Guest Post: Let me be on your list! How RECs Will Influence EHR Vendor Landscape

I’ve previously posted a number of posts about the RECs. However, I found this guest post by Bobby Lee was interesting since it looked at how the RECs could significantly influence the EMR vendor market. I’ll be interested to hear your thoughts.

There’s EMR shopping list being created across the country – about sixty of them. Whether or not your favorite EMR vendor makes these lists may determine the vendor’s future viability.

Let me explain.

HITECH Act established Health Information Technology Extension Program which in turn established Health Information Technology Regional Extension Centers (REC). ONC awarded 60 RECs across the country in two rounds of funding (first on 2/12/2010 and second on 4/6/2010) totaling $642 million. Collectively RECs are charged with getting 100,000 priority primary providers (PPCP) to “meaningful use” within 2 years.

These funds are directed for technical assistance and not allowed to be used for purchase of software licenses or any hardware.

So, these sixty Regional Extension Centers are faced with the challenge of guiding 100,000 PPCP to the promise land of Meaningful Use in less than 2 years. EHR is the tool the PPCP must use to achieve Meaningful Use. Given that the #1 barrier to adoption of EMR is cost (by most accounts), the natural tendency is to create a collective bargaining setup similar to Group Purchase Organizations — gather up as many customers (PPCP) as you can, negotiate on behalf these customers with vendors (EHR vendors) with the promise of attentive customers and thus easier sales to vendors.

For this to really work, the list of EMR vendors should be shorter rather than long and value proposition clearly spelled out (who gets what) between all the parties.

Add to this the requirement of ONC for all the RECs to work together and drive toward best practices should enable an environment of sharing amongst the RECs (e.g. similar EHR vendor selection process) such that fewer and fewer vendors should appear on the list ACROSS all RECs. I also believe there’s probably only 20 really “RFP viable” vendors out there for RECs out of 300 (or however many that’s being quoted lately) so called EHR vendors in existence today. These “RFP viable” vendors must be a player in the market with solid experiences ACROSS the States with enough cash and resources to invest ahead of the potential returns as dictated by the terms of agreement RECs will likely negotiate.

In terms of numbers, I guesstimate RECs collective influence at about $100 to $400 million per year (Assume 80% of PPCPs will need to purchase licenses and it costs $100 to $500 per month per provider). On top of that, good portion of the $642 million awarded to RECs will be spent on supporting the work forces across the country learning and doing the work with the EHR vendors that makes the list.

The natural force of RECs driving the “crowdsourcing” takes over and at the end of few cycles (e.g. stages 1, 2 and 3 of MU requirements), three to five vendors will bubble up to be the “it” vendors. If they don’t screw up too much, the infusion of licenses & revenue will further drive the divide between the “haves” and “have-nots” and will further solidify the vendor landscape with less number of EHR vendors in the market place.

What do you think?

About Bobby:

Bobby Lee is the Principal and co-founder of eRECORDS, Inc., Health IT consulting firm.  Prior to starting eRECORDS, Bobby was President & CEO of NGHN, Inc., a non-profit EHR management service organization started with a competitive grant award.  Bobby specializes in the application of connected technologies, information and processes to improve access and quality of care in community clinics and practices.  You can reach Bobby atbobby.lee@eRecords.com or visit www.eRecords.com.

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.

12 Comments

  • Bobby:

    I haven’t come across what you say is an ONC requirement that RECs work together, specifically to come up with a standardized EHR selection process, though I think this would be wise. Can you direct me to your sources on this?

    Our experience is that the RECs are not using a standardized selection process: anything but, actually. And many are making it a requirement that vendors be CCHIT certified–of all things–in order to be considered as a preferred vendor. That doesn’t seem consisent with ONC’s direction, but that’s what’s going on!

    You might want to read a pair of posts I did on this matter, which appear here:

    http://www.ehrbloggers.com/2010/05/vitl-information-barely-mentions-hitech.html

    and here:

    http://www.ehrbloggers.com/2010/05/new-york-regional-extension-centers-put.html

    Thanks,
    Glenn Laffel, MD, PhD
    Sr. VP Clinical Affairs
    Practice Fusion EMR

  • I attended a recent presentation by CalHIPSO, a local California organization that is positioning itself as one of the several REC’s in CA.

