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Hospital M&A Cost Boosted Significantly By Health IT Integration

Posted on August 18, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

Most of the time, hospital M&A is sold as an exercise in saving money by reducing overhead and leveraging shared strengths. But new data from PricewaterhouseCoopers suggests that IT integration costs can undercut that goal substantially. (It also makes one wonder how ACOs can afford to merge their health IT infrastructure well enough to share risk, but that’s a story for another day.)

In any event, the cost of integrating the IT systems of hospitals that merge can add up to 2% to the annual operating costs of the facilities during the integration period, according to PricewaterhouseCoopers. That figure, which comes to $70,000 to $100,000 per bed over three to five years, is enough to reduce or even completely negate benefits of doing some deals. And it clearly forces merging hospitals to think through their respective IT strategies far more thoroughly than they might anticipated.

As if that stat isn’t bad enough, other experts feel that PwC is understating the case. According to Dwayne Gunter, president of Parallon Technology Solutions — who spoke to Hospitals & Health Networks magazine — IT integration costs can be much higher than those predicted by PwC’s estimate. “I think 2% being very generous,” Gunter told the magazine, “For example, if the purchased hospital’s IT infrastructure is in bad shape, the expense of replacing it will raise costs significantly.”

Of course, hospitals have always struggled to integrate systems when they merge, but as PwC research notes, there’s a lot more integrate these days, including not only core clinical and business operating systems but also EMRs, population health management tools and data analytics. (Given be extremely shaky state of cybersecurity in hospitals these days, merging partners had best feel out each others’ security systems very thoroughly as well, which obviously adds additional expenses.) And what if the merging hospitals use different enterprise EMR systems? Do you rip and replace, integrate and pray, or do some mix of the above?

On top of all that, working hospital systems have to make sure they have enough IT staffers available, or can contract with enough, to do a good job of the integration process. Given that in many hospitals, IT leaders barely have enough staff members to get the minimum done, the merger partners are likely costly consultants if they want to finish the process for the next millennium.

My best guess is that many mergers have failed to take this massive expense into account. The aftermath has got to be pretty ugly.

Hospital CIOs Cutting Back on Non-Essential Projects

Posted on July 10, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

Generally speaking, cutting back on IT projects and spending is a tricky thing. In some cases spending can be postponed, but other times, slicing a budget can have serious consequences.

One area  where cutting budgets can cause major problems is in preparing to roll out EMRs, especially cuts to training, which can lead to problems with rollouts, resentment, medical mistakes, system downtime due to mistakes and more.  Also, skimping on training can lead to a domino effect which results in the exit of CEOs and other senior leaders, which has happened several times (that we know of) over the past couple of years.

That being said, sometimes budgetary constraints force CIOs to make cuts anyway, reports FierceHealthIT Increasingly projects other than EMRs are falling in priority.

A recent survey of hospital technology leaders representing 650 hospitals nationwide published by HIMSS underscores this trend. Respondents told HIMSS said that despite increases in IT budgets, they still struggled to complete IT projects due to financial limitations. In fact, 25 percent said that financial survival was their top priority.

What that comes down to, it seems, is that promising initiatives fall by the roadside if they don’t contribute to EMR success.  For example, providers are stepping back from HIE participation because they feel they can’t afford to be involved, according to a HIMSS Analytics survey published last fall.

Instead, hospitals are taking steps to enhance and build on their EMR investment. For example, as FierceHealthIT notes, Partners HealthCare recently chose to pull together all of its EMR efforts under a single vendor.  In the past, Partners had used a combo of homegrown systems and vendor products, but IT leaders there  felt that this arrangement was too expensive to continue, according to Becker’s Hospital Review.

This laser focus on EMRs may be necessary at present, as the EMR is arguably the most mission-critical software hospitals have in place at the  moment. The question, as I see it, is whether this will cripple hospitals in the future. Eventually, I’d argue, mobile health will become a priority for hospitals and medical practices, as will some form of  HIE participation, just to name the first two technologies that come to mind. In three to five years, if they don’t fund initiatives in these areas, hospitals may look  up and find that they’re hopelessly behind .

