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Posts Tagged ‘Stimulus Bill’

Yesterday, Dr. Blumenthal, head of the Office of the National Coordinator (ONC) who is tasked with the roll-out (setting policy) for all that HIT stimulus funding under the HITECH Act, launched his own Blog: Health IT Buzz.  With over 20 comments so far, this Blog has generated a ready following.  Now the question is: Can he/ONC maintain momentum and truly engage the HIT public at large?  A quick scan of the comments revealed not a single comment from an HIT vendor (though there were a few from systems integrators).

Good to see this type of outreach by ONC and do hope that this forum lends itself to a deeper engagement with all stakeholders in HIT, consumers included.

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congressIn the incestuous world of the healthcare sector, HHS is bringing together the usual suspects in HIT to discuss what exactly “meaningful use” means within the context of the ARRA HITECH Act.  The meeting will take place next week, April 28 & 29, in Washington DC.

Meaningful use is right up there with “certified EHR” as the real sticking points in the future distribution of the $19B to incent physicians to adopt HIT.  In that legislation, the Act provides guidance as to what meaningful use may consist of but it is only guidance.  To actually make all of this work, much clearer guidelines are required to set verification requirements for reimbursement to physicians of their investment and meaningful use of certified EHRs.

At this juncture guidance defines meaningful use as meeting following criteria:

1) Electronic Prescribing: This is a no-brainer as CMS has already put into place carrots today and sticks tomorrow to get physicians using eRx tools.  AllScripts recently reported a huge increase in eRx of over 30% in the most recent quarter. eRx is already being adopted, meaningful use definition here will be easy.

2) Quality Metrics Reporting: Physicians have been providing reports of various types regarding quality metrics for awhile now, so in this instance we are simply moving to an electronic form of reporting.  Where it gets tricky though is in defining what actually will be reported.  This meaningful use metric could go smoothly or really bog down.  Our guess is that the regulators will keep it simple and straight-forward at first to encourage adoption but ratchet-up reporting in future years.

3) Care Coordination: This will be the toughest to define for a whole host of reasons including: lack of infrastructure (“pipes”) to move records, types of data (“water”) as much of the data still can not be readily shared and data ownership.  Wouldn’t it be great to have a patient advocate on the agenda arguing that Care Coordination could be defined as a clinician providing digital records directly to the consumer to assist in coordinated care? Ah, but we digress.  Our prediction is that data sharing for care coordination will be limited to a couple of discrete data sets for now that are already flowing in many HIEs and RHIOS, labs and meds.  As with Quality Reporting, more data elements will be added over time as the pipes fall into place and the data becomes more liquid (interoperable).

Circling all the way back to the beginning though, we are quite disappointed at the agenda for the “Meaningful Use” meeting next week.  Rather than have a balanced mix of those within healthcare as well as “experts” from outside healthcare to assist in defining meaningful use, we have a collection of mostly well-meaning individuals, but individuals who in many respects have helped to create this HIT mess in the firstplace.

Should they really be asked to continue to define our HIT policies going forward or would it not be better to tap into the expertise of those from other sectors who really have no vested interest or ax to grind in healthcare?

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gemsHIMSS’09 had some highlights from various vendor briefings and conversations in the halls that are abstracted below.  By no means is this inclusive of all discussions, but reflects what are the gems I walked away with from this event and is certainly in contrast to the previous HIMSS post.

Overview:

HIMSS was well attended, though a number of exhibitors I talked to said visits were down but in so saying also commented that those they did meet with tended to be of “higher quality” (i.e., those who can sign a check).

The Stimulus Bill and how to capitalize on it was something that every EMR vendor was promoting, each with their own interpretation of “meaningful use” and how they, the vendor could assist the prospect in meeting meaningful use criteria.  Funny thing is, meaningful use has yet to be defined.

While all EMR vendors were pressuring buyers to place their orders early for demonstrating meaningful use, many CIOs and other hospital executives are concerned that the vendors will not have the staff available to deploy their solutions on site.  Vendors stated that they are preparing for this, but I’m not convinced. Also, there is the simple issue that of how does one get the best people on their particular project/deployment.  Indeed, that providers who can act quickly may be at a significant advantage to laggards, problem is, where do you find the money in this economy.

