HIStalk Practice Interviews Glen Tullman

Glen Tullman is CEO of Allscripts.

I know you’re about to release the financials for the first time since your merger, including like for like numbers for Allscripts and Misys. What will the numbers indicate about the success of the merger?

As you know, we can’t really talk about numbers. But I can talk a little bit about the merger.

There have been asked a lot of questions about, one year later, how does the merger look. Of course, the first place to go is the traditional metrics. We said that when we merged the companies we would deliver cost synergies. Those cost synergies would not just be by cutting people. In fact, today we have more people than we had a year ago. In the entire transaction, we lost very few people, only where there was absolute duplication. You don’t need two general counsels, for example; but net-net, we exceeded the annualized cost savings, so that’s metric one.

The second metric is how successful were you in getting the revenue synergies? The revenue synergies are really explained in two respects. One is what you saw in the first six months of the year with 30% year-over-year growth. From that perspective, it’s very aggressive sales growth, especially in electronic records.

Number two, we were able to do just what we said we’d do, and which was so critical to the success of the merger — that was to sell into the Misys space. The beauty of that was that there was an outside survey done that showed over 90% of the Misys clients indicating they would be upgrading their product. Now that said, we don’t take that for granted in any way. We work very hard on customer satisfaction; on making sure that customers understand what the products do, and understand how bright their future is.

Number three, what about innovation? Sometimes companies, when you do a big merger, they get distracted and they start focusing inward. Everything comes to a halt. People don’t know how to work with each other. What you saw at Allscripts is within the year that we’ve had been together as a one company we released more new versions, more new products than we have, ever, in the history of the company.

So things like having our electronic health record functionality available, not only on iPhones, but on the BlackBerry, on Windows Mobile, and looking beyond to the new iPad. We’re introducing a kiosk, which is the most sophisticated in the market; a brand new portal and new versions of our professional product. Last but not least, very substantial upgrades to the MyWay product, which is geared toward the smaller physician groups. So from that perspective, it was very successful.

Some of the innovation also came in areas like revenue cycle management, like what we have with Intuit that allows us to provide payer information to 30 million Quicken users. We’ve made it much easier to pay your bills and to know what you’re being billed for if you’re a Quicken user now. Then, something called mPay, which is a great advantage to physicians because those physicians now can get payment assurance.

The way a lot of people, especially our investors, look at it is what happened to the stock price. When we did this, there was a lot of uncertainty. People said, “Can they execute? Can they pull it off? Are they able to really deliver on it?” I think the stock price largely tells that story because when the deal was consummated, the stock price was roughly $5. Today, the stock price sits at roughly $20, so I think the market has voted and said this was a very successful merger.

All of that, I think, speaks very well of the success of the merger, one year later.

You touched on revenues. I know you can’t comment specifically, but of the revenues that are coming in, are the bulk of them coming from recurring revenue or sales to existing client base, or are you actually seeing increases in initial license fees that represent top line growth?

Let me talk first about the industry, because as an industry, we are starting to see the benefits of ARRA, the American Recovery and Reinvestment Act. We have said all along that there would be a nice steady growth each time we passed a milestone, starting with when ARRA was passed. Another one was when people started to understand what it meant. From there we went to Meaningful Use definition, and then Meaningful Use came out.

Each one of those picks up the level of interest in electronic health records and the level of demand and purchases of them. What I said all along is the next big pick up is going to be January 2011, when the first physician in the local area gets his or her check. What they’re going to say is, “Oh my gosh, it’s real.” A portion of the doctors are still saying, “I’ll believe it when I see it. When I see the first doctors start getting checks, that’s when I’m going to buy.”

Now that said, you asked specifically about our sales. What I would tell you is that Allscripts is, on the one hand, very blessed in that almost 67% of our revenues are recurring. That’s great until you look at growth rate because it makes it harder to get the growth rate up, so we talk a lot about the growth rate of new sales. If you’ve been following Allscripts, you’ll have seen a lot of the new sales activity outside the Misys space. We’re in a very fortunate position in part because healthcare needs us and because all the new physicians coming out that want an electronic health record.

Some young physicians say they won’t go to a practice without one. Then you put on top of that the stimulus, which effectively, in year one, gives somebody $18,000 for an electronic health record that probably costs just over half of that and you’ve got the seeds for very rapid growth. That is consistent in saying that we are seeing new demand, as well as continued demand from our existing clients to upgrade, to buy more training, to get ready for Meaningful Use.

You mentioned MyWay. It seems almost as if Allscripts really has two businesses, one that’s focused on the selling the inexpensive MyWay option to small practices through resellers and the other focused on selling to the large, integrated delivery networks and hospitals that subsidize the small practices and offering them the Allscripts EHR products. Explain the strategy and tell me how you avoid channel conflicts.

Channel conflicts are really a creation of salespeople who say, “How do I get paid for my customer?” That’s the only channel conflict that really exists. So what we’ve tried to do is create an end goal where our people get paid for getting clients to sign up. Consequently, maybe that means we pay a little more because in some cases, yes, we pay the channel and we pay our sales rep. When you’re willing to do that and eliminate any conflict, and make sure that instead of them fighting over whose sale it was, they’re fighting over the next client from a competitor. I think from that standpoint, some people might look at our business and say, “Gosh, you could save some money.” But we’d rather pay our sales rep, we’d rather compensate our channel partners and create a win/win.

