Incentives, Regulations and Consequences

Road to ChangeGood intentions do not always result, in the long-term, in good policy. Such may be the case with the HITECH Act that was passed as part of the huge stimulus bill ARRA in 2009. This bill launched the massive adoption of EHRs by physicians and hospitals across the country, with current adoption numbers of a basic EHR in hospitals at well over 55% from a paltry less than 10% pre-ARRA. Similar trends in EHR adoption can also be found among ambulatory practices.

There is no question that indeed, the HITECH Act has achieved one of its primary objectives – foster the adoption, via incentives, of certified EHR technology (CEHRT). This is truly a good thing, for only by digitizing health data can we then move on to further public health policy goals of beginning to understand what actually contributes to health and well-being (comparative effectiveness), and also move towards a model of personalized medicine and true patient engagement.

But at what point does the government’s role in fostering adoption of CERT end and market forces begin?

A Little History:
To foster adoption of CEHRT but also ensure that tax payers (after all we’re the ones footing the bill for these incentives) get value from said adoption, ONC pulled together a number of workgroups to define “meaningful use” requirements that physicians and hospitals would need to demonstrate to get their incentive payments. This was broken up into three “Stages” with each stage building upon the previous.

The first stage of “meaningful use” requirements were pretty simple as the plan was to just get the medical establishment to begin adopting CEHRT and familiarize them with usage of this tech. The incentive payments were also front-end loaded (receive more for meeting stage one than subsequent later stages) so low and behold, we saw strong adoption and attestation for stage one. Hip, hip hooray were the cheers heard at the Hubert Humphrey building in DC.

Where We Are Today:
But that low barrier to stage one adoption created a false market for EHR technology. There is now a plethora of EHR vendors, especially on ambulatory side that frankly should have never made it this far.

ONC_AmbuEHR

Meaningful use stage two requirements for certification are a significant hurdle for many of these EHR vendors who simply do not have the resources, nor technical chops to meet them. Sadly, a lot of ambulatory practices will suffer as a result. This in large part led to the proposed rule released this week by CMS to allow providers to postpone attesting with stage 2 CEHRT this year and allow them to attest with 2011 CEHRT. It is CMS’s hope that this delay will provide EHR vendors the time to get their act together and be certified for stage two as well as provide sufficient time for providers to adopt these updated systems to attest.

Time to Step Out of Way and Let Market Takeover:
But as often happens with government initiatives, initial policy to foster adoption of a given technology can have unintended consequences no matter how well meaning the original intent may be.

During my stint at MIT my research focus was diffusion of technology into regulated markets. At the time I was looking at the environmental market and what both the Clean Air Act and Clean Water Act did to foster technology adoption. What my research found was that the policies instituted by these Acts led to rapid adoption of technology to meet specific guidelines and subsequently contributed to a cleaner environment. However, these policies also led to a complete stalling of innovation as the policies were too prescriptive. Innovation did not return to these markets until policies had changed allowing market forces to dictate compliance. In the case of the Clean Air Act, it was the creation of a market for trading of COx, SOx and NOx emissions.

We are beginning to see something similar play-out in the HIT market. Stage one got the adoption ball rolling for EHRs. Again, this is a great victory for federal policy and public health. But we are now at a point where federal policy needs to take a back seat to market forces. The market itself will separate the winners from the losers.

The move to value-based reimbursement (VBR) will force healthcare organizations of all sizes to adopt some aspect of population health management. Interoperability, the big sore point today is not so much a technology issue as it is a market issue – and population health management is impossible without interoperability. While I know that the new ONC director, Karen DeSalvo is well-meaning in her intentions, interoperability is something that market needs to sort out, not ONC. My fear is that by letting ONC/CMS define interoperability, we will be left with highly prescriptive definitions and not innovative models, which this market desperately needs.

I applaud the hard work and efforts of all the public servants of HHS and volunteers who have worked tirelessly to get us to the point of where we are today. However, it is now time for them to refocus their efforts elsewhere. Maybe a good place to start is to assist all those ambulatory practices that have adopted a CEHRT under stage one to assist them in the transition to a more viable and stable EHR vendor for the long-term. Then again, maybe this is just an issue of caveat emptor.

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HIE is a Misnomer

hieFor years now we have been talking about HIE as if health information exchange (the verb) is happening across health information exchanges (the noun). This is wrong for the simple reason that true, full health information exchange is not occurring.

Then what is being exchanged across these HIE networks that public and private entities are spending a fair amount of money to make happen?

