Supreme Court Waves Off Software Industry: Bad for HIT

supremeHealthcare depends on new and innovative ideas — often constructed with software. EHRs, HIEs, CPOE, clinical content, medical devices, and numerous medical products are completely or mostly built with software. National governments have helped stimulate innovation over the centuries through the patent system. Inventors devise new, useful and non-obvious things, tell the world about it in a patent application, and receive patents — mini-monopolies that they can then monetize. In exchange for monopoly rents, society receives full disclosure about the invention which encourages other inventors to build on or around the original inventor’s idea. The process nourishes a virtuous circle of innovation, or so the thinking goes.

Whether software-based innovation should be patentable has always been a difficult question. Software does not mesh well with a patent system that was structured for machines. Software patents have been around since the 1970s, but it has never been entirely clear what makes a given software program patentable. A recent Supreme Court decision did nothing to resolve this issue.

Courts have long said that “mathematical algorithms” like “laws of nature” are not patentable. Software is most often nothing more than that — mathematical algorithms translated into code. Yet the number of software patents has exploded in the last decade or so. The problem was exacerbated by changes to the federal court system that resulted in a general philosophy that any patent is better than no patent. The judges and lawyers that run the entire system are patent lawyers — all of whom believe that patents rightly enshrine humanity’s greatest intellectual achievements. Patent trolls, euphemistically referred to as “patent assertion entities”, entered the picture and ratcheted up the speculative fever in what was once a sleepy system of transfers and licensing between big companies. The bottom line is that there is accumulating evidence that software patents do not encourage innovation and may in fact be stifling it.

HIT companies use the patent system as the accompanying data from the US Patent and Trademark Office (USPTO) show. While they do not appear to be big users of the system, other players (e.g., IBM, MSFT, GOOG, ORCL) in the wider economy are. Patent trolls hold patents that HIT companies might inadvertently infringe. Sadly, as in other industry sectors, the majority of HIT companies are resigned to the idea that they might receive cease and desist letters at any time. This is an untenable situation for an industry like HIT in which companies need the flexibility and freedom to innovate.

Quick and Dirty Patent Database Search of HIT Companies

HIT Company

# Patents Found

Sample Patent





Managing patient bed assignments and bed occupancy in a health care facility




Automated configuration of medical practice management systems




Readmission risk assessment

Eclipsys (now part of Allscripts)



Enterprise-wide hospital bed management dashboard system




Interactive system for patient access to electronic medical records




Method for renewing medical prescriptions




System and method for analyzing, collecting and tracking patient data across a vast patient population




Record locator service

Two weeks ago the US Supreme Court issued a widely anticipated opinion on software patentability. Effectively, the Court decided not to decide whether software really is or should be patentable. The Court could well have decided that software is not patentable. Alternatively, it could have spelled out conditions under which software is patentable.

It took neither approach.

Instead, by 9-0 it offered up a brief lesson on the Court’s prior opinions about what is patentable generally, said that the software patent in question was invalid because it was merely an algorithm, and called it a day. The industry is left with the queasy idea that while software patents are everywhere in force, they are valid – unless they are invalid. Uncertainty about software patentability adds to the unpredictability of the licensing and litigation minefield and just exacerbating the problem.

Yet, software inventions should be afforded some protection. After all, software animates innovation. Just because we have a patent system that was designed for physical products doesn’t mean that software inventors be denied the rewards that other inventors have enjoyed for centuries. More importantly, why should society be denied the potential for turbo-charged innovation that the patent system did support once? So far, the federal courts show no ability or inclination to distinguish between good and bad software patents.

Sadly, software patents — under the current system — are not a good idea. It would take a new Supreme Court opinion to say decisively that software patents are indeed patentable and provide clear guidelines – or better yet, instruct the federal government to create clear defensible language that supports software patents. Conversely, Congress could act to refine and clarify the conditions of patentability for software. The latter is unlikely to happen as Congress is beholden to big technology companies, patent trolls and patent lawyers all of whom benefit from the status quo. And the Supreme Court has stated that they will not tread here as well.

