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EMR Usability A Pressing Issue

Posted on January 29, 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.

A few months ago, in a move that hasn’t gotten a lot of attention, the AMA and MedStar Health made an interesting play. The physicians’ group and the health system released a joint framework designed to rank EMR usability, as well as using the framework to rank the usability of a number of widely-implemented systems.

What makes these scores interesting is not that they’re just another set of rankings — those are pretty much everywhere — but that the researchers focused on EMR usability. As any clinician will tell you (and many have told me) despite years of evolution, EMRs are still a pain in the butt to use. And clearly, market forces are doing little to change this. Looking at where widely-used systems rate on usability is a refreshing look at a neglected issue.

To score the EMRs, researchers dug into EMR vendor testing reports from ONC. This makes sense. After all, though the agency doesn’t use this data for certification, the ONC does require EMR vendors to report on user-centered design processes they used for eight capabilities.

And while the ONC doesn’t base EMR certifications on usability, my gut feeling is that the data source is pretty reliable. I would tend to believe that given they’re talking to a certifying authority, vendors are less like to fudge these reports than any they’d prepare for potential customers.

According to the partners, Allscripts and McKesson were the highest-scoring EMR vendors, gaining 15 out of 15 points. eClinicalWorks was the lowest-scoring EMR, getting only 5 of 15 possible points. In-betweeners included Cerner and MEDITECH, which got 13 points each, and Epic, which got 9 points.

And here’s the criteria for the rankings:

  • User Centered Design Process:  EMRs were rated on whether they had a user-centered design process, how many participants took part (15+ was best) and whether test participants had a clinical background.
  • Summative Testing Methodology: These ratings focused on how detailed the use cases relied upon by the testing were and whether usability measures focused on appropriate factors (effectiveness, efficiency and satisfaction).
  • Summative Testing Results:  These measures focused on whether success rates for first-time users were 80% or more, and on how substantive descriptions of areas for improvement were.

Given the spotty results across the population of EMRs tested, it seems clear that usability hasn’t been a core concern of most vendors. (Yes, I know, some of you are saying, “Boy howdy, we knew that already!”)

Perhaps more importantly, though, it can be inferred that usability hasn’t been a priority for the health systems and practices investing in these products. After all, some of the so-so ratings, such as that for the Epic product, come from companies that have been in the market forever and have had the time to iterate a mature, usable product. If health systems were demanding that EMRs be easy to use, the scores would probably be higher.

Frankly, I can’t for the life of me understand why an organization would invest hundreds of millions of dollars (or even a billion) dollars in an EMR without being sure that clinicians can actually use it. After all, a good EMR experience can be very attractive to potential recruits as well as current clinicians. In fact, a study from early last year found that 79% of RNs see the hospital’s EMR as a one of the top 3 considerations in choosing where to work.

Maybe it’s an artifact of a prior era. In the past, perhaps the health systems investing in less-usable EMRs were just making the best of a shoddy situation. But I don’t think that excuse plays anymore. I believe more providers need to adopt frameworks like this one, and apply them rigorously.

Look, I know that EMR investment is a complex dance. And obviously, notions of usability will continue to evolve as EMRs involve — so perhaps it can’t be the top priority for every buyer. But it’s more than time for health organizations to take usability seriously.

Is An Epic Investment Bad For Health Leaders’ Job Stability?

Posted on January 28, 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.

For quite some time now, the buzz has been that at least one EMR vendor was a safe bet for everyone involved. “No one ever got fired for choosing Epic” has begun to seem as obvious a sentiment as “No one ever got fired for choosing IBM” in hospital C-suites. And certainly, in previous times that was probably true.

But it’s beginning to look as though at least in some cases, Epic has not been as safe a choice as health execs had hoped. In fact, while it’s not exactly a fully-fledged trend, it’s worth noting that Epic-related costs and technical issues have led to job losses for hospital CIOs, as well as other operational leaders, in recent times.