Typically, it’s fairly limited clinical data-sets (lab results, discharge summaries, referral documentation) delivered as an HL7 message, ala CCD, or more recently CDA – data sets that rarely embed themselves into clinical workflow where they are most likely to be used. This is not to say that the HIEs that are being stood up today do not provide some level of value – certainly they do and numerous studies point to decrease in duplicative tests, identifying frequent flyers to ED, etc. What I am saying is that the healthcare industry is in a rapid state of transformation and the future need to transmit an ever wider range of health-relevant information across a distributed network will be critical to the success of a healthcare organization.

Some examples:

Advocate Health in Chicago has been working closely with Cerner on the development of “Smart Registries.” In speaking with their CMIO last fall I asked him if he was using their HIE to assist with the data aggregation and information distribution needs that are required to power Smart Registries (their instance taps over 50 data sources). He said no, the HIE simply does not/cannot provide sufficient data nor can it deliver the information they want to present to a physician practice.

In a briefing with one of the largest population health analytics vendors, Optum, who also happened to have acquired an HIE vendor (Axolotl) a few years back, I asked if they were using any of their HIE capabilities to aggregate data to power the new Optum One analytics platform? They said no, the HIE does not deliver rich enough data to do the type of analysis and ultimately deliver the value that Optum One offers.

Last week I met with a vendor CEO to discuss our latest research on CNM. He pointed out that they are seeing a huge need for HCOs to meld clinical and transactional data (claims, PBM, prior auths, etc.) to drive better care coordination across a community. They are now working with a payer and HIE vendor to enable such capabilities to better support ambulatory practices within that payer’s provider network. The HIE alone was not enough. 

The currently limited capabilities of many an HIE will not serve the needs of tomorrow. This belief led us to our research on Clinician Network Management (CNM), which is a visionary look forward on how healthcare organizations need to rethink their dated, and now misnomer of an “HIE strategy” a strategy that has very little to do with the need for a more complete information payload delivered at the point-of-care to enable population health management.

As we found in our CNM research, exceedingly few organizations have come to this realization, though we are seeing glimmers of hope with those on the leading (bleeding) edge such as the aforementioned Advocate. Will others follow? Yes, of course as the transition from fee-for-service to value-based reimbursement will demand it. The real question is when and when they do, will they have the leadership to make it happen? This is a journey not for the feint of heart.

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Free Research: Migration to Clinician Network Mgmt

CNMLast summer we published another edition of our popular Health Information Exchange (HIE) Market Trends Report. Over the years, this report has for many, become the “authoritative source of information on the HIE Market.” That’s not me talking, that is exactly what we have heard from those who have purchased this report.

This, of course, makes us feel quite proud as our mission here at Chilmark Research is pretty straight-forward:

Provide research that will assist Healthcare Organizations (HCOs) in their understanding, assessment, adoption, deployment and use of IT to improve the quality of care delivered. 

This is what get us up in the morning. This is what motivates us for everyone here at Chilmark wants to make a contribution to improving this crazy, at times frustrating, market sector.

With the release of the latest 2013 HIE Market Trends Report, however, I had an uneasy feeling. The vast majority of the market continued to view HIE as just that, moving basic health information from point A to point B. If anything, HIE has been further dumbed-down with the advent of Direct Secure Messaging, which is really nothing more than secure, point-to-point email – a far cry from interoperability and query-based information exchange.

Another issue was that I was not seeing much thought going into what is next for HCOs and their investments in HIE. Recent reports such as HIEs reduce ED visits is something we have been talking about for years. Seriously, is this the best we can come up with? What new capabilities will HCOs want (or be able) to enable across their HIE? What is the next level of value realization beyond basic records exchange and lab orders/referrals?

I increasingly came to the realization that the vocabulary of how we talk about HIE needed to change. Language is powerful and our current fixation on HIE and the vocabulary associated with it may be preventing this industry from looking beyond this limited construct. For the purposes of that 2013 HIE report, we used the term HIE 2.0 (did I ever mention I have never been a fan of 2.0 attached to any acronym) to signal a change.

In late fall of 2013, after some discussions with clients, consultants and HCO executives, we decided there was the need to test these ruminations. Chilmark put together a prospectus for a research project on Clinician Network Management (CNM) and found five willing sponsors for this research (CareEvolution, McKesson, Optum, Orion Health and one that prefers to remain anonymous). The research objective was to conduct primary research to determine the state of the market in moving to enable CNM, which goes under many guises including physician alignment, clinically integrated networks, etc. but none of these terms have quite the scope that we envisioned for CNM.

Some of the results of our CNM research are quite telling.

