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.

Stay up to the minute.

“As biometric data becomes cheaper and easier to collect through smart sensors, devices, and mobile apps, expect to see more innovations in consumer health.”

-Alicia Vergaras

Rational Thought Infects HITECH

Couple of weeks back the HIT Policy Committee began to seriously consider what a delay of Stage Two meaningful use (MU) might look like. This push for a delay is being driven in large part by EHR vendors. The problem is one of timing. While Stage Two rules are to be released on June 8, 2011, there is growing concern among these software companies that they simply will not have enough time to build, test and deploy the required functionality in time for their customers to demonstrate meaningful use and pick-up their incentive check at the Medicare window.

This does not come as a surprise. When the HITECH Act was first passed as part of the broader Stimulus Bill (ARRA), the primary objective, at least for ARRA and subsequently HITECH, was getting people back to work. The HITECH legislative language was purposely vague highlighting such key objectives as getting physicians to “meaningfully use” a “certified EHR” to promote “care coordination.” Since this was a jobs’ bill, the legislative language also pushed for the billions of dollars in HITECH funding to be doled out expeditiously.

Problem is, installing software into an existing operation is just a tad more difficult than say resurfacing a roadway. When you layer into that software installation issues such as changes in workflow, training clinicians, insuring patient safety is maintained (and ideally improved) you end up with a very challenging situation. In the case of HITECH, this challenge is further compounded by the desire to continuously improve, via the proposed three stages of MU requirements, the quality of care delivered. These are the challenges providers and hospitals are facing but as mentioned previously, the EHR vendors are struggling as well to deliver the functionality required to meet future meaningful use requirements.

Last week at the Massachusetts Governor’s Healthcare IT Conference both Dr. Blumenthal and Dr. Halamka gave their perspectives on this conundrum of whether or not to delay Stage Two MU. Blumenthal was quite cautious in his statements that basically inferred that such a delay could have some repercussions on the entire HITECH Act wherein some of the funding may be retracted if it was not spent in the timeframe allotted to it under this legislative act. In today’s acrimonious federal budget wrangling on the Hill this is a very real possibility.

Halamka proposed another scenario wherein Stage Two would be split into a Stage 2A and 2B. Meeting Stage 2A would not entail new software functionality, but simply attestation that the provider/hospital was meeting the stepped up implementation of their EHR. For example, in Stage One, the CPOE requirement is for 30% of patients to have at least one order via CPOE. In proposed Stage 2, the requirement is 60% of patients. No new software functionality is required, just more physicians trained on how to use CPOE. Stage 2B would address those MU requirements that are new and requiring additional EHR functionality (e.g., record a longitudinal care plan for 20% of all patients).

What is likely to happen?

Looking into its analyst’s crystal ball, Chilmark foresees the following:

  1. Stage Two will be delayed in some form or fashion as there has been a lot of grumbling by healthcare providers who have struggled to meet Stage One (and even Stage One was significantly water-downed from what was first proposed).
  2. Halamka’s scenario of Stage Two being broken up into two makes sense as it addresses both legislative issues (keeps ball rolling) but also allows the industry time to add new functionality and subsequent training to ensure safety.
  3. The delay in full Stage Two MU requirements will put significant pressure on Stage Three with Stage Three subsequently pulled. Those requirements outlined in Stage Three will be achieved through other approaches that HHS has at its disposal, e.g., payment reform.

Musings on PHRs & Consumer Engagement

The recent post on Google Health going into the deep freeze has solicited a number of emails, including some from the press. In one of those emails a reporter had spoken to several industry thought leaders to garner their opinions which follow:

Consumers will not sign on to most Personal Health Platforms (PHPs) or services due to the issue of trust.
Leading researcher and developer of an open PHP.

Provider sponsored PHPs and patient portals will dominate the market for they offer services that patients/consumers want such as appointment scheduling, prescription refill requests, etc.
Leading CIO who is also actively involved in HIT policy development.

The only people who care about a PHP, PHR, whatever you wish to call it are those who are struggling with a life-changing illness.
– Co-founder of leading site for those with serious illness to gather and share experiences.

Chilmark’s thesis is an amalgamation of the last two statements (we’ll get to the first one shortly).

By and large, people do not care about their healthcare until they have to, either for themselves or a loved one. Even then, if they are very sick, it may be far more than they are capable of to set-up and maintain a PHP. These systems are still far too hard to create and manage, let alone trying to get doctors and hospitals to feed complete records and updates into them in some automated fashion. There may be an opportunity in providing a system for baby boomers to help manage their aging parents health issues from afar. We have yet to find a PHP, PHR, whatever you wish to call it that ideally fits this market need and may be an opportunity for an enterprising entrepreneur.

As we have stated many times before, consumers are not terribly interested in a digital file cabinet for their records. What they are interested in is what that data can do for them, particularly on the transaction side. In the “what’s in it for me” category, consumers seek convenience in all aspects of their lives. If they are presented with a system that not only grants them access to their records, but helps them schedule appts, directly communicate with their care team via email, do Rx refill requests, etc. then you’ll see some adoption. THis supports the statement of the healthcare CIO above.
But even then it may not see strong adoption if clinicians are not strong advocates of its use. In deference to the first comment above from the researcher, trust does matter and patients/consumers do trust their doctors. If the doctor encourages use, adoption will follow.
Unfortunately, sites like Google Health, HealthVault and Dossia  as well as a slew of other independent PHR companies are one step removed from these types of transactions and their use is not actively encouraged by clinicians, leading to anemic adoption rates. And even within healthcare organizations, there is often not strong support among clinicians for patients to use the organization’s sponsored, tethered PHR.
Will the HITECH Act, meaningful use requirements, the move to bundled payments based on quality, the establishment of Accountable Care Organizations, the creation of individualized care plans, the desire to transition to true patient-centered care, will any of these initiatives change the market dynamics for PHPs, PHRs, etc.? One could hypothesize yes, of course. But we’ll go back to the preceding paragraph: Until physicians/clinicians actively promote the use of such systems by their patients and the systems themselves become far easier to use and address specific consumer/patient pain points, the growth prospects for this niche market will remain flat-lined.

Remember: Technology is but a Tool

Yesterday, Chilmark Research participated in the CRG conference, Driving Change Through Managed Care IT from Provider Payments to Quality, which was held in New York City. Despite having a title that no one will be able to remember, the overall theme of the event and presentations therein gave one a bird’s eye view into what payers are thinking as we march forward with healthcare reform and the digitization of the healthcare sector.

A common theme that repeated itself numerous times over the course of the day was the lack of business process maturity in the healthcare sector. Meg McCarthy, EVP of Innovation at Aetna was the first to make this statement citing this issue as arguably the number one challenge for this industry sector to overcome. (McCarthy provided some interesting details on the Medicity acquisition but we’ll save that for a later date.)

Later that day, Jessica Zabbo, Provider Technology Supervisor at RI-BCBS gave a very detailed presentation on her company’s experiences working with providers on the adoption and use of EHRs. Over the last several years RI-BCBS has done a couple of small pilots. In both cases a defining parameter of success was business process maturity. For example, the company did a Patient Centered Medical Home (PCMH) pilot that coupled pay for performance metrics (P4P) with EHR use. Basically P4P measurements were to be recorded and reported through the EHR. One of the key lessons learned was that P4P program success was highly dependent on the EHR being fully implemented and physicians comfortable with its use (process maturity). But in a Catch-22, to successfully incorporate P4P metrics into the EHR requires a very deep understanding of practice focus and workflow. Without that understanding, failure of the P4P program is almost certain.

Thus, it is with some dismay that when one goes to the HHS site to view the recently released ONC Strategic Plan for HIT adoption one sees the figure below:

What’s the problem you ask?

Where is “Process?”

Nowhere in this figure is there any mentioned of business process/workflow. Technology is but a tool. The proceses by which clinicians collect and securely share health information is where the focus needs to be with technology in the backseat, not in the driver’s seat. But this figure goes beyond just flipping the equation, it completely ignores “process” altogether putting technology squarely at the beginning, at the start to all things grand and possible if only clinicians would simply go adopt and use the technology. (Despite some wishful thinking and pronouncements, e.g. “the era of EHRs is upon us” providers are not necessarily chomping at the meaningful use bit.)

Now to ONC’s credit, they are in a bit of a bind here for to admit that business processes and change thereof need to be taken into account would most assuredly require a major rethink of what is truly possible in the next several years as ONC tries to empty the HITECH coffers of its billions and demonstrate to Congress that this program is indeed a success and is creating jobs (remember, this was passed as part of the Stimulus Act and creating jobs was priority numero uno). Unfortunately, being a job creation bill is not conducive to providing the time necessary to create and implement new business processes that are supported by IT. Business process change takes a tremendous amount of forethought before any contract is signed for any EHR, but HITECH works counter to that with aggressive adoption and reimbursement schedules leaving very little time for thoughtfulness in re-architecting processes.

In a prescient way, Chilmark predicted that the issue of process re-engineering would be one of the greatest challenges in adoption and use of EHRs and recommended to ONC in our 2009 comments that ONC consider relaxing the schedule to allow to allow sufficient time for process re-engineering. Unfortunately, it appears that it remains full-speed ahead with HIT driving a weaving HITECH truck down a narrow and winding road.

mHealth in the Enterprise Set to Explode

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

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

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

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

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

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

Table of Contents

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

Figures

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

Tables

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

 

HIEs in the Public Interest

The Health Information Exchange (HIE) market is the Wild West right now.  Vendors are telling us that they are seeing an unprecedented level of activity both for private and public HIEs.  Private HIEs are being set-up by large and small healthcare organizations to more tightly align affiliated physicians to a hospital or IDN to drive referrals and longer term, better manage transitions in care in anticipation of payment reform.  Public HIEs are those state driven initiatives that have blossomed with the $560M+ of federal funding via the HITECH Act.