We are stuck in a morass.

Without a strong, defensible software patenting system, the software industry, especially for small to mid-size companies, is threatened by questionable litigation that serve no purpose but to extract dubious monopoly rents. Unfortunately, we in the HIT sector who are working to improve the quality of care delivered are under this same threat.


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.


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.


Why ACA Just Doesn’t Add Up for the ‘Young Invincibles’

invincibleOver the past several months, we have been hearing over and over again how important the ‘young invincible’ demographic is for the viability of the ACA. Those young invincibles lower overall medical loss ratios (MLRs) for the population being served. The thought is, without these healthy young folks, how else are insurance companies going to be able offer affordable coverage to the older and sicker populations that were previously uninsured?

However, attracting this demographic to sign-up for health insurance on the health insurance exchanges (HIX) has been challenging. President Obama even went as far as being a guest on Zach Galifianakis’ parody talk show, Between Two Ferns to get the message out to the youth demographic that basically it is their civic duty to get health insurance. To a certain degree, this final push to engage the 18-34 demographic ended up being a modest success, with final enrollment numbers among this group representing around 28% of total enrollees after hovering at about 25% for the majority of the enrollment period.

Some view this as a success. Others are less optimistic. After hearing that a number of insurance companies are planning double-digit rate hikes, it’s pretty obvious that the success is very localized, and even more likely, merely political ‘spin’ (nothing you hear about ACA successes/failures are particularly unbiased). I have personally struggled a great deal with the decision about whether or not to obtain health insurance under the new individual mandate. My reasons are plentiful.

First and foremost, the economics just don’t add up. I have been uninsured in the state of Massachusetts for about four years now, ever since I decided to leave corporate life and pursue freelance work while starting a company. During this interval, I have had my fair share of sicknesses. This past winter was particularly frustrating as I contracted just about every cold that made the circuit. I also fractured my fibula backpacking and developed cellulitis in my hand after my dog bit me in the midst of an epic battle with another dog. These two incidents were my only real need for medical treatment during that four-year period and cumulatively cost about $2000 to treat. At this point, that’s an average spend of $500/year not including things like Advil or throat lozenges. There are plenty of Gold plans on the MA exchange for my age demographic that cost almost that amount alone for their monthly premium.

Bad Economics

Let’s now do a quick breakdown on why insurance at the rates available on the exchanges just don’t add up for the young invincibles. According to the Bureau of Labor Statistics (BLS), the median weekly pay for the 25-34 demographic for the first quarter of 2014 was $727 before taxes. Assuming this is a salaried rate (big assumption), this works out to about $37800 in annual wages. At a 20% tax rate, this works out to be closer to $30,000/year net income – which, mind you, is a wage that does not qualify for federal subsidies so those will be left out of our calculations.

The mean for basic annual living expenses for 25-34 year olds are as follow:

  • Housing (rentals only, includes utilities): $10,000
  • Transportation (not including vehicle purchases): $5,000
  • Food: $6,500

So, after accounting for basic living expenses, 25-34 year olds have only $8500 of net income left. BLS reports that pensions and social security account for an additional $5000 and apparel accounts for $2000. While not essential, these are still important to keep in mind as additional expenses that are incurred during the course of a fiscal year. So the average 25-34 year old is left with approximately $2,000-$8,500 in net income, with 15.7% of this population ‘debt distressed.’ I won’t even begin to go into college student loan paybacks…

Based on nationally reported exchange numbers, the rates for the cheapest available Bronze plans – which provide very limited preventive care coverage and $2000 deductibles that need to be met before any benefits kick in – had monthly premiums that ranged from $114-$286 for a 27 year-old non-smoker applying for coverage, with an average of $163. Annually that works out to be $1956 (6.5% of net earnings) to pay for something that doesn’t actually provide any medical coverage until patients have spent an additional $2000 to reach their deductible (figure 1).

