Deriving Value from Enterprise Systems

clinicalCompMuch consternation has been expressed over the years regarding massive enterprise software roll-outs. There are numerous examples in virtually any industry sector one cares to look at.

Years ago, when I was working as an analyst in the manufacturing vertical, the stories were legendary of ERP deployments gone awry and countless examples of cost overruns. In fact, it was nearly impossible to find an enterprise deployment that stayed within budget.

Is it any surprise then that the healthcare sector has suffered its own share of enterprise software (EHR) woes? Hardly not.

But that is not to say let’s pull up the stakes and forget about digitizing health and revert back to clipboards and row upon row of filing cabinets – we are far beyond that now. The healthcare sector will become, like countless others, digitally-driven. The challenge for the senior leadership at healthcare organizations (HCOs) is to derive value from these deployments, value that requires investment well-beyond the install of that bright and shiny new EHR.

Unfortunately, for many HCOs, insufficient forethought was given to what they hoped to accomplish, what value they hoped to derive (beyond MU compliance) in adopting that new EHR. I have yet to see an enterprise-wide deployment go well, or meet objectives if the organization did not adequately prepare at all levels. The most overlooked aspect is sufficient attention to workflow design and training end users to facilitate adoption and efficient use of a new system.

But there is value in these systems if done right and with the accelerated migration to value-based care (VBC) and associated reimbursement, this will only increase.

At this year’s HIMSS conference, the best presentation I sat in on was by Steve Allegretto of the Yale New Haven Health System. His talk was on their organization’s effort to get a true understanding of costs of delivered care and optimizing for outcomes. He presented some very compelling evidence on how they reviewed their various clinical pathways, supply chain, procedures to uncover unwarranted variabilities to rectify. The result was not only an ability to decrease the cost of care delivered, but in doing so they improved their quality scores. Truly a win-win. When I asked Steve during the Q&A as to what role their EHR had in this analysis – he was adamant: “We simply could not have done this without an enterprise-wide EHR across all of our hospitals to understand variances and then modify them with consistent, clinical pathways across the institution.”

More recently when I was in Colorado for the World Cup Finals, I met a geriatric physician on the lift up the mountain. Our conversation quickly turned to healthcare, the massive transformation that is ongoing and how he, as a physician, was coping with it all. Being in his mid-forties he’s seen quite a bit of change in his career. What I was most struck by though was his enthusiasm for being a physician – he truly loves what he does and secondly, his enthusiasm for his EHR.

As a geriatric physician, virtually all of his reimbursement comes from CMS, which has placed an increasing emphasis on quality reporting. His organization takes part in CMS’s MSSP (Medicare Shared Savings Program).  The physician has a scribe that does all the EHR data entry for him while he interacts with the patient. The EHR tracks and reports the various quality metrics CMS is looking for and his organization has been getting quality bonuses ever since, more than paying for the scribe, and he finds he has more time for his patients.

Adopting a new enterprise software system is not for the feint-of-heart, but if done with sufficient forethought and a clear understanding that the investment doesn’t stop upon deployment, but much like raising a child requires a long-term investment, the benefits are very real and sustainable.


  1. You cannot over-invest in end user training.
  2. Involve end users early and often to ensure workflow is reflective of best practices.
  3. Leverage enterprise-wide capabilities to drive out variance to improve quality and cost structure.
  4. Scribes can, if effectively used, go a long way to improve clinician satisfaction, which will likely also improve patient satisfaction.


Stay up to the minute.

“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

Looking Back – Assessing Our 2016 Predictions

bmurrycardAs has become a tradition here at Chilmark Research, it is time once again to look back at our predictions for 2016 and make an honest assessment of just how accurate we were. We do like to go beyond the blatantly obvious predictions that seem so prevalent – we push the boundaries. While this is a good exercise for us and hopefully insightful for you, it does create some challenges in assessing how on target our predictions were. But alas, no pixels were killed in this exercise, no harm done and we take what we learn and move on.

Without further ado…

HIT: Cyber-security Hacks Increase as Value Escalates
No lack of cyber-security hacks and breaches during 2016 as the value of personal health information (PHI) far exceeds the cost to obtain it.

MISS: EHR Vendors Begin Taking Big PHM Market Share
At the top-end of the market, Cerner and Epic are definitely making some in-roads. In the ambulatory market, athenahealth and eClinicalworks are gaining some traction. However, none of these vendors have really taken the market by storm and there are a slew of other EHR vendors still pulling a PHM solutions suite together (e.g., Allscripts, NextGen) and others seemingly out-to-lunch (e.g., Meditech, Evident, PracticeFusion).

MISS: Telehealth Matures, Consolidates
In a sense we were partially right on this one as telehealth services continue to grow. But we were wrong on two other counts: In the total market for ambulatory health services, telehealth still makes up an exceedingly small percentage. Second, we have not seen any significant consolidation in this sector – maybe 2017 will be the year.

MISS: Physicians Flock to Direct Primary Care
Yes, there is growth in the number of physicians that are choosing to take the path of DPC and that may accelerate under a Trump administration, yet most small practices are simply opting to sell their practice to the highest bidder among local HCOs as those HCOs seek to build out their clinically integrated networks (CINs).

HIT: APIs Gather Steam but FHIR APIs Doesn’t Become Mainstream —
The promise of FHIR has yet to be realized as the standard does not become “official” until 2017. As we predicted, no major EHR vendor released a comprehensive set of production-ready FHIR profiles and resources in 2016.

HIT: CCM Code Underwhelms
CCM code adoption by primary practices in 2016 was poor. The administrative burden combined with the patient co-pay provision was more than most, small practices wished to deal with. In April 2016, CMS put forward CPC+, which if it gains APM status under MACRA, will see far stronger adoption.

MISS: Increased Attention on Referrals Transactions
Standalone referral management market still hasn’t really materialized with a lot general inertia to keep the status quo (e.g., fax machine). Today, only a very small percentage of overall initial referrals are electronic (10%-15%) and closed loop referral remains in PowerPoint from a full feature standpoint with new updated info sent back to referring physician.

MISS: Digital Health Investing Sees Steep Decline
Investment firms continue to pour inordinate amounts of cash into the digital health sector. This being a $3T plus market, a few billion in investment for 2016 is still pretty modest in the grand scheme of things.

HIT: Data Governance, Ethics and Consent Stymie Interop
No doubt, connecting disparate systems in support of interoperability is a Herculean task. That being said, technology is not the main culprit behind the lack of interoperability today – it is cultural.

HIT: Pharmaceutical and Med Device Companies Expand Outcomes-based Pricing
Last year we gave a caveat to this prediction: “Yet, we will only see very limited expansion in 2016 due to challenges associated with measuring and attributing outcomes to a given therapy. The ability of today’s heath IT systems to effectively measure such outcomes will be a key sticking point.” This was spot-on and will continue to hold true in 2017.

MIXED: CCJR Sets the Direction and Care Coordination Benefits
Half right only because CMS had to go with a stick approach after initial enrollment was tepid.  Care coordination still dominated by readmissions programs and the 30/90/120 day follow-up periods that are utilized for various readmissions programs including CMS.  Very rare to see true continuous care coordination that is longitudinal and open-ended across a cohort of patients or specific geographic region.  It is almost entirely episodic, event-based, and limited follow-up duration.

HIT: PGHD Meets Wearables with Mixed Success
As we stated in the original prediction: “To the chagrin of many, 2016 will not be the year we see this industry leverage these data to augment risk scores, conduct proactive engagement, or do much beyond following marching orders from DC.” Don’t hold your breath expecting an uptick in 2017.

MIXED: Mergers and Acquisitions Accelerate While Facing Increasing Scrutiny
M&A activity continued throughout 2016, especially among healthcare providers as large HCOs seek to build out their CINs to create more comprehensive care networks. The M&A activity we were expecting in the HIT market and in particular across EHRs failed to materialize.

Final Score
Hits: 6
Misses: 5
Mixed: 2

While this may be a great batting average for the MLB, for an analyst firm, not so good – we’ve done better. Next week we will post our predictions for 2017. With a new administration coming in under the mantra of repealing ACA – 2017 predictions will be interesting to say the least.



Changing of the Guard: Implications to Health IT Market

vatAfter a brutal election cycle, we are now on the other-side. The Republicans have taken control of the Hill and the White House. The many healthcare programs rolled-out under the Obama administration will now be put under the microscope.

While we try to stick to IT-related topics, in healthcare one cannot divorce policy from technology adoption as federal policy has been and will likely continue to be one of the key macro-economic forcing factors to IT adoption in the healthcare sector.

Certainly, the ACA (Obamacare) will see an overhaul. It is unlikely that there will be a full-blown repeal of ACA as many of the programs within ACA have become part of the fabric of healthcare and would be too difficult to unravel (e.g. MACRA). But make no mistake; significant changes will be phased in over the next few years. It is also important to look beyond just the changes that will be made to ACA as the healthcare sector touches just about every sector of the economy.

During the election campaign, Trump rose to President-elect without divulging any real details as to how he would actually implement his proposals. One must look beyond Trump to the core Republican value of letting market forces lead the way with little government oversight to determine where we might be heading. The Chilmark Research team met collectively to discuss what are the implications of this new Republican leadership team in Washington on the healthcare sector. The Table below is a summation of those discussions of likely policy changes.

Table 1: Pending Changes in Healthcare Policy

Table 1: Pending Changes in Healthcare Policy


As mention previously, in healthcare, IT adoption has been tightly linked to federal policies. That will not change going forward. Looking ahead, Table 2 provides a brief analysis of how the healthcare IT market will fare under this new administration.

Table 2: New Administration and Impact to Health IT Market

Table 2: New Administration and Impact to Health IT Market


Looking Ahead Regardless of who ultimately took office in the 2016 election cycle, the overarching impact to IT adoption is modest. HCOs will still need to continue to increase their investments in analytics to reign in costs and improve quality. The move to a more consumer driven market will also herald yet another round of investments in new care delivery models and software to support. However, mandated models and regulatory approaches to solving some of the ills in healthcare will fall to the wayside. For example, data exchange/interoperability will pull back from being a social/medical need that is mandated to being a business/market need that is economically driven. Our advice to HCOs, do not wait for the dust to settle in Washington. The need to continue to improve costs and quality metrics will continue unabated requiring a long-term investment strategy in IT to facilitate cross enterprise care delivery.

AHIP – The Usual Stories, Amidst Some Refreshing Perspectives

collab-darwinAHIP 2016 is Las Vegas included the usual standard AHIP story lines. Better industry collaboration requires better partnerships, the promise of consumer engagement, the importance of harnessing data to better inform decision making and outcomes. Telemedicine was touted as a life-saving technology to industry cost and access challenges.

But, the absence of an all-encompassing regulatory issue has shaken the industry loose to reveal some new highlights and surprises

Seniors take center stage:  The millennial focus is tempered by a new strategic focus on the senior population, in particular the challenges and expenses of managing end of life care and care settings. As one who worked through a wrenching end of life care scenario with a parent just last year, this is a welcomed focus. Coincidentally, the AHIP discussions came on the heels of research released by Health Affairs identifying four unique spending patterns among senior populations in the last year of life – important research as the industry too frequently ignores critical variables among populations.

Interest in social factors expands:  As we all know, most of the success of a healthcare treatment occurs outside the physical office. Will the patient adhere to medication directions; keep the follow-up appointment; track and report blood sugar levels. We also know that social and environment factors play a key role in compliance.  The healthcare industry and technology partners have been flirting with integrating social factors into consumer health and behavior algorithms, both to better identify population requirements and extend social and support services to improve treatment outcomes. 2016 is the year of the social factor test cases and case studies. Targets are senior and chronic disease populations.

This issue was covered in-depth in our latest Insight Report on Total Active Risk.

Beyond the EHR and PHR:  Interestingly for a health plan conference, discussions highlighted the absence of EHR and PHR value – lack of a common longitudinal health record, gaps, multiple records for single individuals across multiple provider and provider systems, etc. Now that we’ve implemented the EHR and PHR, both provider and consumers are drowning in fragmented information they neither can use to effectively manage care.

Next generation recommendations called for shifting the focus from information storage (the EHR/PHR) to getting only the requisite information to the point of care for making a decision and delivering it to any device and platform. Next generation solutions include workflow, context, analytic or event triggered interactions that reduce a full electronic file of information down to three items of importance to a particular interaction or event.

The Old Guard Doesn’t Work: New Companies on the Block:  As in all evolutionary markets, new business challengers appear. Payer/provider joint venture companies shared opportunities and successes with joint ventures that promoted financial, technology and outcomes alignment. These companies, including ElevateHealth and Bright Health have the latitude to break the mold of traditional payer/provider relationships, leverage IT, co-mingling data and creating new care delivery models.

Iora, a brick and mortar, primary care organization has reset the primary care model to focus on prevention, provide health coaches, communicate with patients on preferred platforms, including text – all to improve primary care, health and outcomes.

In many ways, AHIP 2016 revealed the tension of the old guard and old legacy market strategies and the younger, more nimble individuals and organizations willing to point out that it doesn’t have to be that hard and also willing to invest in new business. The good news is the absence of IT and data no longer is the barrier it once was. The bad news is that legacy businesses can be slow to progress.

Anyone that has tried to work through end of life issues with a senior parent though may take heart. The experience of reconciling pages of hospital claims, dealing with fragmented care settings and processes along with associated health information scattered across these settings is not a pleasant experience. One can only hope that the new found focus on the issue of effectively addressing senior healthcare issues by new entrants will create a spark that is so long overdue.

New Insight Report on Moving to Open Platforms Now Available

[To skip the prelude and go directly to the report sales page, please click here: 2015 Platforms in Healthcare: EHR Vendors’ Capabilities for Interoperability]

Demand for interoperable technologies and platforms is increasing and enterprise technology vendors are responding. Cloud computing, composite applications, and open-source software with publicly available application programming interfaces (APIs) are liberating data to catalyze rapid innovation in nearly every sector of the economy. Vendors such as Amazon, Cisco, EMC, Google, HP, IBM, Microsoft, Salesforce and VMWare have adopted this Platform-as-a-Service (PaaS) approach to help their customers increase their pace of development and deployment, take advantage of more widely available development skills, broaden product and service portfolios, and achieve greater customer satisfaction.

Platform BusinessBut healthcare is stubbornly resistant. All of the factors driving the adoption of platform thinking in the wider economy across other industries — escalating demand for better user functionality, customers seeking an outcome rather than a transaction, rapidly changing payment models — are present in healthcare. Yet HCOs and their HIT vendors cling tenaciously to closed, transaction-based systems and methods of doing business that simply digitize pre-existing business and clinical processes, preserving an undesirable and costly status quo.

Our newest report, 2015 Platforms in Healthcare: EHR Vendors’ Capabilities for Interoperability, provides a broad overview of the current macroeconomic drivers that will foster the growth of platform thinking in the healthcare sector. Specifically, this research found that independent software vendors (ISV) have mixed opinions of the capabilities offered by EHR vendors. Some survive, and even thrive, but always at the sufferance of major EHR vendors. Others survive in the shadows, taking pains not to attract any attention from EHR vendors for fear of being shut out.

Meanwhile, healthcare end-users have elevated expectations based on consumer-facing application ecosystems or “app stores” – built on the technical foundation of open APIs in a cloud-based environment. Yet few EHR vendors admit that provider needs have long outstripped existing EHR feature sets.

This report addresses recent advances in interoperability trends that will help to support the transition to a PaaS model in healthcare – notably HL7 FHIR. The report surveys current EHR vendor strategies to enable PaaS with profiles of leading vendors including ratings on core functionality. After all, as the current hub for health IT in care organizations, this is their opportunity to lose – with other solution vendors happy and eager to innovate to create a true ecosystem for healthcare applications if EHR vendors fail to adapt.

HCOs and their HIT vendors will soon have to decide whether they want to be the platform or be a participant in some other entity’s platform. HCOs will need these platforms to interact with each other, with payers, and with patients if the triple aim is ever to be achieved.


For sales inquiries, please contact Sean Campbell, or go to the report sales page to purchase directly.

HIMSS Will not Have Dragons or Acrobats This Year: Clinician Network Management Watchlist

During the Middle Ages, London’s Bartholomew Fair grew from what we would call a trade show for cloth merchants into a full-blown annual exposition where merchants could conduct business in the presence of “sideshows, prize-fighters, musicians, wire-walkers, acrobats, puppets, freaks and wild animals.” HIMSS’15 in Chicago next week promises all that and more — hopefully without the wild animals. This year at HIMSS, I hope to talk to a lot of different companies and people about interoperability.


Since the publication of our CNM Market Trends Report at the end of last year, it has become clear that the market is seeking interoperability capabilities from EHRs and HIE/CNM that look remarkably similar. As the system of record within an HCO, the EHR is potentially current. As the system of record for the community-wide longitudinal record, the HIE/CNM is potentially comprehensive. These resources could, if they were rendered more accessible, provide the patient data to fuel a vast array of point-of-care, population level, care management, and administrative applications to help the healthcare system shed its fee-for-service blinkers.

Interoperability-related developments of the last few months have set the stage for my HIMSS’15 discussions: the MU3 NPRM, the trial balloon for ONC’s Interoperability Roadmap, a dramatic uptick in interest in HL7 FHIR, the establishment of the Argonaut Project. Healthcare’s interoperability issues have leaked out into general press coverage. The line between genuine interoperability issues and the heat generated by the machinations between EHR vendors and contractors over the impending DHMSM acquisition is cloudy. But radically improved interoperability is a pre-condition to a healthcare system that is patient-centric, population focused and value-driven.

A technology featured in all of these developments is API-based access to application data. This approach is old hat in every part of the economy except healthcare. Walgreens has an API to its photo print operations as well as for its clinic appointments and prescription refills. Bloomberg has APIs to its market data. Twitter provides an API to its vast store of tweets. Virtually any customer-facing operation has APIs for third party developers. Fueled by the rapid adoption of smartphones, enterprises are using RESTful APIs and Open Authorization (OAuth2) to capitalize on the value of their data to drive revenue, lower costs, and better serve customers – B2B or B2C.

The key word here is capitalize. Businesses are charging other businesses for access to this data. In a perfect world, every HCO could provide an API to its EHRs and other applications to support care coordination and population health and … you get the idea. Obviously, this was the idea behind HIE and its predecessor concepts. Proposed legislation circulating in Congress contains language that would require APIs as a condition of certification for EHRs. APIs have captured attention in the industry. They have so far not captured much market share.

