Convergence & Divergence Among the Big Three EHR Vendors
This fall, the three largest EHR vendors by revenue, Allscripts, Cerner and Epic, held their user conferences. This research note provides an overview of each vendor’s strategic intent, areas of future focus and our assessment.
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How to Succeed with a Provider-Sponsored Medicare Advantage Plan
By Matt Cox (Chief Marketing Officer, Lumeris) and Nigel Ohrenstein (Senior Vice President and head of Market, Lumeris)
Health system and health plan leaders across the country are asking the same question: how will our organizations survive and thrive in a value-based world? As the shift to lower-cost settings accelerates and the population becomes older and sicker, organizations are seeking new ways to manage costs, generate income and control quality.
For many organizations, launching a Medicare Advantage (MA) plan paves the way for value-based care models that reward delivering better care at lower costs by combining clinical and financial expertise. As enrollment in MA continues to outpace traditional Medicare enrollment – with national MA penetration growing from 30 to 50 percent in the next 10 years – organizations must have a strategy that enables success in the future.
MA is increasingly viewed as a potential growth area for organizations. While launching a plan certainly carries risk, it also offers significant upside for providers and payers to successfully manage the health care needs of members.
With an average annual premium of $10,000 per member according to a Lumeris study, MA enables provider-sponsored plans to manage the risk of a population. Access to comprehensive claims data can be used to identify high-risk patients and areas of high utilization, supporting an organization’s population health efforts and steering patients in-network. With aligned incentives, organizations can innovate and invest in care delivery with tools and workflows that support high-value, appropriate care.
Further, MA’s sophisticated risk adjustment methodology supports premium payments that reflect the expected cost of providing medical care to each member, including those with complex conditions. Proper risk adjustment requires providers to capture diagnoses accurately and completely to support reimbursement.
Finally, with Star ratings, well-managed MA plans that earn 4- to 5-Star ratings can attract more members and revenue through enhanced benefits. Highly-rated plans receive performance bonuses that bring in an extra five percent a year, which are used to provide additional benefits to members.
Consider creating a plan built around a collaborative model: one that aligns incentives, bolsters the provider-payer-member relationship and enables delivery of high-quality, cost-effective care.
Establishing a provider-sponsored MA plan is a significant undertaking. Given the large investment of time and money, organizations considering launching a plan must ensure they have several foundational elements in place. Consider creating a plan built around a collaborative model: one that aligns incentives, bolsters the provider-payer-member relationship and enables delivery of high-quality, cost-effective care.
Before launching a plan, organizations must evaluate their tolerance for risk and ability to capitalize said health plan. A strong brand reputation in the market is obviously crucial, but additive resources and significant infrastructure are also required. Organizations should also consider market dynamics, population growth and reactions from key players – competing systems, provider groups and other payers – and how these factors impact their strategy as a differentiated plan offering in the market.
Considerable infrastructure is required for claims processing, actuarial analysis and utilization management, among other payer functions, which can be leveraged from working with a collaborative payer or operating partner. In MA, expertise in Star ratings, risk adjustment, sales and marketing, compliance and plan design add further complication to successful operations. To build the right foundation, provider-sponsored plans must focus on enabling the provider-payer-member relationship, often requiring innovative processes on everything from data transparency and aligned incentives, to coordinated care management programs and shared governance.
Core to a collaborative model is ensuring organizations are aligned. Managing a health plan requires organizations to focus on improving patient outcomes and monitoring the entire population, not just the patient in front of them. Fostering the right network and governance, aligning incentives to create mindshare, sharing best practices and information, and supporting new workflows and behaviors are all critical to success in value-based care delivery.
Before launching a collaborative MA plan, organizations must assess capabilities to identify gaps in knowledge, expertise and operations. For most organizations, working with an operating partner is more effective than building internal MA competencies from the ground up. Finding a partner with skill and experience in launching a collaborative plan can enable organizations to gain a competitive advantage more quickly. It can improve the likelihood of success while limiting risk and enable providers to focus on their core strength of delivering high-quality, high-value outcomes.