Allscripts And Team Battle Epic and IBM for DoD Contract

Posted on June 27, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

Earlier this month,we shared the news that Epic and IBM had gotten together to fight for the DoD’s massive Healthcare Management Systems  Modernization project. The project is to replace the current Military Health System, which should serve some 9.7 million beneficiaries.  The winning team should make about $11 billion to do the work.

So it’s little wonder that another group of health IT giants have stepped up to fight for such a juicy prize.  A group lead by Computer Sciences Corp., whose partners include Allscripts and HP, has announced that it intends to compete for the contract.

The HMSM project is extremely ambitious. It’s intended to connect varied healthcare systems across the globe, located at Army hospitals, on Naval vessels, in battlefield clinics and more, into a single open, interoperable platform serving not only active-duty members, but also reservists and civilian contractors.

Before you burst out laughing at the idea that any EMR vendor could pull this off, it’s worth considering that perhaps their partners can.  It’s hard to argue that CSC has a long track record in both government and private sector health IT work, and HP has 50 years with of experience in developing IT projects military health and VA projects.

That being said, one has to wonder whether Allscripts — which is boasting of bringing an open architecture to the project — can really put his money where its mouth is. (One could say the same of Epic, which frequently describes its platform as interoperable but has a reputation of being interoperable only from one Epic installation to the other.)

To be fair, both project groups have about as much integration firepower as anyone on earth. Maybe, if the winner manages to create an interoperable platform for the military, they’ll bring that to private industry and will see some real information sharing there.

That being said, I remain skeptical that the DoD is going to get what it’s paying for; as far as I know, there is no massively interoperable platform in existence that meets the specs this project has.  That’s not an absolute dealbreaker, but it should raise some eyebrows.

Bottom line, the DoD seems determined to give it a try, regardless of the shaky state of interoperability in the industry overall. And its goals seem to be the right ones. After all, who  wouldn’t want an open platform that lends itself to future change and development?  Sadly, however, I think it’s more likely that will be shaking our heads over the collapse of the project some years from now.

Safety Issues Remain Long After EMR Rollout

Posted on June 24, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

The following is a bit depressing, but shouldn’t come as a surprise. A new study published in the Journal of the American Medical Informatics Association has concluded that patient safety issues relate to EMR rollouts continue long after the EMR has been implemented, according to a report in iHealthBeat.

Now, it’s worth noting that the study focused solely on the Veterans Health Administration’s EMR, which doubtless has quirks of its own. That being said, the analysis is worth a look.

To do the study, researchers used the Veterans Health Administration’s Informatics Patient Safety Office, which has tracked EMR safety issues since the VA’s EMR was implemented in 1999.  Researchers chose 100 closed patient safety investigations related to the EMR that took place between August 2009 and May 2013, which covered 344 incidents.

Researchers analyzed not only safety problems related to EMR technology, but also human operational factors such as workflow demands, organizational guidelines and user behavior, according to a BMJ release.

After reviewing the data, researchers found that 74 events related to safety problems with EMR technology, including false alarms, computer glitches and system failures. They also discovered problems with “hidden dependencies,” situation which a change in one part of the EMR system inadvertently changed important aspects in another part of the system.

The data also suggested that 25 other events were related to the unsafe use of technology, including mistakes in interpreting screens or human input errors.

All told, 70% of the investigations had found at least two reasons for each problem.

Commonly found safety issues included data transmission between different parts of the EMR system, problems related to software upgrades and EMR information display issues (the most commonly identified  problem), iHealthBeat noted.

After digging into this data, researchers recommended that healthcare organizations should build “a robust infrastructure to monitor and learn from” EMRs, because EMR-related safety concerns have complicated social and technical origins. They stressed that this infrastructure is valuable not only for providers with newly installed EMRs, but also for those with EMRs said that in place for a while, as both convey significant safety concerns.

They concede, however, that building such an infrastructure could prove quite difficult at this time, with organizations struggling with meaningful use compliance and the transition from ICD-9 to ICD-10.

