Kaiser, the whistleblower and the $3 billion EMR

Back in 2003, Kaiser Permanente CEO George Halvorson made a decision which would change the direction of the company.  Though few of his peers had taken the plunge, Halvorson bought an electronic medical records system from EMR vendor Epic and set plans to bring all of his clinicians online.

While there’s nothing so surprising about that — other than the fact that Kaiser was well ahead of the curve, time-wise  — the project’s trajectory was a bit unusual. The EMR installation, which stumbled at more than one point, sprawled over several years and cost a reported $3 billion dollars. Yes, I meant “billion,” in case you fear your eyes are failing you.

Of course, Kaiser is a $30-odd billion company, so if anyone can afford a billion-dollar EMR, it can, but that’s still a whopping health IT investment by any standard.

Not long after the deal got done, Kaiser and its leadership began taking a tremendous amount of flack over the system, which apparently ran into every obstacle an IT project can face. Apparently, doctors were complaining that the EMR was slow and buggy, and worse, that the system was down more than up. But Lord knows, Kaiser had no intention of breaking its 10-year contract with Epic, a vendor whose lock on big deals continues to amaze me.

Then, in 2006, all hell broke loose when a 25-year-old Kaiser employee named Justen Deal managed to get an e-mail message out to all of Kaiser’s 180,000 employees.  Deal argued that the new system, dubbed HealthConnect, was rife with technical problems and couldn’t scale to meet the demands of the organization. The trade press went nuts. Halvorson was forced to defend the installation to the press and even write a letter to the extremely junior employee who’d blown his cover. Hard to tell whether anyone bought Halvorson’s defense, but the bad press died down within six months or so.

OK, fast forward to today.  HealthConnect is fully deployed, and if Kaiser’s Internet folks aren’t shining me on, the system is working pretty well.  Not only is HealthConnect servicing 431 clinics and 35 medical centers, it’s also supporting a personal health record which serves 3 million of Kaiser’s members.

That, at least, was the news from Jan Oldenburg, senior practice leader with the Kaiser Permanente Internet Services Group, whom I spoke with a few months ago.  Patients use the PHR to fill half a million prescriptions, check out 1.2 million test results and make more than 100,000 clinic appointments each month, Oldenburg says.  (Note that she didn’t address how effective the EMR system has been for clinicians — that may mean nothing, but I was a bit curious about the omission.)

Now, my friends, here’s the pop quiz. If you had to guess, do you think that the $3 billion spend was ultimately a good investment?  Do you believe that the Kaiser HealthConnect system will be a greater success with patients than clinicians?  And if clinicians are still using it at gunpoint, should Kaiser shift gears entirely and focus on patient access?

Looking forward to your ideas…this is a tricky one.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.


  • Looking at some of the success they’ve had, like a decrease of 70% of mortalities in cardiac patients 2 years post-op, and the wealth of information they’ve got to reduce costs, I’m guessing $3 billion (I’ve heard close to $5 billion) will provide a 10X return and more over 15 years. The HealthConnect System is a great start to having what I call an XHR. We shouldn’t have separate records for physicians and patients. It should all be one, centered on the patient.

  • Leonard, thanks for checking in. Lots of great stuff. Some responses:

    * Not that I’m doubting you, but for my education, where did you get those stats? I’d love to dig in and learn more about how the EMR contributed to these results (directly or indirectly, for example)

    * 10X return is a mighty big return. Wow. If you’re right that’s just about historic.

    * Agree totally regarding an “XHR” — sounds like Kaiser is close to having one. I haven’t heard about any implementations, yet at least, which merge the PHR and EMR. Do you know of any?

  • For an integrated provider like Kaiser, one record “centered on the patient” may make sense but that is a small part of the healthcare world.

    I want to get my immunizations at Wallgreens and handle minor middle-of-the-night and weekend emergencies at my local urgent care. It just doesn’t make sense to have to make an appointment to get a shot and then wait an hour if my doctor is delayed when I can walk into Walgreens at my convenience and come back later if there is a significant wait. And, I travel a lot so I need my records and I need updates by multiple practitioners.

    Patient centered? Absolutely. Provided by a medical provider? That would be a whole second line of business for them and one that an MD degree does not provide for. No thank you.

  • Hal, funny I’ve shared your take on the “PHR” (or whatever the heck the darned thing is) since I first read the description. While it would be great for consumers to have a cross-provider repository available to all, that will only happen when, as in New Zealand, 99+ plus percent of providers sign on to a single system. I’m not saying Kaiser’s system isn’t useful, but I am very skeptical that any single provider can address all of the functions you’ve described. For what you’ve talking about, one of today’s amazing 8GB flash drives could more than do the trick!

  • I am making a video about electronic health records for my nursing informatics class at Clemson University. I was hoping to have permission to include the picture from this article in my video. Thank you.

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