One example of bringing these necessary capabilities together is the newly announced collaboration between Cerner, a global leader in healthcare technology, and Lumeris, an award-winning health plan and value-based care managed services operator. Under the relationship, the companies will provide a suite of offerings under the name Maestro Advantage™, designed to enable health systems and health plans to drive success in value-based arrangements through population health service organizations or provider-sponsored plans. The offerings combine Cerner technology and Lumeris operational services aiming to streamline redundant processes that burden members, payers and providers, including lengthy claims processing and reimbursement cycles, and obstacles to sharing data and records across any electronic health record in the network.
This post originally appeared on September 19, 2018, as the second in a series of sponsored guest blog posts on our Convergence conference blog.
Cerner Health Conference 2018: Interest in PHM Solutions Remain ‘Healthe’
By Matt Guldin and John Moore
Recently, we and 12,000+ others attended the Cerner Health Conference 2018, where the theme was “Smarter Care.” Overall, the event focused on building on top of the EHR, while much of the floor space and conversations focused on population health and revenue cycle.
For several years now, Cerner has been focusing on moving beyond the EHR with its HealtheIntent PHM platform. At CHC18, Cerner was doubling down on this bet with the message “Smarter Care” with numerous sessions and a significant amount of exhibit space dedicated to this theme and platform. Today, Cerner has signed ~160 clients of which ~90 are currently live.
HealtheIntent is well positioned as an EHR agnostic solution that will give Cerner the ability to invest resources into developing solutions that think beyond the hyper-competitive zero-sum game of EHR contracts. Two major flagship HealtheIntent customers are also two major Epic customers (Advocate and Geisinger) and there is a clear opportunity to work with these customers to better integrate Cerner’s evolving platform with Epic’s similarly expanding universe of products.
A key challenge for any PHM vendor is developing strong services capabilities to assist clients in extracting the highest value from their PHM solution deployments. In August, Cerner made a significant investment in Lumeris, a company with a strong services offering that Cerner will leverage.
In line with the company’s shift toward consumer-focused healthcare, Cerner is partnering with Salesforce to offer providers an integrated patient engagement solution. Through this partnership, HealtheIntent data, which is collected from numerous sources, will feed directly into Salesforce’s Health Cloud.
Once the data is in Health Cloud, from within their EHR a clinician can quickly identify patient populations based on various criteria via a queried search. Once identified, a campaign can be initiated. Cerner plans to launch this product in 2019, and will be the only EHR company to have Salesforce directly embedded in its EHR and HealtheIntent workflows.
Cerner understands the importance of getting revenue cycle (billing) software right. Cerner has penetrated, to varying degrees, about 40% of its hospital clients with billing software, but those are mostly small facilities. Cerner’s software still appears visually outdated and lacking functionality, particularly for ambulatory practices.
One need only walk through the CHC18 exhibit area of third-party software vendors to see the demand for RCM solutions that work in the Cerner environment. Roughly 40 percent of all vendors were RCM vendors. Clearly, Cerner is missing out on fully capitalizing on this opportunity.
Cerner is seeing strong demand for its RevWorks offering among smaller hospitals, and the firm is still hiring aggressively to support growth into 2019. Cerner has about 100 RevWorks clients, compared to 30-35 two years ago. One of the main reasons for Cerner’s early success in outsourced revenue cycle solutions is that the product comes with a demonstrable return on investment for clients with specific targets outlined before any deal is signed.
The ITWorks business is growing but acquiring clients at a slower pace than RevWorks.
Now that MHS Genesis is up and running across the first wave of an initial 4 sites, the company took important lessons learned for future Department of Defense (DoD) rollouts as well as Veteran Affairs (VA) deployments. Cerner noted that the VA is not yet in the implementation phase as it is currently planning the largest install in the industry’s history.
Of these two massive installs, the one at the VA bears watching closely. A significant portion of veterans receive their care via Tricare (local healthcare providers under contract to VA). How Cerner drives interoperability across multiple venues of care nationwide, the potential role of HealtheIntent, the embedding of telehealth functionality and the list goes on will all be pressure-tested by the VA. The results of that pressure-testing will, in time, roll out to the broader Cerner client base.
“Where the company has truly led the EHR market is with HealtheIntent. Rather than a walled-garden approach, Cerner’s HealtheIntent is architected for a more open future and its capabilities continue to expand even though market has been tepid. Cerner accurately saw the future and invested early for the inevitable move to value based care.”