However, the takeaway from this is that providers probably need to put safety monitoring — for both human and technical factors — closer to the top of their list of concerns. It stands to reason that both newly-installed and mature EMR implementations should face points of failure such as those described in the study, and they should not be ignored. (In the meantime, here’s one research effort going on which might be worth exploring.)

Don’t Blame Providers For Variations In EMR Use

Posted on June 20, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

A new study published in the Journal of the American Medical Informatics Association has documented what we all already know  — that providers have idiosyncracies in how they use EMRs. The question that remains unanswered is whether this is a bad thing.

According to iHealthBeat, researchers dug into a massive amount of data which painted a picture of how 112 physicians and nurse practitioners working in federally qualified health care centers in New York City used their EMRs. To conduct the study, the researchers looked at 430,803 visits by 99,649 patients who came to the centers.

After analyzing the data, the study found that providers varied in several key habits when using their EMRs, including how often the updated patient problem lists, when they would respond to clinical decision support alerts, whether the appointment was with a new patient or an established one, and the use of the meaningful use objective metrics, iHealthBeat reported.

Why were providers vary so widely and how they conducted these tasks? Researchers said that there are several reasons for this variation, including the providers overall familiarity with the EMR system, the familiarity with the patient’s medical problems, and workflow differences due to staffing differences at the health centers.

According to the researchers, significant variance among providers’ EMR use suggests that it’s a good idea to measure individual level measures of usage, as such studies might improve research on quality and cost outcomes of EMR use. In other words, the study suggests that variance in EMR usage might lead to positive or negative outcomes, and that standardization — once best practices are determined — might improve outcomes.

The problem with this logic, though it sounds  good on the surface, is that providers are struggling hard enough already to develop routines which make EMRs work for them. And as with any other technology, those workarounds are going to vary depending on who you’re talking about and what they’re trying to accomplish.

I’d argue that while tracking sources of variance in EMR use might have some value in improving outcomes, it’s no excuse to force standardization in professionals’ EMR habits, as long as their overall outcomes are appropriate. What’s more, a push to standardize how providers use EMRs puts the struggle to make them workable on providers, not the vendors whose product quirks are almost certainly responsible for this dilemma.

The bottom line, as I see it, is that while this research is useful, it should raise a red flag on vendors, whose usability levels are still far from where they should be. When you give providers a highly usable, well-thought-out interface to use which suits their daily routines, then it might be time to streamline their work habits. Until then, give  them a break if you don’t want to spark a revolution.

P.S. If you’re curious about what the best thinking on EMR usability is out there, check out this list.

Epic Joins IBM To Pitch DoD Contract

Posted on June 19, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

Hoping to be the lucky vendors that win a massive pending DoD deal, Epic Systems has team up with global technology giant IBM to compete for the DoD’s Healthcare’s Management Systems Modernization contract.

The new project comes after years of  struggles and changes of direction by the DoD, which has worked for years to integrate its system with the VA’s EMR. Back in 2009, the two giant federal agencies kicked off an effort to create an integrated medical record, the iEHR, which would offer every service member the ability to maintain a single EMR throughout their career and lifetime. But those efforts failed miserably, and the iEHR project was halted in February 2013.

Since then, the DoD has announced that it’s moving along with its iEHR plans once again, a sprawling project which the Interagency Program Office estimates the cost somewhere between $8 billion and $12 billion.

Meanwhile, the DoD Healthcare Management Systems Modernization is moving ahead, slated to replace the current Military Health System. The DHMSM should serve some 9.7 million beneficiaries.

The two partners certainly bring a strong bench to the table. Epic offers an interoperable platform which is one of the most adopted EMR systems in the country, and according to company officials,its open architecture supports more than 20 billion data transactions between systems every year.  Epic says that its customer community, which currently includes 100 million patients, exchanges more than 2.2 million records each month with of the EMR vendors, HISPs, HIEs, the VA, DoD and Social Security Administration.

