At the end of September, 13-hospital North Shore-LIJ Health System announced it was subsidizing up to 85 percent of the cost of implementing Allscripts ambulatory EHR in the offices of its more than 7,000 affiliated physicians in New York City and Long Island, constituting a $400 million investment. Specifically, the plan calls for North Shore-LIJ to provide physicians with individual subsidies of up to $40,000 over five years. To learn more about the project, HCI Editor-in-Chief Anthony Guerra recently talked with CIO John Bosco about the strategy behind this massive tactical move. (Read a related interview with Allscripts CEO Glen Tullman)
GUERRA: Could you have a situation in which 90 percent of the practices keep their data with AllScripts, but a few large IPAs want to keep it in-house?
BOSCO: It’s possible. I’m not convinced that we will hit practices large enough that an ASP solution doesn’t work, but it’s possible. We know a lot about our physicians. It’s more challenging for us to understand how they’re grouped because we credential physicians at the physician level, not at the practice level, so we have really good data about every one of those 7,000 physicians in terms of where they live and work. Our data is less accurate around how many of them practice together, but we truly believe that there are very few, if any, large practices that won’t use the ASP solution.
Security came into play in our forum the other night. We did have some physicians who said they would feel more secure if the data was on their premises. They also, then, would not be subject to Internet outages (as they put it) and network outages and problems like that, but we try to explain to them that’s a dual-edged sword, that having it hosted in their office means they must have some onsite IT experience, because security is a huge issue. And if they’re going to have servers in their offices, they need to invest in some IT expertise, whether it’s consultant or a full time, who can make sure they have the right security products protecting their systems from intrusion.
They say, “Well, I just feel better if I have my data here,” and, “Well, maybe it’s cheaper because then I don’t have to rely on any vendors or anything for support.”
We try to present the other side of the picture and say, “Well, you’re going to need some IT expertise, and you’re going to have to count that into the cost of hosting it locally. You’re going to need vendor maintenance no matter what because you’re going to need updates to the system.”
So that is difficult. It’s not impossible to say, “I’m going to buy the system but I’m not going to buy any ongoing support.” So we try to help them through these decisions. I mean, part of this whole cultural change is that, except for the very large practices, it’s a challenge for physicians to feel comfortable about seeing demos from multiple products and going through the whole vendor selection process. It’s challenging for a small physician office to do that and feel comfortable they understand the difference between the vendors and products.
So that’s also a benefit, we believe, to the program. We explain to them why we selected Allscripts and we believe, as we get through the early kinks, that we will have proven and replicable processes which significantly increase our chances of this being completely successful. A lot of the EMR implementations fail, some say up to 40 percent. We believe part of the benefit of them doing this with us is they can feel more comfortable they have the backing of a major health system, and that we’re going to have a program with proven successes.
GUERRA: They’re also taking on major disaster recovery risks if they want to host it themselves.
BOSCO: Yes, and I mean these guys just don’t have this understanding and experience. I was saying to one of them last night that I spend millions of dollars a year on IT security, on buying new toys, new security toys every year to try to prevent people from breaking into our data center, and into our network and systems. We have firewalls, and we have intrusion detection and prevention systems, and we have a couple of dozen different security products that we used to try to make sure the data doesn’t get leaked, “And you’re not even aware of that, Mr. Physician.”
So you can have a server in your office, but if you’re going to do that, you really need to have an experienced IT consultant advising you about how to keep it safe and secure. That’s the problem. They don’t know what they don’t know. And the vendors convince them, “Now I just stick a server under your desk, somewhere, and it’s just like a PC and everything will work fine,” and then they don’t know anything about backup and restore and, as you said, recoverability and security and all of this IT stuff.
GUERRA: So they enter these meetings with a mindset you have to change.
BOSCO: Yes, and you know what, the only thing that’s going to truly resolve all of this is for us is to be successful in the early stages and for them to have colleagues they can speak to, because that’s who they’re going to believe. They all talk to each other, they all email each other, and when they see it’s been successful, and the guy down the road is up and running, and they can go visit him, and they can talk to him and feel comfortable about it, then they’ll sign on.
So our expectations aren’t that we’re going to sign up 7,000 people in the first year. We couldn’t handle that many people anyway, and we understand that we are in this for the long haul. We don’t have the perfect solutions yet in terms of the integration and exchange and sharing of clinical information, we’re going to phase that connectivity and integration in, and we’re going to think of new ways to do it. So this is something that we’re in for the long haul, we’re in this permanently, and we’ll build this connected community of providers as we go along and get better and smarter about it.
GUERRA: So much of this is going to be worked out as you go along.
