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Commentary: Electronic Health Records

The perfect healthcare storm

U.S. EHR effort poised to falter unless course change comes soon. By Arthur Gasch and Bill Andrew


he healthcare tea leaves are already settling, and ARRA/HITECH

legislation passed to accel- erate the adoption of EHR has had exactly the opposite effect for many EHR compa- nies.

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Physicians are overwhelmed by the scope of the documents and remain understand- ably 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, certifi ed versus cer- tifi ed modular EHRs, the difference between CCHIT certifi cation and ONC-ATCB certifi cation (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 mod- ern 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 Offi ce of the National Coordina-

med by the emain understand- db th h

i d 30 December 2010 If

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

Ath G h dBill A d f d tor for Health Information

Technology (ONC) and the funding of regional extension centers (RECs), burdened with the unrealistic goal of trans- forming 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.


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If one looks atthe status of the medical device and EHR markets since January 2009, only a few larger EHR vendors (who have been prequalifi ed by RECs) are seeing increased revenues from EHR orders, while hundreds of other EHR developers are instead experi- encing 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, stifl ing business prospects of the remaining 98 percent of EHR developers, many of whom have less-expensive, but “functionally equivalent,” EHR products.1 Some REC prequalifi cation requirements are peculiar. The requirement that an EHR vendor already have a signifi cant installed base in its state or region as a quali- fi cation precondition is curious. If RECs were recom- mending EHRs that required in-offi ce deployment, it might make sense (since the offi ce infrastructure would be more complex, but EHR developers usually don’t sup- ply 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 confi gurations


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