The Allscripts-McKesson EHR Deal: Time to Consider the Broader Industry—and Policy—Context | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

The Allscripts-McKesson EHR Deal: Time to Consider the Broader Industry—and Policy—Context

August 6, 2017
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How might the Allscripts-McKesson EHR deal figure into broader interoperability and federal HIT policy trends?

As our Senior Contributing Editor David Raths and our Managing Editor Rajiv Leventhal reported on Thursday, the news that the Chicago-based Allscripts announced that it had agreed to pay about $185 million in cash to acquire the Enterprise Information Solutions (hospital and health system IT business) division of the Alpharetta, Ga.-based McKesson Corporation, came as no shock to healthcare IT leaders in the United States; McKesson executives had let it be known for some time that they were looking to sell off that segment of their overall company.

Executives of both companies expressed satisfaction with the deal. For their part, Allscripts executives noted that, after the transaction closes, the combination of Paragon and Allscripts Sunrise hospitals will double the company’s EHR hospital client count in the United States. “Adding these assets to Allscripts existing portfolio enables us to better serve our clients, increase our scale and further drive our investment in innovation,” said Allscripts CEO Paul Black in a prepared statement. “The healthcare IT market remains highly fragmented. Today’s announcement is a proactive and strategic measure to maintain Allscripts’ long-term leadership and position Allscripts for continued growth.”

And John H. Hammergren, chairman and chief executive officer, McKesson, noted in a statement, “We have selected a company that can serve the long-term interests of our customers and has the experience and capabilities to deliver value through its population health, precision medicine, consumer and care management solutions. The conclusion of this process demonstrates our commitment to support the success of our hospital customers and provide growth opportunities for Enterprise Information Solutions employees.”

Given how everything had played out over many months, industry observers were less than surprised by the deal. Ben Rooks, founder of strategic and financial advisory firm ST Advisors, referred to the transaction as the “finishing off of the Change Healthcare transaction.” He told Healthcare Informatics that it was well-known that McKesson had been looking for a home for these assets for the past few years, and that it was not a matter of if, but when they would close a deal. “The price [of the deal] was a low one; it’s a fixer-upper in a bad neighborhood. McKesson wanted to get rid of it. I think it’s safe to say that it was broadly shopped and that this was the best they could do,” he added. Meanwhile, Jamie Stockton, a senior analyst at Wells Fargo, also noted that Allscripts bought McKesson’s hospital software business “on the cheap.”

In any case, it is clear that Allscripts executives have been looking at their company’s near-term prospects with an eye on the steamroller success of the two largest EHR (electronic health record) vendors, the Verona, Wis.-based Epic Systems Corporation and the Kansas City-based Cerner Corporation. Epic and Cerner have been sweeping new contract bids, and moving towards making the EHR vendor bid process nearly a two-vendor race in many cases. Will Allscripts be able to catch up? The jury is out on that question, but this transaction certainly affirms the direction of the ongoing consolidation of the EHR vendor market.

A key question that will emerge is if this acquisition could tighten the gap that currently exists between the two dominant vendors in the marketplace—Epic and Cerner—and others. Rooks notes that Allscripts needed to do something to this effect to maintain its market relevance and perhaps close up that gap. “You have two sides of the Cold War with Epic and Cerner battling it out, and Allscripts is one of the non-aligned states. They can take some customers of course, but I don’t think it will end up being [substantial],” he says.

Noted Wells Fargo’s Stockton in the above-mentioned analysis, “More importantly, [the deal] gives Allscripts more logos in a hospital landscape what has been increasingly dominated by Cerner and Epic. Choosing Sunrise on the high end or Paragon on the low end should now seem like a safer idea.”

And Coray Tate, KLAS vice president of clinical research, agrees that since Epic and Cerner are so dominant in the market, the other EHR players aren’t “throwing big rocks into their pond at this point.” But that said, Tate told Healthcare Informatics last week, Allscripts was one of just four EHR companies that had net positive growth last year. “So they are hanging in there and they are actually picking up market share, and this deal does double their market size,” Tate observes. He adds, however, that Paragon has been in a state of limbo over the last year or so, with customers leaving and no net wins to speak of in the last year.

Two major questions arise at moments like this: first, are we headed towards a level of consolidation at which literally only a handful of “big-box” EHR and clinical IT vendors remain, and come to control the entire EHR market? And second, does a potential policy issue arise, if we do get down to just a handful of EHR vendors nationwide? Or is that a false worry?

