Evaluated on a revenue basis, they don’t get any bigger in the healthcare IT space than McKesson Provider Technologies. So when the President of that division speaks, it’s a good idea to listen. As such, healthsystemCIO.com editor Anthony Guerra recently talked with Sunny Sanyal to learn how the market was looking from his unique perch. It’s a story of much activity, good advice and lessons learned. What follows is an interview that any healthcare IT insider should take the time to absorb.
My concern is the capacity of these (certifying) organizations and how long will it take for them to ramp up.
… we’re not guaranteeing that customers will achieve meaningful use because, if you think about it, a vendor plays a small part of that role. A very large portion of what the customers need to do is in their hands.
As a vendor who has a very broad portfolio of solutions, we are always exposed to that, and we get held to a bar that’s fairly unique in that sense.
GUERRA: What are your thoughts on the certification situation?
SANYAL: The way ONC has approached it so far leaves us to believe that even if they have multiple entities (for testing), they’ll all end up testing against the same requirements. So that means the scripts would either be the same or similar. It’s like saying you’ve got to go pass a public exam. How do you pass a public exam unless the requirements are the same and the tests are more or less the same? So we believe that the entities will follow more or less the same protocol.
My concern is the capacity of these organizations and how long will it take for them to ramp up. So CCHIT has been around for some time and they have evolved to a level of capacity and competency to administer these, and they’ve got a whole mechanism in place, but it didn’t happen overnight; it took them quite a bit of time to evolve and develop. A new certifying agency that comes into existence will have to put that whole infrastructure in place, and how many will they be able to do it? Say, all of a sudden, every homegrown EMR system, every vendor that’s out there all try to go for the first available slot for certification. I don’t know that the industry is prepared to answer the question of how these certifying agencies ramp up to take that workload. It’s clear that some big bubble will happen in a very short period of time for Stage 1. I’m confident they’ll be ramped up for Stage 2 and Stage 3. But for the first stage of certification, I’m more concerned about the ability of these organizations to ramp up. So, I do hope CCHIT will be one of the entities because they do have the infrastructure in place.
GUERRA: You make an excellent point. I would imagine that dealing with bubbles isn’t something organizations are good at.
SANYAL: It is tough to do. For vendors, it’s a little easier. For example, what would it take for us to do CPOE implementations. We’ve been doing them for awhile, so we have the processes nailed down. We have the methodologies nailed down. And for us, it’s a matter of lead time to getting resources and getting them trained. So CCHIT would be in a similar position, where they’ve been doing this and, for them, it’s a matter of lead time, of getting more examiners in place. So they could ramp up their capacity and they have different ways of doing it. They don’t have to necessarily employ all of them; they could probably contract with a whole bunch of industry professionals to help them absorb the bubble.
I think, for a new organization, it’s a whole different challenge because, in addition to staffing, they need that lead time to establish their infrastructure for how they would administer the exam. So, for example, it’s not clear to me who would develop the scripts? I’m assuming you dig through all the 300+ scripts or line items that have to be tested. Each of these entities will have to develop their scripts, unless it’s done centrally, unless CCHIT shares their scripts with everyone. So there is a body of upfront work that needs to occur. I think that’s where the bottleneck will be. I do believe these organizations will be able to find external industry professionals to staff up and build up capacity. But initial ramp up will take some time.
GUERRA: Let’s talk a little bit about guarantees. Are you guaranteeing clients will get the stimulus money, or just that you will have them on a certified product?
SANYAL: We have some formal programs that are addressing this issue. It comes up during the sales process and what we have been assuring our customers, through our contract terms, is that we will get certified. We will get certified and we will remain certified. Clearly, if a vendor didn’t do that they wouldn’t be in business anymore. So that has not been a problem for us. We have different assurance for our customers around our staying certified to the requirements.
Where the customers have pushed us for additional guarantees, we’re not guaranteeing that customers will achieve meaningful use because, if you think about it, a vendor plays a small part of that role. A very large portion of what the customers need to do is in their hands. So that’s not something we have guaranteed because that’s open ended. It’s not definitive, it’s not definable, it’s not an objective measure that we can stick with. So we haven’t gone that far. And frankly, our customers haven’t pushed us for that. I think what they have been looking for are assurances from us, as a vendor, that we will get certified and that we will stay certified, and we’re offering that assurance.