We’ve worked very closely with the best channel partners in the business. When others like eClinical went out and said, “We’re going to go and get Walmart,” anybody in the industry knew that physicians aren’t going to go drive over to Walmart and write a check for $25,000 to get a new electronic medical record, take it back, and think they can get it up and running themselves. What happened is everybody looked at that and said, “Hey, great PR announcement.”

What we did instead was we went to people who’ve spent their lives working with physicians, building trust with them. People like Henry Schein, Cardinal Health, SYNNEX, then, of course, more recently, Dell Perot — all of whom built very solid relationships. Those are all distributors of our product. They come into the office and we give them not just a product, but years of a relationship.

So our sales strategy is yes, we sell direct and we have about 250 sales reps who do that. Next, we work closely, as you mentioned, with our largest clients, people like North Shore-Long Island Jewish. North Shore-Long Island bought 1,200 licenses for their employed physicians, then another 7,000 for the community and is helping us market those to their affiliated physicians.

This direct sales approach, working closely with our integrated delivery network and academic partners like North Shore-Long Island Jewish or on the West Coast people like Sharp, who we’re talking with; and others.

Then the third prong is the distributors that we already talked about, the Henry Scheins of the world. We also have distributors who kind of complement Henry Schein. A selected group of very high-quality distributors who are located around the country, who are just very very good, people like Etransmedia.

Last but not least, we have a big direct marketing operation.

It’s a five-pronged approach, and fortunately, it’s working very successfully.

What is Allscripts’ strategy to ensure it is well promoted by the RECs and how has the whole REC situation impacted your staffing requirements?

We think RECs, Regional Extension Centers, are going to be very helpful. The real key of the Regional Extension Centers is that they’re to become resources for providers to help accelerate adoption. What you really want to do is be one of the two or three products that they choose to promote. We’re working very hard to ensure that we one of the ones chosen with those parties. I think the advantage that we have there, and the reason why a Regional Extension Center would want to work with Allscripts, is because if the goal is getting people to install an electronic health record, then you want the fastest route to do that.

Remember how RECs gets paid. They get paid $5,000 for signing someone up, they get $5,000 once they go through the training, and they get paid $5,000 once there’s Meaningful Use. So if you’re an REC, your goal is how do I get there fastest? The last thing you want to do is go to a practice and say, “Now you have to either replace or put in a new practice management system.” That just slows you down.

With our system, given that 1/3 of all the physicians in the country already use some piece of Allscripts software, given the fact that a lot of those are practice management, our ability to work with an REC and quickly layer on top of that practice management a fully functional electronic health record, either a MyWay product or our professional product. That’s the fastest route for an REC to be successful. They are going to get measured and they do need to be successful. We think we have a real advantage to helping an REC become successful.

My understanding is that both the Epic and eClinicalWorks software packages allow users to exchange information between one another without any extra software, like an Allscripts Connect-like package. Is the software sharing approach something that Allscripts currently does or is planning to do?

You can answer that in a few ways. Epic is the least-connected system of any out there. I mean, we’re working today with Cerner, we’re working with Siemens, with Eclipsys. We’re working with our competitors, and in cases, we’re connected to eClin and Quality Systems.

The only people in the market who are fighting connectivity are Epic, and their strategy is to say, “Sure, you’re connected as long as everybody’s on one system and it’s the same version.” That’s not how healthcare in America is. Yeah, you can go to a virtual monopoly like Kaiser and force everyone to use it. But you know how healthcare is. Healthcare is diverse and I don’t think we’re ever going to a point where we are going to mandate every physician, “You have to use a certain system. You have to use Epic.” That strategy, that model, is a failed model.

Epic is not only against connectivity, but they’re anti-innovation. From that standpoint, they’re kind of exactly the opposite of the connectivity model that the rest of the industry is working toward.

But, as you said, one in three physicians in the country have some sort of connectivity to Allscripts. So, it seems intuitive that you’d want to make it easier to facilitate exchange of information.

I think we aren’t ready to make an announcement. But I think in a very short time, all our users will be able to be connected and have the ability to exchange information, and that’s where we’re headed. We’ve said that before, and those products are today being tested, which gives people the ability to refer to anyone on our network, and to exchange, easily, information.

Where it gets a little more complicated is where you do have multiple systems. There we have a solution as well, but what a lot of people try to do is simplify the process. The way they talk is they send a flat file, which is essentially sending somebody a picture. But what we’re working toward is multiple systems exchanging information. This is kind of a hard term, but it’s called semantic interoperability.

In an eClinical system, they may call sinusitis one thing and in our system we call it something else. Semantic interoperability will match those two names and know you’re talking about the same thing, and that’s what’s critical because just sending somebody a flat file and saying, “See, we’re exchanging information,” frankly, doesn’t get it done for things like comparative effectiveness and all of the value added stuff we want to do in the future.

I think you can look at a future where all of Allscripts clients are connected. That is where this business is moving. It went from practice management in wave one. Electronic health records are wave two. Wave three is about connectivity and information. It’s about providing physicians with the connectivity and information on those devices, those electronic health records, that they can use to make better decisions, both for higher quality care, and also for more cost-effective care.

We’re on wave two of a three-wave process. That’s why a lot of our R&D and a lot of our work is about information and connectivity as well.

As you know, GE just announced the acquisition of a new EMR vendor. What are your thoughts on that move, and will the industry be seeing more consolidation in the coming months?

I think the industry is going to see substantial consolidation. No industry in this country has more than five real competitors. You can’t support the level of innovation, the R&D, and the like that you need in technology without making a very substantial investment.

