This week CMS announced that the oft-touted VistA system — the EMR developed by the VA — would be made available for free. Given that similar EMR systems are sold for up to $15,000 a seat, this might appear to be a boon to the computerization of the physician practice, while simultaneously destroying the prospects of commercial software companies in that market. But there are many uncertainties.

VistA was built for government hospitals and has been converted to the private small office environment. It doesn’t really have a billing function integrated, nor yet does it link well with other clinical systems. Plus it’s apparently tricky to install, there’s at least one rival EMR system based on it and there’s only a nascent open-source support movement surrounding it — albeit one CMS is trying to encourage. In addition small office practices may do better with an ASP system rather than setting up their own technology. However, what VistA’s availability will likely do is reduce the price of EMR systems for physicians, even if that price is only a small component of the overall "cost" of EMR adoption. And it’s good to see the government realizing that the most crucial part of automating health care is computerizing the physician’s clinical workflow.

I hope to have more on open-source IT in EMRs and the fate of the small office shortly.

Meanwhile, I got this update from Manhattan Research about ePrescribing.  The number of doctors using eRx is now at 14%, 80% of whom are in big groups (and probably using eRx as part of a total EMR solution).  The number using eRx on handhelds is up 300% since last year (although it’s a much smaller proportion of that total and they wouldn’t tell me exactly what it was –after all they are trying to sell this research!)

Finally the piece I’ve been working on about prescribing, including eRx, is being put into editorial today and should be out in the Fall.  I’ll let you all know about that when it comes out.

Just brief musings for Thursday, after I blew way too much time on the HillaryCare piece earlier this week at the neglect of paid employment….

Browsers: I have downloaded Firefox 1.0.6. You may recall that I went back to Internet Explorer after the Firefox 1.0.4 update slowed my surfing to a crawl despite everyone’s help. Well sad to say the 1.0.6 update doesn’t seem to have improved it at all….still way slower than Explorer. Explorer does suffer from more annoying pop-unders though. Any suggestions? Please put them in the comments.

Bloglines: I finally broke down and started using Bloglines. Actually I stole Enoch Choi’s Bloglines subscriptions, then kicked out the stuff that he likes and I don’t on Wine and Parenting, and added in my own stuff on Soccer and Politics….Thanks Enoch! Then I went through all his links and added a few of my own. Bloglines is far superior to My Yahoo as a usable user interface, and I am now more or less up to date on lots more blogs than I used to know about.

Links: Which leads me to another modest gripe. Because THCB has a reasonably good traffic (i.e. in the hundreds rather than in the tens) I have been getting lots of requests to share links. Some of them are dinged immediately because they are from online pharmacies, but many are from other good looking health and medical blogs. So as of today I’m putting out a new request. Please if you want me to link to you send a URL of your RSS feed which I cant stick in Bloglines. If I think that your site has legs over time and is worth a link (i.e. not in the first 2 weeks) then I’ll add it to the links as I get around to it occasionally — or when John explains to me how to add links in Typepad!

Devices and Security: Finally some substance from a blog which will definitely get a link when I get around to fixing my links. Medical Connectivity Consulting has an article about whether medical devices are regulated by HIPAA (and the answer is yes!). This is less obscure than it sounds, as the issue of security of medical devices is becoming a screaming big deal. I have heard 3 stories lately of entire hospital networks being infected by viruses that originated from medical devices like ultrasound machines.  These devices are often on the network, but the CIO’s team can’t do things like add virus protection software to them because the manufacturer claims they’re FDA regulated and can’t be touched. This hasn’t stopped them picking up viruses or being hacked via modem, and in one case the network was accessed via one such device and turned into a porn server. Tricky stuff and becoming more tricky as more devices become digitized.

There’s another interesting healthcare IT blog out there called Medical Connectivity Consulting. For those of you who are deep in the weeds about this sort of thing it had a nice article about wireless communications in hospitals last week.

Chris Mayaud is one of the more amusing entrepreneurial doctors it’s been my pleasure to go drinking with and have on the odd panel (Also the only one ever to use an almost appropriate 4 letter word and get away with it!). He also was a founder at Physicians’ Online and these days appears to be the most connected person in the world on Linkedin as well as being some type of venture capitalist (although I’m still waiting for the check!).  And of course he’s got a blog, called Sacred Cow Dung — pretty interesting stuff mostly about the VC world, and you can usually get him to buy you a beer if you’re visiting New York.

Here’s a interesting post he put up a few weeks back on why it’s not doctors’ fault that they don’t use IT — Sacred Cow Dung: MYTH: Physicians are Resistant to New Technologies.

