2009: A Year of Surprises and Change for the EHR Technology Market

2009 began with a bang for legacy Electronic Health Record (EHR) vendors, promising strong sales and windfall profits on the heels of stimulus package incentive bonuses initially worth more than $19 billion to doctors and hospitals. But things changed dramatically along the way.

Here ten surprises and notable events that have impacted the EHR market:

Payment for Meaningful Use of EHR technology, not for the software and hardware itself.

The idea that using EHR technologies ought to produce improvements in quality of care, better communication with patients, enhanced safety, and better public health reporting — and that these outcomes ought to be monitored and providers held accountable for their achievement — was itself a surprising innovation in 2009.  It has to be counted among the best 10 health care ideas to come out of government in the past generation.

For several years many EHR technology vendors had expected federal money to enhance IT adoption flowing straight to them and their investors.  But the interpretation of “meaningful use” by David Blumenthal, MD and his staff and advisors at the Office of the National Coordinator (ONC) proved that they want EHR adoption tightly linked with health reform and capable of supporting accountable care payment schemes, such as bundled payment, pay-for-performance, and accountable care organizations. The burden of proof that EHRs are being used appropriately lies squarely on the physicians and hospitals that purchase them.

It’s become PC to ask tough questions about EHRs, quality, and health care costs

For several years it seemed that any criticism of EHRs, any questioning of the relationship between the use of health IT and the attendant quality of care or its cost, was off limits in policy discussions.  EHRs were all good, all the time. But in 2009 we’ve seen a trickle become a torrent of  serious challenges to the conventional wisdom about EHR value. It’s come from diverse sources including distinguished federal science panels, academic studies, testimony before ONC and the National Committee of Vital and Health Statistics (NCVHS), and from a chorus of individual users with personal experiences to relate on listservs and blogs. While generally extolling the virtues of health care computerization, these voices of dissent have drawn attention to the large gaps in performance, ease-of-use, and standardization that plague the current crop of EHR products and services.

Perhaps more importantly, in the process they have unburdened the physicians and hospitals who have sat on the sidelines from being labeled “slow adopters,” anti-technology, cheapskates, and even worse.  As it turns out, these folks may have simply not seen the value in current EHR products that offer mediocre performance at best, and which have, so far, mostly demanded a king’s ransom to purchase, implement, and sustain. We expect to see continued critical examination of the uses of EHR technologies, and new reporting that links health IT with documented enhancements in safety of care, quality improvement, and cost efficiencies.

CCHIT’s loss of invulnerability and the displacement of its monopoly on EHR certification

2009 didn’t go as well as the Certification Commission on Health IT, or CCHIT (pronounced sea-chit) might have liked. The HIT Policy Committee advised ONC to replace the vendor-sponsored methodologies for both selecting certification criteria and then carrying out the “certification.”  Instead, the criteria for “certifiied EHR technologies” would be set through an HHS Certification process, and then an international standards-based process used for certification and for selecting accredited certifying entities on the basis of competitive bid contracting.

This was a stunning reversal for the industry-leading companies involved with CCHIT. Many external to the process had criticized CCHIT as a “foxes guarding the henhouse” scheme, with apparent conflicts of interest that would never be tolerated in other industries. But CCHIT’s real sins were a Byzantine certification process that failed to increase EHR adoption among physicians and hospitals, and the glaring fact that, despite an interoperability certification process, it failed to promote health data exchange among EHR applications.  Among the most dramatic and damning testimonies at the HIT Policy Committee hearings in July was that of the CIO of East Texas Health System, who testified that her organization had jettisoned a multi-million dollar CCHIT certified (for interoperability) HIT system because it couldn’t exchange information with another CCHIT certified system.