Perhaps the most recent example of Epic-related job attrition took place earlier this month, when the chief information officer and chief operating officer of Denver Health Medical Center. According to the Denver Post, the two executives left their posts in the wake of major disagreements over the medical center’s big investment in an Epic EMR.

The Denver Post story reports that former Denver Health CIO Gregory Veltri was on the outs with CEO Arthur Gonzalez from the outset where Epic was concerned. Apparently, Veltri argued from the get-go that the Epic install costs — which he estimated could hit $300 million when the $70 million cost of dumping the center’s current EMR contract and doubling of its IT staff were computed — stood a chance of bankrupting the hospital. (Gonzalez, for his part, claims that the Epic installation is under budget at $170 million, and says that the system should go live in April.)

In another example of Epic-related turnover, the chief information officer at Maine Medical Center in Portland seems to have left his job at least in part due to the financial impact of the hospital’s $160 million Epic investment. Admittedly, the departure of CIO Barry Blumenfeld may also have been related to technical problems with the rollout which slowed hospital collections. This took place back in 2013, but it still seems noteworthy.

The spring of 2013 also saw the departure of Sheila Sanders, the chief information officer for Wake Forest Baptist Medical Center, in the midst of the medical center’s struggles to implement its own Epic system. While Wake Forest Baptist had spent a comparatively modest $13.3 million on direct Epic costs during its second quarter of fiscal 2012-13, the medical center had been socked by delays in revenue resulting to Epic rollout problems, including issues with billing, coding and collections.

Wake Forest Baptist reported taking an $8 million hit that quarter due to “business-cycle disruptions (that) have had a greater-than-anticipated impact on volumes and productivity.” It also reported $26.6 million in lost margin due to reduced volume during go-live and post go-live Epic optimization.

Of course, a botched rollout can mean job insecurity no matter what EMR the hospital has chosen. For example, in May of 2014, Athens Regional Medical Center President and CEO James Thaw was apparently pressured out of office when the facility’s Cerner rollout went poorly. (After weeks of Cerner problems, the hospital’s staff voted 270-0 that they had “no confidence” in the hospital’s leadership. Gulp!) Somehow, Senior Vice President and CIO Gretchen Tegethoff kept her job, but my bet is that it was a close-run thing.

And to be fair, this is obviously a small, selected set of anecdotes about questionable Epic rollouts. They don’t prove that Epic is a CIO job killer or an ineffective EMR. But these stories do highlight the fact that while Epic investments might yield good things, rolling Epic out requires nerves of steel and flawless execution.

Athenahealth Amps Up Drive To Build Inpatient EMR

Posted on January 26, 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.

EMR vendor athenahealth has been driving forward for a while now to build a new hospital inpatient system and fight for the big-ticket customers in acute care. Given the intense competition for the acute care EMR dollar, I’m skeptical that athenahealth can wedge its way into the game. But so far, it looks like the vendor is going about things the right way.

athenahealth already offers the athenaOne suite, which includes an ambulatory EMR, revenue cycle management and patient engagement tools. But it seems the ambitious execs there have also decided to participate in the bare-knuckled fight for hospital bucks being duked out between Cerner, Epic, MEDITECH, McKesson and Allscripts. Considering the billions at stake, these acute care giants won’t be gentle. But as the following details suggest, athenahealth may just have enough going for it to slip into place.

Last year, athenahealth got the ball rolling when it struck a co-development deal with Boston-based Beth Israel Deaconess Medical Center to create a new inpatient system. The two organizations agreed to kick off the development work at Beth Israel’s 58-bed hospital, which is located in the nearby suburb of Needham, Mass.  The deal makes particular sense given that athena corporate is located in another Boston suburb, Watertown.

To supplement its development efforts, athenahealth also picked up small-hospital EMR vendor RazorInsights and Beth Israel’s home-built webOMR EMR. athena has replaced the RazorInsights EMR with a rebuilt version of its ambulatory athenaClinicals EMR, and integrated it with the RI hospital information system, plus several ancillary systems. This hybrid system is being sold to the small-hospital market.

athenahealth has begun converting webOMR into athenaNet in partnership with the small Needham branch of Beth Israel, working with clinicians and technical staffers to better understand the inpatient care environment.