    Although not explicitly stated, RECs are exchanging data between other RECs to minimize the cost of screening HIT vendors. Taking a page from NY, they are proposing a list of “approved and vetted” vendors. However, this list is not mutually exclusive and participating REC users do not have to abide by this list.

    However, placement on this list gives a vendor a bit of an advantage because they have been screened by the REC.

  • So the RECs are just brokers and their value to the entire HITECH program is to negotiate a best price for the “croud” in a one size fits all EHR?

    But before that the RECs share “looked at” info with each other as a way to develop lists of “approved” vendors?

    And the standards of who is on the list may be handled differently by different RECs?
    And there is generally only one REC serving an entire state?

    This is going to work very smoothly without a single hitch.

  • Dear DK Berry,

    I’d like to repeat again that in CA, this particular REC is creating a list of “vetted” HIT vendors. Participants can agree to use those vendors on the list or can negotiate or contract by themselves.

    Yes, the REC is trying to appraise the vendor community but I would not want to characterize this as “brokering”. This particular REC is federally funded and do not have a fiduciary interest in any contracts with tentative or prospective HIT vendors.

  • My REC is overtly and assiduously “vendor neutral.” We make that clear to vendors on day one of any interaction. Our clients are the providers, period. So, I bristle a bit when I read broad-brush insinuative assertions about “the RECs.”

    I know that this is not true of all RECs, and I have written about my own concern regarding the heterogeneity of REC business models.

  • I am a retired physician who has given quality care for over 20 years, sat on payer, medical teaching institution and health facility boards. I’ve been interested in medical computing and quality of care since my Robert Wood Johnson Clinical Scholarship about 20 years ago. Together with a now IBM computer architect, we co-produced a working multiuser medical office system which flawlessly automated the administrative tasks for a very busy family practice. Just a brief intro.

    There are many reasons why EMR’s are not going to be effective or affordable in the next 2 or 3 the years. The first is that other than having some systems updating their accounting software, at the government’s expense these systems have little to offer in aiding in the practice of medicine, much less save money or improve care.There are a few issues to be addressed here:

    Interoperability… we all know what it is supposed to be but how is it done. Sending someone home with their discharge summary as being a great money saver or aid to improved care. HL7 hasn’t provided any leader in this regard. Their sites are old and their links are dead. Yes! … and we have a variety of products that can translate records. There’s no money in it and the entire scenario of translating individual records is bizarre.

    Information… free text is free text, its more legible when it is printed rather than written but even when printed data needs to be abstracted then placed in some sort of semantic context before we can begin to call it information. Without information that can begin to call it useful. For example, a family history of TB doesn’t mean the patient has TB. I could go on but let me simply say: The value of information is geometrically proportional to the density of its content, the clarity of intent of the originator and the ability of the computer to produce information and indeed intelligence.

    Work flow… I’ve seen examples of work flow diagrams created by some fairly substantial competitors in the market, and I congratulate them on the idea and the accuracy of some of their renderings, but it seems that the designers have missed the point. The idea of a medical information system is to off load the time and effort of the care givers onto the computer so that the caregivers can give better care. There are furniture stores that do a better job of saving personnel time by at least a factor of three.

    Quality of care… doesn’t result from either cutting costs by over extending caregivers or cutting materials but through the reduction of lengths of stays, delayed( inappropriate or dangerous care) and happier patients. Believe me, many problems could be solved with one or two steps of logic in real time during the entry of the information. Some major catastrophes could be averted as easily as having my typing being corrected by a spell-checker… ah.. and I don’t mean typographical errors either. Imagine that a doctor who is about to order a third generation cephalosporin. Wouldn’t it be nice if the computer reminded him that the patient was allergic to penicillin… and on and on. The physician can still do what he wants. The physician might also be reminded that his/her choice costs five times as much as the drug of first choice for the particular diagnosis. And that it might be inadvisable to use the drug because there are concerns of emergence of resistant strains of enterococcus, staphylococcus or c difficile. I mean medicine is getting more complicated every day and a computer might help in some of these simple bookkeeping chores.