You’ve seen many of the larger companies make acquisitions, but they all run into the same problems. This is like hand-to-hand combat. What we do in Allscripts is we go physician to physician and work with those physicians and that’s not the model that a lot of many of the larger hospital companies have. They don’t get the same level of engagement that we have received. They’re top-down models, and in those models, somebody’s going to tell the physician what to do.

We have a very different model. Our model is about empowering physicians. GE is a great company. All of our competitors are the larger competitors in the market. They’re good companies and they will get some of the business, and we hope to get a little more than our fair share of the business. We are focused on our clients and empowering physicians. That’s our methodology; it’s not top-down.

I understand Allscripts has recently added a number of new members to its management team, including several from outside of healthcare IT. What’s your hiring strategy in terms of attracting talent from outside of healthcare?

I’d say a few things. One, if you look around the rest of the commercial and industrial sector, you’ll see a lot of innovation that you don’t see in healthcare. When we released our kiosk, people were amazed and they said, “Look, this is incredible innovation.” Then they went and they used an ATM at their bank and then they went to the airline and they checked in on an ATM. Then they went to their hotel, they used an ATM there. But in healthcare, that ATM was called innovation.

We think there’s a lot you can learn from bringing in expertise from other industries. A good part of leadership and management is the same, independent of industry. If you’re looking at someone to install software systems, you can just as easily look at Oracle or Computer Associates or a whole range of other companies who do that very well. You don’t have to strictly say, “Hey, let’s do it in healthcare.” But our strategy is a combination of people who bring healthcare experience and people who bring experience outside the industry, and it’s very relevant.

I think somebody recently said that we’re developing an industrial-strength management team and it’s one of the first in the industry. I think our strategy has been about building on success. We’re fortunate to have some very, very talented people at the company. But I think to supplement those, to build on our strengths, we’ve gone out and recruited some folks who can help us go to the next stage, because remember what’s coming. We’re taking a $4 billion industry and we’re injecting $40 billion. That’s 10x growth. When you do that, you want to make sure that you balance the talent you have with new talent. If you look at our COO, Eileen McPartland, she spent time with Gartner, she helped grow revenues at SAP from $100 million to a billion, then she went to Oracle.

Somebody like that coming in can take our culture, which is very physician-focused and client-focused, and then put process behind that as you grow, as you add hundreds of people, that understand process. I do want somebody in there that knows how to grow.

John Zimmerman, who heads Solutions Management, he’s a great blend because he spent 12 years at IBM, but then he spent 12 years at Siemens, all focused on solutions management. Richard Sills came to us from Computer Associates, where he managed 2,500 deployment people. If you’re going to deploy a lot of systems, you want to make sure you have people who’ve been through it before.

We have strength in the team, and ultimately, that’s going to result in something very simple: better client satisfaction and better delivery for our customers. That’s what it’s about.

What effect do you think healthcare reform will have on your business?

The best news about healthcare reform is that it’s done. What I mean by that is that our “healthcare reform” was ARRA. That provided the funding to allow us to make fundamental change. You know, you can’t transform healthcare without the information that you get from electronic health records. That was what President Obama clearly understood. But he also understood that just having the information wasn’t going to be enough unless you address the most vexing problem that we’ve had as a country, covering 35 or 40 million of our citizens.

What also concerned so many people were pre-existing conditions that an insurance company couldn’t exclude you because you had diabetes or you had some other ailment. So ARRA gave us the funding we needed, but without healthcare reform passing, there was a lot of uncertainty. Markets, especially growing markets, hate uncertainty. Now that it’s passed, everybody understands that we have healthcare reform and we hope to approach it intelligently and in a manner that is non-partisan.

Our role in that now gets easier because people say we have health reform and now we can go ahead and continue on our strategy of implementing electronic health records.

So it eliminates the diversion, perhaps?

It eliminates, exactly, distraction and diversion.

What other trends are we going to see in the industry in the next 12-18 months?

You know it’s funny, people have talked about Software as a Service, but when people say physicians want Software as a Service, I always kind of laugh. People talk a lot about technology, but physicians don’t. Physicians talk about getting their job done.

It’s kind of when we talk about phones. You and I don’t say, “Hey, does your phone company’s switching network work well?” All we want to know is how’s the reception from AT&T or Verizon, and, what kind of handset you have. Similarly with EHR, all physicians really want is to be shown a system that’s easy to install, easy to use, and easy to pay for.

We don’t really care what the technology is. If they want client/server, fine. If they want hosted, fine. If they want Software as a Service, fine. But what they really want to know is how much does it cost a month? How easy is it to install? What kind of support do I get? Can I get the Meaningful Use dollars? All those things, the answer with Allscripts is yes.

It’s not about technology because look at Epic using 25-year-old technology. If it was just about technology, they wouldn’t even be in the game, and they’re a very substantial player. It’s about who can make it easy to use. Who can make it easy to install.

I’ve given our folks the challenge of saying make this as easy to use as the video games that our kids have. You don’t need an instruction manual with those games. You just use it. That’s how we have to be.

I think another big trend is going to be health systems like UMass, like North Shore-Long Island Jewish, and others who are going to help the smaller physician groups get connected and adopt electronic health records. That’s clearly a big trend. We’re talking with a lot health systems.

Anything else you’d like to add?

I think the one other thing I’d say is that in some cases today, people are still making decisions based on features. I think it’s useful for people to start to say, “Which companies are going to be around three years from now, five years from now? Which companies are investing in R&D?”

