Lately, most of the news and commentary about Electronic Health Records (EHR) has focused on Meaningful Use (MU) instead of dealing with more the more substantial issues that always arise whenever a business makes a major investment in new software.  Things like, will this application help the business or be disruptive, and will the vendor still be around in 5-10 years?

For healthcare provider CIOs and practice administrators, focusing on MU is a proverbial case of starring at the trees and not seeing the forest - which, by the way, is on fire.

When planning to buy, own, and operate an EHR the first consideration lately has been, will the MU criteria settle down or continue to be a moving target?  Since MU criteria are driven more by politics than technology or economics - it is a government program after all - there has to be, at least, an outside chance that there will be continuing revisions at anytime. There could still be problems with implementation and the new Congress could change things even retroactively.

Second, even if MU criteria do not change, and providers thread the needle to meet the requirements, it is not certain that there will actually be stimulus disbursements - the government is flat-broke, in record-level debt, and is likely to change in January.  Anyone that thinks that EHR stimulus appropriations could not vanish in a Congressional committee meeting at any time has not been paying attention to what goes on in Washington, DC.  And as far as I can tell there is no rigorous contractual obligation for the government to reimburse qualified providers - after all, even paying out Social Security is not a contractual obligation of the government according to the Supreme Court. 

The encouraging news is that providers may be catching on.  In a recent Health Data Management Quick Poll 54% believe neither Medicare nor Medicaid will pay EHR incentives as promised.  Only one quarter trust both to pay as promised.

Third, even if providers meet MU criteria, and the government spigot remains open, how close does the reimbursement come to cover the costs of EHR?  Where we find considerable naïveté amongst the healthcare IT punditry is the notion that buying and installing software is expensive and the stimulus reimbursements cover the costs.  But in fact buying and installing software is cheap compared to ongoing operations, training, and maintenance. 

Good rule of thumb is for every dollar spent buying and installing software users should count on $.50 per year in ongoing costs.  So unless the government comes up with more money each and every year, eventually providers are going to have to figure out how to pay for EHR out of their own revenues.

The More Important Considerations

The most important consideration in selecting an EHR product, which is rarely addressed, is, will the vendor be around for the next 10-20 years and will the technology keep up?

There are hundreds of EHR products from well over 100 different vendors.  The ability of the market to sustain them all is frankly inconceivable.  Just how much consolidation will result is anyone's guess, but if this market is like any other software application, a dozen or so products will be the upper limit as the market matures. 

And it is not just small company products that are likely to disappear from the market.  It is hard to imagine Allscripts not seriously rationalizing its acquired and organically developed product line over time.

There is also a lot of incentive for EHR vendors to start a process to sell now: HIT companies are carrying decent valuations; the sales pipelines are strong; close rates are good; and above all, the industry has a buzz around it.   Savvy EHR investors and owner-operators will "take money off the table" when things are "hot" vs. waiting for things to cool down.

The other motivation for thinking about selling now is the daunting R&D challenges ahead.  Any doctor with a small kitty can hire a Microsoft Windows .NET developer and build a few screens and a database to satisfy most basic EHR requirements, but things are heating up and building and maintaining competitive EHRs will become much harder. 

Security, privacy, and patient driven consent are becoming big issues that need to be addressed.  The user interface in all EHRs need at least some level of upgrade, and most Windows-based client/server EHRs could stand a complete re-write to fully embrace mobile devices like iPhones and iPads.  Plus, EHRs are becoming the hub of providers' overall software infrastructure, but few EHRs are designed to integrate with the rest of the applications.

And finally, a major premise behind EHR deployment is to get medical information from paper to data.  Then the story goes, once the data is electronic it can be used to improve operational efficiency, diagnosis, and treatment.  Moving from EHR as a data capture application to analytics is a giant leap forward.  It is doubtful that even a handful of EHR vendors today have the skills or resources required to build the necessary analytics.

So while MU and government incentives are the hot topics du jour, wise practitioners will evaluate and select when and what EHR technology to deploy based on internal cost savings and the potential to provide better service to the customers (the patients).  The ability of the prospective vendors to remain competitive, and keep up with the evolving technical requirements, has to be near the top of the real criteria list.

 

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