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Four Things You Should Know About Deloitte’s “Evergreen” EHR Program

Posted on February 20, 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.

Recently, consulting giant Deloitte announced a new program, named “Evergreen,” designed to cut down the cost of implementing and operating hospital EHRs. Unfortunately, much of the Evergreen coverage in the health IT trade press was vague or downright wrong, as it suggested that Deloitte was actually going into the EHR business itself. The key point Deloitte sought to make — that it could implement and operate EHRs for 20% to 30% less than hospitals — did come across, but the rest was a bit jumbled.

Having spoken to Mitch Morris, global healthcare leader for Deloitte Consulting LLP, I can clarify much of what was confusing about the Evergreen announcement and subsequent coverage.  Here’s some key points I took away from my chat with Morris:

  • Evergreen is a suite of services, not a product:  Though some HIT editors seem to have been confused by this, Evergreen isn’t an EHR offering itself.  It’s a set of EHR implementation and operation services provided by Deloitte Consultants. Evergreen also includes a financing scheme allowing hospitals and health systems to obtain a new EHR by making a series of equal payments to Deloitte over five to seven years. (“It’s like leasing a car,” Morris noted.) This allows hospitals to get into the EHR without making an enormous upfront capital investment over the first 18 months.
  • Evergreen is only offered in tandem with an Epic purchase:  The Evergreen program arose from what Deloitte learned after doing a great deal of work with Epic EHRs, including the famous multi-billion install at Kaiser Permanente and an extensive rollout for large hospital system Catholic Health Initiatives. So at the outset, the program is only available to hospitals that want to go with Epic.  Deloitte is considering other EHR vendors for Evergreen partnership but has made no decisions as to which it might add to the program.
  • Both onshore and offshore services are available through Evergreen:  One might assume that Deloitte is offering lower implementation and operation costs by offshoring all of the work.  Not so, Morris says. While Deloitte does offer services based in India and Ireland, it also taps U.S. operations as needed. Clients can go with offshore labor, onshore labor or a mix of services drawing on both.
  • This is a new application services management offering for Deloitte:  While the consulting giant has been managing Oracle and SAP installations for clients for some time, managing EHR platforms is a new part of its business, Morris notes.

According to Morris, Deloitte expects Evergreen customers to include not only health systems and hospitals that want to switch EHRs system-wide, but also those which have done some acquisitions and want to put all of their facilities on the same platform. “It’s expensive for a health system to maintain two or three brands, but they often can’t afford the upfront capital costs of putting every hospital on the same EHR,” he said. “We smooth out the costs so they can just make a payment every month.”

This could certainly be a big score for Epic, which is likely to scoop up more of the EHR-switching systems if Deloitte helps the systems cope with the costs. And Deloitte is likely to get many takers. Let’s see, though, whether it can actually follow through on the savings it promises. That could change the EHR game as we know it.

CIOs Want More Responsibility — And It’s About Time They Get It

Posted on January 19, 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.

The life of a healthcare CIO is a tough one. More than ever before, healthcare CIOs walk a fine line between producing great technical results and thinking strategically about how technology serves clinicians. As with their more junior peers, many healthcare CIOs only get noticed when something breaks or goes offline. Worse, healthcare CIOs may get the blame dumped on them when a big project — especially a mission-critical one like an EMR implementation — fails due to problems beyond their control.

But despite the political battles they must fight, and the punishing demands they must meet, healthcare CIOs are largely satisfied with their career paths — as long as they have a shot at getting more responsibility that can help them move their organization’s strategy forward. This, at least, is the conclusion of a new survey by SSi-SEARCH.

SSi-SEARCH surveyed 169 CIOs to learn how they felt about key aspects of their job, according to iHealthBeat.  All told, the researchers found that CIOs are most satisfied with the trajectory of their career, compensation and strategic involvement. (This is a significant change from a couple of years ago, when CIOs told SSi-SEARCH that their pay wasn’t keeping up with the growth in their responsibilities.)