But this mad rush is creating some problems.

While the private HIEs seem to have their act together in putting together their Request for Proposals (RFPs), such is not the case for the state-driven initiatives.  Rather then formulating a long-term strategy for the HIE by performing a needs assessment for their state, setting priorities and laying out a phased, multi-year strategy to get there, far too many states are trying to “boil the ocean” with RFPs that list every imaginable capability that will all magically go live within a couple of years of contract reward.  Now it is hard to say who is at fault for these RFPs, is it the state or the consultants they have contracted with that formulated these lofty, unreachable goals, but this is a very real problem and unfortunately, the feds are providing extremely little guidance to the states on best practices.

While the above is more of a short-term concern, longer-term we may have a bigger problem on our hands.  The proliferation of private HIEs, coupled with state-driven initiatives with very little in the way of standards for data governance, sharing and use (this includes consent both within a state and across state lines) has the very real potential to create a ungodly, virtually intractable mess that will be impossible to manage.

So maybe it is time to rethink what we are doing before we get to far down this road.

What if we were to say, as a country, that much like Eisenhower did during his presidency to establish the Interstate Highway system, we made the decision that it is the public interest to lay down the network for an “interstate” system for the secure electronic transport of health information?  And rather than be cheap about it as we have done in the past dedicating only modest funding (e.g., NHIN CONNECT), let’s really make the investment necessary to make this work.

Yes, it won’t be cheap, but think of the alternative – 50 states, countless regions all with their own HIE.  Yes, states are required under HITECH to work collaboratively with neighboring states, but this will not lead to enough consistency to create a truly networked nation for the delivery of quality healthcare for all US citizens.

It is indeed time to take a stand for much like Eisenhower’s Interstate system, which I had the pleasure to enjoy as I traveled cross-country this week from Boston to my beloved mountains of Colorado, such an interstate system for the delivery of health information at the point of care will be something all citizens will benefit from. And taking a cue from the image above, rather than a “Symbol of Freedom” it would become a Symbol of Health.

Meaningful Use Perspectives & Resources

Everyone seems to have an opinion, or at least has written something, about the final Meaningful Use (MU) Rules that were released on July 13th.  Of the multitude of posts and articles out there on the net, there the top three to get you started are:

1) ONC Chief, David Blumenthal’s article in the New England Journal of Medicine that was published on the same day wherein Blumenthal provides a clear abstract of the rules (the actual rules are 864 pgs in length and not a bad read if you have the time) in a easy to read and understand format.

2) Next, head over to the Dell website for a post by their own Dr. Kevin Fickenscher who gives an excellent background on the broader HITECH Act, the origination of the MU rules as well as taking a look at companion rules for Certification of EHRs and the new Privacy & Security rules that were also recently released.

3) Last, but certainly not least is a visit to John Halamka’s site where he provides a freely available, with no need to provide attribution, deck of slides that gives the big picture view of the final MU rules.

With such great resources out on the net, we at Chilmark Research see little need to write an in-depth review of these rules. That being said, we will provide some quick points of analysis.

1) Clearly, HHS listened to the market and the 2,000 comments it received and has relaxed the final MU rules significantly.  If any provider or hospital is still complaining, well they may be the type to complain no matter what.  These rules, while still challenging for some, are certainly doable.  Time to stop talking and get down to work.

2) Thankfully, probably to the chagrin of payers, the requirements to conduct administrative functions (eligibility checking and claims processing) from within the EHR has been removed.  This has always been a fairly silly requirement as today, much of this process is already done electronically through the Patient Management (PM) system. So no need to duplicate it within the EHR, besides which it would have been tough for many an EHR company to build out this functionality in such a relatively short timeframe.

3) The consumer engagement sections of the MU rules also saw some relaxation, but it was reasonable.  What may prove more interesting here is the new requirement within the certification rules for EHRs that they provide health education resources for consumers within the context of their platform.  This may prove to be a real money maker for the likes of health content providers such as A.D.A.M, Healthwise, WebMD, among others.

4) While understandable that there was some pull-back on health information exchange as we saw in the draft MU rules, we were quite surprised that it was completely eliminated in the final rules for Stage 1.  HHS claims that this was done due to the lack of maturity in the HIE market.  Well, yes and no.  There indeed may not be a lot of multi-stakeholder, publicly-led HIEs today that are actively exchanging data, whether regional or state level, but there is a robust market for private HIEs.  It is unfortunate that HHS pulled back on this one for “information sharing for care coordination” was one of the primary precepts of the original HITECH legislation.  Sure, will likely see something within Stage 2, but that does not get clinicians familiar with the concept today.

5) What really caught us by surprise is a reference in the MU rules (pg 39 to be exact) wherein HHS states that they will not discuss the future direction of Stage 3 at all.  Nothing. Nada.  Does this portend a complete pull-back from Stage 3?  Hard to say, but it is clear that HHS wants to see how well Stages 1 & 2 go over in the market before it makes any further demands on providers and the EHR vendors that serve them.

6) Along with the release of MU rules, HHS also released the final rules for EHR certification.  While having not delved into these deeply, yet, the whole concept of “certification” is fraught with challenges, primary among them, technology lock-in.  It is here where Chilmark believes we will see the greatest challenges to indeed create an environment that fosters innovation, providing clinicians with tools they will readily wish to use while at the same time providing some level of certification. Frankly, we do not believe it can be done. Congress really wrapped an albatross around the neck of HHS when they wrote that into the legislation.

What were they thinking?

Meaningful Use Rules Drop Today

Nearly a year after the HIT Policy Committee’s meaningful use recommendations were approved by ONC chief Dr. David Blumenthal, an extensive comment period that solicited some 2,200 comments, the final Stage One meaningful use rules will be released today at 10:00am.  Details for today’s conference call are:

WHAT: CMS and ONC will host a press briefing to announce the final rules on Meaningful Use and Standards and Certification under the HITECH Act’s Electronic Health Records (EHR) incentive program.
WHO: Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services
Donald Berwick, M.D, Administrator, Center for Medicare & Medicaid Services
David Blumenthal, M.D., M.P.P., National Coordinator for Health Information Technology
Regina Benjamin, M.D., M.B.A., Surgeon General
WHEN: Tuesday, July 13, 2010
10:00 a.m. EDT
WHERE: Great Hall, Hubert H. Humphrey Building
200 Independence Avenue, S.W.,
Washington, D.C. 20201
Dial In: Call in: 800-857-6748
Verbal Passcode: HHS

A Couple of Thoughts on the Pending Release
A significant amount of effort by many a talented and dedicated individual has gone into providing the initial policy framework and ultimately the final language for these rules.  Hats-off to them for their service for what they may have done is defined much of the future core elements of healthcare IT systems in the decade to come.  Granted, this is only Stage One rules, we have only an inkling of an idea as to what to expect in Stages 2 & 3, but there is no doubt in our minds that these rules will have an impact on the HIT market, more broader technology adoption and use in healthcare and even more broadly, a fundamental change in healthcare delivery and the role of the citizen/patient.

While these rules will have a noticeable impact, we are less confident that they will have a lasting impact for two primary reasons:

  1. It remains to be seen just how many physicians will take the bait (incentives) to buy a “certified EHR” and jump through all the hoops to demonstrate their meaningful use of said EHR.  Yes, $44k may seem like a lot initially, but when you start digging a little deeper into what the total cost of ownership is for an EHR and the number of hoops you must jump through to get that incentive payment, that attractive $44k starts looking less attractive in a hurry.
  2. Looming on the horizon, just beyond the street noise that is meaningful use and the HITECH Act, is a far larger change agent, the Healthcare Reform Bill that was passed into law earlier this year.  Tucked into that legislation are a number of significant changes, primary among them, payment reform via CMS’s Innovation Center.  Following the old adage, “follow the money,” we at Chilmark foresee a restructuring of the healthcare delivery system that will necessitate the adoption of IT not for the aforementioned “meaningful use” but to more efficiently and effectively run operations.  (Over in the radiology world, an article on Aunt Minnie clearly directs radiologist to start thinking efficiency.) This is what organizations both large and small, and not just radiologists, need to be thinking about as meaningful use, in retrospect, may be seen as more of a distraction than anything else.


Ramping Up for MU Rules, CMS Launches New Site

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

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

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

Shedding a Light on HIT – Beacon Awards

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

Quick Synopsis:

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

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

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

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

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

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

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

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

Even with Incentives, Docs May Forgo EHR Adoption

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

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

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

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

New Leadership for CCHIT – Will it Make a Difference?

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

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

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

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

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

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

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

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

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

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

Appendix:

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

iPad in Healthcare: A Game Changer?

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

Our 2 cents worth…

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

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

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

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

There is an app for that.

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

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

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

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

Only time will tell.

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

Again, only time will tell.

Appendix:

Some other perspectives on the iPad in healthcare:

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

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

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

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

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

Another ER doc writes a review of the iPad.

Its Not About Meaningful Use

With the impending comment deadline for Meaningful Use (MU) fast approaching, many organizations, from CHIME to AHA to AAFP and others are asking for some form of relaxation of MU criteria in the final version.  Now it is not to say these concerns are not justified, it just may be that they are misplaced for the vast majority of those who currently do not use an EHR, small physician practices and clinics.  It is within these small practices, which are really just small businesses, that the majority of patient care occurs and where possibly the biggest benefit may be derived in the use of EHRs. It is also here where we may find the highest adoption hurdles, and those adoption hurdles are not so much about MU criteria, but more about productivity losses in adopting an EHR.

