Possible REC Business Model

As I said before, I’m finding the EHR RECs very intriguing right now. Thus a few extra posts about the RECs. First, thanks for those who have been helping update the EHR REC wiki page. There’s still a ways to go, but little by little we’ll get all of the RECs listed in one space.

From what I can tell, and as evidenced by this CalHIPSO REC blog, these REC organizations have A LOT on their plate. First, they have to meet the mandates of the government (which I’ll talk about more another time). Second, they have to create an organization that didn’t really exist previously (for the most part). Third, they have to look at a long term business model for when the government funding for EHR RECs runs out. Not a simple task.

I find the third item pretty interesting since it might be the hardest of them all. In the post I did yesterday about rating top EMR companies, Brad made an interesting comment about the RECs providing this type of EHR implementation feedback loop.

Makes sense that these RECs are going to work with 1000 of doctors to meaningfully implement an EMR. Why not have these doctors whom they’ve helped (for free I might add) provide some feedback on the EMR software they implemented. This feedback on its own has little value, but in aggregate could be very valuable and could provide part of the business model for the REC going forward.

Let’s also make clear that even after these EHR RECs do great work and help thousands of doctors we’re still likely to only to be at 50% adoption range. Even if we reach the 70% EHR adoption as some EMR analysts predict, there will still be thousands of doctors that need to implement an EMR. Plus, there are going to be thousands of other doctors who didn’t like the first EMR they implemented and will want information on what other EMR software might be better.

Unfortunately, I see three potential problems with this idea. First, as part of the RECs requirements they have to help so many people. Yes, that means that we’re going to see many RECs obsessing over the number of people they can count on their numbers for the government. It’s just kind of a feature of government grant work. So, RECs will have to tread lightly in what they require from doctors. Remember the RECs are suppose to help the doctors and not the doctors help the RECs. Certainly in a perfect world it should go both ways. Definitely a challenge that RECs can overcome if they are careful in their approach.

The second problem is if RECs only end up recommending a small handful of EMR vendors (which sadly it seems many are going to do), then the RECs will only get back feedback for that small handful of EMR vendors. That makes the EMR implementation data much less valuable than if it were spread across a larger number of EMR vendors.

The third problem was something mentioned by Brad who inspired this post. In his comment he talked about many of the current ratings organizations rating based on “under the table offerings rather than credible data.” Sadly, this same thing could happen with RECs. It will depend on if the REC decides that it’s business model is built on the backs of the EMR vendors or on the backs of the credible data they get from the doctors they’ve helped. I could see it going either way.

Of course, this is just one possible business model. I’d love to hear people’s ideas on other sustainable revenue models for these EHR RECs.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

4 Comments

  • I found your 3rd comment about the need to develop a long term business model quite provocative. If the mission is to facilitate the acquisition of meaningful use of EMR systems, then by definition the project has a limited life. I would love to imagine that someone out there could design a model that would just expire around the same time as the Stimulus package runs out. Perhaps the model might include utilizing an “older” experienced work force, e.g. people 3-5 years away from retirement who are already in the industry. The REC could hire these highly qualified individuals away from hospitals and clinics that already have EMRs in place and take advantage of people who have already fought the change battles. In return those hospitals and clinics could hire younger, less costly individuals and improve their cost ratios. Seems like a win-win.

  • Mary,
    I can see how that might be a knee jerk reaction. However, I’ll be surprised if we’re at 50% EMR adoption by the time the funding for these RECs run out. I guess we’ll find out soon.

    Also, I’d be surprised if many of these “older” people want to make that kind of change in their career. There are certainly exceptions, but many of the “older” people you refer to are a lot of the reason why EMR software isn’t being adopted. They don’t want it. In fact, many of them are counting the days to retirement so that they don’t have to use EMR. Certainly not all of them, but from my experience it’s a lot of them.

  • John, I was really thinking of older admin types, not physician types. While I totally agree that the bulk of the current EMRs are not particularly MD friendly, there are numerous MDs who have learned to use them and value the benefits that these systems do provide. There are many admin folks out there who have been through EMR adoption and who have managed to come through the process with success stories. Besides, MDs/providers want to practice medicine. Selecting and implementing EMR systems is time consuming and distracting from the job of practicing medicine.

  • I see Mary. It’s going to be a really competitive marketplace for people who have experience implementing an EMR. I’m not sure how a REC might persuade them to go there instead of all the other opportunities out there.

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