There are a lot of smaller companies out there. You know, I’ve started enough small companies because I love small companies, but that said, right now the cost of playing is substantial. We’re spending $70 million this past year on R&D and that number’s going up. If you think about it, when you buy a system today, what are you going to say? Well, I want it to work on my iPhone because I don’t want to carry a separate device, but then that’s only a third of your physicians. And then you are going to say I want it to work on my BlackBerry, others will I want it to work on my Windows Mobile. Now we have people who need to get it to work on Droid.

For each one of those, to keep it up, to test it, to get it up and going costs a few hundred thousand dollars. So now you say, “Well what about portals? Would I want to be connected to HealthVault? I want to be connected to Google Health. I want to be connected to work with all these medical devices.” Now, the iPad comes out. Well, is this going to work on the iPad, right? When you start to look at that you say, “How are we, as a company, going to do all those things? How’s it going to connect?”

We have efforts going on to work with Cerner, to work with Eclipsys. How do you do all that and still meet commitments? I think it’s useful for people to start to say, “Look, one of the three criteria is this is a partnership that’s probably 5-10 years and is this is a company that’s going to be here; a company that’s investing in their future?” So I’d ask questions like what’s the management team like; what’s the size? Are they investing a lot in R&D because what I fear is a lot of people are going to buy systems from companies that won’t be around three years from now. Then all that money is going to be wasted and all the time and effort is going to be wasted.

I’d say a similar thing for people about certification. There’s a comprehensive certification and then there’s a lite certification. People who spend a lot of money trying to get a lite certification aren’t going to qualify, not only for the stimulus dollars, but they aren’t going to qualify for the increasing popular pay-for-performance and pay-for-value dollars that the industry’s going to provide. So if you’re going to do it, I’d suggest to people they look doing it right.

Those are, I think, two of the big areas to focus on when you select a vendor. Make sure that you check out whether they’re going to be around; make sure because remember, certification changes. It’s not just about getting certified Year One because that hurdle keeps getting higher. So we’re looking at making changes that you’re going to have to do 24 and 36 months from now.

News 4/6/10

I did not buy one of the estimated 300,000 iPads that Apple sold over the weekend. It’s not that I wouldn’t like one, even if I had a spare $500+ to spend. Mostly I hate waiting in lines and can’t imagine wanting anything that badly. Plus, why not wait until there are more cool apps to become available for download? And for the 3G version. And for the price to drop when Apple comes out with the next generation unit. Why not let everyone else find those little product imperfections that synonymous with version 1.0 of just about anything? Then again, if anyone has a spare they don’t need, feel free to send it my way.

Meanwhile, a few buyers are already expressing discontent with their new iPads due to Wi-Fi connectivity issues. Some users report seeing solid Wi-Fi reception on their iPhones and laptops, but little or no reception for iPads in the same location. Bet we’ll here more on this issue.

Nuance is betting on the iPad’s success, announcing that Dragon Dictation is available for free at the Apple App Store. It supports dictation and sending e-mails by voice.

Hayes Management Consulting announces its assistance services for ARRA-funded regional extension centers.

In case you missed it, over the weekend we posted an interview with  Jeffery Daigrepont, SVP at Coker Group. He shared a number of great insights on HIT and the ambulatory EHR world in particular, and raised some interesting concern about RECs:

The other thing that I’m concerned about is whether or not there’s opportunity for conflict of interest. Let’s say Vendor A has a larger margin and is willing to share more in that margin or give up portions of the services that would ordinarily be done by the vendor, or through other strategic relationships — so hey, we’ll tilt business your way to the REC. Does that then induce more referrals or more friendliness from the Regional Extension Center to that particular vendor that wants to share more of their revenue, versus ones that might price their services a lot leaner and won’t have as much margin to share with these folks?

Regular use of IT systems, including EHRs, e-prescribing, and the Internet, results in only a modest increase in physicians’ knowledge of drug costs. A study of primary care physicians in Hawaii find that less than 20% of IT user knew drug costs when prescribing and less than 10% knew formularies and copayment amounts.

Capital Region Orthopaedics (NY) selects Allscripts EHR and PM solution for its 27 physician practice. The six-location practice will also deploy patient kiosks for check-in and Allscripts Remote for physician smartphone access.

I am excited to report that our number of monthly visitors, as well as our e-mail update subscribers continues to grow each month. I suppose my years in sales have made me hung up on watching “the numbers,” but really it’s nice to know that I am not the only one reading what I write. Thank you sponsors, for showing HIStalk Practice the love. And if you are reading this but not yet getting email updates, take a second to sign up (top right corner of the page.)

VersaSuite throws their guarantee hat into the EHR ring, saying its EHR software will meet ARRA’s Final Rule Certification of Meaningful Use. In fact, the company’s sales and marketing director is quoted as saying, “We are announcing this guarantee to give Doctors the comfort in knowing that they can purchase VersaSuite and will qualify for stimulus funding.” That’s a pretty definitive statement, even though the fine print says doctors must use the software “properly.”  Do physicians understand how meaningless these guarantees really are?

Speaking of Meaningful Use, a group of 37 senators ask HHS Secretary Sebelius to consider more flexibility in the meeting deadlines for a few of the MU guidelines. In addition to deferring some of the HIT goals, the senators want to ensure that outpatient physicians practicing adjacent to hospitals are eligible for incentives.

E-mail Inga.

HIStalk Practice Interviews Jeffery Daigrepont

Jeffery Daigrepont is senior vice president of Coker Goup.

Give me some background on Coker Group, as well as your background.

