Extending Your EHR to Independent Hospitals and Clinics: Five Considerations

Establish a Pricing Strategy: In pricing your offering, you’ll likely not want to be the price leader. Rather, consider the value you bring to the table: top-notch products and services, best practices and order sets, minimal headaches, and enhanced interoperability that facilitates stronger clinical integration. Most of your partners/clients would likely have to settle for a lesser solution if they were purchasing independently, nor would they necessarily have staff, funding, or expertise to implement on their own. Finally, carefully evaluate the cost to implement and support the solution and how much of the cost your organization is willing to subsidize. If you maximize the allowable subsidy amount, the cost to the customer will be less, but you also will be left with no contingency plans if an implementation requires more time than planned.

Develop a Marketing and Communication Effort: Once you have defined the target market and offering, you need to determine the best way to get the word out. Be careful not to underestimate the cost of marketing including the staff time required to manage responses. In addition, develop consistent messages that set realistic expectations with prospective clients and provide transparency around the total cost of ownership.

TWO: UNDERSTAND THE REGULATORY CONSTRAINTS AND RISKS

At the same time as you are developing a roadmap, you need to be very clear about how Stark Law Donation Exceptions, the federal anti-kickback act and Safe Harbor requirements apply.

For example, under the Stark Law exception you can subsidize up to 85 percent of the cost to implement and support the EMR, but remember that you must have clear criteria for the level of discounts you plan to offer. Be careful of any appearance of giving away software for patient referrals; that’s a clear violation of the anti-kickback statute. Stark exceptions were put in place to benefit the public, not a private practice or hospital. Therefore, there are many constraints surrounding what can be subsidized and what can’t.

In addition, as a sponsoring organization you must be able to show that you received fair market value for your products and services, so keep track of every hour and every dollar spent for implementation and support. An audit that identifies violations of these restrictions can result in substantial penalties.

THREE: DEVELOP THE BUSINESS

Many organizations struggle with executing on actual business development since they are not accustomed to playing the role of a vendor. This aspect of an EMR extension strategy requires considerable time and effort, as well as expertise in the three main components: marketing, sales, and contracting. We’ve referenced organizations as clients and customers because they are, and you are a vendor in this case.

Marketing: In nearly all cases, you will need to develop professional materials to market your offering. These should include a brochure and a questionnaire tailored to hospitals or clinics. The brochures can be mailed, hand delivered, or distributed at town hall type meetings, which allows you to communicate your offering and address questions with multiple providers or hospitals in the area.

Sales: You will need dedicated resources to receive calls and visit sites to answer questions and assist potential customers in completing the questionnaire. Whether you decide to proactively sell to all organizations in the region or selectively pursue strategic clients, allocate the appropriate number of resources to review the offering in detail, conduct demos and, if necessary, work with the client to gain approval from their board.

Contracting: While the rest of the business development team is out marketing and selling the solution, your legal team should develop and review templates for all required contracts. Once a hospital or clinic has communicated their intent to collaborate and implement your EMR solution, you will need to tailor contracts for that customer and then have both parties review and sign. At that point the transition from business development to implementation begins.

FOUR: DEVELOP A COLLABORATIVE GOVERNANCE MODEL

Be aware that the strategy of extending your EMR to others implies important changes to your IT governance structure. Going outside of your organization alters how you set a strategic IT direction, prioritize, make decisions, and resolve issues. Among the things your governance team will need to do:

• Review and approve components of the strategy and plan.
• Review and approve the budget.
• Define criteria for pilot sites. Which clients have a high probability of success? Who will be a change agent for the community? Is this a good test site based on size and services provided?
• Review and approve timeline and sequencing recommendations.

In addition, all key stakeholders of the EMR should collaborate to support and optimize the solution. Among the concerns: