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 EMR / EHR

The perfect healthcare storm

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   By Arthur Gasch and Bill Andrew, December 2010

Arthur Gasch and Bill Andrew are
founder and executive VP, respectively, of MSP.

U.S. EHR effort poised to falter unless course change comes soon.

The healthcare tea leaves are already settling, and ARRA/HITECH legislation passed to accelerate the adoption of EHR has had exactly the opposite effect for many EHR companies.
Physicians are overwhelmed by the scope of the documents and remain understandably confused and intimidated by the changes required and accelerated time frame the government has thrust on them. Physicians aren't certain if it is safe to proceed yet. There is still uncertainty regarding meaningful-use (MU) Stage 2 and 3 requirements, certified versus certified modular EHRs, the difference between CCHIT certification and ONC-ATCB certification (and whether the EHR they pick needs both), pending cuts in CMS reimbursement, which integrated EHR/PMS programs will manage the transition from ICD-9 to ICD-10 by 2013, HIPAA 5010, breach reporting ambiguities, the implementation of accountable care organizations (ACOs) and the coming three stages of medical home. Meanwhile, the EHR company acquisition press releases come weekly. So, what are the future prospects for smaller group practices? Is it prudent to make so large an investment during the longest-lasting recession in modern history and, contrary to what HITECH promised, rising healthcare insurance premiums?
To appreciate their predicament, imagine if your household was facing an announced 28 percent cut in income: Would you be enthusiastic about pulling money out of life savings to buy an expensive new technology that someone else mandated you adopt and then picked for you, one you felt your family didn't understand and might not be able to manage? That is the position small practices are in. Confusion, uncertainty and fear are the enemies of EHR adoption.

The ramp up of the Office of the National Coordinator for Health Information Technology (ONC) and the funding of regional extension centers (RECs), burdened with the unrealistic goal of transforming 100,000 physicians into meaningful users in the next two to three years, is consuming billions of dollars and creating both unemployment and unsustainable new employment.

If one looks at the status of the medical device and EHR markets since January 2009, only a few larger EHR vendors (who have been prequalified by RECs) are seeing increased revenues from EHR orders, while hundreds of other EHR developers are instead experiencing major revenue falloff. Few impartial observers we have spoken with believe that the transition of RECs to self-sustaining status in two years (when the grant funds expire) is a high-probability outcome, because this same approach was tried in the previous DOQ-IT program and ceased when the grants ran out. Most RECs (with some important exceptions) have continued to prequalify and form business relationships with only three to six EHR developers, less than 2 percent of the EHR vendors, stifling business prospects of the remaining 98 percent of EHR developers, many of whom have less-expensive, but "functionally equivalent," EHR products.1

Some REC prequalification requirements are peculiar. The requirement that an EHR vendor already have a significant installed base in its state or region as a qualification precondition is curious. If RECs were recommending EHRs that required in-office deployment, it might make sense (since the office infrastructure would be more complex, but EHR developers usually don't supply or support hardware anyway). Computer hardware is purchased locally or comes from a national provider like HP, Dell or CDW, which offers local support as an extra-cost item. However, given the widespread REC preference for Web-based, SaaS EHR configurations (where only a browser is required), there is no need for any SaaS EHR developer to have a large, local installed base.

When you ask some REC representatives about this, they divert the question by saying something like, "We will look at this in a year or so and let any previously excluded EHR vendors, whose share has become significant in our state or region, into our program." That makes no sense either. If RECs picked EHR companies that already have local penetration and then promoted them for a year, to 1,000 to 4,000 physicians that they are helping to adopt EMRs, how likely is it that other non-promoted EHR companies will improve market share in that year? It seems to us that this approach discriminates against a large group of EHR developers whose products don't have penetration in specific market areas.

A better question might be, "Does a company offering a SaaS EHR solution have enough well-trained help-desk personnel for its total installed EHR base?" With a SaaS EHR model, many group practices' eggs are all in one big basket. If the server fails, the disruption could be hundreds or even thousands of group practices all over the U.S. at the same time. What a fruitful hacker and cyber terrorist target! Is the help desk located in the U.S.? Do help-desk personnel speak fluent English? What privacy laws actually apply to sites hosted outside of the U.S. or with non-U.S. help desks? Do foreign privacy laws conflict with state or federal HIPAA privacy laws? If so, how is HIPAA compliance and a secure chain of custody of patient records maintained and substantiated? The current EHR prequalification process is flawed by its lack of transparency and its cumbersome nature. Given that this is the largest giveaway of U.S. taxpayer dollars in history conducted by non-government surrogates, where are the checks and balances?

Readers who are VCs or EHR developer board members, take note: Unless you can find a way to succeed in this convoluted process, your company will be crippled in competing for the next 100,000 physicians who become EHR users, which may put your company in jeopardy — even if you don't focus on primary-care specialties. If less than 10 EHR suppliers gain 100,000 new users, do you doubt they can customize future versions of their primary care-oriented EHR software to address your specific clinical market specialties as well? Companies that want a stake in this $34 billion pie certainly need to get their products ONC certified, but is that is all they need to do?

To date, CCHIT and the Drummond Group have certified 40 complete or modular EHRs, but far fewer have had success with any significant group of RECs — and not one has been selected by all of them. Since certification is a requirement for MU, and no certifications were issued until October 2010, on what basis could any REC consider certification when picking prequalified EHR developers?
It would be helpful for the ONC to publish a table of the scored criteria response from every EHR vendor that responded to every REC RFQ so far, as it would reveal the core functionality they share, if any. Since this is paid for by taxpayer dollars, with RECs acting in proxy for the federal government, it is a reasonable expectation.

Medical Strategic Planning (MSP) has a tool that can demonstrate which common functionalities EHR products share; it's called the EHR Selector, and the specific function is known as the REC-Check. It allows any consultant, REC, physician user or EHR vendor to determine shared functionality of any set of EHR products, including those shared by EHR vendors pre-qualified by any RECs. Visit the MSP EHR Selector (www.ehrselector.com), subscribe and run your own "REC-Check" today. It will allow you to find additional vendors that provide equivalent functionality.

At the recent American Health Information Management Association (AHIMA) Convention and Exhibit in Orlando, one presentation addressed many of the issues described above: According to Deborah Kohn, Dak Systems Consulting, and Elaine Lips, ELIPSe, the "perfect storm" is brewing with the ARRA/HITECH, HIPAA-5010, ICD-10, Patient Privacy Protection Act, ACO legislation and healthcare initiatives — portions of which are already in effect and the convergence of which will occur in 2012-2014. In fact, Kohn stated that the costs of HIPAA-5010 and ICD-10 implementation alone will eat up most or all of the incentive payments anticipated by physician practices.

1. A functionally equivalent EHR is an EHR that shares the collective functionality of the EHR picked by RECs, but was not chosen or even considered. These are determined by extracting shared EHR features from prequalified EHRs and then using those features to search for other EHRs that match them on the MSP EHR Selector (www.ehrselector.com).

Arthur Gasch (art.gasch@msp.com) is founder and Bill Andrew (bill.andrew@msp.com) is executive vice president of Medical Strategic Planning. Follow MSP on LinkedIn and
via MSPehrSelector on Twitter.


Tags:  EMR / EHR