We’re very much a traditional consulting firm. We have two segments. One is more operations in nature, where it deals with a lot of strategy work for hospitals and physician practices. Then we have a technology division, which I head up, which is strictly focused on IT strategies.

Where we’re a little bit unique is we do not have any financial ties with any vendor. We’re 100% non-biased and we work with a lot of folks, largely on the procurement, but also implementation. Believe it or not, about 30% of our projects are removing failed EHR systems, or going back in and reinvigorating EHR systems. That’s kind of it in a nutshell.

How long have you been with the company?

I’ve been with them ten years.

How do you see healthcare reform and ARRA complimenting one another? Or, do you think they actually conflict with one another?

I believe most doctors see reform — at least in the way it was passed recently — as a negative thing, with ARRA already being passed. I believe in order to survive they’re going to have to build better mousetraps, which means that to offset a lot of the reductions or the need to be expected to see more patients that’s now going to be covered, doctors are going to have to become more efficient if they’re going to survive.

Obviously, for those of us in the industry, it’s probably going to help us because we would be available to assist those and become more efficient. While some doctors see reform as negative, I also think now that it’s becoming passed, there’s a little bit of a sigh of relief. I’m not sure, but I’m wondering if now people will start moving on and making decisions. I think for a long period of time people were kind of putting major decisions off waiting to see exactly what it was going to look like and how they were going to be affected by it.

So are you seeing an uptick in practices moving forward with adoption?

I will say that when ARRA first came out, there was a lot of uptick in being intrigued and renewed interest. The market was kind of reinvigorated, so conferences saw an increase in attendance. I saw a huge uptick in doing interviews, speaking, presenting. A lot more people were coming to attend lectures on vendor selection and things like that. The market was upticked, but what I didn’t see a spike — I didn’t necessarily see a spike in the actual execution of contracts. There was a lot of interest whirling, but I think everybody was putting off the actual signing of the contracts.

Now, what was interesting; this week alone, I’ve seen a pretty considerable increase in past clients that were either on the fence or waiting to do something  that said, “OK, we’re ready to begin thinking real serious about this, and ready to start moving forward.” I don’t know what that percentage is. It may just be a fluke, but I do think many people have delayed major decisions until they saw exactly what was going to happen.

What impact do you think the RECs will have on the industry?

That’s a good question. First off, they have to be financially sustainable. Really, the only value that I see, at least on the surface, is to assist with implementation. So on one hand, that’s a pretty good source of revenue for the vendor. The vendor has to decide how much of that they really want to share with the Regional Extension Center, and whether or not there is enough room.

Then, once you do the implementation, what other tricks do you have? I mean, the vendors at least have recurring revenue for annual maintenance and support, and whatnot, so they can be sustainable. We do implementation and our clients are like, “How soon can you get here? How soon can you get it done?” They do not want people camping out on their payroll for an indefinite amount of time.

The other thing that I’m concerned about is whether or not there’s opportunity for conflict of interest. Let’s say Vendor A has a larger margin and is willing to share more in that margin or give up portions of the services that would ordinarily be done by the vendor, or through other strategic relationships — so hey, we’ll tilt business your way to the REC. Does that then induce more referrals or more friendliness from the Regional Extension Center to that particular vendor that wants to share more of their revenue, versus ones that might price their services a lot leaner and won’t have as much margin to share with these folks?

Then you also have the question of subject matter expertise, as to how deep will the vendor go? Because at the end of the day, the vendor’s name and credibility will be on the line. I know from doing a lot of project management and implementation work, there’s always a fine line between “I recommended this vendor,” and then I show up and do implementation services. If you screw up the implementation services, you can easily get upside down with both the vendor and the health system. Then who’s accountable?

One of the things you see vendors having to do all the time is go back in and redo stuff because, “Hey, I got bad advice. The trainer was a bonehead. This was just a total screw up.” The vendor has the value of the long-term relationship, so they’ll usually suck it up and go back in there and redo it. If one of these Regional Extension employees go in and they muck it up, who covers the note for them to come back in and do it a second time? I don’t know, contractually, who’s made accountable either.

I think the best model that I would think that could play out — and I don’t know how deep RECs would want to go, but every project has vendor-side responsibility and client side responsibilities. I think one of the big areas of need right now is client-side responsibilities, because they don’t have good project managers/leaders. So, the Regional Extension Center could play the role of the advocate for the clients, versus playing the role of the vendor. They’re going to have to decide if they’re going to be the client’s advocate, or they’re going to be the vendor’s go-to resource for delivering the services. You really can’t be both.

Obviously, because the RECs can’t be experts at every last software, they’re going to narrow down their preferred vendor list. What do you think is going to happen to those companies that don’t make that short list?

That’s what I was saying. I think if you’re forced to create a business model where you have to be financially sustainable, then human nature’s going to dictate that those Regional Extension Centers’ preferred vendors are likely going to be those that have the most opportunity.

I’ll give you a real good example. A lot of the little vendors, Web-based ASP vendors, are very light and nimble. They’ve got their implementation down to a couple days and they’re usually attracting physicians that really don’t want a lot of heavy implementation. Just keep it short and sweet. A lot of tools built, baked into the product so the product can self-customize and whatnot. When one of our clients goes that route, and we’re perfectly OK with it, there’s less opportunity for us to provide additional services.

Whereas, if they buy a NextGen, an Allscripts, if they buy an Epic, we’re in there for the next five years. It’s that heavy of a system. So, if I was building a Regional Extension Center and I need recurring, sustainable revenue, I’m naturally looking at a system that might be a little bit more self-serving. That gives me the opportunity to provide more services versus a light vendor.