APIs are not really all that new in healthcare. CarePass was a cloud- and API-based effort by Aetna to make data from applications and wearables more widely available to patients via applications from third-party developers. It closed at the end of 2014, a victim of patient and clinician disinterest and mixed support within Aetna. Despite this example, I think that broad-based API-based access is inevitable in healthcare. Lightweight, discrete data access can make exchange more financially palatable than the all-or-nothing datacenter-scale HIEs that struggle with funding. This year at HIMSS, I will be paying close attention to what vendors and HCOs are saying about APIs and their potential uses.

HL7’s FHIR will also be big in Chicago this year. It will be a set of Representational State Transfer (REST) web services APIs. It promises an easier-to-program, less resource-intensive alternative to the more widely deployed SOAP-based IHE profiles. It also promises discrete data access to supplement the various methods for document-centric data access now widely deployed around the healthcare system. I fully expect to see a lot of flame imagery around the McCormack Center this year as well as newly created FHIR marketing collateral. I hope also to find out about some concrete plans for incorporating FHIR profiles into existing EHR and HIE product functionality.

I also want to know more about Project Argonaut, which aims to move the industry toward widespread use of FHIR and APIs. This standards effort proposes to make rapid progress on use cases for clinician-to-clinician exchange and consumer access. How one define “rapid progress” in this industry is difficult to judge. For example, CommonWell Health Alliance launched at HIMSS’13 and only recently published its specification.

Eventually the powers-that-be shut down the Bartholomew Fair because it encouraged debauchery and disorder. HIMSS shows no such inclinations but I plan to talk to as many EHR and HIE/CNM vendors as possib
le and hear both legitimate and outlandish claims about APIs, FHIR, and better ways to support a more interoperable HIT infrastructure.

HIMSS’15: Care Management & Care Coordination Watchlist

In preparation of attending HIMSS 2015 next week, I have been busy finalizing my agenda. It has been a busy week confirming and finalizing meeting times, figuring out what vendors I want to take a more detailed look at, setting up times to meet with some former colleagues, and figuring out what sessions I might want to attend. Care-coordination

This will be my sixth time attending the annual HIMSS conference and if anything I have learned it is that having a detailed plan before arriving is absolutely essential to getting real value out of attending.  It is quite easy to get bogged down especially in a conference that will have more than 1,300+ exhibitors and 35,000+ attendees spread across the 4 interconnected buildings at McCormack Place in Chicago.

The primary focus though for me at HIMSS this year is going to be focusing on our Care Management and Care Coordination domain. Besides wrapping up some final conversations I am having regarding a forthcoming Insight Report on Care Plans, I am following up some of the initial conversations I had on this topic for the Care Management section of our Population Health Management: Aligning IT Solutions to Strategy report.

Here are some of the ideas and concepts in particular that I am following up with at HIMSS this year in regards to care management and care coordination:

  1. Here a care management solution, everywhere a care management solution: Just as ‘population health’ was a buzzword term last year at HIMSS that nearly every vendor featured or spoke about, I anticipate this year it will be care management and care coordination. From our own inquiries, we have identified over 90+ vendors that have some form of care management and care coordination solution. This does not even include some of the startups that are still in ‘beta’ development either. Some of these solutions are more niche-oriented solutions geared around a particular workflow process or event (e.g., discharge planning or referral management). Others are focused on more comprehensive care management activities which are primarily focused on enabling a care team to manage particular groups of patients across various care settings in a community. Given the relative immaturity of solutions in this market, I am going to be taking a look just how vendors are defining their care management solutions and how they are moving from ‘systems of record’ (e.g., registry-oriented solutions) to ‘systems of engagement.’
  1. Need for ‘real-time’ data for real-time interventions: Several recent conservations I have had revolved around the need for more ‘real-time’ data in order to act in a more timely fashion to prevent patients who are at high-risk from ending up in a preventable ER visit or hospital admission. At a recent presentation at the 15th Annual Population Health Colloquium in Philadelphia, Mark Wagar, President, Heritage Medical Systems, went as far as to say that when one of their PCPs receives an ADT (Admissions, Discharge, Transfer) notification that they already missed an important potential opportunity. Heritage Medical Systems represents one end of the spectrum of HCOs in terms of their IT capabilities and ability to consume and act upon data in such a rapid fashion. At the other end are HCOs that are signing up for the MSSP ACO program and not receiving adjudicated claims on their Medicare beneficiaries a full 90-120 days after an event (e.g., hospitalization) has occurred. Literally, unless one of these patients come in for a visit before then, the MSSP ACO likely has little to no visibility into what is occurring with this patient in the interim. One of the things I am looking at is what types of ‘real-time’ data (e.g., pre-adjudicated claims, ADTs and results delivery) are being utilized to facilitate care management efforts and how they are being consumed and utilized by care management IT solutions.
  1. Data, data everywhere, nor any data insight to drink: Even for HCOs that have invested considerable time, energy, and resources to aggregate clinical data from EMRs and claims, they are struggling to put together a ‘360 degree view’ or ‘longitudinal patient record’ view at the point-of-care that allows the various members of a care team to easy and efficiently find the ‘insight issues’ for a particular patient. Given that HCOs often have limited numbers of nurse case managers/coordinators, this is causing a challenge for these HCOs to effectively manage broader numbers of chronically-ill patients as they expand their care management efforts to larger portions of their patient population. There is also a lot of talk about getting data into the EMR in the physician’s office but even a prominent EMR vendor admitted to us recently that they are having many of the same issues on how to present the most pertinent ‘insight issues’ in a succinct fashion within the individual patient record within the EMR. I am going to be looking at how care management solution vendors are presenting summary level information on individual patients within an individual patient’s record including their care plan. I am interested to see how different types of ‘insight issues’ are being presented to various types of care providers via different methods (e.g., mobile, tablet, desktop).
  1. Care management that actually includes the patient and their caregivers: One of the issues that has emerged as I have been researching the current state of provider longitudinal care plans is that they are generally missing a key stakeholder – the patient and their caregivers. Despite supposedly being the key focus of the care plan, it has been surprising to find just how disintermediated patients and their caregivers are from their actual care plan in most cases. In many cases, patients and their caregivers cannot even access the actual care plan itself even in a read-only capacity. I am interested to see at HIMSS is how care management and care coordination vendors are involving the patients and care givers including beyond just providing them with basic access to their own care plan.
  1. Role of others in the care management process: For all of the talk about the shift to provider-led care management, there is still an important role for payers in this process for several reasons. Payers have extensive experience with care management, they have the actual claims data that providers still need to get a holistic view of their patient population, and in most many cases are offering money and/or additional services to assist providers in their care management activities especially in commercial ACO arrangements. Additionally, several payers including United Healthcare, Aetna, and Humana, have made a number of IT acquisitions over the years that they are either offering or selling to HCOs.

    Another key area that I am going to focus on is what home health, post-acute, and behavioral health IT vendors are doing to enable care management activities especially in regards to the issue of being able to receive and send out clinical summary documents including care plans. The status quo largely seems to be that even if these provider entities are owned by HCOs and have adopted IT solutions, they can consume only limited amounts of information electronically. Most transactions are still done via the old reliable fax machine or even paper document transfers. I will be stopping by some of the leading vendors to see what progress they are making and how care plans are being utilized by some of IT vendors in these provider settings.

You Tell Us: What are you looking forward in the care management and coordination space this year especially at HIMSS?

  • How much progress will care management vendors make this year moving to ‘systems of engagement’ that also include the patient and their caregivers?
  • What role are payers going to play in this process and are their care management IT solutions going to have increased provider adoption and actual utilization?
  • How successful are care management solutions going to be in both getting critical information in a timely-enough fashion for care teams to act and presenting insights on patients in an efficient manner to the proper care team member?
  • How much progress is going to be made to incorporate post-acute, home health, and behavioral health facilities into provider-led care management efforts?
  • Thoughts on the numerous startups that are trying to penetrate this space?

Inside Peek at Forthcoming PHM Report

imagesOver the last several weeks, I have been working feverishly to finish our first major report on Population Health Management (PHM), which is now in production. It may appear that we are a little late to the party in providing thoughtful research and analysis on this topic, but honestly, PHM is so nuanced, solutions remain immature and industry best practices have yet to develop, that upon reflection, timing of this report seems just about perfect.

Following are just a few of the insights gleaned from this report.

PHM is Top of Mind
Population health management is now at the forefront of strategic initiatives being undertaken across the healthcare industry. Prompting these strategic initiatives is the massive shift in risk, via payment reform, from payers to providers that is likely to completely redefine the health care delivery system in the U.S.  However, the challenge is that by and large, the healthcare sector today is ill prepared to make this transition to a PHM model of care delivery.

There are a number of challenges that stand in the way of healthcare organizations’ (HCOs) adoption of PHM-centric strategies:

  • Few HCOs have the requisite expertise in PHM and the technology infrastructure to support this transition.
  • The dynamic shift from fee for service (FFS) to value-based reimbursement (VBR) models leaves providers in a difficult situation of having to invest in PHM for the future, with little if any near term returns on investment (ROI).
  • IT solutions to support PHM initiatives remain immature requiring HCOs to take a portfolio approach to investing in a range of best of breed solutions to support their PHM strategy.
  • PHM will require a significant change in IT architecture from an almost exclusive reliance on systems of record to adoption of systems of engagement.
  • No single vendor today offers a fully comprehensive PHM solution suite, though countless vendors will try to convince HCOs otherwise.

Our PHM Perspective
For the purposes of this forthcoming report, we define population health management as:

The proactive management of the health of a given population by a defined network of providers who are financially linked, in partnership with community stakeholders (e.g. social workers, visiting nurses, hospice, patient, caregivers/family, etc.).

Within that short definition there are three important concepts. The first is that providers will move from the current passive management of patient and population health to one that is proactive. Second, that PHM occurs among a defined provider network that is financially linked, in most cases via a contract with a payer or self-insured employer entity. Lastly, that the care team extends beyond the provider(s) to include a community network of stakeholders that play a role in the care of a patient.

While Still Immature, Health IT to Support PHM is Evolving Rapidly
The healthcare industry has been slow to move to a digital, data-driven model of care delivery. It has only been in the last six years that a serious effort has been made industry-wide, via federal incentives, to adopt electronic health records (EHRs) to support the creation of a digital, patient health record. Proficiency in the use of EHRs is slowly improving. However, the industry struggles with a host of issues, from clinical data quality to interoperability across a heterogeneous EHR landscape, to supporting dynamic care teams, all of which will create significant challenges for any PHM program.

On the IT vendor side of the fence, while countless vendors claim to have a PHM solution, none can provide a complete solution today. Therefore, HCOs will be left with the challenge of knitting together best of breed solutions to enable their PHM strategy. Core PHM technology capabilities must include:

  • Analytics for risk identification/stratification, performance management, quality and gaps analysis,
  • Clinician Network Management/Health Information Exchange (CNM/HIE) infrastructure to distribute and share intelligence across all stakeholders,
  • Electronic Health Record (EHR) as a core system of record for patient information,
  • Care Management capabilities that optimize care resources within the community served, ensuring care delivery maintains continuity regardless of care setting, and
  • Patient Engagement tools that seek to empower the most critical stakeholders – the Patients – in proactively managing their health.

The EHR will play a key role in PHM initiatives as a core system for the patient record, but a number of HCOs today are unfortunately using the EHR as the core solution for PHM.

This strategy is doomed to failure.

PHM is not about one provider, one HCO and therefore one EHR. Population health management requires the active engagement of a multitude of stakeholders across a community all sharing data in support of care delivery processes, regardless of care setting. Monolithic, EHR-centric PHM programs will prove unsustainable over the long term.

Other solutions, such as those to address care management and coordination across a community remain quite immature. A number of payer-centric, care management solutions are pivoting to address provider requirements, but by and large, few have been successful to date.

Patient engagement, despite a significant amount of marketing hype, also remains very immature, largely as a result of its relatively low priority for HCOs’ IT investments, and more logistically because of its unclear home in HCOs’ workflow processes.

In the near term, the greatest focus of resources to support PHM will be targeted at analytics and CNM. The adoption of analytics solutions and services is quite strong today, especially among larger HCOs, to assess population risk, stratify that risk and measure performance. Within the industry as a whole though, the ability to attract and retain data scientists is proving challenging. This has created opportunities for solution vendors to provide complete bundled solutions, including sophisticated analytics services.

But performing data analysis is of little use if it is not proactively used. Delivering data insights to the point of care (PoC) will play a crucial role in a PHM program’s success. Leveraging CNM to enable distribution of analytically derived insights to providers across a community has the potential to dramatically improve quality, reduce variability and improve outcomes.

Looking Ahead
The lack of maturity within the healthcare sector in developing and deploying the processes, systems and technologies to support PHM will result in a strong market need for solutions that have a strong services component. However, due to severe resource constraints, healthcare organizations will increasingly look for highly modular solutions that allow them to pursue a piecemeal approach to enabling core functions in support of PHM.

Currently, we are seeing strong convergence on a per member per month service pricing (pmpm) model, often times broken out across an array of modules that a vendor may bring to market. Such a model accomplishes two goals. It allows HCOs to incrementally add functionality that aligns with their PHM priorities and budget constraints. Secondly, this model provides a high degree of flexibility for solution vendors to match pricing to the amount of services provided and is particularly amendable to hosted-service models.

Looking further out, however, HCOs will increasingly look to their solution providers to potentially share in some of the risks as well as rewards that may come from adopting their solutions. Over the course of preparing this report, we came across some examples of such, but this is very experimental at this point in time and such contracts are quite narrow in scope.

There still remain a significant number of questions as to how the PHM landscape, both for providers and their solution vendors will evolve over next several years. This upcoming report is just the beginning of our significant, future research on this topic.

As the market develops, Chilmark will continue to delve deeply into what successful PHM initiatives look like and just as importantly, what are the lessons to be learned from unsuccessful PHM programs. There remains a significant amount of uncertainty in how PHM will develop and it is our mission to assist the industry, through our research, in understanding what path may be the most fruitful for any HCO to follow on its journey to PHM.

Stay tuned – the shift in risk from payers to providers and the adoption of PHM strategies to successfully manage that risk will keep us all quite occupied for some time to come.







A Sneak Peek at Austria’s ELGA

ELGA_logoToday I had the pleasure of having lunch with an informatics professor from the University of Wien and got an inside look into health IT in Austria. The highlight of our conversation was a discussion regarding ELGA – Austria’s national health information network.

ELGA Synopsis
Timeline: ELGA is an Austrian government funded initiative that is being roll-out in phases. While it is “live” now, ELGA is only just beginning to onboard some of the major Austrian provinces public hospitals who will come online in sometime in 2015. By mid-2016, all hospitals will be on-boarded and the process on on-boarding ambulatory practices and pharmacies will begin. Private hospitals and practices will follow in 2017, if they desire. In 2022, they will onboard dentists.

Architecture: ELGA is based on a federated architecture wherein no patient data is stored outside of the host EHR (hospital, physician practice etc.). Austria has a national health ID card (it’s a smart card) that is issued to all citizens. This smart card is the “patient identifier thus addressing master patient indexing (MPI). Patient information is queried via a physician portal. Patients also have their own portal view and gain access via their smart card.

Data Exchange: Unlike most U.S. public HIE efforts, ELGA is not trying to distribute an entire patient record. Instead, ELGA will only be able to query and present discharge summaries, radiology reports, lab reports and medications. Other data elements such as a patient’s problem list will not be a part of ELGA data package in the initial roll-out. However, draft implementation guides for ophthalmologic reports and reports of infectious diseases are being balloted IHE XDS is the query standard, HL 7 CDA the format and use standards such as LOINC and SNOMED.

Privacy & Security: ELGA is an opt-out system wherein a patient has to formally request that their records not be available through ELGA. And one thing I’ve come to understand living here – Austrians take their privacy very seriously (they are appalled at what they see occurring in US – eg NSA). Access to ELGA and a patient’s record is strictly limited to the attending physician and the patient. Physician use the patient’s smart card and must have justifiable need to gain access to data. Other physicians, government agencies, payers (they are part of government), employers, etc. – no one can access a patient’s data.

And since it is based on a federated architecture, no patient medical data is centrally stored anywhere. While this puts a real crimp on an ability to perform any type of analytics, it does provide an added level of security that hybrid and centralized architectures cannot match.

Not Without Its Challenges and Shortcomings
ELGA has some nice things going for it such as relatively straight-forward data package, a highly-refined data consent model (citizens can opt-out entirely, restrict access to specific records, restrict access of specific physicians), security built into the architecture and a reasonable roll-out schedule.

But as in the U.S., ELGA and the Austrian government face some political challenges. The government has yet to provide policy guidance as to who will pay for connecting to ELGA – i.e., does the provider have to pay for connecting to ELGA or will the government. The professor told me that there are likely more than 50 different ambulatory EHRs in use in Austria and that adoption hovers in the mid-90th percentile. There is also no clear policy guidance regarding physician liability. So while hospitals by and large support ELGA, support from private practice physicians is lacking. This has lead to some advertisements in local publications sponsored by physician groups decrying ELGA stating that it is not safe, not secure and that citizen’s health data will be exposed.

The most glaring shortcoming of ELGA is its lack of any sort of data repository for clinical analytics. It appears that the Austrian government knew that Austrian culture regarding privacy would never allow such to happen. There may also be the issue that as a single payer system, the government can determine quite a lot regarding the health of its citizens from claims data. Granted, it may not be as richly detailed as clinical data, but it is useable and there is no political risk.

ELGA is not perfect, but I have yet to find an HIE that is. Some of the issues ELGA faces are not dissimilar to those in other countries, including the U.S. Based on this one afternoon lunch, there is quite a bit we can learn from one another’s experience. Yes, each will have their own peculiar nuances, but there is still plenty there to share.

Orion Health Aspires to PaaS

Pasted image at 2015_01_12 08_33 AMThe interoperability problems that plague healthcare are compounded by the paucity of developer options for modern software development. Software as a Service (SaaS) models are increasingly commonplace for EHRs, population health and other finished applications. Platform as a Service (PaaS) models to support application developers are essentially non-existent in the healthcare sector, though we have been arguing for this need since our first HIE report several years ago.

For this reason, we were pleased to talk this week to Orion Health about its “Healthier Populations” roadmap to support population health efforts of providers. While the roadmap has many components, one aspect is especially relevant to developers: Orion Health’s plans to leverage “open” technologies to create a PaaS for Healthier Populations.

Briefly, Healthier Populations consolidates all data sources into a NoSQL database (Cassandra) with an API management layer to support clinical applications – both clinician and consumer facing. The new Cassandra data platform also connects out to an in-memory Map-Reduce engine, Spark, which has some very strong performance metrics when compared to the currently popular Hadoop.