This past weekend I spent some time with a nurse who works in a primary care/pediatrics clinic in Vermont.  There facility, part of a network of several clinics, recently adopted and went live with a new EHR system (about 18 months ago). According to the nurse, this EHR, from one of the big names in ambulatory systems, has been a complete disaster for the clinic.  Productivity is way down, countless glitches have occurred, whole system crashed during a recent upgrade and the list goes on.  For 2009, this clinic, which has been in operation for a few decades, had its first ever loss last year, the year they went live with this EHR. The clinic puts the blame squarely on the EHR, which has severely constricted their ability to see patients and as all readers know, clinicians get paid for seeing patients, not trying to use a complex and difficult to use EHR.

It is stories like this that concern me.

This is a clinic trying to do the right thing, trying to use an EHR in a meaningful way (note, did not say meaningful use) and they are struggling. Yes, they do want to deliver the best patient care, but at the end of the day, they, like any business have bills to pay.  They are losing money far in excess of what HITECH Act incentives will provide. This story is, unfortunately, not unique, though few EHR vendors will come clean on the productivity hit to a practice.  Maybe instead of guaranteeing that their application(s) will meet MU criteria, EHR vendors should guarantee that the productivity hit of using their solution will not exceed HITECH incentive payments.  Now that would be an interesting value proposition.

Thanks to Michael Jahn of Jahn & Associates for the MU cartoon.

Addendum:

This post was picked up by The Health Care Blog (THCB) and there is quite a lively discussion occurring in the comments area.

Atlanta Bound – HIMSS’10

Three years ago while still very wet behind the ears on all things healthcare IT (HIT), I attended my first HIMSS conference.  Having been to many conferences/trade shows before, some far larger than HIMSS, I was not intimated by the size, but I was quite intimated by a lack of the HIT vernacular (every industry has it’s own language) and frankly, I knew very few people.  One of my mentors to the first HIMSS was Adrian Gropper, one of the founders of Amicas and currently co-founder and CTO of MedCommons.

Now, three years later I head to HIMSS with a comfortable knowledge of the HIT landscape, the significant incumbents and the interesting up-starts and some opinions on where this sector may be headed over the next several years.  A primary objective for HIMSS’10 is to speak with many of these companies over the course of the next three days getting their views and perspectives, better understanding how they intend to meet future market needs and compare and constrast these views not only with my own, but among each other.

While I do not have high expectations for what the organizers of HIMSS will deliver and likewise, I will probably be less than impressed with the multitude of “meaningful use” (MU) messages by the vendors (not unlike last year when it was all about Stimulus funding and the HITECH Act), I am hoping that vendors who I speak to do adhere to the 5 Do’s & Don’ts, that the truly innovative break free of the MU crap and start speaking about true business value to drive adoption and that the CIOs don’t make bonehead statements like “…One lesson we learned in our deployment was to pay attention to workflow before implementing the solution…”

If all those things happen, than this year’s HIMSS will truly be a success.

Flying with fingers crossed and hope to see many of you there.

And if you are flying in to Atlanta, be sure to check out the fabulous exhibit of art (sculptures) from Zimbabwe.  Truly spectacular (above photo).

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

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

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

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

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

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

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

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

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

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

Impact on HIE Vendors

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

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

Confusion Abounds

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

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

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

No Clear Leader

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

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

Relaxing Meaningful Use? Not Really

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

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

But while one hand gives, another takes away.

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

But I digress.

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

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

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

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

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

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

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

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

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

The Wrap:

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

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

Thanks to David Harlow of Healthblawg for the Wordle image.

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

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

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

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

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

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

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

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

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

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

HITECH Act Funding of HIE

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

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

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

Impact of HITECH Act funds & HIE

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

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

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

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

The Wrap:

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

Attribution:

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

Acquisitions Creating White Hot Market for Healthcare IT

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

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

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

IBM Strengthens Healthcare Play, Picks up Initiate

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

So What Did IBM Get?

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

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

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

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

Final Assessment:

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

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

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

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

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

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

Achieving Meaningful Use: View from the Trenches

Since the Meaningful Use and Certification proposed rules have been released, have read numerous articles, posts and tweets to gain some perspective on the ramifications of these rules on the market.  The best piece I’ve read by far is that from Beth Israel Deaconess’s (BIDMC) own CIO, John Halamka.  As many already know, Halamka has been very instrumental in the development of various standards via his leadership of HITSP and is arguably one of the most knowledgeable on the subject.

In his post, Halamka lays out the strategy that he and his team intend to follow at BIDMC. Though this post is certainly not as long as the nearly 700pgs of documentation that HHS released, listing 25 key actions that BIDMC will take is quite comprehensive and worthy of reading completely through to th end. While some of their strategic steps will be difficult for other hospitals to follow (e.g. BIDMC’s use of  the existing network NEHEN which will help BIDMC meet many meaningful use criteria), the overall plan is worthy of emulation.

Couple of final points:

1) Halamka is speaking from the perspective of a CIO in a major healthcare organization.  His plan will not be terribly useful for a small practice or rural hospital that does not have the same resources at its disposal.

2) As part of their plan, BIDMC/Halamka frequently refers to Microsoft’s HealthVault and Google Health as a key part of enabling consumer access to and control of their personal health information (PHI) via use of CCD or CCR standards.  It is Chilmark Research’s opinion that to meet meaningful use criteria for consumer access to and control of PHI, practices and hospitals will increasingly enable such functionality through their own gateways to these two Personal Health Platform (PHP) services

Part One: Stage One Meaningful Use Winners

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

Winners

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

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

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

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

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

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

Meaningful Use Rules Hit the Streets

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

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

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

In Closing…

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

Looking Back: 2009 Forecast Assessment

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

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

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

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

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

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

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

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

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

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

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

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

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

ONC Reaches Out with Health IT Buzz

Yesterday, Dr. Blumenthal, head of the Office of the National Coordinator (ONC) who is tasked with the roll-out (setting policy) for all that HIT stimulus funding under the HITECH Act, launched his own Blog: Health IT Buzz.  With over 20 comments so far, this Blog has generated a ready following.  Now the question is: Can he/ONC maintain momentum and truly engage the HIT public at large?  A quick scan of the comments revealed not a single comment from an HIT vendor (though there were a few from systems integrators).

Good to see this type of outreach by ONC and do hope that this forum lends itself to a deeper engagement with all stakeholders in HIT, consumers included.

Blumenthal Beats HITECH Drum

blumenthalYesterday, David Blumenthal published a very thoughtful post on the HITECH Act as a foundation for information exchange in which he reflected on his own personal experience as a doctor.  That experience included the often frustrating realization that he could not obtain a complete longitudinal record of his patients (customers) due to either (or both) technical or business barriers.  In his post, Blumenthal goes on to elucidate on how the HITECH Act’s language is purposely worded to remove such barriers as the healthcare sector transitions from a provider-centric model to one that is patient (consumer) centric.

Following are our own reflections on Blumenthal’s post based on the reality of the market today and where Chilmark sees it heading in the future. Specifically, we’ll tackle each of Blumenthal’s bullet points in order.

HITECH Act squarely tackles the commercial barriers. Yes, HITECH funding is clearly earmarked in support of open and secure exchange of data, in fact it was one of the three core attributes of meaningful use (information exchange for care coordination) defined in the legislative language.  But HITECH Act and its provisions only pertain to those that accept the $$$ and it remains to be seen just how many entities sign-on.

Blumenthal closes his first bullet point with:

Consumers, patients and their caretakers should never feel locked into a single health system or exchange arrangement because it does not permit or encourage the sharing of information.

Ideally, this is the end result but not so sure how we get there from here.  In Boston, a very competitive healthcare market with some of the best healthcare informatists in the business, organizations and subsequently consumers are extremely challenged to get their data, let alone share it.  The video clip below from Microsoft on the deployment of Amalga for the Wisconsin HIE gives some idea as to how this might work, but even in this case, it is limited to ER, there is no consumer control.  We are in for a very, very long journey.

[youtube=http://www.youtube.com/watch?v=Wk_6NQVfpPQ&hl=en_US&fs=1&rel=0&color1=0x5d1719&color2=0xcd311b&border=1]

HITECH tackles economic barriers. Not really.  Sure, $36B is a heck of a lot of money for the HIT market and the potential follow-on penalties for not adopting an EHR may be significant for clinics and hospitals that derive a large proportion of revenue from CMS, but that is not necessarily the case for smaller, private practices where it is estimated that 80% of care actually occurs. For smaller practices that do not serve a large CMS population, the reimbursement of $44k/physician does not pay. The incentives, frankly, are not the powerful tool that Blumenthal claims they are for a significant portion of the market.

HITECH tackles the technical barriers. Huh?  Not sure how he came to that conclusion.  Maybe in time if the stars all align perfectly, such will come to pass but today we have a host of legacy systems that do not talk (inter-operate) with one another, strong disincentives for HIT vendors to actually create truly interoperable products (the more open and interoperable you are, the easier it is to be replaced with a competing solution) and then there is that whole issue of adoption mentioned under economic barriers above.

Yes, Blumenthal is correct in that the HITECH Act does instruct HHS to continue its investments in creating a nationwide electronic exchange for health information (the NHIN which will become the Health Internet).  But even here there have been challenges. The technology stack of the NHIN today, created by beltway bandits and not those deeply immersed in HIT, is crippled.  Hopefully, as was presented at the Harvard ITdotHealth Forum, the feds will open up and actively solicit the guidance and input of those that were present, and others to create an NHIN that is truly usable.

