Kaiser | Hospital EMR and EHR

Patients Accessing Online Medical Records Use More Services

In previous postings, I’ve noted that for various reasons, doctors using EMRs are tending to bill for more E/M services. This has CMS in a bit of a tizzy, and definitely deserves attention from the industry. (See also this post about EMR and Upcoding)

Now, a study appearing in the Journal of the American Medical Association seems to have identified another vector for increased use of services. According to the study, patients with online access to medical records and clinicians consume more clinical services than those without access.

The JAMA authors drew this conclusion after studying the consumption of clinical services by members of Kaiser Permanente Colorado, a group model IDS. The Kaiser unit was studied from March 2005 through June 2010, reports Becker’s Hospital Report.

What made the Kaiser unit a good choice was that not only did it have an EMR in place, it also launched a patient portal in May 2006 allowing patients secure access to health records details such as test results, care plans and active medications.

Researchers found that members who used the MyHealthManager portal, which gave access to the EMR, had increased rates of office visits, telephone encounters, after-hours clinic visits, emergency department encounters and hospitalizations during the study period.

I was surprised to find out that JAMA researchers generated this data, especially the ED and hospitalization rates, which seem to have to been markedly different between the two groups.

It did occur to me that perhaps the sickest patients are using the portal, or that those who aren’t using the portal aren’t very engaged in caring for their health, but such relationships are rarely that simple. Besides, the researchers did group patients by “propensity scores” which took patient age, sex, utilization frequencies and chronic illnesses, so we aren’t looking at populations that simply self-selected into the sicker and more healthy.

In any event, I’m glad I stumbled across this study and could share it with you. Knowing that these patterns exist, just in case they turn up in your health system. They’re certainly worth bearing in mind.

Health Information Exchange

In an email response to my EMR and HIPAA post on HIE Waste, Edward Fotsch, M.D. and CEO of PDR Network offered these insights into the state and some history of Health Information Exchanges:

The fundamental question for HIEs is two-fold: 1) what is their purpose and 2) who benefits and will pay for them- the latter is a question of revenue model not grant funding which always runs out sooner or later. Relevant facts include:

1. HIEs are not a new concept. I was around when Community Health Information Networks; or CHINs (The ‘C’ in CHIN stands for communism where we all do the right thing because it’s for the good of the order) came and went. Then RHIOs came and went. Now HIEs. What these have in common is grant funding but generally no business model.

2. The idea of providers paying for the opportunity to share their patient (‘read “Client”) information with competitors is novel I must admit. But in the old days when I was seeing patients, when you sold your practice you largely sold your charts. It was the charts as much as anything else that kept patients coming to the new doctor after the sale- ‘it still works this way for many dentists. Now docs are supposed to pay for the privilege of having their charts opened to competitors? Now I know that the hospital execs all salute this flag when the discussion of HIEs occurs at the rubber chicken dinners. But when I was on the exec committee at a community based hospital we spent time trying to compete with, not empower, competing hospitals. You may say that is not right- but that’s a fact.

3. HIEs I’ve seen that have any hope serve a specific business purpose and often exist within an economic entity. Kaiser has a large HIE- they just don’t call it that.

4. Data exchange between competitors has worked in many venues- the obvious example is ATMs where competing banks collaborate. BUT this occurs because customers demand it. Unless or until patients/consumers begin to select healthcare providers who participate in some level (i.e. CCD-level sharing at least) of basic patient information exchange (i.e. refusing to go to providers who hand them a clipboard), the HIE concept is massively challenged. ‘Though it’s always fun right up until the grant funding runs out.

Epic or Best-of-Breed? The Billion-Dollar Question

Ah, the Judy Faulkner stories. They’re beginning to be as numerous, and, uh, epic as those of Microsoft and Apple’s early days. Imagine the average-looking, middle-aged Faulkner — Epic’s CEO, of course — walking into a room of hospital CIOs and telling them she’d come “to decide who she wanted as customers.” Kinda makes you want to admire Faulkner even if you don’t.

But more importantly, such behavior brings up the question of whether Epic brings enough to the table to make such grandstanding tolerable. As Zina Moukheiber, a Forbes contributor, notes in a recent article, Epic has certainly convinced a lot of CIOs that the answer is yes, largely because it offers a single ecosystem hospitals can deploy across the enterprise.

But like myself, Moukheiber seems very skeptical that Epic has justified its astronomical prices, which include:

* Partners HealthCare and Duke University Health System, $700 million each
* University of California, San Francisco, $150 million
* Dartmouth-Hitchcock Medical Center, $80 million

I’d also drop in a casual mention of Kaiser Permanente’s Epic installation, which allegedly hit $4 billion-ish before it was done.