So, I do think it’s going to hurt the smaller business that have been innovative, and trying to get their products installed in a way that doesn’t require a whole army of workforce.

I know you’ve worked with a number of hospitals to help them align with physicians. What are some creative ways for hospitals to do this?

I think that’s a great model, because many of the hospitals can subsidize a good portion of the cost, and usually care is a local thing. So when they can collaborate and become clinically integrated, there’s a lot of value. I think, conceptually, it’s a model that saves all the stakeholders a lot of money, and I also think it improves the interaction between the hospital and the physician, as well as with the patient.

The challenge with the model, almost always is politics — control of data and boundaries. If a hospital wants to buy Allscripts and then distribute it to their medical staff, Allscripts will continue to sell directly to that medical staff as well. You really have to be proactive in getting an understanding with your vendor that you are going to take their HIT system to market; and rather than unintentionally competing with your own vendor, work out more of a collaboration strategy where they help promote it so there’s not that market conflict.

Now some vendors like Epic, for example, have what they call their “hub strategy” and they’re actually teaching their hospitals and consulting with their hospitals on how to deliver Epic to the community. Epic doesn’t want to fool with small practices, but they’re more than willing to help prop up their hospitals to do it.

The ones that really do it right — Sentara Health System is a good example — where they really kind of commercialized their IT services. They even branded it with its own name. It’s called eCare. Well, eCare’s Epic, and the hospital, Sentara. But if it appears to be something kind of unique and not just the hospital giving me an EHR system or sharing it, it tends to play out a little better.

Also, another good structure, or the governance structure, is to include a lot of stakeholders or different members of the party you’re governing. Because you’re dealing with things that typically a hospital doesn’t have to address, they’re on one hand trying to stay a hospital, but they’re also becoming a vendor.

I’ve seen cases where the hospital gives an EMR system to a practice and that practice implodes. Well, the two doctors now don’t get along in the practice, and they’re both fighting over who owns the records. The hospital’s caught in the middle, so you’ve really got to work out a good service level agreement between your hospital and your medical staff or you could really get into some very uncomfortable situations.

What would you say some of the biggest mistakes practices make in the EMR selection and implementation process?

Probably the biggest one — and it’s really, more often than not, the practice’s own fault — they didn’t realize the magnitude and the commitment that was going to be necessary to be successful. Sometimes they just have buyer’s remorse, but it’s a good product, it works fine. But the practice didn’t realize that there was going to be a pretty big commitment.

Then, the second thing that’s probably just as common is a lot of times they just flat out bought a defective product or something that was not going to work at the point of care. It looked good in the demo; the vendor made a lot of promises. But at the end, it started to not perform as promised or as expected. Then people get discouraged and frustrated.

I would say the third mistake is contractually. A lot of those two things I just described could really be avoided if people would take the extra time to create a statement of work, or to develop terms and conditions tied to the goals and objectives of the project. Everybody’s aligned around the same outcome, so you can set up your payments with the vendor to be tied to outcomes.

I always compared it to building a house. You would never pay the roofer before you pay the foundation guy. You do it based on stages and phases. With each phase being successfully completed, you move onto the next phase and you structure your contract based around successful completion. You have a lot of testing, and build and validation built in to that, so that way you’re not just kind of going on blind faith alone.

Do any vendors come to mind in the ambulatory care space that you think are consistently doing things right in terms of product, implementation, and support?

The KLAS surveys tend to track that around customer service. I look at vendors like Allscripts that have unbelievable market savvy, but they have five EMR systems and four practice management systems. At the point of sale they’re talking about a MyWay product, a professional product, an Enterprise product. I think that’s what the hard lesson is. We’ll look back in five years and what they’ll ultimately do is commercially discontinue a lot of those products.

While I think they’re doing a good job selling it, I don’t know if it’s in the market’s best interest to have one vendor throwing multiple products into their stable because it doesn’t serve the vendor very well and it doesn’t serve their customers very well. I tend to think vendors that are very exclusively committed to a single product strategy — like an Epic, like a NextGen, like a Greenway — are ultimately going to come out better.

You look at vendors like, even GE, Allscripts — they get weighted down big time with having that many variations of their product. If you look at the legacy vendors — IDX, Misys, Medical Manager, all of which threw out multiple versions of their products because it allowed them to generate multiple levels of support arrangements — at some point in time, that’s just not sustainable, and it’s probably going to be even more difficult to sustain it as requirements for product certification get more stringent. Now they’re going to have to decide who they’re going to cut and who they’re going to keep because it just isn’t practical for these companies to maintain that many overlapping products.

So, the ones doing it better are the companies that have chosen a niche and are sticking with it, as opposed to trying to reach every end of the market?

I would say companies that are committed to a true, fully-integrated, single enterprise solution, versus ones that cobble a bunch of things together. On the low end you have the e-MDs and the eClinicalWorks and the Greenways. In the mid-range you have the NextGens. Allscripts is probably there if you want to segment them towards just a couple of their products.

I don’t think anybody believes the old Misys application’s going to stick around. In fact, they’ve already started sending out letters to upgrade or move over those people. Epic certainly is a clear, good example of a vendor who’s totally committed to their own development, their own product. They have a lot more control over how the product works and performs, and they’re not always relying on third-party cobbled systems together.

Do you think HIMSS includes a good representation of ambulatory providers and vendors?