HITECH provides the building blocks for information exchange across jurisdictions. Yes and No. Certainly the HITECH Act will fund HIE initiatives in virtually all states with the $560M+ that was announced in early fall (States submitted their proposals earlier this month).  This will certainly accelerate activities at the state level for HIE build-out but the question remains: Will these state activities actually be able to devise a truly sustainable business model?  To date, it is rare indeed to find a public HIE that is self-sustaining.

Beyond the issue of funding these state HIE is the much thornier issue of the myriad of state laws and policies as it pertains to the distribution and sharing of medical records.  The only recourse may be a “super-DURSA” (caution PDF) passed by Congress to supersede state policies, which could prove quite challenging.

Despite outlining what are seen as some fairly significant challenges to Blumenthal’s upbeat and positive post, like him, we share in the desire to move the proverbial ball forward and more importantly (what we really, really liked about his post) focus on the patient, the consumer, the citizen.  In the end, it is they who are footing the bill for this massive initiative to get doctors, clinics and hospitals wired-up. Therefore, is it not they that should ultimately benefit from the HITECH Act through better care, greater flexibility in physician choice and who knows, maybe even receive lower cost of care.  A tall order in deed but certainly one worth working towards.

Pushing ONC to Act on Consumer’s Behalf

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

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

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

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

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

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

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

What’s Missing?

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

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

Bottomline:

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

Spigots are Opening: $1.16B for HIT in 2010

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

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

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

Some quick facts and figures on HITEP:

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

These regional extension centers will:

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

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

Some quick facts and figures on the HIE Grants:

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

And what information sharing will these RHIOs support?

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

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

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

CCHIT has a Seat at Table – for Now

Today, the HIT Policy Committee met once again, this time to hammer out what the term “certified EHR” means within the context of future ARRA reimbursements to physicians and hospitals.  Chilmark sat in on the discussions, here is our assessment of what transpired. (See yesterday’s post, below, as to why the Certification issue is critical.)

The Certification workgroup presented their refined recommendations today (these were first announced at the July 16th meeting), which were subsequently approved by the broader HIT Policy Committee.  Marc Probst of InterMountain Healthcare and co-chair of the workgroup led discussions which began with a high level list of five recommendations, (see slide below).  For simplicity, we will focus on these five recommendations in our discussions as they encapsulate the entire meeting and what was ultimately approved.

cert1

In Recommendation 1 the workgroup emphasized that certification criteria must be kept at a high level, (e.g., not specify how an alert would be presented, simply that one would be presented) criteria must directly link back to supporting the meaningful use criteria that were approved on July 16th. Th workgroup also emphasized that the creation of certification criteria must be the responsibility of HHS/ONC and not a third party such as CCHIT. (Note: CMS is now converting MU criteria into actual rules – and based on some comments today, it is not an easy task.  Creating certification criteria will be easier, but still a lot to add on to the plate of HHS who already has its hands full.)

But where the workgroup wants a lot of specificity is with interoperability suggesting that HHS/CMS develop certification criteria that is quite specific to insure interoperability between systems. With such tight time-frames and deadlines in place, this issue of interoperability could become one of the most challenging aspects of the whole HITECH Act, for underlying all three workgroups (Meaningful Use, Certification and HIEs) is interoperability.  But what is interoperability anyway?  Is it computable data? Is it transmittal and sharing of PDFs? Is it order sets, med lists, labs?

Looking back, the Meaningful Use matrix does provide some guidance as to what data is to be shared for care coordination, but that still does not eliminate the challenge of creating specific criteria for interoperability that can be readily certified and put into the market.  Also, it is important to note that certification for vendors may have to occur every two years (2011, 2013, 2015) in lock-step with the ever increasing requirements for meaningful use which itself calls for ever more complex data sets to be shared.

Recommendation 2 was pretty much a no brainer as ARRA legislation specifically calls for certain enhancements to security and privacy of medical records (audit trails, consent, etc.).   Here again the workgroup emphasized the need for HHS to get aggressive on establishing clear certification guidance on interoperability as it pertains to addressing security and privacy.

It was in Recommendation 3 that the workgroup suggested that HHS allow multiple certification organizations (not just CCHIT), to conduct certifications of EHR systems stating that this will help create a competitive market for such services and increase transparency into the certification process.  The workgroup also recommended that NIST establish and execute an accreditation process for certifying organizations.

While CCHIT has certainly been marginalized, they will still play an important role in the interim.  Right now there are no other certifying organizations, the market is being quite cautious in making any large EMR purchases awaiting to see what comes out of DC and this whole certification/accreditation development and meaningful use rule-making is going to take time.  What was proposed today is that CCHIT take the lead until at least October (it will more likely end up being well into Q1’10) for mapping meaningful use criteria, as defined in the matrix, to high level certification criteria and provide an interim certification for EHR systems.  Remember, this role of CCHIT is on an interim basis and NOT permanent, though others may want you to think differently (Note, Government Health IT is owned by HIMSS a strong advocate of CCHIT.)

The workgroup also wanted to acknowledge the investments that HIT vendors have already made to get CCHIT certified.  Thus, for those vendors with 2008 CCHIT certification, they need not go through a whole re-certification once guidelines are released, but simply be certified for any gaps that may exist between these two certification processes, with the latter focused on meaningful use.

For Recommendation 4 it appears that like CCHIT, the workgroup received a lot of feedback from Open Source advocates, those that developed their own solutions and smaller software companies that have developed EHR enabling modules.  Therefore, the workgroup followed CCHIT’s lead wih a similar strategy recommending that all systems be tested equally with same high level criteria, regardless of the source of the software. They also encouraged a “flexible certification process” that will account for non-traditional software sources (eg, the RYO camp) and that there be a process to certify distinct, meaningful use enabling modules (eg, eRx).  Chilmark thought CCHIT did a good job here and it is equally good to see the workgroup recommend the same.

Recommendation 5 ties back into what we discussed earlier with regards to the future role of CCHIT – there needs to be a transition phase to account for the time-lag between the need to begin certifying EHRs for market and the lengthy rule-making process for meaningful use.  The workgroup recommends adopting what certification criteria that exists today (obviously from CCHIT) that supports meaningful use and where there are no existing criteria, work to converge criteria to meaningful use rules through close internal collaborations within HHS.

This is where it is going to get a little tricky as both the meaningful use matirx is a bit vague and well certification criteria, that is even more vague.  How do we bring convergence for all this in a timely fashion so that physicians and hospitals can begin installing certified EHRs that provide them the capability to demonstrate meaningful use in order to get their 2011 reimbursement?   We’re not sure how to get there from here, but one thing is for sure, it will be a rocky road ahead.

Meaningful Use & the PHR Market

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

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

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

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

Here is our quick sketch:

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

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

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

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

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

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

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

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

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

Meaningful Use Comment Instructions

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

Meaningful Use: A Driver for PHR Growth?

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

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

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

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

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

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

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

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

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

ONC Provides Roadmap for HITECH Act Execution

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

Meaningful Use:

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

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

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

Metrics of Success:

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

Extension Centers:

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

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

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

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

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

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

Making “Meaningful Use” Well… Meaningful

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

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

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

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

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

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

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

What we know today:

EHR

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

Meaningful Use

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

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

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

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

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

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

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

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

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

Certified EHR

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

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

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

EMR certification has not been particularly successful in encouraging adoption.

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

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

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

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

Meaning, Implications & Forecast

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

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

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

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

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

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

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

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

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

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

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

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

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

Addendum:

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

“Meaningful Use” Usual Suspects to Gather and Define

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

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

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

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

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

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

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

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

Bad Data & PHR Adoption

oscarStory in today’s Boston Globe that highlights the experiences of a cancer patient, David Debronkart, who exported his medical records from Beth Israel Deaconess Medical Center (BIDMC) to his Google Health account.  His experiences, which he discusses at length (beware, it’s a long post), exposes a very real problem we have today in the healthcare sector, that of inaccurate data – the old “Garbage In, Garbage Out” problem, though in this case it is the inverse, Garbage Out, Garbage In.

There are many potential sources of healthcare data (claims, clinical, PBM, self-reported, biometric, etc.) that a consumer might use to populate their PHR.  Today, however, the most prevalent source (we estimate 80%) is claims data as it is digital, and both employers and payer sponsored PHRs can use it readily in their offerings to employees/members. And as in the case BIDMC, it is what they push to Google Health at a customer’s request. Problem is, claims data is based on limited code sets (ICD-9) that physicians use for reimbursement.  This can lead to inaccurate entries/codes as physicians struggle to fit a diagnosis to a given code or possibly prescribe a drug for off-label use, or even “game” the reimbursement system.  Either way, end result is an inaccurate picture of the consumer’s health.

Now some may argue that this is exactly the reason we need PHRs that are tethered to an EMR.  EMR data does not necessarily rely on claims codes and could provide a better, more accurate view of the consumer’s health.  Problem here, as we have outlined before, is that tethered PHRs do not aggregate consumer health data from multiple care providers for a full longitudinal record, only the data from those associated with the entity using the EMR to which the PHR is tethered.  These tethered PHRs also do not support portability (MyNYP.org breaks from this tradition, thankfully) which in untenable.

Big Question is: Will Inaccurate Data Stall PHR Adoption?

Consumers are just beginning to wake-up and realize that maybe taking more control of their health records is a good thing. We are still very much at the early adopter stage with only some 3.5% of consumers using an Internet-based PHR today, but we are beginning to see a measurable uptick in adoption, best represented by Kaiser-Permanente who now has nearly 50% of members actively using the KP PHR.