Cerner has been an innovative company since its founding. While not all innovations have been a success (much to some clients’ chagrin), the company has nonetheless made progress and continues to push forward. Their ambulatory EHR is gaining significant traction with larger IDN clients, and RCM—while not there yet—is closing the gap with competing solutions.
Where the company has truly led the EHR market is with HealtheIntent. Rather than a walled-garden approach, Cerner’s HealtheIntent is architected for a more open future and its capabilities continue to expand even though the market has been tepid. Cerner accurately saw the future and invested early for the inevitable move to value-based care.
Visionary leadership made Cerner what it is today. Hopefully, the company’s new leadership fully appreciates this key attribute. Only time will tell if the future focus of Cerner is operational efficiency at the expense of vision. While operational improvements are common in a maturing market, our hope is that Cerner continues to look beyond the near term.
Allscripts — Stabilize, then Proceed with Innovation
At the recent Allscripts Client Experience (ACE, #ACEHHS18) conference, the company gave us a day and a half deep dive into their current strategy and initiatives. As much as Allscripts positioned themselves as the innovative leader among the leading EHR vendors, the fundamental reality was far simpler. This is a company that is seeking to stabilize its base, and that is a good thing.
As most readers know, when CEO Paul Black took over the reins at Allscripts he had quite a mess on his hands. Previous management had grown the company through a series of acquisitions, but little attention was paid to how these various acquisitions would be stitched together to provide a comprehensive and cohesive EHR that extended from hospitals (acute) to small practices (ambulatory).
Clients were not happy, and Allscripts increasingly lost ground to both Cerner and Epic.
Under Black’s leadership losses have been stemmed, costs brought into alignment, and the bottom line has improved. Today, Allscripts has an acute to ambulatory EHR solution in Sunrise, which now represents roughly half of Allscripts’ annual revenue.
The company has also continued its acquisition strategy, picking up two other EHR platforms – McKesson’s EIS business (see our original take here) and Practice Fusion. While hearing little about Practice Fusion at this event – after all it was focused on Allscripts’s acute clients – we did hear from a number of former McKesson (Paragon) clients that they were quite happy to have Allscripts as their new parent. As one Paragon customer told me:
“We have been ignored for years. McKesson failed to address known problems with their software. At least now we have a voice and Allscripts is making progress.”
In another session with two Allscripts customers, each related their thorough evaluation and due diligence research of current acute care EHR solutions. Their conclusion: The EHR has become a commodity with comparable functionality across all major aspects that were important to them. Since EHR software is no longer a key differentiator, the relationship with the vendor and the need to minimize disruption to frontline users of the software become paramount. This is likely true across the industry and why the long purported EHR replacement market never materialized.
The EHR has become a commodity with comparable functionality across all major aspects that were important to them. Since EHR software is no longer a key differentiator, the relationship with the vendor and the need to minimize disruption to frontline users of the software become paramount.
In a brief conversation with Black, he was passionate in stating that he wants this company to be seen as the true innovator of the big three EHR vendors. He pointed to their precision medicine efforts with 2bPrecise, a young company started by the founders of HIE vendor dbMotion, a company Allscripts had acquired several years ago.
2bPrecise is now embedded within EHR Sunrise workflow and the company is working with six beta customers, including the Mayo Clinic. Today, Allscripts is the only EHR company that offers the physician the ability to match medication treatment protocols with a patient’s genomic information (e.g., how well a patient can metabolize a given medication) – pretty futuristic and promising work. But there is a fly in the ointment: who pays for this second order derivative to define patient-medication matching? No clear answers yet, though the move to value-based care (capitation) may provide accelerated adoption for certain, complicated diseases (behavioral health, cancer, etc.).
Another innovation they announced at ACE was allowing clinicians from within Sunrise to directly order (prescribe) a Lyft ride for a patient (original partnership announced in March). The use cases for such are numerous, from setting up an appointment (25% of low-income patients cite transportation as a leading cause of missed appointments) to taking a patient home upon discharge. Nice feature for both clinicians and patients.
