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Did Hospitals Put Off RCM Upgrades for Nothing?

Posted on May 8, 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.

In December of last year, I wrote a piece outlining a study on revenue cycle management systems by research firm Black Book.  The piece noted that despite hospitals’ desperate need to modernize their RCM platforms, such upgrades were being put off over and over again, largely due to the cost of ICD-10 switchover and Meaningful Use compliance.

It’s hard to say whether ICD-10 prep or  MU compliance have been a greater strain on hospital budgets, but it’s clear that ICD-10 preparations have been a major distraction and a major cost.  Even if a hospital’s EMR has included ICD-10 codes in is platforms or upgrades, hospitals have still had to reconfigure some systems, do revenue impact testing with payers, conduct readiness testing with clearinghouses and train with their claims processing staff, and none of it has been cheap. And the longer hospitals wait to pull the trigger, the worse things get. The American Hospital Association recently estimated that delaying the ICD-10 switchover deadline has cost the hospital industry billions of dollars.

Given the cost of the run-up to the new code set — and the fact that most hospitals report being ready to switch over from ICD-9 — the industry has hoped against hope that the deadline wouldn’t be extended again. In fact, a recently-released survey by software firm QauliTest of more than 150 healthcare executives found that 83% said they think ICD-10 will go live as currently anticipated on Oct. 1.

And that’s where politics enters the picture. While hospitals seem raring to go ahead with the transition and skip any further delays to the deadline,  Texas Rep. Ted Poe (R) has a different outcome in mind.  Perhaps pushed by physicians’ lobbying groups, which still oppose the switch as being too burdensome and costly to handle, Poe has introduced a bill which would actually prohibit HHS from adopting ICD-10 as an ICD-9 replacement.

It’s hard to tell whether the bill will even make it out of the House, as it currently has only six co-sponsors, each fellow Republicans to Poe.  But if it did, hospitals would have plenty to gripe about.

As we’ve pointed out here, one of the major sacrifices hospitals have had to make due to outside forces is to postpone RCM system investment, a lapse which has doubtless cost hospitals plenty due to lost money due to claims processing problems. The longer the need to put off RCM switchovers or improvements lasts, the greater the chance that it hospitals will lose too much to afford on claims old systems can’t handle.

Bottom line, I’d argue that another ICD-10 delay or cancellation of the entire transition would be terribly unfair to hospitals.  If CMS needs to help doctors through the process or even help them pay for it, so be it. Hospitals deserve to be freed to focus on their other IT problems, not wait with bated breath for yet another ICD-10 delay.

GE Phasing Out Centricity Enterprise, To Some Surprise

Posted on April 22, 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.

Conceding that its competitors have the upper hand, GE is phasing out its Centricity Enterprise product, informing the world in a #HIMSS15 announcement which has gotten little play from our tech media colleagues.  As we’ve argued before, HIMSS is not only a great time to announce big plays, it’s also a great time to bury unpleasant news, and GE seems to have succeeded.

Not surprisingly, employees saw things coming long ago. More than a year ago, for example, a 10-year-plus employee of GE Healthcare called the vendor out on what they saw as low-wattage efforts on company rating site Glassdoor.com. The ex-employee cited a “lack of resources to deliver a good EHR product, [causing] a strong customer base to choose other EHR vendors.”

It’s little wonder that GE is backing out of Centricity Enterprise, which according to a report in MedCity News generated only 5 percent of its EMR revenue, according to Jon Zimmerman, general manager of clinical business solutions. “Is it in the best interest of our customers, shareholders and employees to (be) in a market where competitors are clearly ahead, or should we recognize the situation and go to where the market is going?” Zimmerman told MedCity.

But the fact is, Zimmerman’s comments are somewhat disingenuous. At HIMSS, the company admitted that it had begun the process of dumping Centricity Enterprise three years ago, though it’s not clear how long ago it began to let customers know about its plans. For example, I doubt that Continuum Health Partners CIO Mark Moroses, who as of summer 2013 was moving his organization to the Centricity enterprise EMR, expected to have it phased out less than two years later.