That agreement alone might have gotten the job done, but athena didn’t stop there. Last week, the vendor announced that it would be partnering with the University of Toledo Medical Center to further speed the development of its inpatient EMR. The agreement clearly builds on the vendor’s prior relationship with the University of Toledo Physicians, which picked up the athenaOne suite in late 2014.

The deal with UTMC will do more than give athenahealth another testbed and development site. This agreement with the health system, which is dumping its McKesson Horizon system by 2018, gives athenahealth a real-life win in a substantial setting. What’s more, given that the medical center is being given the chance to build things to its liking, the new acute-care EMR is unlikely to cost as much over the long-term as, say, Epic support and maintenance.

I must admit that I still see athenahealth’s plans as fairly risky. While it has significant resources, the vendor can’t match those of its big competitors. What’s more, it could lose a great deal if it endangers its strong legacy base of ambulatory users. But if any of the established ambulatory HIT firms have a shot at the bigger deals, this one does. I’m eager to see how this turns out.

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?

Rural Hospitals Catching Up In HIT Adoption

Posted on December 14, 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.

Historically, rural hospitals have lagged when it comes to health IT adoption. But according to at least one yardstick, the HIMSS EMR Adoption Model (EMRAM), rural facilities seem to have closed much of the gap.

Just a few years ago, many rural hospitals were barely at stage one of the model, which ranks facilities from Stage 0 (All three ancillaries not installed) to Stage 7 (Complete EMR; CCD transactions to share data; Data warehousing; Data continuity with ED, ambulatory, OP). Only two years ago, research suggested that rural and critical access hospitals were lagging far behind in meeting Meaningful Use criteria, and risked incurring penalties this year.

By the end of 2014, however, rural hospitals averaged a Stage 4 rating (CPOE, Clinical Decision Support (clinical protocols). This compares favorably with the 4.7 rank achieved by urban hospitals, and though academic/teaching hospitals were well ahead at a 5.4 ranking, that’s a much smaller difference than you might have seen even five years ago. Meaningful Use incentives, plus overall industry pressure to automate, seem to have done their job.

I’m pondering this, in part, because the CPSI acquisition of Healthland piqued my interest. CPSI picked up Healthland, a provider of rural and critical access hospital software, for $250 million. Given rural hospitals’ history of slow HIT adoption, I wasn’t sure what CPSI saw in Healthland, though the deal does bring revenue cycle management and an EMR for post-acute care facilities to the table.

Now that I’ve learned what progress the rural health IT market has seen, I’m no longer so skeptical. In fact, when you consider that the Healthland acquisition brings 3,300 post-acute customers that it didn’t have before, it seems like CPSI got a pretty nice deal.

Given the growing strength of the rural HIT market, I don’t think the Healthland buyout will be the last domino to fall here. I can easily imagine the giants — Cerner in particular — seeing their way clear to acquiring the combined CPSI/Healthland entity. Why Cerner? Well, if for no other reasons than having a ton of cash — and a more flexible attitude than Epic — I can imagine Cerner getting excited about rural access.

But even putting aside M&A dynamics, the news from rural markets is still intriguing. While having sophisticated health IT infrastructure is a plus anywhere, my guess is that it will be particularly powerful for rural and critical access hospitals. I hope that the growth of HIT capabilities brings a breath of fresh air — and the benefits of cutting-edge care management — to facilities that have traditionally gotten the short end of the stick.

