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3 Implications in Death of MU

I’m here at the big JP Morgan conference in San Francisco where CMS administrator, Andy Slavitt dropped the bomb that the Meaningful Use (MU) program will discontinue in 2016. John Lynn did a nice summary of what Slavitt actually said, or at least tweeted out.

This really comes as no surprise, at least not to this analyst. 

Meaningful Use had accomplished its primary goal of getting providers to adopt EHRs and begin digitizing patient information. While we have not seen a tremendous amount of value out of this digitization effort yet, I am confident that it will come. 

But MU went astray in becoming far too prescriptive and innovation, at least in the EHR space, came to a standstill. Nearly all development resources at EHR vendors went to meeting the MU certification criteria. On the provider side, frustration arose in having to meet attestation requirements that had no apparent relevance in the delivery of quality care.

Now it is time to move on and in moving on, the death of the MU program will have three big implications to the market.

  1. We will see rapid consolidation in the ambulatory EHR market. The HITECH Act, which spawned MU created a false market and countless EHR vendors entered. No Ambulatory EHR vendor has more than 10% of the market. The market has also by and large plateaued in the US, which will put a strain on most EHR vendors. A company with deep pockets will begin rolling up the best of the bunch. Look to what Infor did in the ERP market to understand the overarching strategy – same will occur here in the healthcare sector. 
  2. Financially healthy EHR vendors will invest more on innovation. Now that EHR certification requirements are no more, or at least no more Stage 3, companies will have the extra resources to get back to providing true innovation in the market. Expect more innovative models for capturing and sharing PHI going forward and vendors doubling down on their PHM initiatives. P.S., certification organizations will fade into history.
  3. The move to MIPS creates some big opportunities for new solutions. Provider cheering of the demise of MU will be short-lived as CMS still has a big ask of providers tucked into MIPS. The upside and potential penalties folded into MIPS represent a 14% swing in potential CMS reimbursement. Providers big and small will seek-out solutions that mitigate the risk and optimize the upside. A lot of details tucked into MIPS that solution vendors will need to tease out and solve to serve their respective market(s). 

 A lot to digest here and while Slavitt’s comments were telling, they were also thin on the details. Chilmark Research will be digging deeper into this issue in the upcoming weeks. Stay tuned. 

mHealth12Be careful what you wish for sure did apply to this year’s mHealth Summit, which was held last week in Washington D.C. Of the some 4,000 in attendance, I was one of the 10% or was it even 1% of those present that have attended all four events in succession. It is with that perspective that I came away from this year’s mHealth Summit more disappointed than ever.

At previous mHealth Summits, I often bemoaned the lack of organization of the conference, the often bizarre exhibitors one would find (couple of years back one exhibitor, and I kid you not, was marketing herbal aphrodisiacs) and basic necessities one would find at virtually any event, breaks with coffee, maybe a snack here and there. This disorganized, but charming event was mHealth Alliance Summits of years past.

After an initial partnership last year with the NIH Foundation, the original organizers of the mHealth Summit, HIMSS formerly took over the mHealth event this year. The result, a much more well organized registration process, greater focus on the exhibition area and a definite improvement on basic event logistics.

Unfortunately, HIMSS was less successful in improving the content of the numerous sessions that were held. It seemed that anyone with an idea for a topic was given a stage to stand on, or at least a panel to participate on even if what they had to say had very little to do with the session topic.

The exhibit area, while improving, still lacked a core constituency, HIMSS’s bread n’ butter customer base, the traditional HIT companies that one finds at the national HIMSS conference. This struck me as quite surprising as we are now beginning to see EHR vendors finally release solutions that truly enable physicians to use their tablets for bi-directional interaction with a healthcare facility’s core health information system.

But there were two things I found most disturbing about this year’s event. The first was how HIMSS handled the keynote presentations. From this vantage point, it appeared that each and every one of keynote was simply sold to the highest bidder and since they were sold, the winning bidder felt that their keynote provided them the opportunity to sell the audience on their concept, their product, their platform for mHealth. It was horrid to watch and cheapened this event to a level it has never seen in its short history. Seriously HIMSS, today you have enough clout in the market to not stoop this low so why did you?

Another big omission in the main stage was the lack of clinicians discussing the potential use cases for mHealth, the challenges to adoption, the challenges to link into legacy systems and how they see mHealth evolving in the future to meet their care delivery needs. THere could have been some stunning visionary talks on the topic, but none were to be found at this year’s Summit.

