mHealth in the Enterprise Set to Explode

The rapid adoption of smartphones and now touch-screen tablets (e.g., iPad) by clinicians will trigger enormous growth in the use of mHealth Apps within healthcare enterprises, with the market for mHealth in the enterprise projected to reach $1.7B by end of year 2014.  Similar to the hockey stick growth for mobile shown in the slide by Morgan Stanley’s Mary Meeker in last week’s post, the mHealth App market will see a similar trajectory as healthcare enterprises strive not only to meet physician demands for mobile access to clinical information, but seek to improve workforce efficiencies in preparation of future healthcare and payment reform.

These findings and quite a bit more are part of Chilmark Research’s latest report that is being released today: mHealth in the Enterprise: Trends, Opportunities and Challenges. The report is the result of roughly three months of dedicated research by lead analyst Cora Sharma who has interviewed numerous leading adopters of mHealth Apps (Beth Israel Deaconess, Children’s Hospital Boston, UPMC and others) as well as both traditional HIT  vendors, best-of-breed mHealth vendors and consultants.

While this report has plenty of charts and figures providing details as to what mHealth App categories will see the strongest growth in the healthcare enterprise and just how big those specific App markets will get, one area that will reach saturation in the very near future is medical content. Companies such as Epocrates, Medscape and Skyscape have been providing this capability for a number of years to physicians and we peg current adoption and use north of 60%. By the end of 2013, this market will reach saturation. This may partially explain Epocrates’ acquisition move yesterday, picking up Modality for $13.8M. Modality will provide Epocrates with critical relationships to many health content publishers and further solidify and strengthen its position in this market. But of Modality’s some 140 iOS-based Apps, only half are heath and life sciences related. Might Modality provide Epocrates the opportunity to expand into new markets now that the health content market is reaching saturation?

But we digress as health content Apps are strictly physician-driven – they do not connect into the enterprise’s health information systems (HIS) and are of limited value to a healthcare enterprise. What is of value to an enterprise is providing physicians with immediate access to the information they need to deliver the highest quality of care in the most efficient manner. This report specifically targets those enterprise mHealth Apps that link into a healthcare enterprise’s HIS including EHR, CPOE, eRx, CDS and Charge Capture. Providing physicians mHealth Apps that will enable them to deliver higher quality at the point of care will rapidly become an important competitive differentiator as healthcare enterprises look towards not only meeting meaningful use requirements and structuring themselves for payment reform, but also improve internal workflow leading to higher efficiencies and more competitive positioning in the broader market.

To obtain a copy of this report head over to the Chilmark Research Store.

ADDENDUM:
Have received a few private comments requesting Table of Contents, List of Figures, Table etc., which is now provided below:

Table of Contents

  • Executive Summary
  • Why mHealth in the Enterprise
  • Early Adoption Strategies and Trends
  • Initial mhealth Offerings a Mixed Bag
  • Barriers to mHealth App Adoption in the Enterprise
  • Proliferation of Devices and Macro Forces Promise Strong Growth
  • Conclusion and Recommendations
  • References
  • Appendix

Figures

  • Figure 1: Physician Adoption of mHealth Apps in the Enterprise, EOY 2010
  • Figure 2: mHealth Apps Market Diffusion EOY 2010
  • Figure 3: Physician Smartphone Adoption EOY 2010
  • Figure 4: Physician Smartphone and Content App Adoption
  • Figure 5: Worldwide Touchscreen Tablet Units Sales Forecast
  • Figure 6: Physician Touchscreen Tablet Adoption Forecast
  • Figure 7: mHealth Apps Market Size Forecast
  • Figure 8: mHealth Apps Market Diffusion Forecast

Tables

  • Table 1: Crucial Information Gathering Physician Usecases
  • Table 2: Meaningful Use Stage 1 and mHealth Apps
  • Table 3: Early Adopters of mHealth Apps
  • Table 4: Usability Comparison by App Category Smartphones vs. Touchscreen Tablets
  • Table 5: Architectural Deployment Tradeoffs: Benefits vs Costs
  • Table 6: Representative Sample of Current Vendor Offerings
  • Table 7: mHealth App Growth Forecast
  • Table 8: Vendor Recommendations
  • Table 9: Enterprise Recommendations

 

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“Chilmark were one of the first industry watchers to recognize the importance of population health and are still one of the most sophisticated in their apprecition of what is going to be needed to transform health and care.”

-Former SVP of PHM at Cerner

Ramping Up for MU Rules, CMS Launches New Site

Today, the Center for Medicare and Medicaid Services (CMS) launched a new site that is basically an everything you wanted to know about meaningful use, ARRA, the HITECH Act, certified EHRs, etc., but were afraid to ask.  This is a reasonable attempt by CMS to get as much information online, in one location, that addresses most of the nuances of the HITECH Act and its incentive programs for physician and hospital adoption of EHRs.  Unfortunately, like most government websites, or at least those that seem to emanate from HHS, it is a drab site that presents information in a way that your mid-90’s era web designer would be proud of.  (Note: inside sources state the problem rests with a chief web design honcho at HHS who is stuck on that old model much to the displeasure of others – oh well, that’s government.)

Needless to say, the site does provide a wealth of information, though you may have to dig to find what is most important to you.  The site may also become prone to being dated, so be careful and double check other sources for more current info.  For example, the section on certification of EHRs stated that certification rules will be released in “late spring/early summer” – well they are already out, having been released on June 18th.  Hopefully, HHS, CMS and ONC can work more closely going forward to insure that information on this new, and what may become an important site, is truly current.

In launching this site, CMS is trying to get ahead of the curve and likely onslaught of requests for information once the final meaningful use rules are released. While this website states that these rules will be released, again, “in late spring/early summer,” we are now placing our bets that these rules will be released at 4:55pm on July 3rd, unless of course someone in the administration decides to postpone such an announcement until the opportune moment comes along to generate some positive press for what is currently an embattled administration.

AllScripts+Eclipsys, Who Loses?

Today, leading ambulatory EHR vendor AllScripts announced that it will merge (it’s really acquire) with one of the larger acute care EHR vendors, Eclipsys creating one of the largest EHR vendors in the market with some 180,000 physicians using their solutions.  This acquisition is being driven not by ARRA and all the taxpayer dollars flowing into healthcare, but by healthcare reform and the trend towards bundled payments, patient centered medical home models and the move by hospital networks to become Accountable Care Organizations (ACOs). Large healthcare organizations will increasingly be looking to HIT vendors who can provide the full suite of solutions for both acute and ambulatory requirements. This merger is simply an acknowledgement of that need.  It will be interesting to see what impact this merger will have on other ambulatory EHRs, such as NextGen and eClinicalWorks.

Now there will be plenty of others writing about this merger and its implications to the market so rather than focus on the obvious issues regarding EHRs, rationalization of product portfolios, go to market, etc., Chilmark Research will look into one small and important piece:

What might this acquisition mean to these companies’ respective HIE partners, dbMotion and Medicity?

We’ve spoken to both HIE vendors and are on track to release our HIE Market Trends Report (includes in-depth profiles of the twenty leading HIE vendors in the market) by the end of June so we are uniquely positioned (at least we think so) to provide an educated assessment.

AllScripts+dbMotion:
In April 2009, AllScripts and dbMotion announced a go-to-market partnership wherein dbMotion would be AllScripts go to partner for all things HIE.  This partnership is both marketing and R&D with both companies working together to deliver what is called the AllScripts Community Record powered by dbMotion solution.  This partnership did not make a lot of sense to us as dbMotion is a fairly sophisticated solution that is more suitable for large IDNs and academic medical institutions like its US lighthouse customer, UPMC, which also happens to have a significant equity stake in dbMotion.  dbMotion is also not exactly an inexpensive solution.  So how does this fit in the ambulatory market that is the sweet spot for AllScripts?

Speaking to Peter McClennen, dbMotion’s North American President, Peter stated that he is both “excited and humbled” at the thought of this merger. Excited in the future prospects, humbled in its implications to the broader market. Peter went on to state that to date, the partnership has seen a number of market successes such as that at UMass Medical Center, and most recently the win at Thomas Jefferson University.  Today, AllScripts/dbMotion have about a half dozen customers that are leveraging the dbMotion suite to enable, as Peter put it, “actionable semantic interoperability” between an acute care facility and affiliated ambulatory practices.  What Peter means by actionable semantic interoperability is basically an ability to create an on-demand view of a patient record (drawing from all data sources in a dynamic fashion), which is quite similar to Microsoft’s Amalga platform.  This is an important factor which we’ll come back to later.

So getting back to the question: How does dbMotion fit in the ambulatory market that is the sweet spot for AllScripts?  Looking at those joint sales, large mothership institutions (UMass, Jefferson, etc.) are making the investments in dbMotion to more closely tie affiliated practices who are on AllScripts.  These large institutions have the need and the resources to make this happen.

Eclipsys+Medicity:
In June 2009, Eclipsys and Medicity likewise announced a a go-to-market partnership.  Unlike the AllScripts/dbMotion partnership, the Eclipsys/Medicity partnership is far deeper wherein Medicity is the underlying technology powering the Eclipsys’s branded HealthXchange.  This requires a deep level of technology integration between the two respective platforms.  It also requires a higher level of sales and marketing investment by Eclipsys as HealthXchange is on the price sheet that their sales force takes to market.  It’s no easy task to back-out of such a deep integration.

In speaking with Medicity’s CEO, Kipp Lassetter earlier today, Kipp stated that Eclipsys informed him that they remain “fully committed to the partnership.” Kipp went on to state that in addition to several wins to date, the partnership has a “number of deals in the works.”  As with the AllScripts/dbMotion partnership, the objectives are the same, help large IDNs and hospital networks better link acute to ambulatory.  HealthXchange is based more on Medicity’s MediTrust and layered in their some of their Novo Grid technology.

AllScripts+Eclipsys, Who Loses?
In any acquisition/merger there is a natural rationalization process, rationalization of staff, products and of course partnerships.  The combined entity will now have two HIE partners and some rationalization may occur with one HIE vendor remaining at the alter, while the other walks away with the groom.

In their investor slidedeck, AllScripts, on slide 22, clearly shows HealthXchange in the Eclipsys solution portfolio stack.  Looks like AllScripts certainly acknowledges the importance of HealthXchange, though it is curious that they have the solution under the columns of financial and administrative transactions and not clinical. Evenmore curious is that there is no mention of dbMotion and the AllScripts Community Record solution on this slide.

So does this mean dbMotion is the one that will be left standing alone at the alter?

Well, if anyone was left standing alone, it would likely be dbMotion, however, we do not believe this will happen for a couple of reasons:

First, though the relationship is barely a year old, AllScripts and dbMotion have benefited from landing a number of key wins, so why stop now?

Secondly, dbMotion has one of the more technologically advanced HIE solutions in the market today. It’s not cheap, but it does provide some pretty impressive capabilities that are not easily matched.  And remember what we said earlier, dbMotion is more akin to Microsoft’s Amalga than it is to the traditional HIE solutions in the market today, including Medicity’s solution suite. Thus, there may actually be more opportunities to create synergies between these two companies and their offerings.  The wildcard in this scenario is Microsoft’s partnership with Eclipsys wherein Eclipsys is now offering modular apps on top of the Amalga platform.  Will this have any influence on the dbMotion partnership?  That’s anyone’s guess today.

In closing, we see polygamy occurring with both Medicity and dbMotion playing a role in the combined AllScripts/Eclipsys organization.  If done properly, everyone will benefit, especially customers.  If done wrong, a major cluster f*ck in the making.  These are capable companies with capable leadership, our bet is on a successful polygamist relationship.

Subdued in Seattle

What was at one time an event focusing on visionary statements and a desire to attract the developer community has transitioned too much more of a true user conference and with this transition, Microsoft’s 3rd annual healthcare event, Connected Health Conference (CHC), was more subdued focusing on execution more than vision.

Microsoft’s first CHC was a highly energized affair with a lot of excitement and interest across the healthcare IT sector as to what Microsoft was looking to do in the healthcare.  This first event, occurred about 8 months after Microsoft announced its foray into healthcare with HealthVault. The event had a heavy focus on the developer community educating them on what it would take to become a part of the HealthVault ecosystem.  That seems so long ago.

The second event still had a lot of buzz and excitement about HealthVault, particularly its biometric device platform Connection Center. It was also at this event that Microsoft began expending more effort on describing what Amalga was and what problems this solution was intended to solve for healthcare providers. As in the first year, the second year had a high percentage of ISV development partners in attendance who were seeking further guidance and direction, but there was also a marked increase in the number of providers attending.

This year there were even fewer ISVs and even more representation from provider organizations. With this change in the attendance profile, excitement had dissipated replaced by a drier sense of duty to move forward and execute on what is required to meet meaningful use (MU). That is not to say Microsoft focused on this issue – to their credit, they did not instead looking further into the future of what the healthcare sector may become based on current and future pressures (e.g., bundled reimbursements, migration to ambulatory care, accountable care organizations, etc.).  But in discussions with many a provider in attendance (I use provider loosely here to also include the IT staff at healthcare facilities), MU was clearly on their mind.  Providers are currently devoting a significant amount of energy to meet MU requirements, this may help explain the lower attendance in comparison with years’ past.

So, without further adieu, here are a few highlights:

Peter’s Keynote


Peter Neupert, in his keynote, outlined Microsoft’s overarching healthcare strategy, which is founded on four core precepts:

  1. Sunshine the data
  2. Engage consumers
  3. Provide nearly infinite scalability
  4. Establish trust

Nice set of governing principles to guide development and go-to-market strategy.  Now it is up to Microsoft to demonstrate and articulate the business value of these precepts to the market.  Yes, there are incentives such as ARRA to help drive “sun-shining the data” and “engaging consumers” (patients) but such incentives are fairly one-dimensional extensions of today’s healthcare delivery model.   Disruptive transformation is both high risk, but potentially far higher reward. It is such disruption that Peter was attempting to articulate, though found that the Innovation Session on the following day did a better job of driving that message home.

Monolithic vs. Best-of-Breed

Peter also spent some time discussing the value of platforms, or what he called “Open Ecosystem” vs closed, monolithic ecosystems (i.e., Cerner, Epic, GE, etc.).  Microsoft has a partnership with Eclipsys wherein discrete Eclipsys apps can run on top of the Amalga platform.  Eclipsys’s CTO, John Gomez in another session was adamant in his belief that open ecosystem was the way to go stating that no single HIT vendor can adequately address the multitude of IT needs within a large healthcare organization. Now Epic, Cerner, GE, or most any other large EMR vendor would differ with that opinion, but it does raise an interesting question:

Is a best-of-breed, open ecosystem model the way of the future for HIT or closed monolithic systems?

One could easily argue for either approach at this stage of maturity (or lack thereof) in the HIT market, but if one looks around them and sees the number of large institutions still signing contracts with Epic and other large HIT vendors, we have yet to see a swing towards an open ecosystem.  Part of the problem may be the simple fact that is too difficult for a hospital’s IT staff to manage multiple apps, their upgrades, training etc. that is inherent in a best-of-breed approach.  A best-of-breed vendor needs to demonstrate a large value proposition to make this happen and outside of revenue cycle management, it is hard to find such in the HIT market today, particularly among clinical apps.  This is an area of particular interest at Chilmark Research and we will be doing a deeper dive on this topic via a research report on open ecosystems in healthcare that will be released later this summer.

