It’s no secret that in the race to achieve Meaningful Use, critical access and small, rural hospitals are at a distinct disadvantage. For years, Chuck Christian and other industry leaders have argued that factors such as limited capital and resources can make it too difficult for the little guys to compete. Recently, their pleas were answered when ONC announced plans to provide up to $30 million for regional extension centers to target critical access hospitals and small hospitals. In this interview, Christian discusses the unique challenges many organizations face in recruiting IT talent and managing vendor relationships, programs that can help small hospitals successfully leverage consultant expertise, and why implementations are “still more of an art than a science.”
- The unique challenges of rural hospitals
- ONC and CAHs
- The healthcare IT workforce shortage and increased rural acuity
- “It’s really difficult to show the ROI for a physician order entry system”
- Strange bedfellows? Large vendors serving small hospitals
- “We in small hospitals have a real propensity to trust”
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I’ve been after Farzad a couple of times. I’ll say, ‘Every time you go out for a visit to tell everybody this is the way you want to do healthcare, you’re going to Mayo, you’re going to Cleveland, and you’re going to Kaiser, and where you really need to go is to the community hospitals that are working really hard to provide high quality healthcare at low costs.’
When you’re looking at your margin being 1 or 2 percent, but your total net revenue is only a million dollars, and you happen to use the other reimbursement mechanisms to pay for the technologies, you’re very frugal about where you spend your money.
In the smaller and critical access facilities, you have one person that has a lot of jobs. Many of the IT directors in these smaller hospitals are also the network guy. They don’t have the luxury of having that senior executive that has the time to go and talk to the medical staff.
I don’t know their software; I don’t know how it fits together. I don’t know how it integrates with all their other stuff. So I have to depend upon them to make sure that they have covered all the moving parts. If they forget a moving part, then I can’t be held accountable for that.
Sales people sometimes have a tendency to be a little over the top. They say, ‘Yeah, I can do that,’ and then it’s somebody else’s responsibility to deliver upon that. And that’s the very reason that I don’t know have a whole lot of faith in RFPs. I think RFPs just give vendors an opportunity to be less than truthful.
Guerra: Good morning, Chuck. I’m looking forward to talking with you about some of the things that are going on with rural hospitals in the industry and some of the things you’re doing with ONC, so it’s good to talk to you.
Christian: Great. Thanks very much, Anthony, for the opportunity again.
Guerra: You did mention when we were emailing and setting up our chat today that you were working with a group at ONC. Tell me a little bit about that.
Christian: David Muntz, a good friend of mine — I’ve known David for quite a few years — is now the Special Deputy at ONC with Dr. Mostashari. Where I’ve spent most of my CIO career has been in the community hospital setting and working with critical access and smaller hospitals that surround us and in other parts of the country. David hooked me in with a group at ONC that is working with particularly those sized organizations, because the needs and requirements of community hospitals in rural settings — and particularly, the critical access hospitals — are much, much different than how things get done in the larger facilities and in a more urban environment. I’ve been waving that flag for 22 years and I’ve been after Farzad a couple of times. I’ll say, ‘Every time you go out for a visit to tell everybody this is the way you want to do healthcare, you’re going to Mayo, you’re going to Cleveland, and you’re going to Kaiser, and where you really need to go is to the community hospitals that are working really, really hard to provide high quality healthcare at really low costs and providing healthcare to their families.’ I’ve been waving that flag for quite some time, and so they decided that I needed something else to do and I could help them out with that.
It’s been really interesting because they’ve got a great group of folks, and through my association with CHIME and other organizations, I’ve hooked them up with a few more people. I’ve got a friend that used to be chief operating officer here. He’s now been the CEO of a critical access hospital in Western Illinois for a long time. I’ve got them hooked up with Harry; he’s worked with the AHA in that category as well. And then I’ve got a friend down in Mooresville, Kentucky, Randy McCleese, and Buddy Hickman up in New York. Buddy is at Albany Medical Center, which is a big facility, but he has done a lot of work in upstate New York with the smaller facilities and stuff, particularly at the state level. So I’m just trying to gather good folks that I know that will be as passionate about this as I am, and see if we can’t focus on the needs and wants of that low-sized organizations.