It’s worth wondering why a player with GE’s resources seemingly couldn’t hack the enterprise market. But the problem isn’t new. As far back  as 2011, GE was forced to admit that some of its ambulatory and enterprise customers wouldn’t be able to achieve Meaningful Use with their products. That was probably the beginning of the end for the Enterprise product, which ranked either fifth or sixth in the market recently depending on who you asked. But with Epic alone controlling 15% to 20% of the enterprise EMR market of late, and Cerner hot on its heels, giving up probably was a reasonable response.

The real question is what comes next. If Glassdoor.com posters are any indication, GE Healthcare is prone to frequent strategic changes as management shifts, so who knows what the future holds for its ambulatory Centricity EMR?

At the moment,  it seems that GE is firmly behind its ambulatory product. And that makes sense. After all, physicians are decommissioning their existing EMRs at a frantic rate, and are eager to find substitutes, and that gives GE plenty of sales opportunities. With 70% of physicians unhappy with their EMR, according to a study announced in February of last year, it should be easy pickins.

But given the way GE may have fumbled the ball on the enterprise side, I’d want some proof that leaders there had a long-term commitment to ambulatory care. Practices have a hard enough time finding EMRs that work for them; having to switch for reasons that have nothing to do with them makes no sense.

Mostashari’s Call for “Day of Action” Is a Double Edged Sword

Posted on April 13, 2015 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.

Neil Versel has a great article on MedCity News that covers some comments from Farzad Mostashari at HIMSS 2015. Here’s a section of his article:

Patient advocates are planning a “day of action” to generate mass demand for consumer access to medical records in the wake of a plan to roll back the Meaningful Use requirement for engaging patients in their own care.

“I think we need to show the policymakers that they’re not just pushing rope here. We need to show that there’s demand,” former national health IT coordinator Dr. Farzad Mostashari said Sunday afternoon during a preconference symposium on patient engagement before the start of HIMSS15 in Chicago.

While I think that Farzad’s suggestion is noble in idea, my gut tells me that it could backfire in a very significant way. You have to remember that a call for a “day of action” is a double edge sword. If that day goes off successfully, then it could make a great case for why we should be requiring the 5% patient engagement in meaningful use as opposed to the single patient record download that’s just been proposed.

However, the opposite can also happen too. If you call for a day of action and then patients don’t request access to their records, then it will lead many to say “We were right. Patients don’t care about accessing their patient records.” This conclusion would be incredibly damaging to the movement towards patients’ getting access to their medical records.

This would be true even if there were other reasons that the day of action wasn’t successful. For example, if you do some poor PR and marketing of the day of action, then It could very likely fail. I’m talking big boy PR and marketing to really get the word out to patients. Healthcare social media and even all of the attendees at HIMSS won’t have the power to get the word out about this idea in order to really see it take off.

While I think the goal is noble and Farzad is right that patients need to really start demanding their data, I think this idea of a “Day of Action” could end really poorly if we’re not careful about it.

Meaningful Use Reporting Period Changed to 90 Days and Other Proposed Changes

Posted on April 10, 2015 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.

In case you missed the news, CMS posted the proposed rule that modifies meaningful use in 2015-2017 (Here’s the rule on the Federal Register). The 210 page document dropped late on Friday right before HIMSS. If you think we’ve seen CMS do this before, we’ve seen it happen a lot. They love to issue the rules on Friday and often right before HIMSS. At least that’s better than when they released the rule during HIMSS, but not much.

The summary of the changes is pretty straightforward:

  • Streamlining reporting by removing redundant, duplicative, and topped-out measures
  • Modifying patient action measures in Stage 2 objectives related to patient engagement
  • Aligning the EHR reporting period for eligible hospitals and CAHs with the full calendar year
  • Changing the EHR reporting period in 2015 to a 90-day period to accommodate modifications

The patient engagement was changed from 5% to a single download, view, and transmit as it’s been called. I think many will look on this as a very favorable change since you can’t force a patient to do something and so your incentive and penalties shouldn’t depend on their action.