On the other hand, healthcare CIOs were markedly dissatisfied with the resources available to them, and almost half (48%) said that there will need to be changes within the next year. That’s certainly no surprise. As we’ve noted in this space before, not only do healthcare CIOs need to implement or further augment EMRs and handle the switch from ICD-9 to ICD-10, many need to make costly upgrades to or replace their revenue cycle management systems.

Even if their institution can’t increase their budget, healtlhcare CIOs would be somewhat mollified if they got some respect for some of the softer skills they bring to the table.

Forty-five percent of those surveyed said they wanted recognition for improving patient safety, 44 percent said they wanted to be recognized for innovation, and 37 percent wanted CEOs to appreciate their skill at “bringing departments together,”  SSi-SEARCH found.

Not surprisingly, they want to be appreciated for their overall contributions to their institutions as well. While 69 percent of CIOs felt that their work was “critically important” to the strategic mission of their organization, and 29 percent felt they had been “very important,” some of their employers don’t seem to see it. In fact, 23 percent of those CIOs surveyed felt that they hadn’t been recognized at all.

Sadly, though the healthcare CIO’s job has evolved far from bits and bytes to projects and strategies that directly impact outcomes, not every institution is ready to give them credit. But if they have CIOs pigeonholed as tech wizards, they’d better change their tune.

Giving CIOs the latitude, responsibility and budget they need to do a great job is enormously important. If healthcare organizations don’t, they’ll never meet the demands they currently face, much less emerging problems like population health management, big data and mobile health. This is a make-or-break moment in the dance between healthcare organizations and IT, and it’s not a good time for a misstep.

Hospitals Put Off RCM Upgrades Due To #ICD10, #MU Focus

Posted on December 29, 2014 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.

If you look closely at the financial news coming out of the hospital business lately, you’ll hear the anguished screams of revenue cycle managers whose infrastructure just isn’t up to the task of coping with collections in today’s world. Though members of the RCM department — and outside pundits — have done their best to draw attention to this issue, signs suggest that getting better systems put in has been a surprisingly tough sell. This is true despite a fair amount of evidence from recent hospital financial disasters that focusing on an EMR at the expense of revenue cycle management can be quite destructive.

And a new study underscores the point. According to a recent Black Book survey of chief financial officers, revenue cycle upgrades at U.S. hospitals have taken a backseat to meeting the looming October 2015 ICD-10 deadline, as well as capturing Meaningful Use incentives. Meanwhile, progress on upgrades to revenue cycle management platforms has been agonizingly slow.

According to the Black Book survey, two thirds of hospitals contacted by researchers in 2012 said that they plan to replace their existing revenue cycle management platform with a comprehensive solution. But when contacted this year, two-thirds of those hospitals still hadn’t done the upgrade. (One is forced to wonder whether these hospitals were foolish enough to think the upgrade wasn’t important, or simply too overextended to stick with their plans.)

Sadly, despite the risks associated with ignoring the RCM upgrade issue, a lot of small hospitals seem determined to do so. Fifty-one percent of under 250 bed hospitals are planning to delay RCM system improvements until after the ICD-10 deadline passes in 2015, Black Book found.

The CFOs surveyed by Black Book feel they’re running out of time to make RCM upgrades. In fact, 83% of the CFOs from hospitals with less than 250 beds expect their RCM platforms to become obsolete within two years if not replaced or upgraded, as they’re rightfully convinced that most payers will move to value-based reimbursement. And 95% of those worried about obsolescence said that failing to upgrade or replace the platform might cost them their jobs, reports Healthcare Finance News.

Unfortunately for both the hospitals and the CFOs, firing the messenger won’t solve the problem. By the time laggard hospitals make their RCM upgrades, they’re going to have a hard time catching up with the industry.

If they wait that long, it seems unlikely that these hospitals will have time to choose, test and implement RCM platform upgrades, much less implement new systems, much before early 2017, and even that may be an aggressive prediction. They risk going into a downward spiral in which they can’t afford to buy the RCM platform they really need because, well, the current RCM platform stinks. Not only that, the ones that are still engaged in mega dollar EMR implementations may not be able to afford to support those either.

Admittedly, it’s not as though hospitals can blithely ignore ICD-10 or Meaningful Use. But letting the revenue cycle management infrastructure go for so long seems like a recipe for disaster.

