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PODCAST/TECH: Glen Tullman, CEO Allscripts interview–What’s the future for eRx and EHR?

This is the transcript of my HIMSS interview with Glen Tullman, the CEO of Allscripts. it includes some comments from Jim Morrow, an MD from Georgia who is HIMSS doc of the year too. The original audio podcast is here.

Matthew Holt:  …It’s Matthew Holt with The Health Care Blog. It’s another of my HIMMS podcasts, and this one’s really exciting. I have not only Glen Tullman, who is the CEO of Allscripts, which is one of the dominant players in the EMR market for ambulatory care, and moving to other areas, but I also have Jim Morrow who is a doc from…Where in Georgia, Jim?

Jim Morrow:  From Cumming Georgia, North Fulton Family Medicine.

Matthew:  Ah. From a medium‑sized practice, a family medicine practice in Georgia. He is an Allscripts user. Jim isn’t going to be prepared for this, but we brought him here anyway. Anyway. Good morning, Glen.

Glen Tullman:  Good morning. It’s good to be here.

Matthew:  We do this thing‑‑as my listeners are now familiar with‑‑with the mike, so it will fade in and out because it’s not very professional. [laughs]. Anyway, first off Glen, you’ve been CEO of Allscripts since what? 1997, 1998, something like that?

Glen:  I’ve been with Allscripts for nine years now.

Matthew:  Right, so ’98. And you had the joy of being the head of a public company, which went from a stock price of what, seventy‑eight or seventy‑nine in 2000, to two, or three, or something in 2002? And yet, you’re still there. I can’t think of any other health care CEO who’s gone through that experience. Luckily the stock has been at more than two these days. So how did it feel in those dark days…

Glen:  Well, we’ve been…I’m fortunate, this is the third public company that I’ve run, two in health care, one in the property and casualty insurance business. We were the beneficiaries of the Internet "craze", if you will and the stock price ran up. I continued to tell our people that we hadn’t accomplished our mission, but the market put a high valuation on us and the stock ran up to $89. Then it actually came down.Our investors were fortunate that someone called us "the last man standing." It came down slower than most Internet stocks that collapsed; because we had a real business and a real vision. And I think, today we’ve continued over the years to execute on the vision, to build the infrastructure that you see working today. The stock market seems to be rewarding us for it.

Matthew:  Well, you guys made what, nine million bucks last year in profit? What are you scheduled for this year?

Glen:  Well, I’d like to talk about what we’re accomplishing. I think the accomplishment is that the product is working for physicians. We have over 30, 000 physicians today, over 400 hospitals. When you do things right, when you deliver for your customers, the end result is profitability. So we’re seeing a nice growth in our profitability. The analysts have put a number of different numbers on what we’ll look like next year.I think another key point I’d make is: We are actually reinvesting in software development, and other processes, more money than anyone else in the ambulatory sector. So we’re able to provide a great return on products that are well priced. And also invest in the market. Things like the NEPSI initiative, which is a 30 million dollar investment for us over five years.

Matthew:  Let’s move on to NEPSI.

That
was the next thing that I was going to talk about. It’s raised a little
bit of controversy. So first off just give us a quick overview as to
what NEPSI is. You have partners in this including health plans who are
funding some of it, so it’s $100 million over five years, is that right?

Glen:  That’s correct. NEPSI really stemmed from the recent Institute of Medicine
report, which was follow‑on to the first report. The first report said
that 100, 000 people a year die from medical errors. This recent one
focused on medication errors. It said that 7, 000 people a year die,
and over one and a half million Americans are injured from preventable
medication errors. As we read that report, I said, "We’ve been focused
on this for nine years now and this is disgraceful. We can do better.
This is America we know we can do better. We’ve got to figure out why physicians are
not using this." We didn’t blame the physicians because we know they
would if they could. So we identified three issues: the software cost
was one, how easy it was to use was the second, and the third was the
lack of an incentive system that would promote utilization.The
idea behind NEPSI was to say: If we could make software free; if we
could make it available from any computer‑‑which would eliminate their
need to buy new hardware; if we could make it easy to use‑‑so easy that
they could learn to use it and be writing prescriptions within an hour;
and last but not least, if we could get some of the largest health
plans in the country‑‑people like WellPoint, Aetna, Blue Cross/Blue
Shield, Horizon Blue cross/Blue Shield of New Jersey‑‑to sign on and
say: we will incentivize both utilization and adoption. If we could do
that, we think we could actually address this problem. That’s what
NEPSI is about.