It also makes sense that they change the hospital reporting period to the calendar year like it’s been for EPs. The change probably has some logistical questions for many hospitals, but it will make the process cleaner.

The big one of course is the 90 day attestation period. We knew it was coming and I think everyone’s glad that it’s here. Now it will be interesting to see how many wait until October to start their attestation period. That’s pretty risky if you ask me, but that didn’t stop organizations from waiting just the same.

I don’t think there will be many issues with what’s in this proposed rule. Although, we’ll see over the next week what other things people find as they dig into the rule. I know many were waiting for this to drop and are now breathing a sigh of relief over the 90 day reporting period.

Let us know in the comments if there are other details you find that we didn’t talk about or nuances we might have missed. Enjoy the light reading on the flight to HIMSS.

Meaningful Use Stage 3 Apathy

Posted on March 27, 2015 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’ll admit that I was out of town when the meaningful use stage 3 rule was released. (Side Note: Why do they always release the rule on a Friday right before the weekend?) So, unlike many people I wasn’t deep in the regulatory details of meaningful use stage 3.

Since I missed the initial release of MU stage 3, I like to read the commentary coming from other people to sort of triangulate some of the most common issues and challenges people have with the new rule. However, what’s been fascinating for me in almost all of these writeups is that people are tired of meaningful use.

Over and over I’ve read of people who haven’t read the rules, people who are putting off reading the rules, and people who’ve shunned meaningful use all together. In fact, I’ve been shocked by the number of people who are just “over” meaningful use. They’re ready to move on from it and move on to something new.

Many people might misinterpret this apathy with meaningful use as a dislike for technology in general. In most of the cases I’ve mentioned that couldn’t be further from the truth. Most of the people who are tired with meaningful use are all about implementing technology in healthcare. They’re just tired of the government regulating that they do it.

What’s not clear to me is whether this apathy is deep enough that hospitals will not actually go after the meaningful use dollars or not. The EHR incentive money is very real for many hospitals and the penalties are a big deal as well. A decision to not do meaningful use is a really big one and the financial incentives and penalties might still win out. However, you can be sure that whoever’s working on the MU stage 3 project won’t do it with as much gusto as they did MU stage 1.

2015 Hospital Healthcare IT Predictions

Posted on January 5, 2015 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.

At the start of 2015, I thought I’d put down some predictions on what will happen in the world of healthcare IT and EHR. These won’t be crazy predictions, since I don’t think anything crazy is going to happen in healthcare in 2015. We’ll see some clarity with a few programs and we’ll some some incremental change in things that matter to hospitals.

ICD-10 – I predict that ICD-10 will again be delayed with the next SGR fix. I don’t have any inside information on this. I just still believe that nothing’s different in 2015 that wasn’t true in 2014 (maybe AHIMA’s lobbying harder for no delay). I think another delay will put all of ICD-10 in question. Let’s hope whatever the decision is on ICD-10, it happens sooner than later. The ICD-10 uncertainty is worse than either outcome.

Meaningful Use – MU stage 2 will change from 365 days to 90 days. It will probably take until summer for it to actually happen which will put more people in a lurch since they’ll have even less time to plan for the 90 days than if they just made the change now. MU stage 2 numbers will be seen as great by those who love meaningful use and terrible by those who think it’s far reaching. The switch to 90 days means enough hospitals will hop on board that meaningful use will continue forward until it runs out of money.

EHR Penalties – Doctors will be blind sided by all the penalties that are coming with meaningful use, PQRS, and value based reimnbursement, even though it’s been very clear that these penalties are coming. Doctors will pan it off on “I can’t keep up with all the complex legislation.” and “I knew the penalties were coming, but I din’t think they’d be that big.” Watch for some movement to try and get some relief from these penalties for doctors. However, it won’t be enough for the doctors who want to start a perpetual SGR fix like delay of the EHR penalties. Many practices will have to shut down because of poor business management.

Direct to Consumer Medicine – Doctors will start to move towards a number of direct to consumer medicine options such as telemedicine and concierge medicine. These doctors will love their new found freedom from insurance reimbursement and the ongoing hamster on a treadmill churn of patients through their office. How far this will go, I’m not sure, but it will create a gap between these doctors who love this “new” form of medicine and those who feel their stuck on the treadmill.