  • The market is roiling under massive structural changes.
  • Most HCOs are ill-prepared for the move to from fee-for-service to value-based reimbursement (VBR), though all see it coming.
  • Those select HCOs who are now preparing for VBR are looking to be quite prescriptive in their requirements of affiliated and owned physicians – that will be supported via a CNM model.
  • There remains a divide (level of distrust) between payers and providers that will take time to mend despite the need for both to work more closely together.
  • HIT vendors are, by and large, not keeping up with the needs of HCOs to support CNM initiatives.
  • A best-of-breed approach is seen as only path forward today to enable CNM.

Of course, we learned far more than the above which you’ll find in the report itself. Since this report was sponsored with the intent of helping to educate the market, it is being offered for free. I encourage you to grab a copy – you won’t be disappointed.

 

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HIMSS-pressions

EpicRideWhat an epic (or is it Epic, or for that matter EPIC) ride where one seemingly goes in and out of noise tunnels on the exhibit floor all in the hopes of finding some meaningful signal as to what is really happening in the market. This is, for better or worse, what HIMSS is all about and like HIMSS conferences of yore, finding that signal could be excruciatingly difficult. But over the course of those few days wherein I was being bounced from one meeting to the next, patterns did emerge.

Thankfully, at this year’s HIMSS I was not alone and in fact, had the entire Chilmark team there, each focusing on gathering information/data points for their respective research domains. While I will highlight some of the bigger industry-wide patterns in this post, each lead analyst for our four research domains (analytics, EHR, HIE and patient engagement) will publish their own impressions over the course of this week.

Accelerating move to VBR: No doubt about it, the ACA train has left the station and we are halfway to Hicksville on the VBR train (VBR = value based reimbursement). In conversations with several senior HCO executives, there is no longer any question that the industry is moving to VBR and the train appears to be a high-speed one. Three payers I spoke with stated that roughly 50% of reimbursements in 2017 will be VBR-based. We may see a train-wreck among less savvy and astute HCOs as recent research we have conducted uncovered a market where the majority of HCOs remain ill-prepared for this transition – they are still in a reactive, tactical operating mode.

No one wants to be an HIE vendor: With the exception of one vendor, RelayHealth, every HIE vendor I met with no longer considers themselves an HIE vendor. This is partly due to the rapid commoditization of base interop technology and services and the need for these vendors to “move up the stack” and provide a higher value proposition. A few seem to be trending in the right direction but the majority of these vendors are currently pushing PowerPoint and buzzwords rather than truly reference-able clients and use cases. (Brian will take a closer look at HIE in follow-on post.)

Despite buzz, population health management (PHM) remains an amoeba. Last year the big buzz was around PHM. Well, the enthusiasm has not waned for PHM, at least from the vendors but try to get one to clearly articulate what it means and how it maps to their solution suite – good luck.

In every briefing I had with a purported PHM solution provider I asked a simple question: What is your process map to enable a client to effectively move to a PHM model of care across the community they serve with your solution suite? Only one vendor, Cerner, was able to articulate such a process map, everyone else just sort of waved their hands about and spoke of “high-level this, high-level that.” Ugh, I simply can’t stand high-level BS.

Patient engagement saw plenty of visibility but little reality. HIMSS made a big point this year to promote patient engagement, but from what I observed, that market is a mess – confusing messages, confusing positioning, questionable offerings. About the only thing that seems relevant today to most providers that I spoke to was meeting MU2 patient engagement requirements so they are simply using the lame PHR that their EHR vendor offers. For larger HCOs, there is additional interest in promoting customer loyalty. Beyond that, pilot-itis reigns supreme. (Naveen will go into far greater depth later this week.) 

Industry finally gets workflow religion. At my first HIMSS, I vividly recall the Davis Award recipient stating that he wished they had paid more attention to workflow in their EHR install. I about fell out of my chair as a CIO would have been fired in the manufacturing sector for making such a statement. Workflow considerations in that industry were part and parcel of any strategic deployment of IT – not an afterthought.

At this year’s HIMSS I heard plenty of talk about workflow integration but data-rich workflow tools that extend across a heterogenous EHR environment are still in PowerPoint. Likely the leading reason why many HCOs are rationalizing the EHRs they will support to a very select few or in the case of Epic shops, one.

Related sad story though: Met an old colleague who now leads a small ACO of 8,700 patients. She is now in the process of developing a strategic IT plan for the ACO, an IT plan that needs to take into consideration 22 different EHRs across the various practices. I don’t hold much hope for this ACO as I see no easy path to care coordination across such a disparate network.