Another Health System’s Finances Weighed Down By Epic Investment

Posted on December 26, 2014 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.

While Memphis-based Baptist Memorial Health Care Corp. may intend to be “the high-quality and low-cost provider” in its region, spending $200 million on an EMR purchase has got to make that a bit more, shall we say, challenging.

While health systems nationwide are struggling with issues not of their own making, such as some states’ decision not to expand Medicaid, it appears that Baptist Memorial’s financial troubles have at least some relationship to the size of its 2012 investment in an Epic EMR platform.

Baptist, which let 112 workers go in September, has seen Standard & Poor’s lower its long-term rating on the health system’s bond debt twice since mid-2013.  Through June, the system’s losses totaled $124 million, according to S&P.

Baptist employs 15,000 workers at 14 hospitals located across the mid-south of the US, so the staffing cuts clearly don’t constitute a mass layoffs. What’s more, the layoffs are concentrated corporate services, Baptist reports, suggesting that the chain is being careful not to gut its clinical services infrastructure. In other words, I’m not suggesting that Baptist is completely falling apart, Epic investment or no.

But the health system’s financial health has deteriorated significantly over the past few years. After all, back in 2009, S&P gave Baptist Memorial a long-term ‘AA’ rating, based on its strong liquidity and low debt levels; history of positive excess income and good cash flow; and solid and stable market share in his total surface area, with favorable growth in metropolitan Memphis.

However, at this point Baptist is clearly struggling, so much so that is taking the extraordinary step of cutting the salaries of top executives in the system by 22% to 23%. That includes cutting the salary of health system CEO Jason Little. But this is clearly a symbolic gesture, as executive pay cuts can’t dent multimillion dollar operating revenue shortfalls.

So what will help Baptist improve its financial health? In public statements,  Baptist CEO Little has said that the hospitals’ length of stay has been excessive for the compensation that they get from payers, and that fixing this is his key focus. This problem, of course, is only likely to get worse as value-based reimbursement becomes the rule, so that strategy seems to make sense.

But Baptist is also going to have to live with its IT spending decisions, and it seems obvious that they’ve had long-term repercussions. I don’t think any outsider can say whether Baptist should have bought the Epic system, or how much it should have spent, but the investment has clearly been a strain.

Do Consulting Firms Increase or Decrease Your Bottom Line?

Posted on July 25, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I’ve been learning a lot more about the Health IT and EHR consulting industry as I work with many of them who post jobs on our Health IT job board. In fact, I’ve written previously asking the question, “Are Most EHR Consulting Companies Really Staffing Companies?” The reality is that many of the so called consulting companies out there are much more like staffing companies than they are consultants. It’s just a lot more sexy to call someone a consultant than a temporary staff member. Plus, it’s hard to charge the rates they do as a temporary staff member, but a consultant seems to justify the higher rates.

I should make clear that there’s nothing wrong with this approach to business. Many healthcare organizations need the temporary staff that consulting companies provide. However, it has diluted the term consulting quite a bit in the process.

If you’re looking for a good way to know what type of consulting company you’re working with consider this question: Does the Consulting Firm Increase or Decrease Your Bottom Line?

The reality is that consultants are expensive. It costs money to get someone to come in and share their time and expertise with you. Plus, when you look at how many “billable hours” a consultant has available to them with travel, finding business, etc, they have to charge a premium to make up that time. However, just because something costs money doesn’t mean that it’s not worth it.

If I told you that you could spend $50,000 and you would save $200,000, every one of you would do it. If I asked you if you’d spend $100,000 in order to generate $500,000 in increased revenue you’d all be interested. This is the model a great consultant provides. Sure, the numbers are projections of value and that what makes it difficult. Although, many consultants are hired these days to complete specific tasks as opposed to provide ROI. That’s how you can quickly recognize the difference between a true consultant and a temporary staff.

The challenge consulting companies face is that it’s much easier to prove that tasks were complete. It’s much harder to really impact a company’s bottom line.

EMR Investment Can Mangle Hospital Credit Rating

Posted on January 13, 2014 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.