Matthew:
Let’s talk about that last plan. There were two‑‑what are the
incentives that the health plans are going to be offering the doctors?

Glen:
Well each health plan is offering physicians different sets of
incentives. I was with the folks from WellPoint yesterday. If you’re a
WellPoint physician, and if you’re located in certain states where
they’re starting to roll this program out, you can receive bonuses for
both adopting electronic prescribing, which might be as much as one
percent of what you get paid during the course of the year, and then
you can receive another, up to nine or 10 percent, based on your
utilization and your meeting certain metrics–so on generic
utilization, on appropriate drug use, and the like, compared to your
peer group.If you think about it, that not only pays for the
cost of the software, which of course, is free so it wouldn’t take a
lot. But those numbers can be very substantial to physicians. The whole
idea is to incentive the right behavior and to make it easier for
physicians to adopt this.

Matthew:
Ok. So it would tie into the pay‑for‑performance stuff that WellPoint
is doing in some of the other states? That’s pretty interesting. Let’s
get to the heart of this physician adoption question. Perhaps I can
grab Jim on this, because he’s an early adopter. Very interesting. I
too, when I put the post up about NEPSI I had my tag on the end
that’s‑‑You often hear that "free isn’t cheap enough" and I guess we’re
now going to find out. Just by way of background, I wrote a report on
e‑prescribing and the physician prescribing infrastructure, for the
California HealthCare Foundation a year back, and I think the evidence
is pretty much in. From folks like yourselves, and also a bunch of
other players in the market, that yeah, there’s a bunch of time saved
in the physician’s office if you can make it work with Allscripts,
which I guess is not completely solved this year. But there’s a bunch
of time saved at the pharmacy, and it should make sense. It should pay
for itself. So why aren’t people doing it?I got a couple of
comments back, and I’ll just paraphrase really one. But one says, it’s
a guy who says: "I ran an IPA. Our IPA paid for licenses for one of
your competitors, paid for the wireless modems and paid a $1, 000 to
those docs who wrote 200 ‘scrips in the first month or two. We couldn’t
get more than half the doctors to sign up, and one year into the
program we even had the majority of the docs who had got the $1, 000
bonus, stop using it.A similar comment from somebody else about
both the NEPSI program, and the give‑away with NextGen with Wellpoint
while back, and also some comments about Allscripts use in San Diego,
and again the comments are that “this stuff gets rolled out and somehow
doesn’t get adopted properly. Even when it is being rolled out, it’s
not being used to it’s full extent and people go away from it again”.
I’d like you both to comment on that, because we clearly have a big
problem in the country around this whole issue. We’re at about twenty
percent over all, but it’s probably in the smaller groups below the big
guys, down in the low teens or even below that. You look around the
rest of the world most of the primary care doctors in the UK, in New
Zealand, in Holland, in Norway are using this stuff in their office. So
what do you think about those kinds of comments and what can be done to
change the physician mindset?

Jim Morrow:
I think those comments are sincere and I think they’re really the
general belief of a lot of doctors, but the biggest problem is that
doctors are just so hesitant to change, period. Before I went on
electronic records, I felt like I was a very good physician. I thought
I took great care of my patients. I was wrong. I’m a good physician
today because of the electronic record. If I had not made that change,
I never would have learned of all the things I was not doing that I
needed to be doing and the people who were not getting the care they
needed.It’s a completely different world, but getting doctors
to change is tough. Getting to change to something that’s free is hard,
getting to change to something they have pay for out of their pocket is
even harder, because they have so little going into their pocket, they
feel, as it is. But your correlation to the United Kingdom they don’t have a choice.

Matthew:  Which helps, right?

Jim:
Which absolutely helps. I’m a firm believer that’s the one thing
that’s going to make people adopt, is you just say this is how you do
it now. Just like you do electronic billing, now you’re going to do
electronic medicine. Until we have that happen we’re going to have
scanty adoption rates, because doctors will come up with every reason
in the world to not do this, because it is a huge change in their
process. The truth is their processes are broken. They’re comfortable
with them. They work on a given day, but they do not provide what they
need to provide to their patients. And until we do it, we’re not going
get there.