A Few Parthian Shots
HIT spending will be flat in 2014 as HCOs focus on meeting ICD-10 and MU2 requirements. Speaking of which, there are lies, damn lies and then there are statistics. Sat in on HIMSS Analytics Leadership survey presentation, where I kid you not, according to their survey, 92% of the nearly 300 HCOs surveyed said they are ready for ICD-10 switch-over. That’s a very optimistic group they are surveying.

Not sure we’ll see any big announcements for EHR switches either in 2014 as HCOs look to stabilize their infrastructure in advance of ICD-10 conversion. Just too big a financial risk.

Spoke to a few senior executives from large HCOs that have moved to Epic. Each one stated that their strategy will be to move all physicians, owned and affiliated, acute and ambulatory, to Epic. If you want to be a participant in their contracts with payers, that will be the entry fee. They all admitted that they will allow specialists to keep their EHR but all stated this is an exceedingly small percentage (~5-8%) of physicians in-network.

Looks like CVS is dumping their longtime EHR partner for their MinuteClinics, a highly customized version of athenaclinicals (as I recall, CVS was athena’s first athenaclinicals customer) A thousand apologies athena, and thanks for informing us that CVS MinuteClinics use athenacollector, not athenaclinicals. Indeed it was a highly customized version of Allscripts that got the boot in favor of Epic’s ambulatory EHR. In a twist of irony though, CVS is now a member of Epic’s detested foe on the interop front, CommonWell.

Epic counters CommonWell by working with HealtheWay to stand-up the Carequality alliance. Details still extremely thin on this alliance with some vendors, like Greenway, a member of both CommonWell and Carequality (Is Greenway hedging bets?).

Caradigm has once again remade itself and its strategy, now calling itself a population health company. Much of their offering is the productization of Geisinger best practices. If you like what Geisinger has done to date on care coordination, Caradigm may be of interest.

Cerner’s Smart Registries, which was co-developed with Advocate and now live appears to be gaining traction with over half-dozen contracts signed so far. I like what they have done here and is much in alignment with our views on Clinician Network Management.

Orion Health continues to roll, in fact rolling much faster than I imagined having grown enterprise clients by 200% in 2013. Orion struggled in the past to move beyond the public HIE market but that issue is now in the rearview mirror. Their challenge though is to move even faster to build out functionality on top of their base infrastructure.

In closing, HIMSS is exhausting and I need fuel to move. My preferred fuel of choice is a double shot cappuccino. I sampled many on the show floor, thank you one and all for providing. But there is only one vendor that truly stands out in providing the absolutely best expresso – Agfa. So big thanks Agfa and your professional baristas for providing me the fuel for HIMSS. See you next year.

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HIMSS or Bust

CA or bustNext week is that proverbial event we all, in the HIT industry, look forward to with some trepidation - HIMSS’14. For an analyst firm such as ours HIMSS provides us a great opportunity to talk with end users, vendors of all stripes and just reconnect with like-minded folks. HIMSS is probably the only annual event that is a must attend to get a good perspective on where we are, as an industry, in advancing the adoption, deployment and use of HIT in the provider setting. That’s the upside.

There is a downside to HIMSS as well. Like most conferences of its type, HIMSS is a huge cheerleading event for all things HIT. In many ways, HIMSS is like the town of Lake Wobegon, where all of the children are above average. You will almost never hear anything called into question – no negativity here folks. Everything looks rosy and as one cruises the exhibit hall vendors pitch what they believe is the next big thing in healthcare.

HIMSS is the epitome of buzz-card bingo. Be forewarned ye vendors for which meetings between us have been scheduled for every time I hear “Big Data” I will yell out, BINGO! 

As Naveen pointed out in his recent post, HIMSS and the vendors therein must be approached with a healthy bit of skepticism. But as analysts, we must do our best to not let that skepticism slip into cynicism, for a cynic often paints a broad negative brush, losing their objectivity in the process and not see the good things that are happening as well.

HIMSS is also a fairly large event and I know that no matter how comfortable my shoes, no matter how much rest I get beforehand, by the time I take that flight back to Boston, I will be absolutely spent.

Despite these downsides, I am actually really excited about HIMSS this year and can’t wait to get there.

First and most importantly, this year’s event will be the first time that we have our entire team attending. Not only has this lessened my own meeting burden (last I counted, this year I only have 24 meetings in 3 days vs last year’s 35), it also gives us a great opportunity to interact with a far broader range of stakeholders in the HIT market with analysts focused on analytics, patient engagement, HIE, EHR and the biggest buzzword from last year, population health management (PHM).