They didn’t always, but they are now. I think that has been their biggest area of improvement is that they have finally started to reach out to ambulatory. I’m seeing where before, only my hospital clients even knew about HIMSS, and now I’m starting to find that the ambulatory people that we’re working with are attending it and becoming members of HIMSS. I’ve actually seen HIMSS making an effort and trying to reach out into ambulatory.

I also think that that aggressive effort was one of the reasons why TEPR was unsuccessful, because HIMSS, about three years ago, started going after that market and there just wasn’t room for two of them. TEPR did really reinvest a lot of it back into driving attendance, where I think HIMSS, at least they get good attendance. There will probably be a point in time, I don’t know exactly when, where HIMSS may become just a conference to network with your existing customers because of all the selected systems — or until the next thing that re-emerges. But I do think they are really making good strides and progress in reaching out to the ambulatory side.

Do you think that one day they could be a threat to, say MGMA?

You know, it’s funny. MGMA didn’t initially have a lot of IT presence until EMR became popular. Five years ago, if you went to an MGMA conference you found CTAs and billing companies and professional service-type companies exhibiting, but very few vendors. Also, MGMA is almost usually attended by office managers and by administrative.

I’ll give you an example of how trade shows evolved. AMGA, which is similar to MGMA but it’s exclusively focused on large, multi-specialty group practices — they just had their annual conference in New Orleans. I’d say 20-30% of their members are Epic customers and Epic didn’t even have a booth there, but Judy was walking around the floor and meeting her clients. She says, “Hey, I come here to see my clients.”

Very few vendors were exhibiting and the reason why is if you look within that membership and that trade association membership, 90% of those members already have an EMR system. So the few vendors that were exhibiting, they were exhibiting extra modules like patient kiosks, Web portals. They were there to try to sell additional services to their customers. But I think MGMA is going to always have a market because they’re appealing to the smaller primary care ambulatory space; whereas, HIMSS is 100% focused on healthcare information technology and the MGMA covers a much broader range of topics.

What’s your prediction for the physician EHR adoption three years from now?

I think in spite of the stimulus money and whatnot, I think it’s very unrealistic that we can get this many physicians through the system in this short period of time. One prediction I do have is that there will likely be an extension of the stimulus. I do think Obama wants to spend the money and he’ll make it easy. I mean, the bar’s been set kind of low as it is, but I do think that there will be an extension of the deadline so we have more time for more people to get through it.

My fear is that if there is this massive rush, I think that we run the risk of doctors getting first, bitten by a bad experience — which could actually cause us to backslide a little bit. I also think that if there’s a massive rush, then a large percentage of our doctors trying to do this are going to buy systems from “two guys in a truck” EMR company and in three years, we’re going to have to recycle a lot of those people back through because that vendor couldn’t hang with the requirements as they get more difficult each year.

I do think the market’s going to continue to compress. There’s going to be more vendor consolidation and the market won’t have as many players in it, which means that a lot of the early adopters will have to recycle back through.

What percentage adoption do you think will be in say, 2013?

We tried our best to get the exact adoption rates because you know adoption rates have been all over the map, anywhere between 4 and 40%.

The CDC did a study and they concluded that 40% had EHR. Well, it depends on how you ask the question, so they went back and re-surveyed. They said, “Of all you folks that said you have an EHR, how many actually have a certified system, one that meets Meaningful Use requirements as we know it today? Actually uses the system at the point-of-care and has it integrated?” Let me ask the question that way — only 4% said, “Well, if that’s what you’re describing an EHR as, then that’s what I have.” There’s a slag between what people think they have, versus what they really have.

We tried to sort of prove it out ourselves, so we went to the AMA to find out exactly how many physicians there were. We took out all those that worked in academia. We took out those who were physicians, but worked in a hospital, like a radiologist, an anesthesiologist, those that couldn’t really buy an EMR. We took out those who worked in corporate medicine — they’re doctors, but they weren’t practicing. That left us with about 600,000-700,000 physicians who could even buy an EMR if they wanted to. So we said, “OK, well this is real easy now. Now that we know how many people can actually buy one, all we’ve got to do now is go ask the vendors how many systems were actually sold.” We contacted every vendor that we possibly could, and by the time we contacted about 60 of them, the vendors had somehow managed to sell more EMR systems than there were physicians to buy them.

I’m not surprised.

What happens is when you try to get market share from the vendors, they continue to count systems that have been sold, but they don’t ever really go back and count systems actually used. That’s the problem with our reporting. All vendors are counting systems sold, but not actually implemented. I would say that if the vendors were totally honest, 20-25% of systems sold never get implemented. They just stop using it for whatever reason or they change to something else and the vendor doesn’t reconcile their user count because they’re basing it on X number of licenses sold over their years of business. Also, a lot of vendors double count.

Allscripts, I love their statement: “One in every three physicians use Allscripts.” Really? When you unpack that, you may have somebody that’s on an old Medic Plus system that’s been discontinued five years ago. You may have someone using PayerPath; you may have someone using the handheld e-prescribing tool that they have.

But I do think adoption is going to continue to climb. I personally believe that true adoption — using an EMR at the point of care; a real EMR at the point-of-care, not a “lite” or transcription — is probably somewhere between 7-10%. I think in that time period we’ll probably see it move up to 15-20%. I think it also depends on the carrot and the stick. If the stick gets bigger, which it probably will, then we’ll probably see that move a little faster and a little higher.

Any other thoughts or comments you’d like to share?

I enjoy HIStalk. It’s always an honor and a privilege to be asked to contribute. You guys do good work. I’d be happy to do it again in the future.

News 4/1/10

gloStream is the latest EMR to announce a stimulus guarantee program. To qualify, doctors must use the gloStream software “properly,” which includes following gloStream’s gloDNA implementation process. The company says that physicians who follow the correct process will be able to demonstrate meaningful use and thus become eligible for stimulus funding. While I am sure all these guarantees companies are making are on the up and up, I sure wish I had a crystal ball so I could look ahead a couple years to see how all these implementations turn out.

Navicure snatches up a couple of industry veterans for its management team. David Bond, Allscripts’ former Healthmatics division president, is Navicure’s new VP of sales, while ISTA CEO Kernie Brashier signs on as CTO.

IT consulting firm ProviDyn signs on as a reseller for Aprima Medical Software.

Amazing Charts announces the release of  Amazing Charts V5, that includes ePrescribing, a health maintenance component, and order and referral tracking. I also hear that Amazing Chart’s CEO and Founder Jon Bertman, MD will be debating Greenway Medical’s Justin Barnes in a HCPLive-sponsored event. The two will square off April 14th from 12:30 TO 1:30 PM (ET) during a webinar entitled, “Small Vs. Large EHR Vendors: What’s Best for Your Practice.” Register here.

Central Connecticut Medical Management selects Ingenix CareTracker practice management and e-prescribing system for its 16-office, 59-physician group.

Ophthalmic Imaging Solution reports 2009 net losses of $5.5 million, compared to a net loss of just under $3 million in 2008. Revenues increased 8.6% to $13.6 million in 2009. Among other offerings, Ophthalmic Imaging Systems sells a CCHIT-certificated EHR and practice management solution. I don’t know the ins and outs of this company, but as a casual observer, I can’t help be reminded that just because a product is certified and seems well-suited for a particular specialty, it’s always a good idea to check out the financial status of your potential vendor.

Texas Tech University hopes its new Family Medicine Accelerated Track plan will encourage more medical students to choose family practice as a specialty. The program is three years, versus the traditional four, and provides a $13,000 scholarship to each student going into family practice. In other words, less school, less money, plus some scholarship money. I’m not sure I’d pick Lubbock, Texas as a place I’d want to spend three years, but otherwise, it sounds like a sweet deal.

Even though more people than ever turn to the Internet for health information, patients are also trusting their doctors more than ever to decipher the wealth of information available. It turns out patients are increasingly skeptical of information found on the Internet, though they like using the Web to correspond with their doctors. Personally I enjoy surfing every once in awhile, just to assess myself for incurable diseases, like canities.

E-mail Inga.

Intelligent Healthcare Information Integration 3/31/10

Going Full Blown EHR Sorta Sucks

After such a title, please know this up front: I love my EMR…most moments of most days.

What I don’t love, not in the least little bit, is changing how I go about dealing with everything related to patient care information capture, manipulation, and sharing. Converting from a tried and true workflow that has allowed me to provide the best care I’m capable of providing (at least, that’s as true as it could be with paper-based data) to processes that feel foreign and kludgy and downright odd sorta… well… sucks!

After spending our formative years learning how to navigate paper and penmanship (deterioration of the later aside), we are now challenged by the transformation to an almost entirely different way to manipulate our information. Further, it isn’t just how the data goes from brain to storage; it’s how that info is accessed, viewed, and managed.

Sure, we (my staff and I) have all been using computers for a while now (from 3 to 40+ years,) but none of us were even remotely prepared for the overwhelming shift in processes and the enormous learning curves we encounter by going medically electronic.

I’ve tried to think of a comparable or analogous change. Changing how we do banking, changing how we access news and gossip, changing how we buy and window shop, changing how we research and do schoolwork, changing from viewing three television channels which closed shop at 2:00 A.M.to a bazillion — all of these were virtually effortless. We all do all of these things now, even though we weren’t “skillsetted” with them in our youths. None of them seemed like a mountainous climb.

But, changing from free flow data capture, be it for SOAP notes or lab orders, via the familiar pen and paper format to the seemingly simple point-and-click tech of a PC has been, without question, the greatest challenge of my life. (OK, aside from raising kids, maintaining a healthy marriage, dealing with cluster headaches, and remembering to put the toilet seat down, that is.)

It isn’t just how the data goes from head to storage — it’s how everything gets accessed, viewed, shared, and integrated into pre-existing mental categories. My synapses have been strained beyond their original design constraints trying to establish new neural connections and pathways for this completely queer new work style.

I hope I’m not alone when I admit to being exhausted by “change management.” Back in the “pre-EHR days,” it was really easy (relatively speaking) to go to work, see patients, and deliver myself home at the end of the day with some smidgen of energy reserve. Nowadays, my serotonin and dopamine stockpiles are so depleted that I barely have enough left over for fêting my youngest son’s latest fourth grade feat or catching a chuckle from my wife’s current chef-challenged concoction.

Why put myself and my longsuffering staff through all this? Simple. Because, as I said up front, most moments of most days, I absolutely love my EHR. I am daily astounded by the new capabilities I am gaining to deal with data. The upside usually outweighs the downside. It is, without question, worth it.

However, that doesn’t mean this transition time doesn’t sorta suck. It does, big time.

From the trenches…

“Always be yourself…unless you suck.” – Joss Whedon

Dr. Gregg Alexander, a grunt in the trenches pediatrician, directs the “Pediatric Office of the Future” exhibit for the American Academy of Pediatrics and is a member of the Professional Advisory Council for ModernMedicine.com. More of his blather…er, writings…can be found at his blog, practice web site or directly from doc@madisonpediatric.com.