Here we are, just 15 months after HITECH’s enactment and the government’s “full court press” to drive HIT adoption is in full swing. The dizzying pace of events over just these past three months has been enough to take one’s breath away. So let’s pause for a moment, take a deep breath, recap some relevant highlights, and try to take a sober view of where we are and where we’re going, lest we fall victim to what former Fed Chairman Alan Greenspan called “irrational exuberance”.
In the period between February and March, DHHS awarded $547 million to local authorities in all 50 states and six territories to initiate the planning and construction of statewide HIEs. The market has been flooded with RFPs from state agencies looking for consultants and vendors to bid on the work. While there appears to be no shortage of consultants willing to bid, even the largest of the HIE platform vendors – none of whom are particularly big companies — have been hard pressed to respond to the sudden inflow of business opportunities. Given this, how, I wonder, will they be able to respond to the implementation demands that are soon to follow?
OK, so hold that thought and let’s shift gears for a minute. Ground zero in the HIT battle is, after all, the solo and two doc practices. According to CDC survey stats, about 46% of the physicians in private practice work in practices of this size and deliver slightly more than 50% of the annual office visits in the US. Again according to the CDC data, adoption of fully featured EMRs among practices of this size hovers around a dismal 5%.
Since it does no good to build HIEs if there’s no data in electronic form to exchange, the feds’ strategy to accelerate adoption here has been to fund the creation of Regional Extension Centers, or RECs, to help small practitioners implement EMRs more easily than they could on their own and more cheaply than they could using traditional consulting resources. On April 6th, ONCHIT’s second round of REC awards brought the total number of awardees to 60 and the total value of the awards to $643 million.
The RECs have a tall order to fill. Their mission is to bring at least 100,000 new physicians live on EMRs by the end of 2012 – not just live, of course, but able to demonstrate that they are using those certified EMRs in a “meaningful” way. Now let’s examine where we’re at with respect to “certified” and “meaningful use”.
First, where are we at with “meaningful use”? In limbo, it seems. Normally, the federal agency that issues a Notice of Public Rulemaking (NPRM) is expected to publish an Interim Final Rule (IFR) within 30 days of the close of the public comment period. Well, the period of public comment for the Meaningful Use NPRM closed on March 15th and it’s now almost 90 days past that date. It’s beginning to look like a scene from Samuel Beckett’s “Waiting for Godot”.
Next, the lack of certifying resources represents another looming bottleneck. Despite ONCHIT’s release of the draft criteria for entities wishing to become a certifying body, the criteria have not been finalized. As a result, we still don’t have any other certifying organizations “anointed”. CCHIT remains the only game in town, yet they have been forced to suspend certification efforts pending the finalization of the certification criteria.
Now let’s go back to the RECs and their drive to bring 100,000 more docs into the EMR fold. Their campaigns to orient, educate, and contract with their physician constituencies have now kicked off all across the country. I was a guest at one of these sessions yesterday morning, conducted by the NY e-Health Collaborative. NYeHC (pronounced “NICE”) is one of the two REC grantees here in New York. Nowhere will there be greater pressure to deliver than here in New York, where the two grantees, NYeHC and REACH, are collectively responsible for 10% of the national total.
But are physicians really ready and willing to accept the helping hand being offered? Based on the questions raised publicly, as well as privately around my table, I’m not so sure. There were many concerns expressed by the attendees – and none were, in my view, particularly unique or new. They were mostly the same concerns I’ve heard in similar gatherings over the past year; the same concerns that I have written and spoken about and the same concerns expressed by researchers, other analysts and industry thought leaders.
