Free Hospital EMR and EHR Newsletter Want to receive the latest news on EMR, Meaningful Use, ARRA and Healthcare IT sent straight to your email? Join thousands of healthcare pros who subscribe to Hospital EMR and EHR for FREE!

Hospital CIOs Still Think Outcomes Improvement Is The Best Use Of EMR Data

Posted on August 4, 2017 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.

Sure, there might be a lot of ways to leverage data found within EMRs, but outcomes improvement is still king. This is one of the standout conclusions from a recently-released survey of CHIME CIOs, sponsored by the trade group and industry vendor LeanTaaS, in which the two asked hospital CIOs five questions about their perceptions about the impact of EMR data use in growing operating margins and revenue.

I don’t know about you, but I wasn’t surprised to read that 24% of respondents felt that improving clinical outcomes was the most effective use of their EMR data. Hey, why else would their organizations have spent so much money on EMRs in the first place?  (Ok, that’s probably a better question than I’ve made it out to be.)

Ten percent of respondents said that increasing operational efficiencies was the best use of EMR data, an idea which is worth exploring further, but the study didn’t offer a whole lot of additional detail on their thought process. Meanwhile, 6% said that lowering readmissions was the most effective use of EMR data, and 2% felt that its highest use was reducing unnecessary admissions. (FWIW, the press release covering the survey suggested that the growth in value-based payment should’ve pushed the “reducing  readmissions” number higher, but I think that’s oversimplifying things.)

In addition to looking at EMR data benefits, the study looked at other factors that had an impact on revenue and margins. For example, respondents said that reducing labor costs (35%) and boosting OR and ED efficiency (27%) would best improve operating margins, followed by 24% who favored optimizing inpatient revenue by increasing access. I think you’d see similar responses from others in the hospital C-suite. After all, it’s hard to argue that labor costs are a big deal.

Meanwhile, 52% of the CIOs said that optimizing equipment use was the best approach for building revenue, followed by optimizing OR use (40%). Forty-five percent of responding CIOs said that OR-related call strategies had the best chance of improving operating margins.

That being said, the CIOs don’t exactly feel free to effect changes on any of these fronts, though their reasons varied.

Fifty-four percent of respondents said that budget limitations the biggest constraint they faced in launching new initiatives, and 33% of respondents said the biggest obstacle was lack of support resources. This was followed by 17% who said that new initiatives were being eclipsed by higher priority projects, 17% said they lacked buy-in from management and 10% who said he lack the infrastructure to pursue new projects.

Are any of these constraints unfamiliar to you, readers? Probably not. Wouldn’t it be nice if we did at least solved these predictable problems and could move on to different stumbling blocks?

The More Hospital IT Changes, The More It Remains The Same

Posted on June 23, 2017 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.

Once every year or two, some technical development leads the HIT buzzword list, and at least at first it’s very hard to tell whether that will stick. But over time, the technologies that actually work well are subsumed into the industry as it exists, lose their buzzworthy quality and just do their job.

Once in a while, the hot new thing sparks real change — such as the use of mobile health applications — but more often the ideas are mined for whatever value they offer and discarded.  That’s because in many cases, the “new thing” isn’t actually novel, but rather a slightly different take on existing technology.

I’d argue that this is particularly true when it comes to hospital IT, given the exceptionally high cost of making large shifts and the industry’s conservative bent. In fact, other than the (admittedly huge) changes fostered by the adoption of EMRs, hospital technology deployments are much the same as they were ten years ago.

Of course, I’d be undercutting my thesis dramatically if I didn’t stipulate that EMR adoption has been a very big deal. Things have certainly changed dramatically since 2007, when an American Hospital Association study reported that 32% percent of hospitals had no EMR in place and 57% had only partially implemented their EMR, with only the remaining 11% having implemented the platform fully.

Today, as we know, virtually every hospital has implemented an EMR integrated it with ancillary systems (some more integrated and some less).  Not only that, some hospitals with more mature deployments in place have used EMRs and connected tools to make major changes in how they deliver care.

That being said, the industry is still struggling with many of the same problems it did in a decade ago.

The most obvious example of this is the extent to which health data interoperability efforts have stagnated. While hospitals within a health system typically share data with their sister facilities, I’d argue that efforts to share data with outside organizations have made little material progress.

