standards.

I read something where someone said that CCOW is a great standard, but that Sentillion controls it. Boy, did that rile me. I’ve been doing this for over 15 years, originally for non-CCOW work. There are very specific rules of engagement for a standards open development process, from NIST, a standard for being a standard, how you vote, how you achieve a quorum, etc. For an open standard, when you have a final ballot, people can vote Yes, No, or Abstain. You throw out the Abstain votes and 90% of what’s left has to be Yes for the standard to be valid. Imagine trying to get that level of agreement in your own family. [laughs] It’s a tough hurdle with lots of opinions, lot of eyeballs before a ballot passes. There’s no way any one organization can control a standard. They can be a blocker if they have enough votes, but they can’t force something to happen.

If there’s a secret to what we’ve done, it’s two things: show up to the meetings and document them. [laughs] I like to write and most people don’t, so often it is myself or others who volunteer to document the meetings, but that doesn’t mean we’ve done anything more than spending evenings and weekends to pull documents together for the greater good. The idea that an individual or organization can control a standard is unfounded.

When I Google Sentillion, I get ads for ComputerProx and Encentuate. What is the Sentillion value proposition over these and other competitors like Carefx?

The companies we’re most likely to compete with head to head are more often companies like Novell or Computer Associates, We’ll also see Imprivata. We don’t see a lot of some of the other companies that come up with the ad hits, even though they’ve latched onto the keywords. Across the board, for all our competitors, there are really three salient points.

First is the healthcare focus. A CA or Novell, while they have sales and marketing teams that cater to healthcare, have products that are generic that are supposed to work in 9 to 5 office environments and not necessarily healthcare.

Second, we believe strongly that we provide a fabric or glue. The last thing we want our customers to have to do is glue our glue. If we show up and say, “We have one piece of the puzzle and you’ll have to work with these other vendors”, that’s not particularly satisfying. That’s why we’ve invested heavily in developing our own products. All our products were developed by Sentillion so our customers would have a single vendor, a single number to call. Every one of our competitors requires multiple partners to do what we do as a single vendor.

Third is the incredible track record we have in getting customers live and keeping them live. We have hundreds of hospitals and hundreds of thousands of users. We monitor uptime across all customers and report to our board like it was financial information. Five nines. Who’s doing that for a security apparatus like we provide?

I hope you don’t think it’s bravado, it’s just pride. There are still hospitals using monitors that I wrote firmware for, like the HP Clover. I still feel pride when I walk by them in a hospital and know that patients are being cared for with something I wrote.

Why is desktop virtualization important?

Going back to this sense of responsibility to solve problems, for years our customers were asking us to help with people who are not physically in their facility, like community docs or docs working at home. We told them we could help to a point, but they’d have to build a portal or provide remote emulation like Terminal Server or Citrix, which requires an investment in servers and expertise. That’s an OK answer, but not satisfying for customers.

We were developing improvements to our internal testing apparatus. We do massive scalability tests to test response time and failure factors and failover. We were experimenting with the virtualizing of clients, not servers. 99% of what people are doing is on servers, putting multiple virtual servers on one physical server. We thought, “With a bit more work, we could provide a virtualized client to our customers.” That was the birth of our vThere product.

Take the clinical workstation with whatever applications, OS, service packs, etc. for people who are physically in your enterprise. You can make exactly that same environment available to people outside your organization. It’s transparent, no particular software package or OS, or even preventatives or antivirus. You need a host PC of a reasonably contemporary vintage running a reasonably contemporary version of Windows. That’s it.

Fire up Windows and you get a completely virtualized version of the clinical workstation running on the host using the host’s memory and CPU, but no other aspect of the host software, If you use a VPN, we use that. The user clicks on an icon, it runs in a window and looks exactly like the application in a hospital. They provide their logon credentials and everything is identical. Radiologists can manipulate their images exactly like in the office without the remote delays. There’s no training involved, no new portal, and no additional expenses for standing up servers to host WTS or Citrix. It’s all running on native client hardware.

We introduced vThere in the middle of 2006. Use ranges from physician access to their full cadre of clinical applications to medical coders who work at home, who have increasing clout because they stand between the hospital and reimbursement. Hospitals are increasingly willing to accommodate a work-life balance for coders. Customers are doing that with IT, too, allowing them to work from home two or three days a week. How can you provide with them their usual applications? Our vThere product is a practical, elegant, and cost-effective solution.

