The 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.

So 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.