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Rural Hospitals Catching Up In HIT Adoption

Posted on December 14, 2015 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively 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.

Critical Access, Small Hospitals Lagging In Meaningful Use

Posted on August 14, 2013 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Many critical access hospitals and other smaller hospitals are falling behind on Meaningful Use and may be at risk for being slapped with Medicare reimbursement penalties in 2015, according to a study reported in Health Data Management.

The study, which appeared in the journal Health Affairs, was conducted by Mathematica Policy Research and the American Hospital Association.  Its bottom line conclusion was that smaller and rural hospitals were less likely than other hospitals to have met Stage 1 criteria, and that very few had all of the IT systems in place needed to reach Stage 2, HDM reports.

The researchers noted that between 2011 and 2012, the percentage of hospitals with at least 200 beds getting Meaningful Use almost doubled, but that those with less than 100 beds had a lower rate of Meaningful Use compliance. Meanwhile, the proportion of critical access hospitals that received a Meaningful Use payment in 2012 fell slightly from the previous year.

The study also concluded that teaching hospitals had a higher rate of Meaningful Use compliance than non-teaching hospitals, and that a small percentage of government-owned and non-profit hospitals received MU incentive payments compared with for-profit facilities.

According to Health Data Management, the study isolated three challenges faced by critical access and smaller hospitals:

* Low patient volume complicates long-range planning and limits ability to maintain adequate cash flow,

* The hospitals may not be able to offer competitive salaries for skilled information technology professionals, and

* Smaller hospitals may have difficulty finding a suitable I.T. vendor.

It’s not lost on the ONC that these hospitals face significant disadvantages in getting their Meaningful Use program rolling. About a year ago, the agency rolled out a campaign intended to get 1,000 critical access and small rural hospitals meaningfully using certified EMR technology by the end of 2014. To get things rolling, ONC is spending up to $30 million for Regional Extension Centers targeting these facilities.

But as I see it, funding more REC activity is far from enough. The plain fact is that mounting a Meaningful Use program is time consuming and expensive, so much so that some smaller hospitals simply make it happen without help. Maybe the time has come for the feds to offer grants outright to hospitals struggling with these challenges.

ONC Releases HIE Toolkit For Rural Healthcare

Posted on March 18, 2013 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

The ONC has released a new toolkit designed to help rural healthcare players such as rural hospitals, critical access hospitals, clinics and state offices of rural health to participate in HIEs, iHealthBeat reports.

Here’s a summary of what the toolkit contains, courtesy of iHealthBeat:

The toolkit release follows on ONC head Farzad Mostashari’s announcement that this will be the year providers are pushed hard to go for interoperability.

Expect to see more efforts of this kind as ONC nobly soldiers along, suffering from a trimmed budget due to sequestration, attempting to close the gaps vendors seem loathe to close.

Yes, as Mostashari notes in an interview with HealthcareITNews, Meaningful Use Stage 2 pushes the vendors a long way toward interoperability:

Vendors are really going to have to step up to the plate in terms of being able to achieve the Stage 2 expectations for true vendor-to-vendor coded, clinical structured, documents being able to have kind of ubiquitous protocols with security in place. That’s a big step for the industry and meaningful use Stage 2 sets the tempo and expectations for that.

But vendors have proved amazingly agile at wiggling out of interoperability promises to date. Let’s see if MU Stage 2 finally breaks the deadlock.

For Hospitals, EMRs Increase Costs For Several Years

Posted on August 16, 2012 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

In theory, the push for EMRs installation is all about money — saving it, that is.  Short term, it’s hoped that hospitals improve patient care and reduce the incidence of adverse events, but ultimately public policy types are paying for EMRs because they believe EMRs will squeeze costs out of the healthcare system.

That being said, it seems some recent research from the National Bureau of Economic Research has poked a sharp stick in this thinking.  Researchers there have concluded that EMR adoption drives up costs at hospitals, for years, regardless of the resources they have at their disposal (though location matters a lot — more to come).

The NBER study set out to measure the extent to which costs rose at U.S. hospitals between 1996 and 2009, and the relationship between this increase and hospital EMR adoption. They found that across all hospitals, EMR adoption is first associated with a rise in costs.