ACA Post figure

Figure 1: Basic insurance adds approximately 6.5% to annual expenses for the ‘young invincible’ market for practically no coverage (high deductible of $2000). Meeting the deductible drives that percentage much higher, at 13.2%.

Now, anyone paying attention knows that there is a slight misdirection in that figure – there are bound to be some accrued health expenses across this population. According to the Healthcare Cost Institute, the average annual spend on healthcare per patient in the 26-44 yrs old demographic was $4123 in 2012, only $753 of which was paid out of pocket by consumers. This cumulative expense is shockingly close to the $3956 that would need to be paid by a consumer to even begin experiencing benefits under a bronze plan, and therefore there is not really any benefit to purchasing insurance, except for catastrophic events.

Why Bother?

Knowing full well that exchanges need my health to offset the expenses of chronically ill patients, the elderly, and everyone else that is less healthy than me, it seems a bit absurd that I should spend my money on a plan that would barely provide any coverage unless I become a high-utilizer (a whole different problem whereby the structure of our health system incentivizes poor health decisions).

So where is the incentive? Why would I want to bother? Right now the only real incentive is the disincentive tax penalty, which is a paltry $95 this year, or 1% of income.

Admittedly, my peers do tend to view themselves as pretty indestructible. Most of us live healthy lives, and accidents are rare. But accidents do happen, and unforeseen illnesses occur regularly, so insurance is certainly important to have long term. As has been proven over and over again in many different contexts though, spending time or money on something that gives no immediate gratification is a difficult sell. Add in that HIXs were plagued by bad software and horrible user experiences, and it comes as no surprise that the final enrollment numbers do not reflect the national demographics, where 40% of the uninsured population is 18-34.

Hopefully these issues are addressed going forward, and the administration, whoever it happens to be, thinks a little harder about how to motivate the youth to enroll. Current tactics are entertaining and gain exposure, and the HIXs are a great start to making costs and coverage options more transparent, but with networks narrowing and proposed rate hikes in the double digits, something is going to need to change or this part of the ‘grand experiment’ will fail before it gets a chance to take off.


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.


Three Big Questions for Stage 3 & Patient Engagement

big waveFor many, the delay of Stage 3 of the Meaningful Use program evoked a collective sigh of relief, providing a much-needed extra year to focus on the challenging requirements for patient engagement and interoperability. As distant as 2017 may seem however, the preparation for Stage 3 is already underway in Washington; the vendor community and providers will soon be scrambling to follow suit.

Barring further delays, the timeline is as follows: This fall CMS will release the notice of proposed rulemaking (NPRM) for Stage 3 and the corresponding NPRM for the Standards and Certification Criteria. The former is the programmatic framework for what to expect – measures, percentages, reporting requirements, etc., while the latter is the technical product guidelines for software vendors to follow in order to receive ONC certification as a Stage 3 compliant solution that will enable their customers, if properly implemented and used, to collect those sought-after incentive dollars. The final rule is expected to drop sometime in Q1-Q2 of 2015 – just one year away.

But that doesn’t mean there’s a year to put off thinking about it. In a few short weeks, the Health IT Policy Committee (HITPC) is set to deliver an official recommendation on the topic of Stage 3’s patient engagement requirements to the ONC. From all indications, it appears this super-group of wonks will press for inclusion of patient-generated health data (PGHD – yet another #ONCronym for your twitter streams) into electronic health record systems. The technical experts have defined PGHD as follows:

“health-related data—including health history, symptoms, biometric data, treatment history, lifestyle choices, and other information—created, recorded, gathered, or inferred by or from patients or their designees (i.e., care partners or those who assist them) to help address a health concern.”

At first glance, this is a no-brainer, as we’ve been hearing the clarion calls for such inputs for the better part of the last decade. 60 percent of US adults claim to track their weight, diet, or exercise routine, according to the Pew Research Center’s data. Evidence for the positive impact of this data on quality, satisfaction, and in some cases cost is thin but growing.

