What’s in Store for 2014?

zoltarThat time of year once again where we collectively look into our crystal ball, or throw the sticks or maybe even look at the coffee grinds dripping down the sides on our coffee cup to see what may be in the year to come. Making these predictions for the coming year is almost a rite of passage for any self-respecting analyst firm and what the heck, from our vantage point, we may have a slightly better view into the future than most.

So in keeping with some sense of tradition here at Chilmark Research, the following are our ten predictions for 2014, plus one (think of it like a baker’s dozen).

Meaningful Use (MU) stage two delay provides little relief to IT departments. Many breathed a sigh of relief when HHS announced that stage two timeline would be extended. Yet despite that extension, IT departments will remain overwhelmed in 2014 coping with a host of other initiatives, from ICD-10 to HIPAA compliance to preparing the organization for changing models of reimbursement and of course MU 2.

Best-of-breed solutions proliferate. Despite the desire to have as few as possible IT vendors and their solutions within an organization, department heads take it upon themselves to adopt new solutions as IT departments are not able to meet all the needs of the organization at this time, nor are EHR vendors capable of delivering new offerings in a timely manner. We anticipate analytics and care coordination to be high among list of adopted best-of-breed solutions. This will create its own host of problems several years hence.

Consolidation continues unabated in mid-market. Much to the concern of payers, large provider organizations will continue to purchase their smaller brethren to extend their reach and improve care coordination. Payers will fight back with lawsuits (monopolistic tendencies of providers) and by making their own acquisitions. Payers will be particularly attracted to the dual eligible market.

Bloom is off the rose as physician dissatisfaction with chosen EHR rises. OK, yes this is a no-brainer as we have been seeing discontent rise throughout 2013. But this discontent will escalate as smaller organizations increasingly realize that their EHR is ill-suited to address the needs of tomorrow in a value-based reimbursement world.

Limitations of deployed HIE becomes increasingly apparent. It’s one thing to put in an HIE infrastructure, quite another to embed HIE capabilities into clinician workflow, especially across a heterogeneous EHR community. Couple that with a growing realization among leading HCOs that to truly support clinicians at point of care, far more data is required to flow through the network and you end up with a lot of future head scratching as to where the real value realization will be derived from the HIE now in use.

Re-prioritization moves patient engagement to back burner. Despite the strong efforts of ONC/HHS to promote the concept of patient engagement, providers, no longer having the stage two gun to their head, will reset priorities on other, more pressing matters.

One third of stage one, MU-certified EHRs do not or choose not to certify for stage two. The HITECH Act created a false market for EHRs that led to the proliferation of vendors and their solutions. Unfortunately for many an ambulatory practice, their chosen EHR vendor will not have the resources to refine their product for stage two certification leaving smaller practices with the unenviable task of having to find a new vendor. Thankfully, a price war is anticipated as vendors look to build customer bases and subsequently valuations before inevitable acquisition.

Clinical analytics remains a hot, yet immature market. Leading HCOs are all clamoring for analytics to help run their operations and improve care delivery processes. But despite the high demand for such solutions, EHR vendors are still behind the curve in delivering such capabilities, the buyers still are not quite sure exactly what they want and rarely have the resources to begin asking the right questions. The best of breed vendors themselves struggle to keep up with market demand, leading to longer then anticipated deployment times.

Cloud-based EHRs become de facto standard for small, ambulatory practices. Pricing pressure will grow fierce in the ambulatory market and in an effort to lower cost of sales, shorten product lifecycles and improve customer service, ambulatory EHR vendors will move to cloud-based services for their solutions. Some push-back will occur over concerns of data governance and privacy. Physicians taking this path will need to review terms and conditions of such contracts carefully.

Payers increasingly become part of HIE fabric. In mid-2013, payers became increasingly involved in the HIE market partnering with leading providers in some communities to share data and improve care coordination. While providers have instinctively been reluctant to partner up with payers, the move to value-based contracts and the strong skills and critical data that payers can provide is forcing providers to re-evaluate their previous stance.