Unlike most of the vendors we routinely talk to, Orion Health’s plan uses technologies and development ideas that leverage modern distributed processing concepts, and web-based client functionality. It plans to assemble a comprehensive clinical and financial data source (EHR, HIEs, payer sources) with an API that will provide roughly the data-sharing network envisioned by the JTF.  For now, the API is proprietary but we expect the company to provide the JTF’s recommended FHIR-based open API if and when it becomes a reality.

Orion Health is currently piloting this solution at Cal INDEX, a health information organization (HIO) formed by California’s two largest payers but open to any healthcare data contributor in California. It has information on 9 million patients and aspirations to encompass the health data of most everyone in the state (some 25M). The technology that Orion Health’s new Healthier Populations platform is built upon can certainly handle that scale. What remains to be seen is how quickly Orion Health and Cal INDEX will open up the platform for independent software vendors (ISVs) as the current plan is to do internal development of apps, especially consumer-facing.

This table provides our general impressions of this new offering from Orion Health:

Orion Health Open Platform



  • Modern computing architecture with open, NoSQL database and analytics staging
  • Better base for analytics, BI tool agnostic
  • Could support wide range of workflows including community-wide care management
  • Highly scalable PaaS architecture
  • Published APIs positioned for eventual FHIR compliance
  • Integration to clinical and administrative workflows
  • Pricing strategy
  • Provider willingness to experiment with new technology
  • Not open to ISVs yet and strategy to remedy unclear
  • Lack of partnerships for analytics tools (e.g., risk stratification, contract management, readmissions, etc.)


Orion Health’s Healthier Populations platform is their attempt to assemble a general-purpose, open infrastructure to support a healthcare organization’s (HCO) population health management (PHM) strategy. Orion Health has rightly assumed that they alone will not be able to provide all the capabilities required for PHM and have instead developed a truly state-of-the-art PaaS platform, built on open technologies. This provides a certain level of future-proofing of the solution suite and the flexibility to optimize the platform to meet specific community PHM needs. We are hard pressed to name any other HIT vendor that is in a position to offer anything similar although many will say that they do.

2014 Year in Review: Analytics

2014analy2014 saw the analytics industry remain in flux and marked by a large degree of ambiguity & complexity.  Four main themes stood out in 2014 that we will discuss in more detail below:

  • Every vendor thinks of itself as a ‘Population Health Management (PHM) vendor’.
  • Divisions between best-of-breed and enterprise-platform vendors are blurring.
  • EHR vendors continue to make progress on their analytics capabilities and are winning accounts.
  • HCOs continue to ‘dip their foot’ in value-based care and scale their investments in analytics solutions accordingly.

Every analytics vendor is now a ‘PHM vendor’
A wide and growing variety of vendors are now defining analytics and PHM according to their core capabilities and rebranding themselves with the uber-mantra of “PHM vendor.” We really don’t like this trend as there is no such thing as a PHM solution – only those that enable such. This is creating significant confusion in the market. Interesting competitive dynamics are emerging and lines are blurring between various types of vendors.

That being said, most analytics vendors that we are tracking are building out solution capabilities to tackle more of the PHM pie. This is being done for two reasons: First, it allows the vendor to sell more capabilities to their existing and future clients. Secondly, and likely just as important, it allows analytics vendors, especially independent, best-of-breed vendors, to gain a higher valuation as the purported PHM market is far larger than just analytics alone.

Divisions between best-of-breed and enterprise-platform vendors are blurring
There is currently a division between best-of-breed vendors and enterprise-wide platform vendors — although this division has been blurring in the past year, as plenty of best-of-breed vendors have aspirations to turn into enterprise-wide vendors. In addition, platform vendors tend to offer PHM apps as well.

Today’s best-of-breed solutions still better align with mass market needs. The market is highly concerned with quality measure compliance and readmissions, and is cobbling together several best-of-breed solutions at a time — in pockets where those specific capabilities are most needed. It is not uncommon for sophisticated healthcare organizations (HCOs) to house several different best-of-breed solutions for quality reporting & benchmarking, enterprise data warehouse (EDW), registries, care management workflow and claims-based risk management.

Finally, no one knows what the ideal platform of the future will really look like. Will it be built off an EDW or a clinical data repository? What will become of legacy EDW/analytics? Will they turn into just another app? While vendors may be looking to become the platform for PHM, with the vision of offering interchangeable apps, this remains a long-term strategy goal and few will succeed. For now, the enterprise platform aspirations remain just that.

EHR vendors continue to make progress
EHR vendors enjoy several advantages going forward, including a stronghold (stranglehold) on clinical workflow, clinical data and all the benefits that come from being already entrenched within the HCO.  The level of this advantage, though, depends on the target HCO and its network strategy.

In tightly integrated clinical networks with a single dominant EHR across the enterprise (Cerner, Epic, McKesson), there remains a strong desire to inject analytics insight into clinical workflow — with overall reduced effort due to the dominant EHR. In these cases, buying analytics solutions from the dominant EHR vendor is a strong pull.

In HCOs with a highly heterogeneous EHR ecosystem, such solutions from a given EHR vendor are in less demand and EHR vendors will still struggle to compete in the near-term. A handful of EHR vendors readily acknowledge this and are developing and/or reengineering acquired solutions to better meet the needs of these particular HCOs.

EHR vendors still lag behind best-of-breed vendors for several reasons. Mainly it has been due to the necessity of having devoting significant resources to the ongoing requirements for various federal programs (e.g., Meaningful Use, ICD-10). A few EHR vendors, including Cerner and, to a lesser extent, Epic, have chosen to build instead of acquire and are starting to catch up. Specifically, Cerner has made significant progress on both the product and marketing fronts and is landing clients. However, there are still going to be areas such as care plans & clinical guidelines, predictive analytics and data visualization where even Cerner or Epic will have to either acquire and/or partner to develop additional capabilities necessary to support an HCO’s PHM strategy.

HCOs continue to ‘dip their foot’ in value-based care and scale their investments in analytics accordingly
Evaluating the pace and scale of HCO investment to enable PHM is challenging for several reasons including the broad range of IT solutions included under PHM, the lack of granular reporting by publicly-traded health IT vendors on their PHM sales, and the variable costs involved especially regarding data aggregation.

While overall HCO IT investments continues to grow, the pace of investment has moderated this year for a few reasons:

  • HCOs continue to deal with unresolved issues including attempting to successfully attest for Stage 2 MU and remedying unresolved ICD-10 issues.
  • Slower than anticipated role out of value-based care that has true, negative down-side risk to HCOs.
  • Lack of additional funds in HCO IT budgets to fund additional large-scale investments to support PHM programs.
  • Initial results from the Year 1 Medicare ACO programs has given HCOs who have not embarked in an ACO or ACO-like program reason for hesitation and thereby limiting their investments in analytics and other PHM enabling solutions.

Instead HCOs are focusing their efforts to reengineer clinical practices and workflows on an incremental basis to address specific business issues related to PHM instead of large-scale enterprise implementations.

It does not mean that HCOs are not purchasing analytics solutions to support their PHM programs but it is crucial that these vendors have a modular approach and compelling product roadmap which allows HCOs to scale their investments over time as the number of covered lives under value-based care initiatives increases. Health Catalyst has been particularly savvy in this regard.

2015: Incremental capability additions and optimization
2015 looks to hold much more of the same as 2014 did as HCOs are looking to optimize prior IT investments and add additional incremental capabilities to better address PHM.   HCOs will continue to shift away from EHRs to solutions that enable PHM but the market will remain in the early stages with significant HCO spending still two years away.  It will also remain a very crowded market with a number of competing vendors including an increasing presence of EHR vendors who are building their own proprietary solutions.

Analytics and care management offerings still need to show more commercial promise in enabling PHM to achieve widespread adoption.  We plan on covering the care management area in greater detail in 2015 including a comprehensive market trends report similar to the just released CNM Market Trends report that profiles key vendors in this emerging market along with examining several key issues in this market.

What Lies Ahead for Meaningful Use?

matts2After much speculation and mounting criticism of Meaningful Use (MU), two recent developments provided some clarity on the future direction of the program and indications of how rocky a road it will be for providers in stage 2.

Fleeting Relief
After a summer filled with mounting criticism and a litany of responses & comments on how to modify the program, CMS issued their much anticipated new final rule for Meaningful Use (MU) Stage 2 on August 29th. For providers who were hoping for some relief, they did not get much.

While providers have greater flexibility for 2014 in terms of using 2011 or 2014 certified EHR technology (CEHRT) to meet the 2013 or 2014 objectives and measures, many were critical CMS did not go far enough in relaxing the rules for 2015. In 2015, providers will be required to use 2014 CHERT and report for the full year (vs. only one quarter in calendar year 2014).

Making matters worse, this is based on the federal calendar year which begins Oct. 1, 2014. This leaves providers with little time to get their bright shiny CEHRT for stage 2, in operation, workflows mapped to support new guidelines (more eCQMs) and staff trained to insure the right metrics are collected for future attestation. It also continues to place a heavy burden on providers who are struggling with MU menu objectives that relies upon cooperation from third parties (e.g. patients, labs, post-acute providers) to meet threshold objectives.

Tepid Attestation – Will it Continue?
Last Wednesday’s HIT Policy Committee monthly meeting also provided an update on electronic MU attestations thus far in 2014. Year-to-date figures showed noted improvement since the last meeting in August but overall adoption of stage 2 remains lackluster.

Through August 25th, 8,024 (vs. 2,823 as of July 1) eligible professionals had attested for the 2014 reporting year with 3,152 (vs. 972 as of July 1) attesting for stage 2. For eligible hospitals, 436 (vs. 128 as of July 1) had attested for the 2014 reporting year with 143 (vs. 10 as of July 1) attesting for Stage 2.

Eligible Providers_Stage 1 MU Hospitals_Stage 1 MU

To put that in perspective, only ~3.5% of hospitals of eligible hospitals and ~2.5% of eligible providers who have successfully attested for MU stage 1 have attested for stage 2 to date. As of this writing, an estimated 85% of all hospitals in the US have yet to meet stage 2 requirements. That is a very big percentage.

Cloudy Forecast for MU
From a payment perspective, MU is entering a period where penalties will potentially become larger for hospitals than incentive payments. The numbers disclosed at the monthly HIT Policy Committee meetings will be very important to monitor through January. If stage 2 attestations remain tepid, it will be an early indicator of waning provider motivation regarding stage 2 MU and likely the whole MU program.

Several key questions regarding MU also remain. What happens if the initial funds that were authorized by the HITECH Act are exhausted this year? What is the political will today in Congress to actually implement the penalty phase of MU? Will the rumors of stage 3 being permanently shelved if stage 2 attestation rates remain low through 2015 come true? Then there is always the issue with a pending change in the administration and just how much the next administration will continue to invest political capital in this program, which frankly has met its initial objective of driving the adoption and use of EHRs.

The net takeaway is that these particular MU announcements will have little real impact on providers or health IT vendors. Providers committed to stage 2 MU will continue to invest in solutions and services through 2015 in order to attest. Providers who have yet to upgrade or purchase 2014 CEHRT technology or are struggling with quality reporting and meeting menu objective thresholds will face a difficult decision:

Is it worth the time and capital to get on the stage 2 bandwagon or place the bet that future penalties for not meeting stage 2 requirements will be small if not non-existent?

Regardless of what a provider/HCO may decide, health IT vendors who offer CEHRT-related solutions, will have to remain committed to spending a significant amount of their R&D budgets on MU for the foreseeable future. Vendors who cannot meet this requirement will have to make some difficult strategic decisions over the next year including whether to exit the market entirely.

Read All About It: Analytics for Pop Health Hits the Streets

AnayticsCvrI am happy to announce that the long labors of our Analytics analyst, Cora Sharma, have come to fruition with the release today of our newest report: Analytics for Population Health Management Market Trends Report This report takes a significantly different look at this rapidly evolving market from last year’s report, whose primary focus was clinical analytics.

Since last year, we have uncovered a market that still is heavily dependent on claims data for analysis – thus the change in title. While claims data will never completely go away and is in high use today due to immaturity in use of clinical data (we found some serious issues remain with clinical data quality), we do foresee a migration to clinical datasets, but this migration will occur over many years.

We also found a market that is currently seeing strong adoption of niche, best-of-breed solutions. These solutions, while offering [relatively] short implementation timeframes and time to value, are also solutions healthcare organizations tend to grow out of after only a few years. Some of the more innovative best-of-breed vendors that continue to aggressively invest in development have stayed ahead of the curve. Others, less so.

And best-of-breed vendors are keeping a watchful eye on their biggest potential threat, EHR vendors. EHR vendors have the gateway into clinician workflow and are an obvious candidate to provide clinical decision support at the point of care based on data-driven analytics. While EHR vendors have this somewhat obvious advantage, they have not capitalized upon it and by and large, their solutions remain immature in comparison to their best-of-breed brethren. But the EHR behemoths seem to have awoken, in comparison to last year’s report, with some of the leading EHR vendors moving aggressively to provide their customers with analytics solutions to enable their PHM strategies.

Here’s a link to the press release if you wish to read more about this report which provides an extremely thorough analysis of the market, where it is trending, and how 19 vendors with leading market mind-share stack up against one another.

Big Fish Swallows Another – Will it Choke?

fish2Rumors that have been floating around for months that Siemens planned to exit the health IT (HIT) market have come true. Earlier today, Cerner announced that it will acquire Siemens HIT business for a whopping $1.3B with expected close in Q1 2015. While we will be doing a more thorough breakdown of what this acquisition means to the two companies, the market and most importantly their customers in a research piece for clients, following is my back of the envelop analysis.

  • With this acquisition, Cerner now surpasses Epic in # of hospital clients, something I’m sure that makes Cerner’s CEO smile – Neal is a tough competitor.
  • Cerner will certainly support Siemens clients on Siemens clinicals, but there will be a time horizon on that support with Cerner’s ultimate goal of having Siemens clients ultimately switch to Cerner clinicals.
  • A weak spot for Cerner has been their financials. Siemens brings them a reasonably good financials solution that some existing Cerner Millennium clients are already using. The trick here will be to truly integrate the two systems (clinicals of Cerner with financials of Siemens) to be truly competitive in the market.
  • Acquisition gives Cerner a much stronger international presence, especially in Europe – a target growth area for most acute EHR vendors now that US acute care market is basically tapped out.

The price of $1.3B is quite high for what Cerner is getting, but Cerner is not a company known for wasting money. It is also VERY uncharacteristic of Cerner to make such a large acquisition. However, Cerner sees value here to leverage long-term, and they do look long-term.

Much of that future value is likely found in Cerner’s rapidly growing PHM activities (HealtheIntent). One of our analysts just came back from Cerner’s PHM Summit last week and was truly impressed with how aggressive Cerner is moving on this front. There is a huge untapped PHM market among existing Cerner clients and now Siemens clients – potentially huge up-sell opportunities if Cerner does it right.

This acquisition is also just the tip of the iceberg – we’ll see many more in the next 12-24 months as market is way overdue for consolidation.

Note: Our forthcoming 2014 Analytics for PHM Market Trends Report (to be released this month) provides a detailed look at this market including a detailed profile of Cerner and 18 other leading vendors. 


Incentives, Regulations and Consequences

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

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

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

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

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

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


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

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

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

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

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

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

Claims Data is NOT a Trojan Horse

dataTrustProbably the most notable development apparent at HIMSS14 was how much HIE and interoperability vendors are now talking about including claims data in their solution sets. Last year at this time, most of these vendors questioned the clinical value and utility of claims data at the point of care. In contrast, this year HIE vendors are now talking as if claims data were as liquid as orders and results between provider organizations. This is a positive, if somewhat overstated, development on the part of the vendors.

In mid-2013 we did see quite an uptick in interest on the part of payers to become more directly involved in HIE initiatives. This interest continued to accelerate through the remainder of 2013 as payers felt that they did have valuable information to contribute, such as eligibility checks when patient is being admitted to ER or information on patient follow-up post discharge and prescription refills (medication compliance). Some of this information, e.g. eligibility check can be provided in near real-time to a patient’s primary care physician.

While vendor support for claims data exchange points to the general increasing level of support for the evolution to value-based reimbursement (VBR), the problem with claims from the provider perspective is history.

Payers until now have been the gatekeepers-to-money translating in the minds of doctors, nurses and patients as gatekeepers-to-care. Payers have wanted better access to clinical data for decades but provider organizations do not want payers poking around in their clinical data. This is not the opinion of most providers, it is still the opinion of every provider we’ve spoken to. This stems from simple distrust of payer motives and the fear of ultimately having their data used against them, which regrettably has happened in the past.

Another challenge has been payers unwillingness to share data outside of a specific VBR contract. In numerous calls we have had with clinical executives, a common refrain has been that payers hold-out on sharing data unless there is something in it for them. Not exactly altruistic or in the best interests of providing quality care across a community.

Most provider organizations are only too happy to get specific about the limitations of claims data and further entanglements with payers through claims or other kinds of data:

Claims data is not that current
Most of the provider organizations we talk to maintain that the payers can only provide accurate data for things that happened six months ago. Anything of a shorter time horizon than that is subject to revision and therefore of very limited value. The exception to this is the aforementioned eligibility checks wherein a provider organization can receive near real-time visibility into network leakage.

Claims data is hard to work with
Providers correctly point out that most payer data sits in 1960s- and 1970s-era mainframe databases and file systems and is processed nightly by COBOL batch applications. While payers use this data to send lots of paper reports to providers, few providers have figured out how to use this data to improve patient care. Instead, this kind of payer data mostly just adds to the fog of data surrounding patient care and is by and large ignored.

Payers motives are suspect
Payers like to create the impression that they make healthcare happen for patients even though they do not provide the full suite of healthcare services nor do they appear to serve patients/members in a manner to truly help them with their healthcare issues. On this point, members share provider views and have strong distrust of payer motives.

Challenges Using Payer Data
Provider organizations will have challenges using claims data in the here and now. Looked at from what happens at the point of care, providing physicians with tools that somehow integrate financial relevance into the practice of delivering quality care is not something that most organizations are really prepared to do. From a more narrow technical perspective, the EHR’s ability to accept this data and make it relevant and actionable for front-line clinicians in their workflows is also something that providers (and by extension their HIE and EHR vendors) will need to address.

Benefits to Providers
But VBR is coming and payers are in a position to help solve some of the soon-to-be or already vexing problems for many provider organizations: revenue leakage, patient risk scoring, care gap identification, medications adherence, clinician performance management, care management or population health.

Solutions to these problems will provide a range of different benefits to provider organizations but genuinely hard to incorporate gracefully into clinician workflows. In addition, solving these problems will require more than just the payer claims data. A range of payer-derived data types will be needed to help provider organizations.