Where’s the Money?

While I enjoyed the majority of Peter’s keynote, it was incomplete.  Rather than looking at the healthcare market in its entirety, the keynote focused on only providers and consumers.  Not addressing those that ultimately pay the bills, employers and payers, the keynote was incomplete and for thus hard to take seriously.  The continuum of care extends beyond the provider-consumer relationship and our convoluted healthcare system will not improve if we fail to talk about the other stakeholders in this complex equation.

Making an HIE Play

Microsoft is making a play in the HIE market with Amalga currently supporting the DC RHIO and Wisconsin’s HIE WIHIE.  They also recently won a contract to provide HIE capabilities for Hawaii.  When sitting in on the HIE session the DC RHIO discussed the development and roll-out of their HIE that encompasses 8 hospitals and 20+ facilities in that region. Great story here in that within 2 hours of go-live, the DC RHIO was able to identify a MRSA outbreak at two hospitals and alert others within the network to minimize the spread of this potentially deadly virus. Now that is delivering community value, so why was so much attention during this session devoted to models of sustainability?  Both the DC RHIO and WIHIE spent precious time discussing their efforts to create long-term sustainability models.  Honestly, Chilmark is getting quite tired of this discussion and has begun wondering why the hell we, as a nation, cannot just simply accept that putting in an interstate-like system for secure healthcare data transmission is critical to this country’s long-term health and wellness.  Seriously, is it really any different than President Eisenhower’s desire, after returning from Europe, to establish the US Interstate Highway system that has done so much to improve the movement of goods across this country?  I think it is time we just accept the fact HIEs are critical and just establish a clear set of guidelines, similar to AASHTO for highway design and get on with it.  It’s that important.

Strong Interest in HealthVault Community Connect

The technical session on one of Microsoft’s newest products, HealthVault Community Connect (HVCC) was packed, standing room only and out into the hallway.  Clearly, providers in attendance are seeking solutions that they can effectively use to engage the populations they serve and HVCC is a compelling concept.  Unfortunately, that message may not have been effectively communicated during this session.  Granted, it was a technical session but based on audience Q&A, what the audience really wanted to know was how might this solution fit into their organization, what critical pieces of the MSFT HSG stack do they have to buy/adopt (Amalga, SharePoint and HealthVault – note that MSFT has developed a stripped down version of Amalga to insure that HVCC is affordable to smaller hospitals and clinics) and what does the future roadmap look like for this solution suite (right now all it really addresses is pre-registration and patient discharge processes).

The Wrap:

Unfortunately, due to time constraints was unable to attend a number of other sessions, including that on one of MSFT’s newest modules for Amalga, “Connected Imaging”.  This does not appear to be a solution that will immediately compete with the likes of such upstarts as LifeImage, as it appears to be structured to operate within the enterprise but in the future could easily branch out into HealthVault, via HVCC and possibly become a disruptive technology in this huge sector of the market (imaging is massive, but frankly, Chilmark just has not had the bandwidth to delve deeper).

But what Chilmark was able to capture at CHC2010 was a rising level of maturity on the part of Microsoft in its go to market strategy for HIT.  Yes, there are a number of areas where Microsoft is still feeling its way around (HIEs is certainly one of them), but progress is being made in a methodical fashion.  Though the energy and excitement that filled the air in past events has dissipated, it is being replaced with greater clarity of purpose and direction, which is not necessarily a bad thing in a market that is seeing far greater hype than what is healthy.

Addendum:

MSFT’s HSG leader Peter Neupert’s own impressions of this event.

Shedding a Light on HIT – Beacon Awards

Last week, the White House finally announced the 15 Beacon Award recipients who will split the $220M (roughly $15M each) to effectively leverage HIT to improve healthcare delivery in their communities. While many a community waited patiently for this announcement that was originally scheduled for sometime in March, it appears that the feds, and in particular the White House, took their own sweet time in getting this announcement out, which reads more like a $$$ for jobs announcement than one about improving the quality of care through the judicious use of HIT.  White House must be getting some heat about where are all the jobs that were to be generated from ARRA, of which this particular program is but a tiny piece.  Sad thing here is, despite the heavy “jobs” messaging in this press release, the program provides funding for only three years, after that party’s over and so might those new jobs this program will create.

Quick Synopsis:

Over 130 proposals were received with only 15 given the green light.  Everyone seems to be looking to Washington there days for a hand-out.

Communities are geographically broad-based, a number of them are rural and range from behemoths like Geisinger, Intermountain and Mayo, to the Delta Health Alliance in Stoneville, MS.  Good to see such a broad cross-section of the US receiving awards though seeing big institutions receiving federal largess does make at least this analyst cringe.

One of the factors used in choosing these communities was the level of current HIT adoption where there needed to be above average EHR adoption and an existing exchange mechanism in place to facilitate care coordination.  This is not, thankfully, another program to pay for HIT, but to look at applying existing HIT infrastructure to improve care in specific disease communities.

Awards are heavily weighted to diabetes, with nearly 75% having some diabetes program associated with it.  Why diabetes, hard to say but one could make the conjecture that diabetes is one of the leading chronic diseases in this country and secondly, that it has relatively straight-forward metrics to measure and quantify.  This is myopic.  Seriously, if this program is to look at healthcare in its entirety and explore novel models for HIT deployment and use, should we not cast the net a bit broader? Likely, the three-year scope of this program limited more innovative models that may have had difficulty showing clear, demonstrable results.

A third of those receiving awards will have some component of consumer outreach ranging from basic patient education (hasn’t this been done enough already – by now we should know how to do this effectively) to a program in North Carolina that will include a Health Record Bank and another in California that will leverage mHealth to “…empower patients to engage in their own health management…”  OK, so we have 75% of all awards focusing on diabetes but it appears that only a third focus on consumer engagement?  Odd, very odd and hardly innovative.  Granted, this assessment is based on the White House PR, but still, to have what appears to be such a relatively small percentage of programs focusing on consumer outreach and the effective leveraging of HIT in these communities is a BIG PROBLEM. After all, it is the citizen consumer footing this bill, should they not see some direct benefit?

This is not not a grant program but a three-year cooperative agreement where the feds will work closely with these 15 communities in developing, deploying and ultimately measuring the success of these programs.  The tricky part will be to take the lessons learned and apply them more broadly to other communities.  Not an easy task and based on our limited observations to date, something the feds are not been very good at performing.

Many of the recipients plan to focus on the use of such technologies as mHealth, telemedicine and remote monitoring technologies to create new care models particularly with regards to chronic diseases.  Great to see support for these new technologies/approaches to care delivery. Hurray!  But there is one small problem with this (OK, it’s a REALLY BIG PROBLEM), ultimately, without CMS’s support (i.e., willingness to reimburse for the use of such technologies in the delivery of care) these potentially great ideas will end up on the proverbial shelf of great ideas with no sustainable business models.  But there may be a silver lining in recently passed Health Care Reform (Sec.3021) legislation that requires CMS to establish by 2013 an “Innovations Center” to look at new funding/reimbursement models.  Still looks pretty fuzzy from here, but keeping our fingers crossed that the Innovations Center will drive payment reform at CMS and open up the gates for innovation to blossom.

The Beacon Community Awards are not perfect but they are an attempt by at least one branch of HHS to support the innovative use of HIT at the community level.  The challenge for this program though will not so much be the deployment and use of the technology, but rather how to extend the likely successes in these communities more broadly across the US.  And while success is certainly measured in improved outcomes, the more important factor in the success of this program and others similar, is in the net benefit to clinicians and the institutions that employ them.  Thus, without payer and subsequently, payment alignment to these programs, their long-term success will likely not extend much beyond this limited three-year window of opportunity.

Even with Incentives, Docs May Forgo EHR Adoption

The federal government, via the HITECH Act, and many an EHR vendor are hoping for broad adoption of EHRs in the goal to digitize the healthcare sector, which today is honestly, pretty abysmal.  And why is EHR adoption so low?  Pretty simple really, EHR vendors have not adequately demonstrated to the market that there is indeed value creation for the end user after adoption and go live.  In fact, one could easily argue the exact opposite occurs when one looks at the productivity hit a practice typically takes (20-30%) in the first year.  Practices get paid by throughput, how many patients are seen in a given day, so if an EHR hits a practice with a 25% productivity hit, where does one make that up, working extra hours, laying off an employee or two?  Not exactly attractive options.

Yes, hospitals will adopt and meet meaningful use requirements as the future CMS penalties will simply be too painful to do otherwise.  Private practices, however, may just forgo adoption and decide to not serve CMS (Medicare/Medicaid) patients.  It remains to be seen what direction this will take but as I stated in a recent keynote at the PatientKeeper User Conference, the focus of EHRs and their successful deployment, adoption and use needs to be based on what is the value that is delivered to the end user, the physician/clinician.  For too long and even today, all the grand talk of EHRs and adoption thereof focuses on the broader public good.  Yes, there will be a broader public good but if we don’t get back to focusing on delivering true, meaningful value to the end user all this talk, incentives and promotion will fall on deaf ears and many a tax dollar will be wasted.

As an aside, we have stated before on this site, the consumer/citizen may play an important role in the future.  As the first comment in response to this Boston Globe article this week puts it, he/she would not go to a doctor that did not have an EHR in place.  This is something that the digital natives of this nation who are beginning to get married and settle down with families of their own will increasingly demand. EHR adoption will come, the question is how fast and what will be the forcing functions.  Right now, just not convinced that HITECH Act $$$ will do it at the practice level.

And just by way of example regarding those youthful digital natives, my 25yr old son found both his doctor and dentist via the online user community Yelp. He’s quite happy with both.

New Leadership for CCHIT – Will it Make a Difference?

The organization that Chilmark Research has had, at times, a trying relationship with, CCHIT, otherwise known as the Certification Commission for Health Information Technology has appointed a dear friend, Dr. Karen Bell as its new leader.

Dr. Bell, who I first met while doing research on the PHR market, was instrumental in having me present to then Sec. Leavitt on consumer-facing healthcare technology trends – still one of the highlights of my relatively short career as a healthcare industry analyst.  Since that presentation in 2008, my relationship with Dr. Bell has deepened and she has been one of several key mentors who have assisted me in understanding the healthcare IT market.

So, now that Dr. Bell has accepted this position to take over the reigns at CCHIT immediately, what might we expect:

Dr. Bell knows Washington DC and HHS quite well from her many years there.  She is effective in a highly politicized environment and will be able to effectively lead CCHIT through that political minefield.

She also knows the issues and is fairly competent on the technical side of the fence, though certainly not a coder.  Dr. Bell may be one of the better choices for CCHIT as she can advocate for this organization at a time when many still call into question its very existence.  Of course, that existence has been somewhat guaranteed by ARRA legislative language (was this put in by HIMSS/CCHIT lobbying efforts?) that states organizations will receive incentive reimbursement for “meaningful use of certified EHRs“.

Dr. Bell will put up a Chinese Wall between CCHIT and the HIT vendor organization, HIMSS.  She is fully aware of the perceived conflicts of interest between CCHIT and HIMSS and will seek to create some distance between these two organizations.

A strong advocate of consumer control of PHI, interoperability of EHRs, and the need for “open” HIE platforms/apps one can expect Dr. Bell to put extra emphasis on these issues at CCHIT within the context of certification requirements.  This actually works out just fine with HHS as that is just what they are looking to foster with ARRA funding.

But what is less clear about Dr. Bell’s future role at CCHIT is how she will lead this organization forward in bringing together those that truly know HIT (reaching beyond the vendor community), the challenges of adoption (e.g., workflow), the cumbersomeness of many apps (plenty of them already having been blessed in the past by CCHIT), the need to create a certification structure and pricing model that fosters innovation rather than stunts it (CCHIT certification is still too expensive for many young, innovative companies) and finally, insuring that CCHIT does not over-reach (as it was doing under Mark Leavitt’s leadership) and focus where it can make the most meaningful impact.

This is a very tall order for anyone and while I still question even the very existence of CCHIT (have yet to see any demonstrable proof that CCHIT certification has moved the EHR/EMR adoption needle in any statistically meaningful way), I do have faith in Dr. Bell.  If anyone can right this listing ship, it is her at the tiller.

Congratulations Dr. Bell and may you see smooth sailing in the not so distant future.

Appendix:

Anthony Guerra of HealthSystemCIO has a podcast interview with Dr. Bell now up on his website.

iPad in Healthcare: A Game Changer?

There have been a lot of discussions on the Net regarding the potential impact of the iPad in the healthcare sector.  At this point, there is very little agreement with some pointing to the ubiquitous nature of the iPhone in healthcare as a foreshadowing of the iPad’s future impact, while others point to the modest uptake of tablet computing platforms as a precursor for minimal impact.

Our 2 cents worth…

We believe the iPad will see the biggest impact in two areas: medical education and patient-clinician communication.

The iPad’s rich user interface, native support for eReading, strong graphics (color) capabilities, ability to use various medical calculators (there are a slew of them already in the AppStore) and numerous other medical apps (most of these are iPhone apps and will need to be updated to take full advantage of the iPad’s larger 9″ screen) provides an incredibly rich ecosystem/learning environment for medical students.  Nothing else comes close – a slam-dunk for Apple.

That rich, graphical user interface, it’s inherent e-reader capabilities and portability also lends itself as possibly the best patient education platform yet created to foster patient-clinician interaction.  At bedside, a clinician has the ability to review with a patient a given treatment, say a surgical procedure, prior to the operation showing rich anatomical details (e.g., a patient’s 64 slice color enhanced 3D CAT scan), potential risks, etc. Heck, one could even show a video clip of the procedure right there on the iPad.  Now that is cool and sure beats the common approach today, some long lecture that oft-times is difficult to follow.

Beyond those two compelling use cases, other uses in healthcare for the iPad include its use by nurses and hospitalists to provide bedside care, tap multiple apps (hopefully multi-tasking will come in OS v4.0 to be announced on April 8th), in an intuitive environment.  As to how the iPad may extend beyond these limited boundaries for support of say charge capture and CPOE remains to be seen but in the immortal words of many an Apple iPhone advertisement:

There is an app for that.

And based on some of our initial conversations with mHealth app developers, many are already working on just these types of applications for the iPad, which they hope to bring to market within next several months.

One thing is certain, from at least one data point we received this past weekend, there is strong, initial interest in the medical community as to what the iPad may facilitate.  Speaking to one of the technical folks at the local Apple store this past weekend we learned the following: Of the 1,000 iPads sold on Saturday (this store did sell-out), 700 were sold off the floor and 300 were reserved for business customers.  Of those “business customers” a significant share of those 300 iPads (north of 30%) were sold to local medical institutions.

One of those local healthcare institutions appears to be Beth Israel Deaconess Medical Center (BIDMC) where an ER doc has provided his own iPad review, based on actual use during a shift.  Particularly like his comment about using it for patient education.  Might the iPad truly bridge the information gap between patient and clinician?  One thing is for certain, it will make it much easier for patient and clinician to confer over a given diagnosis, results and creation of a treatment plan with supporting documentation/graphics.

Read into that what you may but one thing is for certain, there is significant interest in the healthcare sector to at least understand how the iPad may be used within the context of care delivery in a hospital.  It remains to be seen as to how end users will actually use these devices and what apps will be developed to serve this market (might Epocrates see stronger uptake for their EMR on the iPad vs. the iPhone?) that take advantage of the larger, 9″ screen, but based on what we have experienced with the iPhone, there are likely more than a few developers right now working on novel applications that clinicians will find valuable. Question is: Will they be valuable enough to augment the extra weight and volume of lugging the iPad versus a smartphone?