Proximity-based security and biometrics always seemed ideal for healthcare. Are they, and how well are they selling?

We have extensive implementations of proximity and biometrics, primarily in the US. Less so in Canada and in the UK, which has a different model where NHS has mandated the use of smart cards. The combination of active proximity and biometrics is very powerful. You can achieve touchless logon. You walk up to a workstation, your identity is provided to an active proximity device, and you are then authenticated by fingerprint. With Vergence, our flagship product, we can not only log you on, but automatically launch your applications based on your role, and then single sign you onto those applications. The first thing you need to do is select a patient – we can’t read minds yet. [laughs] It’s very powerful. Customers are using the technologies separately as well.

We introduced in the latest version of Vergence a variation on the strong authentication theme using passive proximity devices and an Enterprise Grace Period. Most healthcare environments are reasonably physically secure. You can have flexibility in how you apply authentication to users during the day. The user, at the beginning of their grace period, swipes a proximity card, authenticates by password, and does their business. The next time they need to log on, during the grace period defined by the organization, they only need to swipe their smart card. Possession of the smart card within the grace period tells us it’s that user. Those seven or eight character strokes done 50 to 100 per day times add up. It allows organizations to find the right balance between strong authentication and caregiver convenience.

How does expreSSO change the single sign-on equation for healthcare customers and for Sentillion?

The biggest challenge that customers have with anybody’s single sign-on always centers around connecting with the application. Often, a vendor walks into a sales situation, tries to impress on the customer how easy their tools make it, and shows a live demo. They’ve thought through the applications to impress how easy it is. For more complicated applications, or those developed in-house with less optimal programming, what seems so easy in the sales call is much harder.

We’ve taken everything we’ve learned to make it easier to deploy. The next generation of tooling accompanies expreSSO. A wizard allows organizations to create incredibly sophisticated connectors without having to write code. If you think about a process of creating a connector for signing on and off and dealing with other sign-on related events, you’re navigating through a series of screens and either inputting information on behalf of the users or accepting information like a password expiration message. The trick is to satisfy the application by putting in the right information at the right time while responding to the information needed.

We looked at metaphors that would be easy for people to understand. We decided to use editing a movie. Movies have frames, they flow in a sequence, and you can insert special affects. We take a movie metaphor and apply it to the process of having a user generate a connector to a target application. We show screens in the order they want them to appear and define inputs based on visual controls that they point and click through — for a logon, logoff, or password expiration message, each representing the application as it appears at a certain point in time.

Anybody that’s used iMovie or Microsoft’s movie maker would instantly get how the expreSSO wizard makes connectors for applications. My wife recently edited videos of my son, who’s a competitive fencer. Colleges wanted 15 minutes of video. My wife went through hours of movies, having a great time with iMovie creating effects. She’s not a movie director, and had never used iMovie before, but she was still able to use a tool to do very powerful things.r That’s what expreSSO is all about.

The press release mentions cost savings.

Vergence does an awfully lot more than single sign-on – patient selection, auditing, and role-based access. Vergence is really a platform for creating a complete clinical workstation. It’s always been that, but in the early days, it was too broad for people to understand that, so we positioned it as a single sign-on solution. It’s like saying a car is an air conditioner when it’s more than that, like an entertainment system and transportation.

expreSSO does one thing really well and cost effectively – signing on and signing off. Customers increasingly want to focus on that to start and that’s what expreSSO is meant to solve really, really, well. When they’re ready for a more comprehensive solution, they can upgrade to Vergence.

You’ve had some recent organizational changes, I’ve heard. What’s going on at Sentillion?

We made some changes back in June that were mainly centered around refocusing the company on healthcare. We had started a process with vThere in broadening our footprint beyond healthcare in a thoughtful way. We created a business unit inside of Sentillion to look at opportunities outside of healthcare so the bulk of the company could stick with healthcare.

It’s difficult for a $30 million company to do as many things as we were trying to do. We were diversifying into the UK, bringing vThere and expreSSO to market, and trying to establish a foothold for vThere outside of healthcare. It was one vector too many. I decided we needed to reconsider expanding outside of healthcare, or at least let it be opportunistic and let companies find us. We had hired people without the healthcare background because we didn’t need that.