Meditech EHR Market Share

Posted on November 25, 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 recently got subscribed to the Navin, Haffty & Associates email newsletter. The title on their website claims they’re the “Largest and Most Respected MEDITECH consulting firm.” I’ll let you decide on those two counts, but they’re clearly all in as a consulting firm with MEDITECH. In their latest newsletter John Haffty, President of Navin, Haffty & Associates, shared some statistics on MEDITECH market share that I thought might be of interest to readers:

Statistically speaking, MEDITECH has over 2,400 clients. The number of MEDITECH clients by platform is outlined below:
Client/Server – 1,056
MAGIC – 848
6.x – 546

Over the past five years 285 clients have been added, 137 of which implemented 6.x. Clients often add their existing platform as they acquire hospitals and this has resulted in the addition of 22 MAGIC and 126 Client/Server sites. In addition, MEDITECH has signed 31 organizations for the new Ambulatory product. Of the 546 Ambulatory 6.x sites, 279 have chosen 6.1, with some already LIVE.

MEDITECH’s market share for hospitals by bed size demonstrates a strong industry presence:

23% – under 99 beds
36% – 100-199 beds
36% – 200-299 beds
27% – 300-399 beds
17% – 400+ beds

I’ve long argued that MEDITECH was still a sleeping giant in the EHR space. Epic and Cerner gets most of the headlines, but MEDITECH still has a massive market share. Of course, after CPSI’s acquisition of Healthland today, it looks like CPSI wants to play as well.

Interoperability Challenges (VA, DOD, Epic, CommonWell) – Where Do We Go From Here?

Posted on November 16, 2015 I Written By

David is a global digital healthcare leader that is focusing on the next era of healthcare IT.  Most recently David served as the CIO at an academic medical center where he was responsible for all technology related to the three missions of education, research and patient care. David has worked for various healthcare providers ranging from academic medical centers, non-profit, and the for-profit sectors. Subscribe to David's latest CXO Scene posts here.

The state of healthcare in the United States is fairly well known with the US healthcare spend between 17-18% of the GDP. It is one of the most expensive countries in the world for healthcare. America is also one of the few developed nations not to have a universal healthcare scheme, and one of the main barriers is interoperability challenges.

As we have just finished celebrating veteran’s day, one of the challenges in our federal system is interoperability. In order to provide these veterans with proper healthcare, the Veterans Association and the Department of Defense each proposed an update to the way medical records were stored. The proposed system involved purchasing or customizing an existing an EMR software, which would allow doctors to access patient files far more easily.

This would make it easier for veterans to switch doctors without having to worry about taking large amounts of paperwork along with them. It would also allow doctors to give their patients the best care possible without having to worry about red tape and legal hoops they have to jump through. While this makes sense to everyone, a decision has been made to have two separate systems.

We are also having the same discussion in the commercial EMR space recently where representatives from Cerner asked Epic to joing the CommonWell Health Alliance. Based on my experience Epic has done a great job at exchanging data with other Epic customers. At the request of the customer, Epic will work on creating interoperability with other non-Epic systems. The challenge is the need to create a special request for data sharing every time an Epic customer wants to communicate with a non Epic facility.

The House of Representatives have questioned the VA and DOD decisions to create these separate EHR systems. This makes perfect sense since I am also questioning the decision myself. What should have happened in this situation is the VA and DOD should have come together to collaborate on one EHR system. At the same time, the federal government should step in to create a standard for interoperability and mandate that we move towards collaboration.   If you think about the impact that meaningful use had on transforming the healthcare sector’s move towards digital, I believe the government could have the same impact on interoperability if they made it a requirement.

5 Pieces of Advice When Checking Out Epic or Cerner

Posted on September 29, 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.

Elise Ames and Vince Ciotti has an interesting follow up post on Health System CIO that looks at Epic versus Cerner in the hospital EHR (or HIS if you prefer) market. The reality is pretty simple. Epic or Cerner are both going to be around for a long time to come. Although, I really enjoyed the 5 pieces of advice they offer at the end of the post for those buying a new car EHR (LIS):

  1. Owner’s manual —it’s sitting right there in the glove box. For an HIS, check out the user manuals – they’re all on-line today. And unlike RFP feature checklist responses, they contain the truth…
  2. Chat with the mechanics — they know what works well, and what breaks the most. For an HIS, ask to meet your implementation project manager before signing, and ask about their staff and (non?) experience…
  3. Take a test drive in the model you’re buying, and on the roads you’ll be travelling. For an HIS, make unchaperoned site visits and phone calls to client hospitals of your size and using your apps…
  4. Check out the warranty — what’s covered versus what’s not? With an HIS, ask for a boilerplate contract and request changes while you still have some competitive pressure…
  5. Negotiate price — don’t tell the Chevy dealer he won, then ask for a discount. Tell him you may buy a Ford unless he gives you a deal… After all, no one pays list price for a mega-buck HIS, do they?