Healthcare.gov falls short – payers wring their hands. Healthcare.gov has far more sign-ups than detractors anticipated but falls short of administration goals, especially for the young and healthy. This leads to payers to continue wringing their hands over adverse selection of new enrollees and the likely higher risk profile as a result.

There you have it folks. Now let’s see how the year plays out and just how close these predictions are to reality come early 2015. Either way, never a dull moment in this market for the foreseeable future.

 

 

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Pushing the Envelope to HIE 2.0

Innovation driven by the effective use of IT has long catalyzed industry transformations – except in healthcare.

We all know people who have never waited in a teller line to cash a check. In the now unlikely event that systems fail, it would be a new experience for many to actually go to a teller to conduct a transaction with a bank.

Patients still get diagnosed and treated with or without electronic health records (EHRs), health information exchanges (HIEs), or any of the panoply of IT-based tools used by clinicians and their organizations. Goose quills wielded by the credentialed are the universal backup plan in healthcare. IT has thus far not been mission-critical the way it is now for other industries. We find this somewhat surprising as healthcare is such a knowledge intensive industry. Logic and reason would argue for wide-spread adoption and use of IT, but such has not been the case, that is until recently.

Inexorably, the healthcare industry is undergoing massive transformation and IT is seen as playing an absolutely pivotal role in the future effective and efficient delivery of healthcare. Among the multitude of IT vendors targeting healthcare, HIE vendors are pushing hard to make IT truly mission-critical.

We saw this trend coming several years ago when we initially launched our unparalleled, in-depth research on the HIE market, which continues with the release of the 2013 HIE Market Trends Report next week. In the last several years, HIE developers’ brainpower, as well as that of their customers, has focused on getting existing installations to function at adequate levels. in the last year or so, vendors have zeroed in on improving deployment timeframes to decrease time to value. While this is a laudable goal, its end result has been an actual decline in innovation in the HIE market – a key finding in our 2013 HIE report. It shows that 2012 was most notable for a pause in innovation, even among the strongest vendors.

Future of HIE Hinges on Reimbursement, Which Remains Uncertain
The healthcare market is shifting faster than HIE vendors, partially because two things are happening at once. Stage 2 meaningful use will go into effect in 2014, causing (healthcare organizations) HCOs to seek interoperability solutions in large numbers. An even more significant driver for interoperability solutions is the ongoing conversion to value-based reimbursement across the healthcare sector. This transformation, with its ever-mutating timetable, radiates uncertainty.

For example, in December, one HIE vendor executive told us he believed the strategic imperative for larger HCOs to connect to their affiliates had been overstated. He and his colleagues saw the shift to value-based care as a process that would unfold over many years and the company planned to help its customers connect to affiliates as fee-for-value slowly became a reality. By late May, the same vendor had executed an about-face and – like every vendor in the report – had gone all-in on supporting new models of care delivery and reimbursement – right now.

Fast forward to two weeks ago and we see data indicating that providers are considering bailing out of the Pioneer ACO program for reasons that are still obscure. Last week UnitedHealth Group predicted its accountable care business will more than double in the next few years from its current $20 billion base. You can’t blame HIE vendors for feeling whipsawed.

Vendors Embrace Care Coordination, Or Exit Stage Left
While the pace of transformation to value-based reimbursement keeps everyone guessing, the momentum is clearly away from fee-for-service. Every vendor interviewed and profiled in the HIE report has plans to provide better support for care coordination so that HCOs and clinicians can band together to maximize payments and care quality while minimizing penalties. Yet, nearly all vendors have a slightly different take on how to enable such capabilities.

Some are focusing on specific clinical processes like referrals or cross-enterprise medications reconciliation. Others are focusing on knitting together HCOs, clinicians, and patients with robust notification services embedded in the diverse EHRs and devices found in connected care communities. But the key word here is “plans.” No HIE vendor is currently able to meet the demands of this transformation in the industry – whatever its eventual pace. We dispute the naysayers who insist you can’t get there from here, and believe the HIE vendors profiled in this report are pushing hard to get in front of this transformation, a transformation in HIE capabilities to a future state we have termed HIE 2.0.

