One-on-One w/Fletcher Allen CIO Chuck Podesta, Part II

Chuck Podesta’s stance on Stage 1 Meaningful Use criteria probably won’t win him any toasts at the next CIO event. That’s because, despite the position of organizations like CHIME (and this journalist), Podesta thinks the criteria aren’t overly onerous. Though he acknowledges the incentive payout structure isn’t perfect, little else about the program disquiets the Vermont-based CIO. One reason Podesta is feeling pretty good about meeting Stage 1 requirements is he’s in the process of becoming an Epic shop and, more interestingly, he’s embarked on a path to help neighboring community hospitals become Epic shops as well. It’s all part of a nascent program from the vendor called Epic Community Connect. And while Podesta says it works for his neck of the woods, it may not fit into all healthcare markets. To learn more about these issues and many others, healthsystemCIO.com editor Anthony Guerra recently chatted with the Fletcher Allen SVP & CIO.

(Part I)

BOLD STATEMENTS

Epic is very, very conscious about that success, which I find extremely helpful, even though at times it may sound like they’re being rigid. They’re experts on this, and they’ve done this a lot, and they know what works and what doesn’t work.

The other challenge is can you create an organization that runs as a “software as a service” (SaaS) … If you can apply those same principles to your internal customers, that’s a win-win all the way around.

… they don’t care where the database is, they just want Epic, and they would love to be part of Fletcher Allen’s Epic system because that’s the only way that they can get it.

GUERRA: Since you think the HITECH bar is just fine, I don’t think you’ll win Mr. Popularity at the next CIO party.

PODESTA: Yeah, exactly. But hey, you know, I’ve got to keep it real. (laughing)

GUERRA: “I’ve gottta be me,” as they say, right?

PODESTA: Exactly. I just said this to eight consultants and they said, “You know what Chuck, you’re right,” but I talk to other CIOs and, of course, it’s the other way around. So I have my proponents and my naysayers. Remember that I also want to change the reimbursement rules so that providers get some money upfront. I think that goes hand in hand with not relaxing the criteria or the date.

But I don’t think they are going to adjust that upfront money. There’s just not enough time to get it all done, even with people that are showing good faith, but if there’s some money that’s brought in upfront, I think the resources can be hired to moving along a lot faster than what will happen without upfront money.

GUERRA: Let’s talk a little bit about the Epic scenario that you’re working with. It sounds very interesting. You call it PRISM Regional, do you know if Epic has a formal name for this?

PODESTA: They call it “Community Connect.”

GUERRA: So that’s where a hospital, which is an Epic customer, relicenses out the software?

PODESTA: That’s correct.

GUERRA: Since Epic is known for requiring that users bring a certain amount of resources to bear on an implementation, I wonder if they are involved in the relicensing implementations?

PODESTA: Yes. Actually, they’ll be part of it. I mean they will certify the resources that we put on the project. So from that standpoint, we’re also working with them on a 30-day readiness assessment. At the beginning of the project, we want them to come in and assess the organization so they have a pretty good idea of what the strengths of that particular community hospital or practice are. So they really are part of the implementation.

They also have an option of doing the implementations. We can take advantage of their implementation services and have them come in and work side by side with us as well, which we’ll probably do with some of the models. So they won’t be as close as they are when doing a direct implementation, but some of the rules that they follow will also be followed by us.

You made a good point because Epic is very, very conscious about that success, which I find extremely helpful, even though at times it may sound like they’re being rigid. They’re experts on this, and they’ve done this a lot, and they know what works and what doesn’t work. So it’s really nice to have a partner that understands what it takes to be successful, especially as we go into this unknown territory. So we do rely on them quite a bit.

GUERRA: And who does the community hospital pay for the license?

PODESTA: They would pay Fletcher Allen or the subsidiary, which is Fletcher Allen. Epic would receive their revenue based on those increased volumes, both on the licensing side and support side. It’s a single pipeline from Fletcher Allen to Epic.

GUERRA: So the community hospitals pay you, and then you pay Epic?

PODESTA: Correct, based on the added volumes of these hospitals and practices, yes.