But as we are learning through the first two stages of this program as well as the early headaches of ACA rollout, reams of sophisticated studies floated down from the ivory tower do not effective policies make. Despite the need for PGHD, when it is wonkified, ONCified, and held to the temple of the nation’s delivery system, there may be a small disaster in waiting. Below are three questions Chilmark is keenly tracking throughout the remainder of 2014:

What Constitutes PGHD?
The language used thus far raises much speculation about what exactly this inclusion will mean when it hits the front lines. The definition provides only a general description, leaving a lot of possibility for interpretation and application down the road. For many, PGHD evokes the notion of datastreams from the vast array of health and wellness devices such as fitbits and jawbones, Bluetooth medical devices, and of course, tracking apps. Yet the definition above makes PGHD seem to carry more of an health risk assessment (HRA)-like utility, where patients fill out a survey and have it sent to their doctors in advance. Yet another angle is the notion of patient-reported outcomes: clinically oriented inputs from patients with regard to their physical and psychosocial health status. Outfits like ATA, HIMSS and others are lobbying for full inclusion of patient-monitoring and home-health data.

Each of these use cases brings with it a unique set of programmatic and technical components. A popular example as of late is with biometric data: If a panel of diabetic patients are all given Bluetooth glucometers that input into respective EHRs, then what – Will someone monitor each of them? Or are HCOs expected to fit those data into an algorithm that alerts and ultimately predicts any aberrance? This has been referred to as providing doctors with ‘insight’ rather than raw data. That sounds snazzy, but can we realistically mandate the creation of insight?

Collecting data such as patient allergies or side effects appears a simpler use case on paper. Yet HITPC is appearing to use everyone’s favorite A+ students – IDN’s like Geisinger, Kaiser Permanente, and Group Health Cooperative among others as the basis for their recommendation. As one example, the report lauds GHC’s eHRA model, which is based on a shared EHR and shared clinical staff for data review. As nicely as that may work, Chilmark is skeptical that it’s reproducible in an average clinical setting. Generally, the innovators in the digital engagement space have been the insurers, not the providers. We understand the need to look at innovators in order to prescribe a path for the rest of the country, but in talking to regular folks at urban hospitals, community clinics, mid-sized IPAs –it’s more likely that fluid data is a byproduct of integrated systems, not the other way around.

How Will the Market Respond?
Despite its unpopularity in the C-suite, meaningful use has forced EHR vendors to pull their heads out of the sand and advance their product features. In addition to giving providers a break, part of the reason behind the Stage 3 delay was for vendors’ benefit: “[to provide] ample time for developers to create and distribute certified EHR technology…and incorporate lessons learned about usability and customization.” The Standards and Certification Criteria 2017 edition will play a big role in the next lurch forward, and one can be sure that those new mandated features will be all the rage at HIMSS 2015.

Yet at the broadest level, the evolution of EHRs (billing >> administration >> clinical) appears to be stalling. In exploring the patient engagement market and the to-date limited functionality of tethered patient portals despite Stage 2’s requirements one thing has become clear: EHR vendors will simply not just add new features for the sake of their customers (forget about patients). With new PGHD functionality emerging, we expect new companies to step up to the plate and seek modular ONC-ATCB certification

An example already underway is 3rd party data integration. Over the last few years, device manufacturers, startups, and third parties started seeing the value in injecting their data into EHRs. The emergence of middleware companies who provide integration as a service, such as Nanthealth, Corepoint, and Validic, will continue as PGHD requirements develop over the coming months. Similar companies will start (and already are) filling the void for HRA functionality, portal requirements, patient communication, and so on. We expect that this will only exacerbate the headache faced by CIOs & CMIOs with a long list of purchasing options. Startups take note: It should also set off a shopping spree by EHR companies and other enterprise vendors looking to buy rather than build. Allscripts acquisition last year of Jardogs is one such example.