Outlook for HIE 2.0
The main theme of this report is the evolution to what we call HIE 2.0. We introduce a revised maturity model that starts at messaging-based HIE 1.0 and ends at HIE 2.0 where multidisciplinary care teams working across organizations collaborate to care for patients and patient panels using HIE-enabled care planning tools and applications. While some will undoubtedly quibble with the specifics of this maturity model, it sets forth a clear path to an endpoint where HIE technology will begin to assume a more mission-critical role in care delivery.

To support this new maturity model, we have in-turn defined the capabilities that HIE vendors will need to enable in an HIE 2.0 solution suite. THis capabilities are outlined in the table below.

Messaging Rises to the Level of Its Incompetence
While messaging will be an integral part of HIEs until time itself wears out, messaging-based HIEs have gone as far as they will go from a use-case standpoint. There are still a lot of faxes, phones calls, and letters that messaging could replace, but the limitations of messaging as a way to support complex, multi-enterprise clinical workflows are obvious to nearly everyone in the industry. Messaging diehards persist but their numbers continue to dwindle.

In the future, messaging will be supplemented with more robust notification services built into HIE-enabled collaborative care plans that deliver the right information, in the right context, to the right clinicians at the right times, on the devices or in the clinical applications of their choice. Moreover, many of the advanced applications of HIE 2.0 will be built using query-based services that take more fulsome advantage of the longitudinal patient record. A caution here is that Stage 2 meaningful use requires the use of Direct Secure Messaging protocols for certain transactions. This is not only driving strong demand from HCOs but also causing HIE and EHR vendors to include Direct-based services in their product plans. For reasons detailed in the report, this technological detour into messaging is a dead-end.

Lower Rankings Yet Reason for Optimism
For readers familiar with our past HIE Reports, we must mention that all vendor rankings are lower this year. This reflects the need to adjust the ranking criteria to reflect increasing expectations of HCOs and changing market requirements. HCOs need more from their HIEs than ever before – more functionality, more use cases and better reliability, availability and servicability. No vendor is remotely close to being able to assemble an HIE 2.0 solution right now. But many vendors are pushing hard and we expect the best to begin rolling out HIE 2.0 products by the middle of 2014

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ACO Here, ACO There, ACO, ACO Everywhere & Vendor Response

In less than two years we have gone from Accountable Care Organization (ACO) as a concept, to ACO as a new model of care delivery. With the January announcement that there were 106 more added to the Medicare ACO program, we now have 254 ACOs nationwide. David Muhlestein of Leavitt Partners has done some of his own research and puts the total number of ACO-like entities at over 400. And let’s not forget that commercial insurers are putting forth their own contracts with providers to set-up similar accountable delivery systems where there is some element of gain and risk sharing with providers.

Now it is one thing to say you have signed on to become an ACO and quite another to actually execute on the contract. Among the numerous challenges that an ACO model presents, is the need for more sophisticated IT systems that will support distributed care management across a diverse care team that extends from the primary care physician, to the specialists, to the care manager, the patient and others. EHRs today will simply not get you there.

Today, there is no such out of the box solution from any one vendor that will enable an ACO model. But there are several vendors positioning themselves to be that one stop shop to enable your ACO strategy.

Following are some vignettes of several vendors looking to enable an ACO strategy and what they have on offer. (Note: This is our proverbial toe-in-the-water as we’ll be doing a comprehensive report on this market later this year)

Aetna: A commercial payer, Aetna is looking for new high-growth revenue opportunities and has targeted healthcare IT. Shortly after acquiring leading HIE vendor Medicity, and soon after leading mHealth App iTriage the company announced its ACO-enablement suite that combines the two above with analytics/managed care solution Active Health.
Strengths: Strong HIE brand, good consumer/patient engagement tools
Weakness: Predictive analytics and care management tools are not as competitive

CareEvolution: A privately owned HIE targeting the private, enterprise market, the company has built its own analytics engine, Galileo. Galileo provides deep dive capabilities into clinical, operational and claims data contained within a given network of providers.
Strengths: State of art HIE solution, good analytics capabilities
Weaknesses: Consumer/patient engagement tools are almost non-existent, low recognition in market