As we all know, EMRs are huge investment for hospitals, albeit a necessary one by most standards.  The thing is, can they afford their EMR?  At least in the following case, the answer seems to have been with a resounding “no.”

As we reported earlier, Winston-Salem, N.C.-based Wake Forest Baptist Medical Center went through terrible troubles with both implementation and collections when it installed an Epic EMR system.

In the wake of the fiasco, during which the hospital reported a loss of $56.6 million in operation costs for fiscal 2013, the facility and was slapped with a downgraded credit rating From Standard & Poor’s Ratings Services (from “AA-” to “A+”).  Wake Forest leaders attributed the loss largely to the cost of the EMR installation.

It’s little wonder Wake Forest struggled, and moreover, somewhat surprising that more hospitals aren’t seeing major financial troubles in the wake of their EMR rollout.  After all, as S&P’s Kevin Holloran points out, healthcare IT expenses now account for 25 percent 35 percent of the hospital capital project budget, and Meaningful Use requirements a major contributor to this.

Now, it is worth noting that Wake Forest’s financial troubles came in part due to billing concerns that were only part of the overall implementation picture.  Hospitals that manage to go out their EMR without directly harming cash flow should do far less damage than Wake Forest’s implementation.

But the bottom line is this: when Meaningful Use incentive payments are no longer there to cushion the blow, will hospitals really be able to afford their extremely pricey EMRs?  Will they be able to afford to support them, in a market where health IT recruitment is excruciatingly tough?  And given that EMRs are inevitably married to billing, will Accounts Receivable problems pop up later in the game and endanger hospitals’ credit rating?  My guess is that 2014 will see more hospital performance belly flops courtesy of their EMR.

Expense Growth vs Revenue Growth in Hospitals

Posted on January 2, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I recently interviewed Alan Kravitz, Founder and CEO of Medsys, and he offered an insight into the challenges hospitals face that I hadn’t heard before. Here’s what he said:

Expense growth is expanding faster than revenue growth for the first time in healthcare.

This is really interesting to consider when you think about the billions of dollars that are being spent on EHR software. Although, I don’t think it’s the EHR expense that’s the issue. Sure, it’s now a part of the cost of running every hospital. Plus, we could certainly argue over whether it’s worth the cost and whether the EHR is overpriced. However, there’s something much more challenging at play.

When you think about the political landscape for healthcare, all you hear about is the rising costs of healthcare. You also hear other things like the huge percentage of GDP that come from healthcare and how we spend so much more money than other nations around the world. With all of these things, there’s a huge drive to stop paying so much for healthcare.

When you look at this trend from a hospital perspective, all you hear is that they’re going to be paying us less for doing the same thing (and some might argue for doing more). With this in mind, Alan’s quote above makes more sense. A hospital’s revenue growth is declining and that’s by design. I’m not sure most organizations are ready for this change.

We’ve long heard about the potential of EHR to lower costs. Considering the pressures hospitals face today, we could really benefit from EHR living up to its potential. If not, I’m not sure where hospitals are going to cut.

Hospital IT Investment Shoots Up

Posted on August 26, 2013 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.

Struggling to keep up with the demands of Meaningful Use and ICD-10, hospitals are investing a disproportionate amount of money in health IT, according to a story appearing in Healthcare IT News.

It’s not that hospitals have been on an overall spending spree. Capital investment for medical equipment overall (including non-IT technology) dropped from 30.4 percent to 27 percent in 2013, while medical equipment costs fell from 44.5 percent to 13.8 percent, according to Advisory Board Company figures.

But capital spending per bed for IT grew 62 percent between 2010 and 2011, while total capital spending grew only 2.6 percent, according to Chantal Worzala, director of policy at the American Hospital Association, who spoke with the publication.

What makes these big-dollar investments particularly galling is that CIOs aren’t sure whether all of this IT spending is going to produce a return on investment, according to Healthcare IT News. According to a January 2013 survey by Beacon Partners of more than 200 hospital CIOs, only 40 percent of them measure ROI on EMRs implemened, and even less (36 percent) are confident that their ROI calculations are accurate.