Guerra: In terms of the thresholds in Meaningful Use, there are no different thresholds for critical access hospitals. It just has to do with Medicare and Medicaid, those different programs. But do they get any special allowances in the Meaningful Use program that let them off the hook for some of the thresholds?
Christian: No. Meaningful Use is Meaningful Use. How the critical access hospitals will be reimbursed is a little bit different. Their reimbursement mechanism, if they have that critical access classification, is based upon their cost report. They don’t really work under the same DRG system that the larger facilities do, and so the way that they are able to pay for their technologies is a little bit different. And so how they get involved in an incentive program is a little bit different.
Guerra: The concept you’re working on is that these organizations are at a disadvantage in some sense — either manpower or level of sophistication of their IT personnel. And I don’t mean that in an insulting way, but they’re at some sort of disadvantage. So we need to take that into consideration when trying to get them to the same bar as Mayo or Duke.
Christian: Absolutely. They started off behind. If you look at the smaller rural faculties they’ve got a couple of — and I really hate to use the word — ‘handicaps,’ because there are quite a few organizations of that size that have done amazing and extraordinary things, being Level 6 and Level 7 hospitals on the EMR Adoption Model scale. But typically, they started out behind in technology because when you’re looking at your margin being 1 or 2 percent, but your total net revenue is only a million dollars, and you happen to use the other reimbursement mechanisms to pay for the technologies, you’re very frugal about where you spend your money and how you look at that return investment.
So most of the smaller facilities started out behind. From a resource standpoint, if you’re in Chicago or even if you’re in Indianapolis, you have a much, much larger pool of resources in human capital that we have to pull from than in Vincennes, Indiana. I’ll give you a perfect example. I’ve got two system positions open right now, and I’m struggling trying to find good, qualified folks because I’m looking for couple of different skill sets that may or may not be local. I have to look outside the market, and so that also makes those folks very expensive.
There are a couple of different approaches. I think that’s the thing — if you look at a critical access hospital and you’re looking at a capital investment for, say, physician order entry, it’s a million dollars to do that. And against that, you’re looking at, ‘I need a new CT scanner too.’ Well, a CT scanner would generate revenue and also provide higher quality of care for the patients, particularly if they have a market for that and theirs is getting old and is causing a lot of failures and that kind of stuff. So it’s those balances that they have to do with where they make that capital investment, because other than the Meaningful Use dollars, it’s really difficult to show the calculation of return on investment for a physician order entry system. And so that’s what they’re battling.
Guerra: One’s a lot simpler to put in. You don’t get all the doctors angry with you, right?
Guerra: Which one are you going to pick?
Christian: Which one are you going to pick. Exactly.
Guerra: One of the other important elements here is that to make these systems successful requires really sophisticated understanding of project management and engagement with clinicians and physicians — those subtle, soft skills of management and communication, and also all the expenses that go around. If you don’t have all that stuff, then you bring in consultants to help you. The point is that it’s not just the cost of the software. There’s so much else that goes into making these successful that brings that cost up and up.
Christian: Absolutely. The thing about it is, particularly in the smaller and critical access facilities, you have one person that has a lot of jobs. Many of the IT directors in these smaller hospitals are also the network guy. They don’t have the luxury of having that senior executive that has the time or needs to take the time to go and talk to the medical staff. And the fact is, you may have a much, much smaller medical staff, but that also means that you can have a more intimate relationship and know those folks better — know their habits and that kind of stuff.
