Dollar Blocking, Part 2: The Real Cost Of Interoperability

In part one of this series, we identified the four business practices that are believed to be the cause of interoperability, and discussed the different ways in which they impact CIOs, vendors, and the government. Now we’ll go a little further into the solutions that have been proposed, and how much they really cost.

There have been many attempts in the past to make HIT data more interoperable, starting with HL-7, established way back in the ‘80s with the vision of: “A world in which everyone can securely access and use the right health data when and where they need it.” Right, if they can afford it… And there are many versions of HL7: from 2.0, 2.1, 2.5, 2.5.1… all the way up to 3.0. Their website lists sixteen pages of versions and options.

Then along came Interface Engines (IEs), proprietary systems sold by specialty vendors to enable hospitals to build and maintain their own interfaces, rather than pay HIS vendors exorbitant fees for custom “point-to-point” interfaces. IEs gave rise to an entire market segment that generated millions of dollars for vendors like InterSystems, Orion, Mirth, Cloverleaf, etc. Many HIS vendors also jumped into this market to make money selling their “open” and “standards compliant” IEs such as Siemens’ (now Cerner) OPENLink. The one standard that these IEs had in common was cost: all except Mirth charged handsome fees, and even they were recently acquired by highly-for-profit Quality Systems (NextGen) who now charges for it.

Most recently came one of the most brilliant marketing ploys in HIS-tory when in 2013 Cerner launched CommonWell, a trade association aimed at increasing the common wealth of HIS vendors in 49 states (excluding Wisconsin). Cerner was joined by cofounders McKesson, CPSI, Greenway, & Sunquest, all of whom were losing market share to a certain WI vendor. Today, CommonWell claims its members represent over 70 percent of the HIS vendor market and over 30 percent of physician practice vendors. The most notable exception of course is Epic, which still refuses to join CommonWell, citing membership fees and a stringent non-disclosure agreement.

Although ostensibly not-for-profit, CommonWell charges vendors handsomely for membership, based on a sliding scale listed on their web site. E.g., small vendors with $100M in annual revenue pay $35K in annual dues, plus an annual subscription fee of $250K. Large vendors with $1B in annual revenue pay $90K in annual dues, plus $1.25M in subscription fees. Seemingly high prices to pay, although cost-justifiable for the marketing benefits of joining the club and taking the moral high ground against Epic. There are additional fees for member hospitals as well, which unfortunately are not listed on their web site. Currently, Cerner is offering CommonWell services for free to its clients until 2018; after that, we’ll see…

Interestingly, if a hospital has, let’s say, Cerner’s Millennium as its core HIS, and Sunquest in the Lab, they still have to pay both sides and possibly an IE vendor to interface them, as well as whatever fees CommonWell charges. So CommonWell is more of a super-HIE than an answer to the interface issue. How does CommonWell comply with the ONC’s four points of interoperability above? Although they do conform to nationally recognized interoperability standards (IHE’s), they have a strict non-disclosure agreement and charge various fees. I guess two out of four ain’t bad, huh Karen?

So what’s the prognosis for the ONC’s call for vendors to stop charging for access to data in “their” systems? Pretty poor, we’d say. After all, ours is a capitalist society, and most of us earn a living from organizations that charge for services rendered. It may have been a good thing for the government to accelerate the adoption of EHRs through ARRA and the HITECH Act, but the likelihood of further government regulations requiring vendors to soften contract terms, cease charging for interfaces and develop systems in a common format, are about as remote as a Cloud’s data center.