Another major stagnation point is data analytics. Even organizations that spent hundreds of millions of dollars on their EMR are still struggling to squeeze the full value of this data out of their systems. I’m not suggesting that we’ve made no progress on this issue (certainly, many of the best-funded, most innovative systems are getting there), but such successes are still far from common.

Over the longer-term, I suspect the shifts in consciousness fostered by EMRs and digital health will gradually reshape the industry. But don’t expect those technology lightning bolts to speed up the evolution of hospital IT. It’s going take some time for that giant ship to turn.

Measuring Population Health ROI Is Still Tricky

Posted on May 24, 2017 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.

Over the past few years, health systems have made massive investments in population health management technology. Given the forces driving the investments are still present – or even closer at hand – there’s every reason to believe that they will continue.

That being said, health leaders are beginning to ask more questions about what they’re getting in return.  While systems may have subjected the initial investments to less scrutiny than usual, having accepted that they were critically necessary, many of these organizations are now trying to figure out what kind of return on investment they can expect to realize. In the process, some are finding out that even deciding what to measure is still somewhat tricky.

Many healthcare organizations started out with a sense that while investment returns on pop health management tech would take a while, they were in the knowable future. For example, according to a KPMG survey conducted in early 2015, 20 percent of respondents believed that returns on their investment in population health IT would materialize in one to two years, 36 percent expected to see ROI in three to four years and 29 percent were looking at a five+ year horizon.

At the time, though, many of the execs answering the survey questions were just getting started with pop health. Thirty-eight percent said their population health management capabilities were elementary-stage, 23 percent said they were in their infancy and 15 percent said such capabilities were non-existent, KPMG reported.

Since then, health systems and hospitals have found that measuring – much less realizing – returns generated by these investments can be complicated and uncertain. According to Dennis Weaver, MD, a senior consultant with the Advisory Board, one mistake many organizations make is evaluating ROI based solely on whether they’re doing well in their managed care contracts.

“They are trying to pay for all of the investment – the technology, care managers, operational changes, medical homes—all with the accountable payment bucket,” said Weaver, who spoke with Healthcare Informatics.

Other factors to consider

Dr. Weaver argues that healthcare organizations should take at least two other factors into account when evaluating pop health ROI, specifically reduction of leakage and unwarranted care variation. For example, cutting down on leakage – having patients go out of network – offers a 7 to 10 times greater revenue opportunity than meeting accountable care goals. Meanwhile, by reducing unwarranted variations in care and improving outcomes, organizations can see a 5 percent to 10 percent margin improvement, Weaver told the publication.

Of course, no one approach will hold true for every organization.  Bobbie Brown, senior vice president with HealthCatalyst, suggests taking a big-picture approach and drilling down into how specific technologies net out financially.

She recommends that health organizations start the investment analysis with broad strategic questions like “Does this investment help us grow?” and “Are we balancing risk and reward?” She also proposes that health leaders create a matrix which compares the cost/benefit ratio for individual components of the planned pop health program, such as remote monitoring and care management. Sometimes, putting things into a matrix makes it clear which approaches are likely to pay off, she notes.

Over time, it seems likely that healthcare leaders will probably come to a consensus on what elements to measure when sizing up their pop health investments, as with virtually every other major HIT expense. But in the interim, it seems that figuring out where to look for ROI is going to take more work.

EMR Replacement Frenzy Has Major Downsides

Posted on May 16, 2016 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.

Now that they’ve gotten an EMR in shape to collect Meaningful Use payouts, hospitals are examining what those incentive bucks have gotten them. And apparently, many aren’t happy with what they see. In fact, it looks like a substantial number of hospitals are ripping and replacing existing EMRs with yet another massive system.

But if they thought that the latest forklift upgrade would be the charm, many were wrong. A new study by Black Book Research suggests that in the frenzy to replace their current EMR, many hospitals aren’t getting what they thought they were getting. In fact, things seem to be going horribly wrong.

Black Book recently surveyed 1,204 hospital executives and 2,133 user-level IT staffers that had been through at least one large EMR system switch to see if they were happy with the outcome. The results suggest that many of these system switches have been quite a disappointment.