BOSCO: And impacted by outside entities. I mean, New York State is going to come in. A lot of the RHIOs have been developmental efforts to this point, and now they’re looking at SHINY, at the state infrastructure, and trying to figure out whether we even need the regional organizations, maybe we’ll plug right into the state to exchange data. I mean, there are so many different aspects, and you have the whole thing on the national level on one hand – the national information network. And so all of these things are going to evolve over the next few years and we’ll be figuring out how we take our own little community of providers and plug into that. So yes, all of this is evolving, and it’s going to take a bunch of years to figure out.
GUERRA: With so much uncertainty, it’s tempting to get frozen in place.
BOSCO: Yes, it really is, and that’s one of the reasons we went through HITECH with them because you need to understand there are going to be penalties at some point. This is the future and you can do it with us now or you can wait and hope that you’ll still be able to get your incentives, but my fear is that if we don’t do something like this, everybody will run out and buy many different systems, some of them worthy uncertified systems and some of them fly-by-night – more scanning solutions than anything. If I’m sitting here with 7,000 providers that have 7,000 different systems a couple of years from now and we want to start talking about and doing all of the things that are part of healthcare transformation, we won’t be able to do them. It will get too technically complicated to share information between these providers, to effectively coordinate.
We want to make sure these providers are communicating better with each other, that we’re handling transitions of care in and out of the hospital better than we did today, that we can measure and manage quality and really understand whether physicians are able to meet nationally recognized standards or not. I mean, all of the things that are part of healthcare transformation are going to be immensely more difficult if everybody’s using a different system. And I know we can’t ever force people to use the system that we’re putting out there. We’re trying really hard to get them to understand why we’re doing it.
GUERRA: The Stark relaxations actually set up a good paradigm for alignment, then HITECH muddied that up. What are your thoughts?
BOSCO: Yes, I know. I hear you. I was at a Health Management Academy meeting recently and we were all talking about how HITECH has impacted physician alignment. And quite a few of them actually said now that the physicians are going to get incentive money directly from the government, the health systems are going to scale back and they’re revisiting their plans about whether to offer any subsidies via the Stark relaxations.
I don’t know; I guess that makes sense. A lot of places can’t afford these subsidies in the first place, and I don’t know if when they did the relaxations there was any massive movement anyway. I think there was not the level of activity they thought there would be, but I don’t know if I would say that HITECH has messed it up.
If nothing else, HITECH has brought much more attention and visibility to the fact that we need to use EHRs to enable better care and quality and safety improvements. Everybody’s trying to figure out, “Well, what the heck’s our strategy now, and how do we better align with our physicians?” So yes, it has had some crazy effects, like you said, but I think it’s had some good ones too, so far.
GUERRA: Did you ever consider requiring them to turn over the $44,000 of incentive payments since the health system is largely paying for the EHR?
BOSCO: We didn’t, because really core to our strategy is our belief that cost was, and still is, the number one barrier to physicians adopting EHRs. What we’re hearing from our community physicians is that the incentive money is great. Of course, not everybody gets it. The ones that get it are saying it’s great, but the money’s going to come in over five years and they have to make the investment first.
“So you want me to invest $50,000 per doc to get this thing and maybe my five year TCO number is $50,000, but I’ve got to invest the money now. The money’s going to come in over five years. I guess I just have to take it on faith that the money’s really going to be there like the government says. It’s going to trickle in as little incremental additions on to every one of my Medicare payments.”
But that $44,000 really doesn’t cover the cost of putting in the EMR in anyway. So this is what we are hearing.
And I say to them, “Don’t look a gift horse in the mouth.” $44,000 is fabulous, but the fact is that the way it’s going to be disbursed isn’t ideal, and it really doesn’t cover the cost of putting in an EMR. I mean, it could if you buy a cheap one, and you’re careful about how you put it in, you might come close. But if you want to hook medical equipment up in your office and have interfaces in for the EMR, if you want to get rid of some of those paper charts and you either want to scan them all in and attach them to the records or abstracts, along with data elements for the next six months worth of patients that you’re going to visit, if you want to stick those in attachments with electronic records, that alone could cost more than $44,000.
Regarding our 1,200 employed physicians that we are also installing the Allscripts software for, we are going to spend a few million bucks to put just the abstracts to a certain portion of the charts – and a certain portion of the data in that portion of the charts – and attach them to the records.
So I mean, when you look at the fact that we’re not able to subsidize the hardware in the physician offices or PCs, printers, scanners, wireless infrastructure, all of this stuff, they still have to foot the bill for that. It’s really expensive, and I don’t know that just $50,000 and $60,000 or $30,000 to $60,000 that you hear about five-year TCO for a physician to install an EMR really covers all of the hidden costs.
So we said, “Yes, they’re going to get $44,000, but we don’t know that this is really going to get them over the hump and so we need to add something to that.” If we really believe in the EHRs as enabling technology, and we really believe that everything we want to accomplish with quality and safety is the most important thing, then we have to go a step further than HITECH goes and add something to it. So that’s why we really never gave consideration to asking them for that money back.
Part III Coming Soon