There are actually numerous lenses through which one could look at all of this. For one thing, because of the long history of closed, proprietary development in the clinical IT space, the reality is that none of the commercially available EHRs are truly “open,” and the very few “open-source” EHRs in existence have had very few takers indeed. Yet at the same time, the implementation and optimization of EHRs have become essential to the functioning of virtually all patient care organizations, with more and more solutions being placed “on top of” those EHRs, especially including data analytics solutions for accountable care, population health, and care management purposes.

So one could see this situation as one of opportunity or one of potential challenge. In other words, either the accelerating EHR vendor consolidation could lead to enhanced interoperability, or, potentially, the opposite, if the couple/few remaining EHR vendors feel less pressure to “play well with others.”

There is of course also the question of the extent to which any of these vendors will support the development of FHIR-compliant assemblages of clinical apps, and the extent to which consolidation favors that type of support, or, paradoxically, inhibits it.

With regard to the broader question of whether a handful of vendors will dominate the EHR market, if one looks at the two main sub-markets—hospital and physician practice—that is essentially already true. On the hospital side, Epic, Cerner, Allscripts, Meditech, and to a lesser extent, GE Healthcare, already hold dominant positions in the hospital EHR market, with Epic and Cerner grabbing the lion’s share of new contract battles. Meanwhile, on the physician practice side, Epic, athenahealth, NextGen, Greenway, eClinicalWorks, and a few other companies, have become increasingly dominant on that side of the fence. What’s more, the way in which the meaningful use process played out under the HITECH (Health Information Technology for Economic and Clinical Health) Act only intensified both consolidation and accelerated market dominance among the handful of larger EHR vendors in both the hospital and physician markets, as providers found that they could ill afford to go with vendors that might not be in business in a few years from the time of inking contracts.

The other question, though, is a prickly one, and probably one without any clear answer. Could the ongoing consolidation of the two EHR markets mean on the one hand that the EHR vendors left standing would have less and less reason to collaborate to improve interoperability—and also that the remaining EHR vendors might end up being so powerful that they could essentially dictate federal healthcare IT policy? When I met with Judy Faulkner and Carl Dvorak at Epic’s headquarters this spring, as I was preparing our “Most Interesting Vendors” portion of our May/June Healthcare Informatics 100 cover story package, they vehemently denied that either outcome would emerge. Judy in particular appeared shocked that I would even suggest either possibility. The Epic viewpoint is that the marketplace is still quite well-populated with vendors, and that there is no dominant vendor on either side of the hospital-physician EHR divide.

And yet others see things differently. “The answer to that question”—whether Epic in particular has become so big and so powerful that its size and dominance could reshape the landscape around interoperability and policy—“really depends on what hat you wear,” Julia Adler-Milstein, Ph.D., told me this spring. Adler-Milstein, who was then an assistant professor in the School of Information and in the School of Public Health at the University of Michigan (Ann Arbor), but who has since transitioned to a new position as associate professor in the Division of Hospital Medicine in the Department of Medicine at the University of California-San Francisco, told me that  “There are some people who are saying that interoperability is proving to be such a challenge that maybe  we are better off with a few dominant vendors. In markets that Epic dominates, people with Epic are thrilled with CareEverywhere,” Epic’s proprietary, Epic-customers-only HIE service. “On the other hand, others oppose market dominance, because they believe that it hinders interoperability and innovation. It really cuts both ways,” Adler-Milstein adds. “The bigger Epic gets, the more interoperability there is only within the Epic sphere, but the less there is outside it.”

Meanwhile, on the federal healthcare IT policy level, if we end up with literally just a few market-dominant EHR vendors, to what extent might those members be able to strong-arm the federal government around issues like interoperability? I wonder this particularly in light of the fact that the new administration has a Health and Human Services Secretary who, as a member of Congress, spoke out quite vehemently against over-regulation, and who has made statements indicating that he wants to lessen the regulatory burdens on physicians in practice in particular.

Yet at the same time, various federal healthcare IT policy leaders, including Donald Rucker, M.D., the new National Coordinator for Health IT, have spoken out in favor of accelerating interoperability in healthcare. Indeed, just a couple of weeks ago, the Office of the National Coordinator for Health Information Technology (ONC) kicked off the first of three meetings and webinars to inform the public about the department’s work related to the implementation of the 21st Century Cures Act trusted exchange framework and common agreement provisions. Charged with supporting nationwide interoperability under the Cures Act, section 4003 of the law directs ONC to establish a trusted exchange framework for policies and practices as well as a common agreement for exchange between health information networks. ONC officials have indicated that the common agreement should be out for the public later this year or early in 2018.