Interoperability – 2015 still won’t see widespread healthcare interoperability, but it will help to lay a clear framework of where healthcare interoperability needs to go. A couple large EHR vendors will embrace this framework as an attempt to differentiate themselves from their competitors.

There you go. A few 2015 predictions. What do you think of these predictions? Any others you’d like to make? I feel like my predictions feel a little bit dire. A few show signs of promise, but I think that 2015 will largely be a transitory period as we try to figure out how to get the most value out of EHR.

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.

CFO Pleads Guilty To Meaningful Use Fraud

Posted on November 24, 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.

It had to happen eventually — the money is just too good.  The former chief financial officer of a now-closed Texas hospital has plead guilty to charges that he defrauded the meaningful use program, in what may be the first prosecution of its kind.

According to Healthcare IT News the former CFO of Shelby Regional Medical Center in Center, TX, has been indicted on charges that he falsely attested that Shelby Regional met meaningful use requirements for fiscal year 2012. The alleged fraud garnered the medical center $783,655 in payments, according to the indictment.

It’s not that hospitals haven’t wrongly claimed large amounts of meaningful use cash before. In fact, Florida-based Health Management Associates seems to have wrongfully claimed $31 million in meaningful use payments last year prior to its acquisition by Community Health Systems, with 11 of 71 HMA hospitals failing to meet meaningful use criteria.

But it does seem to be unusual, if not unprecedented, for CMS to catch providers in the act of willfully falsifying meaningful use attestations. Either the self-attestation honor system is working or CMS  is failing to catch a great deal of monkey business.

In Shelby Regional’s case, the hospital relied on paper records throughout fiscal year 2012 and only minimally used an EMR, according to the feds. To make sure the facility still captured its meaningful use payout, CFO Joe White instructed the software vendor and employees of the hospital to input data from paper records into the EMR, sometimes months after patients were discharged and after the fiscal year. (If convicted, White faces five years in prison).

What makes the purported fraud at Shelby Regional seem all the more egregious is that it was apparently part of a much larger scheme. Tariq Mahmood, MD, who owned Shelby Regional and five other Texas hospitals, is also being investigated by federal prosecutors for alleged healthcare fraud. The six hospitals owned by Mahmood collected a total of $16.8 million in meaningful use incentives for fiscal 2011 and 2012.

The truth is, there’s probably a lot more fraud going on in the meaningful use program that hasn’t been caught. After all, a report by the Office of the Inspector General for HHS issued early this year concluded that CMS fraud auditors such as the Recovery Audit Contractors weren’t doing a great job of reviewing EMR records, failing to take basic steps such as reviewing EMR audit logs to verify that medical records support a claim. It’s little wonder they haven’t caught more providers deliberately gaming the meaningful use system.

Hospitals can do more to avoid accidental problems with meaningful use claims, too. Observers have noted that few hospitals have sufficient safeguards in place to catch attestation problems before they happen.

Marc Probst Takes Aim at Meaningful Use in Interview at CHIME

Posted on November 6, 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.

One of the must read interviews coming out of the CHIME Fall Forum is Mark Hagland’s interview with Marc Probst. We know that Marc Probst had a growing dissatisfaction with meaningful use after he said he would love to kill meaningful use during National Health IT Week. He keeps on that same trajectory during this great interview by Mark. Although, I think Marc is just representing the feelings of many hospital CIOs.

Here are a few excerpts of the interview for those who don’t want to read the whole thing:

So what is meaningful use for you, as an IT pioneer?

Well, it’s a pain in the neck! We believe we were already some of the most meaningful users, in the broader sense of the term, in healthcare IT, prior to the meaningful use program. But meaningful use has imposed rigid functions that you have to do, and I don’t think it’s added any additional value to what our clinicians do, but only to add tasks. So it hasn’t been all that helpful. I sit on the [federal] IT Policy Committee, so I have a little to do with meaningful use, but nonetheless, it hasn’t been [satisfying].