According to researchers, hospitals doing new EMR implementations have encountered a host of troubles, including higher-than-expected costs, layoffs, declining inpatient revenues and frustrated clinicians. In fact, hospitals went in to these upgrades knowing that they would not be back to their pre-EMR implementation patient volumes for at least another five years, but in some cases it seems that they haven’t even been keeping up with that pace.

Fourteen percent of all hospitals that replaced their original EMR since 2011 were losing inpatient revenue at a pace that would not support the total cost of the replacement EMR, Black Book found. And 87% of financially threatened hospitals now regret the executive decision to change systems.

Some metrics differed significantly depending on whether the respondent was an executive or a staff member.

For example, 62% of non-managerial IT staffers reported that there was a significantly negative impact on healthcare delivery directly attributable to an EMR replacement initiative. And 90% of nurses said that the EMR process changes diminished their ability to deliver hands-on care at the same effectiveness level. In a striking contrast, only 5% of hospital leaders felt the impacted care negatively.

Other concerns resonated more with executives and staff-level respondents. Take job security. While 63% of executive-level respondents noted that they, or their peers, felt that their employment was in jeopardy to the EMR replacement process, only 19% of respondents said EMR switches resulted in intermittent or permanent staff layoffs.

Meanwhile, there seemed to be broad agreement regarding interoperability problems. Sixty-six percent of system users told Black Book that interoperability and patient data exchange functions got worse after EMR replacements.

What’s more, hospital leaders often haven’t succeeded in buying the loyalty of clinicians by going with a fashionable vendor. According to Black Book, 78% of nonphysician executives surveyed admitted that they were disappointed by the level of clinician buy-in after the replacement EMR was launched. In fact, 88% of hospitals with replacement EMRs weren’t aware of gaining any competitive advantage in attracting doctors with their new system.

Now, we all know that once a tactic such as EMR replacement reaches a tipping point, it gains momentum of its own. So even if they read this story, my guess is that hospital executives planning an EMR switch will assume their rollout will beat the odds. But if it doesn’t, they can’t say they weren’t warned!

Will Hospital EMR Prices Ever Fall?

Posted on May 9, 2016 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.

In most industries, prices fall as supply rises. Basic economics, right? Well, if that’s true, will the price of EMRs fall as the industry matures?  A recent discussion on LinkedIn demonstrates – as you might expect – that there’s a lot of room for debate on the topic.

Davíð Þórisson, an emergency physician at Landspitali University Hospital in Iceland, kicked things off with this question:

Now that the major workflow has been designed in all major EHR systems available it would seem the biggest part of the hospital needs are addressed. Competition should increase as more vendors catch on… prices surely must go down from here?

Nelson Wong, a senior consultant with Fuji Xerox, responded that price increases are all but inevitable when EMR vendors compete with proprietary technology:

The only way out is a vendor neutral EHR providers to integrate all systems with international standard like HL7.

Zac Whitewood-Moores, a clinical data standards specialist who’s helping to implement SNOMED CT in systems across the NHS in England, noted that EMR vendors currently have little incentive to switch to a cheaper, less-customized EMR model:

Vendors appear reluctant to share work from previous deployments and part of this has to be that the commercial model is built on consultancy, not just licensing of the IT product itself.

But Whitewood-Moores also holds out hope that true data interoperability could do the trick:

When there is more use of SNOMED CT and common interoperability models forced by purchasing goverments/health providers…this may bring down costs if customers are not locked in by their data and the costs of migrating large amounts of it.

And Ryan Pena, social media manager at MentorMate and MobCon, argued that innovation might yet reduce health data management costs:

I think the key with EHRs is to ensure the industry continues to innovate on how information is captured. Perhaps secure automation will drive down this cost as we learn ways to transfer health data from medical grade wearables?

On the other hand, other people who commented felt that even some kind of open source reference EMR wouldn’t do the trick. John Shepard, president and co-founder of HIT software vendor Shepard Health, points out that there’s actually surprisingly little pressure on vendors to lower prices, in part because the market is still evolving:

The cost of EHRs has already gone down but also up. For example, you can buy an EHR out of the box at Costco or utilize one of the open source EHRs for free. However, to get a supported enterprise-level EHR (Epic, McKesson, etc.) then the price is very high and I don’t think it will come down anytime soon…[After all,] the cost of the EHR is not preventing sales because there is minimal change in demand based on increase in cost.