Only time will tell.

That being said, based on initial impressions of physicians, such as the one from BIDMC (see above) and our own limited experience in using the iPad this week, the iPad is pretty incredible and could usher in a whole new approach to healthcare IT (interfacing to and interacting with an EMR/EHR system) that may result in physicians adopting and using such technology, willingly.  Could we even go so far as to say that the iPad will be a bigger contributor to HIT adoption and use than the $40B in ARRA funding that the feds will spend over the next several years as part of the HITECH Act?

Again, only time will tell.

Appendix:

Some other perspectives on the iPad in healthcare:

Article in HealthLeaders with some interviews with med professionals buying an iPad at Apple store in SanDiego.

ComputerWorld article looking at various business sector (including healthcare) uses of iPad.

Post by iPhone iMedicalApps on some of the current challenges for those adopting an iPad for medical use (virtually all the problems listed will be resolved within next few months)

Another post, this time at iPhoneCTO looks at the iPad in the med space for workforce mgmt.

Well look at this!  Children’s Hospital here in Boston announced today (4/8/10) that it has received one of the recent HHS innovation grants to “…investigate, evaluate, and prototype approaches to achieving an “iPhone-like” health information technology platform model…”

Another ER doc writes a review of the iPad.

Managed Care, HIT & ARRA

Yesterday, had the privilege to attend and present to a packed audience in New York City for CRG’s conference: IT & the Future of Managed Care: The Next Wave. Unlike most conferences I attend that are predominately focused on either the provider consumer sector of the healthcare market (tomorrow its the local New England HIMSS Chapter’s Annual Event), this event was for payers.  In light of the recent passage of the Healthcare Reform Act, ARRA and the move to digitize providers, they had a lot on their minds, particularly with regards to their future role in the digitization of medical records.

Following is my presentation. Brief as it is (was part of a panel and had about 7 minutes to fly through it), it does have a few nuggets worthy of a looksie.

[slideshare id=3596753&doc=moorecrgnycmar10fnl-100330144448-phpapp01]

Key Event Take-Aways:

Payers are struggling to develop new cost control models.  The Patient Centered Medical Home (PCMH) is attracting a lot of attention, lots of pilot studies currently underway or will be launched this year.  Remains to be seen as to true efficacy of this care model.

Telehealth is definitely ramping up, or at least some of the more innovative payers are looking to use telehealth in rural settings. (Of course, we have heard this so many times before and it remains to be seen if this time it is for real, but Cisco among others is making a big push, and with payers behind it, it may actually take hold).

Payers want to introduce best practices (comparative effectiveness) into the clinician’s workflow to insure that clinicians are complying to well-regarded and uniform standards of care.  Again, objective is to lower costs of care and improve outcomes.  Challenge, however is that clinicians are trained to deal with variability, they thrive on it.  Best practices, standards of care, etc., run counter to clinician training/culture.

Providing cost transparency/comparisons to consumers to allow them to consider costs as a variable in their healthcare decision making is difficult in many regions of the country as providers do not wish to be compared on costs and are reluctant to share such information.

Payers, as they have been for a number of years, are promoting collaborative care but are still running into significant challenges in making this happen.  The usual obstacles stand in their way, primary among them is data ownership and trust.  Payers are hopeful that HIE initiatives via ARRA and in the future CMS penalties will finally break this log-jam.

Significant interest in what Google Health and HealthVault are doing and where are they headed.  Few that I talked to are ready to commit (allow their members to export their claims data) to either platform, but they are having some pretty serious discussions internally as to what they should do. Surprisingly, (then again maybe not) no one at his event ever mentioned Dossia.

This was a well-run event with some excellent presentations.  Certainly plenty of hand-wringing in the audience as this sector grapples with both healthcare reform and the digitization of the provider sector.  What role payers will play in the future is fairly well-spelled out in the Healthcare Reform Act. Lesser known is what role payers will play within the context of healthcare IT.  Payers believe that they can play an important role in facilitating care (via telehealth, care coordination or clinical decision support tools) but as I told the audience in one of my closing comments:

Clinicians do respect the role that payers can play to a point, but there is still a level of distrust and do not expect a clinician to allow you to enter the exam room.  Keeping that in mind and respecting it will instill a level of good will that can lead to more fruitful interactions/collaborations in the future.

The Great Land Grab of 2010 or the Play for State HIEs

The first major distribution of HITECH Act funds occurred a couple of weeks ago when HHS awarded nearly $1 billion for HIT initiatives including $386 million to 40 states and territories to help establish public Health Information Exchanges (HIEs).  This represents the lion’s share of the original $564 million allocated for Statewide HIE development under ARRA.

Sixteen states did not receive funds including some of the largest states (by population) including Texas, Florida, and New Jersey.  Other states not receiving funding in this first round include: Alaska, Connecticut, Idaho, Indiana, Iowa, Louisiana, Maryland, Mississippi, Montana, Nebraska, North Dakota, South Carolina, and South Dakota.  These states will likely receive funding in the next round.  Additionally, there were a couple of awards that were bizarre including minor awards (~$700k) to some U.S. territories including Guam, American Samoa, and the Northern Marianas.  Almost kind of inevitable it seems when the federal government gets involved in handing out large amounts of cash.  Everybody wants to make sure to grab their respective piece of the pie however small it may be.

Funding Requirements (or how to get the $$$):

In its Funding Opportunity Announcement (FOA) last August 2009, the ONC identified 5 “Essential” Domains for HIE funding:

  • Governance
  • Finance
  • Technical Infrastructure
  • Business and Technical Operations
  • Legal/Policy

The ONC expectations were that states will define objectives, set goals, and measure progress within the context of these five domains.  This also includes the submission of a plan, approved by the Department of Human and Health Services, that describes the activities to facilitate and expand the electronic movement and use of HIE according to nationally recognized standards and implementation specifications.

To specifically get the funding, states had to submit an initial application by October 15th to the Department of Human and Health Services.  Additionally, states also have to submit a Strategic and Operational Plan.  The Strategic Plan contains the State’s vision, goals, objectives and strategies for statewide HIE including the plans to support provider adoption.  The Operational Plan contains a detailed explanation, targets, dates for execution of the Strategic Plan.  Basically, states applying for funding fell into 3 general groups:

  • States with no existing Strategic Plan – These states needed to provide a detailed description of activities to develop Strategic and Operational Plans by October 15th.  Subsequently, the state is expected to develop and submit their initial Strategic and Operational Plans within 6 –8 months of receiving their funding.  A limited number of states fell into this group including Arkansas, Illinois, Iowa, New Hamphsire, Nevada, North Dakota, Oklahoma, and South Carolina.
  • States with existing Strategic and/or Operational Plans that are not consistent with ONC criteria – These states submitted existing Plans with a detailed gap analysis compared to ONC’s criteria and a plan for revision by October 15th.  Subsequently, these states were to submit updated Strategic and Operational Plans in alignment with ONC criteria within 3 months of funding.  Almost all of the states fall into this category with about half needing to further align their Strategic/Operational Plans with ONC criteria required prior to the Implementation phase and the other half needing additional planning efforts required prior to the Implementation phase.
  • States with existing Strategic and/or Operational Plans that are consistent with ONC criteria – These states submitted their Plans for approval by ONC, including a description of health IT implementation to date and the plan for continued implementation. Only 4 states (Delaware, Idaho, New Mexico, Utah) submitted Operational Plans by October 15th.

Once the State’s Strategic and Operational Plans are approved, the State is free to begin to use the HIE funds for ‘Implementation purposes.’  From a Technical perspective, this means that the State can use these funds to select a vendor, sign a contract and begin actual development of the HIE infrastructure.

Impact on HIE Vendors

Several states, including Alaska, Maryland, and West Virginia, assumed future funding was in the bag and released RFPs in the later months of 2009.  Now that the awards are official, states across the country (and territories) will work with consultants to finalize their Strategic Plans and begin looking for an HIE vendor. In total, about 20-22 states are expected to issue RFPs for technical infrastructure over the next 6-12 months.

This is creating a giant land grab as vendors vie for position to tap this windfall of State HIE funding.  Some of the RFPs, such as the one from West Virginia in late November, elicited interest from dozens of various Health IT vendors.Officials from the West Virginia Health Information Network stated they received a ‘significant number’  of responses to their RFP although they refused to cite the exact number.

Confusion Abounds

All of this activity is creating a great deal of confusion in the market for those looking for an HIE solution.  HIT vendors of all strips are now claiming to be HIE vendors to tap into this new found source of funding.  One could even argue that IBM’s recent acquisition of Initiate was to some extent prompted by all this activity in the HIE market.  While numerous  HIT vendors  claim they have an HIE solution, only a handful have a solution that meets current and immediate future needs of the statewide HIEs.  Most others have specific HIE functionality elements, but not necessarily the full solution package.  Our forth-coming HIE Market Report (hope to have it on the streets by end of March) will seek to provide clarity by providing a market classification schema.

Vendors are also facing several challenges responding to these RFPs, primary among them, little commonality from one state to the next.  The most obvious one is that each state has their own unique approach to their technical architecture. They range from Idaho with its desire for a single statewide network (Idaho Health Data Exchange) to Indiana with multiple, independent, local HIEs, and no statewide architecture. Additionally, most states are issuing RFPs that include a number of use cases that go beyond just basic data exchange functions.  While the statewide HIEs obviously need to plan for the future, it is creating uncertainty among vendors in how they respond and price their solutions given that some of the use cases outlined in an RFP may never be implemented.

While being rewarded with a statewide HIE contract represents a significant win for a vendor, especially for smaller vendors, the real value (i.e., money to be made) is not from the initial contract of simply ‘connecting the pipes.’  The long-term value will come from deploying higher-value add applications and services such as analytics, quality reporting, transactional services which typically are 5x-7x more lucrative than basic data exchange services.  Data exchange is but the «tip of the iceberg» to far more lucrative opportunities and is why vendors are competing so hard for these contracts.

No Clear Leader

Our research has not identified any clear leader in the state HIE market today. Part of the reason for this is that few states have begun the process selecting an HIE vendor, let alone go live with a solution. If pressured, we would give the leadership crown to Axolotl who has had almost a singular focus on such public exchanges and now supports 4 statewide HIEs. Axolotl’s leadership, however is a tenuous one as there are several other vendors with at least one statewide HIE client including Medicity, Intersystems, and GE Healthcare. This market is clearly one that is wide open and we foresee significant activity in the coming 9-12 months.  Let the Great Land Grab of 2010 commence!

Note to Readers: In giving credit to where credit is due, Matt Guldin, who is leading Chilmark Research’s HIE research for our forthcoming report, authored this post.  Thank you Matt for a very informative post.

Relaxing Meaningful Use? Not Really

There has been a lot of talk this week in the trade pubs about the HIT Policy Committee (HITPC) meeting on Wednesday wherein the committee recommended a relaxation of meaningful use (MU) requirements.  But if one looks closer, the “story” is far deeper and certainly of more significance.

If you frequent this site, you already know that providers will only receive ARRA (Stimulus funding) reimbursement under the HITECH Act if they demonstrate meaningful use of certified EHRs.  The Center for Medicare and Medicaid Services (CMS) defined MU and all it entails (some 25 specific measures) in a proposed rule that is currently in the public comment period, which ends March 15th.  Since release of those rules, there has been much discussion and hand-wringing as to whether or not the MU rules were asking for too much in too short a time or simply were not clear enough to assist healthcare IT professionals in making appropriate decisions for their institutions.  Thus, when the HITPC came out this week recommending that CMS adopt greater flexibility and relax MU requirements, well this is just what many were hoping.

But while one hand gives, another takes away.

Indeed, it is a very good thing that the HITPC has recommended that some flexibility be built into the MU requirements.  While it may be easier for HHS/CMS to enforce an all or nothing approach to meeting MU requirements to receive incentive payments, in reality such inflexibility will lead many a provider (especially small ambulatory practices) to think twice before committing to adopting an EHR.  Seriously, why would I as a provider commit to a certified EHR wherein I have to pay for it up-front and then strive to meet all 25 MU criteria in 2011 to get my first reimbursement check?  A highly risky proposition in 2011 that only looks more risky further down the road for we still do not know what CMS will be asking of providers (definitive terms) in 2013 and 2015 for demonstrating meaningful use of certified EHRs.

But I digress.

What the HITPC did on Wednesday was to make public their comments/recommendations to CMS (by way of ONC head, David Blumenthal) regarding MU rules. Among the 12 recommendations, the majority (eight) of recommendations seek a strengthening of MU rules.  They are:

1) Include “Document a progress note for each encounter” for Stage 1 EP MU definition. For acute care, HITPC recommends that this requirement occur in Stage 2 (2013). Basically what they are asking for here is that the progress notes a clinician records in a patient encounter be documented in digital form.  Sure makes a hell of a lot of sense as it is during those encounters that significant information is exchanged and when we start thinking about transitions in care, these notes will prove critical in maintaining continuity of care.  Many a clinician will push back on this recommendation.

2) Providers should produce quality reports stratified by race, ethnicity, gender, primary language, and insurance type. If we truly wish to assess and ultimately address disparities in care, combining quality reports with demographic information is required.  This is a very logical recommendation and fairly simple to implement as the all of this information is already being collected.  It is simply a matter of employing an analytics overlay.

3) Eligible Providers (EPs) and hospitals should report the percentage of patients with up-to-date problem lists, medication lists, and medication allergy lists. Again, this should not be that hard to do provided one has some simple reporting features built into their EHR.  The big question here, however, is how many EHRs in the market today can automatically produce such reports?  Likely, not too many but there are a number of solutions/work-arounds that are not that difficult to deploy and use and should this indeed become part of MU rules, EHR providers will build this capability into their offerings.

4) EPs and hospitals should record whether the patient has an advance directive as part of the Stage 1 MU criteria. CMS, is their all too common myopic way, only required advanced directives for those 65 and older.  Well CMS, as HITPC has rightly pointed out, many of us may not make it till 65 and it is wise to have advanced directives recorded for all who have one.  Really quite simple to provide this function as it could be as easy as attaching a file to a given patient record.

5) EPs and hospitals should report on the percentage of patients for whom they use the EHR to suggest patient-specific education resources. Why CMS took this out in the first place is beyond me as there are a multitude of services, both free (eg from CDC or NLM) or paid (A.D.A.M., Healthwise, WebMD, etc.) available in the market. The HITPC is correct: If one of the purposes of HITECH is to truly engage patients in the management of their health, such educational resources are a prerequisite.  Come on CMS, wake up.

6) Include measures of efficiency for Stage 1 MU definition for EPs and hospitals. Another tighten of MU requirements wherein HITPC wants clinicians to report (record) percentage of patients using a generic drug alternative and have at least one of the efficiency measure reported (the requirement is for five) to directly address diagnostic testing.  Pretty clear why CMS stayed away from this one and did not prescribe specifc measures – what a political minefield.  Doubt if much headway will be made here and can already hear the drumbeats from the You Won’t Ration Our Care coalition.