- I don’t have enough Medicare revenues to qualify
- I don’t have enough of a Medicaid patient volume to qualify
- I’m reluctant to shop, let alone buy, until I know what criteria I must meet for my usage to be considered “meaningful”
- The vendors I have spoken with don’t offer a version suitable to my specialty; a general purpose EMR simply doesn’t meet my needs
- I have no personal capability or interest in becoming my own IT department and I don’t have the luxury of staff with the necessary skills
- I haven’t begun to shop and don’t know where to start
- The software I have seen doesn’t match my needs; usability is a key concern
- I’m concerned about sharing my patient information with competitors and with the government, how do I preserve the confidentiality of my patient information?
- How do I obtain and manage patient permissions?
- I need help; lots of help
Indeed. It’s clear that this provider group needs lots of help. Are the RECs the answer? Are they adequately equipped – and staffed — to provide the necessary help? Can they achieve their ambitious mission? I’m not so sure. Let’s do some quick math. NYeHC got $26.5 million; REACH got $21.8 million. That’s $48.3 million to bring 10,000 physicians on-line, which translates into $4850, on average, that these two RECs can afford to spend on each physician.
What about others? Last week, I dialed into a REC webinar sponsored by the e-Health Initiative. One of the speakers was Amy Andres, CEO of the Ohio Health Information Partnership (OHIP), the REC grantee for Ohio. Ms. Andres indicated that OHIP’s “bogey” was roughly 6,000 physicians. OHIP’s award was $28.5 million, which works out to $4750 per physician. In her presentation Ms. Andres noted that the “bogey” in neighboring Michigan was also 6,000 physicians. The Altarum Institute, the sole Michigan grantee, received $19.6 million, which works out to less than $3300 per physician.
Now let’s do another math exercise. Assume that to hire a decent EMR analyst, a REC has to pay $75,000 plus benefits of 25%, or $94,000. Using metrics common to the consulting industry, let’s assume that they will have a utilization rate of 65%, after discounting for holidays, vacations, some modest number of sick days and training time. That’s 170 days a year available for client-facing work, which works out to 1360 hours. At that level of available hours, the REC would need to charge $70 an hour to cover their direct cost – and this doesn’t even consider management overhead and non-salary expense. So now divide $4850 by $70. That works out to roughly 70 hours per physician. This means that if a REC is to break even, the maximum time they could spend with any one physician would be limited to roughly two person-weeks in total – for contracting, for site planning, for training, for installation and first line post-implementation support. Two weeks? I don’t know about you, but that sure doesn’t seem to be adequate, not given the lack of experience and level of anxiety I sensed at today’s meeting.
Look at it another way, too. If each of the New York RECs has to deliver 5,000 physicians in 24 months, that’s roughly 200 physicians a month. At roughly two weeks per analyst per physician, NYeHC and REACH will each have to ramp up to a staffing level of at least 100 – 120 analysts within the next 60 – 90 days. One wonders if that’s even feasible and whether there are enough qualified candidates in the state to meet those needs. My bet is that the target physicians are not going to sign up quite so quickly, either, further compressing the implementation window and exacerbating their staffing problems.
As one who has been in this industry for more than 30 years, I thought I suffered from an incurable case of chronic impatience with the historically glacial pace of IT adoption. Now I’m beginning to develop a contrarian view – that the industry is being asked to assemble a complex jigsaw puzzle while blindfolded and under far too restrictive time limits. I am reminded of that old expression, “haste makes waste”, and wasting the golden opportunity HITECH represents will be in no one’s best interests.
Over the next two years, we need to keep our “eyes on the prize” and not put our faith solely on these current initiatives. It would be unfortunate; indeed, if these physicians expect that the RECs will be their “knights on white horses”. As an industry, we need to pursue these efforts in manner that under-promises and over-delivers. My concern is that we have embarked on a course that, instead, is creating unrealistic expectations and is doomed to under-deliver, leaving the inhabitants of ground zero disenchanted, disenfranchised and, you’ll pardon the metaphor, burned.
Secretary Sebelius is on the hook to testify before Congress roughly 24 months from now as to whether the RECs achieved their mission. Let’s hope she can make a positive report. I have my doubts. Let’s hear from you. Perhaps you have a different perspective.