Matthew:
Now, I love the comment you made about “I wasn’t actually a good
doctor, but I am now because of electronic medical record.” My
understanding, and I always say this widely, "Sorry, guys. The EMR
isn’t here to make the doctor’s life better, it’s here to make the
patient care better.” Say a little bit about what kind of things are
you doing that you weren’t doing before.

Jim:
The ability to track lab results, for example. If I order a PSA on a
fifty year old man, when he leaves the office in the paper world, I
never think about the PSA again. If the result comes across my desk
that’s great. I’m glad I see it and I act on it. But if it never comes,
for whatever reason, I never knew it. I have no idea how many times I
had ordered a lab test that was never resulted. I have no clue.In
the electronic world, I can look every two weeks for labs that were
ordered and not resulted, labs that were resulted and haven’t been
looked at, labs that have been resulted, looked at and haven’t been
seen by the patient. I’ve got lots of options now that I didn’t have
before.It’s very easy for me now to look and see now when a
patient’s had a colonoscopy last and whether or not they’re up to date
on that, or a mammogram, or a pap smear, or a physical, or a stress
test. Things that in the paper world are so cumbersome to find that in
most case you just don’t take the time to do it. Because if you take
the time to do it, you’re going to see fewer patients in a day and we
already get paid little enough per patient as it is.That,
coupled with the medication tracking and the ability to look at
interactions electronically and have it say, "Hey, this person is
taking Lipitor. Are you sure you want to give them Biaxin?" I used to
not be concerned about that. I used to not put a lot of though into
that.Now a days, I have no choice but to think about it.
There’s a big red flag comes up when I try to do that. That’s an
example that’s not particularly important, because you give Biaxin for
five or seven days. But if you put them on some other medication, it
could interact with something they’re taking on a daily basis. It’s a
real big deal.

Matthew:  I agree. I think that’s a very eloquent expression.  You’ve been doing this for a while now.  Tell
me a little bit about what happened when you first announced and when
you first installed it. How did you and your colleagues deal with that
switch process? When you went from the old way to the new way, and
presumably you had some drop in patient loads while that happened.

Jim:
Actually, we did this entire thing in 1998 because we needed to do
better financially. So the last thing we needed to do was to drop our
patient load. The day before we went electronic, which was December 17,
1998, we saw 101 patients in our clinic. The day we went electronic,
December 18, ’98, we saw 111 patients in our clinic. We did not
decrease our number.We told our guys, number one, this is how
we do it now. Number two, we’re not going to work less and we’re not
going to see fewer patients. And yes that means in the evening you’re
probably going to be here a little bit doing some documenting that
you’re not going to be able to get done in the exam room. Today the
people that come work with us get the documentation done in the exam
room, myself 100% of the time, most of my other docs 80‑85% of the time
on the average. And nobody is there after five o’clock. We’ve expanded
considerably, but we see 450 people a day and at five o’clock it’s a
ghost town.

Matthew:
That’s great. That’s a great story. It’s one of those success stories
we ought to try to keep getting out there and evangelizing actually is
a big part of this.

Jim:
The only reason that it’s a success story is that failure was never
considered to be an option. The only thing that’s going to keep doctors
from successfully implementing electronic records is a choice to fail.
Because it’s ridiculous to fail at this. There’s no reason in the world
you can’t do this. You just have to decide that now this is what we’re
going to do and we’re going to be good at it.

Matthew:
That’s great. Glen, are you seeing the switching process that Jim
described. Is that fairly typical for an EMR installation for
Allscripts? You hear stories from things like the Kaiser installation
of Epic, where they’re going down to half patient load for some time. A
lot of people hear that and get terrified. What’s the typical
installation? Is Jim particularly special?