Challenge in the PHR market from day one though is: How do we provide compelling value within the context of a PHR for the average consumer to encourage use? A primary component of that value proposition has been: Let’s help the consumer by pre-populating the PHR with healthcare data and automating the process for future updates.  The consumer can then use this data as the basis to better understand their health, their risk profile, assist in engaging the healthcare industry and even help them manage a chronic disease or more importantly, prevent them from contracting such a disease.

But this value proposition may quickly unravel if upon entering their brand, spanking new PHR a consumer finds the kind of inaccuracies that Dave found in his experience with Google Health.  How many consumers will go to the trouble of trying to correct the PHR by either annotating each data field that is wrong (and even if they do that, would another physician looking at the PHR trust it?) or contacting the source of the erroneous data to have it corrected, which we imagine would be a Herculean task.  Our guess is few would be willing to take on this task and simply walk away from the PHR.

At least two things need to happen to maintain PHR adoption growth.

1) In the near term, we need to begin setting appropriate expectations for the consumers i.e., yes, we have done the best job to provide you an accurate portrait of your health via your records, but there may indeed be inaccuracies that you will need to identify and correct.

Along with setting expectations, we need to provide tools for the consumer that allow them to make necessary corrections (annotations) to their records and a process whereby a trusted source (e.g., physician or other care provider) verifies such changes are correct.  Will Crawford of IndivoHealth believes that a good starting point is to simply point out to the consumer what types of claim data sets (codes) are known to be problematic that may require their attention.  A great idea to move along this path.

2) Longer term the adoption of ICD-10, which will assist in insuring that claims data is more reflective of actual diagnosis and treatment, combined with wide-spread adoption and meaningful use of EMRs via the HITECH Act have the potential to significantly increase data accuracy and liquidity.  This, in turn, will facilitate the consumer’s ability to access and aggregate accurate health data and eliminate the need for those actions listed in Number 1.

Looking even farther down the road though at PHR adoption…

While data may indeed be the foundation of any PHR, it is hardly compelling, engaging and unlikely to drive adoption in any significant fashion.  For far too long, most PHR providers have focused on the data issue and not what a consumer will find of value.  This is simply a legacy of most PHRs in the market today that were built by physicians.  Such simple solutions we give the moniker of PHR0.25.  Adding associated content brings us to PHR0.5.  Combining some journaling and disease management brings us to PHR1.0. You get the idea.

The slow evolution and growth in the PHR market is partly a function of low market demand (consumers rarely engage in their health at that level) and poor solutions that offer only modest value.  For adoption to continue to accelerate, PHR vendors need to begin thinking beyond the PHR construct that is prevalent today.  A new model is required that divorces itself from the old model striking new ground and offering a compelling new value proposition.  With Google Health (if it gets its act together) and MS HealthVault now doing the heavy data lifting work, developers have a unique opportuntiy to refocus their resources and create new and compelling solutions that truly engage the consumer and provide direct, measurable value.

HIMSS’09: Meetings of Interest

gemsHIMSS’09 had some highlights from various vendor briefings and conversations in the halls that are abstracted below.  By no means is this inclusive of all discussions, but reflects what are the gems I walked away with from this event and is certainly in contrast to the previous HIMSS post.

Overview:

HIMSS was well attended, though a number of exhibitors I talked to said visits were down but in so saying also commented that those they did meet with tended to be of “higher quality” (i.e., those who can sign a check).

The Stimulus Bill and how to capitalize on it was something that every EMR vendor was promoting, each with their own interpretation of “meaningful use” and how they, the vendor could assist the prospect in meeting meaningful use criteria.  Funny thing is, meaningful use has yet to be defined.

While all EMR vendors were pressuring buyers to place their orders early for demonstrating meaningful use, many CIOs and other hospital executives are concerned that the vendors will not have the staff available to deploy their solutions on site.  Vendors stated that they are preparing for this, but I’m not convinced. Also, there is the simple issue that of how does one get the best people on their particular project/deployment.  Indeed, that providers who can act quickly may be at a significant advantage to laggards, problem is, where do you find the money in this economy.

CIOs are also concerned as to how they will on-ramp affiliated physicians, e.g., what will it take to get smaller practices to adopt as Stimulus reimbursement may not be enough incentive.  Nothing new here.  The only way IT is adopted in any sector is if it either saves money or makes money, with preference to the latter.  EMR solutions have not had much success in clearly articulating the value, thus low adoption.

img_0141While the Microsoft booth was absolutely hopping during the show, most other large EMR vendors had booths far too large for the amount of attendees visiting them.  At some, it looked like the only people in the booth were bored sales people. Clearly there is something wrong with this picture for EMR vendors as one would have thought they would have been equally busy as prospects look to adopt and tap the Stimulus.  Instead, attendees appeared to be looking for solutions that will improve operations, regardless of Stimulus.  A big exception was AllScripts, they seemed to be busy each time I walked by.

Saw surprising little, truly innovative solutions on display.  Seems like the vendors have cut R&D as aggressively as their customers (hospitals) have cut CapEx spending, which according to investment firm Credit Suisse, is currently down 9.9% and is expected to drop 11.2% over the next six months.

HIT Vendor Briefings:

While I met with numerous vendors over the three and a half days of HIMSS, I paid particular attention to HIE/RHIO vendors as I see them as becoming a potentially important part of future consumer-centric healthcare for they are aggregating health data at the local and regional level which later may be served up into one of the Personal Health Clouds, e.g., Google Health, HealthVault or even Dossia.

InterSystems: Company’s strategy is to productize solutions after they see a critical mass of customers doing a particular activity with their product.  This strategy led to development of HealthShare, which is the platform being used at Rhode Island’s new RHIO and also for the Long Island RHIO.  If memory serves me correctly, this will also be used for the Brooklyn RHIO.

Kryptiq: Nine year old company targeting HIE market. Luis, their CEO, told me they are an “HIE-enabler”, whatever, still an HIE play to me.  Right now, they have about 33K physicians using their platform, one third using hosted, SaaS solution.  Company is focusing on expanding the suite of “care modules” for specific chronic diseases to facilitate care and automate PQRI quality reporting requirements for CMS reimbursement.

Medicity: Met with Kipp Lasseter, CEO and Robert Connely, SVP and former CEO of Novo Innovations (Medicity “merged” with Novo). Had a great conversation with these two who appear to be a good tag team stated that their merger is going well, particularly with cross-sell opportunities, which is not surprising as had predicted such just after merger announcement.

Robert gave example of one Medicity client where they layered Novo on top of and literally went live during the phone call while discussing with client project scope and time-frame (client was planning 2 weeks).  The big trend they are seeing is hospital CIOs & CFOs looking to use Medicity to facilitate care coordination upon discharge.  Big issue right now as payers are denying reimbursement(s) for readmissions that occur within 30d of discharge.

Allviant: Small spin-off from Medicity that is currently in beta with their product CarePass at the Delaware RHIO.  Can’t really say too much about what they are doing, best hint is to think a Mint.com type platform in healthcare to assist consumers in aggregating and managing their relationships with healthcare service providers.

MEDSEEK: Met with Rich Grehalva, SVP who gave me the usual analyst pitch with flipchart PowerPoints on what they are about and their platform.  Really not much more than a portal solution with physician-facing and consumer-facing portals.  Despite the relative simplicity of MEDSEEK’s offering, company is doing something right as they are now in 700 hospitals and are forecasting 30% growth for 2009. Not all is rosy, however, as Rich did say that a number of projects have been frozen recently as hospitals struggle with declines in CapEx.  This was a common refrain from many vendors, they got the win, but project on hold.

Microsoft’s Amalga: With Amalga, Microsoft is adding another acronym to the mix, as if we do not have enough already.  In this case it is UIS for Unified Intelligence System and on display at the Microsoft booth was the new Amalga UIS 2009. The reason for going to UIS was to distinguish Amalga from more traditional CIS (Clinical Information System) platforms and in that they are justified. Amalga is really a business intelligence (BI) solution that can be used not only for just clinical data (which Amalga/Azyxxi was originally developed for) but also billing and workflow analysis.  Was given a demo of how Amalga can be used to analyze reimbursements, identifying problem areas (e.g., claims refusal) that one can drill down into to discover specific workflow glitches and correct.

The Amalga UIS 2009 release had three new modules layered on top of base stack, Quality Measurements, Research Foundation and Medical Imaging. Each of these modules taps data that already exists within the hospital enterpise and presents it in a new fashion.  The imaging module was very cool as it rapidly aggregated data from multiple PACs systems and using MPI, presented it in a single patient record with thumbnails that could be tapped and enlarged.

Today, Amalga is being rolled out across 20 clients, most of them large as this is a high-powered system.  Amalga is also the basis for two RHIOs, one in DC and the other in Wisconsin.

From this humble analyst’s viewpoint, looks like Microsoft is more than willing to let the EMR vendors fight it out for market share while it develops platforms (Amalga and HealthVault) that pull data from those systems to deliver higher value.  Still early and hard to say how successful Microsoft will be, but at this point, do not see any other vendors stepping up to the plate in such an aggressive and comprehensive fashion.  Honestly, not even sure EMR vendors are aware that they are being out-flanked.

RelayHealth: Chatted with RelayHealth to get an update on their work with Microsoft’s HealthVault team.  RelayHealth is getting ready to launch a solution developed with HealthVault for a hospital to manage chronic care diabetes patients combining the transactional services of RelayHealth with backbone data repository services of HealthVault.  An announcement is forthcoming.

Similar to the Kryptiq example above, broad based solutions such as RelayHealth are being fine tuned to address specific chronic diseases. Expect to see more such developments in the future that go beyond just quality reporting or basic transactions to also charting consumer’s biometric data recorded at home, alerting, and tying in educational content for the consumer.