The other disturbing issue relates more to the industry itself and those positioning themselves to be the leaders in the mHealth market. Companies such as Aetna, AT&T, Qualcomm, Verizon, et. al., all spoke about an open platform for mHealth applications. Of course each of them was talking about their own proprietary “open platform” that they are hoping will become the de facto standard in this industry sector. Problem is: none of them have the consumer traction, nor a compelling enough vision to gain a critical mass of developers for their specific platform. There are no “Apples” in this bunch.

The need for a common set of standards that will allow mHealth apps to cross-talk to one another is a serious need in this sector, Without such standards, mHealth will never truly blossom into its full potential and remain the sideshow that it is today. Now, if we could get these big players to all agree that mHealth is far more important than any single one of them, that competing via proprietary platforms is a dead-end, then maybe we will finally get somewhere.

Note: As mentioned previously, we are getting ready to switch to a completely new site. THerefore, while you can leave comments here now for discussion, it is unlikely that they’ll be transfered over to the new site.

CR_brandWebNovember saw the acquisition of yet another HIE vendor by a payer (Humana). An in-depth analysis of this acquisition and its implications was provided to Chilmark Advisory Service (CAS) clients at the end of November. Following are abstracts of the three research notes in our latest Monthly Update.

Humana Leaps Into the HIE Market
The health insurance industry is undergoing massive upheaval. Payers don’t need a crystal ball to see that in the near future, providers will sell services directly to employers, and that insurers need to get creative in order to stay competitive. With its acquisition of HIE vendor, Certify Data Systems, Humana joined two other payers in the HIE market: Aetna and UnitedHealth Group. Yet Humana’s strategy sets it apart from the other payers. On a single day in November, Humana announced not one but three acquisitions: Certify plus two Florida-based managed care service organizations. Humana has clearly articulated its plan to become the preferred Integrated Delivery Provider to Medicare Advantage members and dual eligibles. By adding Certify’s strong HIE capabilities to its bag of tricks, along with the ability to deliver primary care directly to a large Medicare population, Humana has positioned itself to do just that.

Taking Population Health from Claims to Clinical
As you know from past updates, the burgeoning field of healthcare analytics is a top priority here at Chilmark Research. This month, we take a look at population health management and current efforts to adapt existing claims-based risk management to clinical settings. Population health and risk management have long been the purview of health insurers and public health departments. Yet as providers take on more risk, they will need to identify populations and sub-populations that could benefit from preventive health – and ultimately cost less in healthcare services. THis research note takes a look at some of the traditional, claims-based analytics vendors and their intentions to move into analysis of real-time clinical data sets.

From Med Lists to Meds Reconciliation to Meds Adherence
Ask any home-care provider, and you’ll hear stories of medicine cabinets chock full of old, unused medications. Chronic disease and frequent hospitalizations compound the problem, because patients end up with medications from before and after each hospital stay. It’s no wonder that medication maladherence is recognized as the most important driver of preventable readmissions. But understanding the problem is much different than finding a solution. Chilmark Research reports on the current fractured state of medication adherence, and argues that without deep provider engagement and interoperability across systems, true medication adherence programs will remain a pipe dream.

Each month, subscribers to the Chilmark Advisory Services (CAS) receive an update of our research on the most transformative trends in the healthcare IT sector. Exclusive to CAS subscribers, monthly updates are part of the continuous feed of information and analysis we generate to keep subscribers on top of the rapid-fire changes in this market. Below is a summary of what we covered in the latest update, which was distributed in November.

Innovation: What is it?

innovationIf it is one thing that the healthcare IT industry doesn’t lack, it is innovation – or it least innovation on the edges. A quick search on Google for health IT innovation challenges will serve you up over 23K hits. From Sanofi, to HHS, to Cigna and other stakeholders, there seems to be no lack of challenges, code-a-thons and the like but one has to wonder, do the results of any of these challenges actually end up in the hands of consumers and/or clinicians? If yes, and I have my doubts, the number that actually make it over that last threshold is exceedingly small.

That’s not to say these challenge grants do not serve a purpose. Such challenges do attract young developers into the healthcare sector where they can apply their well-honed skills to solve a problem. Maybe it will never be a commercial success, but it does expose them to the market, the needs therein and maybe they’ll stick around by joining one of the many HIT companies.

Beyond these challenges though, larger healthcare organizations (HCO) have their own internal centers of innovation. A couple of weeks back I had the opportunity to participate in a workshop at Kaiser-Permanente’s Garfield Innovation Center where 22 innovation center leaders gathered together to share their successes, challenges, best practices and ultimately forge relationships for the future. This event was organized by BluePrint Healthcare IT, of which I am on the Advisory Board.