Meanwhile Pim Volkert, terminologies coordinator for Nicitz, the National IT Institute for Healthcare in the Netherlands, shared an interesting view of the future. He seems to suggest that paying more for EMRs may actually be justified as they grow more sophisticated:

EHRs will move more and more into the clinical domains. [They] will become a medical device just like an MRI or DaVinci robot. Development, testing of software and liability insurance fees will increase costs.

Obviously, there’s no way to predict exactly where EMR prices will go, but I’m more on the side of the posters suggesting that enterprise EMRs have nowhere to go but up. I hope I’m wrong!

HIMSS Puts Optimistic Spin On EMR Value Data

Posted on February 5, 2016 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.

After several years of EMR deployment, one would think that the EMR value proposition had been pretty well established. But the truth is, the financial and clinical return on EMRs still seems to be in question, at least where some aspects of their functioning are concerned.

That, at least, is what I took from the recent HIMSS “Value of Health IT Survey”  released earlier this month. After all, you don’t see Ford releasing a “Value of Cars Survey,” because the value of a car has been pretty much understood since the first ones rolled off of the assembly line more than a century ago.

Industry-wide, the evidence for the value of EMRs is still mixed. At minimum, the value proposition for EMRs is a remarkably tough case to make considering how many billions have been spent on buying, implementing and maintaining them. It’s little surprise that in a recent survey of CHIME members, 71% of respondents said that their top priority for the next 12 months was to realize more value from their EMR investment. That certainly implies that they’re not happy with their EMR’s value prop as it exists.

So, on to the HIMSS survey. To do the research, HIMSS reached out to 52 executives, drawn exclusively from either HIMSS Analytics EMRAM Stage 6 or 7, or Davies Award winning hospitals. In other words, these respondents represent the creme de la creme of EMR implementors, at least as HIMSS measures such things.

HIMSS researchers measured HIT value perceptions among this elite group by sorting responses into one of five areas: Satisfaction, Treatment/Clinical, Electronic Information/Data, Patient Engagement and Population Management and Savings.

HIMSS’ topline conclusion — its success metric, if you will — is that 88 percent of execs reported at least one positive outcome from their EMR. The biggest area of success was in the Treatment/Clinical area, with quality performance of the clinical staff being cited by 83% of respondents. Another area that scored high was savings, with 81% reporting that they’d seen some benefits, primarily in coding accuracy, days in accounts receivable and transcription costs.

On the other end of the scale, execs had to admit that few of their clinical staffers are satisfied with their EMRs. Only 29% of execs said that their EMR had increased physician satisfaction, and less than half (44%) said their nurses were more satisfied. If that isn’t a red flag I don’t know what is.

Admittedly, there are positive results here, but you have to consider the broader context for this study. We’re talking about a piece of software that cost organizations tens or even hundreds of millions of dollars, upon which many of their current and future plans rest. If I told you that my new car’s engine worked and the wheels turned, but that the brakes were dodgy, fuel economy abysmal and the suspension bumpy, wouldn’t you wonder whether I should have bought it in the first place?

Another Epic Loss: Iasis Upgrades To Cerner

Posted on January 20, 2016 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.

It’s too early to make a definitive claim, but I’m picking up some increasing evidence that Cerner is beginning to win out over Epic as some health systems upgrade. I’m not suggesting that Epic is ready to topple by any means, but it does seem that Cerner’s winning more potential matchups than they were before.

Want an example? Take the recent news that Iasis Healthcare will switch out its McKesson platform for the Cerner  Millenium EMR.  The 17-hospital system will spend $50 million to make the upgrade, which should be complete by March 2018. Most of the spending is ($35M+) is projected to come in fiscal 2016.

As I noted in an earlier post, Epic continues to grow at, well, an Epic pace. Reports suggest that Epic added 1,400 staffers last year, and the company seems likely to keep on pace in 2016. And as I previously noted, Epic software is either being used by or installed at 360 healthcare organizations in 10 countries, and also reported generating $1.8 billion in revenues for 2014.

But as the Iasis deal illustrates, Cerner is picking up some split-decision deals for what look like important reasons. One intriguing reddit post by captainnoob explains why his health system went with Cerner:

We whittled our choice down to 3 applications… McKesson Paragon, Epic, and Cerner. Those 3 were our forerunners as they were fully integrated and had modules to handle (almost) every service our facility provides. Ultimately the decision to go Cerner was based primarily on a combination of user input and cost of ownership.