7) The numerator for the CPOE measure should define a qualifying CPOE order as one that is directly entered by the authorizing provider for the order. OK Docs, the HITPC does not believe it a good idea for you to just handover the CPOE process to some underling, you will be the responsible party.  Nice in theory but virtually impossible to enforce.  This is definitely a K.I.S.S. and let any licensed clinician with such authority/knowledge perform this function.

8 ) Make patient reminders specific to the individual and not limit it to only those 50 and older. Again, CMS is looking at only those it primarily serves (the elderly) and not looking more broadly at the original legislative intent of HITECH to serve all citizens.  Thankfully, there are bodies like the HITPC that have significant clout and can step-up and give CMS some mid-course direction.  The challenge here will be exactly how “personalized” to the individual such reminders might be and again, how does one actually measure such parameters of personalization.

The Wrap:

While it is easy to understand why the federal government would like to use some form of quantifiable measurements (MU rules) to insure that it is indeed getting its money’s worth for this multi-billion dollar investment in HIT, stepping back, one really has to wonder if this is truly the best approach and the best use of precious tax-payer dollars. It is increasingly looking like what HITECH is creating is yet another layer of bureaucracy, truly a jobs bill (isn’t that what the Stimulus bill was all about anyway), that will ultimately have very little impact on the costs and delivery of care for the incentives are misaligned.

To drive adoption and use of HIT/EHRs it will take far more than what is basically a one time incentive payment and the potential for penalties down the road.  What s truly needed is a core business benefit, something that to date, EHR vendors have struggled to demonstrate.  How that might manifest itself is where we as a nation and industry need to focus.  Unfortunately, in the rush to jump-start the economy with ARRA, we appear to be heading down a path that while paved with good intentions, may ultimately result in little forward movement.

Thanks to David Harlow of Healthblawg for the Wordle image.

Kick Starting HIEs: What Meaningful Use Asks for, What Feds are Willing to Pay

The release of draft Meaningful Use (MU) requirements at the end of December, finally provides clarity to what will be required of providers receiving ARRA funding under the HITECH Act to meet the 2011 objectives.  Even though there are 25 specific requirements, the health information exchange (HIE) requirements were scaled back significantly from the original recommendations approved in July 2009.

One of the key reasons for the scale back in requiring providers to exchange clinical information via an HIE is that today there is simply no existing infrastructure in place to make this happen.  Sure, there are countless HIEs today, but the vast majority of these are within a given Integrated Delivery Network (IDN) but these are closed systems.  A primary intent of HITECH is to create an infrastructure that allows for the free and secure flow of clinical data throughout the healthcare sector, across the traditional institutional boundaries that exist.  As Dr. Blumenthal, head of HHS’s ONC and directly responsible for distributing HITECH funds, put it in a post last November:

A key premise: information should follow the patient, and artificial obstacles – technical, business related, bureaucratic – should not get in the way.  …This means that information exchange must cross institutional and business boundaries.  Because that is what patients need…

The infrastructure to enable such cross-institutional exchange of health information does not exist today.

The draft MU requirements state that providers should have the ability to exchange clinical data with other systems and to report to various State and Federal agencies but there is no specific requirement for an ongoing, working exchange of clinical information.  Rather, providers need only test the system once during the reporting period for various criteria (e.g, submitting lab results to a State Public Health dept).  The only operational clinical interfaces required are for ePrescribing and Lab results.  The other HIE requirement is an administrative one – the ability to perform electronic eligibility checks and submit claims electronically.  Required compliance rates range up to 80% depending on the requirement.  The MU requirements for 2011 are expected to be finalized in March after the 60-day public comment period.

The 2011 requirements starts simply by setting the ground floor for future clinical exchange by focusing on existing transactions from Labs-to-Providers and Providers-to-Pharmacies and the aforementioned eligibility checking and claims submittal.  Starting in 2013, HIE requirements will substantially increase.  While no requirements have been formally set, the HIE requirements will likely include:

  • Registry reporting and reporting to public health entities
  • Electronic ordering
  • Health summaries for continuity of care
  • Receiving public health alerts
  • Home monitoring
  • Populating PHRs

This greatly expands on the types of transactions that will be covered and entities that will be affected including moving to bidirectional flows of clinical information from Physician Office-to-Hospital (and vice versa) and from Physician Office-to-Physician Office.  It also will require providers to move beyond providing consumers with a digital record (this is required in 2011, but sharing data with patients in an electronic format over the Net (e.g. a PHR with portability.

By 2015, HIE requirements will increase even further including accessing comprehensive clinical and administrative data from multiple sources, robust reporting requirements, and medical device interoperability.  The goal is to envision a health care system where there is routine availability of robust HIE between many of the key stakeholders (e.g, providers, patients, State and Federal agencies, labs, pharmacies, etc).  Getting there is another story entirely.

HITECH Act Funding of HIE

In order to help facilitate HIE, there are two programs under the HITECH Act that are intended to directly fund HIE-related activities: State Health Information Exchange Grants and the “Beacon” Community Program.

The State Health Information Exchange Cooperative Agreement Program is the larger of the two and the more prominent one.  Under the program, there is $564 million allocated for Statewide HIE development.  Each state or state designated entity is eligible to receive between $4 and $40 million over a 4-year period from 2010-13.  There is only award per state although multi-state arrangements are permitted.  Every state plus the District of Columbia and Puerto Rico is eligible to participate.  The size of an individual award is determined by a formula with pre-determined, multiple factors but the bottom line is that the states with the largest populations will receive the largest awards.  For example, CA, TX, and NY are likely going to receive the largest awards while smaller states or states with small populations such as WY, VT, RI, and DE are set to receive the smallest amounts.

The Beacon Community Program is slightly smaller in size and different in scope.  There is $220 million allocated to the program and unlike the State Health Information Grant process it is a competitive process.  Not only can State Agencies apply but so can non-profit Integrated Delivery Networks, Health Information Organizations, and Regional Extension Centers.  The main caveat though is that applicants must have existing HIE capabilities and high rates of Health IT adoption to demonstrate advanced quality and efficiency required of being designated a recipient under the Beacon Community Program.  The main purpose of the Beacon Program is to define best practices in the adoption and use of HIT that other communities may emulate. Applications were accepted until February 1st and the reward recipients are expected to be announced in the summer of 2010.  There will be 15 recipients who will be eligible to receive between $10 to $20 million per award.

Impact of HITECH Act funds & HIE

It is important to understand though what the HITECH Act does and does not do in regards to HIE. Neither of the aforementioned programs is intended by themselves to facilitate full implementation of HIE at the state or regional level nor does it ensure long-term sustainability of any HIE effort, although grant proposals must provide a business plan that articulates a sustainability model.  As we have seen in a number of failed HIEs to date, stating in writing a sustainable business plan and actually having one that works are two very different things.

Additionally, the HITECH Act does not explicitly coordinate funding and requirements that will inevitably flow to states across various agencies including Medicaid, State Public Health departments, etc as a result of the HITECH Act or other health care programs.  The HITECH Act also requires matching funds from states and holds states that receive funds accountable for how the funds are spent on an annual basis.

Some of these requirements have some states reluctant to make a large-scale investment in a statewide HIE effort.  In particular, the matching funds requirement that starts in 2011 at $1 dollar for every $10 federal dollars eventually rises to $1 dollar for every $3 federal dollars in 2013 has some states very concerned.  (Note: After 2013, the feds are assuming that HIEs established under this grant program will be self-sustaining.) This was most recently raised by the National Governors Association and other public policy entities have raised some similar concerns given the likely precarious budget pictures most states are facing for at least the next 2 fiscal years.

Instead the HITECH Act focuses on accelerating HIE development in the short term by providing funds over a 4-year period from 2010-13.  For most states, this means beginning begin at an early stage including creating some type of governance model (usually the hardest task) and developing their policy and technical capabilities from there.  For states that are much further along in this process including UT or DE, the ARRA funds challenges existing state-level HIE efforts to expand their purview and operationalize governance and HIE strategies at new levels.  The ARRA funds also give a modest degree of flexibility to a state in how they choose to set up a governance model, what technical approach they deem best, and what policies they need to set in place based on the unique needs of their citizens.  The only real requirements are their approach is within the framework of meaningful use and they ensure the HIE is available throughout the state.

The Wrap:

We are just beginning what will likely be a very long and arduous journey to put in place the infrastruture necessary for true health information exchange across the healthcare system.  While the funding is welcomed by many in the industry, creating regional and statewide HIEs will prove challenging as to date, there are still no demonstrable and repeatable business models to create such exchanges that are truly self-sustaining.  Hopefully, the Beacon Program will identify such model(s) that others may modify and adopt to insure the long-term sustainability of health information exchanges that in the long-term will lead to a truly networked and viable system.

Attribution:

The vast majority of this post was actually authored by Chilmark’s Senior Analyst, Matt Guldin, formerly of analyst firm Frost & Sullivan, who joined Chilmark Research at the end of 2009. Matt is currently conducting research on the HIE market that will culminate in a market report scheduled for publication in early Spring 2010.

Acquisitions Creating White Hot Market for Healthcare IT

Since the beginning of 2010 there has been a series of acquisitions in healthcare IT (HIT) market, which recently culminated in one of the largest, IBM’s acquisition of Initiate.  Triggering this activity is the massive amount of federal spending on HIT, (stimulus funding via ARRA which depending on how you count it, adds up to some $40B) that will be spent over the next several years to finally get the healthcare sector up to some semblance of the 21st century in its use of IT.  But one of the key issues with ARRA is that this money needs to be spent within a given time frame, thus requiring software vendors to quickly build out their solution portfolio, partner with others or simply acquire another firm.

And it is not just traditional HIT vendors doing the acquiring (AdvancedMD, Emdeon, Healthcare Mgmt Systems, MediConnect, etc.).  As the table below shows, many of these acquisitions are being driven by those who wish to get into this market (Thoma Bravo, Wound Mgmt Technologies, etc.) and capitalize upon future investments that will be made by those in the healthcare sector.

We are only at the beginning of the sea change in the HIT market and one can expect far more acquisitions over the next 12-18 months as stronger players expand their portfolios and new companies enter the HIT market.  If you are currently assessing an HIT solution for your organization, be sure to assess a vendor’s product road map and how they will meet your future needs (government mandates – e.g., meaningful use, interoperability, etc.) for if their answers are not absolutely clear, compelling and logical, you’ll better off looking elsewhere.

IBM Strengthens Healthcare Play, Picks up Initiate

This morning, IBM announced that it will acquire leading healthcare Master Data Management (MDM) vendor, Initiate for an undisclosed sum.  The healthcare IT (HIT) sector is white hot right now so it is likely IBM paid a pretty penny for Initiate, the clear healthcare market leader in Master Patient Index (MPI) technology.  Combining Initiate sales for 2009 at around $90-95M, a hot sector (say 3.5-4x revenue evaluation)  and one concludes that IBM put down nearly $400M for this healthcare darling.  This acquisition confirms one of our 2010 predictions – a significant increase in HIT acquisitions, including the entry (or increased presence, as in this case) of large IT vendors.

So What Did IBM Get?

With tens of billions of ARRA stimulus funding being poured into the healthcare sector under the HITECH Act, IBM has picked up one of the real jewels in the industry who is ideally positioned to capitalize on a significant portion of that federal largess.

As we have written previously, core to HITECH legislation is that funding be used to promote “information exchange for care coordination.” Such coordination of care hinges on a clinician’s ability to pull up the right records, for the right patient, at the right time. Tapping such patient information tucked within an EHR, an HIE, a public health database, etc. at the click of a mouse is done via MPI, but this is no trivial task. Most software vendors offer an MPI solution within their product based on deterministic algorithms.  But these algorithms, that rely on such things as name, address, maybe a social security number, are often not robust enough for large data sets.  More advanced, albeit more complex, MPI solutions rely on probabilistic algorithms, which is Initiate’s core competency.

Initiate currently serves some 2,400 healthcare facilities and lays claim to being used at 40 or so health information exchanges (HIEs).  Currently, Chilmark Research is conducting a study on the HIE market (hope to have draft ready by HIMSS) and in our discussions with many in this sector, Initiate is seen as the clear market leader and partner to provide HIE clients with an MPI that will meet their complex information sharing needs.

In somewhat of a surprising move, Initiate jumped directly into the HIE market by acquiring the small HIE start-up, Accenx in October 2009.  It will be of some interest to see how aggressively IBM leverages both Initiate and the Accenx solution going forward.  Our bet is that IBM will partner for RHIOs (e.g. Axolotl, Carefx, Medicity, etc.) but go directly after the private HIEs within large Integrated Delivery Networks (IDNs) competing against the likes of large EMR companies Cerner and Epic as well as HIE pure plays Medicity, RelayHealth, etc.

Final Assessment:

Excellent move by IBM and an acquisition that they will be able to leverage in other markets such as their significant presence in supply chain management.

Installing Initiate requires a significant amount of services, IBM will be able to capitalize upon this as well.  Also, IBM has a not so insignificant hardware (large database servers) and software businesses  that can be combined with Initiate to provide healthcare with a larger, more complete solutions suite.

This acquisition will put increasing pressure on Oracle to make a bigger move in the healthcare sector.  (Note that Sun Microsystems, a recent Oracle acquisition, does have an MPI – being used in NHIN’s CONNECT platform – but reports from the field do not rate this solution highly).

Acquisition also puts some pressure on Microsoft’s Health Solutions Group, who yesterday closed on their acquisition of Sentillion.  Microsoft is making a modest play in the HIE market with Amalga UIS, Sentillion will also play a role here, but there is, at least to our knowledge, no MPI solution within Microsoft’s portfolio that can compete with Initiate. How Microsoft responds will be interesting to follow.

There is some danger, however, that Initiate may languish under the IBM umbrella becoming buried within a multitude of applications that IBM currently offers.  Hopefully, IBM recognizes the jewel they have acquired and will not let this market darling succumb to internal forces that may wish to simply drop Initiate into the large IBM application hopper.

For another perspective, Ray Wang of Software Insiders has a good analysis of this acquisition in the context of the MDM market space.

RHIO Failure: CalRHIO Goes Belly-up

The much ballyhooed Health Information Exchange (HIE) in the state of California, CalRHIO, has raised the white flag, dismissing its troops and sending home its arms supplier (Medicity).  Despite its founding five years ago, support of some significant organizations (e.g., United Health Group, Cisco, HP, California Hospital Assoc., etc.) spending some $7M to date and launching a major roadshow in March last year that included the go live of 23 institutions in Orange County in October, CalRHIO did not get the support of California’s Health and Human Services (CHHS) to be the state designated entity for overseeing ARRA funding for state HIEs.

Based on an article in California Healthline, a number of other organizations had some serious concerns with CalRHIO, enough concerns to start their own organization, the California eHealth Collaborative (CAeHC).  What is surprising here is that one of those that called into question CalRHIO’s operating model was its former CEO Lori Hack, who is now a board member of the competing CAeHC.  Primary concerns/issues with CalRHIO included:

Besides the obvious hit the Medicity takes (they widely promoted this win) and the egg on the face of many proponents of the CalRHIO, probably the clearest message here is that the governance issue of HIEs is extremely political, especially when a boat-load of federal Stimulus dollars are at stake.  The CalRHIO fiasco is unlikely to be the last one we’ll hear of over the next 3-9 months.