The company has also been quite progressive on the patient engagement front, first with its vendor agnostic patient portal – FollowMyHealth and its recent acquisition of HealthGrid, a patient engagement tool based on texting.
Lastly, the company is in the process to move its core portfolio of products to a common client user interface (UI) based on progressive web architecture. This effort is in conjunction with their move to hosting their solutions on Microsoft’s Azure platform. Note: the move to hosted cloud services has taken the healthcare IT sector by storm. Three years ago, few CIOs were willing to go “off-prem.” Today, there is literally a tsunami of interest among CIOs looking to off-load the care and feeding of their EHRs and other applications.
The EHR market is dead in the U.S. To grow, one must either acquire other EHR vendors and leverage their maintenance revenues aggressively while cutting SG&A costs or look to the next generation of solutions and services the client base will need.
Allscripts has done a little of both but what concerns me most is their lack of a clear and compelling solution suite to support the migration to value-based care. Their messaging around population health (CareInMotion) was generic and this solution suite to support value-based care modalities still lags competing solutions. They are working to rectify these shortcomings, but they are slow in coming.
Their analytics story, quite surprisingly, was nowhere in evidence – little discussion during the sessions I attended nor highlighted in their product pavilion. Contrasting this with what I experienced this past week at Cerner’s own user conference, CHC, or at Epic’s UGM in late August, was striking.
The innovative efforts at Allscripts are heartening, especially those regarding patient engagement. Yet these efforts will not keep the lights on for most healthcare organizations as we migrate to data-driven care delivery models. The industry migration of clinical care from an art (little to no data) to a science (data-driven) is readily apparent – Allscripts’ own story on this, however, is currently not quite as clear.
Healthcare App Stores Moving to Mainstream
Update, 9/4/2018: This post was based on research conducted for the report, Healthcare App Stores: Status and Outlook, which is now available.
Apple’s early and fantastic success with its app store spawned imitators. App stores are a relatively new wrinkle in healthcare IT vendor’s approach to relationships aimed at better serving existing customers or finding new ones. Most major IT vendors to payers and providers have partnerships with other companies that provide complementary technology or services. These arrangements allow the partners to reach markets, users, or use cases that either vendor would find challenging on its own.
In the wider economy, successful app stores rely on a widely-accepted set of Web technologies. Chief among these are REST-style APIs offering programmers simple and uniform access to data and functionality across organizations and systems. REST APIs provide the data fuel that transformed consumer and enterprise apps. Most API programs are open in that documentation is available to anyone. Programmers can often use the APIs without any interaction with the API publisher. In other cases, they can use them after getting an API key, usually a simple online process while many API program sponsors monetize access at certain call volume thresholds. Health Level 7, the standards organization, created Fast Healthcare Interoperability Resources (FHIR) to enable modern, REST-style APIs that will be far less unwieldy for programmers than traditional HL7, IHE, or C-CDA APIs. The advent of FHIR-standard APIs and SMART’s use of OAuth supplies the crucial building blocks for effective app stores in healthcare.
While the challenges are daunting, the opportunity to improve healthcare is vast. Healthcare users are eager to discuss their unmet needs. Small and independent developers are eager to address these needs.
App stores facilitate the distribution of applications that add value to some base platform or brand. On the strength of the large volume and variety of data these companies collect for their HCO customers, the EHR is that platform. EHRs also have strong brand recognition among clinicians. The vast majority of HCOs lack the resources to develop their own applications, relying mostly on their EHR vendor for new and better functionality. Ironically, most EHR vendors recognize that they lack the resources or bandwidth to be the sole source for new and better functionality.
Other categories of companies could be the platform that establishes and hosts an app store. Payers and providers have the strongest brand name recognition with patients and their caregivers. Medical equipment vendors have large data volumes and established brands among healthcare workers that could provide visibility and attention from users. Companies that provide healthcare transaction or data services have amassed stupendous data volumes but remain mostly unknown to patients and are not top-of-mind for healthcare workers. In theory, any entity that holds large inventories of patient data or has a strong brand could sponsor an app store.
The technical potential already exists to access data or services from any combination of provider, payer, data aggregator, or another source. For now, the willingness to make such capabilities a reality is lacking, given that healthcare’s financial incentives almost demand that organizations hoard, monetize, or closely control the use of their data. While the challenges are daunting, the opportunity to improve healthcare is vast. Healthcare users are eager to discuss their unmet needs. Small and independent developers are eager to address these needs.
