Sunday, December 6, 2009

2009: A Year of Surprises and Change for the EHR Technology Market


2009 began with a bang for legacy Electronic Health Record (EHR) vendors, promising strong sales and windfall profits on the heels of stimulus package incentive bonuses initially worth more than $19 billion to doctors and hospitals. But things changed dramatically along the way.

Here ten surprises and notable events that have impacted the EHR market:

Payment for Meaningful Use of EHR technology, not for the software and hardware itself.

The idea that using EHR technologies ought to produce improvements in quality of care, better communication with patients, enhanced safety, and better public health reporting -- and that these outcomes ought to be monitored and providers held accountable for their achievement -- was itself a surprising innovation in 2009. It has to be counted among the best 10 health care ideas to come out of government in the past generation.

For several years many EHR technology vendors had expected federal money to enhance IT adoption flowing straight to them and their investors. But the interpretation of "meaningful use" by David Blumenthal, MD and his staff and advisors at the Office of the National Coordinator (ONC) proved that they want EHR adoption tightly linked with health reform and capable of supporting accountable care payment schemes, such as bundled payment, pay-for-performance, and accountable care organizations. The burden of proof that EHRs are being used appropriately lies squarely on the physicians and hospitals that purchase them.

It's become PC to ask tough questions about EHRs, quality, and health care costs

For several years it seemed that any criticism of EHRs, any questioning of the relationship between the use of health IT and the attendant quality of care or its cost, was off limits in policy discussions. EHRs were all good, all the time. But in 2009 we've seen a trickle become a torrent of serious challenges to the conventional wisdom about EHR value. It's come from diverse sources including distinguished federal science panels, academic studies, testimony before ONC and the National Committee of Vital and Health Statistics (NCVHS), and from a chorus of individual users with personal experiences to relate on listservs and blogs. While generally extolling the virtues of health care computerization, these voices of dissent have drawn attention to the large gaps in performance, ease-of-use, and standardization that plague the current crop of EHR products and services.

Perhaps more importantly, in the process they have unburdened the physicians and hospitals who have sat on the sidelines from being labeled "slow adopters," anti-technology, cheapskates, and even worse. As it turns out, these folks may have simply not seen the value in current EHR products that offer mediocre performance at best, and which have, so far, mostly demanded a king's ransom to purchase, implement, and sustain. We expect to see continued critical examination of the uses of EHR technologies, and new reporting that links health IT with documented enhancements in safety of care, quality improvement, and cost efficiencies.

CCHIT's loss of invulnerability and the displacement of its monopoly on EHR certification

2009 didn't go as well as the Certification Commission on Health IT, or CCHIT (pronounced sea-chit) might have liked. The HIT Policy Committee advised ONC to replace the vendor-sponsored methodologies for both selecting certification criteria and then carrying out the "certification." Instead, the criteria for "certifiied EHR technologies" would be set through an HHS Certification process, and then an international standards-based process used for certification and for selecting accredited certifying entities on the basis of competitive bid contracting.

This was a stunning reversal for the industry-leading companies involved with CCHIT. Many external to the process had criticized CCHIT as a "foxes guarding the henhouse" scheme, with apparent conflicts of interest that would never be tolerated in other industries. But CCHIT's real sins were a Byzantine certification process that failed to increase EHR adoption among physicians and hospitals, and the glaring fact that, despite an interoperability certification process, it failed to promote health data exchange among EHR applications. Among the most dramatic and damning testimonies at the HIT Policy Committee hearings in July was that of the CIO of East Texas Health System, who testified that her organization had jettisoned a multi-million dollar CCHIT certified (for interoperability) HIT system because it couldn't exchange information with another CCHIT certified system.

Then, recently, CCHIT's embattled CEO Mark Leavitt, MD announced his resignation from the organization. Although still retaining a primum inter pares status as an EHR-certifying entity due to its contractual ties to ONC, it seems likely that several other testing labs will compete with CCHIT for the contracts to certify EHRs under the ARRA/HITECH program. In fact, one company, Drummond Group, announced on November 2, 2009, that it would submit to become a certifying body upon the release of the requirements, expected in late December. The hope is that competition and oversight will create a more level playing field by keeping certification costs down and reducing the barriers to market entry.

Innovation as a theme and goal going forward, backed by the White House
One of the most unexpected, but also most promising, twists in 2009 was Aneesh Chopra's arrival into the fray, with support from the new Chief Technical Officer for HHS, Todd Park, the former co-founder of web-based practice management software company AthenaHealth. Aneesh holds the title of first Chief Technical Officer of the United States. A known innovator and proponent of off-the-shelf and open source software, Chopra was previously Virginia's Secretary of Technology.

Chopra sits on the ONC advisory HIT Standards Committee, where late this year he formed an Implementations Workgroup. That effort breathed much needed fresh air into the smoky backrooms atmosphere of the HIT Standards Committee, which had effectively blocked entry of innovative and start-up firms into the EHR technology market by recommending a set of untested, complex, and large enterprise-centric standards.

Apparently recognizing that these were unimplementable, Chopra's work group held a day of hearings that solicited advice on what does and doesn't work with respect to standards from - imagine this! - experts with proven track records outside of the health care industry. We don't yet know the results of this last minute counterbalance to the incumbent and legacy vendors' influence on ONC. But even some of the most entrenched people on the HIT Standards Committee are now blogging on their ideas for the "Health Internet," a term quietly replacing the older National Health Information Network. This is good news.

The Power Shift Away from Legacy HIT Firms

Physicians, particularly those whose practices are owned by hospitals, will continue to purchase legacy EHR systems. But there are now alternatives, supported by a grass roots movement towards modular, web-based, and much less expensive software for managing clinical work and information in medical practices.

We've called this emerging and disruptive innovation Clinical Groupware to differentiate it from the previous generation of EHR products. We're happy to report that there is new trade association on the scene, the Clinical Groupware Collaborative, with a mission to educate, promote, and organize collaboration among its members. It's existence is simply one indication that Web-based applications and software-as-a-service (SAAS) is finally arriving in health care.

This new health IT paradigm is being aided by the phenomenal success of Apple's iPhone and apps store (2 billion downloads, more than 100,000 apps) and a chorus of technologists, politicians, and public commenters who are asking why a similar platform + modular apps approach hasn't gained more acceptance in health care among physicians and hospitals.

Interest in HIT by Big Technology Companies

The convergence of the opportunities in health care and the race toward cloud computing isn't lost on the largest Web firms. Organizations like Microsoft, Google, Salesforce, Covisint, IBM, Intel, and Amazon not only are marshaling their forces to create new health care products, but have the resource bases and very deep IT infrastructures required to rapidly scale the kind of effort that will be required in a sector as vast and sophisticated as health care.

Their emergence in this space presents a non-traditional challenge to legacy firms, which have typically faced and easily out-gunned smaller, less resource-capable innovators. These new entrants are extremely sophisticated, established businesses with enormous capitalization and, often, more leading edge technologies.

These unexpected turns of events are profoundly important for a simple reason. The changes in health information technologies over the next few years could well be foundational, shaping how health care works globally for the next several decades. Which is why it is imperative that we not allow older paradigms that have outlived their utility to prevail, just because they were there first. 2009 has been a bright spot, in the sense that we've seen signs that the old guard could be dislodged. Against a backdrop of a health care reform effort that, as far as we can understand it, will not do much to improve the system, this progress in Health IT is encouraging.

David C. Kibbe, MD, MBA and Brian Klepper, PhD write together about health care market dynamics, technology, and innovation. Their collected works are here.

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