And in the bitter, twisted segment of THCB this week, apparently Empire Blues will be offering personal health records to their patients. And the records will be prepopulated for the members with information gleaned from claims data. including outpatient lab test results, physician visits, hospital stays, reported diagnoses and prescriptions. They can also (self-enter, I assume) values, such as cholesterol levels, that can be grouped together and graphically tracked over time. They’re using WebMD (who bought Wellmed, the last man standing in the PHR space phase 1 c.2002) to provide the service.

This is a screamingly logical thing for health plans to do. It gives them a compelling front end web application for their members, and thus gives their members a reason to stick with the plan (given the choice, although I know a lot of members are not). In addition they are the only ones who’ve got the majority of a member’s data all in one place. The only real exceptions are providers with a full service HMO like a Kaiser or a Group Health of Puget Sound who can then offer views into their electronic medical record system (e.g. MyEpic). For the traditional health plans, who’s CRM for their members has been completely crap for decades, this is an easy and relatively cheap way to improve their "customer service".

I’m just a little bitter that they’ve decided to do it now rather than FIVE years ago when I was selling exactly the same thing….

However, if any health plan or tech company wants to know more about this, I will work for food.

Last week I had two separate, but close to identical, conversations with software companies that claim to have found the solution to the problem of getting physicians to use the EMR.  But in neither case did they perceive the problem to be exactly what I think it is. I don’t think the problem is the cost of the software, or the lack of ROI, or even the functionality of the current tools.  I think the problem is the "switch".  And trawling around the web today I found an interesting article on COPE in HealthImaging which basically makes my point.

John Fitzpatrick, MD, director of medical informatics at Forrest General Hospital (FGH) says the biggest barrier the hospital first encountered with CPOE was that it took too long to use and was not intuitive for physicians.<snip>…Fitzpatrick recommends that healthcare providers in private hospitals find a CPOE system that physicians can enter the orders in as fast as doctors can hand write them or else the chances of success will be slim. "If the system can be made faster than on paper, all you have to do is incentivise the doctors through the learning curve," says Fitzpatrick.

"We are paying the pilot physicians for a limited time frame for their efforts acknowledging that at least initially it takes more time than on paper," he continues. "However, as they become more comfortable with the system, they get faster and faster at entering orders. Our original incentive plan was structured based on an incremental target for percentage of orders entered spread out over six months. However, most of the physicians are entering more than 95 percent of their orders from day one, and are probably reaching paper neutrality within six weeks."

So "time breakeven" on the switch to CPOE is 6 weeks or about one eighth of a year. Unfortunately translated into private practice that means that moving to an EMR will cost a physician some considerable chunk of one-eighth of their income in lost productivity. Let’s say that number is 30% of their productivity for that time period and lets say that the average doc’s annual revenue is about $500K, and for the sake of easy math let’s say it’s a 5.2 week period of lost productivity.  That translates into a $15,000 loss in practice income, ignoring the cost of the software and hardware.  And there are no corresponding costs to be cut, so the upshot is that the average small practice doc is looking at taking $15K that as income loss.

And there alone is a good reason not to do this…which is why some kind of bribery incentive is required.

I wrote a brief editorial in THCB and also on FierceHealthcare last week, suggesting that the problem with IT in the US wasn’t so much a lack of interoperability as it was a lack of use of IT in the clinical workspace by physicians in small practices. My editorial was in part inspired by a comment emailed onto me from Girish Kumar, who’s President of eClinicalWorks–an EMR vendor aiming at that market. Given that I’m doing some work on the use of ePrescribing by doctors in that market anyway, I thought I’d imitate MrHISTalk and do a CEO interview to go down a layer or two about how that small practice segment of the market is playing out. So here’s my take on my discussion with Girish.

eClincial Works is based in Westborough Mass , and it’s a private company with no debt and no investors and no plans to go public — working in a similar philosophy to Meditech just down the road. Currently it has around 150 employees with some $20-25m in software revenues on an annualized basis. They are doubling in size each year with 1500+ customers representing 3300 providers (meaning nurse practitioners and doctors). Their business is focused on the small end of the market, which they define as practices with 1-15 physicians, although they have started going into mid (15- 50) and large (50 +) practices. And a couple of even bigger practices have signed on recently, although that’s not been their prime market.

What about the market in general?

Girish believes that EMR adoption in health care is a long term process — and that realistically we are still 5-7 years away from peak adoption rates and some time after that from total penetration. He was (he says somewhat mis)-quoted last week as suggesting that government help was needed to get that market to take off. He does think that the conversation emanating from Washington is creating a catalyst which is helping physicians move towards automating their practices. But this is a numbers problem. While there are only a few thousand hospitals and big practices, there are over 150,000 small practices. Their EMR adoption is low in percentage terms but quite a few have EMRs which makes a large total number. Girish says that as eClinicalWorks continues to see more and more business every quarter, that tells him that the market is moving forward rather than backwards or sideways. But, and this is the key issue, the numbers of doctors needing to make that move are so large that unless the government puts in place bigger incentives the market won’t go from 30% adoption to 80% without a catalyst any time soon.