I’ve heard of many of these suggestions before. However, the first one was one I hadn’t heard before. It’s a great idea and is the beauty of the internet. I’m also surprised by those that don’t do “unchaperoned” visits to current users of an EHR. Yes, it’s one thing to go to a reference site for an EHR. That’s a good thing as well, but you’ll get more value visiting one that isn’t a reference site per se.

Another Giant In Play: 3M Looking At “Strategic Alternatives” For HIS Unit

Posted on September 14, 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.

Given the staggering number of EMR launches that took place in the wake of the Meaningful Use kickoff, mergers, sell-offs and business failures were quite predictable. Despite the feds’ doling out $30B in incentive dollars, even that wasn’t enough to keep hundreds of EMR entrants afloat.

It hasn’t been as clear what would happen to large vendors with HIT interests, given that they had enough capital to ride more than one wave of provider adoption. The field has just begun to shake out, with only a small handful of major transactions taking place. Recent plays by large tech players include Cerner’s $1.3B acquisition of Siemens Health Services, which included the Soarian EMR. There’s also ADP’s sale of EMR solution AdvancedMD to Marlin Equity Partners after previously acquiring e-MDs. Not to mention Greenway and Vitera Healthcare Solutions joining forces and Pri-Med acquiring Amazing Charts.

Another major move was announced this April at HIMSS 15, when GE Healthcare announced that it was phasing out its Centricity Enterprise product. According to news reports, the Enterprise product only generated 5% of the Healthcare division’s EMR revenue. I could keep going, but you get the point.

Now, 3M has joined the fray, announcing this week that it was “exploring strategic alternatives” for its HIS business, including spinning off or selling the unit.  (It’s also considering keeping its HIS business on board and investing in its future.)  The company, which has signed Goldman, Sachs & Co. as strategic advisor and investment banker, says that it will probably announce what direction it will head in by the end of the first quarter of next year.

On the surface, 3M Health Information Systems looks like a very solid business. The HIS unit, which is focused on computer-assisted coding, clinical documentation improvement, performance monitoring, quality outcomes reporting and terminology management, reportedly works with more than 5,000 hospitals, plus government and commercial payers. According to 3M, the HIS business generated trailing 12-month revenues of about $730M, and has sustained 10%+ compounded annual growth for 10 years.

That being said, it’s hard to say what the fallout from the ICD-10 switchover will be, and it’s not unreasonable for 3M to consider whether it wants to compete in the post-switchover world. After all, while the HIS unit seems to be quite healthy, it’s certainly faces stiff competition from several directions, including EMRs with integrated billing and coding technology. Also, the company may be saddled with outdated legacy infrastructure, which makes it hard to keep up in this new era of revenue cycle management.

By the end of the first quarter of 2016, 3M will have had a chance to see how its customers are faring post-ICD-10, and how its customers needs are shifting. 3M will also find out whether other HIS players with (presumably) newer technology in place are interested in doing a rollup with its business.

Truthfully, if 3M doesn’t think it can benefit from investing in the HIS unit, I’m not sure who else would benefit from doing so. In fact, I’d argue that 3M is undermining its chances at a deal by waffling over whether it plans to invest or divest; as I see it, this implies that the HIS unit will be on life support without a major cash infusion, which is not something I’d find attractive as an investor.  If nothing else I’d want to buy the unit at a firesale price! But I guess we’ll have to wait until March 2016 to see what happens.