CIOs are also concerned as to how they will on-ramp affiliated physicians, e.g., what will it take to get smaller practices to adopt as Stimulus reimbursement may not be enough incentive.  Nothing new here.  The only way IT is adopted in any sector is if it either saves money or makes money, with preference to the latter.  EMR solutions have not had much success in clearly articulating the value, thus low adoption.

img_0141While the Microsoft booth was absolutely hopping during the show, most other large EMR vendors had booths far too large for the amount of attendees visiting them.  At some, it looked like the only people in the booth were bored sales people. Clearly there is something wrong with this picture for EMR vendors as one would have thought they would have been equally busy as prospects look to adopt and tap the Stimulus.  Instead, attendees appeared to be looking for solutions that will improve operations, regardless of Stimulus.  A big exception was AllScripts, they seemed to be busy each time I walked by.

Saw surprising little, truly innovative solutions on display.  Seems like the vendors have cut R&D as aggressively as their customers (hospitals) have cut CapEx spending, which according to investment firm Credit Suisse, is currently down 9.9% and is expected to drop 11.2% over the next six months.

HIT Vendor Briefings:

While I met with numerous vendors over the three and a half days of HIMSS, I paid particular attention to HIE/RHIO vendors as I see them as becoming a potentially important part of future consumer-centric healthcare for they are aggregating health data at the local and regional level which later may be served up into one of the Personal Health Clouds, e.g., Google Health, HealthVault or even Dossia.

InterSystems: Company’s strategy is to productize solutions after they see a critical mass of customers doing a particular activity with their product.  This strategy led to development of HealthShare, which is the platform being used at Rhode Island’s new RHIO and also for the Long Island RHIO.  If memory serves me correctly, this will also be used for the Brooklyn RHIO.

Kryptiq: Nine year old company targeting HIE market. Luis, their CEO, told me they are an “HIE-enabler”, whatever, still an HIE play to me.  Right now, they have about 33K physicians using their platform, one third using hosted, SaaS solution.  Company is focusing on expanding the suite of “care modules” for specific chronic diseases to facilitate care and automate PQRI quality reporting requirements for CMS reimbursement.

Medicity: Met with Kipp Lasseter, CEO and Robert Connely, SVP and former CEO of Novo Innovations (Medicity “merged” with Novo). Had a great conversation with these two who appear to be a good tag team stated that their merger is going well, particularly with cross-sell opportunities, which is not surprising as had predicted such just after merger announcement.

Robert gave example of one Medicity client where they layered Novo on top of and literally went live during the phone call while discussing with client project scope and time-frame (client was planning 2 weeks).  The big trend they are seeing is hospital CIOs & CFOs looking to use Medicity to facilitate care coordination upon discharge.  Big issue right now as payers are denying reimbursement(s) for readmissions that occur within 30d of discharge.

Allviant: Small spin-off from Medicity that is currently in beta with their product CarePass at the Delaware RHIO.  Can’t really say too much about what they are doing, best hint is to think a Mint.com type platform in healthcare to assist consumers in aggregating and managing their relationships with healthcare service providers.

MEDSEEK: Met with Rich Grehalva, SVP who gave me the usual analyst pitch with flipchart PowerPoints on what they are about and their platform.  Really not much more than a portal solution with physician-facing and consumer-facing portals.  Despite the relative simplicity of MEDSEEK’s offering, company is doing something right as they are now in 700 hospitals and are forecasting 30% growth for 2009. Not all is rosy, however, as Rich did say that a number of projects have been frozen recently as hospitals struggle with declines in CapEx.  This was a common refrain from many vendors, they got the win, but project on hold.

Microsoft’s Amalga: With Amalga, Microsoft is adding another acronym to the mix, as if we do not have enough already.  In this case it is UIS for Unified Intelligence System and on display at the Microsoft booth was the new Amalga UIS 2009. The reason for going to UIS was to distinguish Amalga from more traditional CIS (Clinical Information System) platforms and in that they are justified. Amalga is really a business intelligence (BI) solution that can be used not only for just clinical data (which Amalga/Azyxxi was originally developed for) but also billing and workflow analysis.  Was given a demo of how Amalga can be used to analyze reimbursements, identifying problem areas (e.g., claims refusal) that one can drill down into to discover specific workflow glitches and correct.

The Amalga UIS 2009 release had three new modules layered on top of base stack, Quality Measurements, Research Foundation and Medical Imaging. Each of these modules taps data that already exists within the hospital enterpise and presents it in a new fashion.  The imaging module was very cool as it rapidly aggregated data from multiple PACs systems and using MPI, presented it in a single patient record with thumbnails that could be tapped and enlarged.

Today, Amalga is being rolled out across 20 clients, most of them large as this is a high-powered system.  Amalga is also the basis for two RHIOs, one in DC and the other in Wisconsin.