Glen:
Let me first make two comments about what Dr. Morrow had said. We have
a lot of physicians that are absolutely, as Dr. Morrow is, world class
terrific doctors providing great care. The issue is, we haven’t
equipped them with tools to allow them do their jobs in the way we know
they can. And this is the only industry in our entire economy where we
haven’t used technology to improve quality and reduce cost. We are now
and that’s a great aspect of what’s going on.Second, the most
important point, I think, that Dr. Morrow made is the leadership point.
And this is about deciding that we’re going to do it. Governor
Bredeman, in yesterday’s address, said, "Stop talking and stop getting
ready, and get going."I think that’s the message, which is
“don’t get ready, get going,” that we have to communicate to the
market. We don’t allow people to drive without a license. We don’t
allow people to do other unsafe things. We’ve got to get that message
across. And I think you’re going to see some state leadership along
those lines. Where states actually step up and say, "It’s now free.
It’s now easy to use. It’s not an unfunded mandate and we’re going to
require that this be used." So they’re going to help us along in the
process.In terms of your question, relative to adoption, I
think this is largely vendor driven in the sense that only today we’re
starting to get the systems that are very use‑able, very easy to learn.
I don’t know if you’ve gone on to the NEPSI site. If you have, what
you’ll see is that this is truly a product that can be used; you can
write your first prescription within thirty minutes. That’s the kind of
commitment, we’ve got to get the software that good, that valuable and
that smart making it free, getting incentives in place.This is
why a coalition is required. In the past we had individuals trying to
do it. We now have a coalition and we have leadership from physicians
like Dr. Morrow, like Dr. Azark Korby in New Hampshire,
who’re actually coming out and saying to their fellow physicians: "We
have to do this. We have to step up and deliver better care. We know we
can, that’s why we entered medicine." I think that’s the message.Relative
to, you mentioned one or two names, some of the failed implementations
that are out there, the reality is that is largely a function of the
software. You can’t blame the physicians for software that’s not
fitting into their workflow, that’s not running effectively. I know the
industry would like to say it’s a physician problem; my view is that
the issue is the physicians were doing just fine; you gave them
software and if it’s not working, part of that is that the software
isn’t intuitive and it’s not easy to use. Because physicians are very
intelligent, they’re going to use things that help them do their job
better. It’s that simple. So make it easy. Make it free. Make it
available and they will come.

Matthew:
Okay, let’s move on to one other issue which was also raised in the
comments to this and then we’ll wrap up in a few minutes off of that
which is the issue of privacy. We just had Janlori Goldman and Paul
Feldman resign from the AHIC committee because they feel the issues of
privacy aren’t being looked at closely enough within the whole AHIC
set‑up. You’re obviously deeply involved in that. You get the
impression there are some Americans who won’t trust anything [laughter]
no matter what it is and yet we all know there’s a whole bunch of stuff
known about us that we don’t know about and all the rest of it. But
nonetheless, what do you think about the privacy issue?And I
want to raise too there’s been a little bit of comment about the
relationship that you guys have with Google. There’s been some other
speculation about what you guys have been doing with Google elsewhere
in the press. So could you comment a bit about privacy and then we’ll
move on to Google in a second.

Glen:
Sure. Well, in terms of privacy, we take this very, very seriously.
All of our products not only meet but exceed all the requirements set
forth in HIPAA. We have tremendous respect for patient privacy. All of
our products not only address it from a privacy standpoint but from a
security standpoint as well. So I don’t think you’ll find an
organization that takes that more seriously.I think we have to
balance the privacy issue with the issue of saving lives. There are
people, as you suggest, that are going to fight any kind of automation,
any kind of centralized database. But the real question is when
someone’s in an emergency room and the ER‑doctor has to make a decision
about whether to give them a medication that could potentially save
their life they don’t have the chance to ask them right then and there
in all cases, maybe a car accident, "what drugs are you taking?" or the
like. We have a number of procedures built into our products that are
called "break the glass" procedures where there’s a life‑threatening
situation; there are a number of procedures they go through to get
access to that information.With that exception, we protect
patient privacy one hundred percent. I think that’s a requirement for
anybody in this business. We take it seriously. We’ll continue to meet
and exceed every requirement for patient privacy out there. We think
it’s very, very important.

Matthew:
Okay, let’s talk a little bit both about the relationship with Google
on the NEPSI site. And also you guys are obviously investors in Medem
in the personal health records base, sort of providing physician
connectivity to their patient base as it were. So just give me a couple
of thoughts about what’s going on in those two arenas because they’re
not the core of your business but it’s obviously an important
peripheral part.