Reddit Users Comment on Epic Losing the DoD EHR Contract to Cerner

Posted on August 17, 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.

The reactions to Epic losing the DoD EHR contract to Cerner have been all over the place. Most of them create some simplified view of why Epic beat out Cerner. I personally think that Leidos vs IBM had a lot more to do with the DoD’s decision than Epic vs Cerner. Either way, HIStalk reported that the protest period for the DoD EHR bid has expired and so Cerner is the big EHR winner. Mr. H said that rumors have been that Cerner’s bid was $1 billion less than Epic and Allscripts and so that’s why there was no protest.

Personally, I’ve been most fascinated by the reactions to Cerner beating out Epic in this reddit thread that includes a number of current and former Epic employees. The person who started the thread conveyed many people’s reaction to the selection of Cerner over Epic:

RIP my contracting plans for the next 2+ years :(

No doubt, Cerner consultants are celebrating in the opposite direction along with the 30+ other partners that won the bid with Leidos, Cerner, and Accenture. I previously wrote about how many people will be required in the $4 billion DoD EHR contract.

Here are some of the other interesting reactions in the reddit thread linked above:

I don’t think this is that bad for Epic.
* The government contract likely would have significantly shifted the focus of R&D efforts for the next few years towards features that may not be in the best interest of other Epic customers.
* When the project invariably runs into issues: overbudget, overtime, stability, training, response time, upgrades, etc. Cerner will be on the hook and take the hits in the media. Much of this implementation will be handled by outside consultants so coordination will be a huge challenge for any company.

Reminds me of the post I wrote about a year ago suggesting that losing the DoD bid might be the best thing for Epic.

Some source claim the contract would have been worth $9 billion overall. Just to put that in perspective… For an Epic employee making $200k a year, $9bn would pay your salary for 45 THOUSAND years. For 5,000 employees each making $200k a year, $9bn would pay their salaries for nine years.

(Yes, I know its not that simple… just trying to put $9 billion dollars in some kind of perspective).

Point is, yes, gaining or loosing a contract for that kind of money is a very big deal for ANY company, and impacts the future of that company in a significant way.

I don’t think most of us can comprehend a billion dollars. I know I can’t. However, I agree with the point that losing the DoD EHR contract is a big deal for any company. Even with this other clarification about how much money the EHR vendor will get from the contract:

I saw estimates that the contract would be worth $9 billion over 18 years, and that Cerner was likely to get only 10-20% of it (with most of the money going to Leidos). That means Cerner is getting $50-$100 million per year. This is obviously substantial, but it’s not as impressive as the $9 billion sounds.

I’ll be interested to see if those estimates are accurate. Plus, we’ll see how much the project cost balloons over time.

This Epic employee offered an interesting concern over Epic losing the DoD contract:

As a current Epic employee, I’m more than a little concerned about how much of the current building projects and massive hiring was made under the hope/assumption that we would be awarded this contract. I think this represents a much bigger deal for Epic than what you try to wave off.

Another user offered this comment on why Epic might have lost the deal:

What everyone needs to consider is that Epic is currently working on the build for United States Coast Guard (USCG). 1.The USCG falls under the DoD in terms of rules of engagement to include use of CHCS and PGUI (USCG didn’t transition to ALHTA). 2. The Epic build is consider by most involved on this project as an Epic failure! 3. DoD know about this Epic failure and of course the decision to to choose Epic is based upon this build failure. 4. After five years of this USCG contract Epic is still trying to understand military processes.

However, I think this was the feeling for many and why many are still in shock that Cerner won the contract over Epic:

Wow, I thought Epic had that contract locked up.

Just like I’ve done with ICD-10, I chose not to try and predict what the government will do. So, I wasn’t personally surprised by the DoD picking Cerner over Epic. However, now that Cerner is chosen, I’m interested to see how this affects both companies. The last comment about Epic’s USCG implementation illustrates how challenging working with the government can be. Cerner will definitely be spending time developing some unique software and technology to meet the DoD’s unique needs.