Changing Dynamics of the Payer-Provider Relationship
The use of payer-derived data is inevitable and providers need to look at potential silver lining. Some providers are actively talking about using payer data to evaluate and compare health plan benefit design. The thinking is that by comparing similarly situated patients from different payers from an outcomes standpoint, they may be able to link specific features of a benefit plan (e.g. free annual physical exam by PCP) to better outcomes. If the outcome variance from payer to payer is not minimal then maybe there is a member-benefit design problem that they need to raise with the payer. More importantly, it might put the provider in a better position to recommend to their patients the most effective health plan based on the patients’ overall health history. Using the same logic, providers could compare the performance of partner provider organizations as an aide to negotiation with those partners.

The point is that provider organizations need not view the use of payer-provided claims and other data as all downside. Claims data is as good a place as any to start building trust between traditional adversaries.

HIMSS14: Patiently Waiting for Progress

patinceA grade-school English teacher of mine would write a little guide on the chalkboard at the beginning of our expository writing lessons:

Say what you’re going to say; Say It; Say what you said

Coming off another HIMSS, that lesson reminds me of the patient engagement market today, where it seems we have heard some things being said, and then being said again and again. We have been sold on the transformative promise of more proactive patient populations, fueled with education, armed with their own data, and empowered to become interactive with a connected fleet of software and hardware. Tools for medication adherence or doctor communication continue to be sold as silver bullets to bring down costs of care while improving outcomes; Scalability via SaaS and enterprise IT means that patient engagement can serve as a lynchpin in population health management. Around the corner, a safety net of Bluetooth and wireless devices promises to catch us when we fall.

Yet as John observed in his recap, there is very little out there today that suggests these solutions are mature enough to work as advertised in the real world, not just on the HIMSS tradeshow floor. With all fronts – payers, providers, device makers, and more – claiming to engage patients, the market has become a jumbled jungle with diminishing clarity around strategy – how solutions work together, what settings or populations are best suited for what products, and where one begins the patient engagement process.

However, the squawky chaos of HIMSS is nothing new, and neither is the immaturity of the patient engagement market. So beyond all of the countless patient engagement rah rahs on the expo floor, we did see a few faint signs of progress amidst the following trends, based on our conversations with a dozen or so health IT vendors, clinician leaders, and tech entrepreneurs.

EHRs Look Inward
EHR vendors are at last developing moderate to advanced functionality with their portals (refills, secure communication, education, scheduling), with improved UX/UI that is starting to conform to consumer tech standards. However, the bulk of their efforts in advancing patient engagement over the coming year will be moving “in” to the delivery system rather than “out” towards the patient.

This makes sense, as EHRs have the deep reach into HCOs to advance provider-centric functionality and optimize the patient engagement workflow. In particular, we saw abundant attention on care planning/management tools that generate task lists, discharge plans, medication lists, and so on (possibly a result of efforts to streamline workflow, as Cora described yesterday). Cerner and Epic are leading the pack in optimizing patient engagement workflow for clinical end-users (e.g. tying in medication refill tools or simple note entry based on patient interactions).

These are welcome improvements that will do much to enable better patient engagement down the road, yet:

A) they appear to remain limited to a select test-bed of all-Epic or all-Cerner deployments, or for that matter, any other EHR-system and
B) they still focus heavily on point of care workflow, signaling that EHRs may be the bottleneck when it comes to reaching out to patients between or after visits.

There are exceptions to every norm however, and PracticeFusion’s announcement of two health monitoring partnerships with AliveCor and DiaSend was an encouraging acknowledgement that the EHR can and should become more than a point of care documentation system.

HIEs Look Backward
HIE vendors are looking to build out patient portals and care coordination applications as they transition from building pipelines to demonstrating value. While this represents progress for that market, after seeing a leading vendor’s demo and speaking with leadership from two others, we are not quite ready to celebrate.

Instead of looking ahead, HIE vendors are looking at MU2 and assembling a new crop of anemic patient portals that allow VDT and little else. If HIEs really want to get involved with patient engagement in a truly meaningful transformative way and generate value, they ought to tackle a problem that nobody was talking about at HIMSS: consolidating payer and provider patient portal data to create a unified, longitudinal patient record. (Editor’s note: In our ongoing research of the HIE market (we’ve been tracking this market since 2008), Naveen’s finding is not at all surprising. The primary culprit to the lack of rich patient engagement tools among HIE vendors is simple, there has been very little customer demand.)

Maybe HealtheWay’s new CareQuality initiative will be able to bridge that gap (with Medfusion’s presence serving as a reassuring sign that patient portals might one day benefit from this work). However, given how long it’s taken Commonwell’s work to translate into real world improvement, coupled with patient data taking a backseat to provider data, we won’t hold our breath to see (and feel) results anytime soon.

Mobile Players Look Forward
Sadly, most enterprise vendors are limiting their present mobile strategies to optimized web, leaving tools like GPS, Bluetooth, accelerometers, wearables, and more on the table. Realizing that EHRs aren’t going to come knocking on their doors anytime soon, mobile plays of all types have taken these integrations on themselves. On the device side, companies are also going to market using an array of channel partnerships that range from traditional disease management call centers to Qualcomm’s ecosystem to bundling with personal emergency response system (PERS) targeted at the senior market to TelCo resale plays. We learned of one major partnership between a biometric device maker and a large MCO, and see continued growth on that front despite little buzz on the topic at HIMSS.

On the app front, IMSHealth’s recently launched Appscripts platform is positioning itself to deliver on Happtique’s failed promise, not just by curating clinical apps, but setting up a platform for docs to prescribe them to patients. Aetna, a recent darling on the consumer engagement front under their Healthagen and CarePass banners, seemed more of an also-ran this year, with great soundbytes from Mark Bertolini’s keynote belying a suspiciously quiet year save for emergence of the occasional odd story.

Other than that, mobile apps (and startups in general) are still subsisting on a traditional bait-and-tackle, door-to-door growth strategy for delivery system partners and pilots. These apps are at different stages of maturity, but some are proving that the daunting challenges faced by startups, such as clinical workflow or EHR integration, are not insurmountable. One promising trend is that more of these new “startups” seem to be run by seasoned veterans, doctors, and technologists than in previous years.

Conclusions: Signs of Progress
There is no one-size fits all approach to patient engagement, which is the ultimate shortcoming of the portal approach espoused by the Meaningful Use program. Past the immaturity of any particular solution, the abundance of fragmented approaches, and general lack of cohesion on the strategy front, there were small signs of progress at HIMSS this year. We heard how vendors and customers are working together to co-generate care plans and discharge protocols, or forging piecemeal, meet-you-where-you’re-at approaches to disease management that pair a stratification engine with a good old-fashioned call center.

As Rob pointed out, there are changes afoot in the world of post-acute care (where an estimated ~50 percent of providers still lack EHRs) and for whom a mobile app or a web dashboard is an immediate upgrade for patient management. With much of this world situated closer to patients’ homes (rehab hospitals, SNF, VNA, LTC facilities), there is a big opportunity for reminders, virtual assistance, device support, etc., that folks have started to pick up on. As one startup told us, “we’re competing with clipboards out there.” (Boy, haven’t we heard that one before!) We saw creative new uses of old data, from ADT feeds in hospitals to set up ‘project management plans for post-discharge’ to early neuralnet algorithms for a biometric device that disintermediate the doctor to provide patients with analysis of their readings, mere seconds later. More engaging than a portal, if you ask me.

Bringing it all home for me, on my last day in Orlando I happened to run into my former primary care physician, who has since become a HIMSS Rockstar. We caught up briefly outside the press room before he went on his way, off to give a speech and accept a second Stage7 award. I was left reminiscing back to when I saw him last as a patient, over a decade ago. So much has changed in patient engagement since then – EHRs, patient portals, smartphones, wearables. So while progress may appear to be lost amidst a sea of repetitive soundbytes and multi-million dollar displays, we are indeed moving forward. Let’s all remember to be patient.

HIMSS14: As Vast and Chaotic as Ever

3Three big takeaways from HIMSS14 were:

  • It was great to meet so many new people.
  • Found lots of fodder for future work.
  • I was expecting more push back on my EHR 2.0 trends.

The best thing about an event like this is the exposure to new ideas and new people. The most interesting discovery was the sheer number of places that provide HC services outside of traditional acute and ambulatory care (e.g., doctors’ offices, surgery centers, and hospitals). From the perspective of the big medical centers and frustrated ambulatory docs, it looks like just one big provider consolidation, but the other side of the coin is just as rich.All this HCO M&A is clearing the field for a whole new raft of alternative healthcare providers.  These non-traditional providers need technology to enable their new business models and the big-HIT vendors are not nearly nimble or cost effective enough to provide it. This creates some interesting opportunities for those who can meet this unmet market need, though not without challenges. There are a number of varying models being deployed and the market has yet to choose which one is viable for the long-run.

I was somewhat disappointed, but not surprised, to see no single EHR vendor that really completely changed the paradigm of how we currently do clinical data capture and how clinicians access, view and use the data. What I call EHR 2.0. Sad really.  But there are people trying, and different from my last HIMSS two years ago, a large number of attendees know we need a radical rethinking of the EHR model. In fact, thanks to not hanging out too long with the Big-half-dozen EHR vendors, I’d say the need for radical change was expressed in well over half my conversations.

If there was anything shocking in retrospect it is the number of smallish EHR vendors just now reinventing the wheel — click-happy-itis redux. Seriously, why bother. These guys also do not tell straight stories on just how far along their products are developed. A lot of marketing and tee-shirts depicting stuff that is just not there. In the software business we talk about vaporware (software that does not exist), promise-ware (products or enhancements promised but not even in design), and slideware (product descriptions, features, functions, benefits, and “screen shots” only found in PowerPoints). This conference introduced me to tee-shirt-ware — products that only exist on vendor employee t-shirts.

The best news was that this was the first venue where one could easily find folks that understand that we have to work on the cost side of the provider ledger. Activity-based costing is no longer a dirty word. At HFMA last summer there was almost no one focusing on cost management, which still amazes me. You can’t improve what you don’t measure.

Best in Show once again for me was Surgical Information Systems Analytics. I am not one to heap praise on vendors very often, but SIS just blows me away with their analytic approach and how they display the data. I still have some work to do to understand how the data is gathered, but the application is where we all need to go. It is the best thing I have seen to date that is focusing on lowering the price we pay for healthcare and increasing the quality, by far — at least for work done in the OR.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HIMSS or Bust

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

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

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

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

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

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

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

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

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

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

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

Is the EHR Transformational?


Image by Caras Ionut

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

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

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

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

So getting back to that question…

Is the EHR transformational to the delivery of care?

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

We are adding a fourth domain in 2014…

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

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

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

Three Big Questions for Stage 3 & Patient Engagement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What’s in Store for 2014?

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

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

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

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

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

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

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

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

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

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

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

Payers increasingly become part of HIE fabric. In mid-2013, payers became increasingly involved in the HIE market partnering with leading providers in some communities to share data and improve care coordination. While providers have instinctively been reluctant to partner up with payers, the move to value-based contracts and the strong skills and critical data that payers can provide is forcing providers to re-evaluate their previous stance. falls short – payers wring their hands. has far more sign-ups than detractors anticipated but falls short of administration goals, especially for the young and healthy. This leads to payers to continue wringing their hands over adverse selection of new enrollees and the likely higher risk profile as a result.

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



Looking Ahead to Data Visualization & Blazingly Fast Database Technology

dataVizLast week I attended the annual Data Warehousing (TDWI) event in Orlando. This is a fantastic, intimate setting of the top experts, and plenty of novices, in data warehousing and analytics. The event is totally focused on education, with only a small amount of vendor hype.

Some interesting new things came out of the conference, and plenty of improvements for older analytic concepts and technologies.

The major takeaways were:

Data visualization has gone completely mainstream.
Clearly, presenting data visually — vs. in tables, or distributed as printable PDFs — is the dominating trend, although in HC we still see a lot of visually challenged information presentation. Really, there is no excuse given the availability of easy to use and low cost visualization tools. Time to move beyond boring tables.

There are two flavors of data visualization along a continuum vs. distinct markets. Visualization products span from tools and usages for high-powered end-user analysts, to on-the-spot at-a-glance dashboards to assist production type activities. All products are beginning to overlap each other covering both ends of the visualization spectrum. Vendors with dashboards have made them interactive and vendors with complex data discovery and modeling approaches offer ways for mass deployment of the analytic conclusions converting them to end-user dashboards with one click.

The other manifestation of the popularity of data visualization is that the large BI vendors are catching on. SAP/BusinessObjects is offering a free, very useful desktop data visualization tool (Lumira), with a paid version adding more features (basically database connectors). IBM/Cognos is about to release a new data visualization tool, also. Then you have a growing number of third party data visualization tools that continue to improve (i.e. Yellowfin, Tableau, Qlikview, DOMO, etc.). Plus, cloud BI vendor Birst is also getting on the visualization bandwagon.

Finally, rationalization of the whole so-called “big data” market.
People are finally getting it that most users, especially in healthcare, do not have a big data problem. Most of the selling points for big data can be easily accomplished with traditional analytics tools and database technology. Last year I wrote a Monthly Update titled “Big Data for the Rest of Us.” If I had to do it again it would be “Big Data NOT for the Rest of Us.”

Seems like the appropriate entry point for real big data technology (basically Hadoop and variants) is when you have a lot, and I mean a lot, of unstructured data being produced and stored. This means, de facto, machine generated data and most likely unstructured machine generated data. I am talking about systems that generate 200,000 transactions per second and up. Certainly no EHR or LIS in even the largest IDN is producing these kinds of data volumes. Even, as is stumbles to life, will ever reach that kind of volume.

In healthcare, Big Data is mostly a big distraction – more hype than reality.

Database engineers are busy creating mind-blowing, architectures.
Lots of new ideas in terms of performance architecture and cloud solutions. memSQL was there showing mind bending performance doing hundreds of thousands of insertions per second into an relational database, while simultaneously executing complex multimillion row queries in seconds, this across a geographically dispersed cluster of cheap Linux servers. TreasureData had its innovative agent based cloud database product on display. This architecture greatly reduces the latency of hauling data from the generator systems to the analytics processes.

TDWI continues to amaze and is never boring. I just love this type of event where you can rub elbows with the best minds in the analytics world has to offer in a non-sales oriented forum. Truly a great event.


Whose Data is it Anyway?

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

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

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

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

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

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

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

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

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

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

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

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

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

Can Mirth Revive NextGen?

Last week, NextGen’s parent company, QSI, acquired open-source tools vendor Mirth for $59M. While a relatively small acquisition, it nonetheless will have an impact on the broader HIE market. Mirth’s toolset has an array of HIE components, notably its well-regarded Mirth Connect integration engine, the cornerstone of its commercial and open-source success to date.

The acquisition confirmed two critical points we made in our 2013 HIE Market Trends Report:

1) EHR vendors need new and better ways to support clinical interoperability in an increasingly heterogeneous EHR world and
2) that consolidation in the HIE market will continue unabated.

Mirth, was never a full-bodied HIE vendor, but has been a steady presence in the market as a component supplier to HIEs and HIE vendors, notably Harris and Covisint among others. Its open-source tools get potential customers in the door who can then convert to a commercial license. In a call with Mirth executives, post acquisition, they stated that today, there are nearly 650 commercial licensees of Mirth Connect – for clinical interoperability projects.

Mirth’s integration engine, Mirth Connect, is not as widely deployed in production environments as most of its competitors (i.e., Orion Health, Corepoint, InterSystems or Infor). However,, Mirth Connect has found its way into a variety of prototyping and testing environments for HL7 messaging and EHR integrations. For many developers and healthcare systems, its no-cost, initial cost has been irresistible to desperate HL7 developers around the industry with Mirth claiming some 25,000 active open source licenses out of the 100,000 plus downloads of Mirth Connect.

While Mirth Connect is the cornerstone of Mirth’s product suite, the company does offer other tools that are commonly found in HIE deployments including a data warehouse and master patient index (MPI).

Like other open source vendors, Mirth has grown by selling wrap-around services to healthcare organizations (HCOs) that use its solutions for more extensive and complex deployments. Accordingly, Mirth pops up on our radar screen in discussions with public and enterprise HIEs. Mirth has also been very active in the efforts of the EHR Vendor Affinity Group for the Beacon Community, convened by ONC. But despite its well-received tools and commitment to better clinical interoperability, Mirth has always been somewhat hamstrung by its organizational reach, resources and delivery capabilities.

With this acquisition, NextGen will now use Mirth products for the 90,000 physician users of its community EHR offerings. In speaking with a senior executive at NextGen, she informed us that NextGen plans to preserve Mirth’s independence, retaining the Mirth brand, staff, offices and existing partner relationships and software licensing terms.

We see this acquisition of Mirth as a relatively low cost way for NextGen to accomplish two goals:

1) Do what it could not accomplish internally; develop a cross-enterprise interoperability platform for its current and future customers.
2) Reinvigorate the company and its market luster.

Main Street Realities and Wall Street Expectations
Quality Systems is under pressure to change for two sets of reasons: the dynamics of the community EHR market and the requirements of Wall Street.

These are unsettled times in the community EHR market as physicians gain more day-to-day experience with EHRs, leading inexorably to heightened expectations for EHRs. While the giants of the community EHR market boast like Roman emperors about their offerings, single-digit market shares and rumors of mass EHR replacements have vendors looking over their shoulders. NextGen, like all community EHR vendors, has customer retention concerns and must take product actions so its customers can participate in new models of care at both the patient and population level.

The acquisition of Mirth is also a tacit admission that NextGen’s EHR Connect has not been entirely equal to the complex task of providing cross-enterprise EHR interoperability for its customers. NextGen EHR Connect, like similar offerings from most EHR vendors, does not readily support interoperability in a heterogeneous EHR environment.

While the company is making all the right noises about how Mirth can help provide more interoperable data to support new payment models and population health management, it is unclear why NextGen took this specific product action: buying – rather than partnering with – a company to achieve this goal. After all, plenty of HIE vendors, EHR vendors and HIT integrators thrive using partnerships to get any or all of the tools that Mirth sells.

The explanation probably lies in Quality Systems, Inc.’s (QSI) relationship to Wall Street. The company is now “dead money” in Wall Street lingo. It certainly has fared less well than some its competitors (see chart for an unflattering 1-year comparison with Cerner, athenahealth and even down on its luck Allscripts). A hedge fund owner forced QSI to take on three new board members this summer and reevaluate the company’s “strategy”.