GUERRA: Let’s talk a little bit about integration. In a perfect world, a hospital on Siemens, for example, would be able to export the EHR of a patient to another hospital on McKesson, and that record could then be imported seamlessly with all data populating correctly. How far are we from that?
SANYAL: I think there is a huge momentum to getting there, and I do believe we will get there more rapidly because of this push from the stimulus. For example, McKesson has always held a philosophy that we would coexist in a heterogeneous environment. So we don’t make our customers swap out their IT investments en masse. We say, “Okay, let’s lay out a roadmap for you so you can continue to leverage the investments you have in place.”
Ultimately, McKesson can provide everything, but if you want to leave a lab system in place, if you want to leave a pharmacy system in place, if you want to leave an ambulatory system in place, we will work with you. We’ve never required our customers to give up their revenue cycle system in order to deploy a clinical system. So we’ve always taken that approach. We’re building into our products the technical elements that are needed to be open and collaborate.
So we’re launching solutions through RelayHealth to connect different settings of care, such as physicians taking to hospitals. We’re embedding that capability in all our solutions so McKesson will be able to communicate with any HIE, any foreign system that’s out there using standards. So the industry overall is preparing to exchange information through the CDA type of construct. I think that’s a very positive thing. I think what we’re clearly seeing is that standards will continue to evolve and will expand to create more interoperability in the near future. I’m confident that it will get there.
GUERRA: The main knock I’ve heard about McKesson over the years it that, since the company has made a number of acquisitions, many of the products which bear the same name are not deeply integrated. Is there any truth to that and, if so, what are you doing to remedy it?
SANYAL: As a vendor who has a very broad portfolio of solutions, we are always exposed to that, and we get held to a bar that’s fairly unique in that sense. So yes, the company in past years has done a lot of acquisitions. But as you look back at the last several years, there haven’t been that many. I’ve been here for six years, and during these six years the only meaningful-sized acquisition we did has been Per-Se. We acquired Per-Se and we acquired capability on the pharmacy transaction side, in the transaction hubs, and we acquired a revenue management business which is fairly, I’d say, standalone in that sense.
On one hand, yes, it’s true that we’ve done a lot of acquisitions. On the other hand, over the last decade, our focus on the acquisition front has been primarily on closing a few key intellectual property gaps, where we might have done a very small acquisition of some IP that was needed, as opposed to buying a whole new product and a whole new platform or a complete new application.
So we’ve been focused over the last decade on organic development, and we’re continuing to invest tremendous amounts of resources and R&D dollars on organic development.
Where the acquisitions have come in, they have not had any impact, positive or negative. The revenue management business that I acquired hasn’t had any impact one way or another on our integration work. As you know, there are two dimensions to the integration challenge. We have certain businesses that are part of our technology portfolio that are fairly distinct and, in them, the integration needs are different. So, for example, we have an automation business, pharmacy robots, cabinets, and there the integration that’s needed is more of a point to point workflow. There is no such thing as a common database for these in the sense that it’s not necessarily the main criteria for integration. There the criteria would be, for example, do we have good workflow, can the pharmacy robot receive orders from our CPOE system. That’s one type of integration that we have to do, and we’ve done those.
Over the last five to six years, we have been steadily rewriting the acute care applications so they would be on one platform. Horizon Architecture was the platform that we standardized on several years ago, and we have progressively been putting all our applications on the Horizon Architecture. I use the word progressively because we have to continue to meet our customer’s requirements for functionality as we’re funding the integration work.
So you’ll hear in the market of our version 10.X — that is the platform that we’re currently upgrading all our customers to. That is the platform on which all our inpatient acute care applications are integrated — our nursing systems, physician systems, CPOE systems, all come together to provide for a single view of the patient, for common workflow for nurses and physicians.
That’s also the release level at which our ambulatory applications come on the same platform. So we’ve come a long way in terms of integration. I believe we’re at the tail end of getting the work nailed down. And our customers who are upgrading to version 10.X will see that.