We’ve just come off a terrific Q3, the first full quarter since the change. We signed six new customers and sold a bunch of products to existing customers. It was a good thing to do and we did it thoughtfully for our customers and employees.

What do you like most and least about being a CEO?

I thought I would miss writing code. My expertise is in distributed, object-oriented programming. How’s that for a mouthful? [laughs] I really don’t miss it. I find what I really enjoy is the challenge of doing things that others haven’t done before.

People often ask me about what I do other than work. I have a car that I’ve been building for years. I drag race it. It’s a combination of parts that have never been put together, which means I make a lot of mistakes. I fine tune my problem solving skills and persistence. The thing I love most is to see what others here are able to accomplish that I have nothing to do with. It’s intensely satisfying. It happens following ethical principles that we care about and a corporate style that I care about, but I had nothing to do with it.

What I like least is the set of arcane accounting rules that govern software revenue recognition. It’s a set of principles defined by accounting boards that software companies need to follow to book revenue on an annual or quarterly basis. The rules are complex, but accounting rules don’t have that foundation of reason. It’s kind of like laws that evolved over the years. You can spend an inordinate amount of time interpreting the rules so you do the right thing. I’m not always sure that time is effective for the business or customers, other than you want to do the right thing.

Who do you admire in the industry?

The people that I admire most are in the new generation of CIOs, probably in their late 30s or early 40s, who grew up with information technology instead of having it happen around them. They have business savvy as well. The combination of a comfort with IT and business savvy are impressive.

Mark Hopkins at UPMC is one such person. Steve Hess of Christiana Care, Praveen Chophra at Childrens Healthcare of Atlanta, Allana Cummings of Children’s Omaha, and Marianne James of Children’s Cincinnati. All of these are examples of healthcare CIOs who have a comfort with technology and business acumen. They are putting it to formidable use in their organizations.

I gave a lecture at HIMSS about the healthcare tipping point, referencing Malcolm Gladwell’s book. One of the required ingredients is people like this to make it happen. If healthcare IT becomes truly pervasive in the next five years, it will be because of people like this.

Thanks for sponsoring HIStalk, by the way.

What was most fun about sponsoring your blog is that we all reading it already. It was a Homer Simpson Doh! moment. The best endorsement is that we didn’t just hear about it and decided to sponsor. Just like we use our product, we were already reading your blog.

A Report from the Cerner Health Conference

The Cerner Health Conference kicked off Sunday at the Kansas City Convention Center. Don Trigg, Cerner’s chief marketing officer, offered to connect me with some attendees for a report. (I should note that, despite my occasional criticisms of Cerner, Don has always been a straight shooter, has invited me to Cerner events, and offered to connect me with sources there, all in a casual, non-official way, which I appreciate).

My guests for this live update were Helen Thompson, CIO of Heartland Health of St. Joseph, MO; Reid Conant, MD, CMIO of Tri-City Emergency Medical Group of Oceanside, CA; and Stephanie Mills, MD, CMIO and CIO of Franciscan Missionaries of Our Lady Health System of Baton Rouge, LA. I’m sure they were ready to relax after a long day of conference education, so I appreciate their voluntarily taking time to speak with me.

What’s your impression of the conference so far?

Reid: It’s been very productive sessions so far. I gave two talks today and will be on a panel on Wednesday. I sat in on a few sessions and shared ideas with my colleagues. The setup of the CHC is kind of neat – it’s primarily client-driven educational sessions. The overwhelming majority of sessions are either entirely client-presented or have a panel with Cerner people and other clients. It’s sharing of ideas. It was in Orlando for a few years, now it’s back in Kansas City. It’s a very productive way of sharing ideas among clients. We’re using many of the same applications. You can always learn something from someone else who’s using what you are in a different way.

Helen: The networking that we get from this event, as well as the strategic look at what’s next on the agenda, makes this an extremely valuable conference.

Stephanie: It’s been very interesting to watch healthcare IT over the past several years. I’ve seen us as clinicians become more engaged, more involved, and more committed to developing solutions for quality and patient safety challenges. It’s a group of colleagues with the same experiences, tools and challenges. It’s important to get together in a safe environment and collaborate. It’s amazing what comes out. It breaks down a lot of the barriers.

How would you compare the value you get from attending Cerner’s conference to other conferences like HIMSS?