IBM, meanwhile,is contributing its system integration, change management and expertise , ad experiments in delivering large-scale solutions in partnership with complementary software and services providers. IBM’s Federal Healthcare practice will lead the effort, backed by IBM global information technology,research and health care organizations which already collaborate with Epic in support of EMR solutions internationally.

Without a doubt, IBM is the grandfather of all big iron providers, so they don’t have a lot to prove.  And Epic is a clear leader in the enterprise EMR space, by some measures leading the pack by a considerable margin. It’s likely they’re a top contender for the job.

If the DoD does indeed choose the partnership of Epic and IBM to make its health IT transition, it seems likely that they’ll have recruited more than enough firepower to get the job done — though there’s always the question of whether Epic, which is used to bossing hospitals around, will function as well when the big bureaucracy of the DoD is calling the shots.

But what’s more worrisome is whether the DoD will work effectively with these two private sector companies, assuming t hey win the bid. As noted, the DoD’s track record with change management is nothing to write home about, to say the least, and bureaucratic waffling could conceivably undermine even the most expert efforts to bring DoD’s healthcare architecture into the future. As big and powerful as they are, IBM and Epic may be in for one heckuva ride. In fact, John’s even suggested that the best thing for Epic might be for them to not win the DoD EHR contract.

MinuteClinic Goes With Epic – What’s It Mean?

Posted on March 12, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

Retail clinic operator MinuteClinic has decided to purchase and roll out the Epic EMR, upgrading from its home built system it’s used until now.  MinuteClinic, a division of CVS Caremark, expects the rollout to take about 18 months.

This is a big win for Epic.  An estimated 274,000 physicians will use the company’s EMR, and roughly 51% the US population will have a record in Epic when its current customer rollouts are complete.

And MinuteClinic has big expansion plans, which will bring Epic to a wide range of new environments.  According to Andrew Sussman, MD, president of Minute Clinic and senior vice president/associate chief medical officer, CVS Caremark,  the company is expanding rapidly, having added more than 350 clinics in the past three years, and planning to reach 1,500 clinics by 2017.

“EpicCare will take us to the next level by offering enhanced connectivity with other providers, more advanced patient portal capabilities and key analytics to run our practice more efficiently and improve patient care,” Sussman said in a press statement.

What’s particularly interesting about this deal is not just that Epic has racked up another big customer, though keeping an eye on their progress is definitely important. No, what’s more newsworthy is the possibility that epic is slowly but steadily changing its strategy, from selling only to large hospitals to exploring other customer relationships on the ambulatory side.

Not only is Epic rolling out a large ambulatory deal with MinuteClinic, the EMR vendor has struck a deal with the Cleveland Clinic and Dell under which the Clinic and Dell offer providers EMR consulting installation configuration and hosting service for Epic.  Bearing in mind the needs of ambulatory providers, the Cleveland Clinic deal even allows buyers to have the Epic EMR hosted mostly by Dell.

Certainly Epic won’t stop pursuing big hospital deals, but the MinuteClinic and Cleveland Clinic agreements suggest that Epic may be looking for other markets beyond the large hospital market. It looks like ambulatory is on their radar and we know they’ve been working hard to grow internationally.

CMS Adds Vendor Unreadiness To Meaningful Use Hardship Exemptions

Posted on March 11, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

After watching providers struggle to get their vendors in line for the next round of attestations, CMS has decided to give hospitals a break where vendor unreadiness is concerned in meeting Stage 2 Meaningful Use requirements.

Until recently, lack of infrastructure and unforeseen or uncontrollable circumstances were the only criteria CMS would consider in granting hardship exemptions to providers struggling with reading Stage 2 requirements.

Now, CMS has taken a new step demonstrating that it understands that EMR vendors are not up to speed many cases. CMS has added “2014 EHR vendor issues” as an acceptable reason to receive a hardship exemption to Stage 2 requirements.

To qualify for this exemption, the hospital’s EHR vendor must have been unable to obtain 2014 certification of the hospital was unable to implement Meaningful  Use due to 2014 EHR certification delays. According to the form required to apply for this exemption, “circumstances must be beyond the Hospital’s control and the Hospital must explicitly outline of the circumstances significantly impaired the Hospital’s ability to meet Meaningful Use.”