Cerner: Cerner’s HealtheIntent is part of the company’s broader strategy to move beyond being an IT company to becoming a health company. Like most EHR companies, ability to move as fast as market requirements is a challenge.
Strengths: Leading EHR, strong brand, leading visionary among EHR companies, has a good HIE solution, has broad suite of consumer engagement tools
Weaknesses: Analytics is lagging, resources to respond quickly is a challenge, distributed care management tools still work in progress

Epic: Company has one objective, rule all and do so through a highly proprietary and closed model. With Epic Everywhere, their HIE solution for Epic sites, company is able to provide exchange across entities as long as they are using Epic. Recently signed deal with Surescripts to allow exchange with other EHRs. Epic’s MyChart is the leading patient portal in the market.
Strengths: Growing dominance in market, solution suite is tightly integrated from ambulatory to acute care settings, patient portal is widely adopted
Weaknesses: Epic continues to follow a dated model of highly controlled, closed system that while providing high integrity, will ultimately yield a lumbering dinosaur – think Wang circa 1983

RelayHealth: Part of McKesson, RelayHealth has always been a catchall for various acquisitions that McKesson could not find an appropriate home for. A major reorg occurred a couple of weeks ago that will reposition RelayHealth as McKesson’s ACO-enablement suite.
Strengths: Strong consumer/patient engagement tools, a leading HIE solution in the enterprise market and with the reorg, the addition of new assets including the recently acquired analytics solution, MedVentive
Weaknesses: Still does not have a good story to tell around distributed care management, how MedVentive will be folded in remains to be seen.

This is by no means an exhaustive list of those HIT companies looking to offer an ACO-enablement solution suite, but simply meant to provide some perspective on what is currently on offer in the market.

As we prepare to head to HIMSS a week from Saturday, on the top of our list of things we wish to learn more about is exactly how companies such as those listed above and others not listed are meeting the current and future needs of the 400+ ACOs across the country and more importantly, how they intend to become the leaders in this rapidly developing field.

Thanks to KramesStayWell.com for the image

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2013 – A Year of Surprises

In the blink of an eye, a New Year has appeared and with it the need to look into our crystal ball (or is it a magic 8 ball) to make our annual predictions for the healthcare IT sector. Personally, I find this to be one of the more interesting and seriously fun parts of being an analyst.

Be forewarned, we’ve seen enough mealy-mouth, water-downed predictions as of late that simply state the obvious to last a lifetime. So let’s crack a few eggs and make some stretch predictions shall we. (Note: each analyst has contributed a prediction or two, which is noted).

1) Structured Data will Remain Gold Standard in 2013 – Cora
Despite Watson and all the buzz about mining unstructured data, the only data that will be analyzed in volume in 2013 will remain structured data. Forget about the 80% of health data that is unstructured. Simple key-value matching will continue but robust, rigorous pattern matching, NLP, etc, will have to wait.

2) The Need to Address Data Quality Moves to Forefront - Cora
Data quality issues (DQ) will become increasingly visible as more providers wonder why their clinical data is such garbage. Providers will be shocked they need to invest in DQ specialists/departments/processes (along with the security to support them).

3) Many ACOs Come to an “OMG, What Have We Done” Moment - Rob
For the first half of the year healthcare organizations (HCOs) will be all buzzy implementing, on paper, gain-sharing ACOs. By Independence Day these same HCOs will begin figuring out it is hard and expensive to set up an ACO and that their back office financial management tools are inadequate. By the end of 2013, just two years away from Risk Assumption ACOs (RAACOs) HCOs will take one of three paths: 1) realize ACOs carry all the risk and more of HMOs and bow-out; or 2) scramble to purchase and implement complex financial management software; or 3) cash-out and sell themselves to a payer.