Part One: Stage One Meaningful Use Winners

As required by legislation in the American Reinvestment and Recovery Act (ARRA), HHS/CMS released rules for the meaningful use of certified EHRs before the end of 2009 (late the afternoon of Dec. 30th).  Others have already written plenty on what is actually stated in these rules, therefore, let’s take a look at the potential winners and losers of these new rules as well as those where it is still too early to tell.  This analysis will be laid out over the next few posts starting with Winners below.

Winners

Consultants: At 556 pages, very few physicians and hospitals will take the time to read the complete meaningful use rules, rather hiring consultants to guide them in mapping out a strategy to adopt and implement a certified EHR to meet these requirements in the tight time-frame allowed.  Hospitals and large private practices will have the resources to hire such consultants, small practices will not, instead relying on the yet to be formed statewide extension centers.

Payers: Demonstrating meaningful use will require electronic eligibility checking and claims submission for 80% of all patient visits.  This will greatly simplify payers cost burden for payers who must currently contend with eligibility checking by phone and mountains of paper claims submissions from providers.

Large, Established EHR/EMR Vendors: These vendors have the resources and political clout to insure their apps will meet certification requirements.  They will meet such requirements either through internal development or acquisitions.  In some cases, partnerships will also be used to meet smaller, niche requirements of meaningful use.  Big boys with an established presence include: AllScripts, Cerner, Eclipsys, Epic, GE, McKesson, NextGen, Siemens, etc.

Revenue Cycle Management (RCM) Vendors: Core to most RCM vendors solutions is the ability to perform electronic eligibility checking and e-claims submission.  As this is now a core requirement for incentive payment, these vendors will see a boom in business. Smaller, independent vendors such as MedAssets and SSI will likely be acquired.  Large vendors, such as Emdeon, may expand their offerings into core EMR functionality similar to what athenahealth has done with the introduction of athenaclinicals.  Companies such as RelayHealth should also see a bump up in business as providers look to address this requirement.

Medication Checking Reconciliation & eRx Apps: A significant amount of attention is being paid to addressing medication errors and e-Prescribing (eRx) in Stage 1 of the meaningful use rules.  The HITECH Act legislation specifically calls out eRx as part of meaningful use and CMS has been promoting/encouraging adoption as well so this is a no-brainer.  The big winner here is SureScripts.  Medication/formulary reconciliation is also called for in Stage 1, something that the Joint Commission has been advocating since 2005.  Several eRx and EMR apps have embedded this functionality in their solutions.  Lastly, physicians and hospitals will be required to do drug-drug, drug-allergy and drug-formulary checking.  Companies such as First Data and Thompson as well as Cerner’s Multum solution should do well in addressing this requirement.  There are also a plethora of smaller companies, such as enhancedMD, Epocrates, Medscape, etc. that may benefit, through partnerships with or acquisitions by larger HIT firms.

M&A Firms and Small, Innovative Software Companies:: Stage 1 is asking for a lot of functionality that simply does not exist in many EHR/EMR solutions.  Larger, more established EHR/EMR companies will not have enough time to build out all the functionality required and will either seek partnerships or acquire smaller, niche vendors such as those mentioned previously (our bet is we’ll see more acquisitions than partnerships).  Due to the strong demand for niche applications to fill gaps in their solution portfolios to meet Stage 1 requirements, these EHR/EMR vendors will likely pay premium dollars for the best-in-class apps.  Small, innovative software vendors and the M&A firms that represent them will do well over the next few years.

Meaningful Use Rules Hit the Streets

Late yesterday afternoon, the Center for Medicare and Medicaid Services (CMS) who holds the big bucket of ARRA incentive funds for EHR adoption, released two major documents for public review and comment that will basically define healthcare IT for the next decade.

The first document, at 136 pgs, titled: Health Information Technology: Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology is targeted at EHR vendors and those who wish to develop their own EHR platform.  This document lays out what a “certified EHR” will be as the original legislation of ARRA’s HITECH Act specifically states that incentives payments will go to those providers and hospitals who “meaningfully use certified EHR technology.”  This document does not specify any single organization (e.g. CCHIT) that will be responsible for certifying EHRs, but does provide some provisions for grandfathering those EHRs/EMRs that have previously received certification from CCHIT.

The second document at 556 pgs titled: Medicare and Medicaid Programs; Electronic Health Record Incentive Program addresses the meaningful use criteria that providers and hospitals will be required to meet to receive reimbursement for EHR adoption and use.  Hint, if you wish to begin reviewing this document, start on pg 103, Table 2.  Table 2 provides a fairly clear picture of exactly what CMS will be seeking in the meaningful use of EHRs.  In a quick cursory review CMS is keeping the bar fairly high for how physicians will use an EHR within their practice or hospital with a focus on quality reporting, CPOE, e-Prescribing and the like.  They have also maintained the right of citizens to obtain a digital copy of their medical records.  An area where they pulled back significantly is on information exchange for care coordination.  Somewhat surprising in that this was one of the key requirements written into the original ARRA legislation.  But then again not so surprising as frankly, the infrastructure (health information exchanges, HIEs) is simply not there to support such exchange of information.  A long road ahead on that front.

In Closing…

As I am on vacation and today is a powder day here in the Rockies, I will come back to this at a later date after I have had some time to review and digest these two documents.  First thought though that comes to mind is that the only initial winners here will be the consultants as few doctors have the time or inclination to pour over the 556pgs of the incentive program.  Heck, in my own brief encounters with many doctors, most have only the most cursory knowledge of the HITECH Act and that knowledge is most often full of inaccuracies.  Hopefully, those regional extension centers that HHS will be funding will go live in the very near future as there is a tremendous amount of education that needs to occur to insure this program’s future success.

Quiet for the Holiday Break

Will be quiet here at Chilmark Research as I take a break to be with family in the western offices of Chilmark Research.  Though I’ll be skiing as much as conceivably possible, in the early mornings before the lifts open or evenings, if I have any energy left, I’ll check the news, various sites keeping tabs on the impending release of the meaningful use rules that will define the process for EHR adoption under ARRA. Doubt if I’ll have any energy to extend myself beyond that critical issue.

Speaking of which, CMS submitted its meaningful use rules for regulatory review on Christmas Eve.  Titled EHR Incentives Program (CMS-0033-P), we can expect final rules released for public review and comment in very near future.  Incentive payment schedule: hospitals may begin receiving reimbursement payments by 10/01/2010.  For physician practices, reimbursement payments begin on 01/01/11.  Of course, reimbursement is dependent on demonstration of meaningful use of a certified EHR  and we still do not know what “certified EHR” is.  Long road ahead folks – we’ll do our best to provide clarity as it evolves.

Next week, I’ll return to a more normal state of research and writing or this site.

Until then, may all enjoy the time they spend with their family over these holidays and wishing god health to you and yours for the New Year.

Looking Back: 2009 Forecast Assessment

A common practice among analyst firms such as Chilmark Research is to make annual predictions of what is in store for the coming year.  Chilmark will be making its own predictions for 2010 in the next couple of weeks.  Unfortunately, what most analyst firms do not do is reflect on their previous predictions and assess where they hit the mark, where they completely missed it and those partial hits.  Chilmark differs here in that we actually find it quite instructive to perform such an assessment for it both gives us some satisfaction when we get it right, but more importantly, provides us some humility and lessons when we get it wrong.

Following is our humble assessment of our 2009 Top Trends & Forecast post which was published in late December 2008:

Healthcare not Immune to Economic Woes: HIT – Indeed, 2009 has not been kind to the overall economy with unemployment rates still hovering in the 10% range.  Though healthcare is one of the few sectors that is actually hiring, truly a bright spot in this economy, certain sectors of healthcare have been anemic, especially HIT as physicians and hospitals await the final definition of meaningful use before plunging in and adopting a certified EHR, whatever that is.  As per our forecast, the market for Revenue Cycle Management (RCM) apps remained robust in 2009 and HIE apps did fairly well.

Health 2.0 Companies Shrivel on the Vine: MIXED – In retrospect, not a very insightful forecast as the cost to create and maintain a Health 2.0 company are not that significant, thus it may take sometime for founders to call it quits and close up shop.  And as many close their doors, there are plenty of others inspired to create some form of Health 2.0 app that will appeal to the masses, or at least a large sub-group (think diabetes, weight-loss, etc.) coming in to take the place of those before them.  We still hold to our basic premise that those who will succeed long-term will be characterized by: strong competitive differentiation, a revenue model that is not solely dependent on advertising, and a clear and compelling go-to-market strategy with a clear value proposition and partner network.

Retail Health Clinics Gain Traction, Corporate Clinics Stall: MIXED – Rather than turning to retail clinics in these times of uncertainty consumers continue to turn to those they trust, their primary care physician.  Despite the flu season and the ability to get your flu shot virtually anywhere, including the airport, retail clinics actually saw some contraction with one of the leaders, CVS’s MinuteClinic actually rationalizing the number of clinics it owns.  CVS’s claims that this was in response to an initial over-build, but more likely is a result of tepid demand.  Walgreens, CVS’s main competitor is the leader in providing on-site corporate clinics.  Despite their strong presence in the corporate clinic market, they have been noticeably quiet in recent presentations and quarterly reports saying little if anything about their success in this market.

Virtual Visits a Mixed Bag: HIT – American Well certainly appears to lead the pack for virtual visits (they seem to show-up at every event out there and the press is having a lovefest with them) and are the consummate marketers of virtual visits, but despite this, Chilmark still does not see a vast and growing market for such services, yet.  Virtual visits will indeed grow at a fairly rapid clip as physicians look for new ways to further engage their existing patients/customers, where a level of trust has been established.  The market growth for ad-hoc virtual visits, such as American Well, MDliveCare, etc., will continue to be modest at best until consumers become more familiar and comfortable with this approach to delivering care.

Dossia Ramps-up: MISS – Though predicting that Dossia would ramp-up its services with more go-lives of consortium members, such was not the case. While Dossia has done a lot of work in 2009 and claims that this work was necessary prior to others beyond Wal-Mart going live on the platform, Chilmark thought that at least by now, employers such as Intel, Pitney-Bowes and other advocates for the Dossia platform would be introducing their employees to Dossia during their annual benefits fairs in the fall.  To date, we have seen nothing more from Dossia and it continues to remain an enigma in the Personal Health Cloud market.

Chicken and Egg Scenario Plays-out for GHealth and HealthVault: MIXED – Google did add support in Google Health for unstructured data (ability for users to add advanced directives), but beyond that no further strides to support other standards outside the still limited bastardized version of the CCR standard currently in use. Chilmark also thought that Google would become more aggressive in attracting other data providers and partners, but this has fallen far short of expectations. Predictions for HealthVault were much more on target with its efforts to go international (Telus-Canada), the coupling of Amalga and HealthVault together (New York Presbyterian & Caritas Christi), the addition of many more partners and most recently, the roll-out of the consumer health widgets on MSN.

New HIE Models Leveraging Cloud Computing and SaaS Gain Traction: HIT – In the last few months, leading HIE vendors Axolotl, Covisint and Medicity have each announced their own Platform as a Service (PaaS) model, a combination of cloud computing and SaaS. Clearly, these leading vendors see the writing on the wall: HIEs will be pivotal solutions in the future roll-out of HIT supported by ARRA stimulus funding.  Now the question is: How will traditional EHR vendors respond?

Continua Compliant Devices Hit the Market with Little Impact to Anemic Telehealth Growth: HIT – Despite the hoopla regarding Continua and its certified devices (there are five today and one adapter) that were to storm the market, the use of biometric devices by consumers to facilitate telehealth remains by and large in the testing phase.  There has been no broad roll-out, and very little in the way of ARRA funding is targeting this area despite the pleas of some.

Dreams of Big Fed Spending on HIT Do Not Materialize: MISS – Complete and total miss now that the feds plan to spend some $44B on HIT in the coming years to wire up physicians, hospitals and clinics.  Couldn’t get any farther from what has actually come to pass in this forecast, but it remains to be seen just how successful this federal largess will be in the successful deployment and implementation of HIT.  A very tight schedule with a number of hurdles to overcome – keep your fingers crossed that not too much of tax payer dollars will ultimately be wasted.

mHealth Continues Expansion, Most Apps Lame: HIT – mHealth is seeing increasing attention with an increasingly large array of apps being made available, from simple text messaging apps from the like of FrontlineSMS targeted for NGOs in developing countries to increasingly complex, useful and expensive apps such as the $189.00 app, Proloquo2Go, which was a top iTunes seller in 2009.

Adding it all up, Chilmark Research did a reasonable job of forecasting 2009, with five hits, 3 mixed and 2 total misses.  Hope you’ll forgive the blunder/complete miss on the HITECH Act and we’ll strive for a more accurate forecast for 2010, which will be forthcoming within the next couple of weeks.

Pushing ONC to Act on Consumer’s Behalf

CBR002836Just about anything you hear coming out of HHS’s ONC office is with regards to digitizing the doctor’s office.  This is somewhat understandable as there is some $36B in ARRA funding just waiting for the rules on “meaningful use” (MU) to come out of CMS sometime in December. Until those rules are released, the EMR market will continue to be in stasis.

Unfortunately, this nearly myopic focus of the physician and their adoption of a “certified EHR” has completely left the consumer/citizen out of the equation. We fear that this could come back to haunt ONC as our back of the envelop calculations show that ARRA funding comes up about $80K short of reimbursing a physician for adoption of an EHR.  Another forcing function is needed to bring these doctors into the 21st century.  Citizens can be that forcing function, but to date, HHS/ONC has completely ignored them.

We will give credit to the HIT Policy Committee MU workgroup and their MU matrix which states that physicians will provide citizens a PHR by 2013.  Question is, what will that PHR be?  Just an electronic file cabinet (nothing but records) bolted to the floor (not portable)?  If that did occur it would be an unmitigated disaster, with extremely low adoption and use.

Stepping into this fray is Rep. Patrick Kennedy of Rhode Island who’s office is now creating a Bill (caution PDF of draft Bill) likely to be introduced int he near future, entitled the Personal Health Information Act, to amend the ARRA/HITECH Act by establishing clearly defined guidelines (at least clearer that what has been defined to date) for “Personal Health Record systems.”  We won’t quibble that Kennedy’s office does not use the term Personal Health Platforms, but take satisfaction in seeing the term “systems.”

This 8pg draft Bill is a quick read, but below is out outline of it with commentary.