While better applications for clinicians and patients are a priority, the demand for more effective use of IT in healthcare is not limited by user category or use case. Some specific examples include:
The recent and widespread adoption of EHRs highlights the need to supplement or enhance the EHR itself. EHRs are not the only opportunity, since only a minority of the healthcare workforce uses an EHR regularly. The need to activate and engage patients with more effective applications is also important for most healthcare stakeholders. Patients have only ever known a disjointed “customer experience” with healthcare. Ideas such as convenience, price transparency, or predictability would never enter into the average patient’s expectations of interacting with any aspect of the healthcare system. But patients are beginning to expect a more conventional “consumer” experience with healthcare. The proliferation of high-deductible plans and rapidly increasing out-of-pocket costs could eventually produce a market or regulatory response that could impose a different approach and processes for consumers.
In theory, an app could discover patient data at multiple organizations using a network-based record location service’s APIs. It could access that data directly from as many organizations as the application and use case demand. It could match pertinent records using an API-accessible master patient index service. It could access workflow from yet another network-based service to support part or all of a patient encounter. This kind of orchestrated functionality using distributed data is increasingly commonplace in consumer and some enterprise apps where the application uses REST-based access to data and functionality from multiple organizations. Healthcare is years away from being able to deploy such a scenario, but many in HIT would like to see it become a reality.
We are preparing a report on the status and outlook of healthcare app stores. For now, EHR vendors have shown strong interest in investing to reach new markets, users, and use cases. Most vendors recruit third-party developers and companies into their developer programs outside of their clinician user base. Third-party experiences with EHR vendors such as Epic, Allscripts, and athenahealth have varied in terms of support, costs, and allowed functionality. This report not only inventories the ways that EHR vendors are expanding functional and organizational app coverage; it also looks at the outlook for some of the other potential app store platform hosts.
Convergence Analyst Recap: Exciting Progress, Still Plenty to Be Done
What a whirlwind it has been – three major conferences for Chilmark Research analysts in three consecutive weeks. Sure, the Epic UGM and Cerner CHC are industry leading events, but our own humble, inaugural event, Convergence, was influential in its own right.
Attendees, speakers, and panelists from across the healthcare spectrum came together in Boston for two days of in-depth, strategic discussions on how providers and payers will converge to provide a more streamlined health service for the populations they jointly serve. To better understand what is involved in Convergence, we worked with Involution Studios to create the following graphic (feel free to download a larger version and use yourself):
Our friends at Galen Healthcare and media partner SearchHealthIT.com provide cogent summaries of the event’s insightful presentations about payer-provider convergence strategies. Following our team of analysts offers their own highlights and key takeaways from Convergence.
Brian Eastwood, Engagement:
I enjoyed hearing from the Trenton (N.J.) Health Team and Boston Medical Center. They demonstrated that successful examples of provider-payer convergence can stem from collaborations in socially and economically disadvantaged areas, where stakeholders see common vulnerabilities (such as a lack of coordinated care management) that threaten their long-term financial survival.
I also appreciated the message from employer Iron Mountain’s head of benefits planning, Scott Kirschner, about the need for employers to take value-based care (VBC) seriously. Kirschner noted that 95% of the company’s health plan costs are claims, and 80% of those claims are medical. Like it or not, employers have to find a way to get in between employees and their physicians – and to explore the widespread use of proven technology solutions that can address employees’ health and wellness needs without cutting into their billable hours.
Kirshner also reflected on the savings – the clear ROI – that Iron Mountain has seen through aggressive moves to optimize benefit design. A key contributor to ROI is the use of High Performance Networks for employees across the country – HPMs are most often based on a converged model between provider and payer. Current insurer Cigna is not expanding its HPMs fast enough for Iron Mountain, which led the company to look elsewhere and ultimately choose Aetna for 2018 due to Aetna’s aggressive moves to drive towards a converged model.