Helen: We’re just 45 minutes north of Kansas City, so the location factors in. We have an opportunity to do much more focused sharing and learning from one another. HIMSS has such a broad range that it makes it difficult to do this level of collaboration.

Stephanie: It’s practical, with stories from other organizations. Very practically oriented. HIMSS tends to be more theoretical, which is also good. You need both sides of the coin. In the trenches, to know what is or isn’t working.

Reid: Being in Kansas City, there’s been an even larger presence of Cerner associates. That’s done a few things. It’s gotten them more involved and given them a view of what clinical medicine is. I heard from a few of them that that is encouraging to them as they’re working on code. For us, it allows us to give them direct feedback. That’s very important and they seem to listen. I’ve been on an ED solution advisory group for years and they take direct feedback on specific issues. Today in one of my talks, I spoke about using scribes with PowerNote. Cerner has electronic, template-based charting. To augment productivity, we use undergraduate students to assist the physician in creating that document. That electronic record gives them the tool. After this talk, an engineer came up and said, “We liked what you did with that column. It fits with our code.” They want to put it in the product. These guys will listen and the next service pack will often have those kinds of suggestions in them. That reception of ideas is valuable.

Stephanie: Team members were here and some of the Cerner documentation team were dealing with some challenges that’s been difficult to diagnose, working over phone and conference calls and sending log files back and forth. We got in the room, got on the system, and had both teams together. To be able to share those experiences is really valuable, to have direct access to a vendor and share that knowledge and experience and frustration – it really gets folks bought in to finding the solution. We build relations with people, not just a voice over the phone.

Reid: It makes them accountable on a personal level.

Helen: It makes us accountable, too, because we share feedback with them. The success of our organization is tied to the success of this application. It’s very much a two-way learning street. They learn so much from us while we’re down here presenting and we learn from them as the dialog is opened.

Have there been any big announcements or revelations so far?

Reid: This morning, Neal Patterson said something that I felt was impressive. Cerner has taken a stand as an organization and said, “We are going to focus on the current code level.” In this day and age of rushing to get the next release out, they said they’ll focus on 2007 code and put all of the innovation into that code level. They’re going to, for the rest of this decade, ride that code level and make it the best they can, as solid as they can, before moving to a major change to the architecture of the code, incorporating Java and so forth. Thankfully, they recognized that ahead of time. I appreciate that.

Stephanie: We’ve had keynote addresses, discussion about health policy, the future of healthcare, how technology can come to the table in a number of ways. Then, lots of sessions in different areas that focus on a combination of presentations from clients in the trenches and living this, and also some sessions from the Cerner team about what’s going on today in problem solving and development.

Helen: The conference is broken down into a series of tracks to select from. Some are application-specific, some are role-specific. There’s quite a broad range.

You mentioned code levels. Millennium’s Achilles heel for years seemed to be response time, with a rumor that the entire application would have to be scrapped and sent off to India for a rewrite. Was that mentioned and are you seeing performance issues?

Reid: When went live 3 1/2 years ago, we felt some of that. We’ve been remote-hosted since go-live. Some places that tried to do it on their own felt that impact. They had more delays then than now. ED is one of the fastest paced environments. Anything short of sub-second response time won’t cut it and I won’t hesitate to call them for a four-second delay. That’s just not an issue any more. We’re using CPOE with meds and every order I enter is through the system. I can enter 20 to 30 orders on a complex patient in 15 seconds, using order sets and other tools. There are lots of clicks. If response time is not immediate, I feel it and they hear about it. What Cerner highlighted today is the Lights On Network, a Web-based application that allows you to drill down to an institutional and user level on response times. They track some huge number of the most common and most important actions. They track each and every one, so you can literally drill down to Dr. Mitchell if he’s complaining and say, “We saw at 2:55 pm you had one delayed action, but other than that, it’s been sub-second.” You can also pull out by department, not just response times, but how they’re using it, like ignoring alerts.

Helen: We’re a client-hosted solution and Lights On Network user for over a year. We’re very pleased with system performance improvements that Cerner continues to develop from data they get from Lights On.