I have always returned from HIMSS with new, invaluable contacts and an updated perspective on where the industry is truly at – not the picture the vendors paint, but the composite, the collage that is created from countless conversations over those three to four days of attendance. In having the Chilmark team there, I hope they will also walk away from HIMSS with a similarly refreshed rolodex and some nuanced thoughts on how their respective research domains will evolved in the years to come.

Secondly, we are seeing some interesting trends in the market as of late that need further validation. For example, today PHM is whatever a vendor decides it to be based on their own core competencies. Our conversations with healthcare organizations (HCOs) has not been all that insightful either as their PHM definitions are as disparate as the vendors. Where there is convergence though is on the need for strong analytics to drive PHM initiatives. So if analytics is the engine, what is the steering wheel, what are the tires, is HIE the gas tank, or the fueling station?

Looking to HIE, as we mentioned in late 2013, we see a need to redefine this sector. Where is the next opportunity for value realization for a provider once their HIE is live? Yes, we are looking beyond referrals! We have our own ideas, but we want to bounce those ideas off of others – HIMSS is a fabulously opportunity to do just that.

These are just a couple of my own thoughts. Our analysts; Cora for analytics, Naveen for patient engagement, Rob for EHR and Brian on HIE, all have their own questions they seek answers to. Hopefully, HIMSS will prove fruitful for us all in finding some of the answers we seek on the future trajectory of HIT, where the value is to be found and how together, we can all work towards a healthcare system that delivers ever higher quality care to all.

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Is the EHR Transformational?

trans

Image by Caras Ionut

Under HITECH, physicians and hospitals have adopted EHR technology in droves but are now coming to grips with the fact that their brand new EHR is not well-suited for the new world of value-based reimbursement (VBR).

For years, healthcare providers have lived in a fee for service (FFS) world where, much like a consultant, they were paid for services rendered on a specific fee schedule. Such services were paid for as episodic events with various codes for specific procedures. To insure physicians were paid for services rendered, EHRs were architected to record those episodic events. Sad thing is that today’s crop of EHRs do not even do a very good job of that. They are often slow, cumbersome, and create a lot of unnecessary disruption to a physician’s workflow.

While the healthcare sector by and large still lives in the FFS world today – the ground is rapidly shifting towards VBR. Healthcare organizations are now coming to grips with the fact that the shiny new EHR they have just deployed is ill-suited to support an organization’s shift to VBR. In conversations with more than a few HCO executives and some of their Board members there is a common refrain: Our EHR will not be up to the task that lies ahead.

That future task is the management of a patient population, not as simple episodic points of care, but as a population whose care will be managed over time. This has and will continue to give rise to a multitude of solutions that will wrap-around the EHR in much the same fashion that wrap-around apps are now becoming prevalent in other software sectors such as ERP. Much like the ERP market, we will see a similar focus on workflow and solutions delivered via cloud-based (SaaS) models.

So getting back to that question…

Is the EHR transformational to the delivery of care?

This is an important question for us here at Chilmark. We have always had as one of our core operating tenets to focus only on those technologies within the HIT sector that are truly transformational in contributing to the quality of care delivered. Certainly HIE technology contributes to that tenet and our recent extension into clinical analytics does as well. We have also, since our founding, been keenly interested in technology that supports the ability of a patient to be more engaged in the care process – an active participant of the care team, not one who is simply subjected to it. Each of these areas (we call them Domains) will see significant research from Chilmark analysts in the coming year.

We are adding a fourth domain in 2014…

Yes, we will focus on the EHR domain, which will be led by analyst, Rob Tholemeier. So why do we believe the EHR will be transformational? A couple of reasons:

  1. It is the single biggest IT software expense for almost all HCOs. It will not simply go away, (though over a third will be replaced in coming few years) and will become the core system clinicians use to record patient data. It will also remain the primary lens that clinicians use to review a patient’s medical status and clinical history.
  2. How, when and if EHR vendors open their systems to third party ISVs and migrate to a true ecosystem platform has the potential to be highly transformative. Cerner talks a good story on this, wanting to become the “Health OS” for the industry, but their progress towards opening their system up is still wanting.

It took awhile for Rob and a few clients to convince me that EHR’s have the potential to be transformational and to be honest, I’m still on the fence. For one thing, for EHRs to be transformational they have to be actually transform themselves into becoming a much more useful and less disruptive clinical tool. Rob thinks that will happen and sees lots of glimmers of hope. But part of running a company is having faith in those that work for you. Rob is an extremely bright analyst, is no newcomer to the software industry and to boot, is married to a physician. I’m looking forward to Rob’s contributions as he leads Chilmark’s fourth research domain, that the provence of the EHR.

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