Matt Guldin, Care Management:
Convergence is underway in the form of providers becoming their own payers, as well as providers acquiring payers. Geisinger Health, for example, has moved to value-based contracts in 70% of its business and does not intend to go back to volume-based care. However, the trend is still in the early stages, just as the move to VBC is occurring slowly and, amid political turbulence, sometimes erratically.
The healthcare payer-provider alliances that are sprouting across the country, along with employer-provider deals, will require more advanced health IT systems to manage and analyze complex data undergirding value-based care: Big data and analytics, data governance, wellness platforms, and healthcare approaches like remote patient monitoring are key to the transformation.
One major challenge to making both convergence and VBC produce better care and lower costs is the current widespread variability and lack of interoperability of health information. In addition, as healthcare transitions to value-based care, providers will increasingly be responsible for the entire continuum of care, from prevention to rehab.
Ken Kleinberg, Analytics:
First, convergence is not for everyone – yet. The speakers and attendees at the event were those who either realized that something key and important needed to happen, or was happening, or they were making it happen. Out of the many health IT events going on in the fall months, leading vendors, providers, payers, and other stakeholders choose to attend this event – and in so doing, became part of this growing movement to transform our industry.
Second, convergence affects everyone – now. The most powerful moment of the event had key leaders from the health IT community sharing their personal stories of their interaction with a dysfunctional system where each stakeholder, in its efforts to do what it thought was right for its interests, had the unwanted effects of increasing costs, decreasing quality, and increasing the friction of access. It affects the very patients, members, and employees the system is supposed to be helping – that is, all of us, even our leaders.
Third, convergence is coming – there is hope. From payers like Aetna completely rethinking interactions with their members and their goals, to employers like Iron Mountain taking healthcare as a new core competency, to providers like Beth Israel Deaconess Medical Center reaching out to share data with their payers, to vendors like Allscripts, CareEvolution, Cerner, and Epic putting their best people and increased resources on population health management, we see many reasons for not just hope, but action and progress.
Brian Murphy, Interoperability:
The challenges of adequate access to data and the need to build new and improve old applications are deeply intertwined. APIs will be a major part of the solution. As we saw in presentations from Cerner’s Dave McCallie, Boston Children’s Hospital’s Dan Nigrin, and Google’s Aashima Gupta, providers are moving deliberately to adopt APIs on many fronts.
Application programming interfaces (APIs) are being used to extend EHRs. The combination of APIs built on the Fast Healthcare Interoperability Resources (FHIR) standard and SMART today allow clinicians to augment and extend their EHRs with new or different workflows. McCallie noted examples such as better clinical decision support, clinical trial recruiting, and different visualizations. Organizations and independent developers can build such extensions in a fraction of the time it would take for the EHR vendor to spec and build new features into their base products.
APIs are being used to empower patients. Gupta used a Google Home device to show how APIs can make it much simpler for a patient to schedule an appointment at a local clinic using just a voice-activated smart home device. Google’s developer portal for healthcare helps engineers build the FHIR APIs needed to support customer-facing apps.
APIs are being used to more effectively coordinate care. They provide a more efficient and easier-to-program way for different organizations and users to contribute data. At Boston Children’s, SMART has enabled an application that tracks patients’ disease symptoms and response to therapy over time. To date, more than 5,000 patients with complex needs have used the application to provide valuable information to clinicians.
While these anecdotes attest to the progress being made, we still have a long way to go before the industry can claim that data is readily available wherever and whenever it is needed. Many eyes are now on the Office of the National Coordinator as it develops new rules stemming from the API provisions of the 21st Century Cures Act. On the one hand, there is some trepidation about how ONC will define data blocking and how fines will or won’t be levied. We know that EHR vendors must make patient data available “without special effort, through the use of APIs.” The specifics of what “special effort” means is still very much up in the air. The addition of a new requirement to provide a bulk API also raises questions.
Let’s Continue the Convergence Conversation
Convergence may be over, but there are still several opportunities for further collaboration and learning:
Cerner Impressions: Beginning Signs of PHM Maturation
Two weeks ago, we attended the 2017 Cerner Collaboration Forum, which combined the Population Health Summit with three other annual events (Ambulatory Summit, CareAware Summit, and Cerner Physician Community). This larger single summit resulted in a broader representation of provider organizations and other attendee. The “power” of combining these various events also reflects the growing convergence of technologies, workflows, and practices that are necessary as providers, payers, and other stakeholders further shift to valued-based care.