This acquisition could be more related to how the company is perceived by Wall Street than Main Street HIT customers and partners. Buying Mirth was relatively cheap – $59 million reportedly – and, in the Wall Street worldview, a way to burnish NextGen, with its roster of captive physician customers, thereby making it a more attractive target to the usual roster of larger, acquisitive HIT and private equity companies.

Licensing Caution for Mirth Customers and Partners
For existing Mirth customers, product licensing could become problematic over the long term. While NextGen is committed to preserving Mirth’s existing open-source and commercial licenses, the pressure to deliver better revenue results is on at NextGen and the company will eventually turn its attention to increasing the revenue yield of solutions built with Mirth tools that are now spread across many HCOs.

For Mirth’s open-source customers, the transition to some kind of NextGen master license from Mirth’s Mozilla-derived license could introduce unwelcome changes in the form of decreased deployment flexibility or increased direct or indirect costs. These customers could experience higher than expected costs and contractual complexity as they expand their deployments to support new needs or more users. All Mirth customers risk being stranded on existing software as NextGen evolves the software and licensing terms of future versions of Mirth tools to suit its needs. NextGen’s commitment to or interest in preserving the licensing rights or upward compatibility of existing customers is a question mark over the long term. If QSI itself is acquired, that uncertainty multiplies.

For Mirth partners, the foregoing concerns could be more significant. We know that HIE vendors Harris and Covisint have relationships with Mirth under which they use a variety of Mirth tools. We can only hope that these and other partners contemplated that Mirth could be acquired – and its new parent could in turn be acquired – when negotiating the terms of their partnership agreements and licenses. If not, they and their HCO customers could be surprised as Mirth’s licensing terms change to meet the business needs of its new owners.

Granted, all Mirth customers have the current source code should NextGen indeed change terms and conditions in unacceptable ways, this may put some of these companies in the position of directly supporting the code base going forward.

Consolidation Continues and EHR Vendors Interoperate

The bottom line is that this acquisition is more evidence of consolidation in the market for clinical interoperability and for the technology stack found within HIE solutions suites. NextGen is not the only EHR company to acquire HIE technology with Allscripts having acquired dbMotion earlier this year and Siemens acquired MobileMD nearly two years ago. It is also evidence of EHR vendors’ need for better interoperability technology and the inadequacy of existing EHR vendor solutions for connecting care communities in the new world of payment reform.

If history is any guide though, HIE-related acquisitions by EHR vendors do not bode well for this acquisition of Mirth. Over the last several years several HIE vendors have been acquired by EHR vendors. In all cases, these acquisitions have led to the former independent HIE vendor to be but a shadow of its former self.


Pushing the Envelope to HIE 2.0

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here an HIE, There an HIE, Everywhere an HIE

In late March, I headed down to Belize with a bunch of high school students to do some service work. Joining the crew was a parent, Harry (not his real name), who happened to be a urologist sharing a private practice with five other urologists. We got to talking about the industry, the rapid changes that are occurring and of course HIT, where the conversation quickly turned to health information exchanges (HIE).

This urologist’s practice has been using eClinicalWorks (eCW) for several years now and despite their proficiency with using this EHR, the practice has never fully recovered the productivity it once had. Regardless, they have come to accept this hit on productivity as just the cost of doing business. (Note: In Massachusetts all physicians must adopt and use an EHR to be credentialed, regardless of meaningful use or any other programs.)

Harry spends two days a week in surgery with most operations taking place in one of four facilities: local, unaffiliated hospital Winchester (who uses Meditech), Beth Israel Deanconess (has a home-grown EHR but encourages affiliate practices to adopt eCW), Childrens’ Hospital (a Cerner shop that also promotes eCW in ambulatory) and Partners which is now moving from its homegrown EHR solution to Epic (BTW, in a recent conversation with a contact at Partners learned that they are spending $1M/day for next five years on Epic switch – ouch!).

All of these hospital organizations want a closer affiliation with these urologists in support of future value-based payments and of course just getting these physicians to do more surgeries at their respective institutions. Thus, all of them want the urologist practice to adopt their interoperability model. Harry stated that Partners, the biggest healthcare organization in metro-Boston and arguably New England, is pushing particularly hard for them to switch to Epic as Epic does not have an HIE offering (Epic Everywhere is not an HIE in our definition nor apparently in ONC’s) and encourages its customers to put all ambulatory affiliates on Epic instead. In addition to these organizations, the Commonwealth is also encouraging this practice to join the statewide HIE.

After the pain and suffering Harry’s practice went through to become proficient on eCW, they are loathed to switch to Epic. Besides, switching to Epic would limit their ability to connect with other healthcare organizations they work with as Epic does not play well with others.

Harry’s situation is not unique and is likely being played out across the country, especially in urban areas where there may be a number of competing healthcare systems each trying to establish their own HIE. In such a situation what is an independent physician practice to do?

Certainly they could sell the practice, as many physicians have already done, to the highest bidder. Not an option for Harry and his physician partners as they like their independence and plan to keep it that way.

They could turn to the statewide HIE and hope that it will provide the depth of services (interoperability) to enable them to connect and share records in support of care coordination with all hospital systems they work with. Ideally, this may be the best approach but unfortunately they’ll be waiting a very long time for this to happen, if it happens at all. Today, most statewide HIEs, including Massachusetts are focused on enabling Direct secure messaging, a simple, political expediency that those in D.C. can point to as a shiny example of information exchange for the nearly half billion dollars spent on statewide HIEs. It is unlikely that most statewide HIEs will evolve beyond Direct providing the type of deep connectivity between a practice and an healthcare system to coordinate care effectively. That’s not to say we are throwing out the baby with the bathwater as there are some states that are doing exemplary work e.g., NY, IN

Then there is the option of just staying the course and hoping that lightweight connectivity directly into eCW will miraculously occur. For Harry and his partners, both Childrens and Beth Israel currently support eCW and interoperability with the acute care EHR will be supported. Partners may be left with no other option then to purchase a third party HIE solution to connect affiliate practices in the highly competitive, metro-Boston market. As for community hospital, Winchester, this hospital is unlikely to survive as an independent and will either be acquired or eventually be forced to shut its doors.

Still Waiting…
While the vast majority of ambulatory practices will ultimately be acquired, there will be a significant number of specialists who will continue to operate independently and with a number of healthcare institutions. The current hodgepodge of HIEs being stood up in various communities and the multitude in a given urban area will put increasing strain on physician practices such as Harry’s, who like any of us, given too much choice will simply forgo a decision.

Maybe, just maybe the efforts of the Interop Workgroup will take practices such as Harry’s to the promise land that will allow them to support coordinated care, in a simple streamlined fashion, amongst a wide range of healthcare organizations in their community irrespective of underlying HIT infrastructures. We have not heard of any such examples to date, but we remain hopeful as the current model being deployed today, while likely addressing the all too familiar 80% of the problem, still leaves a very critical 20% unresolved.


Finding Few Answers at HIMSS’13

Last week was yet another HIMSS, this time in the Big Easy – one of my favorite cities, despite the unfortunate decay occurring on Bourbon St. As with the many HIMSS I have attended before, this is the seminal event of the year where one has the opportunity to reconnect with friends, acquitances and countless others all in the hope of gaining a pulse on the healthcare IT (HIT) industry.

Having been barraged with countless invites in advance of the show to meet with this or that vendor, I winnowed down the number of meetings to a select few and even then, had far more on my plate then I could reasonably consume over the three plus days that I was there. And of course, there were the countless press releases I received during the week of HIMSS, nearly all of them barely worth the digital type and bandwidth used to create and distribute.

So easy to get lost in all this noise. I just can’t fathom how a healthcare executive is suppose to wade through it on their own, let alone the staff that reports up into them.

This year’s HIMSS pilgrimage was to seek knowledge within four core areas:

  1. State of innovation in HIT,
  2. Greater understanding on the state of analytics adoption,
  3. Market maturity with regards to population health management and
  4. Is the industry finally taking true patient engagement seriously?

Following are findings and musings on these four.

Innovation – Where is it?
For all the talk of innovation in this sector, it is astonishing just how little there truly is. I searched high and low for real innovation and came up dry. Even went to the Venture Fair on Sunday to see what a number of young companies are bringing to market and found little to capture my imagination. Either this is a sign that I have been in this market too long or maybe a sign of just how challenging this market can be for those who wish to truly be innovative, to be disruptive. Walking the halls of HIMSS, one certainly gets the feeling that this is a show that is not about leveraging HIT for disruptive purposes, but to maintain the status quo.

One of the few glimmers of hope for future innovation may come from an unlikely source; the consortium of five EHR vendors that have committed to the CommonWell Health Alliance. While one must be cautious in throwing one’s support behind such an initiative, I threw caution to the wind in a brief interview after the announcement.

Why the enthusiasm?

If CommonWell succeeds in its mission to create an information sharing platform across these five vendors – and others should they join – we’ll finally, as an industry, move beyond competing on data silos ultimately providing a higher level of functionality to the end user. On top of this sharing platform, we may then begin to see true innovation occur – innovation that taps the data that flows across the CommonWell network. Of course this is all dependent on just how “open” CommonWell will be and that is something we will not know for at least a year. – Yes, healthcare moves slow.

Analytics – Why is it?
The market for healthcare analytics has been hyped beyond imagination but beyond the hype is what appears to be a complete lack of why this industry is even pursuing analytics. There appears to be very little underlying justifications as to why a healthcare organization should be doing analytics in the first place.

Time and again, in one discussion after another, we found a very immature buyers’ market for analytics solutions. Most buyers cannot answer, with any degree of specificity, the simple questions: Why do we want an analytics solution? – What is the business case? And its not just the buyers as many vendors complained of the horrible RFPs that they are receiving which were drafted by some big name consulting firms. One vendor told us point-blank:

“We are no longer responding to RFPs as they are such garbage and a waste of time. If we can’t connect at the most senior strategic level of the organization, then we know that they do not have the maturity of thought to begin the conversation, let alone the journey.”

As most of you already know, Cora is working on the report: Analytics for Population Risk Management that will be released in April. It is our goal to help clear the air and educate this market and if anyone can do it, it is Cora.

Population Health – What is it?
And to think, I though analytics was an over-hyped market. Analytics has nothing on the next big market buzzword, population health management (PHM). Much like the fable of the blind men and the elephant, population health is whatever you wish to make of it or whatever part of the healthcare elephant you happen to be attached to.

What a mess. Despite all the hype on PHM, which comes under many guises including Accountable Care Solutions, Systems or Suite, I did not come across a single vendor that had a complete solution suite. Even those vendors that have significant pieces of a PHM solution, still have not knitted their portfolio together to be a seamless offering. Buyers of such solutions will be spending a lot of money on services to stich these things together for the next 2-3 years.

In the second half of the year, Chilmark Research intends to devote a significant amount of resources to fully flesh-out what is meant by PHM, what are the critical components to enable such and where one might go to find them. Stay tuned.

Patient Engagement – How is it?
Anyone who has followed Chilmark Research and my ramblings for more than a couple of years knows that I have a soft spot for patient engagement. It was within this broad category that I got my start with the publication of the iPHR Market Trends Report in 2008. While that market has not developed sufficiently to support a full-time analyst, it is still an area we track closely and in addition to myself, both Cora and Naveen keep tabs on this market. Naveen will give some of his HIMSS impressions next week wherein he’ll focus specifically on patient engagement.

Waiting with bated breath for this market to take off is fraught with futility. Despite the quite vocal efforts of ONC to push patient engagement to the forefront, I still see most programs at healthcare institutions being funded by marketing departments. It is not about engagement, its about loyalty. Even HIMSS seems to recognize this as they had a number of screens scattered throughout the convention center that flashed four screens: 1) Healthy Patient, 2) Connected Patient, 3) Informed Patient, 4) Stronger Patient which left me wondering…

Where is the engaged patient?

Without engagement folks we are dead in the water for only an engaged patient will take the necessary steps to actively managed their health.

HIMSS is what it is, a large conference that gathers just about everyone interested in the HIT market in one place. But in such a gathering, a significant amount of noise is created leaving one wondering: Does this conference provide real enlightenment and clarity to the market and the solutions therein, or does it just create greater confusion?

Reflecting on the conference and reviewing my notes for this post I find it is some of both, with a weighting towards noise and confusion. In the coming months, as we release our reports on HIEs, Analytics and later this year, those on population health and patient engagement, we intend to provide the clarity that all stakeholders need to have informed discussions and ultimately make informed decisions. That in a nutshell is the purpose of Chilmark and what guides us our research agenda.


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

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

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

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

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

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

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

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

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

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

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

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

Thanks to for the image

Four Diverse Research Notes in Jan Monthly Update

As Chilmark has grown, so has our areas of research which is best represented in the following four research notes that our analysts put together for Chilmark Advisory Service (CAS) clients. The following four abstracts provide you perspective on some of the most critical and pertinent developments int his market sector.

We will be at HIMSS this year and likely have a few copies of this Monthly Update in our bags. If you want to get together to discuss the CAS service, just let us know, but be quick as our calendars for this event are rapidly filling up.

Fair Warning For Healthcare CFOs
The office, duties, and functions of healthcare CFOs will begin a major upgrade this year. Such changes have been a long time coming, but with only three years to take on Risk Assumption ACOs (RAAs), time is short. The difference between what is coming in, in fees for service, or capitation fees, has become dangerously close to what it costs to “keep the lights on.” Something has to be done. Fortunately there is plenty of mature software and a number of best practices CFOs can borrow from other industries to insure the solvency of our healthcare system. The four primary domains where CFOs should begin are:

  1. Formalized Budget & Planning
  2. Activity-based Costing
  3. Performance Monitoring and Measurement
  4. Contract Management

EHR Data is More Untrustworthy Than You Think
The healthcare industry, in its rush to adopt medical records and fervor to keep medical records HIPAA-compliant, has completely underinvested in ensuring the quality of the data that is entered into those medical records. Poor data quality stemming from human error and a pervasive lack of validation has enormous consequences for treatment decisions at the point of care and for secondary uses of patient data, particularly analytics. This research note takes a close look at the problem of data quality and what other industries have done to address it.

Keeping Track of Wearable Health Tech
Up until now, the $2 billion wearable tech market has focused primarily on wellness and fitness, and barely skittered around the edges of the broader healthcare market. In the past, devices such as quantified-self tools, fitness peripherals, movement trackers, and the like were not up to the task of tracking complex healthcare data but this is rapidly changing. Thanks to a confluence of growing interest, increasing market maturity, more robust, multi-dimensional devices and good timing, Chilmark Research believes wearable tech stands ready to make significant inroads into a value-driven healthcare market.

Learning to Like Direct
Despite a strong market and federal incentives, this is an uneasy time for HIE vendors, and Direct (Direct Secure Messaging) tops the list of HIE headaches. Direct doesn’t just sequester data in silos. In many HIE vendors’ view, it sends clinical information to some bunker underneath the silos of healthcare data. Add to this the fact that the legion of EHR-enabled providers is growing and these providers want information from their HIEs, including secure messages sent through Direct, integrated into existing EHRs. From a workflow perspective, this makes sense, but established EHR vendors have little to no incentive to make things easy for the new HIE kids. This article looks at Direct and what its rise portends for the future of HIE vendors and their product development and go to market strategies.

 Each month, subscribers to the Chilmark Advisory Services (CAS) receive an update of our research on the most transformative trends in the healthcare IT sector. Exclusive to CAS subscribers, monthly updates are part of the continuous feed of information and analysis we generate to keep subscribers on top of the rapid-fire changes in this market.

2013 – A Year of Surprises

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



Humana Jumps into HIE Market, Claims Analytics Turn Sights of Clinical, Med Adherence

CR_brandWebNovember saw the acquisition of yet another HIE vendor by a payer (Humana). An in-depth analysis of this acquisition and its implications was provided to Chilmark Advisory Service (CAS) clients at the end of November. Following are abstracts of the three research notes in our latest Monthly Update.

Humana Leaps Into the HIE Market
The health insurance industry is undergoing massive upheaval. Payers don’t need a crystal ball to see that in the near future, providers will sell services directly to employers, and that insurers need to get creative in order to stay competitive. With its acquisition of HIE vendor, Certify Data Systems, Humana joined two other payers in the HIE market: Aetna and UnitedHealth Group. Yet Humana’s strategy sets it apart from the other payers. On a single day in November, Humana announced not one but three acquisitions: Certify plus two Florida-based managed care service organizations. Humana has clearly articulated its plan to become the preferred Integrated Delivery Provider to Medicare Advantage members and dual eligibles. By adding Certify’s strong HIE capabilities to its bag of tricks, along with the ability to deliver primary care directly to a large Medicare population, Humana has positioned itself to do just that. (more…)

Will Surescripts Become De facto NwHIN?

Just as Healtheway looks to ween itself off the federal gravy train, Surescripts comes along and in a couple of quick strokes looks ready to drive a stake into the heart of Healtheway or at least any desire Healtheway may have to become the Nationwide Health Information Network (NwHIN).

It all started when Surescripts acquired collaborative HIE messaging vendor Kryptiq in late August. This was quickly followed a week later with Surescripts’ announcement that it would become Epic’s vendor of choice for cross-EHR connectivity. It appears that Epic has finally succumbed to the inevitable; that it will need to open up its system (Epic’s purported Epic Elsewhere, to address cross EHR connectivity was in reality Epic Nowhere – just vaporware) to communicate in a heterogeneous EHR environment. The Surescripts Clinical Interoperability (CI) network solution will become an “Epic Unit” and on Epic’s price sheet. The details of this story were covered in our September Monthly Update for CAS subscribers. (more…)

Cerner Takes a Road Less Traveled

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

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

A Layer Above it All: Healtheway’s Value Prop

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

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

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

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

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

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

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

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

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

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

Limits and Lags in Healthcare Productivity

In a recent Health Affairs blog, Alex Goldsmith does a back-of-the-envelope analysis of the peculiar economics of healthcare. According to the Bureau of Labor Statistics, employment in healthcare increased by 1.149 million people from 2007-2011. He contrasts this increase in employment (read increased cost) with declining hospital admissions, low single-digit growth in hospital outpatient volumes and declining physician office visit volume (read declining economic output). A New England Journal of Medicine article published in Oct. 2011 also showed a net percentage decrease in productivity growth (see figure below).

Over this same time period there has been steadily increasing investment in IT for hospitals and doctor’s offices much of it as a result of the HITECH Act that was passed in 2009. Compared to ten years ago, more healthcare workers are doing less healthcare with more information technology. And little over a week ago a Wall Street Journal op-ed by Stephen Soumerai and Ross Koppel pulled no punches, calling the savings to be gained from IT in healthcare “chimerical.” We have known for a long time that providers themselves insist that productivity drops after installing an EHR and there is little evidence to refute such claims and plenty of evidence to support them.