The Bill defines a PHR System (PHRS) as one which:

  • Provides a medical history that includes all major diagnosis and procedures with updates.  This is a no-brainer.
  • Provides recent lab results if available in electronic form.  Not sure why they state that this is limited to electronic lab results only.  Don’t most doctor’s offices have scanners? Concern here is that it may become a loophole.  Also, are all lab results to be fed into PHRS?  If yes, this could create some challenges as their is a significantly wide range of views in the medical community as to what labs should be shared with their customers via a PHR.  And if those labs are provided, they are basically useless to your average consumer if they are not provided in context.
  • List medications and prescriptions, both current and historical.  Again, a no brainer on providing the lists, but what about providing the capability to request prescription refills?
  • Online secure communication with provider practices.  Many a provider is not too keen on this if there is no corresponding reimbursement model. CMS, why don’t you take the lead here, the rest of the payers will follow.
  • Automated appointment and care reminders as well as educational and self management tools.  Now appointment reminders, heck even scheduling an appointment online is pretty straight forward and it does facilitate front-office operations, but what do they mean by self management tools?  What about educational tools?  Will a simply link-out to some website suffice or are these tools to be embedded within the PHRS itself.  This could get tricky and expensive.
  • Provide privacy, security and consent tools.  While it does not mention it in the Bill, assume such will be HIPAA compliant.  Not really sure why they do not mention HIPAA in the Bill itself.  Also, consent may prove challenging, especially for parents of teenagers as the laws vary from state to state.
  • Provide CCD & related CDA documents as well as clinical and administrative messages necessary to exchange information between providers.  Please, do we really want to force CCD/CDA onto the PHRS market where CCR is perfectly adequate and by the way, generally viewed by most IT folks as a far superior standard to work with for exchanging information.  Bad move here by Rep. Kennedy and hope this will be modified as this Bill makes its way through the House.
  • Support full portability between providers.  Good to see portability supported, but should this not be portability between systems/other PHPS or PHRS in this case?
  • PHRS delivers the functionality to serve the intake process and thereby minimize use of or eliminate the ubiquitous clipboard.  Great to see this in the Bill and any physician worth his or her salt will support this capability as it again reduces front office workloads.
  • Access to the PHRS is controlled by the patient or an authorized representative of the patient.  WHOA, expect big time push-back on this one from the physician community.  The Bill asks them to support some pretty rich functionality within the PHRS and then goes and states that the physician can be completely shut out of the PHRS a the whim of the patient?  While we do support citizen control of their health records, believe this provision is a political mistake that could completely sink the whole Bill.  This may be a bridge too far for the medical community to cross.

What’s Missing?

While this Bill is a good first step, we did find a couple of areas where the Bill is lacking.

  • First off is the whole concept of Provenance. By this we mean who create a given record entry, who has seen the record, has the record been altered in any way.  Basically, an audit trail for one’s PHI within the PHRS.  Which leads to the next omission:
  • Providing the citizen the ability to annotate the notes to provide feedback to the provider/care team.  Which leads to another omission:
  • Provide journal capabilities within the PHRS that allows the citizen to record their health/health events that occur outside of the practice.
  • Another area we were surprised to not see addressed was the ability to incorporate biometric data into the PHRS.  Biometric data will become increasingly important in the years to come to support care outside the confines of the doctor’s office or hospital.  Ability to import biometric data needs to be a fundamental capability of a PHRS.
  • One other key attribute that is missing from the PHRS is the ability for the citizen to selectively tag and share data elements within their PHRS account.  For example, one may want their primary care physician to know that they had an STD in college, but not necessarily their dermatologist.

Bottomline:

This draft Bill shows promise and may finally get ONC to start talking about the value taxpayers will receive from the HITECH Act, rather than what they have done to date, simply messaging to physicians.

Spigots are Opening: $1.16B for HIT in 2010

CashYesterday, there was a press conference at Mt Sinai Hospital in Chicago with VP Joe Biden, HHS Sec. Kathleen Sebelius and ONC head David Blumenthal to announce the first major release of ARRA funds for HIT.  The total amount, $1.16B will be distributed in 201o to address two priorities, setting up extension centers and helping states create RHIOs. The official announcement from Biden’s office provides a few more details. The HHS HIT site has a good letter from Blumenthal that further outlines the purpose if this funding

Putting each of these initiatives right up front in the funding cycle makes a hell of a lot of sense to us.

First, dedicating $598M to the Health Information Technology Extension Program (HITEP) for the establishment of some 70+ extension centers, as well as a national Health Information Technology Research Center (HITRC), which is separately funded at $50M, will put in place the needed infrastructure of technical advisers to assist physicians in adopting EHRs and insuring that their deployment will support meaningful use, well at least that is the plan, which is much easier said then done.  We still wonder where the feds and these extension centers will find the necessary skilled staff to man these extension centers once this market begins to heat up.

Some quick facts and figures on HITEP:

  • Only non-profit institutions are eligible to receive funding.
  • These extension centers are expected to serve 100,000 or more physicians with the primary target being small physician practices (>10physicians).
  • Funding floor is $1M, and the ceiling is $30M.
  • HITRC will receive separate funding of $50M and will basically become a clearinghouse of best practices for implementation adoption and us of HIT.
  • Grants will be awarded on a rolling basis beginning with 20 awards in Q1, 2010, another 25 in Q3,’10 and the balance in Q4’10.
  • Initial funding is expected to support the first two years of an extension center.  By 2012, HHS is expecting these centers to be pretty much self-sufficient, though there will be an additional $45M to distribute in years 3 and 4. If the Land Grant and Sea Grant programs are of any guidance, these HIT extension centers will not be self-supporting – it just doesn’t happen.  Trust me, I worked in the Sea Grant program for several years.

These regional extension centers will:

  • Support health care providers with direct, individualized and on-site technical assistance in:
  • Selecting a certified EHR product that offers best value for the providers’ needs;
  • Achieving effective implementation of a certified EHR product;
  • Enhancing clinical and administrative workflows to optimally leverage an EHR system’s potential to improve quality and value of care, including patient experience as well as outcome of care; and,
  • Observing and complying with applicable legal, regulatory, professional and ethical requirements to protect the integrity, privacy and security of patients’ health information.

Second, dedicating $564M to assist states in establishing RHIOs is logical, if not critical, if indeed we want to have true care coordination.  Besides, if the feds are going to demand that one of the core precepts of meaningful use be information sharing, then it is the responsibility of the feds to facilitate building the infrastructure to make it happen.  Distributing $564M to States or State Designated Entities (SDE) is quite a boat load of money to make this happen, hopefully it will be spent wisely and not result in more cobbled together RHIOs that live from one grant to the next and have no sustaining business model.  Maybe they could make a condition of receiving a grant – a clear business plan that shows a self-supporting entity within say three years of go-live.

Some quick facts and figures on the HIE Grants:

  • Objective is to “develop and advance information sharing across the healthcare system” in a given State, or among States and an even broader vision to support the NHIN.
  • States will be required to match grants in 2011
  • HHS is expecting to distribute ~50 awards, only one allowed per State.
  • Funding floor is $4M and the ceiling is $40M.
  • Critical dates (proposed): Letter of Intent due Sept. 11, Application Oct. 16, Awards, Dec. 15, Program Start, Jan 15, 2010.
  • Program is anticipated to last four years.  Over the course of the four years, HHS will have certain milestones that the RHIOs must meet. Not surprisingly, these milestones are broken into three phases with the likely intent of matching the three tiers of meaningful use.
  • HHS is targeting to have these RHIOs fully operational prior to 2015 when Medicare penalties kick-in for those not demonstrating “meaningful use”.
  • RHIO performance will be monitored quarterly with entities evaluated on their ability to support information sharing.

And what information sharing will these RHIOs support?

Glad you asked and here is your list of minimum requirements (note, these align directly to the meaningful use recommendations that were approved on July 16th)

  • eClaims and eligibility checking (certainly the payers had a role in getting this in there),
  • Electronic order and receipt of labs and test results,
  • Public health reporting,
  • eRx, including refill requests,
  • Medication fill status and med history,
  • Quality reporting and
  • Clinical summary exchange.

All in all quite a tall order considering most RHIOs have not gotten much further than distributing labs and test results.  But really what choice does ONC and HHS have?  Congress, in its infinite wisdom, has put into legislation that some $36B+ must be spent in a very short time period to get the healthcare sector into the digital age.  The aggressive schedule put forth by this legislation leaves HHS with little choice but to charge ahead.  Considering te circumstances, HHS/ONC are being about as thoughtful as one could expect. Let’s hope that when it comes to actually executing on these initiatives the measured approach taken to date continues.

Meaningful Use & the PHR Market

growthYesterday’s ONC HIT Policy Committee meeting was a big one.  Over the course of many hours, the committee went from hearing revised recommendations for Meaningful Use, to recommendations from the HIE workgroup and lastly recommendations regarding certification processes for EHRs.  Over the next week or so we plan to do separate write-ups on each of these topics and their implications.

ADDENDUM: HHS now has a webpage with links to various Meaningful Use documents and background pieces for you to drill down on.

But for today, one topic seems the most urgent and relevant to bring to the forefront (at least from our somewhat biased perspective) and that is…

What do the new meaningful use recommendations within the matrix (which was passed yesterday) mean to the PHR market?

Here is our quick sketch:

1) The topic of PHRs is embedded with the second priority of the meaningful use matrix, “Engage Patients & Families”.  Putting engagement of patients and families number 2 out of 5 signals that this is indeed important to this administration.  A very promising sign that tells the market that PHRs are, or at least will, become mainstream.

2) The revised matrix also accelerated the timetable for physician practices/hospitals to provide a patient with a PHR, populated in real-time with their personal health information (PHI) from 2015, to 2013.  Again, another sign that consumer access to PHI is not only critical to meaningful use (and critical to showing value to citizens that their tax dollars are going to something they may directly benefit from), but also critical to improving health and indeed doable.

3) With such emphasis on PHRs in this crucial set of recommendations that will define future HIT architectures for many years to come, PHRs will now have a front row seat at the CIO’s table and no longer simply be an afterthought.

4) While many EHR/EMR vendors will certainly attempt to sell their existing PHR solution to their prospects (most of these solutions are no more than a simple consumer portal into the EMR), most hospitals and physician networks do not have simple, single EHR vendor environments, e.g. New York Presbyterian’s partnership with Microsoft is a good example.  Thus, this creates an opportunity for independent PHR vendors with strong interoperability tools to step-up to the plate and serve this market opportunity.

5) This also creates an opportunity for independent PHR vendors to serve smaller specialty practices with solutions engineered to serve specific disease communities with a level of specificity not found in generic EMR/PHR solutions.  For example, one can envision a PHR for oncology practices that embeds rich functionality (CDS) and content that pertains to a given cancer condition and may even link-out to social communities such as LiveStrong.  As the market for PHRs expands and the population that can use them, naturally, the market also expands to address such niches in a profitable manner.  This will be the next evolution in the PHR market, but we are still at least 2-3 years away from this moving from trial stage to early adopter stage.

Heartening to see such high level support and committment to PHRs from HHS.  A market opportunity has been created and some PHR vendors are well-positioned to capitalize on it.  These may be quickly acquired by EMR vendors.  Others will successfully carve out a niche, but even here, they will need strong, or at least friendly partnerships with many a traditional HIT/EMR vendor.

Stay Tuned, Meaningful Use Part Deux Forthcoming

EHRs-meaningful-useToday, ONC’s HIT Policy Committee will reconvene to hear the latest iteration of draft recommendations on “meaningful use.” For those of you that are new to all of this, “meaningful use” is the legislative language used in ARRA, to insure that the ~$36 billion to be spent on clinician adoption of EHRs will result in EHRs being used in a meaningful fashion.

About one month ago, the meaningful use workgroup of the HIT Policy Committee released their first draft of recommendations which received significant comments during that initial presentation from others on the HIT Policy Committee along with some 790+ written comments in the comment period that followed (here’s Chilmark Research’s own comments).  The meaningful use workgroup chaired by Paul Tang and Farzad Mostashari (don’t be surprised to see Mostashari in senior position at ONC within next month or so) did an admirable job in this first draft but our final assessment of this draft, it was DOA.

Hopefully, the workgroup has taken a much closer look at what is actually doable within the time constraints of the HITECH Act, which are very tight and modifications have been made to insure that not only meaningful and substantial adoption occurs, but that adoption leads to better, high quality outcomes.  If we focus on just the technology, as it appears HIMSS special vendor committee EHRA would have us do, we are likely not to see meaningful adoption and use.  If, on the otherhand we set our sights on meaningful outcomes such as what the Markle Foundation suggests (disclosure, Chilmark Research did review and comment on earlier draft of Markle’s comments and is a signator to these comments) with clearly defined targets and let the innovators of healthcare create the means to get there without some prescriptive technology fix, we will see meaningful and sustainable adoption leading to measurable results that all citizens will benefit from.

uncle-samThe proverbial doors to get your comments in on the Draft Recommendations for Meaningful Use that were released on June 16th close late this afternoon at 5pm ET.  Plenty has been written here by Chilmark Research on the topic of “meaningful use” (simply do a search) and we did a quick review on the recommendations last week if you need a refresher.

If you are in anyway impacted by these recommendations, we strongly encourage you to get your comments in.  Sources tell me that to date, surprisingly few comments have been submitted.

Following are the details cut n’pasted (bold & italics are ours for emphasis) right off of the HHS site.

Meaningful Use Comment Instructions

The Office of the National Coordinator for Health Information Technology (ONC) is seeking comments on the preliminary definition of “Meaningful Use,” as presented to the HIT Policy Committee on June 16, 2009.  Comments on the draft description of Meaningful Use are due by 5 pm est June 26, 2009, and should be no more than 2,000 words in length.
  • Electronic responses to the draft description of Meaningful Use are preferred and should be addressed to:
    MeaningfulUse@hhs.gov
    With the subject line “Meaningful Use”
  • Written comments may also be submitted to:
    Office of the National Coordinator for Health Information Technology
    200 Independence Ave, SW
    Suite 729D
    Washington, DC   20201
    Attention: HIT Policy Committee Meaningful Use Comments

CHIP Chimes In: Let’s Build an iPhone Platform for HIT

iphoneMedJust received an email this afternoon from Children’s Health Informatics Progam (CHIP) here in Boston announcing the release of a workshop derived document: Ten Principles for Fostering Development of an “iPhone-like” Platform for Healthcare Information Technology. Not sure if release was serendepidous or not but timing is interesting in light of yesterday’s release of Draft Meaningful Use Recommendations and today’s webcast by CCHIT outlining future certification processes.

The workshop itself came about as a follow-on to the paper CHIP researchers Mandl and Kohane published in NEJM last March.  Maybe with all that ARRA money floating about in the HITECH Act, ONC should just go ahead and build such an “Open” platform that supports modular apps to meet specific needs wihin this highly fragmented market.

Seriously, this needs some consideration.

Congress did grant authority in the ARRA legislation for HHS to develop an open-source EHR if existing vendor solutions do not adequately meet market needs. So, rather than build a full-fledge EHR which is almost doomed to fail in the market (despite what VistA promoters may argue) a better strategy may indeed be the building of an Open, iPhone-like platform with open SDK, open APIs, etc., heck, even throw in an AppStore (with an app review feature) and let the development community have at it.  This could really get things moving and accelerate adoption of HIT, especially in small practices where 80% of care is delivered.

Are you listening Washington?

Meaningful Use Draft is Tough to Swallow

hhslogoToday, the Meaningful Use (MU) workgroup of ONC’s HIT Policy Committee presented its recommendations for what physicians and hospitals will need to demonstrate to obtain ARRA funding for “certified EHRs.”  Chilmark listened in on the presentation and deliberations of the meeting and also downloaded the slide deck, following is our initial assessment.

The MU workgroup broke down meaningful use into 5 broad categories:

  1. Improve quality, safety, efficiency and reduce health disparities.
  2. Engage patients and families.
  3. Improve care coordination.
  4. Improve population and public health.
  5. Insure adequate privacy and security protections for personal health information.

Within each category, the MU workgroup set specific objectives and measures.  As proposed, these objectives and measures will ratchet up in two year increments, 2011, 2013 and 2015.  In 2011, the broad objective is to capture and share data.  For 2013, MU is to advance care processes with decision support. In 2015 MU criteria focus on improving outcomes.

