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Is the EHR Transformational?

by John Moore | February 03, 2014

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Image by Caras Ionut

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

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

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

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

So getting back to that question…

Is the EHR transformational to the delivery of care?

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

We are adding a fourth domain in 2014…

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

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

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

9 responses to “Is the EHR Transformational?”

  1. […] Under HITECH, physicians and hospitals have adopted EHR technology in droves but are now coming to grips with the fact that their brand new EHR is not well-suited for the new world of value-based reimbursement (VBR). For years, healthcare providers … Continue reading → […]

  2. EHRs are a (poorly) regulated commodity. They will be as transformational as indoor plumbing. EHRs, like plumbing, are sold to the developer and not the end user, and are regulated, accordingly through code (sic).

    The interesting market will shift to software and services that either physicians or patients can actually buy – the way they buy pharmaceuticals, referrals or lab services today. Much of the market will be in the cloud and mobile apps. Many will provide their own user interfaces – just like our plumbing does.

    • John Moore says:

      In the ambulatory sector, most practices did buy their EHR, much as they would buy anything else for their office, be it an exam table or diagnostic equipment. Unfortunately, much of what they purchased was poorly architected.Agree that in the ambulatory sector, there will be a shift to cloud-based services. What I hope will occur is that physicians will be able to mix n’match a variety of software apps to create a system that works for their practice. This would require a degree of openness that no vendor that I have seen to date is willing to support.

      As for the plumbing analogy – indoor plumbing was truly transformational as it had a huge impact on public health.

      So are you saying Adrian that EHRs are likewise truly transformational?

  3. Dave Chase says:

    I think your question boils down to one’s definition of “transformational”. There is little doubt that it’s quite a transformation to go from paper to digital. There are clear benefits. At the same time, organizations are spending billions to make the current, broken reimbursement model more “efficient” with legacy EHR systems. By efficient, I mean getting a bigger bill out faster. That is an entirely rational response to the FFS reimbursement system. I can’t say I’d have made a different decision a couple years or more ago if I was a CIO.

    On the other hand, I have yet to hear someone clearly explain how a system architected/optimized for one model (FFS) which is nearly a 180 from another (VBR) is going to position providers well for the world of VBR. The real question, in my mind, is whether those systems will be open to the systems that will enable the transformation.

    • John Moore says:

      I’m with you on this one Dave. Choices made regarding EHR selections were rational for the most part, even if some of the less tech savvy physician practices got stuck with some pretty bad software in their rush to capitalize on HITECH reimbursement funding. But as we move towards VBR, organizations are now starting to come to a rude awakening – that new EHR may not serve their future needs.

      We see the transformation being an opening up of these systems for we do not believe that the vast majority of these EHR vendors will be able to move fast enough on their own.

      In a way, it is all pretty ironic as EHR vendors rode the wave to ever higher sales on the back of the HITECH Act and now we may see a coming backlash. I guess it goes back to the adage – be careful what you wish for.

  4. sushant saraswat says:

    Last year has been very eventful for the Healthcare IT industry. with the advent of HIPPA and Hitech regulations and approaching deadlines for Healthcare organizations to switch to EHRs have definitely led to a systems being implemented in a chaotic manner without due importance given to meaningful use, also aiding to this chaos is the changing regulatory landscaspe.
    For EHRs to be really transformational , one needs an system which is flexible, interoperable and can adapt to changing compliance requirements easily. Following up on this, I came across and registered for a webinar on Healthcare IT: Role of EDI in Affordable Care Act Reforms, it looks a promising one http://j.mp/1b4qJC3

  5. Yes. EHR is transformational in a sense it have direct impact on decision making at the point of care. Although currently it is driven by meaningful use and there is minimal Health Information Exchange across the EHR but there is a good potential in it. Once there are standards set for information exchange it will greatly impact on overall patient’s health outcome because all the information you need is available and system may alert in case of duplicity of test or medication error.

  6. I think there are many medical transcription companies that provide EHR suited for value-based reimbursement.

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