Will Providers be Ready?
In a word, no. The inclusion of PGHD brings with it an avalanche of procedural and programmatic preparation: data review and quality assurance, governance models and new workflows, the prickly issue of data ownership, staff time and training, liability concerns, HIPAA extension of coverage, ever-increasing insurer coordination, clinician accountability, and of course, patient consent, onboarding, and marketing. With the last one, keep in mind that we now live in the post-Snowden era…

Of course, without details of the required measures, further hand-wringing is unwarranted at this point. But suffice to say there’s a small storm-a-comin.’ As the definitions, rules, and standards of patient-generated health data emerge, we look forward to what promises to be a rich commentary and response to the NPRM amidst the broader discussion in the health IT community throughout 2014.


Whose Data is it Anyway?

privacyA common and somewhat unique aspect to EHR vendor contracts is that the EHR vendor lays claim to the data entered into their system. Rob and I, who co-authored this post have worked in many industries as analysts. Nowhere, in our collective experience, have we seen such a thing. Manufacturers, retailers, financial institutions, etc. would never think of relinquishing their data to their enterprise software vendor of choice.

It confounds us as to why healthcare organizations let their vendors of choice get away with this and frankly, in this day of increasing concerns about patient privacy, why is this practice allowed in the first place?

The Office of the National Coordinator for Health Information Technology (ONC) released a report this summer defining EHR contract terms and lending some advice on what should and should not be in your EHR vendor’s contract.

The ONC recommendations are good but incomplete and come from a legal perspective.

As we approach the 3-5 year anniversary of the beginning of the upsurge in EHR purchasing via the HITECH Act, cracks are beginning to show. Roughly a third of healthcare organizations are now looking to replace their EHR. To assist HCO clients we wrote an article published in our recent October Monthly Update for CAS clients expanding on some of the points made by the ONC, and adding a few more critical considerations for HCOs trying to lower EHR costs and reduce risk.

The one item in many EHR contracts that is most troubling is the notion the patient data HCOs enter into their EHR is becomes the property in whole, or in-part, of the EHR vendor.

It’s Your Data Act Like it
Prior to the internet-age the concept that any data input into software either on the desktop, on-premise or in the cloud (AKA hosted or time sharing) was not owned entirely by the users was unheard of. But with the emergence of search engines and social media, the rights to data have slowly eroded away from the user in favor of the software/service provider. Facebook is notorious for making subtle changes to its data privacy agreements that raise the ire of privacy rights advocates.

Of course this is not a good situation when we are talking about healthcare, a sector that collects the most personal data one may own. EHR purchasers need to take a hard detailed look at their software agreements to get a clear picture of what rights to data are being transferred to the software vendors and whether or not that is in the best interests of the HCO and the community it serves..

Our recommendation: Do not let EHR vendor have any rights to the data – Period!

The second data ownership challenge to be very careful of is the increasing incorporation of patient generated health data into the healthcare delivery system. We project an explosion in the use of biometric devices, be it consumer purchased or HCO supplied, to monitor the health of patients outside of the exam room. Much of this data will find its way into the EHR. Exactly who owns this data and what rights each party has is still debatable. It is critical that before HCOs accept user data they work out user data ownership processes, procedures, and rights.

If the EHR vendor has retained some rights to data the patients need to be informed and have consented to this sharing agreement. In our experience this is rarely if ever explicitly stated. HCOs need to be careful here as this could become a public relations disaster.

We are not lawyers, we are offering our advice and experience to HCO CEOs, CFOs and CIOs, from the perspective of business risk and economics. At Chilmark we have deep experience in best practices used in other industries with regards to data use and sharing agreements. We have also spent significant time reviewing the entire software purchasing lifecycle and culture, and are here to help HCOs in reviewing these contracts.

Addendum: Rob and I worked together on this post but our WordPress backend doesn’t like to do co-authored posts.