MU1

A 7pg MU matrix (PDF) is now up on the HHS site provides a clear picture of what is proposed.  This matrix has a significant amount of info, far too much to cover within the context of a post, so please take a look for yourself.  Chilmark’s summary assessment:

The Good:

The MU workgroup was charged with an enormous task and have done an impressive amount of work in a relatively short time-frame defining clear, comprehensive goals and objectives for MU.  The five broad categories successfully reflect the prime precepts of the ARRA HITECH legislation, going beyond ARRA’s suggestions of meaningful use to address such critical issues such as consumer rights to Personal Health Information (PHI), public health, privacy and security.

The MU recommendations have a strong focus on creating and exchanging data elements that are already becoming “liquid” (e.g., meds and labs) a logical place to start and one that can be accomplished without undue burden.  Also, the strong desire on the part o the workgroup to direct MU recommendations towards outcomes and not just focus on technology is to be commended.

The Challenges:

Despite the fine work that has been done the MU recommendations are DOA.

The bar has been set too high and the recommendations put forth will be virtually impossible to implement within the aggressive time schedule of the HITECH Act.  Simply put, it appears that not enough attention was paid to the processes/workflow changes that are required as part of a successful HIT roll-out to meet these MU recommendations.

For example, recommendations call for CPOE use in 2011.  CPOE is extremely challenging to implement and the technology piece is actually a pretty small component of the overall implentation.  The real challenge with CPOE is its direct impact on physician workflow and practices.  Thus, CPOE requires significant forethought, process mapping, implementation and training.  Getting all that done and to demonstrate meaningful CPOE use by 2011?  Don’t bet on it.

An even bigger challenge may simply be the reimbursement schedule’s structure, especially for those smaller practices who may not derive a significant portion of their payments from CMS and thus not heavily impacted with future CMS penalties.  (We do not have to worry so much about hospitals and IDNs as the future 5% CMS payment penalty is more than enough incentive). The reimbursement schedule, which was written into the legislation is front-end loaded, i.e., physician reimbursement higher in early years than later ones (see table).  Ratcheting up MU criteria from 2011 to 2015 may make compliance to MU criteria so onerous that physicians simply opt-out of reimbursement in 2015, which for one starting in 2011, only represents a loss of $2,000.

hitech2

There is also the issue of the technology itself. Will the physician’s EHR vendor be able, or willing to keep pace with this schedule of MU recommendations, will they embed the needed technology in their solutions to assist the physician/practice/hospital to readily meet future MU criteria? Will there be enough good, experienced consultants available to assist with implementing new changes? Sure, the larger EMR providers will be able to do it, and large hospitals and IDNs will be able to get the good consultants, but will smaller providers be able to keep pace?  Much of this may be answered in the future in how ONC defines “certified EHR” and what may come of extension centers.  If ONC keeps the definition of “certified” loose to encapsulate an ability for a physician to readily mix and match any number of apps to meet MU criteria, we may have a chance, but currently, it does not appear that we are heading in that direction for certification.

The Wrap:

The MU draft recommendations of this workgroup are just that, DRAFT.  Discussions today during the HIT Policy Committee meeting were wide ranging and significant.  Chilmark also had an opportunity to participate in an ad hoc call this afternoon sponsored by a mid-western IDN’s CIO. During that call as well, discussion was wide ranging, but in this case the focus was more on whether or not the MU recommendations were even doable. Answer was a universal, No and most on this call plan to provide comments to ONC on what is actually doable/reasonable to accomplish within the tight legislative time-frame of the ARRA.

Looking ahead, core MU recommendations addressing privacy and security will pass through with little change.  Details regarding “% values” for reporting of various health data metrics will be a key part of negotiations/deliberations.  Significant challenges will arise regarding level of CPOE adoption and by who (hospitals vs practices) as well as patient engagement as it pertains to home monitoring with biometrics and eConsult capabilities (2013) and providing PHR with real-time view of EMR data (2015).

Stay tuned folks, it will be an interesting evolution for MU in the coming months.

Meaningful Use Hits the Streets Tomorrow…

recovery…or at least the first draft of meaningful use.  As just about everyone who has not had their heads in the sand for the last four months knows, the definition of meaningful use is critical to future ARRA funding distribution for “certified EHR” adoption.

It is being widely reported, including a direct quote from John Glaser, who is on loan from Partners Healthcare to assist David Blumenthal at ONC to usher in the execution framework for ARRA funding, that the HIT Policy Committee, will submit its recommendation of meaningful use criteria to ONC on June 16th. Early reports are that meaningful use criteria will initially have a low threshold (2011) but will be tightened in 2yr increments (2013 & 2015).

Chilmark has written plenty on this topic before (links below – have highlighted some of the most popular ones) and will refrain from any further prognosticating.  Once the recommendations are released, we will give it a thorough review.

Projecting release of recommendations for June 16th (learned about this one via Twitter source).

Wondering if meaningful use will impact PHR market

Looking at how “Meaningful Use” can be meaningful

First post (Feb 16, 2009) when meaningful use issue was raised in context of overall ARRA.

Also, below is a chart that outlines the work schedule for HITSP. Within it, you can ascertain some idea of the aggressive schedule now in place to get Stimulus $$$ flowing into the healthcare sector.

HITSPARRAplan

Meaningful Use by June 16th

Yesterday, at an mHealth event in Washington DC, Michael Fitzmaurice of AHRQ stated:

We’ll tell the world what meaningful use is on 6/16.

Referring to the next meeting of the ONC Policy Committee.If this indeed comes true, Chilmark will feel pretty good about this as it is something we predicted back on April 30th.

Many a vendor will also breath a sigh of relief as the delay in a meaningful use definition, which is required as part of the ARRA stimulus funding for EHRs, has stalled the market.  But that raises another question: Will the market continue to keep checkbooks in their drawers awaiting the definition of “certified EHRs?”

Hopefully, when it comes to certified EHRs, ONC will take a more measured and rational approach as advocated by the likes of the Markle Foundation, Adam Bosworth (former head of Google Health and one of the original developers of XML standard), Chilmark Research and many others rather than the approach that one legislator down in the Garden State of New Jersey has proposed in recent legislation that states, and I kid you not:

A prohibition on the sale or distribution in this State of HIT products that have not been certified by CCHIT…

Needless to say, it appears (thanks Mr. HIStalk) that this legislator has fans in Chicago (HIMSS), who, as we all know, is a big time supporter of all things CCHIT.

The Consumer Role Post Stimulus

HCcostcutCartoonAfter the $36B+ has been spent on what is hoped is the digitization of the healthcare sector via adoption of EHRs, what will be the consumer role?  That was the question put to four speakers yesterday as part of the eHealth Initiative webcast that Chilmark Research participated in yesterday. Other speakers included: Phil Marshall of WebMD, Eva Powell of the National Partnership for Women & Families, and George Scriban of Microsoft.

With only 10 minutes allotted to each speaker, it is not like we had sufficient time to dive deeply into the issues, but simply to give some flavor as to what might be expected in the future, post-Stimulus.  Currently, the legislation as well as all discussion to date regarding the ARRA funding for EHR adoption has been eerily silent on what will all of this funding mean to the average consumer/tax-payer.  How will they directly benefit?  Will it be through lower costs and subsequently insurance premiums? Will it be through better quality of care? Might it be convenience?  Hard to say but one thing can be said at this point: Sadly, HHS, has spent very little effort in articulating the value proposition of the planned HIT Stimulus spending for the tax-payer.  If HHS is not careful, this may come back to haunt them and more broadly, the Obama Administration further down the road.

Following is the slide presentation that Chilmark Research used yesterday where we gave our own views on the role the consumer will play post-stimulus.  Not exactly the most far-reaching of projections, simply too many variables at this early date.

[slideshare id=1497885&doc=ehimay09-090527161742-phpapp02]

During the Q&A, what struck me was the relative simplicity of the questions and to some extent the lack of in-depth knowledge on some of the critical consumer issues,  particularly with regards to PHRs.  Following is a set of questions that came through from one of the Blue Plans.  If they have these types of questions, quite sure many others do as well.

Ques: What types of metrics are available to track PHR usage?

Ans: Currently, there is no consistency on what metrics are tracked in a PHR.  Most often, metrics used are defined by the sponsor and may include accessing record, taking an action, responding to an alert, etc.  Ill-defined as market is still immature.

· Ques: What are the most used features in the PHR?

Ans: Depends on who is sponsoring the PHR. Employer/payer sponsored PHRs often have an HRA with incentives tied to it to encourage completion.  Increasingly, these PHRs have tie-ins to HSAs and pricing data to assist in purchasing decisions. Provider PHRs depend on level of transactional services provided. The most successful PHR today in North America is the one at Kaiser-Permanente and consumers use the following: Access Labs, Schedule Appointments, Request Rx Refills and have eConsults.  Consumer sponsored PHRs are minuscule part of market, less than 2% by our estimates.

· Ques: What percentage of today’s PHRs are pre-populated with data?

Ans: Data comes in many forms, claims, PBM, clinical, admin, images, labs, etc. Most sponsored PHRs have some pre-populated data. Thus Chilmark’s guess is ~90% but warning, amount & type of data is HIGHLY variable.

Meaningful Use: A Driver for PHR Growth?

infoexInformation Exchange in support of care coordination is one of the three meaningful use criteria cited in the ARRA (Stimulus) legislation, with the other two being demonstrated use of eRx and ablity to provide quality reporting metrics.

In many conversations and presentations though, it appears that the consensus view is that “Information Exchange” is that which occurs between clinicians.  Funny thing though, the legislation never states that this is indeed the requirement.  Within the Recovery Bill, Division B, Subtitle A, Section 4101 that legislation states:

(ii) INFORMATION EXCHANGE.-The eligible professional demonstrates to the satisfaction of the Secretary, in accordance with subparagraph (CHi), that during such period such certified EHR technology is connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination.

Thus, is HHS chooses to go down this path, Information Exchange for care coordination could be defined very broadly to include an entity that has a stake in coordinating care, including the patient/consumer.  Therefore, might a clinician that agrees to provide a consumer with open access to their records be construed to meet this particular requirement for “meaningful use”? If yes, portal providers such as EMR agnostic MEDSEEK or EMR vendors such as NextGen or Epic who offer a portal may see an uptick in their patient portal business.

But what might happen if HHS tied Information Exchange for care coordination together with the language of Division A, Part 1, Section 13405 (don’t you just love government docs!) which states:

(1) the individual shall have a right to obtain from such covered entity a copy of such information in an electronic format and, if the individual chooses, to direct the covered entity to transmit such copy directly to an entity or person designated by the individual, provided that any such choice is clear, conspicuous, and specific;

In such a scenario, we see portability of medical records in support of information exchange come to the forefront.  Might such an incentive encourage recalcitrant organizations to begin opening up and allowing patients/consumers to not only have a digital copy of their records, but request that it be sent to the PHR or personal health cloud of their choosing and then using their PHR as the locus for care coordination?

If such does come to pass, PHR providers may have a unique opportunity to assist physicians in addressing what will be one of the more difficult meaningful use criteria.  What Chilmark also likes about this scenario is that it gives the patient/consumer direct control of their records and in some respects puts them on more equal footing with the clinician>  This could become one of the few areas where consumers directly benefit from all the billions being spent on HIT.

One area that might trip this up completely though is demonstrating “care coordination.” It is here that the PHR vendor will need to focus their energies demonstrating that their solution provides the tools and capabilities in support of such among all stakeholders in this web of information exchange.

ONC Provides Roadmap for HITECH Act Execution

Yesterday, ONC published an 8pg document that provides a roadmap for the important decisions that they will make in the coming months. Over on the industry news website, Healthcare IT News, John Halamka provides a good overview on some of the highlights of this fairly important document.

Meaningful Use:

Clearly, ONC is seeking to provide some assurances to the market that they do have a clear plan moving forward giving some direction to the market as to what to expect. All well and good but what is surprising is what is not provided in the document.  For example, while timelines are given for such issues as the HHS-NIST relationship for conformance testing and milestone dates for “Standards Rulemaking” there is no timeline for definition of “meaningful use.”  Rather the document states:

Define “Meaningful Use of an EHR”: Recovery Act §4101– The Recovery Act authorizes that incentive payments may be made to eligible professionals and hospitals that are using EHRs in a meaningful way.  Specific understanding of what constitutes meaningful use will be determined through a process that will include broad stakeholder input and discussion.  HHS is developing milestones for major phases of the program’s activities with planned delivery dates.

As this has been acknowledged by many, including the new head of ONC, Blumenthal himself as the linchpin in the HITECH Act, where is the plan? In an earlier post Chilmark predicted a draft release on meaningful use by mid-June.  After reading this document, it appears that ONC may be moving slower than originally thought and we might not see such guidance until late August at the earliest. This could be a long summer.

Metrics of Success:

Another to come later statement is the outcome measures that ONC will use and measure on a quarterly basis to report on the success, or lack thereof of the ARRA funding for “certified EHR” adoption.  What those outcome measures might be is anybody’s guess.  Might they be based on “meaningful use” criteria, e.g., growth in eRx or improvement in quality outcomes? No clear signals from ONC at this time.  What we do know is that in the past, ONC has looked annually at adoption of EHR metrics, but even these numbers (at least the ones referenced in the document) do not align with adoption numbers reported by Blumenthal et. al. in a recent NEJM paper.  Chilmark’s hope is that the metrics ONC wil use has some relevancy to Joe the Plumber and Jane the IT executive for at the end they are the one footing the bill, not a hospital, not a physician and certainly not a payer.

Extension Centers:

While the ONC document outlines appropriations for RHIOs/HIEs ($300M), NIST ($20M), and Privacy and Security (~$24.3M), there is no mention of how much will be allocated towards regional Extension Centers (EC) which will be instrumental in outreach to small and single physician practices.  For that matter, ONC provides very little guidance beyond stating that by the end of 2009 ONC will publish funding availability for ECs with actually $$$ beginning to flow in 2010.

Which raises the question: If these centers won’t even see funding until 2010, how do physicians get the advice they need in the near term?  Talk to/listen to vendors?  Talk to/listen to consultants?  It would seem that getting these regional ECs in place sooner than later is prudent.

But then one gets to the last page of the document and all becomes so much clearer.

At the bottom of that page, ONC fully realizes the challenges ahead and also makes what Chilmark found to be a shocking admission; ONC only has 30 FTEs to orchestrate this monumental task!

Barriers to Effective Implementation: Staffing levels in ONC must be increased.  With the current staff of 30 FTE, plans are to use all available human resources vehicles to increase the level of staffing.  This will include term appointments for projects with short-term needs; details as permitted by Recovery Act legislation; a limited number of permanent positions for long-term projects; and other temporary and contractual agreements.

Thirty FTEs to define criteria for the distribution of over $21B in federal funding, funding that will define the HIT industry for at least the next decade, if not longer?  Maybe this ONC document needed to start with a simply staffing plan.

How to Win Billions for Your Members

Washington Post on Saturday had an interesting article that profiles how HIMSS, through strong lobbying efforts, was able to land the huge ARRA windfall for its member HIT vendors.  Great lessons here for those looking to tap the federal spigot, though doubt many will have such luck in timing as HIMSS had in this instance.

Now the question is: Will HIT vendors be the only beneficiaries of this federal windfall or will both clinicians and consumers also see value at the end of the day?  At this point, it is anybody’s guess.