4) Several HIE Vendors Pack Bags & Leave – John
Virtually all of the federal funds distributed to States to stand-up their statewide HIEs has been allocated. Without that federal largess we will begin seeing some vendors exit the HIE market. Who will they be? Think large companies with lots of brand equity and close ties to lobbyists but with only modest healthcare experience. Those vendors that remain must now contend with upping their value proposition beyond simple information  exchange (Direct Secure Messaging will take over that task). Some of the weaker HIE players with limited resources will be looking for a buyer.

5) HIE Market Growth Begins to Slow -John
Over the last several years the HIE market has been growing at a blistering pace well in excess of 30%. That growth will begin to taper off ever so slightly in 2013, say 18-22% CAGR as all who have adopted a solution continue down the arduous path deployment and on-ramping ambulatory providers to extract value from their HIE platform.

6) Despite Strong Growth in Direct Secure Messaging (DSM), Fax Isn’t Dead Yet - Brian
Volume growth in use of DSM sent via health information service providers (HISPs) in 2013 will exceed 100% driven primarily by integrated delivery networks (IDNs) seeking efficiencies and referrals. Despite this impressive sounding growth, far less than 5% of all care transitions will use DSM by end of 2013. And don’t forget, numbers lie. Much will be reported in 2013 on the growth in absolute number of secure email IDs issued by HISPs, but the majority of those accounts will remain inactive.

7) EHR Source Code Subpoenaed -Rob
We will see our first EHR software source code subpoenaed in a malpractice lawsuit this year – the developer will be named as a co-defendant.

8) Chorus Grows Louder, Politicians Weigh-in and MU Program is Put in Stasis – John
HITECH & meaningful use (MU) have done their job, by and large as EHR adoption and use has swelled dramatically throughout the healthcare sector. But there is also a dark-side. Deploying software so that it is effectively used takes time. Unfortunately, the provisions of ARRA do not allow for time to be taken, which is leading to a rapid cram-down of EHRs and associated MU requirements on clinicians. Early signs of a backlash began appearing in 2012. That backlash will come into full bloom in 2013 leading to Congressional hearings and ultimately someone in the White House being forced to hit the pause button on MU requirements.

9) Quantified Self (QS) Crosses Over into Healthcare – Naveen
The peripheral, biometric, consumer market is starting to bloom. In addition to completely new products and companies, we will see development of more flexible platforms driven by a focus on open APIs. Employers will start to incentivize the QS movement as part of their benefits programs. There will also be a shift from wellness-only into light medical use of these devices for such things as physical therapy/rehabilitation programs, mood tracking, sleep tracking and simple pain reporting.

10) Providers Take Interest in Health & Wellness Solutions – John 3
Payers and employers are the traditional markets for health and wellness solutions. But in 2013, those healthcare organizations (HCOs) that are moving towards capitated care models will markedly step up their interest in and adoption of these solutions. This will also result in new hires (health coaches, nutritionists, etc.) as clinicians balk at taking on added responsibility.

11) Emerging Conflicts Over Patient Generated Health Data - Cora
Conflicts will emerge between EHR data and user-generated health data.  Early adopting QS-type patients (see prediction 10) will be bringing in their mobile-app-generated data to their doctors. Majority of doctor(s) will declare that the data doesn’t match up to their records and will not accept it. Resulting conflicts over how/if to get this data into the medical record will ensue.

12) Patient Experience Begins Being Factored In to Treatment – John 3
With increasing attention on patient/customer satisfaction and need to improve adherence to treatment plans, innovative HCOs will begin adopting mHealth solutions that enable patients to track, in real-time, their treatment experience. Treatment plans will be modified “on-the-fly” based on these “experiences” to improve adherence.

Of course there were many other predictions that we mulled over that ultimately landed on the cutting room floor. What remains are predictions that we felt will create the greatest disturbances or ripples in the industry. Predictions that are generally not all that obvious or maybe it is just that there are not many who wish to state such in writing (we’re not shy).

Whatever the case may be, these are our predictions. we’ll stick by them unless someone has some incredibly brilliant argument as to why we have it completely wrong (that’s what comments are for).

So have at it everyone, are we on target, or will we completely miss the mark in 2013?