That being said, many CIOs have taken the position that ROI is less important than “strategy enablement,” according to Jim Adams, executive director of research and insights at the Advisory Board Company, who spoke with the magazine.

One key purpose for making these investments is to make sure they have the right infrastructure in place to shift from fee-for-service to accountable care, Adams said. Added IT infrastructure is being  used to prepare to manage the greater financial risk hospitals will be facing under ACO-type models, he suggested.  And at least some of these dollars are being spent on EMR optimization which can help meet that goal.

Another major area of spending within health IT is data security, including mobile device management software to support BYOD, data loss prevention tools and encryption software, HIN reports.

We should know pretty soon whether hospitals made the right IT bets, as the forces pushing them to spend are cresting. But if they find that they need to rethink their strategy, let’s hope they didn’t bet the farm on what they have;  as my colleague John points out, there’s a myth floating around out there that the more expensive an EMR is, the better it is.

Many Hospital Executives Expect Big Health IT Investments This Year

Posted on May 8, 2013 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.

Surprise, surprise.  A new report from the Premier healthcare alliance finds that many hospital executives will make their largest capital investments in IT this year.

To prepare the report, known as the spring 2013 Economic Outlook, Premier spoke with 530 survey respondents, most of whom were hospital leaders.  Survey respondents also included materials and practice area managers, reports iHealthBeat.

Roughly 43 percent of respondents said that their health organization’s biggest capital investment over the next year would be in health IT, a jump of 21 percent from two years ago.  Offering a hint on where the money may be going, the report also found that 32 percent of respondents can’t currently share data across the continuum of care.

Other clues as to where the spending is going come from the study’s topline finding, which predicts a big shift from inpatient to outpatient care.

According to Premier, only 35 percent of respondents are expecting to see an increase in inpatient spending this year as compared to 2012, down 30 percent from predictions made last year. Meanwhile, 69 percent of respondents said they expect to see an increase in 2013 outpatient volume compared to last year.

Some additional intelligence from the report:

* 22 percent of respondents are in an ACO, and 55 percent plan to be by the end of next year

* 27 percent don’t have plans to pursue the ACO model, and may look to bundled payment, care management fees or pay for  performance options

*  29 percent said overutilization of products and services and 22 percent said lack of clinical coordination were the biggest drivers of healthcare costs

* 48 percent said reimbursement cuts had the biggest impact on their health systems

* 40 percent said capital spending would increase over the next 12 months as compared with the previous year

* Almost 37 percent project a capital spending decrease

Healthcare Big Data Trends Leading To Analytics Spending

Posted on March 26, 2013 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.

Ready to exploit big data? So are your competitors, and they’re preparing to spend big bucks in areas where they’ve historically been weak, such as predictive analytics and data discovery, reports  HealthcareITNews.

Technology vendor Lavastorm Analytics recently surveyed more than 600 technology professionals in healtlhcare and other industries about their IT investment plans for this ear.

Right now, researchers found, three-quarters of respondents still routinely use Excel for self-service analytics processes, and 35 percent use the R programming language.  Of the remaining 24 self-service analytics tools listed by the survey, 17 of them were used by less than 10 percent of the audience. In other words, once you get past R and Excel for analytics, there’s little agreement as to what works best.

But the coming months should bring some big changes in this landscape, Lavastorm’s research suggests. As the desire to exploit big data grows, providers are planning investments that will allow them to exploit it. Nearly 60 percent of respondents plan to increase their investments in areas where their capacity is limited.

Those areas include gleaning insights from data (25 percent), accessing data (22 percent) and having the ability to integrate and manipulate data (19 percent), HealthcareITNews says.

To meet those goals, providers intend to invest in predictive analytics (51 percent), big data (35 percent), dashboards (32 percent), reporting (31 percent) and data exploration and discovery (30 percent). At the same time, 27 percent said that they’d invest in advanced visualization tools and 24 percent self-service analytics tools for business users.

All this being said, my hunch that providers probably aren’t particularly sure where they’re headed with this technology yet.  I’d like to have seen Lavastorm ask which clinical or business goals, specifically, they hoped to meet by making these investments, wouldn’t you?