CMS has also offered additional hardship exemptions to eligible professionals. Eligible professionals can use “lack of control over the availability of Certified EHR Technology” and “lack of Face-to-Face interaction” as well as EHR vendor issues lack of infrastructure and unforeseen/uncontrollable circumstances.

The expansion of hardship exemptions follows a letter that was sent by six Republican senators last week to CMS requesting clarification of the qualification criteria for the hardship program. The Senators, in their letter, asked CMS how hardship categories might be expanded.

As I see it, it’s good to give providers a break under these circumstances, as they can hardly control whether their vendors have their act together. The question is, how long can CMS continue to give providers and vendors exemptions without undermining their larger policy goals?

HIE Study Finds That Failure To Use Data Cost $1.3 Million Over 18 Months

Posted on March 3, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

You can put an HIE in place, but you can’t make doctors drink. That fractured moral was demonstrated recently by an HIE in Western New York, which found that many doctors were failing to use data available in the HIE, and thus ordering CT scans that were unnecessary — wasting about $1.3 million over an 18 month period.

The HIE, HEALTHeLINK, recently conducted a study intended to put a specific value on how many potentially unnecessary duplicative tests were being ordered by providers in its region, as well as a potential savings to the health system.

The sample audience was comprised of patients who had received more than one CT scan within a six-month period on the same part of the body. Scans were then sorted into the three most common categories of CBT groupings — head and neck, chest, and abdomen.

The duplicate scans were divided into three separate categories: 1) studies in which the CT report clearly reference to previous CT scan, 2) inconclusive studies in which researchers were able to tell if the previous study was known prior to ordering the scan and 3) unknown studies in which the CT report clearly stated that no previous study was known of.

Some findings include the following:

* During the 18 month study, which drew on claims data from three major insurance carriers in the area, researchers found about 2,763 CT scans which were considered to be potentially unnecessary.

* About 90 percent of the potentially needless CT scans were ordered by physicians who never or infrequently used the HIE. And more than 95 percent of the identified potentially unnecessary CT scans were done in a hospital,

* About 50 percent of the patients who had a duplicate CT scan had already consented to have their data accessed (so patients weren’t the obstacle).

While the analysis is complex, the lesson seems to be fairly simple. HIE’s are missing out on producing cost reductions when doctors aren’t accessing them prior to ordering tests.

ONC Releases Findings on Study of Patient-Matching Practices

Posted on February 28, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

The ONC has released findings from its study of patient-matching practices in the private sector and federal agencies.

Its conclusion: standardizing specific demographic fields within health IT systems and broad collaboration on industry best practices are two of the key steps the industry needs to take to make advances in patient matching.

In its study, ONC was looking to describe common data attributes, processes, and best practices to assess the industry’s current capabilities in this area. To do so, it did an environmental scan to get a look at current industry capabilities, literature review, feedback received at public meetings, collaboration with federal partner agencies and written comments stakeholders.

Problems it found include differences in the way names and addresses are formatted in various systems which can lead to high rates of unmatched records.

According to a story in FierceHealthIT, the study’s key recommendations include the following:

* Certification criteria should be introduced that require certified electronic health record technology to capture the data attributes that would be required in the standardized patient identifying attributes
* The ability of additional, non-traditional data attributes to improve patient matching should be studied
*Certification criteria should not be created for patient matching algorithms or require organizations to utilize a specific type of algorithm
*Work with the industry to develop best practices and policies to encourage consumers to keep their information current and accurate is necessary

With these me just at the suggestion stage, it’s evident that patient matching needs more attention.

In the past, the ONC has suggested hospitals create a standardized patient identifier during data transactions to make sure the right patient is matched with the correct information. But that won’t address the problem higher-order problem.

Simply being aware that data mismatches on patients a problem is a good first step, but it looks like we have a long way to go before data can be shared from institution to institution accurately without duplicate records and other errors of this type. Interoperability between institutions which allows for accurate patient matching is the real brass ring.