There’s some give and take, but really and truly, a lot of the smaller organizations have a tendency to lean heavily upon the vendors. And with the rate of change that’s happening in the industry right now, some of those vendors are pretty stretched with the quality of the staff that they have to actually do the implementation. It’s not a matter of, ‘Yeah, I can do the install. I can hang around and help you clean up and handle the process issues.’ They’ve got to move on to the next thing, or they may have more than one implementation going on at a time, and so those relationships may get a little strained. Even the quality of the consultants you bring in is that if there wasn’t money to be made in those engagements, you wouldn’t see some of the mergers and acquisitions in the consulting space that are currently taking place. There has been quite a bit of that taking place right now. Trying to get the right people in the right seat on the bus to do these implementations is tough, particularly in the smaller rural places where the pool of folks to pick from is smaller.
The other issue is that from a system vendor standpoint, there are those vendors that have a tendency to work particularly in those small and critical access areas, but there are also some of the larger vendors that are servicing the larger facilities and the smaller facilities. Getting the necessary upgrades and getting in those schedules for those smaller facilities may be a little more difficult, because if you are a company, you have to survive. And so if they look at upgrading three or four clients that is a larger pot of money versus 10 or 12 smaller facilities that each one of them is a smaller amount of money but it takes exactly the same effort, the thought — and what we’re seeing in the industry — is that the smaller facilities are getting a less attractive slot in order to get that implementation done because we’re all working on exactly the same timeframes.
That was one of the reasons that the Policy steering committee for CHIME and the IT group for AHA raised the question about timing with ONC and CMS in the comments that we put forth for Stage 2. And I really do appreciate the fact and know that ONC and the folks are listening and the regulators are listening, because in talking with some folks, it became apparent that they realized that there’s no way this industry could be successful in hitting those timelines the way that the original rules were pitched out there to start with, the proposed rules. And so the final rules, even though they weren’t as lenient as many of us had hoped, gave us more time, and I think that we have a higher opportunity for success than we would have had otherwise.
Guerra: You mentioned the idea of some of the larger vendors working with smaller facilities and moving into that area. We saw recently where there was a lawsuit, I think it was a small hospital suing one of the large healthcare IT vendors. It seemed like they just never had a meeting of the minds in terms of what was going to be exchanged in terms of goods for services and expectations. They just really didn’t understand each other. There are vendors out there that cater to that small niche. So it’s interesting; as a small hospital, if you’re going to work with the large vendor, you’re going to want to be very careful and savvy and make sure they understand that you are small. ‘Here’s what I can do, and here’s the part I can play. Don’t think I can play a part of one of your customers that’s 10 times my size.’
Christian: Right, well I’m going to say what I’m going to say, Anthony. But I don’t want this to come across the wrong way. I believe that the people running the small hospitals are as good a business people as everybody else. One of the things I think, particularly in organizations our size or smaller, is we have a real propensity to trust — to trust individuals more than we do, and depend upon, attorneys and contracts. That’s where things fall apart, as you come to agreement and then those relationships change for whatever reason — people move on or the organization changes or they get bought, and those relationships change. Therefore, our recollection of what we discussed and what we agreed upon and what we shook hands on may not be exactly what we got at the end, and so then we have to fall back to what’s in writing.
I have a real tendency to keep all the email conversations I have back and forth, particularly when we’re going into contract negotiations. My vendors have learned I have one question that I ask on the phone when we’re wrapping up, particularly when we’re doing upgrade, and I’ve used it quite a bit. I ask them, ‘Is this everything?’ and if they say, ‘Yes, it is. This is everything.’ Then they know that if something pops up that they missed, they get to pay for it. And that’s happened on more than one occasion. Because I don’t know their software; I don’t know how it fits together. I don’t know how it integrates with all their other stuff. So I have to depend upon them to make sure that they have covered all the moving parts. If they forget a moving part, then I can’t be held accountable for that, and I do not think it’s an appropriate thing to ask my organization to pay for their error. They get to pay for that and they get to use it as a learning experience.
Guerra: Very interesting.
Christian: They don’t like it a whole lot, but that’s the way the cookie crumbles.