The absence of productivity improvements or cost savings after big IT investments is neither new nor unique to healthcare. Way back in 1987, Nobel laureate and MIT professor Robert Solow famously said, “We see computers everywhere but in the productivity statistics.”  For the next ten years, economists leveled forests (this was a pre-internet time after all) trying to explain away the Solow productivity paradox. While the dotcom boom rendered productivity paradoxes as interesting as bell-bottom pants, few would now contest that increased use of IT drives productivity improvements. It is just a long journey to get there with some successfully surviving the journey and others not. There are plenty of examples in other industry sectors of companies that did not effectively adopt and use IT, ultimately contributing to their downfall.

The EHR Incentive Program and all of the other IT-related ONC and CMS programs have a host of now familiar policy objectives. The fact that IT is at their center says loudly that CMS is trying to coax incremental productivity improvements from a reluctant system.

So where are the productivity improvements in healthcare? While we are only one year into the meaningful use (MU) saga, we would argue that we are seeing three things: 1) the limits to IT as a productivity-boosting panacea, 2) a lag between the investment in IT and a productivity payoff and 3) an existing reimbursement model that does not effectively support IT adoption that is in alignment with meaningful use objectives.

Providers that invest: Most of the current incentives for IT adoption are aimed at the point of the healthcare spear: CMS is willing to pay most frontline clinicians in private practices, clinics and hospitals to adopt IT. These same frontline clinicians, however, are increasingly frustrated and burned-out by the fee-for-service treadmill. Simply getting a primary care physician (PCP) to meaningfully use an EHR will not allow her to suddenly double her patient load. If anything, it will likely decrease office productivity for at least a year as all staff members become familiar with and effective in using an EHR.

Measures like the Stage 2 MU objectives build on that basic EHR to let that same PCP leverage work done in other parts of the healthcare system to deliver more coordinated care. The PCP still can’t double her workload but she might be able to accomplish more in each encounter. In this instance, we see the lag between the investment in a basic EHR and the enhanced productivity of a more interoperable EHR, a time lag measured in years.

Providers that do not invest or under-invest: These incentives are not available to some segments of the provider community (e.g. skilled nursing facilities, behavioral health facilities). The limit is that non-incented providers presumably will invest modestly or not at all in EHRs, interoperable or otherwise. In this instance, the lag may well be a very long time.

Further, incentives are voluntary. Eligible providers can IT-up and take the money — or not. Nearly half of eligible hospitals have collected something under the EHR Incentive Program. The ranks of qualifying EPs, while still low, continue to grow and we will likely see a majority of EPs sign-on to this program.

The Wall Street Journal op-ed claims that ONC and providers are captives of the healthcare IT vendors.  The authors suggest that vendors, presumably in an effort to protect their markets, blocked efforts to make EHRs more interoperable, effectively blunting cost or productivity improvements. This is a fair criticism, probably true, and a clear limit to what we could expect from Stage 1 MU.

However, providers in a pure fee-for-service world have rarely found sufficient value in adoption of EHRs to justify the investment, thus the need for incentives. As the market slowly shifts reimbursement to value-based metrics, the justification to invest in an EHR begins to look more attractive to a PCP. Coupling this with future, MU Stage 2, certified EHR solutions that will better support care coordination across a heterogenous EHR landscape in a given community, the potential for true improvements in productivity appear promising. There is even a potential silver lining for providers that do not invest or under-invest as even the left-behinds have at least have a fax machine and a browser and may begin to enjoy some of the productivity gains of a reformed, networked system.

The network effect that kicks-in over time may like a rising tide, lift all boats. But this is a very slow tide that will rise over many years. Now the question is: How many of those boats have holes in them and will forever rest on the ocean’s bottom or does the tide simply rise too slow and others just pull their boats out of the water?

Note: This post has been authored by our newest analyst, Brian Murphy a former employee of Eclipsys, IBM and others as well as a former analyst for Yankee Group. Find out more about Brian on our About page.

The Promise of a Little Blue Button

Yesterday, I was in Washington DC to attend ONC’s Consumer Health IT Summit. While having high hopes for some breathtaking new developments, ultimately walked away disappointed as this event ultimately devolved into a Blue Button promotional event. Now I have nothing wrong with some promotion, after all my background is heavily steeped in marketing. What I do have a problem with, as an analyst, is major hype around any concept, technology, etc. that is not balanced with some serious, thoughtful critique.

There were times when I thought this event felt more like a channeling of a Health 2.0 event with the clarion call of “Give me my damn data” being chanted. At times like that I had to pinch myself to remember, no, I’m in the grand hall of the Hubert Humphrey Building. Of course the multiple, large portraits of past HHS Secretaries hanging from the walls was also a clear reminder of exactly where I was.

But despite some shortcomings, the event was focused around what may be the government’s (VA & CMS) finest contributions to promoting patient engagement – the Blue Button. The Blue Button was first released in 2010 by the VA to allow veterans to gain access and control of their personal health information (PHI). CMS later released their own version of Blue Button that allowed beneficiaries access to their claims data. The VA thought Blue Button would be a success if they saw 25K Vets use this capability. The VA passed that number long ago and now, two short years later, the doors have literally been blown off that original estimate with some one million patients now using Blue Button to gain access and control of their PHI.

That is a phenomenal rate of adoption especially when one considers what they actually have access to.

A Blue Button download does not give one a well formatted easy to read file of their PHI. No a Blue Button download is nothing more than a simple ASCII text file and when you look at such a file dump, it isn’t pretty. Thankfully, ASCII has been around since we were hunting the great wooly mammoth during the ice ages so just about any piece of software (e.g., legacy EHRs and claims data bases) can easily create an ASCII file and developers can likewise take an ASCII file and repurpose that text into something fairly legible.

One company doing just that is Humetrix who I first met at the HDI Forum in June. They were also present at this event where they gave me a quick demo of their latest version of iBlueButton – a nice piece of mHealth software that takes the ASCII file from a Blue Button download and reformats it into a very easy to read and decipher file that a consumer can share with their care team. There is even an iPad version designed specifically for physicians, which gets to my next point.

Whenever I am in the company of physicians, I often ask them how they are coping with the changes taking place and specifically adoption of HIT. Had one such conversation Sunday while I was doing the charity Jimmy Fund Marathon walk for cancer research. On this walk there are always quite a few oncologists and nurses and seeing as you’re walking for a good many miles, plenty of time to talk.

I asked one oncologist about HIT adoption at Dana Farber and meaningful use to which he quickly replied: “Meaningful use is the bane of our existence right now.” So I asked further: What problem could HIT really solve for him? He had a ready answer: “Rather than a new patient showing up with a mound of paper records that I must laboriously review, I want a digital version of a new patient’s record with labs, pathology, images, meds, etc. all readily laid out so I can make a more rapid assessment to define a treatment plan for that patient.”

Now we could wait until all the HIEs are in place, all DURSAs are signed resulting in frictionless data flows between healthcare institutions. We could wait until every certified EHR for Stage Two is deployed and physicians start using Direct messaging. We could also wait for patients to request under Stage Two that their provider transmit records to another (still not sure how complete those records need to be to meet Stage Two). Or we could enable Blue Button, educate the public and let them take direct control of their PHI and share it with whom they see fit. Plenty of options but if we really want to change healthcare, the last one is the most impactful, the most viable, but unfortunately like the others, it will take some time, though likely less than getting those DURSAs signed.

Getting back to yesterday’s event and my disappointment, following is what I would like to see in the future:

Honest and frank discussion on giving patients access to their records. The American Hospital Association was in vehement opposition to the Stage Two rules on patient access to their records. Let’s put them on stage to explain why, to give that contrarian viewpoint, to provide balance.

Enlist providers to discuss the benefits and challenges of giving patients access to their records. How does patient access to records change the conversation of care? How does it impact the workflow of a practice? What fears may physicians have and how do we address them?

Fewer panels of talking heads and more real world perspectives. The event had a wonderful moment when a Vietnam veteran talk about his healthcare challenges and how Blue Button contributed significantly to his self-management. Let see more of that, e.g. a Medicare patient using Blue Button.

And my biggest disappointment of all had nothing to do with this event – it had to do with Stage Two.

If indeed the feds really believe in the Blue Button the same way they believe in Direct then why the h*ll did they not directly put it into the certification criteria for EHRs. Clearly something went amiss and it is unfortunate.

Thankfully, many vendors have stated they will support Blue Button in a forthcoming release including Allscripts, athenahealth, Cerner, Greenway, and many others. Our last HIE report also found just over 25% of vendors profiled intend to support Blue Button in 2012. There is momentum here already, now we just need to on-board physicians to talk to their patients about the value of having access to and control of their PHI for as we move to more capitated models of care, the engaged patient may indeed be the miracle drug to rescue our healthcare system from financial collapse.

Addendum: Have received feedback regarding Stage Two and patient access to their records so let me clarify. Stage Two does indeed grant a patient the ability to access, view and transmit their records. This is incredibly powerful, especially with the push towards standards and the transmitted file being in a CDA standard format. As Keith Boone so clearly articulates, the content package that is transmitted under Stage Two is a fairly complete, summary document of care received and an individual’s health status. But Stage Two does not support an ability to transmit a full and complete longitudinal record. It is my understanding that the Blue Button, at least the instance at the VA, allows a patient to download their complete record thus why I took the argument down the path I did. 

In time it is my hope that the Blue Button becomes a symbol, as Keith puts it, “a verb,” that all will understand instinctively – click this, get your data and move on. Other services will take that data dump, transpose it the way you want it for the purposes you intend. The technology and standards behind it will simply become irrelevant to the user. It just works. Getting there will be the task of the S&I Framework workgroups. I wish them God’s speed in accomplishing that task for the benefit of all citizens.

Many in both the private and public sectors are working hard on that vision – keep up the good work!

Struggling to Understand or Data Does Not Equal Empowerment

Recently upon leaving my doctor’s office I was presented with a print-out of my visit summary. Knowing I worked it the HIT space my doctor proudly stated that this was one the ways that they planned to meet one of the menu objectives of Stage One meaningful use (MU). This is great I thought, until I began looking over that visit summary.

A significant portion of the summary listed the basics such as who I was, why I paid them a visit etc., all pretty boiler plate – nothing new. Then I turned the page to see the lab results of the routine blood-work – YIKES! nothing but acronyms, values and acceptable ranges. I think I was able to decipher about 10% of those lab results and I work in this industry! I can only imagine how difficult and mind-numbing these figures may appear to an “ordinary” patient/consumer.

So seeing some out of range values I began asking my doctor:

What does this acronym stand? Why is this out of range? Is this something I need to worry about?

Being the great doctor that he is, he took the time to explain my results (some of those out of range values are the result of meds) but also expressed a certain level of frustration stating: “I’m not a big fan of passing this information on to a patient for I worry that they won’t understand results such as these and then I need to take time out to walk the patient through their results which can be quite time consuming. Is this another contributor to physician burnout I wondered?

Now I am all for patient/consumer empowerment and do believe that providing patient’s access to their personal health information (PHI) as a critical component of such empowerment. But does providing a patient a visit summary really empower them or does it simply make them confused (as I was) and resigned or worse endanger?

Stage 2 meaningful use rules released last week state that an eligible physician or hospital will be required to:

Use Certified EHR Technology to identify patient-specific education resources and provide those resources to the patient.

But what will that “patient-specific education resource” look like? Will it solve the problem I encountered?

I want more than a generic here is what these type of acronyms and values mean that litter the internet. I want personalization. I want a system that will take my lab results, my problem list, match it up with my meds, allergies etc. and provide me with personalized knowledge of what these results mean to me and my future health. I then want to be provided suggestions as to how to improve those values? This is what I see as true patient/consumer empowerment.

Unfortunately, what I have actually experienced as a result of this grand HITECH effort under Stage One falls far short of empowerment, if anything, it is closer to disempowerment.

Getting a bunch of data in a visit summary without putting it into context is not meaningful, it is meaningless.

My hope is that there are some novel, creative solutions now being developed that will leverage the new concept in Stage Two, the Base EHR, and provide a module that automatically digs into a patient’s PHI and presents the patient with an empowering visit summary. This is one of the ultimate intents of the HITECH Act, I now want to see it happen.

Why We Won’t See EHR Consolidation Anytime Soon

All too frequently I get the question:

When will we see the EHR market consolidate?

Not an unreasonable question considering just how many EHRs there are in the market today (north of 300) and all the buzz regarding growth in health IT adoption. There was even a recent post postulating that major EHR consolidation was “on the verge.” Even I have wondered at times why we have not seen any significant consolidation to date as there truly are far more vendors than this market can reasonably support.

But when we talk about EHR consolidation, let’s make sure we are all talking about the same thing. In the acute care market, significant consolidation has already occurred. Those companies that did not participate in consolidating this market (Cerner, Epic & Meditech) seem to have faired well. Those that pursued a roll-up, acquisition strategy (Allscripts, GE, McKesson) have had more mixed results.

It is the ambulatory sector where one finds a multitude of vendors all vying for a piece of the market and it is this market that has not seen any significant consolidation to date and likely will not see such for several years to come for two dominant reasons.

First, you need to be half crazy to do an acquisition. As nearly two-thirds of all acquisitions fail, the odds are stacked against you. Therefore, you need to be darn sure that this acquisition makes sound business sense before pulling the trigger.

Second, the ambulatory EHR market is simply not ripe for consolidation. The reason is simple. To remain viable in the market, EHR vendors must ensure that their products meet Meaningful Use (MU) requirements and meeting those requirements requires hefty investments.

Virtually all EHR vendors invested resources to get over the Stage One hurdle. In fact, the federal largesse of the HITECH Act attracted a number of new EHR entrants to market and likely kept a many EHR vendors afloat who would have otherwise gone under.

Stage Two’s certification hurdle has yet to be released but will assuredly require a continued and potentially significant investment in development resources by EHR vendors to comply. Same holds true for future Stage Three certification requirements.

At this juncture, it would be foolhardy to try and execute an EHR acquisition roll-up strategy. The technology has yet to stabilize, significant development investments are still required and most vendors do not have sufficient market penetration. Better to wait until the dust settles and clearer stratification of the market (who will remain viable, who will not) becomes apparent.

An Example from Manufacturing:
In my many years as an IT analyst I’ve seen few instances where acquisitions have actually worked out well for all parties concerned. When I led the manufacturing enterprise analyst group at a former employer I watched as two separate companies (Infor & SSA) executed roll-up acquisition strategies in the mature Enterprise Resource Planning (ERP) market.

Much like the ambulatory EHR market, these two companies targeted the low-end of the ERP market (small manufacturers). ERP companies acquired had two defining characteristics: stable platforms and reasonable penetration in their target markets.

Infor and SSA executed their strategies skillfully acquiring multiple companies; promising customers never to sunset a product; and meeting their investors’ goals by lowering operating costs (reduce duplicative administrative costs across acquired companies.

Post acquisition, Infor and SSA did not invest heavily in development, simply doing the minimum necessary to meet customers’ core requirements. Ultimately, Infor acquired SSA and Infor remains one of the dominant ERP companies in the market today.

A similar scenario will play-out in the ambulatory EHR market, it just will not be this year or next or even the one after that. Look to a couple of years post-Stage Three, for the long-awaited consolidation that so many have predicted to finally occur.

Digging into Analytics

At this year’s HIMSS conference the big buzz was analytics. Seemed as if every vendor in attendance was promoting some sort of analytics capability. It was a tad overwhelming and if I was having a problem trying to separate out all these countless vendor offerings (this is exactly what I am trained to do as an industry analyst) I couldn’t imagine what it must have been like for those representatives of healthcare IT departments.

Then I had this deja vu moment – I had experienced this all before a few years earlier when the buzz at HIMSS was health information exchange (HIE). As with the HIE market back then, it was hard to make sense as to who was riding the latest marketing buzzword (e.g., ACO analytics) and who was actually solving problems for customers. There was also no easy way to differentiate one solution from the next. Clearly, the market needed someone to make order from the chaos.

Making order, applying structure to a market is one of the key roles of an analyst firm. As Chilmark Research has done for the HIE market, we intend to develop a similar structural framework for the analytics market.

We have recently embarked on a major research project to delve into the healthcare analytics market that will culminate in a report of similar length (~100pgs) and breadth to our 2012 HIE Market Report. Padmaja Raman, who recently joined Chilmark Research, will be the lead analyst for this research project.

In advance of formal research, we have had roughly a dozen casual conversations with various stakeholders in the healthcare analytics market. Here’s a few things we have learned so far:

Two dominant market vectors: 1) Changes in reimbursement and associated risk. 2) Regulatory requirements (MU attestation, quality reporting etc.)

Analytics using clinical data is in its infancy.

Clinical datasets are typically a mess and very difficult to work with.

For foreseeable future, most healthcare organizations will need to rely on claims data to ascertain risk.

We may be years away from doing true real-time analytics with clinical data.

Most healthcare providers do not have well-trained informatists on staff (particularly problematic for smaller healthcare organizations) and thus “analytic offerings” will have a high service component.

Business intelligence (BI) tools are not well-developed (either too simplistic or too complex for average clinician) and thus clinicians are unable to run their own reports. This has led to IT departments being completely overwhelmed with clinicians asking for various reports.

Those pretty dashboards that are based on clinical data which you see at trade shows and in PowerPoint presentations can rarely be replicated at a client site – lots of smoke and mirrors.

Most EHR vendors are just getting started in this area and their solutions are rudimentary.

This is a fascinating market and one where I am confident we can provide value. Without exception, every stakeholder we have spoken to has stated that this market is prime for in-depth analysis. Now it is our turn to provide such – Stay Tuned.

Implications: Supreme Court Gives Thumbs Up to ACA

This morning, as most of you already know, the Supreme Court ruled that the Privacy Protection and Affordable Care Act (commonly known as ACA) is constitutional and basically left the entire law intact. While it was no surprise that this was a close 5-4 decision, it was surprising that rather than rule that certain sections of the law were unconstitutional (e.g., the individual mandate), it was either an all-in or all-out dividing line (those in dissent would have thrown the entire law out the window). In fact, among our esteemed and we like to think highly knowledgeable readers, two-thirds voted in our prediction poll that ACA would be circumscribed by the Supreme Court while 17% felt the law would be upheld in its entirety.

