Allscripts Loses NYC Hospital Deal To Epic, Files Complaint

Posted on October 11, 2012 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Usually, battles over a hospital EMR contract fall below the radar, with only the hospital and vendors the wiser as to what took place during negotiations. But this time, we may be treated to the spectacle of seeing a large health system explain, in some detail, why it chose one vendor over another.

Allscripts, which lost an EMR contract for New York City’s public hospital system, is crying foul over the system’s decision to go with Epic.  Allscripts has filed a complaint over the award of the $303 million contract, which involves tying together 11 public hospitals, 70 clinics, thousands of doctors and more than one million patients, The New York Times reports.

Allscripts estimates that over 15 years, when ancillary costs are included, it would cost $1.4 billion to implement Epic, while its own EMR rollout could be completed for less than half that number.

Right now, the contract is on hold, and won’t be in force until Allscripts’ complaint with a procurement-review board within the city’s Health and Hospitals Corporation is resolved. (HHC runs the public hospital system.)

But Alan Aviles, president of the corporation, doesn’t seem like he’s willing to budge. Aviles told the Times that HHC chose Epic after considering nine vendors over four years. And he argues that Allscripts’ recent management and financial troubles only validate HHC’s decision.

And at the end of the day, Aviles simply doesn’t buy Allscripts’ estimates. “Allscripts and its CEO absolutely know that the $700 million [savings] number they tossed out is fallacious,” Aviles said. What’s wrong with their numbers? Well, for one thing, Aviles says, Allscripts estimated that the application-support team needed to implement the EMR would cost nothing over 15 years, while HHC had calculated that 15-year staff support would cost $357 million.

Readers, I don’t know about you, but I think there’s some degree of truth on both sides.  If Allscripts submitted a proposal assuming no support costs for HHC, they must be out of their minds.  At the same time, though, I’ve never heard of a major Epic installation being anything but the most expensive option, bar none. Seems to me the truth lies somewhere in the middle.