However, once the dust settles, big differences emerge between urban and rural hospitals. Hospitals situated close to IT organizations, usually those in urban areas, saw a decrease in costs after three years. Meanwhile, hospitals in “unfavorable” conditions, typically those in rural areas, saw a “sharp” increase in costs even after six years of operating their EMRs.

It is worth noting that cost savings from improved outcomes don’t seem to be figured into this analysis.  Also, it doesn’t seem to include any offsetting income from the marketing/PR value of a strongly branded EMR — which I believe has been too little studied.  Finally, the study’s results might be quite different if they ran from 2006 through 2012, say, as EMRs continue to mature and hopefully cost less to operate.

Still, these are troubling pieces of data. What cost trends have you seen at your hospital?  Do you think the NBER study is on target?

Which Health IT and EHR Vendors Should Critical Access Hospitals Consider?

Posted on September 27, 2011 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 number of health IT and EHR enterprise options available to critical access hospitals is increasing as competition for new hospital contracts moves downstream to smaller facilities. The following is a brief (not all-inclusive) list of health IT and EHR vendors that could be ideal fits for critical access and small, rural hospitals:

  • CPSI: Has done a good job of proving clinical adoption and leads with the most critical access hospital clients doing CPOE.
  • Healthland: Solid system with proven operational capability. Clients give the EMR high marks for usability.
  • HMS: Reinvesting heavily in improving clinical functionality and UI, including a partnership with MEDHOST for strong ED capability.
  • McKesson: Paragon is being considered more often in the critical access space. Has significant sales momentum in larger community hospitals, with some IDN wins.
  • Meditech: Already has a huge client base in larger community hospitals. Small organizations with resources are considering v.6.
  • NextGen: Gets little notice despite having an inpatient offering that is completely integrated with their successful outpatient EMR. Already have a number of clients. Has solid functionality.
  • Prognosis: Exciting new entrant. Applies remote-hosting technology to a single-database inpatient solution for small, rural facilities and critical access hospitals. Already has several clients.

These health IT and EMR vendors represent a mix of those who have caught the attention of smaller facilities, those who represent a new and intriguing competitive advantage, and those who have proven able to deliver products in a small hospital environment.

See also our list of hospital EMR and EHR vendors.

Chris O’Neal is Managing Partner at KATALUS Advisors. KATALUS Advisors is a strategic consulting firm focused on the healthcare vertical. We serve healthcare technology vendors, hospitals, and private equity groups in North America, Europe, and the Middle East. Our services span growth strategies in new and existing markets, M&A due diligence, market analysis, and advisory services. www.KATALUSadvisors.com

What Are the Health IT Trends Working in Favor of Small Hospitals?

Posted on September 20, 2011 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.

Given their limited resources, small hospitals must search for a health IT solution which presents a low barrier to implementation, ease of adoption, is low cost to maintain, and places minimal IT support burden on the client.

Many solutions marketed specifically to critical access hospitals are integrated clinical/financial platforms. The rise of remote-hosted web applications as a delivery model promises to reduce the total cost of ownership, mitigates IT staff turnover, and places the IT burden back on the vendor.

Some large hospital Health IT and EHR vendors (Cerner, Allscripts) are moving downstream into the community hospital space, but they have yet to make a material impact in the critical access market. The enticement of these offerings is a proven track record of clinical functionality. This means that current vendors specializing in marketing to small hospitals will need to enhance their offerings and accelerate clinical adoption in order to help their clients meet Meaningful Use requirements in the face of competition from sophisticated large hospital health IT solutions.

Next up, I’ll look at which EHR and Health IT vendors seem to be doing well in the small hospital space.

Chris O’Neal is Managing Partner at KATALUS Advisors. KATALUS Advisors is a strategic consulting firm focused on the healthcare vertical. We serve healthcare technology vendors, hospitals, and private equity groups in North America, Europe, and the Middle East. Our services span growth strategies in new and existing markets, M&A due diligence, market analysis, and advisory services. www.KATALUSadvisors.com

Pressures on Critical Access Hospitals – IT Budgets, Competition and IT Talent Retention

Posted on September 15, 2011 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 acquisition and implementation of enterprise solutions is a daunting process for any healthcare provider. Critical access hospitals usually find the task even more nuanced given unique pressures, some of which include:

  • Constrained budgets: Compared to other facilities, critical access hospitals typically have the smallest IT budget, as a percentage of overall hospital budget and in gross numbers. Budget constraints are also exacerbated by low volumes, rising number of uninsured, recession related unemployment, and a patient mix with a high Medicare/Medicaid presence typically found in rural geographies.
  • Increased competition from larger IDNs: Competition can come in the form of IDNs opening/acquiring rural clinics, as well as from Federally Qualified Health Centers (FQHC) which often have greater access to grant funding and better medical liability coverage. This makes future growth plans hazy given that critical access hospitals can be challenged in projecting consistent market share given the changing competitive landscape.
  • IT talent retention: Attracting and retaining talented IT personnel is one of the prime concerns for critical access facilities. Some have turned to IT outsourcing, but this also carries its own risks and costs.