And in that context, Dr. Rucker said in that July 21 meeting that he was glad to move forward to work with members of Congress, as they push the administration to come up with more explicit definitions of interoperability and open APIs, and to prohibit information-blocking.

So the Allscripts acquisition of the McKesson EHR segment is coming at a time of accelerating change on a number of fronts in U.S. healthcare and healthcare IT. Considering the broader industry and policy context, it will be fascinating to see how all this plays out, both with regard to how the EHR vendor market evolves forward, and the implications of all this business activity for federal healthcare IT policy and thus, for the leaders of patient care organizations. Only time will tell; but I have no doubt that we’ll look back on this moment in the evolution of U.S. healthcare IT as a significant one.

 

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EHR-Compatible Pharmacist Care Plan Standard Opens the Door to Cross-Setting Data Exchange

September 14, 2018
by Zabrina Gonzaga, R.N., Industry Voice
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Pharmacists drive information sharing towards quality improvement

Pharmacists work in multiple environments—community, hospital, long term care, clinics, retail stores, etc.—and consult with other providers to coordinate a patient’s care.  They work with patients and caregivers to identify goals of medication therapy and interventions needed, and to evaluate patient outcomes.  Too often, pharmacy data is trapped in a silo and unavailable to other members of the care team, duplicated manually in disparate systems which increases clinical workloads without adding value.

To address these issues, Lantana Consulting Group and Community Care of North Carolina (CCNC) developed an electronic document standard for pharmacist care plans—the HL7 Pharmacist Care Plan (PhCP). The project was launched by a High Impact Pilot (HIP) grant to Lantana from the Office of the National Coordinator for Health Information Technology (ONC).

Before the PhCP, pharmacists shared information through paper care plans or by duplicative entry into external systems of information related to medication reconciliation and drug therapy problems. This documentation was not aligned with the in-house pharmacy management system (PMS). The integration of the PhCP with the pharmacy software systems allows this data to flow into a shared care plan, allowing pharmacists to use their local PMS to move beyond simple product reimbursement and compile information needed for quality assurance, care coordination, and scalable utilization review.

The PhCP standard addresses high risk patients with co-morbidities and chronic conditions who often take multiple medications that require careful monitoring. Care plans are initiated on patients identified as high risk with complex medication regimes identified in a comprehensive medication review. The PhCP is as a standardized, interoperable document that allows pharmacist to capture shared decisions related to patient priorities, health concerns, goals, interventions, and outcomes. The care plan may also contain information related to individual health and social risks, planned interventions, expected outcomes, and referrals to other providers. Since the PhCP is integrated into the PMS or adopted by a software vendor (e.g. care management, chronic management, or web-based documentation system), pharmacist can pull this information into the PhCP without redundant data entry.

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The PhCP allows pharmacists for the first time to share information with support teams and paves the way for them to support value-based payment. The project goals align with the Center for Medicare & Medicaid Services’ (CMS’) value-based programs, which are part of the Meaningful Measure Framework of improved care team collaboration, better health for individuals and populations, and lower costs.

Scott Brewster, Pharm.D., at Brookside Pharmacy in East Tennessee, described the PhCP as a tool that helps them enhance patient care delivery. “From creating coordinated efforts for smoking cessation and medication utilization in heart failure patients, to follow up on recognized drug therapy problems, the eCare plan gives pharmacists a translatable means to show their value and efforts both in patient-centered dispensing and education that can reduce the total cost of care.” (The eCare plan reference by Scott Brewster is the local term used in their adoption of the PhCP).

The pilot phase of the project increased interest in exchanging PhCPs within CCNC’s pharmacy community and among pharmacy management system (PMS) vendors. The number of vendors seeking training on the standard rose from two to 22 during the pilot. Approximately 34,000 unique care plans have been shared with CCNC since the pilot launch.

This precedent-setting pilot design offered two pharmacy care plan specifications: one specification is based on the Care Plan standard in Clinical Document Architecture (CDA); the other standard is a CDA-on-FHIR (Fast Healthcare Interoperability Resources). The latter specification directly transforms information shared using the FHIR standard into CDA. FHIR is straight forward to implement than CDA, so this is an appealing option for facilities not already using CDA. The dual offerings—CDA and CDA-on-FHIR with lossless transforms—provide choice for implementing vendors while allowing consistent utility to CCNC.