From this humble analyst’s viewpoint, looks like Microsoft is more than willing to let the EMR vendors fight it out for market share while it develops platforms (Amalga and HealthVault) that pull data from those systems to deliver higher value.  Still early and hard to say how successful Microsoft will be, but at this point, do not see any other vendors stepping up to the plate in such an aggressive and comprehensive fashion.  Honestly, not even sure EMR vendors are aware that they are being out-flanked.

RelayHealth: Chatted with RelayHealth to get an update on their work with Microsoft’s HealthVault team.  RelayHealth is getting ready to launch a solution developed with HealthVault for a hospital to manage chronic care diabetes patients combining the transactional services of RelayHealth with backbone data repository services of HealthVault.  An announcement is forthcoming.

Similar to the Kryptiq example above, broad based solutions such as RelayHealth are being fine tuned to address specific chronic diseases. Expect to see more such developments in the future that go beyond just quality reporting or basic transactions to also charting consumer’s biometric data recorded at home, alerting, and tying in educational content for the consumer.

Also met briefly with Axolotl, who now serves 200 hospitals and is currently working with new RHIOs for Idaho, Nebraska and Utah. Their technology is built upon the IBM stack, a bit unusual as most today have built their solutions on the Microsoft stack.

mHealth:

Caretools: Met up with Tom Giannulli, doctor, founder and developer of the Caretools iChart EMR for the iPhone.  Tom gave me a nice little demo of this fairly complete EMR that can be purchased on the iPhone App Store for $139.  Additional modules, such as eRx can be added for an additional fee.  While iChart may not meet all the requirements of meaningful use for Stimulus reimbursement, hard to argue the price for something many solo practitioners will find easy to use and meeting most, if not all of their requirements.  Tom was sharing the booth with a service provider who was demonstrating iChart connected to a larger EMR, in this case Meditech, for care coordination.

A small example of the power of Apple’s AppStore for developers is its distribution capabilities. Tom developed Caretools on his own and put it up in the AppStore in July ’08.  Without any advertising to speak of, Caretools has sold over 1,000 apps in nine countries.  Not bad for a one man operation.

volateVoalte: HIMSS was the coming out party for the launch of Voalte who made their presence known by having all staffers wearing hot pink medical pants, you could pick them out of any crowd.  Voalte is looking to solve a relatively simple problem: aggregating all communications and platforms (pagers, cell phones etc.) that a care provider may use on to one single platform, the iPhone.  Spoke with the founder Trey Lauderdale who came up with this idea while visiting a hospital and seeing the myriad of communication devices hanging from a nurse’s waist and knew there had to be a better way.  Trey went out and found a top-notch iPhone app developer and together created the solution that was on display.  Based on the activity at their booth, looks like they hit a raw nerve.  Now I wonder, what will be their next act?

Other:

Met with Cisco’s new Healthcare Group leader, Dr. Kaveh Safavi.  While Cisco made a big deal of their telepresence offering at HIMSS – it did look very cool – was particularly intrigued by their use of information “in the network” to define what is critical healthcare information.  Basically, applying analytics to historical network traffic Cisco identifies patterns as to what information is important.  With this technology, Cisco can use a federated model for information aggregation and presentation without falling into the pitfall that plagues most, scalability. Cisco is currently applying this technology in the EU across 11 countries as part of Tiani SpirIT.  Maybe this will be successful, then again, may end up like Sun’s NHIN platform CONNECT, which seems to have struggled to gain any market acceptance.

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doctor-computerProf. David Blumenthal, the new head of ONC, makes some disturbing comments regarding the Stimulus Bill, HIT and HITECH Act  in his article in the New England Journal of Medicine (NEJM). The article is not completely off-base as he does a very good job of describing the basics of the HITECH Act, its intentions and some of the very real challenges that the feds face in actually executing on the language of the Act.  But there are a couple of areas where Blumenthal’s interpretation of the Act raises concerns.

The first pertains to HITECH Act language regarding extension of HIPAA compliance to Google and Microsoft where he states:

It extends the privacy and security regulations of the Health Insurance Portability and Accountability Act to health information vendors not previously covered by the law, including businesses such as Google and Microsoft, when they partner with health care providers to create personal health records for patients.

At this time, neither Google or Microsoft provide the PHR to a hospital who then provides it to their customers.  Rather, the current model that both Google and Microsoft are using is one that supports portability of the consumer’s health record allowing the consumer to invoke an export of their records from the hospital to one of these Personal Health Systems (PHS), of course provided the hospital establishes a link to a PHS.  Our interpretation is that in this scenario, HIPAA does not extend to Google or Microsoft, as the consumer drives the transaction of data flow.  Hopefully, others in HHS will convince Blumenthal of this as well as otherwise, such HIPAA extensions may thwart portability and subsequently consumer engagement and ultimately control of their records.