Participating in a number of breakout sessions and conversing with various leaders of these innovation center leaders I came to the conclusion that the greatest impact these centers could have on their respective organizations was to all join together to identify  and measure lost opportunity costs that are the result of poor or insufficient interoperability across systems.

The healthcare industry remains a cottage industry with even the largest HCOs, such a Kaiser-Permanente or Partners Healthcare not having enough clout to drive interoperability across systems, be they hardware or software. If innovation centers were to rally together, develop a clear and consistent set of metrics to measure lost opportunity costs, in aggregate, they may be able to start driving change that will lead to more open systems.

Yes, it is a tall order and will require strong leadership but frankly, this industry is long overdue for tackling this issue. In the manufacturing sector, this challenge was address over a decade ago with the creation of the HART standard for device interoperability. Continua Health Alliance is trying to do something similar but still has a long ways to go. Won’t even begin talking about interoperability across disparate IT systems.

Yes, there seems to be some movement, but it is almost entirely regulatory-driven. What will it take for this industry to wake up and actually do something? Hard to say, but I would place my bets on these innovation centers, if they heed the call to collectively define metrics, to be very influential in the future.

Note: As of midnight in Cambridge on December 4th we will be closing down the ability for one to leave comments on posts. This will continue till Dec 20th. The reason? We will be launching a completely new website that will have a lot of cool features that will make it easier for you to get to know Chilmark Research, engage with us and of course continue to receive our thoughts and view on trends in the HIT sector. Stay tuned.

Just as Healtheway looks to ween itself off the federal gravy train, Surescripts comes along and in a couple of quick strokes looks ready to drive a stake into the heart of Healtheway or at least any desire Healtheway may have to become the Nationwide Health Information Network (NwHIN).

It all started when Surescripts acquired collaborative HIE messaging vendor Kryptiq in late August. This was quickly followed a week later with Surescripts’ announcement that it would become Epic’s vendor of choice for cross-EHR connectivity. It appears that Epic has finally succumbed to the inevitable; that it will need to open up its system (Epic’s purported Epic Elsewhere, to address cross EHR connectivity was in reality Epic Nowhere – just vaporware) to communicate in a heterogeneous EHR environment. The Surescripts Clinical Interoperability (CI) network solution will become an “Epic Unit” and on Epic’s price sheet. The details of this story were covered in our September Monthly Update for CAS subscribers.

What drove Epic to make such a drastic move? Pretty simple really, Stage Two meaningful use requirements which were released on August 23rd. Within those new requirements for certification, EHR vendors must demonstrate that they can send a message across EHR boundaries (outside their ecosystem). Epic really had no choice in the matter – they had to do something to address this requirement. Chilmark has also been hearing an ever louder drumbeat that Epic customers were also demanding that Epic do something to address messaging in a heterogeneous EHR environment. (Note: eClinicalWorks is another EHR vendor that was forced to open up their notoriously closed peer-to-peer networking service for clients, though eCW twisted it around to make it appear like an act of generosity.) Surescripts provided Epic an easy way out with a non-competing entity.

Last week, Surescripts announced that another major ambulatory EHR vendor would adopt the CI network, this time it was NextGen. Surescripts now has three of the top five ambulatory EHR vendors (Epic, GE, and NextGen) on its network. If one were to just look at the numbers, these three EHR vendors combined represent over 50% of practicing physicians in the US.

Surescripts is likely to add more EHR vendors in the coming months as these vendors look to grapple with the latest Stage 2 MU requirements for both Direct Secure Messaging (DSM) and cross EHR messaging. Adopting Surescripts CI network as a module into their existing EHR solves that issue in a non-competitive manner.

Surescripts’ intent is to leverage its core competency of providing lightweight, network services to reach beyond eRx to address basic clinical messaging. Some may argue that DSM accomplishes the same thing. Not really. The Kryptiq solution, upon which Surescripts’ CI network is built, provides collaborative, threaded messaging and not just the simple point-to-point messaging of DSM. Surescripts also brings to the table what is arguably the largest physician directory, that currently supports its eRx capabilities.

Surescripts jumping into the mix of HIE solution vendors will only complicate what is already becoming an increasingly competitive HIE market for services. In our 2012 HIE Market Trends Report we called such services as Surescripts’ CI a micro-HIE for they are self-forming, starting at the physician practice level, rather than being sponsored by some large entity, be it a public agency or larger hospital system. One of the findings of eHealth Initiative’s latest survey released last week is that HIEs are seeing increasing competition from other HIEs in their community. This competition will only increase with the advent of micro-HIEs.