Stephanie: I agree. We’ve been quick to look for a quick fix for our healthcare woes and sometimes fall prey to technology seduction. We want the magic Band-Aid. At the same time, we’re quick to blame when the magic fix doesn’t solve the problem. You can’t do that in a vacuum. When you look at performance, we have a lot of challenges that can be pointed at a particular vendor or application. We’re maturing as an industry in applying best practices like ITIL. For leaders in healthcare IT, it’s important to have a comprehensive perspective and make sure our organization is optimized to provide quality of care and to apply technology. It’s about people and processes and workflow and not just automating a process.

Helen: We need to think back. When we had a paper record and a very ill patient and the chart got larger, it took longer to filter through that information. The more data we collect, it will be a more constant process to keep sub-second response.

Reid: One real strength of Millennium is integration, like accessing old records. If the patient rolls into the ED by ambulance, with a couple of identifiers I can pull up the record from visits three days or three years ago. The ED course is immediately accessible to the nurse in the ICU. For hospitalists, it’s worth it to get out of bed and get online. They can look at orders and tests.

Stephanie: It really does change the way we pratice completely.

Are you glad the conference moved to Kansas City?

Stephanie: It’s helpful for the reasons we mentioned, access to team members and architects and engineers and folks here behind the scenes that we don’t get to build a face-to-face relationship with. Orlando is a very big conference town and its nice to bring it to Kansas City.

Reid: It’s a busy week, too busy to bring the family to Disney World, so we get much more out of having it here.

Are you planning to check out any particular Cerner products?

Stephanie: We’re an integrated Cerner site using a lot of the solutions. We’re going through a reorganization of Information Services. The next step is to optimize what we have, dialing things back, looking at current state, looking at workflow. The next piece that we already own but haven’t implemented is Power Insight, which has clinical and operational dashboarding.

Helen: We’re optimizing the solutions, also looking at the Care Aware product, leveraging the application to move to a digital environment.

Reid: Care Aware is on the horizon. It was demonstrated this morning at the kickoff. In the ICU setting, where they’ve had antiquated paper flowsheets with graphs four by six feet double sided [laughs] someone goes in there with a pencil and traces the latest vitals on that graph. How antiquated is that? But it was one of the most useful tools. If I go to a code, that’s one the first things I look at. Care Aware is a centralized reporting tool and repository for acute care patients. Many of us were salivating at the demonstration. It uses a larger screen, maybe a 20-inch monitor, with an image of the latest chest X-ray, vitals, etc. It’s highly customizable at the user level. It asists you in decision-making, changes in plan. It appears that it will be an invaluable tool.

Stephanie: It will be great. It’s been fun to see this in development. In Louisiana, we have problems with access to care. We can leverage what we have outside of our walls to create a virtual critical care environment that’s more automated. We’ve been saying, “You have to be able to tell the story and have that snapshot in a comprehensive view.” Our Lady of the Lake has created our version using Cerner tools, but it’s pieces and parts and not quite as seamless. To be able to see that pulled together and configurable is certainly where the future is.

Reid: It takes something like the tracking board in the ED, the FirstNet application. The tracking board is highly customizable, data-rich, and drives processs improvement. It’s a very powerful tool. At a glance, you can see exactly what’s happening with each patient, what’s pending and what’s back. It’s a matter of getting as much data in an organized fashion right there in front of the provider.

What would you say has changed most dramatically about Cerner in the last couple of years?

Stephanie: I’ve seen consistent dedication to partnership, to collaboration from Neal Patterson down, a true interest in what’s going on and how Cerner can impact that. I think it’s authentic, it’s genuine. When the Cerner brass comes to visit your hospital, they’re out there and want to know what’s going on. They’re continuing to march the ball forward in that arena. We need all the help we can get in healthcare, to have companies that are truly committed. We’re all in this together. To feel that we’re able to collaborate with our colleagues and vendor partners in a meaningful fashion and with the patient as our primary responsibility – what more can you ask for? We’re continuing to see clinician involvement on the Cerner side. That’s promising. They’re taking a smart approach to technology, applying it where it makes sense, and not just trying to get the latest whiz-bang out.

Reid: An example of that is the organizational decision to take a step back and not advance to the next code immediately. That’s organizational maturity. There’s always the risk of misperception of what that means. I don’t think it’s a negative indicator. It just shows that, when they roll out the next code, that they want it to be a dramatic step up. Where we already are is phenomenal. Look at the curves on the Lights On Network and graph performance over the last year or two. You can see a very steady and fairly steep drop in response times, now to the point where it’s not an issue.