Implications of Decision:
We are an analyst firm that is focused on the adoption and use of healthcare IT. Thus the implications of the Supreme Court decision which follow are focused on just that:

Healthcare systems will continue to aggressively move forward to form comprehensive care delivery systems (acquiring practices, long-term care facilities, etc.) to more effectively manage their patient populations across care settings. This will in turn require greater clinical connectivity and integration across these care settings. Expect to see very strong demand for health information exchanges.

Payers will continue to struggle with improving their operating margins. Some, such as United Health Group and Aetna, have ventured into the more lucrative and higher margin HIT market via acquisitions. Expect to see other payers make a move here as well jumping into the HIT market via acquisition(s).

Payers will also venture directly into care delivery via partnerships with large providers to stand-up ACO-like entities (e.g., Blue Cross of CA & Dignity Health) or acquire (e.g., Highmark and West Allegheny). We may also see some payers be quite innovative and begin providing more state-of-the-art, low cost concierge care services such as One Medical to serve the vast pool of some 30M+ new members nationwide.

To effectively and efficiently survive under future bundled care reimbursement models, hospital systems will finally have to get truly serious about patient engagement. No longer can they view this as just something for the marketing department to deal with (listen to yesterday’s podcast) but will need to actively engage with patients and aggressively encourage self-management of chronic diseases. This need will lead to a blossoming of innovation in new solutions, be they mobile, telehealth, whatever you want to call it to improve patient adherence outside of the clinical setting.

Got Analytics? Yes, analytics is going to be huge but today, most analytics solutions are not up to the task of serving all healthcare provider needs, or at least no single solution/vendor is. Providers will need to accept the fact that for the foreseeable future they’ll be purchasing best-of-breed solutions. But providers also need to do their homework as we predict that there will be a significant amount of consolidation, via acquisition, in this market over the next five years. And one last word of advice to providers, don’t count on your EHR vendor to deliver these solutions anytime soon.

Of course there is far more that we could delve into on the implications of this ruling to the HIT market but for now believe we have provided enough to get your collective  juices flowing. Is there anything we missed that you believe is screaming out loud in the HIT market due to this decision? If so, please let us know via a comment – we love comments!

In closing, hope all have a great July 4th week ahead and…

God Bless America

At Last, It’s Here: 2012 HIE Market Report

This morning we announced the release of our latest report: 2012 HIE Market Report: Analysis and Trends of the Health information Exchange Market. As we found in last year’s report, the HIE Market and the vendors that serve it continues to be a very dynamic.

In little over a year we have seen several vendors exit the market, several others enter and the acquisitions of Carefx by Harris and MobileMD by Siemens. We also saw Microsoft pull completely out of the clinical market by turning over all its HIT assets (except HealthVault) to the new joint venture with GE, Caradigm.

Yet in spite of all this turmoil, the market continues to see spectacular growth in excess of 40% in 2011. The big news with all this growth is that only a small portion of it is coming via the HITECH Act and the various statewide HIE contracts that were awarded. No, the big market that literally all HIE vendors are now targeting is the private, “enterprise” market. Healthcare organizations (HCO) of all sizes are now looking to deploy HIE technology to not only meet Meaningful Use requirements, but respond to the pending changes in reimbursement, moving from a fee for service model to one that is based on outcomes.

To be successful under these new payment models, HCOs must better manage operations and the complete care cycle of a patient across care settings. In a community of heterogeneous EHRs, HCOs are adopting HIE technology at an accelerated rate to unlock the data silos of EHRs across the community to enable higher quality of care.

Arguably, the 2012 HIE Market Report’s most significant finding is…

The healthcare sector is rapidly moving to the post-EHR era. The value of patient data is not in the data silos of EHRs but in the network that an HIE supports.

The report provides the most comprehensive overview of the market and what are the significant trends that are driving this market forward. The report also provides a deep dive review of 22 leading HIE vendors, including product capability assessment and market presence. This information, compiled through in-depth research and countless interviews, provides all HIE stakeholders with the most accurate view of the market today.

It is our sincere hope that the information contained in this report will contribute to furthering the success of HIE deployments in the future as we strongly believe that only through health information exchange (the verb) can we improve the quality of health delivered within a community and ultimately, the nation.

Hunkered Down on HIE

Been pretty quiet here on the Chilmark Research site for the simple reason – we are doing one heck of a lot of research which you’ll be seeing the results of in the not so distant future.

Primary among those research efforts is the update to the 2010 HIE Market Report. The last report was extremely successful and highly regarded among those in the know. For example, a CEO from one of the top HIE vendors told us:

By far, Chilmark Research has done the best research on the increasingly critical HIE market – no one else has come close to providing the in-depth research that is contained in the 2010 HIE Market Report.

And it is not just the HIE vendors who appreciated the report as we sold quite a few to healthcare organizations who have been using the report to assist them in their strategic decisions and ultimately vendor selection process.

But the HIE market is evolving quite quickly and thus the need to provide a refresh of the report. For example, of the 21 vendors profiled in the last report, 7 will not show up in the next edition. Even with that change, there are more entrants into what has become a lucrative market (albeit still relatively small) and in the 2012 report we will have in-depth profiles of 22 HIE vendors.

To give you some brief insight into the report, following is the intro to Chapter 3.

“The more things change, the more they stay the same.”

This French proverb accurately characterizes the state of the HIE market and the vendors who serve it. In last year’s report we commented on how the market was becoming increasingly crowded and competitive. We profiled 21 vendors in that report and a third of them did not make it into this report. Some exited the market (ICW, MedPlus, MEDSEEK, Misys, PatientKeeper, Telus), others acquired (Carefx and MobileMD) and then there is the folding of the HIE assets of GE and Microsoft into the new entity Caradigm. This year we have 22 vendors profiled including: Caradigm and Microsoft (still difficult to know what will become of their joint assets, but we provide some guidance), Harris, who had acquired Carefx, Siemens, who picked up MobileMD and some new entrants including 4medica, Certify Data Systems, the young start-up GSI Health and HealthUnity. We even broke from tradition, if you can call one year a tradition, and profiled one of the leading EHR vendors, Cerner, who contrary to prevailing EHR vendor wisdom, or at least strategy, is creating an open HIE platform.

The market is as competitive as ever with a monumental shift towards the enterprise market. Some vendors have been serving this market all along, others, whose focus has been the public market are to varying degrees of success making the transition to the enterprise market. But despite this overwhelming shift to the enterprise market, the HIE market remains no less mature than it was last year. The solutions on offer vary significantly and in our interviews with vendors, consultants and end users we found a market that really has not defined a clear set of requirements for the HIE. There is always the ubiquitous desire to facilitate orders, referrals and distribution of results but beyond that, the needs of a given HCO can vary greatly, which has subsequently led to continued market confusion as to what an HIE is and is not.

With this report, Chilmark Research once again has applied its deep research methodology (see Appendix B) to provide a clearer picture of where this market and the vendors who serve it are today and where it is heading. The profiles contained in this report are not meant to provide an exhaustive analysis of each vendor’s solution and business strategy. Rather, their purpose is to provide a concise overview of leading HIE solutions in the market today, their strengths and weaknesses, what sector(s) of the market that the vendor has had particular success in and provide insight as to an HIE vendor’s future direction. Armed with this information, the reader will gain a clear picture of currently available solutions enabling one to create a short-list of those worthy of more in-depth internal review and follow-up for their own HIE initiatives.

In our opinion, we are slowly but surely beginning to enter the post-EHR era. The U.S., federal government’s push for physician and hospital adoption of EHRs, via the HITECH Act, appears to be having the intended affect. The recent Robert Wood Johnson Foundation study published in the April 2012 edition of Health Affairs has physician adoption and use of EHRs now at 57 percent. But the value of those electronic patient records is not in the data silo of a given EHR, but in how patient data can be aggregated and used to facilitate care coordination across care settings and subsequently improve the quality of care a patient receives. This is the province of the HIE and where the real value of electronically recording a patient’s health will reside, not in the silo of the EHR, but in the network of the HIE.

Please bear with us and our lack of frequent posts. We are working hard here at Chilmark Research, which can make it a challenge to find that extra bit of time to write for the public. Once the HIE Report is released (next week), we should be getting back to a more regular schedule of posts to this website. Stay Tuned.

mHealth Apps & Patient Engagement – Moving Beyond Transactions

Despite a constant buzz around the idea of using mobile technologies for patient engagement, the depth and breadth of these solutions has remained consistently thin and frankly dated. Today, healthcare organizations who are adopting and deploying engagement solutions are focusing these efforts on marketing/patient retention (e.g., simplifying transactional processes such as appointment scheduling, prescription refills, etc., online access to lab results & records) and accelerating payments (online bill-pay). Despite all the talk about using mHealth for care provisioning, our research for the upcoming report that will be released later this month, mHealth Adoption Trends for Provider-Patient Engagement, finds a market that is still in an early, embryonic stage of development.

So why the disconnect between the hype of mHealth for care provisioning and reality? Of the many potential reasons, there are two that are dominant: a lack of solutions with proven clinical efficacy and few financial incentives to drive adoption.

While there is little argument that increasing the interaction between a care team and their patients is a good thing, the best means for accomplishing this feat are still unclear. A year ago, Group Health published results from an internal study testing just what impact this increased communication may have on outcomes and patient satisfaction. What they found comes as no surprise to us as trusting advocates of patient engagement. In this study, Group Health provided patients suffering from depression a relatively simplistic form of engagement wherein patients were able to communicate with their care team through the EMR portal. The results, impressive: antidepressant medication adherence increased 33%, overall depression scores decreased, and satisfaction with treatment improved 61%.

While this study fostered communication via a computer/portal, it is not too big a stretch to see such communication readily migrate to a smartphone modality wherein a patient would not be tethered to a computer and could communicate from virtually any location. But that is part of the problem. This study, which was published only last year, uses a relatively old model of communication (portal), which has been used to varying degrees in the healthcare sector for years. And if there is a paucity of clinical evidence for the efficacy of portals, for mHealth Apps it will approximate a vacuum. Sure, basic logic tells you that increasing patient-provider communication should lead to better outcomes, but the healthcare community can be a bit odd at times in its demands for stacks and stacks of clear evidence before it is willing to take the plunge, either providers adopting such models of care and more importantly, payers will to reimburse for such models of care.

Therein lies the crux of the problem – reimbursement.

Now we don’t mean to be crass but physicians are like the rest of us. We are dedicated to our work, we work hard and at the end of the day we receive compensation for those efforts. For physicians, who seem to be perpetually overbooked, their time is particularly precious and adding another activity (patient communication outside of the exam room) without compensation, is a non-starter. There is also the issue of how does one bring mHealth data into an existing HIS let alone into the daily workflow of a physician is not without costs. Who will shoulder those costs when there are few if any reimbursement models in place to support such? This idea scares away investors and many innovators.

And that creates a Catch-22. Without clear reimbursement models there is little incentive to support the adoption of mHealth for care provisioning and therefore, little financial upside for innovators and subsequently creating an unstable market. To date, no mHealth engagement solution for care provisioning has been able to gain enough traction (relates back to financial) in the market to make a significant impact and thus are perceived as risky partners by healthcare organizations. There is ample proof for such concern as there remains a tremendous amount of churn in the mHealth market. For example, two startups in the space were recently ‘acquired’ by other startups: Pipette by and WellApps by Medivo (both in the same week no less!), yet far more start-ups simply fold-up their tents and move on. But without having healthcare organizations willing to take a chance, how are these young companies going to demonstrate clinical efficacy. Yes, Catch-22 indeed.

But all is not lost.

As we’ve written before, reimbursement models are migrating away from the traditional fee for service model and one that is structured around value-based outcomes. These new reimbursement models will in-turn lead to more capitated models of care where healthcare organizations will take on greater responsibility for managing patient risk. To effectively and efficiently do so, these organizations will need to create new models and processes of care delivery that extend beyond the confines of the exam room and actively engage the patient as a critical member of the care team (where they are capable of course). This has the potential to create a “Golden Age” for such new technologies as mHealth. But like all new market opportunities, a big question is timing – just when will the inflection point occur that will truly launch this market. In that forthcoming report we mentioned previously, we intend to provide some insight into that question as well.

Stay Tuned.

HIMSS’12 Take-away: Follow the Money

Last week we attended the big healthcare IT confab HIMSS in that grand city of sin, Las Vegas. While many spoke of how HIMSS hit an all time record of over 37K attendees (an impressive number), HIMSS is still dwarfed by what is arguably the largest US-based healthcare trade show, RSNA, which had a 2011 attendance of just over 57K, (roughly 54% greater than HIMSS). Why such a radical difference you ask? As one colleague put it:

RSNA is where providers come to make money and HIMSS is where they go to lose money.

While that may be the case today, it is unlikely to be so in the future. The healthcare industry is undergoing a massive transformation that will likely take a decade to complete as we transition from a reimbursement model largely based on fee for service to one based on outcomes. Under this new model, providers will be taking on a greater portion of risk. In reward, these providers have an opportunity to receive a significantly higher net reimbursement. This transition is making for some interesting bedfellows as payers and providers join together to create new care delivery models such as Accountable Care Organizations (ACOs) and Patient Centered Medical Homes (PCMHs). These new models will be increasingly dependent on a robust HIT infrastructure to effectively measure quality, risk and performance, something that simply cannot be done effectively with the antiquated systems that are in place today in many healthcare organizations (HCOs).

Nearly every vendor we met with at HIMSS had a story to tell about how they had the solution the market was seeking for ACO enablement. This was not entirely unexpected for last year we thought that would be the year of ACO. Obviously, we were a little ahead of ourselves and the industry with that prediction but alas it has come to pass. Small problem though: HIT vendors have had plenty of time to prepare their solutions for ACO enablement but to our surprise, most solutions were still far from mature. Frankly, we are not too worried about this right now for Chilmark is forecasting significant evolution, innovation, and in short-time maturity in these solutions as customers (HCOs) further define what they truly need to succeed in this new world order of reimbursement for healthcare delivery in the US.

This raises what our research team found to be the most significant learning from HIMSS’12.

As most of you already know, ONC made quite a splash at HIMSS by announcing the release of Stage 2 meaningful use (MU) requirements (we’ll have a future post on the implications of these requirements later this week). But honestly, we did not see a wild wrangling of commentary and discussion in the halls of HIMSS’12 regarding these new requirements. Maybe this was because most attendees were simply addressing the needs of today and did not have time to thoroughly review these new requirements. But we believe something else may be at work here.

Our Thesis:
The MU requirements have become little more than a “spec-sheet” for vendors, consultants and IT shops and departments. These requirements have nothing to do with innovation and have little to do with the dramatic changes that will occur in this industry in the next decade. Quoting that oft-used phrase, “follow the money” one can quickly see that the billions in funding for incentivizing providers to adopt EHRs under the HITECH Act is relative chump change to the dramatic fortunes that may be won or lost under the new value-based payment models that are proliferating throughout the industry – payment models that commonly fall under the rubric of ACO or PCMH. In each of these models, EHRs are important to a degree, they are part of the basic infrastructure. But it is what one does with the data that matters (collect, communicate, collaborate, synthesize, analyze, measure and improve). Therefore, if you want to see innovation look beyond today and the tactical push to effectively adopt and meaningfully use EHRs and towards the future of how that data will be used to drive quality improvements, better outcomes and lowering risk exposure.

And speaking of risks…

What was clearly lacking at this year’s HIMSS was patient engagement. Yes, there was a seminar on the topic and sure, everyone speaks of patient-centric care but there was little evidence among exhibitors at this year’s HIMSS (with a few exceptions, e.g., Cerner, MEDSEEK, RelayHealth) that spoke to the need to engage patients as part of the care team. Get a clue folks, one will never get to that nirvana of a truly effective ACO or PCMH without active, effective engagement of the patient. Not having an engaged patient is your greatest risk.

Forecast and Ramifications of Payers in the HIE Market: Part Two

(Note: This is the second of a two-part post.)

Keeping it Local

This is most representative of the status quo and the most realistic path forward for the vast majority of payers who typically operate at the local level. In this scenario, one or more health plans in a regional market partner with other community stakeholders to co-fund and sustain a regional HIE. These stakeholders typically include large corporations with a large local employee base and/or provider organizations. Successful examples of such multi-stakeholder HIEs include the Louisville HIE (Humana, Anthem, Ford, Yum! and Kroger), and the Rochester RHIO, where payers (Aetna, BCBS, MVP) and hospitals share a 2/1 split of all operating expenses on a transaction model.

The benefit to payers in participating and most often funding the majority of such an HIE is three-fold. First, partnering with other organizations in the region contributes to a greater “fabric of trust” between the HIE and physicians within the region leading to greater physician participation. Secondly, by partnering with others, the payer is able to share HIE operating costs with other stakeholders. Third, physicians actively exchanging patient data can prevent some hospital readmissions and decrease duplicative lab and imaging tests, thereby lowering a payer’s total coverage cost in the region.

Conclusion: As HIE’s unfold at the community scale, local and regional stakeholders will share the operating costs and governance. As far as payer support for HIE’s goes, Chilmark predicts continued growth of these types of HIEs, particularly in less urban communities. We also predict that there will be significant growth in enterprise HIEs that are partially funded by payers, ultimately in support of a payer-provider partnership to establish an ACO. (Again, look to the recently announced NaviNet-Lumeris deal wherein three regional payers also played a role. For those payers, it’s all about making the provider transition to ACO/PCMH models as frictionless as possible.)

Real Challenges Remain

Despite a seemingly straightforward path for payers to get involved with HIE’s, there remain a number of challenges. These are two-fold in nature: Regulatory and Marketplace. On the regulatory front, the list of challenges is long and familiar: ICD-10 (while it seems like there will be another delay, much to the chagrin of the AMA this isn’t just going to go away) and HIPAA 5010, health insurance exchanges and other health reform mandates. (On the plus side, health information exchange-related spending counts favorably towards new medical loss ratio (MLR) rules).

However, the marketplace is where the true challenges lie, as there is hardly a guarantee that payers and provider groups will play nice with each other. Nowhere is this more evident than in the Western PA market, where a sort of fisticuffs have been going on between Highmark BCBS and UPMC.  Without going into the sordid details, Highmark (who just bought Pittsburgh’s second largest hospital network, West Penn Allegheny) and UPMC are now building competing HIEs in the same region because of a longstanding spat over contract negotiations. To hospitals who are now faced with participating in two separate HIE’s, this does not make much sense.

For the payers however, it does make sense when cast against the backdrop of rising competition. (Chilmark noted this challenge after attending the AHIP confab last summer.) Insurers are fighting with each other to keep their networks competitive. Providers are fighting with each other to secure preferred referral status, i.e. patient volume. Introducing an HIE in the middle of this environment has wide reaching implications for where patients are sent as well as who accrues and shares the savings. Throw in the variable of different reimbursement rates for commercial, Medicare and Medicare Advantage patients and you can see why partnering up to set up an information network is more than simply writing a check.