Is there a distinct set of players for different practice size?

For practices with 50 + doctors there are a now a more or less dominant set of EMR vendors, such as NextGen, Epic, Allscripts & GE Centricity (Logician). When you go to the below 50 doctor market, it’s coming down to 6-8 companies too, but not the same as the larger ones. For example, Epic doesn’t sell into that market. There are many smaller vendors who used to be able to be much cheaper than the better known companies, but the challenge for those companies is that original price point of $15-20,000 per physician is now falling. So the difference between the small vendor and bigger, better-known players has come down. For example eClincalworks’ EMR is $7500 a seat (you need to add $2500 more for the practice management module).

This is being accompanied by some level of market confidence in the vendors. Girish claims that others are telling him that eClinicalWorks is becoming a brand name for EMR. In addition the vast majority of doctors who buy their EMR product are also picking up the practice management application, and are starting to replace the Medical Managers of the world. As in many other parts of the health care IT arena, the value of the pre-integrated product can exceed the reason for keeping a legacy practice management system, and he expects to see that trend continue. Incidentally, some of his competitors, don’t share that view–Allscripts for instance doesn’t have a practice management module and integrates with those legacy systems. But clearly if physician organizations can recognize a distinct set of vendors who will be around for a while, then it will help the market.

So what should the government do?

In Girish’s view government is recommending the standards for building the highway, (interoperability and RHIOs). There’s no question that you need that for nodes (or in his analogy, cars) to be able to able to connect with each other. But we need to focus on the nodes, and we have to build the on-ramp and off-ramp to the highway. The government needs to incentivize both the infrastructure creation and incentivize the plug-in at the doctor’s office. He’s not critiquing building the highway but we must realize that we need the cars too.

What should that look like at the node level?

The government should come up with a subsidy either via Medicare or a pay for performance package directly related to IT adoption. Then the government should mandate that vendors implement interoperability standards at no additional cost — customers shouldn’t be burdened with the extra costs of interoperability. We need to build an incentive to vendors to do that and that incentive for vendors should be a growing market. In other words, create a market so that the vendors make more money but force them to make interoperability part of the products features. In one example Girish cited a vendor who wanted $60K to integrate inpatient and outpatient information together for single practice. That’s not acceptable to him and the path to interoperability ought to be built into vendors’ standard product roadmaps.

Having said that, there is only a small demand from doctors for seeing the inpatient chart in the outpatient environment, although that varies by specialty. For example, no dermatologist cares, but an ObGyn or cardiology practice might care. The big deal in terms of interoperability is access to lab results. However, overall adoption will be easier if physicians know that the products they buy are interoperable and that they are both able to get information from other systems and able to walk with their data if they don’t like the system they have.

So why should the government subsidize the EMR?

Putting aside the fact that the government subsidizes lots of parts of the health care system already, I pushed him a little on the idea of subsidies. After all if adopting technology gives the physician efficiency (and several vendors show that in their studies) and it’s saving them money, why should there be an incentive from the taxpayer? Girish felt that the improvement in care EMRs would create would save Medicare and the government money in terms or reduced hospital admission, better drug compliance, etc — so in his view it would be an investment. But he was happy enough with a proposal that any subsidy should be budget neutral overall for physicians, but that Medicare or the government would essentially be paying them to adopt the EMR while they were paying them less for other activities in their practice.

While I agree and I think that the P4P movement is pushing this way, I can imagine the AMA might not agree quite so readily! Still, I’m with Girish in believing that the adoption of EMR tools in small practices is the most crucial aspect of IT in health care, and it’s good to hear that there is some activity in that arena. And that at least one vendor is talking a good game about how that market can be grown at benefit to all of us.

This week the Clinton/Frist (or should it be Frist/Clinton) legislation got on breakfast time TV, and Brailer’s office announced that it was going to be starting the first few pilots towards interoperability with some $60m available. A more ambitious $4bn bill was introduced too, although that won’t go anywhere unless someone adds the words "Terror" or "Iraq" to the title. But while all the fuss is about interoperability of data transfer, there is a whole set of players who need data to become electronic before it can be made "interoperable". While the larger medical groups and hospitals are rapidly getting on the EMR adoption curve, it’s a much slower process among the small practices that account for 75% of America’s doctors and patients — most of their information is stuck in paper. Other countries solved this problem the old fashioned way — the government paid for doctors to get EMRs in their offices.  Before we get too worked up about interoperability and RHIOs, a bigger national push to get smaller practices using clinical information technology might be a better idea.