Also met briefly with Axolotl, who now serves 200 hospitals and is currently working with new RHIOs for Idaho, Nebraska and Utah. Their technology is built upon the IBM stack, a bit unusual as most today have built their solutions on the Microsoft stack.

mHealth:

Caretools: Met up with Tom Giannulli, doctor, founder and developer of the Caretools iChart EMR for the iPhone.  Tom gave me a nice little demo of this fairly complete EMR that can be purchased on the iPhone App Store for $139.  Additional modules, such as eRx can be added for an additional fee.  While iChart may not meet all the requirements of meaningful use for Stimulus reimbursement, hard to argue the price for something many solo practitioners will find easy to use and meeting most, if not all of their requirements.  Tom was sharing the booth with a service provider who was demonstrating iChart connected to a larger EMR, in this case Meditech, for care coordination.

A small example of the power of Apple’s AppStore for developers is its distribution capabilities. Tom developed Caretools on his own and put it up in the AppStore in July ’08.  Without any advertising to speak of, Caretools has sold over 1,000 apps in nine countries.  Not bad for a one man operation.

volateVoalte: HIMSS was the coming out party for the launch of Voalte who made their presence known by having all staffers wearing hot pink medical pants, you could pick them out of any crowd.  Voalte is looking to solve a relatively simple problem: aggregating all communications and platforms (pagers, cell phones etc.) that a care provider may use on to one single platform, the iPhone.  Spoke with the founder Trey Lauderdale who came up with this idea while visiting a hospital and seeing the myriad of communication devices hanging from a nurse’s waist and knew there had to be a better way.  Trey went out and found a top-notch iPhone app developer and together created the solution that was on display.  Based on the activity at their booth, looks like they hit a raw nerve.  Now I wonder, what will be their next act?

Other:

Met with Cisco’s new Healthcare Group leader, Dr. Kaveh Safavi.  While Cisco made a big deal of their telepresence offering at HIMSS – it did look very cool – was particularly intrigued by their use of information “in the network” to define what is critical healthcare information.  Basically, applying analytics to historical network traffic Cisco identifies patterns as to what information is important.  With this technology, Cisco can use a federated model for information aggregation and presentation without falling into the pitfall that plagues most, scalability. Cisco is currently applying this technology in the EU across 11 countries as part of Tiani SpirIT.  Maybe this will be successful, then again, may end up like Sun’s NHIN platform CONNECT, which seems to have struggled to gain any market acceptance.

Blumenthal’s Views = Lock-down on HIT Innovation?

doctor-computerProf. David Blumenthal, the new head of ONC, makes some disturbing comments regarding the Stimulus Bill, HIT and HITECH Act  in his article in the New England Journal of Medicine (NEJM). The article is not completely off-base as he does a very good job of describing the basics of the HITECH Act, its intentions and some of the very real challenges that the feds face in actually executing on the language of the Act.  But there are a couple of areas where Blumenthal’s interpretation of the Act raises concerns.

The first pertains to HITECH Act language regarding extension of HIPAA compliance to Google and Microsoft where he states:

It extends the privacy and security regulations of the Health Insurance Portability and Accountability Act to health information vendors not previously covered by the law, including businesses such as Google and Microsoft, when they partner with health care providers to create personal health records for patients.

At this time, neither Google or Microsoft provide the PHR to a hospital who then provides it to their customers.  Rather, the current model that both Google and Microsoft are using is one that supports portability of the consumer’s health record allowing the consumer to invoke an export of their records from the hospital to one of these Personal Health Systems (PHS), of course provided the hospital establishes a link to a PHS.  Our interpretation is that in this scenario, HIPAA does not extend to Google or Microsoft, as the consumer drives the transaction of data flow.  Hopefully, others in HHS will convince Blumenthal of this as well as otherwise, such HIPAA extensions may thwart portability and subsequently consumer engagement and ultimately control of their records.

The second Blumenthal comment that caught us off-guard pertained to the term “certified EHR” where he states:

ONCHIT currently contracts with a private organization, the Certification Commission for Health Information Technology, to certify EHRs as having the basic capabilities the federal government believes they need. But many certified EHRs are neither user-friendly nor designed to meet HITECH’s ambitious goal of improving quality and efficiency in the health care system. Tightening the certification process is a critical early challenge for ONCHIT.

While we certainly agree with Blumenthal that defining the critical terms of “certified EHR” and “meaningful use” is paramount and must be done quickly, yet judiciously, his views on certified EHR, as defined above are downright frightening for two reasons.

First, he condones the work of CCHIT as certifying the minimum capabilities for EHR.   Minimum capabilities?  If anything, those minimum capabilities are already restrictive in defining use of specific standards and models that do not provide the flexibility for true innovation.

What is even worse though, is that Blumenthal appears to want to extend certification requirements to “user-friendly” and defining how “quality and efficiency” will be embedded within an EHR.

User-friendly? There is simply no way you can certify such – end of story.  Let the market define what is user-friendly by what a doctor or hospital chooses to purchase.

Quality? Maybe, just maybe you can ask for the simplest of quality metrics to be recorded within the EHR, but highly doubt that is something you want to certify.  Would it not be better to simply verify quality actions supported as part of meaningful use reimbursement?

Efficiency? That is certainly not something you can certify and falls in the realm of implementation (process mapping/workflow) and training.  You can’t certify that!

Suggesting that we tighten the certification process is heading in the wrong direction.  Instead, we need to actually relax the certification process to encourage innovation in the HIT market allowing developers to create solutions that will truly provide value to their users while concurrently meeting the broader objectives of delivering better care and better outcomes.  Creating light certification criteria and focusing more on what outcomes we wish to see occur as a result of broad HIT adoption is where Blumenthal and his staff need to focus their energies.  To do otherwise will lead to a stifling of innovation, stalled HIT adoption among physicians and ultimately a poor investment of the tax payers’ dollars, which we can ill-afford.

The HITECH Challenge: Is $19B Enough to Drive HIT Adoption

stimulus_bill_cartoonWith the HITECH Act passed and the Dept. of HHS feverishly working to draft a clear definition of what “meaningful use” and “certified EHR” actually mean for reimbursement purposes, a far bigger question looms: Is the promise of $19B dollars dedicated to reimbursing those hospitals and physicians who adopt and meaningfully use an EHR enough?

Let’s take a quick look at the numbers. (For sake of simplicity, this post will look at physician reimbursement.)

For adopting and meaningfully using a certified EHR a physician may be reimbursed between $44K (Medicare) to $65K (Medicaid).  This will not be a lump sum payment, but is parsed out over 5 years as the physician continues to demonstrate meaningful use of an EHR.  Important points here, the physician pays up-front costs (sunk capital) and is reimbursed over time if he/she can demonstrate meaningful use and the solution adopted is “certified.”

As the latest Wal-Mart, Dell and eClincalWorks partnership shows, vendors looking to sell into this market opportunity are pricing their solutions at or near reimbursement levels, e.g., $25K year one and $4-6.5K for follow-on years in the Wal-Mart offering.

According to athenahealth CEO, Jonathan Bush, their customer, a physician, grosses $400k/yr.

Virtually every report we have seen and physicians we have spoken to who use an EMR/EHR today, readily admit that the upfont pain of implementation, training and becoming adept at using the solution was significant.  The significance is most often felt in an average 30% productivity hit for the first 6 months that is compensated through longer hours or seeing less patients.  The proactice does not return to pre-implementation state of operation till a year after go-live.

Combining the above and keeping calculations simple: (Note: we’ll assume productivity returns to previous state within first year and use a sliding scale for productivity hit in year one of,  first 6 months 30% hit, second 3 months, 20% and and last 3 months 10%)

Year One Cost: ($25K) for EHR purchase + (0.30($400K/2) + .2($400K/4) + .1($400K/4)) = ($115K)

Year One Reimbursement: $25K (more generous Medicaid)

Total Cost to Physician: ($115K) + $25K = ($90K)

After Year One, the physician is already down $90K.  Assuming practice returns to normal operations/productivity in years 2-5 and the physician is successful in getting full reimbursement from Medicaid, at the end of five years, that physician is still down $50K. Depending on how much business the physician derives from Medicaid, it will take many more years of avoiding the “stick,” the sliding decrease of Medicaid payments, before a physician recoups this initial, year one loss.

Bottom-line: Adopting an EHR to tap that $19B dollar Stimulus package does not make economic sense for the average physician.

Solving the Physician Adoption Problem

To drive EHR adoption we will need three things:

1) Low “meaningful use” thresholds to ease the pain that a physician has to go through to demonstrate that indeed they are meaningfully using an EHR.  As a starting pointing, let’s target electronic exchange of labs, meds and vitals (including allergies) for care coordination combined with eRx.  That should address care coordination, quality and eRx outlined in HITECH Act.

2) Very simple certification process for HIT. Do not burden the system with complex certification processes, ala CCHIT.  Don’t get me wrong, CCHIT has done some good things in the past, but to apply CCHIT certification for “certified EHR” will create far too complex and onerous a process for truly new and innovation approaches to provide solutions that assist physicians in meeting meaningful use criteria.

3) Leverage the consumer to create an additional forcing function to drive physician adoption as reimbursement under the HITECH Act is insufficient.  Getting the consumer engaged may prove challenging, but engage we must for at the end of the day, the value in a physician adopting and using an EHR must return to the end consumer/taxpayer as they are the one footing the bill.

Over the next few years we, as a nation will be extremely challenged to drive true healthcare reform, healthcare reform as President Obama stated that is “evidence-based.”  A common refrain in the manufacturing industry is:  “You can not improve what you do not measure.”  Today, our healthcare system has absolutely no systematic way of measuring its performance.  It truly is a travesty.  Healthcare IT can, if effectively deployed and used, can play a critical role in collecting those measurements that we can begin to use to conduct true, evidence-based reform.