  • User Input – We did numerous site visits with users from various clinical and managerial areas to talk workflow, ask questions such as how each product dealt with certain challenges we have already faced with McKesson, and view demonstrations in real-world conditions.
  • Cost of Ownership – Not just the cost of the product and implementation, but the cost of maintaining the product over 5-10 years.

I’m not sure why the competitive advantages Cerner has have shown up in higher relief recently. But my guess is that the wins Cerner is capturing have something to do with the psychology of EMR investment.

Going from a severely underpowered system — or none — to Epic involves taking a big leap of faith. How can you rationalize spending dozens or even hundreds of millions (or billions) on Epic? I’d argue that in essence, the ROI on that buy has been essentially unguessable. So the systems that have made a big Epic buy have had to justify their investment by pointing to big, still-intangible benefits like improved population health.

On the other hand, health systems that didn’t do Epic the first time, and have reasonably competent systems on board already, aren’t buying vision or reputation-ware. They aren’t pioneers, but instead, are looking for an economically and technically workable solution. In that circumstance, I know I’d be far more likely to go with a system with a lower total cost of ownership than an expensive Big Blue-style tool.

But these are just my theories. What do you think?  Is the investment tide turning toward Cerner, and why?

Thoughts On The Quality Systems Transaction – What Does It Mean for Ambulatory EMR?

Posted on November 9, 2015 I Written By

David Chou is the Vice President / Chief Information & Digital Officer for Children’s Mercy Kansas City. Children’s Mercy is the only free-standing children's hospital between St. Louis and Denver and provide comprehensive care for patients from birth to 21. They are consistently ranked among the leading children's hospitals in the nation and were the first hospital in Missouri or Kansas to earn the prestigious Magnet designation for excellence in patient care from the American Nurses Credentialing Center Prior to Children’s Mercy David held the CIO position at University of Mississippi Medical Center, the state’s only academic health science center. David also served as senior director of IT operations at Cleveland Clinic Abu Dhabi and CIO at AHMC Healthcare in California. His work has been recognized by several publications, and he has been interviewed by a number of media outlets. David is also one of the most mentioned CIOs on social media, and is an active member of both CHIME and HIMSS. Subscribe to David's latest CXO Scene posts here and follow me at Twitter Facebook.

The top news last week was from Quality Systems Inc., which owns physician software vendor NextGen Healthcare Information Systems. The news was that NextGen will acquire HealthFusion Holdings, another ambulatory vendor, for $165 million (NextGen also sold their hospital division to QuadraMed the week before). As healthcare systems are consolidating, we are also seeing the consolidation happen on the vendor side and the payer side. The shrinking healthcare profit margin has an effect on the entire industry.

What is next for the ambulatory space?

  1. Physician Groups Joining Health Systems

As we move towards creating a clinical integrated network, the number of physician groups and independent physicians will also decrease where the majority will join an ACO or become an employee for the health systems. The decrease in medical groups and the consolidation of the medical groups will have a huge impact on the ambulatory EMR space. The industry will see a shift in the ambulatory EMR systems transition to the same EMR system that is used by the health systems, so I see a big pickup for the Cerner and Epic in the ambulatory world.

  1. Enterprise EMR

The enterprise EMR will have bigger demands from their clients to focus on the ambulatory side. Health systems are utilizing their technology investments as part of the outreach and growth strategy so it is vital that the clinics and medical groups have a system that fits their workflow. Many industry leading healthcare organizations are becoming a software EMR vendor by providing their ambulatory system to smaller hospitals, rural clinics, and physician groups that cannot afford the technology investment of an enterprise system.

This will be a very interesting space to watch in the next year. We’ll see which players will survive and see what their strategies will be moving forward. I have been providing advisory services for many health systems in regards to their strategy for maximizing their technology investment and making it a revenue-generating tool. So I will be keeping a close eye on this space and sharing insights with you on CXO Scene going forward.

If you’d like to receive future health care C-Level executive posts by David in your inbox, you can subscribe to future Health Care CXO Scene posts here.

Thoughts on Leveraging EMRs Effectively

Posted on September 28, 2015 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.