Then, recently, CCHIT’s embattled CEO Mark Leavitt, MD announced his resignation from the organization. Although still retaining a primum inter pares status as an EHR-certifying entity due to its contractual ties to ONC, it seems likely that several other testing labs will compete with CCHIT for the contracts to certify EHRs under the ARRA/HITECH program. In fact, one company, Drummond Group, announced on November 2, 2009, that it would submit to become a certifying body upon the release of the requirements, expected in late December. The hope is that competition and oversight will create a more level playing field by keeping certification costs down and reducing the barriers to market entry.

Innovation as a theme and goal going forward, backed by the White House
One of the most unexpected, but also most promising, twists in 2009 was Aneesh Chopra’s arrival into the fray, with support from the new Chief Technical Officer for HHS, Todd Park, the former co-founder of web-based practice management software company AthenaHealth. Aneesh holds the title of first Chief Technical Officer of the United States. A known innovator and proponent of off-the-shelf and open source software, Chopra was previously Virginia’s Secretary of Technology.

Chopra sits on the ONC advisory HIT Standards Committee, where late this year he formed an Implementations Workgroup. That effort breathed much needed fresh air into the smoky backrooms atmosphere of the HIT Standards Committee, which had effectively blocked entry of innovative and start-up firms into the EHR technology market by recommending a set of untested, complex, and large enterprise-centric standards.

Apparently recognizing that these were unimplementable, Chopra’s work group held a day of hearings that solicited advice on what does and doesn’t work with respect to standards from – imagine this! – experts with proven track records outside of the health care industry. We don’t yet know the results of this last minute counterbalance to the incumbent and legacy vendors’ influence on ONC. But even some of the most entrenched people on the HIT Standards Committee are now blogging on their ideas for the “Health Internet,” a term quietly replacing the older National Health Information Network. This is good news.

The Power Shift Away from Legacy HIT Firms

Physicians, particularly those whose practices are owned by hospitals, will continue to purchase legacy EHR systems. But there are now alternatives, supported by a grass roots movement towards modular, web-based, and much less expensive software for managing clinical work and information in medical practices.

We’ve called this emerging and disruptive innovation Clinical Groupware to differentiate it from the previous generation of EHR products. We’re happy to report that there is new trade association on the scene, the Clinical Groupware Collaborative, with a mission to educate, promote, and organize collaboration among its members. It’s existence is simply one indication that Web-based applications and software-as-a-service (SAAS) is finally arriving in health care.

This new health IT paradigm is being aided by the phenomenal success of Apple’s iPhone and apps store (2 billion downloads, more than 100,000 apps) and a chorus of technologists, politicians, and public commenters who are asking why a similar platform + modular apps approach hasn’t gained more acceptance in health care among physicians and hospitals.

Interest in HIT by Big Technology Companies

The convergence of the opportunities in health care and the race toward cloud computing isn’t lost on the largest Web firms. Organizations like Microsoft, Google, Salesforce, Covisint, IBM, Intel, and Amazon not only are marshaling their forces to create new health care products, but have the resource bases and very deep IT infrastructures required to rapidly scale the kind of effort that will be required in a sector as vast and sophisticated as health care.

Their emergence in this space presents a non-traditional challenge to legacy firms, which have typically faced and easily out-gunned smaller, less resource-capable innovators. These new entrants are extremely sophisticated, established businesses with enormous capitalization and, often, more leading edge technologies.

These unexpected turns of events are profoundly important for a simple reason. The changes in health information technologies over the next few years could well be foundational, shaping how health care works globally for the next several decades. Which is why it is imperative that we not allow older paradigms that have outlived their utility to prevail, just because they were there first.  2009 has been a bright spot, in the sense that we’ve seen signs that the old guard could be dislodged. Against a backdrop of a health care reform effort that, as far as we can understand it, will not do much to improve the system, this progress in Health IT is encouraging.

David C. Kibbe, MD, MBA and Brian Klepper, PhD write together about health care market dynamics, technology, and innovation. Their collected works are here.

21 replies »

  1. I like the valuable info you provide to your articles. I will bookmark your blog and check again right here frequently. I’m slightly certain I’ll be informed lots of new stuff proper here! Best of luck for the following!