We need to articulate to the Joe the Plumbers of this country, what HIT adoption and use means to them.  To date, the healthcare industry and government has done an extremely poor job of helping Joe understand that value.  Without his/her support, no amount of money thrown at this problem will suffice.

HIMSS-CCHIT Controversary Continues to Simmer

conflict_of_interest_600As most of you well know, a certain Calvin Jablonski liked to comment here at Chilmark Research taking some pretty hard shots at the EMR certification organization, CCHIT and the close relationship between CCHIT and the vendor organization HIMSS.  Jablonski’s comments raised the ire of the HIMSS executive suite leading to a calling out of the dogs (lawyers) of which we were the humble recipients of their communications.

In our post on the subject, we were miffed that rather than countering Jablonski’s claims, HIMSS, through their lawyers, sought censorship. We did not comply.

What we countered with was what we thought a great idea:

HIMSS, we at Chilmark Research will gladly offer you the opportunity to guest post on Chilmark Research where, in full view of the public/readership you can provide a point-by-point response to Jablonski’s claims.

Seems sensible to us but for some odd reason, HIMSS has yet to respond to this offer.  Is there really something to hide here?  Does the cartoon above (simply substitute CCHIT for FDA) accurately portray what is really going on here?

Honestly, we tend to side with the belief that Jablonski is in some way a very disgruntled individual (former employee, contractor etc.) who has some ax to grind and was intimately familiar with some of the inner workings of both CCHIT and HIMSS.  But disgruntled or not, Jablonski does raise some broader issues that really need far closer review and scrutiny in light of the recently passed Stimulus Bill and the HITECH Act which will pour some $20B+ into the HIT market.

In today’s issue of Healthcare IT News, Neil Versel does a very good job of reporting on the controversy surrounding the Jablonski post and interviews others in the industry, including yours truly, on what many perceive as a strong potential for conflict of interests between an organization that is charged with certifying EMRs (CCHIT) and one responsible for promoting EMRs (HIMSS).

Many industry pundits, including John Glaser, CIO of Partners and senior member of NeHC (AHIC 2.0) believe that CCHIT will be the one responsible for making sure that all those EHRs that get adopted under HITECH Act, meet the “certified EHR” requirement.  But is CCHIT really in the best position to grant certification?  In one sense yes, as they have been doing just that for the last several years and claim over 160 products are now CCHIT certified.

But given their all to close relationship with the “HIT establishment” (HIMSS and the entrenched EMR vendors), are they really the best organization to oversee certification going forward?  Probably not in their current form.  Rather than contracting out to some third party, ala CCHIT, maybe a better solution would be to just let NIST do it themselves as they are truly neutral, have been given the authority (it’s in the legislation) and if they have sufficient staff, could certainly accomplish this task.

Ideally though, would not it be better to get the legislative body to go back and simply strike “certified” from the language of the HITECT Act?  To do so would leave us with providing incentives to physicians for “the meaningful use of EHR” by still promoting such behaviors as care coordination, quality, and eRx, without the burdensome requirement for “certified” EHR that will almost always be 3-5 years, at best, behind technology advances.

And by the way, just because it is “certified” does not, by any means, equate to interoperable.  One of the biggest fallacies in the market today.

HITECH Act & EMR Sales

Since our series of posts on the Stimulus Bill (ARRA) and in particular the HITECH Act, Chilmark Research has been receiving a lot of questions from the market as to how we see this funding affecting EMR sales.  Following is an example of our response to these inquiries.

Mike, thanks for the kind words regarding analysis of the Stimulus Bill and in particular the HITECH Act.  Now as to your ques:

As we wrote earlier this week on the reimbursement schedules, the timelines are pretty tight, esp under Medicare reimbursement.  There is a $3K bonus for those who demonstrate meaningful use in 2011 or 2012, so some upside to adopt earlier than later.  Also, zero funding, under Medicare for those who show meaningful use after 2015, and in fact penalties start kicking in.  Medicaid, which has a more complex funding schedule provides funding/reimbursement payments until 2021.

Thus, two key points:

1) If a physician is looking to Medicare for reimbursement, we do expect a more rapid run-up in EMR sales if the value to adopt exceeds the pain to adopt.  Still a lot of fugly EMR solutions in the market.  Just because they have CCHIT certification, doesn’t mean they are easy to use and the pain to adopt may not be worth the payback.

2) If Medicaid is the funding source, a more measured and slower adoption of EMR is anticipated.  The challenge under Medicaid is that reimbursement schedules are set upon what the HHS Sec. determines as fair market price for software and services.  Still unsure where that will fall and physicians may hold back till there is some clear precedent set.

Let’s not forget the big caveat:

We still do not have firm definitions for “meaningful” and “certified” leaving a lot of uncertainty in the market.  We are cautioning physicians to go ahead and entertain conversations with EMR vendors, but do not make any firm purchase decisions, if we wish to receive reimbursement through one of these mechanisms until it is absolutely clear how HHS/ONC plans to define those two critical terms.

HITECH Act: Medicaid Reimbursement Plan

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

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

The high points:

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

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

hitech3

HITECH Act: Reimbursement Schedule a Challenge

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

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

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

hitech2

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

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

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

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

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

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

Final Analysis

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

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

Final Stimulus Bill Released

senateLate last night (10:45pm EST to be exact) Congress released the negotiated final version of the Stimulus Bill (The American Recovery and Reinvestment Act) that is on its way to Obama’s desk for signature, which is expected on Monday.

We’ve downloaded the massive bill, which combined (it’s currently broken into two parts, Division A and Division B) comes in at about a 20MB PDF.  Once we’ve had an opportunity to extract the HITECH Act portion of the Bill, we’ll be providing a more detailed analysis on where that $19B is headed and how.  Not expecting much change as the original Senate and House versions were quite similar with largest divergence appearing to be with the Privacy provisions of the Act.

Update: Finally got the files downloaded.  To make it easier for you that are only interested in HIT, need only download Conference Report Division A – HITECH language begins on page 286.

And if that is not enough, you can always read the Opinion piece from the WSJ’s Feb 11th edition (Health-Tech Monopoly) which, oddly enough, shares some of our opinions on the HITECH Act.

Stimulus Package Breakdown

If a picture is worth a thousands words, this Washington Post graphic is worth nearly $800B.  Provides a fantastic breakdown of exactly what the Stimulus package is and where all the money is headed.

Impressive job Washington Post.  Hat’s off to you.

Transforming Heatlhcare: 2/26/09

transformOn the evening of February 26th healthcare leaders, will gather together here in Boston to discuss what the new administration may have in store for healthcare.  Drawing upon local talent, the event will have the CEOs of both Tufts and Harvard Pilgrim health plans, the CIO of Partners Healthcare, John Glaser (who also just happens to be one of the leads on the National eHealth Collaborative – NeHC has been defined in the HITECH Act as the organization responsible for guiding ONC’s HIT policies), athenahealth’s CEO Jonathon Bush (can’t wait to hear what he has to say – always amusing, poignant and on target).

Now, if you just happen to live in the Boston metro area or are planning to be in the area around that time, Chilmark Research has a special discount code for you.

When registering, use the code: chilmark1 to receive a 15% discount.

If you can not attend, you can still participate in advance by submitting your questions, which get voted upon, best ones ending up in the moderator’s hands.

HIE, SaaS and Low-Cost, Nationwide Adoption of EHRs

doctorsnhspubdombigThe Stimulus packages (HITECH Act) that are winding their way through the Senate and House call for spending some $20B on healthcare IT initiatives, the lion’s share to provide incentives to physicians to adopt “certified EHRs”.  In addition to the very real potential that this legislation will completely shut-down HIT innovation, another issue was brought to our attention by one of the leading Health Information Exchange (HIE) vendors – getting an EHR into every physician’s office could be done for about a tenth of the cost.

So how would they do it?

Using their Software as a Service (SaaS) solution the HIE vendor would:

Establish 200 HIE/RHIOs nationwide that would connect to…

  • 6,250 hospitals
  • 100 national and regional reference labs
  • 660,000 physicians.  Among those physicians, 550,000 (their estimate) would have access, in addition to  network node, access to a lightweight EMR on the network.

Cost of software: $500M/yr

Their is also the cost of operating an HIE, which in their experience is about 2:1 operating costs to software/service cost.

Cost of operations: $1B/yr

Total Cost: $1.5B/yr to provide a National Health Information Network (NHIN) and insuring all physicians have an EMR.

Roughly 7.5% of what is proposed in the economic stimulus package for HIT.

Granted, these numbers come from a vendor and maybe slanted (though we believe they are well within reason) and these are annual costs, not the one time costs that the legislation is based upon, but those are small quibbles.

What is important here are the following points:

Current stimulus legislation would not likely support an “EMR lite” solution as it is unlikely such an EMR would meet “certified” status.  Besides, do all physicians really need a full blown, “certifed EHR”?

Proposed spending on HIT is huge and if dumped into the market too fast, besides being wasteful, could make the situation worse.

Legislation, and its support (via incentives) for only “certified EHRs” will not solve the problem of secure, health data liquidity.  IT takes far more than simply adopting a piece of technology to make all of this work.

In closing, below are some comments provided to us by a physician who is currently using a highly regarded CCHIT-certifed EHR. His/her comments clearly show that being certified does not mean delivering end user value.