Nice to see that Marc Probst is taking a little bit of accountability for meaningful use. Although, if you’ve ever sat on a committee you know that you can only do so much if the committee is against you. I think the thoughts above are the opinions of many in healthcare. Although, this simple quote from Marc Probst sums up what many would like to see done:

“I honestly think we should now declare victory and move on.”

Although, Marc Probst also offers this sobering reality that many healthcare CIOs will face:

But I think that a fair number are going to say, look, if I haven’t done it this year, I’ll get the penalties anyway if I haven’t yet attested to Stage 2. I think many will focus instead on ICD-10 and data security, because meaningful use is so frustrating and they don’t control the variables; and security, they can control some of the variables. And the penalties are much harsher for breaches than for meaningful use failure.

I’ve never seen someone compare the meaningful use penalties with the penalties for breaches. It’s a very interesting comparison. However, they are hard to compare since the meaningful use penalties are guaranteed to happen if you don’t attest to MU. The breach penalties only happen if you have a breach occur…or I should say if you have a breach occur and you realize it happened (or get caught). That’s likely why more people are concerned with the meaningful use penalties than security and privacy in their organization.

I think this type of sentiment about meaningful use will grow stronger and be heard from more areas of the country. Marc Probst and Intermountain are really powerful figures in the healthcare community. No doubt, Marc’s decision to speak out on this subject will embolden many others to do the same.

Go and read the rest of Mark Hagland’s interview with Marc Probst. Many more good perspectives in the full interview. I’m glad that people like Marc agree with me that we should Blow Up Meaningful Use and focus on interoperability.

Investor Wants to Take Down Epic

Posted on October 13, 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 came across a really interesting comment from Chamath Palihapitiya, a venture capitalist (made his money working at Facebook), who commented on the healthcare industry and how he wanted to invest in a startup company that would take down Facebook. I embedded the full video below. His comments about EHR and Epic start at about 52:38 or you can click here to see it.

Here’s a great quote for those who can’t watch the video:

“Somebody has to go after the electronic medical record market in a really big way. Let’s go and take down this company call Epic which is this massive, old conglomerate. It’s like the IBM of healthcare.”

After saying this, he talks about how he and other VC investors like John Doerr could call people from Obama (for meaningful use stage 3) to Mayo Clinic to help a startup company try and take down Epic. He even asserts that he’d call Mayo Clinic and suggest that they should rip out Epic and go with this startup company.

Everyone reading this blog know that it won’t be nearly this simple to convince any hospital that’s on Epic to leave it behind. I agree with Chamath that it will happen at some point, but it won’t be nearly as easy as what he describes. Chamath also suggested that it might take $100 million and you might fail, but what a way to fail.

It certainly provides an interesting view into the way these venture capitalists and many startup companies approach a problem. However, I take a more nuance and practical approach of how I think that Epic will be disrupted. I think that it will require a mix of a new technology paired with a dynamic CIO that’s friends with the hospital IT leadership. You need that mix of amazing technology with insider credibility or it won’t be a success. Plus, you’re not going to go straight in and take out Epic. You’re going to start with a hospital department and create something amazing. Then, that will make the rest of the hospital jealous and you’ll expand from there until you can replace Epic. That’s how I see it playing out, but it likely won’t happen until after the MU dollars are spent.

Chamath’s comments were also interesting, because it shows that he doesn’t know the healthcare market very well. First, he said that meaningful use was part of ACA, but meaningful use is part of ARRA (the HITECH Act) and not ACA. This is a common error by many and doesn’t really impact the points he made. Second, he said that Epic is a big conglomerate. Epic is the farthest thing from a conglomerate that you can find. Has Epic ever acquired any company or technology? Cerner, McKesson, GE, etc could be called conglomerates, but Epic is not. Again, a subtle thing, but shows Chamath’s depth of understanding in the industry. It makes sense though. He isn’t an expert in healthcare IT. He’s an expert in seeing market opportunities. No doubt, disrupting Epic and Cerner would make for a massive company.