Guerra: Right, and you were talking about people changing — sometimes the person who sold you the stuff you don’t see again.
Christian: Right, exactly.
Guerra: You’re passed over to the implementation people and you say, “When I bought this, Jim told me this,’ and they say, ‘that’s not true,’ and you can’t get a hold of Jim anymore.
Christian: Right, and they change it for a variety of reasons. I’ll tell you this story real quick. When I worked for Baxter Travenol eons ago, I worked for the Lab Systems Division, and I was the manager of Client Support. I was also the one of the ones that did the integration between the Sigma lab system, it was Compucare lab system, and at that time the Dynamic Control order management system which is now the Series 4000 that McKesson sells. And Sigma no longer exists; it’s gone. But it was a good lab system though. So we get to look at the contracts, because we need to look at them before they were signed to see what was the new development, what was the feature functionality, what were we going to have to install, what were we going to have to support after the fact, and at what level of integration it’s going to be.
We had one sales guy who was just over the top. He wrote a contract with the Children’s Hospital in Corpus Christi. I looked at it and I took it to the director of the division and I said, ‘If you sign this, you’re an idiot, because there was functionality written in that agreement that we agreed to provide that I still don’t think you can get today.’ It was a children’s hospital and they wanted the results to follow the patient, but they had no mechanisms for tracking the patient. They wanted the results send right to a screen in the OR. You can do that today, but it takes a little bit of a slide of the hand to make that happen. And you have to remember that this was back in the mid-80s. This was not 2012. We were still writing code and running them on mini computers back then. We didn’t have near the tools that we have today. Thankfully, we didn’t execute that contract in the form that it was in. It was modified. I don’t remember if in fact we actually closed that deal or not, but I think that’s one of the issues.
The roundabout way I’m getting to this is that the sales people sometimes have a tendency to be a little over the top. They say, ‘Yeah, I can do that. I can do that. I can do that,’ and then it’s somebody else’s responsibility to deliver upon that. And that’s the very reason that I don’t know have a whole lot of faith in RFPs. I think RFPs just give vendors an opportunity to be less than truthful, because there’s an art form in how you answer those. You’re answering the question, but you’re really not providing an answer. There are people with degrees on that kind of stuff. So it makes it really difficult for smaller organizations to have the resources and the horsepower to look at those agreements and know if they’re going to be longstanding or not. And one of the things I’ve done with some of the smaller organizations is help them and provide some a little guidance. It’s not a whole lot, but when they ask, ‘What would you do in this circumstance,’ we’ll bring to bear some of our experience with those things and give them some ways of avoiding the landmines and letting them know where they’re buried.
Guerra: Do you try and counsel these organizations and say, ‘hey, maybe it is best to work with vendors that really specialize in your space’? I don’t want to speak against the larger vendors, but if they are dabbling in or starting to get into the small hospital space, there could be a learning curve in terms of the resources they’re going to have to dedicate to these organizations. Do you ever say, ‘hey, you might want to look at these guys because this is really all they deal with — they’re small hospitals.’
Christian: I have. What I’ll do is, I get a phone call about ‘who would you look at,’ and I’ll give them a list, because some of the vendors I’ve had no experience with whatsoever. I only know their reputation by what I’ve read or other people I know that have used them. The other thing I’ll do is put them in contact with others that are using the same software because there’s nothing better getting than someone’s own opinion about the experience they’ve had with the vendor.
Of course, if you look at particularly the KLAS research, you can take the same software and install in two different places and have two different outcomes for a variety of reasons. It’s still more of an art than it is a science doing implementations, but a good Six Sigma answer is that it depends. It depends on whether they’re looking to grow. It depends upon their market area. It depends upon what they want to accomplish, and are they positioning themselves to be acquired by a larger organization. There are so many variables that come into play about what they should do. I’m not a consultant and don’t profess to be one. What I do is just give them a list — here are some things to look at and then here are some things you have to watch out for.