 

 

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Cerner Takes a Road Less Traveled

Cerner is embarking on a journey of transformation. That transformation, if successful, will culminate in Cerner becoming more than a health IT company to becoming a health company. They’ve tested much of this strategy internally with onsite campus clinics, health and wellness challenges, the creation of rich consumer/patient engagement tools, heck, they have even created their own third party administrator (TPA) as Cerner is self-insured. The company wishes to take these lessons learned, these solutions that have been developed, to transform their company into a health company to address not only the patient experience in a clinical setting, but the patient/consumer health experience throughout the community.

This is all a part of Cerner’s Healthe Intent strategy, a strategy we received a deep dive in during our recent attendance to the Cerner User Conference in early October. Healthe Intent is a big, grand, bold vision in an industry where there seems to be a dearth of such visions. Whether or not Cerner is successful, Healthe Intent certainly has its fair share of challenges, rests more with Cerner than any other outside force. Continue reading

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A Layer Above it All: Healtheway’s Value Prop

Now that NwHIN has been spun-out into the public-private entity Healtheway one has to wonder exactly what value they can deliver to market that will sustain them as they attempt to ween themselves from the federal spigot. Healtheway has no lack of challenges ahead but they intend to target one area that presents an interesting opportunity. Question is: Are they too early to market?

During a recent webinar, Healtheway’s interim executive director, Mariann Yeager, outlined the origin of Healtheway, the apparent traction Healtheway is gaining in the market and what their plan is going forward.

Healtheway got its start via funding from a variety of federal sources, all of whom who were looking for a solution to address their unique problems. For the Social Security Administration it was the need for a nationwide network to facilitate processing of disability claims. For the VA and lesser extent DoD it was the need to enable military personnel to receive care in the public sector and insure that their records were complete. Health & Human Services led most of the development effort leading to NHIN CONNECT, a less than stellar technology platform built by beltway bandits (who else), that hit the market with a thud.

One of the things the feds did get right though is a clear and comprehensive policy for data use sharing across disparate entities. The DURSA (data use and reciprocal support agreement) remains one of the key differentiators in Healtheway’s portfolio. Healtheway’s intent is to leverage the DURSA as the “unifying trust framework” and build upon that with a common set of technical exchange requirements (standards) to facilitate exchange with eHealth Exchange (this replaces the former NwHIN Exchange). Healtheway has also enlisted CCHIT to perform testing of technology vendors solutions to insure they comply with the technical exchange requirements that will allow for HIE-to-HIE connectivity.

That last sentence is the kicker. Healtheway and its eHealth Exchange is not intended to be an uber-national HIE but a set of policies and technical specs that will allow HIEs, be they public or private, to share information across institutional boundaries. Therefore, Healtheway will not get into the current rat’s nest of looking to on-board the multitude of ambulatory EHRs into an HIE but sit one level above that facilitating exchange across HIEs. This is something that many regional and state HIE programs are looking to facilitate, thus it is not surprising to see that a significant proportion of Healtheway members come from such organizations.

There will be a need for this functionality at some future point in time, but not today and likely not tomorrow either. Three key challenges stand in their way:

1) Getting buy-in from healthcare organizations and technology vendors. While membership has indeed grown, Healtheway is offering membership at a discount (likely a loss) to gain traction and unfortunately they still do not have significant traction as many brand names in healthcare are missing.

2) A tainted history with more than its share of missteps. Slowly coming out from under the wing of federal politics as a pseudo independent organization (Board still has plenty of government influence), Healtheway may begin to act more as an independent organization, more like a business. Unfortunately, due to a likely continual need for government funding that independence will likely be limited.

3) The HIE market, both from a technology, policy and implementation/deployment perspective is still primitive. The broad market is simply nowhere near the point of needing what Healtheway intends to offer for a few years to come, at least as it pertains to the exchange of clinical data. Good idea, too early to market. That being said, tehre will be value on the transaction side, e.g., SSA and disability claims processing.

Hopefully the future will prove us wrong on this one and Healtheway will indeed prosper and contribute to the maturity of the HIE market. But our advice, don’t bet on this horse just yet, give them six months than take a second look.

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