Glen:
Sure. Let me start with our relationship with Google. As you
mentioned, we really have a who’s who list of sponsors for the National
Prescribing Patient Safety Initiative beginning with Dell at a national
level and then adding names like Microsoft, like Fujitsu, and a number
of others. Google is our search sponsor. One of the things that, when
we surveyed physicians to design this product, they told us is they use
Google all day long to do searches along with other search engines and
they’d love a simple search. But they’d love for that search to be
healthcare specific and was there a way to do that? Google not only
agreed to become our search sponsor but the Google search that takes
place on the eRx Now product is healthcare specific. There’s an extra
level of search that qualifies the search for healthcare.That
information in relationship with Google is totally opt‑in. In other
words, if a physician never decided to use Google search at all, they
could use the product. They could actually turn off the Google search
and disable it from the product so all that’s fine. To the extent they
decide to use Google, it’s no different than if they went on their own
computer and used it; they’re opting into Google’s set of rules of what
they do with the information. There are specific, again, specific kind
of disclosures on there they say "you’re now entering a different
system, it’s the Google system and you should be aware of that".
There’s no other information sharing agreement in all the information
that is recorded as a part of the NEPSI processes protected; it’s
separate, it’s confidential. There’s no mixing of those two groups. It
would be illegal to do so, frankly.

Matthew:  Do you expect any other announcements for Google? Or I guess you can’t tell me.

Glen:  [laughter] You’ve already answered that so…

Matthew:
[laughter] all right, let’s move on to the Medem relationship and a
little bit about where you think the whole EHR thing is going and how
they integrate. I had a good argument with a guy, Bob Lorsch yesterday,
who has a standalone, basically, fax‑in vault PHR system. As you
probably know, I was in a PHR company that unfortunately didn’t do as
well; it had the crash without the recovery that you guys had!
[laughter] This is one my little pet peeves: when is this going to take
off and when are the providers and the plans going to be providing
data? Where do you see the whole Medem thing going and the other EHRs
involved within? How are you going about the issue of auto populating
those PHRs? Where is that whole thing?

Glen:
I think that the good news here is that a year ago we had electronic
medical records. Those electronic medical records said we’re going to
automate inside a physician practice. Then someone like Paul Bernard,
someone said we may want, as we’re building this electronic highway, we
may actually want to involve other people like patients. [laughter]
That was kind of a novel thought but it was a very good thought. We
took an initial step making an investment (in Medem)…with made that
investment to support the AMA and about 46 other medical societies who
are trying to advance patient care, who are trying to make sure that
that patient care is delivered through the physician, not around the
physician to the patient, and we support that as well.So from
that perspective, we’ve been a big supporter…it’s integrated into our
products so you can exchange information, physicians can communicate
with their patients and vice versa. We also however, push
interoperability, so we’ve made it very clear that we will connect to
and talk to virtually any quote‑unquote non‑proprietary personal health
records. So, for example those are being built by Relay Health, and we
have an agreement with Relay Health to exchange information. Those are
being built by people like Revolution, Steve Case’s company, and we are
happy to ‑‑ we don’t connect to them today ‑‑ we would be happy to work
with them.Microsoft and Google are likely to have personal
health records, so we’re going to see a tremendous amount of innovation
in this area, we think it’s good, we think it’s healthy, the only thing
we don’t think is healthy, is when individual vendors try to build
their own. Because what they’re doing there ‑‑ some of our competitors
are doing that ‑‑ is essentially creating more silos, and we don’t
think we need silos.So, from that perspective we see tremendous
activity there, we see lots of innovation and we’re happy to connect
our electronic health records, both our HealthMatics and our TouchWorks
records to every one of them.

Matthew:
I wasn’t at the NEPSI launch. But I saw the video a bit later and you
basically came out and said that ‑‑ which is I think is a very true
statement — if we don’t get this right eventually it’s going to happen
to us. This is the general health care reform angle ‑‑ we’ve seen the
last five years in which although plenty of money has been made by
various people in health care ‑‑ the problems of costs and the
uninsured and all the rest of that are, you know, really getting to a
national visible level. That means single states ‑‑ my state of California,
obviously elsewhere too, a lot of people are all launching different
initiatives, and it’s kind of clear that something has to be done at
some point.What’s your general take on that, and what kind of solution do you think you’d like to see?

Glenn:
Well you know Jerry Garcia from the Grateful Dead I think said it
best, and he said you know, something has to be done and it’s just
pathetic that it has to be us to do it.[laughter]And
you know ‑‑ I think this is the time ‑‑ I think business has made it
very clear, as the government has made clear that this is really the
last opportunity that we will have the chance to help set that agenda.
Business can operate in the United States and continue to operate cost
effectively ‑‑ states are talking about a third of their budget’s going
to health care, we have waste on the order of 30 to 40 percent, which
is 700 billion dollars of waste and that’s more than enough to treat
the forty million or so uninsured or under insured, so there’s
tremendous opportunity here, and we have to step up. We need the
leadership to make that happen.I think it is happening now ‑‑
you know in the United States we’ve had this curious phenomena of
protecting two areas and saying they are too sacred for business to get
involved in ‑‑ health care and education ‑‑ and yet if you look today
at what’s happened those are the two areas that are fundamentally
broken in this country, and we need to use software and technology to
improve the business process, to improve quality, and take costs out of
that. And the great thing about technology is it allows you to do that.So
again I see it happening, I see us moving along the path, I see
adoption happening, I would love to see some states step up and start
to acquire some of the basics. I would love to see the continued work
from CCHIT where I serve on the board of trustees or governors continue
their efforts in terms of standardization ‑‑ all that is very helpful,
and then we have to see the actual user step up and say we’re going to
make this happen.

I
think the work that LSU ‑‑ which Steve Ballmer from Microsoft talked
about ‑‑ the great work from ‑‑ that’s going on at LSU, of going from a
system that was all paper based and lost a quarter of a million patient
records to a system that’s going to be literally the best in ‑‑ if not
the country, the world. In terms of being fully automated. Now they get
to start from scratch, and that’s a good news‑bad news situation but
they are making it happen and they simply said, we can can do better
and we have to do better now.And I think that ought to be the message.

Matthew:
Great, ok so the last question. You’re a young guy, you’ve been in
business in what, about 20 odd years, you’ve been very successful, I
assume that the Tullman household isn’t going short of the odd, you
know, shoes for the kids feet and that sort of stuff. You also have
strong interest in outside charity work, I know you’re involved in
juvenile diabetes and some other stuff, and you have. Some of your
statements are inferring that you’re probably in the sort of liberal
Republican zone, is that a correct assumption? I’ve made that
assumption anyway.Just so happens there’s another young
successful guy who’s had a very stellar career from your own home
state, and he’s looking for a new job in 2008 as well. Which means
there may be a vacancy in the Senate. Are you thinking about that?

Glenn:  Well I think you’re ‑‑ we’re blessed in Illinois with two great Senators. Senator Dick Durbin and Senator Barack Obama, and I’m, I’m a well known supporter of Barack ‑‑ he’s a good friend, I
was a supporter in his Senate campaign, and I’m a supporter of him in
his quest for Presidency. And I think his whole approach to what we
have to do nationally is to go after some of these problems because we
can, and because we need to.

In
terms of speculation in the political arena, the only thing I’d say
there, and it’s a question that I do get asked is that, I think the
ability to make a difference on important issues is what drives me in
the business world and in the philanthropic world. So as I evaluate
options going forward, whatever is the best way to make that happen is
something I would consider. But let me be very clear, we have an
enormous task to do, in health care, and until that task is done I
don’t plan on going anywhere, so unless my board tells me they have
other plans for me ‑‑ you know with Barack, I’m hopeful there will be a
vacancy, I can say definitively that I would not be interested in
filling that vacancy in the time frame we’re talking about.

Matthew:  [laughter]

Glen:
So I guess that’s a political answer, but it’s actually one that’s
pretty definitive. So I won’t ‑‑ I won’t be running for Senate from the
state of Illinois, and there maybe something that happens in the long term future, but right now we’re about fixing health care.

Matthew:  Great, and thank you very much for your time.

Glen:  Thank you very much, great to talk to you and I hope that this is useful to all of your listeners.

Matthew:  Thanks so much.

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