I have used about 6-7 EMR’s, and I will say that VendorX (editor’s note: name masked by Chilmark) is probably the best, but that’s not saying much. In the kindgom of the dead, the PEA (pulseless electrical activity) patient is king. VendorX is a PEA. I think that they benefitted most from a very charming PR campaign, but when you peel back the propaganda and notice that while you are billing almost every visit as a 4 or 5, but you have to pay for IT, more staff to handle the onerous data entry, and you yourself have a day that is 1-2 hours longer, it becomes a zero to negative sum game.

I think people’s knee jerk reaction to EMR’s has to do with “it’s a computer, therefore it has to be better”. But healthcare is not as easy as stocking shelves or tracking inventories. You have to deal with people, and the fact that taking care or patients while using one of these EMR’s is as distracting as trying to drive with two wasps buzzing around the car.

That and the fact that the EMR’s don’t talk to each other is another serious issue, so I have to scan all the specialists’/hospital records in and manually enter the data.

Stimulus Package, HITECH Act and Ossification of HIT

congressWe are heading down the wrong path.

Despite the rounds of applause from virtually all sectors of the healthcare establishment (AHA, HIMSS, AllScripts’ customers, etc.) the HITECH Act, as currently drafted in the Stimulus Bill (both House and Senate versions of HITECH are quite similar), will ossify healthcare IT (HIT) completely stagnating innovation in HIT.  It is also questionable as to how much the HITECH Act will actually contribute to the ulitmate objective; simply delivering better, more cost effective care.

That is not to say that the use of HIT can not improve outcomes, that it cannot improve health, far from it.  What we argue is that this legislation is extremely problematic for it has created an incentive structure that is not conducive to innovation.

Where did the legislature make a wrong turn?

As we mentioned in our previous post on the passage of HR 1, HITECH legislation is providing incentives for physicians to be reimbursed for the adoption of “certified EHRs”.  Certification, by its very nature, is a time consuming (some might say time wasting) exercise. Certification to standards is even worse (ever been a part of a Standards making body – they move at a glacial pace).  Stating that physicians will only be reimbursed for adopting certified EMRs basically puts the death nail into any innovative ideas that break from the cumbersome certification process or don’t adhere to some archaic standard like CCD.

Let us not also forget that the very word “certified” strikes fear into the heart of any Venture Capitalist (VC).  Honestly, who in their right mind would ever invest in a start-up that need to go through some arduous certification process to enter a market, a certification process established by players in a given market?  No, certification is good at creating moats and castle walls and not greenfields that foster opportunities for innovation.

A second key point and maybe even more important one is that if the purpose of HITECH is to deliver better, more effective healthcare than the incentives are completely misaligned.  Just because we reimburse a physician for purchasing a certified EHR, doesn’t automatically equate to their using the solution to deliver effective care. We are providing incentives for actions, not behaviors.

And what’s the alternative?

To truly foster an open market, open innovation and subsequently open adoption of HIT, it is necessary to create a legislative framework of incentives that focus on what behaviors we wish to see adopted by physicians and not which technologies we wish to see them use.

For example, if we were to develop an incentive program that simply asks physicians to do a quick review of a patient’s current medication list prior to writing a prescription for a new medication and include checking for possible interactions, (prof that they checked might be easily monitored through the major eRx clearing house SureScripts) we would see a likely decrease in adverse drug events (ADE).  This could easily be tied to the current eRx push by CMS.

In this example, we are not incenting the physician to use a certain technology, but adopt a certain behavior (check before prescribing).  Imagine the impact if we saw but a 15% drop in ADEs as a result in such change in behavior. Now that’s savings, that’s better healthcare and it is a greenfield of opportunity.  Similar behavioral incentives can be created in numerous other areas.

It is clear that the legislature took the easy path as it is far simpler (and politically more expedient) to create incentives for the adoption of a technology, certified EHRs, rather than the more strenuous task of creating incentives to encourage behavioral change.  Unfortunately, if the current legislation ends up with Obama’s signature, we will be pouring wet concrete into a market with woefully low HIT adoption.  When that concrete sets, it will be nearly impossible to chip-out and we will be left with an edifice of good intentions gone horribly wrong.

HR 1: Stimulus Package and HIT

cashJust finished reading/scanning HR 1, the House Stimulus bill focusing on the HIT section, to which some $20B greenbacks will flow. This Bill just went just the Appropriations Committee and will likely pass the full house later this week. The HITECH Act (HIT for Economic and Clinical Health), is massive at some 190 pages, beginning on page 395 covering everything from codifying the Office of the National Coordinator (ONCHIT), to the numerous reports that ONCHIT has been instructed to fund, to how that $20B will be spent.

HITECH Act also carries with it a legacy of the Bush era: “The utilization of a certified EHR for each person in the US by 2014.”

Following are some quick, interesting highlights:

ONCHIT budget to soar over 4x to $250M for FY09 from the $61M it received in FY08.  Guess they’ll need all that money to fund those research reports, as well as support the new version of HITSP and AHIC, which is now called NeHC.

Both HITSP and NeHC become key advising entities to ONCHIT, HITSP on standards and NeHC on HIT policy.  Quite sure the folks in both groups are happy to hear this, especially NeHC as there was some question as to their survival if the feds did not dump $$$ in their coffers.

National Institute of Standards & Technology (NIST) to take a leadership role in testing standards and implementation specifications.

Substantial amount of writing on privacy, particularly consumer notification process should their health information be compromised.  Even had a special section on notification process for PHR vendors going so far as to reference third part data repositories (e.g, Dossia, GHealth and HealthVault).  Good to see formal procedures put in place, at the federal level to guide notification process – it’s about time!

Continuing on privacy, Bill also instructs ONC chief to appoint a CPO, Chief Privacy Officer.  This individual will have the uneviable task of attempting to coordinate helth data privacy policies across this great land of ours where it seems as though every State has their own unique twist.  Without some reconciliation on these privacy policies, the whole NHIN is nothing but a pipe dream.

A whooping $300M or RHIOs.  All those small RHIO software vendors must be licking their chops as this is a significant amount of money (about double the market size in 2008).  Expect to see consolidation and acquisitions as bigger HIT players look to get into this lucrative market.

Establishing an Extension Program for HIT.  Much like the existing Land Grant and Sea Grant programs and their extension services for agriculture and marine industries, the Bill proposes the establishment of a similar program for  HIT.  At one point in my career, I actually worked for Sea Grant, thus I know the model intimately and have mixed feelings.  Yes, it can be a very good model to reach out to small business and assist them in adopting best practices in the adoption and use of HIT, but often these programs, while well-intended, are not terribly efficient.  There is a universal benefit, however, in that often these extension services are located in academic institutions and thus can foster undergraduates and graduates to pursue research/careers in this field and right now, we can’t have too many.

trainFor the most part, we are comfortable with the above, but where the Bill really flies off the tracks is with the term:

“Certified EHR”

This term is used throughout the HITECH Act and refers to an EHR that is “certified” as:

‘‘(5) CERTIFICATION.—
‘‘(A) IN GENERAL.—The National Coordinator, in consultation with the Director of the  National Institute of Standards and Technology, shall develop a program (either directly or by contract) for the voluntary certification of health information technology as being in compliance with applicable certification criteria adopted under this subtitle… (want to dig deeper – go to page 407)

Basically what this states is that any reimbursements, payments, anything coming out of that $20B largess towards the support for adoption of HIT will only go to those instances where a “certified” EHR has been adopted or used.  And what it implies is that funding/reimbursements/incentives will onlygo to those who adopt nd use a CCHIT certified EHR.

This is a MASSIVE MISTAKE for the simple reason that it results in technology lock – technology locked to specific, “certified” criteria/standards resulting not in new innovative products, but actually retarding their introduction.

Need evidence?

Turn to the EPA and the Clean Air Act (CAA) (I did quite a bit of research at MIT for EPA on technology adoption in regulated markets, hmm, is healthcare much different, surprisingly no). The CAA when first promulgated specified specific technologies to be used to control and measure stack gases.

Benefit: Clear articulation of what technologies industry needed to adopt to comply to the CAA.

Outcome: Rapid adoption and use of these technologies leading to dramatic reductions in air pollutants.

Unintended consequence: When new and better technologies arrived on the scene, the EPA had no ready approach to get industry to adopt better technologies (without an Act of Congress) and as for diagnostic techniques for measuring stack gases, they were stuck as well.

Result: This stifled the US market for technology developers and subsequently, new technologies, once the regs were changed to incentives (trading emission credits) came from overseas, where the market was structured to advance their development and use.

Unfortunately, it does not appear that today’s legislature, nor those in HHS remember what happened at EPA with the CAA and have created an incentive program within this Bill that will result in exactly the same outcome as we saw in the environmental sector, rapid adoption, widely deployed HIT, technology lock-in with archaic standards such as HL7’s CCD and ultimately a technology frozen wasteland with other countries beginning to take the lead in HIT development, deployment and use.

Rather than follow this path, the Senate, in negotiation with the House, can strike the term certified from this legislation and instead encourage the adoption of HIT in support of scenarios that are based on information sharing and not just within an IDN but across a more expansive network.  For example, information sharing could be demonstrated by a physician being able to export of a health record, at a customer’s request, to that consumer’s personally-controlled online health account using CCR, CCD or other standard. Is that not in support of the objectives of data portability?  Of course, there is also the example of sharing health information within the context of an HIE or RHIO or other, more loosely formed network.

Therefore, it is not so much requiring that an EHR comply to specific criteria to be certified and thereby, the adoption of only certified EHRs will be reimbursed, rather it is to provide incentives that encourage what is our ultimate goal, putting health information into a digital form factor that can be securely shared among all relevant stakeholders in support of a healthier public.  After all, at the end of the day, is this not what we are all trying to accomplish?