2012 and Beyond

So what does this all mean for a huge guest who’s seemingly unwanted at the party? Ultimately, payers’ involvement boils down into a few categories:

  • In the light of the tighter margins imposed by health reform, insurers who can afford it will diversify their business. The national health plans will be looking to acquire their own platform ala Aetna and UHG, with the additional hopes of squeezing cost savings out provider users and building a more favorable MLR. The main considerations in predicting this shift include vendor consolidation and the readiness of existing provider networks to collaborate.
  • Regional Insurers, such as the Blues and other statewide or multistate networks, have the wherewithal to setup and license their own platform for exchange either through payer-payer partnerships or on their own. The recent NaviNet deal seems to be more of an ACO play, but indicative of the business strategy of this class of payers who are willing and able to be flexible in how they approach their role as stakeholder in information networks.
  • Local Insurers who have fewer resources and who operate directly in the tides of market competition will opt for a ‘safer,’ multi-stakeholder approach in their communities. Partnerships will be heavily influenced by network dynamics, reimbursement channels and existing arrangements, such as burgeoning accountable care communities.

So, as rosy as information exchange seems on paper, it is permanently changing the way that provider and payer groups do business. From where Chilmark stands as an observer of the market’s evolution, it is all too clear that payers and providers ultimately have little choice but to work together. Payment reform and millions in IT incentives have already begun to influence the way that the delivery and payment markets work; the future of accountable care, proactive population health management and ‘smart’ health care delivery all depend on willing and trusting partnerships.

Unfortunately, as is too often the case, patients and other stakeholders get left out of the decision calculus. Pittsburgh residents will hardly benefit from the competitive business posturing there. We hope the folks deploying HIE’s over the coming years will put as much of an emphasis on leadership and governance as they do on technology and of course, the health of their business.

Forecast and Ramifications of Payers in the HIE Market: Part One

The numerous changes in the healthcare sector are forcing stakeholders to develop new business models to prosper, to survive. Among health insurers, this means one thing: diversification. Health reform was the nail in the coffin of yesterday’s business model, a model that had no restrictions on margins, a model where payers sold to businesses, not individuals. Tomorrow’s strategy for payers is still a work in process but one thing is clear, its foundational elements will be consumers, technology and data. The emerging world of big data in healthcare is providing payers with new potential ways to make profits. Beyond the promise of efficiencies, some payers are beginning to look closely at harnessing the flow of clinical, claims and administrative data to allow for the creation of stand-alone business opportunities.  Specifically, information exchange will grow in importance in 2012 and beyond as value-based payment models rely to increasing extents on the availability of diverse types of data at the point of care.

So why have payers been so cautious to jump on board and fund HIE’s?

The answer is multi-faceted. First and foremost is simply the issue that many a provider is uncomfortable with a payer having direct access to clinical data and is thus unwilling to share such data with an HIE that has payer involvement. Second is the business uncertainty at this early stage of HIE maturity. The HIE market remains very dynamic and there is a lot of uncertainty as to where this market will eventually lead. Before putting some parameters around the direction of payer-involvement in the HIE market, it bears a quick run-through of what the different models of payer involvement look like today.

Infrastructure Play
Axolotl and Medicity are the clear leaders in the HIE software market. Both were acquired in 2010 by big insurers (Axolotl by United Health Group, which was folded into the Optum Division and Medicity by Aetna) and continue to dominate the HIE landscape. Both UHG/Optum and Aetna are clearly looking to build out new lines of business, in this case healthcare IT, where the opportunities for future growth and expansion are promising. Their investments are already paying big dividends: In a telling sign of the direction of this market, Optum has actually begun to grow faster than UHG’s main insurance business.

The investments these insurers have made in HIT are significant and ones that only the biggest national players will have the appetite for. Kaiser’s walled garden, in-house approach effectively rules them out of this kind of play. Other payers have not shown signs of moving towards owning their own HIE solution, or making other major bets on HIT…yet. Humana and Cigna have only helped out by funding pilots to date. Despite a national brand and association, the Blues fit into their own category because of the state-based nature of their business structure. They are certainly not slouching in the HIE race though as the next section explains. Chilmark has also heard murmuring around the water cooler about some potential partnerships on a more national scale in 2012, so again only time will confirm these rumors.

Conclusion: It may be too late for other payers to get in on the HIE market via acquisition of a leading vendor as few independent vendors remain. Lumeris, with three regional Blues acquired NaviNet this week. This acquisition may provide a non-traditional route to the same end-point, purchasing the network to build-out future pipes for numerous data types. Further crystallization in the HIE marketplace as well as more evidence from operational systems will help them make a bet on a particular vendor.

Entirely Payer Funded
These are HIE’s that are exclusively funded by payers. As it stands now, this is a pretty lonely space, as providers continue to be skeptical of payer intentions and there remains a dearth of conclusive proof of return on investment (ROI), more studies like Humana’s with WHIE will only help. However, some early movers have already tasted success with this approach, the most prominent being Availity, a Florida-based collaboration between two Blues plans, Humana and WellPoint. Their business model is simple: Payer contributions help to get the data flow and integration efforts underway, providers receive a base set of information access services for free, and pay for premium business services such as revenue cycle management and practice management tools. The value equation for providers has been enough to keep Availity in the black to date. They’ve gone one step further and it looks like Availity will be licensing this to other Blues plans around the country as well. While this work is certainly laudatory, Chilmark is skeptical that this level of collaboration will occur widely today (Availity began in 2001). While it’s possible for a national payer to partner with local plans to get an HIE off the ground, these typically include other intermediaries for purposes of getting buy-in from other stakeholders (these are insurance companies, after all), skin-in-the-game and governance. Moreover, because the ROI in HIE can be somewhat invisible, appearing in efficiencies and reduced costs for payers and providers, payers feel more comfortable sharing the investment.

Conclusion: Aside from emerging collaborations between Blues plans and some provider organizations (e.g. Catholic Healthcare West and Blue Cross of California), we foresee little progress here. For big payers considering an acquisition play, investing in one-off models is quickly becoming redundant; for local plans it makes more sense to share the load with non-payers.

In Part Two will look at local support of HIEs, challenges and what lies ahead for the future.

Welcomed Changes for 2012

Since its start in 2007, Chilmark Research has kept a fairly low profile as analyst firms go, focusing on a few discrete domains of healthcare IT (HIT). First there was patient and consumer engagement that led to the publication of our first report on Personal Health Records (PHRs). That first research effort led to a significant amount of consulting work and subsequently no reports published for broader market consumption until 2010. That year Chilmark research expanded into the mHealth domain, with the assistance of analyst Cora Sharma, and published the report: mHealth in the Enterprise.

In early 2011, Chilmark published what is arguably its most important, or certainly most popular body of research, a report on the Health Information Exchange (HIE) market. It was this report that clearly cemented Chilmark Research as a well-respected analyst firm providing unbiased, objective, and in-depth research on the domains it covers.

But there was a problem. By and large the vast majority of this work was done by one individual, myself, the founder of Chilmark Research. Over the course of 2011, particularly during the fall when a significant number of consulting assignments came in the door, I quickly came to the realization that I needed help. I was reaching burnout and the model needed to change.

What’s New:
In 2012, Chilmark Research is launching a subscription service called the Chilmark Advisory Service (CAS). This service will provide subscribers one of our annual market research reports (an updated HIE report is forthcoming, others in the works), a number of other content deliverables and direct access to Chilmark Research analysts for specific inquiries. More will be forthcoming regarding this service but encourage you to contact us directly (info @ chilmarkresearch dot com) if you wish to learn more immediately or schedule a meeting at HIMSS to discuss this service further.

Our research agenda for 2012 will look quite similar to our past work for we strongly believe these are the most important topics in healthcare IT today:

Patient & Consumer Engagement
Why it’s important: As the industry migrates to reimbursement models based on outcomes and providers take on more risk, it will become increasingly important to truly engage the patient and their loved ones as part of the care team. Also, in highly competitive markets, providers will be seeking new approaches to not only engage consumers, but build loyalty.

What we’ll be covering: Patient/consumer engagement and outreach strategies of both providers and payers including patient portals (Stage 2 meaningful use requirements are key market driver), telehealth, privacy & security (including consent management) and new models of care & outreach to not only improve consumer/patient satisfaction but improve outcomes.

Why it’s important: No doubt about it, the growing ubiquity of smartphones and how they have become such an integral part of our lives (we store family pictures there, we record our expense reports on them, we answer emails, etc.) and an ever growing number of consumers are doing mobile searches to answer health-related questions. Couple this with near saturation of physician adoption of smartphones and the growing use of touchscreen tablets by providers, it is not too hard to imagine a future where mHealth becomes the touch-stone for provider-patient engagement.

What we’ll be covering: Primarily address consumer-centric and clinician-centric mHealth Apps, how the market is developing, what is being adopted and used and why, and lastly, what is the trajectory for this rapidly evolving, ever changing market.  Currently, we are in the midst of producing a report (ready by HIMSS’12) that takes a close look at mHealth Apps for provider-patient engagement.

Health Information Exchange
Why it’s important: The HIEs being put in place today are the fundamental infrastructure, “the pipes,” that will enable one, be it clinician or consumer, to create a true longitudinal, patient record which will lead to safer, more effective care (at least basic logic points to such). These pipes will also allow researchers, public health officials and others to perform advanced analytics on this clinical data that can lead to better, more effective and responsive care. Lastly, as we move to new outcomes-based reimbursement models, HIEs will become an absolute necessity for virtually all medium to large size healthcare organizations.

What we’ll be covering: As mentioned above, last year’s HIE Market Report put Chilmark Research firmly on the map as a firm providing unmatched coverage of this market. We have every intention of keeping that title. First off, we will be releasing an update of the HIE Market Report (target HIMSS’12 release date) with in-depth profiles of some 25 vendors. Second, we are launching a major research project in early February on end users’ experiences and future strategies for their HIE deployments. We have much more planned for this market, but that is a very good start!

How We’ll Do It:
As mentioned previously, I had some help, but not enough and certainly not enough to launch a major expansion of Chilmark Research. To address this issue I went out and found some incredibly bright young people (always believed in the adage, surround yourself with people smarter than you) to join Chilmark Research. They are:

The returning Cora Sharma who’s research use to be the mHealth domain but has now moved to Patient & Consumer Engagement Strategies & Tools.

The former Washingtonian who has returned to his New England roots, Naveen Rao. Naveen’s research focus will be HIE & analytics/BI domains.

And last but certainly not least, my son, John Moore III who in addition to leading an mHealth start-up of his own, will be focusing his research efforts at Chilmark on, you guessed it – mHealth.

Brief bios on these three stellar additions to the Chilmark Research team are over in the “About” section of this website.

I do not hire readily (learned my lessons there long ago) and have been very judicious in choosing only those who show significant promise. I have no doubt in my mind that with some mentoring, these three have the chops to become some of the finest analysts in the industry and the credibility that Chilmark has established in the market will continue to grow.

Speaking on behalf of the Chilmark Research team, we look forward to continuing to provide this vitally important industry that impacts us all with the critical research that is needed to help guide it forward in the successful adoption and use of IT to truly improve healthcare delivery. Each of us are very passionate about this issue, it is a mission for us and through our research we intend to make a positive impact.

Predictions 2012: Not What You Think

Admittedly, our predictions for 2011 were modest. Most of those predictions were logical and did not take a whole lot of imagination to envision thus our success rate, 7 “hits”, 2 “toss-ups” and 2 “misses was quite high. And though are biggest accomplishment, predicting Blumenthal’s departure just a few short weeks before he actually announced such intentions is laudable, by and large these predictions just didn’t go far enough. So for 2012, rather than make simplistic predictions such as “analytics will be a high growth area” or “mHealth will create greater security concerns” or even “ACOs will begin to take hold” as none of these are all that thought provoking, we’ll go out on a limb with many of our predictions. Hopefully that limb won’t crack sending us crashing to the ground.

Without further adieu, here are our predictions:

Consumer/Patient Engagement – Not What it Seems
Despite the best efforts of the team at ONC to beat the consumer/patient engagement drum, providers by and large are still struggling with such basic issues of taking live their certified EHRs, making the transition to ICD-10, meeting physician demands to have everything served up on their new iPad and of course mapping out future strategies in anticipation of payment reform. Thus, we foresee consumer engagement remaining a tertiary issue in 2012. Just too many other pressing priorities at the moment. WebMD’s implosion on Jan. 10th may portend that this is not such a bad move – at least in the near term.

Bloom is Off the Rose, EHR Market Plateaus
Going out on a limb, we see 2012 as the year when we start talking of the post EHR-era. Yes, there will be plenty more EHR sales in the year to come but over 2012 we will also see EHR sales growth begin to plateau and level off by end of Q4’12. You heard it here first folks, it is time to collect your EHR winnings and seek new places to invest.

Finally, We’ll See Some Fairly Competent Tablet Apps from Legacy Vendors
Though physicians continue to adopt iPads at a rapid rate, they struggle to effectively use them in the hospitals to which they are affiliated simply because most hospital HIS cannot serve up an application effectively on an iPad. Sure, many have tried using Citrix as a stop-gap measure but this is just isn’t cutting it. In speaking to one CIO of a major IDN recently, he was so frustrated with his core EHR vendor’s slow pace of development that he is about ready to self-fund the development of an App for his physicians. Fear not CIOs and frustrated physicians, we have had the opportunity to see several alpha versions of iPad Apps that major EHR vendors are developing and they actually look pretty good. Look to Q2-Q3 ’12 for general availability release of these touch-screen native (mostly iPad-centric) Apps.

At Gunpoint, Direct Project Gains Traction
In 2011, the message came down from on high, or at least from the feds, that all State HIEs must include the use of Direct in their strategic plan. Pretty clear that this was politically motivated as to date, for the $500M plus we, as taxpayers are spending on these public HIEs, there is very little to show for it and we are now running headlong into an election year and this administration needs to show something, anything, in the way of success as it pertains to health information exchange. Sure Direct facilitates health information exchange (the verb), but so does a fax machine and frankly, Direct is only a modest step beyond faxing. Therefore, Direct will gain traction in these “forced” instances but we do not see it extending its reach into the much larger market of private, enterprise HIEs (does not sufficiently support care coordination, population health and analytics) and thus Direct’s overall impact in the market will be small and fade to nothing in three years time.

First CPT Codes for mHealth Apps Issued
mHealth Apps for care provisioning have not seen any significant adoption beyond pilot studies, studies which typically show some efficacy in their use. The big hang-up is a simple one, the risk to reward ratio for physicians to adopt and use mHealth Apps as part of the care process is too low. What might change that risk-reward ratio though is a CPT code whereby a physician actually gets paid to use, or have a patient use an App as part of the care process. WellDoc is one of the few mHealth App companies that is quite aggressive in moving the ball forward and we would not be too surprised if WellDoc did industry ground-breaking work to secure the first CPT codes for their diabetes management App.

Train has Left the Station as Supreme Court Rules on ACA
Though the Supreme Court will hear arguments for and against the constitutionality of the Affordable Care Act (ACA), it is unlikely that their subsequent ruling will throw out all of ACA (they may prune it). More importantly, the move to value-based reimbursement models is already in full swing, which is something that will not be reversed. Whatever the Supreme Court rules, its impact will be minimal and the numerous changes we are seeing take place today (move to accountable care models, patient centered medical home, etc.) will continue as the train has already left the station.

Changing of the Guard as Dynamic Duo Departs
Last year we predicted the departure of ONC head, Dr. David Blumenthal. This year is an election year and it is expected that there will be a significant changing of the guard across the administration. We predict that the dynamic duo that is Aneesh Chopra, White House CTO and Todd Park, HHS CTO will both be leaving their posts by end of the year.

M&A Continues, but at far more Reasonable Valuations
Okay, yes we have had this prediction for three years running, but we just can’t help ourselves as we see far too many vendors in this market (some 300+ EHR vendors alone!) and some rationalization must enter at some point. We are seeing rationalization on valuations (e.g., no one was willing to pay what Thomson Reuters wanted for their healthcare business unit despite there being a sizable number of bidders) and this will create an opportunity for acceleration in M&A activity in 2012.

Floundering HITECH Initiatives Attract Political Spotlight
Yes, we are seeing some modest success and adoption of EHRs as a result of the HITECH Act but the preponderance of such success is at hospitals that first have had some form of EHR already in place and also have a lot to lose if proposed reimbursement cuts from CMS come to fruition at the end this multi-year march to certified EHR adoption and meaningful use. Yet, under the covers we are still not seeing wide-spread EHR adoption at the ambulatory level, especially among smaller practices, State HIE initiatives struggle to define what they’ll actually be when the grow-up, the Beacon programs have not reached the promise land, and the RECs, well we were never a big fan of these for obvious reasons we outlined previously. As this is an election year, healthcare and anything with the stamp of the Obama administration on it, will become fair game and dragged into the limelight. Get ready for healthcare to become the political piñata of 2012

HIE Vendors Stumble
By the end of 2012, the final awards for State HIEs will conclude and with it the evaporation of the $500M plus honey-pot that attracted so many vendors into this space. What’s next for these vendors? Some will stumble out of the market with little to show for their efforts. Others will work with their public clients to stand-up these public HIEs in order that they provide value to their respective communities, which will not be easy and lead to more stumbling. And of course HIE vendors who have traditionally been focused on public markets will reposition themselves for the private, enterprise market. Some of these vendors are now stumbling in this transition to the enterprise market (requires different sales resources and tactics, technology requirements, etc.). This will result in yet another shakeout in this niche industry sector. (Our forthcoming HIE Market Report will provide further details)

The funny thing about doing these predictions is that as one actually goes through the process of thinking about this market, which is currently going through nearly unprecedented change, one ponders so many other predictions that just end up on the cutting room floor. Some of those include:

Payers continue to struggle with exactly what they’ll offer on the State Health Insurance Exchange.

Pharma companies look to insert themselves directly into physician workflow, via HIT.

Despite rising cost share, consumers still struggle to make intelligent, informed decisions.

Telehealth gets some wind under its wings as big telecoms start aggressive lobbying efforts.

You get the idea, plenty of turmoil, no lack of potential trajectories in technology adoption and use within the healthcare sector and we here at Chilmark Research look forward to continuing to provide thoughtful insight on this ever evolving market in 2012.

So now it’s your turn. Are we on the mark with our predictions? Did we reach too far? Is there a particular prediction that you have which we totally missed? It is you, the community of readers that make this site far richer than we ever could do on our own and we look forward to your feedback.