One-on-One With Allscripts CEO Glen Tullman, Part I

So from that perspective, those hospitals are saying, “Hey, this is a great way to be easy to do business with; to allow hospitals who refer to us to look at the progress of their patient electronically, to check on their patients similarly if you show up in an emergency room; to make sure that all the information from their physician is available real time, which is a patient safety issue.” So from all of those perspectives, now we see that happening.

GUERRA: What do IPAs want from hospitals? How do CIOs balance the practices desire for integration with their desire to maintain independence?

TULLMAN: Well, I think you hit on a very important point. That is the trade off. Now, all these systems should allow – and I know all of the Allscripts systems allow – physicians to do a referral to any hospital. It is electronically enabled, and more and more of these systems are interoperable. So for example, the Allscripts system will be interoperable with the Eclipsys system, the Allscripts system is interoperable with the Cerner system in many locations. So we are seeing healthcare get connected.

If we look at the North Shore Long Island Jewish contract in particular, they said, “Number one, we will pay 85 percent of the cost of your system, and then you get to keep the federal stimulus money. But we’ll pay 85 percent of the cost if you follow our tier guides. If not, we’ll pay 50 percent of the cost.”

We’re also seeing many programs that say to physicians, “You can either use a system that the hospital hosts, or the hospital will help to subsidize a system that you buy – a client/server system that you maintain at your own practice.” The only thing generally being required is that these systems have to be able to submit data and communicate; because that’s where a lot of the value is added.

Many of the smarter or more sophisticated programs take into account that some physicians are going to say, “Listen, I don’t want the hospital to either have my information or to control my information system.”

But some physicians say, “I don’t care. I’m happy to have the hospital host my system or provide it; especially if they’re going to pay for it.” Others say, “I want control of my information. I’m going to add separate servers, and either I will pay for it or they can pay for it; but I have to have full control of it.” I think the more sophisticated programs take account of both groups of physicians.

GUERRA: Long Island Jewish is only offering the Allscripts EHR; they’re not giving a choice.

TULLMAN: That’s correct.

GUERRA: We see different ways of structuring that. Some people offer one, some people offer two or three, and some leave it more open-ended. Of course, there’s integration issues that come with providing a wide selection, but I suppose that’s the trade off.

TULLMAN: Yes, that’s exactly it. I mean, what they have said is they looked around and wanted to make sure the system they provided had the capabilities to do care management. They want to be able to give their physicians the latest care management, the latest best practices. Many of the smaller vendor systems out there, or the less expensive systems, don’t have those capabilities.

So what they said is, “We are happy to invest our own money. Now you can keep the government money, but we’re going to put our own money in so we have to know that the system we’re putting in (1) can communicate, (2) is going to be around long term.” They wanted a safe choice.

Michael Dowling (North Shore LIJ CEO), I love the guy. Why? Because when asked by the New York Times, “How do you know that $40,000 is the right amount? What if you can give them only $10,000?”

He said, “You know, we think it’s enough money to get them to change their behavior, but I don’t know if it’s exactly the right amount. What I do know is we have to improve patient care, and we’re willing to invest in it.”

To me, that’s exactly the kind of statement that a CEO of a health system ought to make. He should say, “We’re willing to invest these dollars to improve care.” He’s saying. “If I give my physicians better information on diseases, on clinical trials, on how much things cost; I trust they’re going to make good decisions. I actually trust them.” What a novel concept.

GUERRA: I can’t imagine there are many systems that have that kind of financial ability to do what North Shore LIJ has done.

TULLMAN: Does every system need to give that amount of funding to every physician? Well you’ve seen North Shore did, for example, they’re giving 85 percent to certain physicians, 50 percent to others. What we would suggest is that every system needs to figure out what their objectives are, what they’re targeting, what physician groups they want to work with, and what they need to do. We see systems making enormous investments in all kinds of different IT initiatives but this is, in our view, the most important because this connects them to their customer and to their patients. Even if a system doesn’t have a lot of money, they do have the federal funding, and that is driving much of the interest here. There’s no question about it.