Here are four key impressions of the event.
PHM presentations have matured. The client population health management (PHM) presentations employed a case study approach and included results from deploying various HealtheIntent solutions. This was a change from the past two years, which focused more on implementation issues and presented limited utilization and outcomes data. Early adopters of HealtheIntent now have two or three years of experience using some of the solutions (HealtheRegistries, HealtheCare) and have started to really focus on operational and tactical-related issues, ranging from integration with transition management processes to population health maintenance to care team workflows.
Starting a provider-owned health plan is not for the meek. Bill Copeland from Deloitte Consulting spoke about research on 224 provider-owned plans with more than $1 billion in annual revenues. Deloitte has identified four success factors for these types of plans.
• Core line of business. It is a significant percentage of their overall payer mix and the HCO has lengthy experience in treating those patients prior to enrolling them in a provider-owned health plan.
• Tenure. The 10 most profitable plans were all more than years old.
• Scale. Plans need more than 100,000 members in order to have an adequate risk pool.
• Market Share. In their market, they rank at least second or third in market share, with the ability to buy services out of network at reasonable costs.
What really caught my attention was that it took a minimum of five years for a new provider-owned health plan to become profitable, with significant losses realized in the first two or three years. This should them significant pause to health systems with constrained cash flows.
Provider demand for APIs is strong, but they have questions. A half-day event focused on FHIR and APIs preceded the summit. Provider interest is strong – Cerner has more than 1,100 applications in its sandbox, and this number is increasing rapidly – but a few key questions remain.
• Security or convenience? Which of these two attribute will patients demand more of, and what tradeoffs are they willing to make in the process?
• Vendor role? Providers and potentially patients need more guidance and intelligence on the information brought in via APIs especially in regards to the variety and veracity of the data. Using this data to provide analytic insights is still a bit down the road.
• Increasing utility? Providers ultimately want API-supplied information put into their flow charts/templates within their EMR and where else appropriate, with little manual intervention.
• Who regulates? There’s a large degree of ambiguity at the federal level as to which agency or agencies (FDA, FTC, HHS, etc.) will regulate privacy, security and competition-related issues. This has caused some hesitation among providers and vendors.
Health IT is an enabler, but more is needed for community-level change. A panel on Healthy Nevada, a five-year partnership between Cerner and the city of Nevada, Mo., discussed the lessons learned and impact of the partnership.
Since 2012, Vernon County has moved from 88 to 60 in Missouri’s county health rankings (as updated annually by the Robert Wood Johnson Foundation). HealtheIntent gives the community a single source of community-wide data and access to real-time public health information, which is used to segment the population and begin to employ ‘hot-spotting’ interventions.
What struck me during the panel and in a few conversations I had afterward, though, was that, despite the desire to connect healthy lifestyles, creating a public health or health system-led program simply will not work without broader engagement with various civic organizations, especially in rural areas or among certain population segments. Cerner and a number of other vendors are starting to place a greater emphasis on consumer and caregiver engagement functionality – but as our recent Care Management Market Trends Report suggests, there is much progress to be made.
Will small providers be left behind? This year’s Cerner Collaboration Forum marked the beginning of a maturation of provider attendees who have been on the HealtheIntent platform (HealtheRecord, HealtheRegistries, HealtheCare) for a few years now. Early adopters are moving away from implementation-related issues and starting to fine-tune how these solutions support specific care management and care coordination use cases and workflows.
Combining all the events in a single one also provided a broader scope of attendees. We received feedback from a wider array of providers, including smaller customers who still have not made a substantial PHM investment or others who were reevaluating earlier investments in point solutions and looking for a more comprehensive “go forward” data strategy and IT investment.
The question is whether most small to midsize providers are willing and able to make the necessary PHM investments including in Health IT moving ahead forward. The Cerner event did not really cover this topic and there are mixed signals in the market place right now about this market segment right now including when PHM buying activity may begin to pick up in earnest.
The Nexus of Interoperability and Consumer Experience
The annual Cerner Health Conference (CHC16) held last week in Kansas City provided an excellent opportunity to gauge current population health strategies, challenges, and implementation status of both Cerner and their clients. The conference was unexpectedly touching, as well.
More on the Interoperability Theme
Integration as a dependency to long term HIT viability cannot be overemphasized. We have reached the tipping point—to be vendor agnostic or not, participate in open data sharing or not, be a data integrator or not. Vote for interoperability. We learned of vivid examples of vendor solutions that chose not to fully integrate and consequently lost all previously strong adoption. Provider workflow and efficiency crumbles when they are forced to work across multiple interfaces.
As a sign of market evolution, we witnessed the success of empowered providers exerting influence over vendors in a push for greater interoperability. Let this serve as a call to providers to expect interoperability from your technology vendors as the optimal approach. Don’t assume you need to “go it alone.” We talked with providers who attempted to build their own code to integrate disparate systems, only to eventually give up after years of sunk cost and lost productivity. On the flip side, only when providers also share their data can the ecosystem function as truly open and optimized for value.
Cerner has certainly evolved their open platform strategy embarked upon several years ago when they partnered with then Certify Data Systems for HIE, and more recently being a founding member of Commonwell Health Alliance. In Q3 2016, Cerner officially opened HealtheIntent PHM and Millenium EHR to third party developers via the brand “code” – a development environment that includes a multitude of APIs. Cerner has also completed custom coded integration with competitor eClinicalWorks (eCW) for even more seamless interoperability of HealtheIntent modules in an eCW clinician’s workflow, an indicator of how client requirements are driving transformational vendor relationships in healthcare.
Cerner’s multi-pronged growth strategy consists not only of serving up an open ecosystem, but also includes planned expansion and refinement of HealtheIntent with new network functionality to better enable value-based arrangements. New modules targeted for GA in 2017 include referral, contract, and network management, allowing a CIN or ACO to project their success in launching a risk-based arrangement, evaluating not just standard population clinical risk and opportunities, but also layering in network coverage determinations by geography.
Care Management: Certainly Adequate, But We Need To Do Better
We liked Cerner’s “value-based” pricing strategy for the HealtheCare care management module of the HealtheIntent platform. The user is exposed to the entire population registry and able to identify care management targets by filtering against varying criteria (diagnosis, open care gaps, risk score). However, software cost is accrued only for the volume of the population actually moved into Care Management programs, where the value realization potential exists.
HealtheCare sales have increased at a steady rate year over year since 2015 GA, as providers need a solution for Care Management that is more advanced than home-grown spreadsheets, SharePoint sites, or paper. HealtheCare delivers on those basic expectations, but we found the user interface fed by the underlying architecture to be dated. To be clear, it wasn’t that HealtheCare is missing any expected functionality; it was that it didn’t include anything exceptionally innovative.
This is an industry-wide issue wherein most of the Care Management solutions we have reviewed for our upcoming Market Trends Report all have a similar look and feel – a glorified spreadsheet with pick-lists. It’s time for an entirely new construct in Care Management technology, time to rethink Care Management as the community engagement tool that it is, to create a contemporary platform to truly engage all stakeholders including consumers, caregivers, and community.
A Poignant Reminder How Interoperability Improves the Consumer Experience
Why are we even doing all of this grueling work to revolutionize healthcare? The keynote address brought it all home for the 15,000 attendees in the Kansas City Sprint Center. Caring. Consumer experience.
I witnessed hands down one of my most moving moments in 25 years in healthcare. First, Geisinger CEO Dr. David Feinberg walked us through a systematic approach for elevating the consumer experience. It simply couldn’t get more inspirational, then Cerner CEO Neal Patterson took the stage and delivered a surprise address despite–and because of–undergoing extensive treatment throughout much of 2016 for soft tissue cancer. His gift is to now turn his own personal experience, profound and troubling as it was, into a drive for further system-wide improvement.
It doesn’t get any better than that, Neal.
Kindness and caring is not about reducing wait times; it’s about eliminating them. It’s about using data to anticipate a consumer’s health issues. It’s about ensuring consumers can readily participate in their care and access their consolidated medical record and care plan inclusive of input from all care providers on their team, absent annoying and exhausting technology or data sharing impediments.
As Neal concluded his address, “We’ve done much, but there is so much more to do.”