The second Blumenthal comment that caught us off-guard pertained to the term “certified EHR” where he states:

ONCHIT currently contracts with a private organization, the Certification Commission for Health Information Technology, to certify EHRs as having the basic capabilities the federal government believes they need. But many certified EHRs are neither user-friendly nor designed to meet HITECH’s ambitious goal of improving quality and efficiency in the health care system. Tightening the certification process is a critical early challenge for ONCHIT.

While we certainly agree with Blumenthal that defining the critical terms of “certified EHR” and “meaningful use” is paramount and must be done quickly, yet judiciously, his views on certified EHR, as defined above are downright frightening for two reasons.

First, he condones the work of CCHIT as certifying the minimum capabilities for EHR.   Minimum capabilities?  If anything, those minimum capabilities are already restrictive in defining use of specific standards and models that do not provide the flexibility for true innovation.

What is even worse though, is that Blumenthal appears to want to extend certification requirements to “user-friendly” and defining how “quality and efficiency” will be embedded within an EHR.

User-friendly? There is simply no way you can certify such – end of story.  Let the market define what is user-friendly by what a doctor or hospital chooses to purchase.

Quality? Maybe, just maybe you can ask for the simplest of quality metrics to be recorded within the EHR, but highly doubt that is something you want to certify.  Would it not be better to simply verify quality actions supported as part of meaningful use reimbursement?

Efficiency? That is certainly not something you can certify and falls in the realm of implementation (process mapping/workflow) and training.  You can’t certify that!

Suggesting that we tighten the certification process is heading in the wrong direction.  Instead, we need to actually relax the certification process to encourage innovation in the HIT market allowing developers to create solutions that will truly provide value to their users while concurrently meeting the broader objectives of delivering better care and better outcomes.  Creating light certification criteria and focusing more on what outcomes we wish to see occur as a result of broad HIT adoption is where Blumenthal and his staff need to focus their energies.  To do otherwise will lead to a stifling of innovation, stalled HIT adoption among physicians and ultimately a poor investment of the tax payers’ dollars, which we can ill-afford.

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stimulus_bill_cartoonWith the HITECH Act passed and the Dept. of HHS feverishly working to draft a clear definition of what “meaningful use” and “certified EHR” actually mean for reimbursement purposes, a far bigger question looms: Is the promise of $19B dollars dedicated to reimbursing those hospitals and physicians who adopt and meaningfully use an EHR enough?

Let’s take a quick look at the numbers. (For sake of simplicity, this post will look at physician reimbursement.)

For adopting and meaningfully using a certified EHR a physician may be reimbursed between $44K (Medicare) to $65K (Medicaid).  This will not be a lump sum payment, but is parsed out over 5 years as the physician continues to demonstrate meaningful use of an EHR.  Important points here, the physician pays up-front costs (sunk capital) and is reimbursed over time if he/she can demonstrate meaningful use and the solution adopted is “certified.”

As the latest Wal-Mart, Dell and eClincalWorks partnership shows, vendors looking to sell into this market opportunity are pricing their solutions at or near reimbursement levels, e.g., $25K year one and $4-6.5K for follow-on years in the Wal-Mart offering.

According to athenahealth CEO, Jonathan Bush, their customer, a physician, grosses $400k/yr.

Virtually every report we have seen and physicians we have spoken to who use an EMR/EHR today, readily admit that the upfont pain of implementation, training and becoming adept at using the solution was significant.  The significance is most often felt in an average 30% productivity hit for the first 6 months that is compensated through longer hours or seeing less patients.  The proactice does not return to pre-implementation state of operation till a year after go-live.

Combining the above and keeping calculations simple: (Note: we’ll assume productivity returns to previous state within first year and use a sliding scale for productivity hit in year one of,  first 6 months 30% hit, second 3 months, 20% and and last 3 months 10%)

Year One Cost: ($25K) for EHR purchase + (0.30($400K/2) + .2($400K/4) + .1($400K/4)) = ($115K)

Year One Reimbursement: $25K (more generous Medicaid)

Total Cost to Physician: ($115K) + $25K = ($90K)

After Year One, the physician is already down $90K.  Assuming practice returns to normal operations/productivity in years 2-5 and the physician is successful in getting full reimbursement from Medicaid, at the end of five years, that physician is still down $50K. Depending on how much business the physician derives from Medicaid, it will take many more years of avoiding the “stick,” the sliding decrease of Medicaid payments, before a physician recoups this initial, year one loss.

