AG: Why do you think that after Stage 3 there is such a dramatic drop off in where people are?
DG: Let me describe how the algorithms work with the rules associated with this, and it will explain why it is the way it is. If you don’t have all three ancillaries, you are at Stage 0. I don’t care if you’ve got closed-loop medication administration up and running, we want all the rest of the stuff. If you don’t have a lab system, a pharmacy system, and a radiology system, you're a Stage 0. You don’t move until you get all three ancillary systems installed.
For example, Stage 2. If you have a repository and you have all three ancillary systems, then you're at Stage 2. That’s where the largest percentage of hospitals in the U.S. are at this point. So you're at Stage 2 and you’ve got a clinical data repository and you decide to implement CPOE, but you don’t have nursing documentation implemented, you leap over and you start doing CPOE, and you’ve got a CPOE on one unit and you’ve got some docs, a cardiologist for example, that are doing orders online, you're at Stage 2. The reason you're at Stage 2 is because you didn’t implement nursing documentation. You're a high Stage 2 — you're going to be a 2.8841 or something. There are four digits after the decimal point on our scoring and that is to give you credit for things that you’ve done above the stage where you are, but you haven't completed all the things at the next stage in order to move to the next stage. So if you’ve got CPOE, but you don’t have nursing documentation, you're a Stage 2 until you implement nursing documentation, at which point you jump to Stage 4, because you’ve already got what you need at Stage 3 because you implemented nursing documentation. There are three things actually in Stage 3 that you have to have, but most of the healthcare organizations have the second two, the clinical documentation is the one that’s the big one. And if you’ve already got CPOE implemented, you come up to Stage 4 immediately.
We’re being a lot stricter in the way we say things — the pieces that need to be there —rather than just having a survey that says how many hospitals have signed contracts and implemented CPOE. That number is 20.1 percent that are live and operational with CPOE, 15.7 percent, in addition to that, have contracted for CPOE but haven't implemented it yet; 5.1 percent of hospitals in the U.S. have an installation that’s in process right now. So if you add all those up, you're at a little better than 40 percent of hospitals that have either contracted for it and not installed it yet or they're in the middle of installing it or they're live and operational. But if they don’t have nursing documentation up and running, which most of them apparently don’t, then they’d never make it passed Stage 2 until they get nursing documentation.
Those are the rules that we are using to create this thing. Now there are people who would contend that our rules aren’t fair, they're probably right. The rules are fair for the way the vast majority of healthcare organizations implement the technology. It’s not true across the board in its entirety. There are places that have implemented CPOE, for example, without implementing nursing documentation. Most of those places have found out, ‘Wait a minute, we need to get nursing documentation up too because we have physicians who are trying to find all the information they need to be able to issue orders and the nursing stuff isn't there because they don’t have nursing documentation.’ So they still have to chase down the paper chart in order to do CPOE.
The way the rules are built, you have to have the stuff underneath the stage to be able to get to that stage. So that’s why the numbers drop off precipitously. Let’s say for the sake of argument, that even if 20 percent of the hospitals in the U.S. are live and operational on CPOE, that doesn’t mean that one complete unit is up and running; that means that one doc is doing it, or they’ve at least got the software implemented, they may not have any docs doing it. When you get in the higher levels of the EMR adoption model, like Stage 4, we’re looking for a whole unit of physicians using it, not just one doc using it. That’s where we are with that.