Whenever I scan Twitter for #HIT ideas, I find something neat. For example, consider this intriguing tweet:

I say intriguing not because the formula outlined will surprise anyone, but rather, because it captures some very difficult problems in a concise and impactful manner.

Here’s some thoughts on the issues Portnoy raises:

* Optimization:  Of course, every healthcare IT organization works to optimize every technology it deploys. But doing so with EMRs is one of the most difficult problems it is likely to encounter. Not only do IT leaders need to optimize the EMR platform technically, they may also face external demands placed by ACOs, HIE partners and affiliated providers. And it’s also important to optimize for Meaningful Use functions.

* Workflows:  Building workflows that address the needs of various stakeholders is critical, as pre-designed vendor workflow options may be far from adequate. While implementing an EMR may be an opportunity for a hospital to redesign workflows, or to enshrine existing workflows in the EMR interface and logic, hospital leaders need to take charge of the workflow implementation process. Inefficiencies at this level can be costly and will erode the confidence of clinical teams.

* Revenue capture:  When properly implemented, EMRs can help providers generate more complete documentation for claims reimbursement, which leads to higher collections volume. As time has shown, difficult-to-use EMRs can lead to physician frustration, and in turn, cut-and-paste re-use of existing documentation — which is why carefully-designed workflow is so important. But if they are used appropriately, EMRs can boost revenue painlessly.

* Patient and provider engagement: True, IT needs to take the lead on getting the EMR in place, and must make some important deployment decisions on its own. Still, hospitals will have trouble meeting their goals if patients and providers aren’t invested in its success, and without patient interest in their data I’d argue that meeting long-term population health goals is unlikely. On the flip side, if clinicians and patients are engaged, the feedback they offer can help hospitals shape not only the future of their EMR, but also the rest of their clinical data infrastructure.

If there’s any common theme to all of this, I’d submit, it’s participation. Unlike most efforts corporate IT departments undertake, EMR rollouts are unlikely to work until everyone they touch gets on board. Hospitals can invest in any EMR technology they like, but if providers can’t use the system comfortably to document care, patients don’t log on to access their data, or revenue cycle managers don’t see how it can improve revenue capture, the project is unlikely to offer much ROI.

Hospitals Favor IT Investments Over Cash on Hand

Posted on June 5, 2015 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.

Today I was reading a piece in Healthcare Finance News concluding that now more than ever, hospitals are being judged by financial analysts by the number of days’ cash they had on hand. At the same time, the story noted that hospitals are facing some of the biggest financial stresses they’ve faced in decades, with high patient deductibles and copays leading to drops in collections, switches to risk-based compensation cutting margins and the ever-present need for EMR and other IT investment looming.

When you boil all of this down to the essentials, you’ve got a pitched battle going between the need for current liquidity and the need for future liquidity. While having cash on hand shored up for a rainy day makes analysts like Moody’s happy, failing to spend on the right IT infrastructure undercuts the chances of making it work a few years in the future.

After all, if you don’t have a current revenue cycle management system in place, payments can slip through your hands that could have been collected.  Without spending the right amount in (on the right product, at least) on tools that help manage risk-based contracts, health systems and ACOs can end up losing big money on these contracts.

And even hospitals that aren’t in robust shape are betting their financial future on big EMR investments because they clearly consider it necessary to do so. For example, as I noted in a post earlier this year, Chattanooga, TN-based Erlanger Health System just committed to a 10-year, $100 million deal to put Epic in place despite its only recently having recovered from serious financial challenges.

So the question becomes whether hospitals can risk being cash-poor for now — at least by one measure — in an effort to keep the IT tools they need at hand. Obviously, there’s no one-size-fits-all answer, but industry strategies seem to offer a hint.

The reality seems to be that many health systems and hospitals feel they need to invest in IT upgrades and new technologies whether the traditional metrics fall into line or not. As scary as the regulatory issues (such as the ICD-10 upgrade) and changes in compensation are, health organizations like Erlanger are making the bet that even if it makes them uncomfortable now, having the right IT in place is a must-do.

While I’m no financial genius, my guess is that this means hospitals are going to voluntarily let key metrics like DCOH slip in favor of building for a solid future. I suppose we’ll know in five years or so whether taking such a risk pushed a bunch of hospitals over the cliff.