Bottom-line: Adopting an EHR to tap that $19B dollar Stimulus package does not make economic sense for the average physician.

Solving the Physician Adoption Problem

To drive EHR adoption we will need three things:

1) Low “meaningful use” thresholds to ease the pain that a physician has to go through to demonstrate that indeed they are meaningfully using an EHR.  As a starting pointing, let’s target electronic exchange of labs, meds and vitals (including allergies) for care coordination combined with eRx.  That should address care coordination, quality and eRx outlined in HITECH Act.

2) Very simple certification process for HIT. Do not burden the system with complex certification processes, ala CCHIT.  Don’t get me wrong, CCHIT has done some good things in the past, but to apply CCHIT certification for “certified EHR” will create far too complex and onerous a process for truly new and innovation approaches to provide solutions that assist physicians in meeting meaningful use criteria.

3) Leverage the consumer to create an additional forcing function to drive physician adoption as reimbursement under the HITECH Act is insufficient.  Getting the consumer engaged may prove challenging, but engage we must for at the end of the day, the value in a physician adopting and using an EHR must return to the end consumer/taxpayer as they are the one footing the bill.

Over the next few years we, as a nation will be extremely challenged to drive true healthcare reform, healthcare reform as President Obama stated that is “evidence-based.”  A common refrain in the manufacturing industry is:  “You can not improve what you do not measure.”  Today, our healthcare system has absolutely no systematic way of measuring its performance.  It truly is a travesty.  Healthcare IT can, if effectively deployed and used, can play a critical role in collecting those measurements that we can begin to use to conduct true, evidence-based reform.

We need to articulate to the Joe the Plumbers of this country, what HIT adoption and use means to them.  To date, the healthcare industry and government has done an extremely poor job of helping Joe understand that value.  Without his/her support, no amount of money thrown at this problem will suffice.

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HITECH Act & EMR Sales

Since our series of posts on the Stimulus Bill (ARRA) and in particular the HITECH Act, Chilmark Research has been receiving a lot of questions from the market as to how we see this funding affecting EMR sales.  Following is an example of our response to these inquiries.

Mike, thanks for the kind words regarding analysis of the Stimulus Bill and in particular the HITECH Act.  Now as to your ques:

As we wrote earlier this week on the reimbursement schedules, the timelines are pretty tight, esp under Medicare reimbursement.  There is a $3K bonus for those who demonstrate meaningful use in 2011 or 2012, so some upside to adopt earlier than later.  Also, zero funding, under Medicare for those who show meaningful use after 2015, and in fact penalties start kicking in.  Medicaid, which has a more complex funding schedule provides funding/reimbursement payments until 2021.

Thus, two key points:

1) If a physician is looking to Medicare for reimbursement, we do expect a more rapid run-up in EMR sales if the value to adopt exceeds the pain to adopt.  Still a lot of fugly EMR solutions in the market.  Just because they have CCHIT certification, doesn’t mean they are easy to use and the pain to adopt may not be worth the payback.

2) If Medicaid is the funding source, a more measured and slower adoption of EMR is anticipated.  The challenge under Medicaid is that reimbursement schedules are set upon what the HHS Sec. determines as fair market price for software and services.  Still unsure where that will fall and physicians may hold back till there is some clear precedent set.

Let’s not forget the big caveat:

We still do not have firm definitions for “meaningful” and “certified” leaving a lot of uncertainty in the market.  We are cautioning physicians to go ahead and entertain conversations with EMR vendors, but do not make any firm purchase decisions, if we wish to receive reimbursement through one of these mechanisms until it is absolutely clear how HHS/ONC plans to define those two critical terms.

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Yesterday’s post and table provided the physician reimbursement schedule under Medicare.  And astute reader contacted us to inform us that there is another reimbursement schedule that a physician (or hospital) could tap into under Medicaid.

Medicaid reimbursement will be managed at the State level, which will institute the guidelines provided by HHS.  Much of the basic qualifications are similar, e.g., meaningful use of certified EHR, but other aspects diverge significantly.

The high points:

  • Significantly more complicated process to receive reimbursement.
  • Total reimbursement amounts up to $65,000/physician over five years.  First year costs applied to purchase, install and training.  Follow-on years, reimbursement for operations and maintenance.
  • Reimbursement is for a percentage of total expenditures by physician for certified EHR.
  • Extended time horizon, payments through 2021.
  • Physician must demonstrate that a certain percentage of patients (20-30%) are covered by Medicaid.

Table below provides physician payment schedule under Medicaid.  For more info, look to Division B of the American Reinvestment and Recovery Act, beginning on page 490.

hitech3

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