In effect, critical access hospitals are feeling fiscal pressures from all sides – in changes to federal reimbursements, a patient population hit hard by recession, rising labor and structural costs, as well as from legislation which requires a higher level of IT adoption within an arbitrary timeline.

In our next post, we’ll look at which Health IT trends working in favor of small hospitals

Chris O’Neal is Managing Partner at KATALUS Advisors. KATALUS Advisors is a strategic consulting firm focused on the healthcare vertical. We serve healthcare technology vendors, hospitals, and private equity groups in North America, Europe, and the Middle East. Our services span growth strategies in new and existing markets, M&A due diligence, market analysis, and advisory services. www.KATALUSadvisors.com

How Big is the Health IT Market for Critical Access Hospitals?

Posted on September 13, 2011 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.

Critical access hospitals are an essential vehicle for delivering patient care to local residents of rural, outlying areas. Their importance was in legislation that Congress passed in 1997 which established a payment system specific to critical access hospitals (25 beds or less in a rural location). The purpose of this bill was to ensure residents of rural areas would have adequate access to hospital care by improving Medicare reimbursements to those facilities.

Slightly over a quarter of all U.S. hospitals are designated critical access hospitals. About 60% of hospitals classified as “rural” are also designated critical access*. The four states with the highest number of these facilities are Iowa, Kansas, Minnesota, and Texas. This is a sizable market where a tremendous amount of care is delivered. Yet given the size of this market, many of these institutions feel under-resourced and underfunded, for a variety of reasons.

In our next post we’ll take a look at the pressures that critical access hospitals are experiencing when it comes to implementing health IT in their hospitals.

*Assuming a total of 5,000 U.S. hospitals

Chris O’Neal is Managing Partner at KATALUS Advisors. KATALUS Advisors is a strategic consulting firm focused on the healthcare vertical. We serve healthcare technology vendors, hospitals, and private equity groups in North America, Europe, and the Middle East. Our services span growth strategies in new and existing markets, M&A due diligence, market analysis, and advisory services. www.KATALUSadvisors.com

Small HIT Grant May Make Big Difference For Rural Hospitals

Posted on September 12, 2011 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Really, what can you do with a $12 million dollars IT budget? Perhaps it could launch one solid EMR at a mid-sized hospital, but it’s not likely to stretch much beyond that in suburbia.

Fortunately, the economics of IT are different in the hinterland. It looks like the $12 million HHS plans to dole out to rural hospitals may have a real impact on their efforts to adopt EMRs and meet Stage 1 Meaningful Use requirements.

Under the HHS program, which was developed as part of the president’s Rural Health Initiative, about 40 organizations will get about $300,000 each in health IT funding. The grants will help rural hospitals to buy technology, install broadband networks and pay for training.

The Obama administration is also offering loans to more than 1,300 rural, critical access hospitals to buy health IT, notably systems designed to raise the quality of care, according to Information Week.

OK, now you’re going to see my prejudices on display. So here goes.

Everything I read and see suggests that rural hospitals can make great use of EMRs and other forms of high-level health IT. So, if it were up to me, the feds would spend far more helping critical access hospitals get up to speed than paying off community hospitals to do what they have to do anyway.

Not only does health IT help rural systematize care, it also lays the foundation for creating effective HIEs.

And in my book, rural facilities need help with HIEs far more than suburban hospitals. After all, if anything, rural hospitals operate on even slimmer margins than their urban/suburban peers.

I’d like to see more projects like this one, in which two rural hospitals got together to share the costs of their Meditech EMR launch. But that kind of partnership is something that won’t happen every day, as such a match requires a unique level of compatibility.

If they invest in rural hospitals, though, the feds could do much to foster such partnerships. I hope to see them do so!