Making “Meaningful Use” Well… Meaningful

doctor-computerThe market for EHRs has stalled as potential buyers await the outcome of the government’s definition of “meaningful use” and “certified EHR” both critical for determining Stimulus reimbursement.  Of course the recession has not helped things for EHR vendors with many a hospital and practice seeing fewer patients, smaller endowments (thanks a bunch Madoff), and longer reimbursement cycles, few are in a mood to put down money on any EHR solution until the dust clears.

But as virtually every EHR vendor exhibiting at HIMSS made clear:

Stimulus funding is coming, we have the solution for you and yes, we already know what meaningful use is and of course, we are certified under CCHIT, or in the process of obtaining such, so your investment is safe with us.

Bold statements indeed, albeit falsehoods, from the vendor community that may put a potential buyer at risk if:

To cover their bases (insure reimbursement) the buyer purchases a bloated EHR, that will most likely meet “meaningful use” and “certified EHR”, but is difficult to install, costly to maintain and clinicians end up hating it due to poor, inflexible workflow capabilities.

They decide to go ahead and trust a given vendor and their assurances that they will be certified and their app will meet meaningful use requirements only to find out later, after deployment, that such is not the case and federal reimbursement is unlikely.

Today, no one (except for maybe a few at HHS and they’re not talking) knows for sure how HHS will define “meaningful use” or what “certified EHR” may mean. Therefore, until these terms are articulated to the market by HHS, we need to sit tight for the final language out of HHS for meaningful use and certified EHR may be far less restrictive than currently envisioned by many.

What we know today:

EHR

Language of the ARRA uses the term EHR, a fairly broad term and can be interpreted to mean an equally broad category of applications, not just EMRs or even PHRs.  This provides flexibility for HHS to create a reimbursement program that does not focus on what the app is, but what it can do, e.g., how can it assist the clinician in meeting “meaningful use” objectives.  There is even the possibility that a clinician could assemble, via a diverse range of modules available in an online market similar to Apple’s AppStore all the necessary components for their practice to use and meet meaningful use requirements. David Kibbe wrote a post prior to the passage of the Stimulus Act that discusses the concept of “Group Clinicalware” another healthcare IT app concept that the ARRA does not necessarily exclude, though how “certified EHR” is define could lead to such exclusion.

Meaningful Use

Legislators were a little clearer on what a clinician would need to demonstrate as meaningful use of an EHR to receive reimbursement.   Basically legislators wanted clinicians, and the apps they use to support three things:

1) The first and easiest is e-Prescribing (eRx).  Last year CMS rolled out its “carrot” to clinicans to begin doing eRx and it is working with AllScripts seeing 30% eRx growth month over month since the CMS roll-out. Easy

2) The legislation suggests some form of “Quality Reporting” also be a part of meaningful use.  Quality reporting gets a little tougher as now one has to define exactly what quality metrics will be reported. General feeling is that some form of PQRI reporting will be used, its just negotiating what the parameters of those reporting requirements will be. Getting tougher.

3) The final guideline for meaningful use is sharing of health records, electronically, in the support of care coordination.  But this raises a whole host of questions including:

What data is to be shared? Is it labs, meds, images, clinical notes, billing info?

How will data be shared? Share electronically yes, but by what mechanisms will health information flow in a secure fashion through some form of network in a healthcare system? Is simply having  secure portal where one can log-in to view health information enough, or must information flow into another app to automatically populate that app with pertinent data (interoperability)?

To whom data will be shared? Is this simply clinician to clinician sharing within an existing hospital network, or is it broader than that including clinicians outside of an IDN.  Also, might not clinician to patient sharing of health information also be valid?  Sherry Roberts, a longtime patient/consumer advocate in the healthcare space gives a very compelling argument that meaningful use must ultimately serve the consumer as well.  Why not start with including the consumer in the data sharing equation?

Who owns and controls the data? One of the biggest challenges that virtually all government sponsored Health Information Exchanges (HIEs) share is negotiating the terms for data ownership.  Many a law firm has made a sizable amount of money negotiating the terms of such data sharing agreements.  Will this continue?

It is here, within the context of sharing health data for care coordination, that policy makers and the healthcare sector will struggle the most. Extremely Tough

Certified EHR

Despite the statements of some (e.g., the vendor horn-pipe HIMSS) nowhere within the HITECH Act of the ARRA did legislators give authority to CCHIT to conduct certification of EHRs.  Rather, the legislation instructs HHS to work with NIST to define certification criteria and even work with an outside contractor (which could be CCHIT) to actually certify EHRs.

But what are we certifying (as stated previously, EHR can mean a very broad category of apps) and why?

As Steven Finley of the Consumer’s Union pointed out yesterday during his testimony at the recently held National Committee on Vital and Health Statistics Monitoring (NCVH) meeting that focused on definitions for meaningful use and certification:

EMR certification has not been particularly successful in encouraging adoption.

thousand-flowersSo again, why are we certifying EHRs, it certainly has not done much to prompt adoption. Oh almost forgot, the legislation asked for it.  But if indeed we do need to certify EHRs, how can it be done in the most unobtrusive and least restrictive manner that will allow a thousand flowers to bloom (new, innovative apps) in the fertile ground of the Stimulus largess that will lead physicians to willingly adopt and meaningfully use EHR apps?  Economics alone may not foster wide-spread adoption.

To march down the CCHIT path could very well be the death knell for many a small, innovative EHR vendor.  In speaking to one vendor this week, who’s annual revenue is ~$2m, the cost to go through the CCHIT certification process is simply prohibitive, they do not have that much in resources, cash or otherwise.  They also realize that without some form of “certification approval” they are dead in the water. A lighter, more flexible and less costly certification process is required than what is currently in place.

Today, the Markle Foundation released its latest report: Getting Health IT Right under ARRA. The report does an excellent job of not just addressing the certification issue (use the K.I.S.S. principle, keep it light and pluralistic) but also goes into some depth on an approach to setting meaningful use criteria that will assist with the ultimate goal of the HITECH Act, improving outcomes. At the end of the day, isn’t this what we taxpayers are all hoping for?

Another, quite different view on proposed definitions for meaningful use and certified EHR comes by way of HIMSS, which released their document earlier this week.

Meaning, Implications & Forecast

In the words of the new head of ONC, Dr. David Blumenthal stated this week at the NCVH meeting:

The definition of “meaningful use” will inform everything in health IT.

Clearly, Blumenthal understands the weight which rests upon his shoulders and those of his staff.  How they move forward in defining not only “meaningful use” but also “certified EHR” will set the course for the clinical HIT market for the next decade or more.

Coupled with the extreme importance of these definitions and their future impact, is a stalled market screaming for direction and legislative language that is extremely aggressive in the desire to get Stimulus $$$ into the market.

Blumenthal and ONC staff are under the gun and they know it.

Looking ahead, Chilmark Research sees the ONC taking a measured approach that will consist of the following:

1) Draft guidelines released no later than mid-June to allow for sufficient public comment and re-work. Final guidelines must be in place by end of calendar year 2009.

2) Meaningful use guidelines will be tiered, less onerous in early years but slowly ratcheting up to meet broader healthcare goals.

3) EHRs in use today that are CCHIT certified will be grandfathered in.  Certification criteria for EHR vendors will be kept to a minimum in support of meaningful use, specific features/functions will by and large be left alone.

3a) CCHIT will not be the only certifying body, others will be created to insure CCHIT does not become a choke point.

4) EHRs will not directly equate to EMRs.  ONC will provide a structure that supports an overarching range of apps that when combined, like building blocks in support of meaningful use, are deemed certified.

This week alone there was the HIMSS release, the NCVH two day meeting and today’s Markle Report release.  That is a lot of activity around one topical area – this is heating up fast and needs to be watched closely.  As an HIT analyst firm, we’ll certainly be following developments closely.

At the end of the day though, when all is said and done, will those who are actually footing the bill, Joe the Plumber and Sue the Executive, actually see a difference in their daily lives?  At this juncture it is extremely hard to say that the billions of $$$ going into HIT will make such a difference. That may be the biggest future problem that HHS will need to grapple with – justifying the huge amount of spending with clear demonstrable results that any tax-paying citizen can easily see, feel and appreciate. Hopefully, they are on top of this as well, or at least have it lined up for as the next big issue to tackle.

Addendum:

BIDMC’s CIO, John Halamka has a good post with interesting comments as well based on his testimony at NCVH.

“Meaningful Use” Usual Suspects to Gather and Define

congressIn the incestuous world of the healthcare sector, HHS is bringing together the usual suspects in HIT to discuss what exactly “meaningful use” means within the context of the ARRA HITECH Act.  The meeting will take place next week, April 28 & 29, in Washington DC.

Meaningful use is right up there with “certified EHR” as the real sticking points in the future distribution of the $19B to incent physicians to adopt HIT.  In that legislation, the Act provides guidance as to what meaningful use may consist of but it is only guidance.  To actually make all of this work, much clearer guidelines are required to set verification requirements for reimbursement to physicians of their investment and meaningful use of certified EHRs.

At this juncture guidance defines meaningful use as meeting following criteria:

1) Electronic Prescribing: This is a no-brainer as CMS has already put into place carrots today and sticks tomorrow to get physicians using eRx tools.  AllScripts recently reported a huge increase in eRx of over 30% in the most recent quarter. eRx is already being adopted, meaningful use definition here will be easy.

2) Quality Metrics Reporting: Physicians have been providing reports of various types regarding quality metrics for awhile now, so in this instance we are simply moving to an electronic form of reporting.  Where it gets tricky though is in defining what actually will be reported.  This meaningful use metric could go smoothly or really bog down.  Our guess is that the regulators will keep it simple and straight-forward at first to encourage adoption but ratchet-up reporting in future years.

3) Care Coordination: This will be the toughest to define for a whole host of reasons including: lack of infrastructure (“pipes”) to move records, types of data (“water”) as much of the data still can not be readily shared and data ownership.  Wouldn’t it be great to have a patient advocate on the agenda arguing that Care Coordination could be defined as a clinician providing digital records directly to the consumer to assist in coordinated care? Ah, but we digress.  Our prediction is that data sharing for care coordination will be limited to a couple of discrete data sets for now that are already flowing in many HIEs and RHIOS, labs and meds.  As with Quality Reporting, more data elements will be added over time as the pipes fall into place and the data becomes more liquid (interoperable).

Circling all the way back to the beginning though, we are quite disappointed at the agenda for the “Meaningful Use” meeting next week.  Rather than have a balanced mix of those within healthcare as well as “experts” from outside healthcare to assist in defining meaningful use, we have a collection of mostly well-meaning individuals, but individuals who in many respects have helped to create this HIT mess in the firstplace.

Should they really be asked to continue to define our HIT policies going forward or would it not be better to tap into the expertise of those from other sectors who really have no vested interest or ax to grind in healthcare?

HITECH Act: Medicaid Reimbursement Plan

Yesterday’s post and table provided the physician reimbursement schedule under Medicare.  And astute reader contacted us to inform us that there is another reimbursement schedule that a physician (or hospital) could tap into under Medicaid.

Medicaid reimbursement will be managed at the State level, which will institute the guidelines provided by HHS.  Much of the basic qualifications are similar, e.g., meaningful use of certified EHR, but other aspects diverge significantly.

The high points:

  • Significantly more complicated process to receive reimbursement.
  • Total reimbursement amounts up to $65,000/physician over five years.  First year costs applied to purchase, install and training.  Follow-on years, reimbursement for operations and maintenance.
  • Reimbursement is for a percentage of total expenditures by physician for certified EHR.
  • Extended time horizon, payments through 2021.
  • Physician must demonstrate that a certain percentage of patients (20-30%) are covered by Medicaid.

Table below provides physician payment schedule under Medicaid.  For more info, look to Division B of the American Reinvestment and Recovery Act, beginning on page 490.

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HITECH Act: Reimbursement Schedule a Challenge

money-doctorThe reimbursement schedule for EHR adoption is aggressive.  Over the weekend, we spent more time pouring over the Stimulus Bill, (formerly known as the American Recovery and Reinvestment Act, ARRA), which Obama is scheduled to sign on Tuesday, Feb. 17th.

Within the ARRA, (Division B, page 489) is a very aggressive schedule to meet the oft-stated deadline of all US citizens having an electronic record of their health by end of 2014.  Those physicians that move quickly (demonstrate being a “meaningful EHR user”) will reap the greatest rewards, up to $48,400, through Medicare reimbursements.  Those that drag their feet (adopting in year 2015 or later) will end up with zero reimbursement, and worse, in the form of future penalties from CMS.

The following table provides our interpretation of the Medicare physician reimbursement schedule for that $19.2B (we have yet to look closely at reimbursement schedule for hospitals).  The Bill also allows for an additional reimbursement of 10% for those physicians providing services in an area designated by the Secretary of HHS as a “health professional shortage area.”  At this point, we are assuming that those practices that have already adopted a “certified EHR” and can demonstrate “meaningful use” will be grandfathered-in under ARRA and receive reimbursement.

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The aggressive schedule outlined in ARRA raises some real thorny issues that we don’t have the foggiest notion as to how they will be overcome.  Those issues are:

With adoption of EMR at the practice/physician level somewhere below 10%, (NEJM puts it at a paltry 4%), do we even have enough IT professionals trained for deploying IT in the healthcare sector?  Will demand for HIT professionals far out-strip supply making it nearly impossible to adopt, install, train and demonstrate “meaningful use” in the time frame of ARRA to receive meaningful reimbursement?

How will “meaningful use” be defined and when? Currently, ARRA states (Division B, pg 435) a “meaningful EHR user” as one who demonstrates “meaningful use of Certified EHR technology.  We still do not know what a certified EHR is.

As for meaningful use, this includes; eRx, information exchange and reporting on quality measures.  eRx is easy to define as CMS has already put this in action. Information exchange is far trickier, but ARRA gives some direction by stating information exchange may be demonstrated by “electronic exchange to improve quality of health care such as promoting care coordination.” As for quality metrics, the preference is for “clinical quality measures that have been endorsed by an entity with a contract with the Secretary.”

To demonstrate meaningful use, the Bill outlines a few approaches including:

  • Attestation,
  • Submission of claims, electronically of course, with appropriate coding,
  • Survey response (whatever that is),
  • And a catchall of basically whatever the Secretary may decide appropriate.

Final Analysis

The roll-out of the HITECH Act and the policies requiring far greater elaboration and definition to successfully implement the Act in a timely fashion is going to be extremely challenging. It will require extrodinary leadership and strategic vision at numerous levels within HHS to be successful.  With Daschle out, we do not have a Secretary designate to help guide this process.  Nor are we completely sure who will ultimately lead ONC, the department within HHS that will be held responsible for actually implementing the HITECH Act.  Without that leadership, the HITECH Act is currently a rudderless sailboat, being carried which ever way the wind blows

While we are extremely strong advocates of the need for HIT to become more wide-spread throughout the healthcare sector, we are concerned that the timeline for reimburement that is outlined in ARRA is far too aggressive.  Aggressive schedules such as this, while well-meaning, have the very real danger of causing more harm than good.  The harm will come in the form of far too many poorly executed HIT deployments by physicians racing to capitalize on the reimburement.  While these deployments may meet the “letter of the law” and receive reimburement, over time we predict that the “hassle-factor” as a result of rushed, poorly thought-thru deployments will become ever larger and longer-term meaningful use of EHR will fade.