GUERRA: If you were talking to a fellow CIO right now who uses Epic and finds this scenario interesting, how can they determine if this is a good strategy for them?

PODESTA: First off, is this a model that fits with their region, do they share an inpatient population with multiple community hospitals and practices in a non-competing way? The second thing is are the hospitals already coming to that particular CIO asking for help, and what are the relationships like between his or her hospital and those other community hospitals and practices? Are they good solid collaborative relationships? Are they competitive relationships?

All those things need to be taken into account to see if this model would really work. To me, this model would not work in New York City or Boston or another major metropolitan area where the competition is great. To me, it works the best in an area like Vermont or a system like Geisinger in Danville, Pa. It works for large organizations surrounded by smaller community hospitals and practices. So I think you need to understand your market first to say whether this would work or not.

GUERRA: I would think a CIO must also determine if he or she has the bandwidth to, essentially, act as a project manager for 13 implementations.

PODESTA: Right. And I think you need to start slow — we’re certainly not implementing 13 hospitals on Epic and quite frankly, I don’t think we’ll ever get there, but you need to start with one or two small ones. Even if there’s an interest of 10, just like any other implementation you’re not going to do all 10. You need to stagger it in stages and see how many you can actually do at one time, and there’s a lot of analysis around that.

The other challenge is can you create an organization that runs as a “software as a service” (SaaS). The nice thing about it is that if you can do it, your internal customers will benefit. SaaS requires you to have service level agreements because you have true customers outside your organization. If you can apply those same principles to your internal customers, that’s a win-win all the way around. But it’s a lot of work. I mean, we’ve had some consultants come in here to help us understand what a SaaS organization is and does, and what you need to have in place, and there’s a lot of groundwork you have to do before you can start down this road.

GUERRA: How many people do you have in your IT department?

PODESTA: We have about 135 right now.

GUERRA: And with this project in mind, do you need to add a few more?

PODESTA: Yes. You need a base, and that’s why you need to do more than one hospital, because I don’t think the financial model works with one 25-bed or 150-bed hospital. In my mind, you need at least two to three hospitals that add up to 100 – 150 beds. That type of model works with a number of resources because you’re passing through all the costs. Unless you’re doing this for a hospital out of state and it’s a for-profit venture of some sort, you’re just passing through the costs, maybe with a little bit of overhead, but not much. So it’s not a money-making type of effort, at least not with the model that we’ve setup within the state. Although, quite interestingly, it can be.

I get emails probably once a month from hospitals outside of Vermont — one in California, one in Colorado just recently — and they don’t care where the database is, they just want Epic, and they would love to be part of Fletcher Allen’s Epic system because that’s the only way that they can get it. They’ve approached their local large organization and that local large organization had said no because that’s not the business they want to be in. These smaller organizations have looked at all the products out there for their size hospital and they have concerns about Meaningful Use, and they’re actually approaching Epic and saying, “Hey, do you have any other Epic sites that may be interested in working with us, because we don’t care where the database is.” So that type of model would actually be a for-profit model, if you could spend the time setting it up.

GUERRA: It’s not something you would consider?

PODESTA: No, not at this point. I think if we already had the regional stuff going, were live with five hospitals, had 100 providers up and running, and had the staff here, and all of a sudden a hospital contacted us from California, then we might not think it’s a bad idea. At some point you could go for-profit, maybe make a little money and pass that on to the participants. In all those cases, you can grow your regional mode,l but I think we’re a few years away from that and, by then, I don’t know if the window will be closed on that type of opportunity. But boy, if I had those five hospitals live and those practices live, I’d be looking closely at that.

GUERRA: And your CEO and your CFO might like that idea as well.

PODESTA: Yeah, I think they would at that point, but right now we have just so much work to do in Vermont, it just would be a distraction at this point. Quite frankly, it would probably impact the success of what we’re trying to do here.

The other thing we’re doing from a workforce development standpoint is working with a company called Vermont High-Tech. We’ve got some Department of Labor grants where we’re actually taking some unemployed and underemployed Vermonters and working with Epic to get these people certified, and then putting them on the PRISM regional project. In my mind, that’s a huge win-win. I get excited about that one.

Part III