    Since every one whose opinions I have read or to whom I have discussed EMRs seem to be interested in getting moving, I am going to offer my own recommendations on how an EMR is designed implemented and maintained in considerable detail over the Internet within the next few days. Perhaps some of you might find it entertaining.

  • Dr. Starr,

    You bring great points, but to address them as a working model, the paradigm of what is the rationale for an EHR/EMR must first be addressed and as you intimate, it isn’t for medical practice but to support an administrative element called billing.

    The actual tangible benefit of an EMR/EHR is difficult to monetize since the use of it cannot be reimbursed much like a medical procedure. An vendors who have deep pockets are constrained to tailor and design their products according to their use.

    I have a difficult time thinking that EMR/EHR as a purely “doctor’s assistant” will be of value to a fiscal intermediary or third party plan as a standalone product.

    As a former product manager, endowing a product with conflicting purposes is a recipe for a bloated product or one that has been misnamed. I consider EMR/EHR misnamed as you suggest because it’s purpose today is for billing rather than helping the doctor do doctoring.

  • Dr. Starr… I look forward to reading your EHR/EMR perspectives. Have you written for Health Affairs?

    There is a nagging suspicion in the back of my mind that while there is considerable documentation that a broadly deployed and integrated EHR network will advance the health care quality and patient outcomes… that the primary reason behind the initiative to integrate the entirety of the health care system is to provide the government the means to control the delivery of health care at the procedure level … and thereby control cost … and the Federal outlay.

    Look forward to reading your thesis …

  • Dr. Starr,
    Where do you plan on posting these ideas? I tried the link with your comment and it has some errors with your WordPress theme. I’d be interested to read. I’m sure many would.

  • Brief responses/comments on above:

    Hi Glenn:
    On RECs working together, ONC will be collecting best practices and lessons learned from the RECs and create “learning community”. They will also assist RECs in communicating with other RECs and providing coordinated technical assistance through HITRC. So, there is no clearly stated “requirement” of working together but I believe it is both the intention and plan to maximize the learning from each other and get the most out of the collective collaboration. As for the RECs preferring CCHIT certified products, my suspicion is that the RECs are utilizing what’s available in the absence of an ONC certification program at the moment.
    I have enjoyed reading your blogs and commented on one of them (but at another site: http://www.thehealthcareblog.com/the_health_care_blog/2010/05/new-york-regional-extension-centers-put-the-ehr-cart-before-the-horse.html).

    Hi Richard & DK Berry:
    Given the number of RECS and differing background of each of these organizations, we’ll have good variations in planning and implementation strategies in getting PPCP to meaningful use, including how best to work with EHR vendors. Some will definitely work together and some will need to move ahead due to its own timeline constraints. But, what’s clear is that there will be sharing of information and words (good or bad) will make the rounds especially on vendor experiences.

    Hi Bobby G.:
    All RECs are required (there goes that word again) to be vendor neutral but it does seem to be ok to have a preferred list of one kind or another. I believe there’s some room for interpretation on the requirement as well as practical reasons driving toward having a list. I don’t think there’s any confusion about what RECs are to deliver and who to focus on, my apologies if you had thought otherwise from my post. Also, if you can spare few minutes, I would love find out a little more about what HealthInsight is doing, especially your fee estimates and payment timing. Please contact me at bobby.lee@eRecords.com if interested.

    Hi Greg:
    I also look forward to reading your post in the near future.

  • It seems that all the RECs are good for is preparing Powerpoint Presentations that have no “meaningful use” to the PPCPs. In California, the LECs are basically the large Provider Groups…HealthCare Partners, Hill Physicians, etc. These provider groups already have their chosen EHR vendors and will attempt to get the PPCPs to adopt their EHR. I think they will find that the typical small practice that has a large volume of Medicaid patients will not be receptive to purchase their $100,000 solution.

  • Jack,
    I agree with you that the RECs presentations on “meaningful use” haven’t been that meaningful. In fact, some of them have been filled with misinformation. You know it’s a problem when the “trusted sources” are giving out bad information when they’re suppose to be the experts. We’ll see how many doctors see through the polished shine.

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