Of course, the issue isn’t merely whether Epic is expensive, but whether it gets the job done in a way which can’t be done by less expensive systems. That, clearly, is the billion-dollar question.

In response, Moukheiber notes that in a recent New England Journal of Medicine piece, published earlier this month, two Boston Children’s Hospital Physicians argue that “diverse functionality needn’t reside within single EHR systems.” Children’s uses Cerner, Epic and best of breed software as needed.

Yes, that’s the heart of the matter, isn’t it. If you believe that there’s less risk and more chance of success implementing one system — thinking embraced by many hospital boards — Epic is likely to be a smash.

But if you’re a best-of-breed CIO, you’re probably astonished that anyone trusts their whole enterprise to a single vendor. Honestly, I am too.

The Same Fate of ERP Software Will Happen with Hospital EHR Software

I’ve often thought of the challenge associated with selling an EHR or other related enterprise software to a large hospital. As I think about this purchase process it’s made me wonder why any hospital would change out that software. I’ve often said that Epic’s approximately $1 billion contract with Kaiser (along with a number of other similar contracts) is one reason that Epic is going to be in the healthcare IT business for a long time to come.

In fact, these contracts and the process of change in hospitals has often led me to feel like change in the hospitals is almost impossible.

The amazing thing is that the same arguments could be made for ERP software in large companies. I know some people don’t like the comparison, but I think there are a lot of really interesting similarities.

In fact, I was reading through this somewhat older article which talks with Aneel Bhusri and Dave Duffield who founded PeopleSoft which was taken in a hostile takeover by Oracle and Larry Ellison. Turns out that Aneel and Dave decided to start another company a few months after the takeover of PeopleSoft. As he describes it, “we had a lot of fun so should we start another one?”

Aneel offers this insight that they found with their new Workday software as it tries and competes with the larger Oracle and SAP ERP software systems:

The big vendors are vulnerable because they require big expensive upgrades. Workday doesn’t go into startups — it’s selling to big companies that have HR and financial software in place. But companies have to update this software periodically, and the traditional vendors like Oracle and SAP make it hard and expensive to upgrade. That’s when startups like Workday jump in.

Can you see the Hospital EHR fate the same as what’s mentioned above?

Sure, the other big hospital EHR vendors will continue doing business much like Oracle and SAP are doing in the ERP world. However, there is a great opportunity for the people that have the right connections and knowledge of the hospital world to do a startup hospital EHR company that steps in and gains some market share.

I will admit that it’s going to take a gutsy hospital CIO to make this happen, but you can be sure that it will happen. Many of these hospital CIO will be rewarded handsomely for the choice as well.

Epic’s Success in the Hospital EHR Market

I took Katherine’s post about Epic Being a Victim of Its Own Success and posted it on Google Plus to see what kind of conversation would happen (Note: You can find me on Google Plus here). Turns out, it’s already generated 15 responses with a bunch of interesting points of view.

Dan Munro just left the following summary of Epic’s success that I thought was definitely worth sharing on this site since it was thoughtful and useful to consider.

1) The KP deal (started in 2003) is estimated to run $4B over 10yrs
2) Kent Gale, president of KLAS Enterprises, a research firm known in healthcare specifically for its customer surveys said “…there’s a huge gap between Epic and the other vendors. That is probably the biggest differentiator. They are able to keep their commitments better.”
3) Epic ranked No. 1 in seven out of 20 categories in one of KLAS’ most recent survey (and they don’t sell products for several of the categories).
4) “They have a reputation for doing the right things,” said Thomas Handler, a physician and research director at Gartner.
5) Founded in 1979 with an initial investment of $70,000, the company now is conservatively estimated by Wall Street analysts to be worth $1.2 billion (2008).
6) Epic has never done an acquisition, has no debt and has been known to turn away business.
7) The company historically has hired only 2% of all applicants.
8) Epic receives about 40,000 to 50,000 applications/year.
9) Epic’s software enabled Kaiser, the country’s largest health system (outside of VA?), to confirm that Vioxx increased the risk of blood clots, leading to the prescription painkiller being pulled from the market.
10) The company rarely negotiates on price. There is one exception: It has been known to give breaks, such as waiving its annual maintenance fee, to struggling hospitals.

Certainly Epic has been doing very very well. I’m not sure anyone would argue against that.

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Patients Accessing Online Medical Records Use More Services

Health Information Exchange

Epic or Best-of-Breed? The Billion-Dollar Question

The Same Fate of ERP Software Will Happen with Hospital EHR Software

Epic’s Success in the Hospital EHR Market

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