Combining Surescripts’ existing national provider directory, its partnerships with three of the top five ambulatory EHRs and you have a truly, commercial NwHI – something that Healtheway wishes to become but has a long journey ahead to get there. This will likely force Healtheway to only tackle issues for its federal sponsors (Social Security Administration, Veteran’s Administration and to lesser extent Dept of Defense). Dreams beyond those limited confines will likely remain such if Surescripts is able to effectively execute on its own vision.

Cerner is embarking on a journey of transformation. That transformation, if successful, will culminate in Cerner becoming more than a health IT company to becoming a health company. They’ve tested much of this strategy internally with onsite campus clinics, health and wellness challenges, the creation of rich consumer/patient engagement tools, heck, they have even created their own third party administrator (TPA) as Cerner is self-insured. The company wishes to take these lessons learned, these solutions that have been developed, to transform their company into a health company to address not only the patient experience in a clinical setting, but the patient/consumer health experience throughout the community.

This is all a part of Cerner’s Healthe Intent strategy, a strategy we received a deep dive in during our recent attendance to the Cerner User Conference in early October. Healthe Intent is a big, grand, bold vision in an industry where there seems to be a dearth of such visions. Whether or not Cerner is successful, Healthe Intent certainly has its fair share of challenges, rests more with Cerner than any other outside force.

In the October Monthly Update, which is exclusive to Chilmark Advisory Service (CAS) subscribers, we provided subscribers a deep dive into Cerner’s Healthe Intent strategy and what its implications are for both Cerner and more broadly, the healthcare industry. Each month, CAS subscribers  receive an update of our latest research findings on some of the most transformative trends in healthcare IT. This is all part of the CAS service, a service that provides a continuous feed of research findings and access to our analysts keeping CAS subscribers abreast of the rapid-fire changes in this market. Below are abstracts of the other two research notes we published in the October Monthly Update.

 With Readmission Penalties Looming, Can Care Get Coordinated?
CMS penalties for patient readmissions within 30 days of discharge went into effect October 1, posing a very real challenge that all hospitals must now address. Needless to say, better care coordination across various settings will be critical to cutting back on readmissions. Currently, patients are transferred from venue to venue with incomplete records, leaving providers to fill in the blanks in their care. Healthcare IT has long been promoted as a magic fix to this problem, but it will take more than technology to truly coordinate care, and different patient populations pose different technology needs. This is partially why our 2013 HIE Market Report will pay particular attention to what solutions vendors may be developing to ensure providers have complete patient data.

Clinical Analytics Gears Up for Second Wave
The second story continues to unwrap the analytics market. Though other sectors have used analytics to make business decisions for decades, all but the most innovative healthcare providers lagged behind under fee for service. With that reimbursement model on its way out, the second wave of healthcare providers are grappling to choose an analytics vendor, even as many work through the rocky early years of electronic health record adoption. These providers are in for a confusing procurement process, with a market awash in vendors claiming to offer a clinical analytics solutions. To say this market is getting heated is putting it mildly.

Today, national health insurer, Humana, announced that it has acquired Certify Data Systems (CDS). This marks the third HIE vendor (UHG acquired Axolotl & Aetna acquired Medicity) that has been acquired by a payer in the last couple of years. Not that surprising when one looks at how aggressively payers are moving into the accountable care arena and seeking to form tighter links with physicians in their network, particularly those in the ambulatory sector, where CDS has done particularly well.

A key part of CDS’s success in the market was through its partnership with Cerner where it provided the technology stack for connecting ambulatory practices. The Certify HealthLogix is a well architected platform that has seen strong adoption. While terms of the deal were not disclosed, it is our guess that Humana paid a pretty penny for CDS, likely all cash deal at about 6-8x estimated 2012 sales.

While it is good to see that CDS leadership will stay in place, at least for now – serial entrepreneurs, such as CDS founder Marc Willard, typically do not last too long in large corporate entities such as Humana- we do have some concerns with Humana’s ability to actually manage a software company. This is way outside their core competency and hopefully they know well enough to provide CDS the resources to scale but also the wisdom to let CDS call most of the shots.

We will be providing Chilmark Advisory Service (CAS) clients with a more detailed breakdown of this deal later in the week after we have had a chance to speak with some key contacts/stakeholders of this acquisition. This will be pushed to subscribers via an Alert.

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