  2. One of the problems with EHR is that by default (HIPPA) all information stays private with the patient. The insurance companies have access to the patient data and mine it extensively, but are very slow at making anonymized results available to other patients.
    There are several companies on the web that address the issue of treatment transparency:
    It would be nice if anonymized treatment results availability would be required by law.

  3. I like the phrase “grass roots movement” to describe the niche markets that exist for modular solutions. It sounds as though these niche markets are perceived as “new” but in fact, small companies that create exceptional products have been competing with legacy EHR’s for years. Typically, these niche products are cheaper and better than their large competitors’ but are less utilized because of the time and research required to implement multiple modular solutions rather than one comprehensive one.
    It’s unfortunate that IT departments prefer to avoid responsibility over their systems, instead shifting it to big vendors. This usually results in physician and nurse dissatisfaction because they end up stuck with a clinical system they don’t like. The argument I hear from large vendors is that you can’t please everyone, which is true, but I think pleasing the majority of your users is a good place to start.

  4. Great post! Bravo to those who are challenging the dramatically unsuccessful status quo of the old guard! As a veteran of the space for over a decade, I’ve seen physicians be too trusting, get stuck with bank debt on unusable products, and be sold on site visits where the host was being paid by the vendor! In the meantime, traditional HIT companies raked in huge dollars and are trading at P/E ratios above 100.
    INNOVATION! New thoughts, better ideas, and Fresh Air!

  5. The national experiment violating the rights of the patients continues in full force, sans any methodological risk/benefit analysis of any of the HIT devices on the market. Ebullient self serving opinion has become the arbiter of success.
    Dr. Kibbe, what are your perks being offered to you and what are you being paid by HIMSS and the HIT vendors to present at the HIMSS Atlanta meeting?

  6. Dear Dr.s Kibbe and Klepper,
    Wonderful heartening news! Another reader writes: “As for ‘legacy systems’ they don’t need to dictate the future, but they can’t just be ‘ripped and replaced.'” Why not? Did the huge companies who supplied the systems and have made huge profits by deploying these systems guarantee a useful life of 50 years? 40? 30?. Did not the HMO’s who bought them profit by these restrictive systems designed primarily to increase the bottom line by controlling services? Do former profits decree future strategies?

  7. This is a great year in review piece. I’m going to link to it, describe it, and add some attaboys later today at ZDNet.
    Meanwhile, I’ll leave y’all an attaboy here. Attaguys.

  8. Dear David Tao: Thanks for your thoughtful comments. It’s going to be an interesting next year or so.
    Kind regards, dCK

