Tuesday, June 15, 2010

Kingmaker RECs

ONC has granted many millions of dollars to Regional Extension Centers (RECs) to promote widespread adoption of EHRs, particularly amongst small private practices of primary care physicians. The RECs are chartered to educate and assist physicians and safety net providers with selection and purchase of EHR technology. Much like the Department of Agriculture stepped in to aid farming at the turn of the previous century, the RECs are creations of the HITECH act and the goals are not much different – diffuse Government best practices to small businesses (the controversial aspect of such activities is best discussed separately). It is possible that after the EHR push is completed, RECs will evolve into helping physicians practice better medicine as Atul Gawande envisioned. But right now, RECs are in the process of defining the ambulatory EHR market.

The common knowledge is that the ambulatory EHR market consists of “hundreds” of competing software products and services. Well, there may very well be hundreds of products out there, with hundreds of flashy websites, but very few have a sizable customer base, whith a dozen or so vendors servicing most current EHR customers. HITECH has brought us an influx of new entrants and I am certain there are many more to come between now and 2011. At the same time, market consolidation through mergers and acquisitions is reducing the number of both vendors and products. Just like the Misys/Allscripts merger displaced old Misys products, the Allscripts/Eclipsys merger will definitely retire duplicate or unprofitable products. And there will be more, and probably larger M&As in this space. There will also be the inevitable demises.

So what should a REC do when it comes to helping physicians select an EHR? Should they present several hundred EHRs to the doctor to look at? Perhaps they should limit themselves to the one hundred or so CCHIT certified EHRs? Or better yet send the physician out there to sort through the multitude with a set of instructions on best practices for selection. Chances are the doctor will not even begin to look, let alone actually select something. It therefore falls to the REC to prescreen vendors, at least to a certain degree. RECs are also directed by ONC to form Group Purchasing Organizations (GPOs) and obtain the best possible pricing arrangements for their constituents. Such arrangements are only possible if large numbers of physicians are all buying the same EHR, thus further narrowing the playing field.

Just getting EHRs in physicians’ offices is not nearly enough. RECs are also supposed to facilitate connectivity of their physicians to HIEs and there is ample collaboration between state HIEs and RECs, with some being managed by the same organization. It would be a nightmarish proposition for HIEs and RECs to facilitate connectivity of hundreds of different EHR products. Just like Hospitals before them, RECs and HIEs are likely to select a few EHRs and work on connecting with those first. In an era of universal standards this would not be a problem, but our standards are evolving in parallel with EHR adoption and we have to start somewhere.

The first announcement of short EHR lists came from the two New York State RECs and created much angst in the small vendor community. New York narrowed it down to the usual suspects – mostly large well established EHR vendors. Are New York RECs short sighted? Do they not wish to support innovation and small new products that may turn out to be “the next big thing”? Are they receiving kickbacks from the financially stable vendors? Most likely, none of the above. The RECs must discharge their duties in the here and now. They cannot afford to bet money (taxpayer money) on the “next big thing” and considering that the grants, as generous as they may seem, barely cover the costs of operations, the RECs must mitigate risk. Contracting with a vendor that has “been there, done that”, a vendor that may not have the newest and shiniest technology, but has a boatload of fairly satisfied customers (and unhappy ones too), a vendor commanding an army of trainers and implementers, a vendor that is already connected to many large Hospitals in the State and a vendor with a balance sheet extending well into the past not just into a projected future, is arguably the safest course of action a responsible REC can take.

I would add one more piece of advice to all RECs creating short lists and GPOs. Make sure all your vendors guarantee the ability to extract all data from their current systems. Technology is not standing still and sooner or later game changing software will make its appearance. It may very well be from one of your established vendors, but if it’s not, you have a fiduciary responsibility to your physicians to ensure they can move on to bigger (or smaller) and better things.

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