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Regional Extension Centers & Ripple Effects

June 26, 2009
by root
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Will HITECH destroy consultants that focus on the large practice/small hospital market?

Recently, HHS/ONC published a proposal for the HITECH-mandated Health Information Technology Extension Program. While a news writeup with highlights can be found at, the proposal brought a number of questions to mind that I'd like to work through.

The document states:

“Providers that seek to adopt and effectively use health information technology (health IT) face a complex variety of tasks. Those tasks include assessing needs, selecting and negotiating with a system vendor or reseller, and implementing workflow changes to improve clinical performance and, ultimately, outcomes.”

It would seem there will be tremendous temptation here for Regional Extension Centers (RCs) to play favorites. Vendors will soon understand that the key to moving software will be not convincing practices and small hospital of their worth, but making friends with decision makers at the RCs. Will there be rules to prevent vendors from taking RC decision makers out to dinner, from buying them lunch? Today, pharmacy reps use such tactics to influence physician prescribing behavior, and government is having a hell of a time trying to stamp out the practice. Will there be reviews to see if particular RCs are predominantly recommending a particular vendor?

“The major focus for the Centers' work with most of the providers that they serve will be to help to select and successfully implement certified electronic health records (EHRs).”

Will such selection assistance put a damper on some private consulting business, particularly work done for large practices and small hospitals? If you can get it for free (or much less, due to government subsidies), why pay full price? Well, often you get what you pay for, and it's possible the RCs will provide such poor service that the private consultants survive. We'll see.

Now on to the question of implementation services. These services often made up the bulk of vendor revenue. Usually, the idea is to sell the software fairly cheap (get in the door) and sock ’em on the implementation, maintenance and upgrade fees. Well, what happens when these vendors find providers buying the software from them, but going to the RC for implementation services? Vendors have a responsibility to shareholders (or themselves, if private) to not just maintain, but increase, revenues. So when you cut off one revenue stream, they either have to grow a totally new one (hard) or increase an existing one (easy). Thus, software prices will go up as vendors look to make the bulk of their money on the front end, now that the back end is gone.

But just how good will the implementation services that an RC provides be? These centers will have to implement software from all vendors, which is very, very hard. This is another reason to fear they will keep recommending the same vendors, as they develop proficiency in the implementation of particular favorites. “Oh, you don't really want that one? It's very hard to put in.”

Will vendors have a chance to brief the RC decision makers on the “benefits” of their products? How can one RC have enough knowledge/talent to have equal depth in 10 inpatient vendor products and dozens upon dozens of ambulatory solutions? On paper, it doesn't quite make sense. How could RCs afford such talent? Wouldn't qualified individuals make much more on the open market?

“All regional centers will assist adopters to effectively meet or exceed the requirements to be determined a “meaningful user” for purposes of earning the incentives authorized under Title IV of Division B.”

Fast forward to a point when, after RC assistance, a small practice is deemed not to have achieved meaningful use and is denied its application for incentives? What happens next? A call to the RC might go as follows:

“I got denied”

“That's terrible.”

“You said I would qualify.”

“You must not have done what we told you.”

“But now I'm stuck with this system you recommended and all the bills, and I've got no money coming in.”

“Good luck with that. We did our part.”

Will there be an appeals process for those denied meaningful user status? How accountable will the RCs be for making sure a provider reaches that status? Will they be dragged into appeals? What is required of the provider in that relationship? Must they prove a good-faith effort? Who decides? Who reviews? We'll see.

“Regional centers will therefore, as a core purpose of their establishment, furnish direct, individualized, and (as needed) on-site assistance to individual providers. This intensive assistance is, per statute, to be prioritized to providers identified in the statute. We expect that on-site assistance will be a key service offered by the regional centers to providers prioritized by the statute for direct assistance, and will represent a significant portion of the regional centers' activities.”