  9. Hi David and Brian,
    Like you, I applaud the focus on ADOPTION AND USE, not just on system features. Furthermore, I agree that the focus should be IMPROVED HEALTH OUTCOMES for the patient, not just usage of EHRs. I am enthusiastic about increasing involvement of consumers in their healthcare, and hope that the innovations of Health 2.0 will in fact not just “coexist” with traditional EHRs, but will actually collaborate and interoperate with them. I observed with interest the “cats and dogs” discussion at Health 2.0 San Francisco http://www.health2con.com/2009/10/19/sf-2009-cats-and-dogs/ and even though only 38% of the audience felt that EHRs and H20 would work together rather than separately, we can still promote cooperation rather than resigning ourselves to information and technology silos.
    In your blog entry, I think that using one data point from East Texas Health System’s testimony (about two CCHIT-certified EHRs not interoperating) to draw a sweeping conclusion about CCHIT, paints a slanted picture. CCHIT 2009 interoperability criteria (prior to the changes in certification due to ARRA) had already been roadmapped (as of 2007). The criteria which would have gone into effect mid-2009 included exchange of structured codified data for meds, allergies, problems, and labs using CCD and HL7 messages, and terminology standards such as RxNorm, UNII, LOINC, SNOMED-CT. Even the previous 2008 CCHIT criteria (generating CCD narrative sections and document display) were already farther along than the currently proposed HIT Standards Committee recommendations which don’t require structured codified CCD until 2013. Of course, narrative was never the end goal, but just a stepping stone in a progression starting with getting clinical summaries to flow bidirectionally (2008), generating structured codified data (2009) and then discrete data import (roadmapped for 2010). Of course, that all changed when CCHIT 2009 was replaced instead by the two flavors of certification that started in October. “Preliminary ARRA” certification is now expected to be more modular and less stringent, whereas “CCHIT Certified 2011” is even more stringent than before.
    BTW, I noticed that the first Preliminary ARRA certification announcements http://www.cchit.org/products/Preliminary_ARRA include some vendors who certified only two of the 27 “modules.” That’s a good indication that things have moved away from requiring a monolithic EHR, for those providers who want to pursue a variety of SaaS and/or software modules from multiple innovative vendors to meet their needs.
    I realize that you favor allowing both CCR and CCD standards, and plenty has been said about that elsewhere. But I think it is misleading to say that CCHIT “failed to promote health data exchange” when it in fact introduced semantic interoperability in a phased approach that was actually two years ahead of where HHS certification appears headed, and over 80 products already passed the first phase. I hope that the CCD momentum will continue. As a volunteer within CCHIT, HITSP, and HL7, I acknowledge that all have room for improvement, and am glad that they provide open public comment processes, where every comment requires a published and web-accessible response (unlike “closed door” processes that you rightfully decry). From seeing these comments, I know there’s a variety of opinions pro and con, and that CCHIT criteria are neither “vendor-sponsored” nor even pleasing to all vendors either!
    As for “legacy systems” they don’t need to dictate the future, but they can’t just be “ripped and replaced.” In inpatient settings, there can be over a hundred such systems, with thousands of users, connected through interfaces. Creating and maintaining interoperability among them is difficult but necessary in order to share patient data. Managing change in a controlled way by replacing it a piece at a time allows addition of new technologies including Health 2.0’s, but connecting to those legacy (said another way, “live and operational”) systems will continue to be necessary, or else we’ll just introduce new silos of information.
    As I said, I hope that the new technologies you espouse will succeed, but in a collaborative way.
    David Tao
    Siemens Healthcare

  10. Great post!
    @MD Hell – are you kidding? This is the most significant moment in public health since the installation of water works in London.
    Except this time the plumbing is potentially a new health protocol (NHIN or Health Internet – what’s the difference if any?) and the clean water is HL7 infobutton messages.
    “Clinical Groupware” appears to be on the Provider side of the health house. On the Payer and Population Management side, the “Virtual Medical Home” is what we’ve been calling software that connects care management clinicians and members, and member providers. Like the WebMD private portal solution.

  11. As a privat consultant to doctors, I find EHR to be a very invasive product that seldom leads to better operation or more profitable. I think a better solution is one I have found recently which is a product that appears like a chart in electronic form and allows the doctors and office to continue operation in a much more streamlined operation with higher quality and lower costs, but without the disruption of other EHR systems. The product name is appropriate as it is called SimplifyMD. To me this makes much more sense and should allow the practice to meet the standards for meaningful use.

  12. Thanks for a refreshing positive note in a mostly depressing year for health care reform.
    Note to MD as HELL: You’re probably using one of the very legacy systems that this post decries. Give your administration HELL and help change it!

  13. There will be change in the health care industry. We just have to be patient and let the change occur. Nothing happens overnight. I believe that these advancements in technology will work wonders for health IT, and overall the Health care industry will benefit greatly.

  14. I am in strong agreement!
    As a advocate of Patient-Centered Collaborative Care, these developments are the most promising I have seen in more than 2 decades. Transformation to PCPCC is simply not possible without these shifts. Much more needs to take place, but these are definitely steps in the right direction.

  15. Agreed. Change is coming to the health care industry, not so much because of government incentives (although that has played a role is shaking things up) but because the marketplace is finally poised to drive the disruption. All of the big players in tech are looking for the next big market to attack and health care is the obvious choice.