What’s on the horizon for the pharmacy community and vendors? With the support of National Community Pharmacists Association (NCPA), the draft standards will go through the HL7 ballot process for eventual publication for widespread implementation and adoption by vendors. This project will make clinical information available to CCNC and provide a new tool for serving patients with long-term needs in the dual Medicare-Medicaid program and Medicaid-only program.  This is a story about a successful Center for Medicare and Medicaid Innovation (CMMI)funded project that started out as a state-wide pilot and is now rolling out nationwide as Community Pharmacy Enhanced Service Network (CPESN)USA. 

The PhCP is based on a CDA Care Plan standard that is part of ONC’s Certified EHR Technology requirements, so it can be readily implemented into EHRs. This makes the pharmacist’s plan an integral part of a patient’s record wherever they receive care. 

Adoption of the PhCP brings pharmacies into the national health information technology (HIT) framework and electronically integrates pharmacists into the care planning team, a necessary precursor to a new payment model and health care reform. In addition, receiving consistently structured and coded pharmacy care plans can augment data analysis by going beyond product reimbursement to making data available for, utilization review, quality assurance and care coordination.

Troy Trygstad, vice president for Pharmacy Provided Partnerships at CCNC, described the strategic choice now available to pharmacists and PMS vendors. “Fundamentally, pharmacy will need to become a services model to survive. Absent that transformation, it will become a kiosk next door to the candy aisle. The reasons vendors are buying into the PhCP standard for the first time ever is that their clients are demanding it for the first time ever."

The move to value-based payment will continue to drive the need for pharmacists, as part of care teams, to provide enhanced care including personal therapy goals and outcomes. Sharing a medication-related plan of care with other care team members is critical to the successful coordination of care for complex patients.

Zabrina Gonzaga, R.N., is principal nurse informaticist and director of health informatics at Lantana Consulting Group and led the design and development of the PhCP standard. 

Email:  zabrina.gonzaga@lantanagroup.com

Twitter: @lantana_group

 


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Health IT Now Pushes for Information Blocking Regulation, Says Administration “Must Uphold its End of the Bargain”

September 13, 2018
by Rajiv Leventhal, Managing Editor
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The executive director of Health IT Now, a coalition of healthcare and technology companies, is again criticizing the Trump administration for not yet publishing any regulation on information blocking, as required by the 21st Century Cures Act legislation.

In an op-ed published recently in STAT, Health IT Now’s Joel White wrote, “More than 600 days after the enactment of the Cures Act, not a single regulation has been issued on information blocking.” White added in frustration, “Health IT Now has met with countless officials in the Trump administration who share our commitment to combat information blocking. But those sentiments must be met with meaningful action.”

The onus to publish the regulation falls on the Office of the National Coordinator for Health IT (ONC), the health IT branch of the federal government that is tasked with carrying out specific duties that are required under the 21st Century Cures Act, which was signed into law in December 2016. Some of the core health IT components of the Cures legislation include encouraging interoperability of electronic health records (EHRs) and patient access to health data, discouraging information blocking, reducing physician documentation burden, as well as creating a reporting system on EHR usability.

The information blocking part of the law has gotten significant attention since many stakeholders believe that true interoperability will not be achieved if vendors and providers act to impede the flow of health data for proprietary reasons.

But ONC has delayed regulation around information blocking a few times already, though during an Aug. 8 episode of the Pulse Check podcast from Politico, National Coordinator for Health IT Donald Rucker, M.D., said that the rule is "deep in the federal clearance process." And even more recently, a bipartisan amendment to the U.S. Senate's Department of Defense and Labor, Health and Human Services, and Education Appropriations Act for Fiscal Year 2019 includes a requirement for the Trump administration to provide Congress with an update, by September 30.

White, in the STAT piece, noted a June Health Affairs column in which Rucker suggested that implementation of the law’s information blocking provisions would occur “over the next few years.” White wrote that this is “a vague timeline that shows little urgency for combating this pressing threat to consumer safety and stumbling block to interoperability.”

Health IT Now is not alone in its belief that the rule should have been published by now, nor is it the first time the group is bringing it up. Last month

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By the end of this year, ONC’s implementation and interpretation of data blocking will also be published and available for comment, as was the case with the TEFCA proposed rule. The TEFCA final rule is also anticipated by the end of 2018.

HOWEVER…there’s still time to prepare for TEFCA and the data blocking regulation, and final rules for both in the coming months will set concrete timelines, and for TEFCA it will be interesting to see how ONC reacts to stakeholder comments, internal and external.

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