RSNA is where providers come to make money and HIMSS is where they go to lose money.

While that may be the case today, it is unlikely to be so in the future. The healthcare industry is undergoing a massive transformation that will likely take a decade to complete as we transition from a reimbursement model largely based on fee for service to one based on outcomes. Under this new model, providers will be taking on a greater portion of risk. In reward, these providers have an opportunity to receive a significantly higher net reimbursement. This transition is making for some interesting bedfellows as payers and providers join together to create new care delivery models such as Accountable Care Organizations (ACOs) and Patient Centered Medical Homes (PCMHs). These new models will be increasingly dependent on a robust HIT infrastructure to effectively measure quality, risk and performance, something that simply cannot be done effectively with the antiquated systems that are in place today in many healthcare organizations (HCOs).

Nearly every vendor we met with at HIMSS had a story to tell about how they had the solution the market was seeking for ACO enablement. This was not entirely unexpected for last year we thought that would be the year of ACO. Obviously, we were a little ahead of ourselves and the industry with that prediction but alas it has come to pass. Small problem though: HIT vendors have had plenty of time to prepare their solutions for ACO enablement but to our surprise, most solutions were still far from mature. Frankly, we are not too worried about this right now for Chilmark is forecasting significant evolution, innovation, and in short-time maturity in these solutions as customers (HCOs) further define what they truly need to succeed in this new world order of reimbursement for healthcare delivery in the US.

This raises what our research team found to be the most significant learning from HIMSS’12.

As most of you already know, ONC made quite a splash at HIMSS by announcing the release of Stage 2 meaningful use (MU) requirements (we’ll have a future post on the implications of these requirements later this week). But honestly, we did not see a wild wrangling of commentary and discussion in the halls of HIMSS’12 regarding these new requirements. Maybe this was because most attendees were simply addressing the needs of today and did not have time to thoroughly review these new requirements. But we believe something else may be at work here.

Our Thesis:
The MU requirements have become little more than a “spec-sheet” for vendors, consultants and IT shops and departments. These requirements have nothing to do with innovation and have little to do with the dramatic changes that will occur in this industry in the next decade. Quoting that oft-used phrase, “follow the money” one can quickly see that the billions in funding for incentivizing providers to adopt EHRs under the HITECH Act is relative chump change to the dramatic fortunes that may be won or lost under the new value-based payment models that are proliferating throughout the industry – payment models that commonly fall under the rubric of ACO or PCMH. In each of these models, EHRs are important to a degree, they are part of the basic infrastructure. But it is what one does with the data that matters (collect, communicate, collaborate, synthesize, analyze, measure and improve). Therefore, if you want to see innovation look beyond today and the tactical push to effectively adopt and meaningfully use EHRs and towards the future of how that data will be used to drive quality improvements, better outcomes and lowering risk exposure.

And speaking of risks…

What was clearly lacking at this year’s HIMSS was patient engagement. Yes, there was a seminar on the topic and sure, everyone speaks of patient-centric care but there was little evidence among exhibitors at this year’s HIMSS (with a few exceptions, e.g., Cerner, MEDSEEK, RelayHealth) that spoke to the need to engage patients as part of the care team. Get a clue folks, one will never get to that nirvana of a truly effective ACO or PCMH without active, effective engagement of the patient. Not having an engaged patient is your greatest risk.

After being away for nearly two weeks, it is a challenge to pick up where one left off. Cruising through the reams of email (please excuse any delays in getting back to you I’ll get to your email yet, I promise), trying to catch up on my reading of the various industry rags and tapping twitter I feel pretty comfortable in stating the more things change, the more they stay the same (not exactly the best quote for an analyst to say as we thrive on turmoil…).  That being said, following are a few items that did catch my attention and may look into further:

FDA Releases Proposed mHealth App Regulations
On Tuesday, the FDA finally released guidance on how it intends to regulate mHealth Apps. Having taken a cursory review of these proposed regs, have to say I’m quite impressed as the FDA has struck a careful balance of  applying regulatory review where warranted while allowing plenty of room for innovation in this very young and still immature industry sector.  MobihealthNews has a fine write-up on this story.

WebMD Provides Abysmal Guidance and Tanks
WebMD, which has been seemingly immune to the recession, provided Q2’11 guidance that sent its stock into a tailspin and leading to a very rapid (next day) letter to investors from the Chairman to quell fears. Why is this significant? First, pharma is feeling the effects of the recession and is pulling advertising dollars off the table. Over the last few years, WebMD has been putting virtually all of its “eggs in one basket” – pharma. It appears that the golden goose of pharma is no longer laying golden eggs which will likely have a ripple effect on the multitude of other smaller Health 2.0 like companies whose business models are advertising based. Secondly, once again WebMD is projecting contraction in its “private portal” business. This is, or at least was, the 800lb gorilla in the PHR market for employers and payers. WebMD has milked this cow for about all its worth and do not be surprised if others start aggressively moving in. Cerner is one and we’ll talk about another tomorrow.

Stage 2 Meaningful Use Likely Delayed till 2014
Can’t say we didn’t see this coming as ONC’s advisory board basically recommended such but it does complicate the schedule for incentive payments which, as part of ARRA were meant to create jobs and create those jobs quickly. As the recession continues to drag on, there appears to be an acceptance that getting back to near full employment in this country will not occur quickly. Such acceptance has appeared to bring some rationality as to the rollo-out of EHRs. Choosing, installing, mapping workflow, testing, training and going live with an EHR, let alone meet the various requirements of meaningful use (MU) is no small task and this delay will bring a sigh of relief among many a CIO and eligible professional. But now one has to wonder: What does this mean for Stage Three?  Don’t be surprised if Stage Three gets the ax.

I’m sure there are other bits of news that I missed and welcome your input to help educate this off-the-grid analyst on all the wonderful things he missed as he was trudging through the temperate rain forests of Alaska or battling grizzlies for a share of their salmon (note, grizzlies don’t share).  BTW, this last picture is of one of the “deep forest creatures” you’ll find in that rain forest.

This does not come as a surprise. When the HITECH Act was first passed as part of the broader Stimulus Bill (ARRA), the primary objective, at least for ARRA and subsequently HITECH, was getting people back to work. The HITECH legislative language was purposely vague highlighting such key objectives as getting physicians to “meaningfully use” a “certified EHR” to promote “care coordination.” Since this was a jobs’ bill, the legislative language also pushed for the billions of dollars in HITECH funding to be doled out expeditiously.

Problem is, installing software into an existing operation is just a tad more difficult than say resurfacing a roadway. When you layer into that software installation issues such as changes in workflow, training clinicians, insuring patient safety is maintained (and ideally improved) you end up with a very challenging situation. In the case of HITECH, this challenge is further compounded by the desire to continuously improve, via the proposed three stages of MU requirements, the quality of care delivered. These are the challenges providers and hospitals are facing but as mentioned previously, the EHR vendors are struggling as well to deliver the functionality required to meet future meaningful use requirements.

Last week at the Massachusetts Governor’s Healthcare IT Conference both Dr. Blumenthal and Dr. Halamka gave their perspectives on this conundrum of whether or not to delay Stage Two MU. Blumenthal was quite cautious in his statements that basically inferred that such a delay could have some repercussions on the entire HITECH Act wherein some of the funding may be retracted if it was not spent in the timeframe allotted to it under this legislative act. In today’s acrimonious federal budget wrangling on the Hill this is a very real possibility.

Halamka proposed another scenario wherein Stage Two would be split into a Stage 2A and 2B. Meeting Stage 2A would not entail new software functionality, but simply attestation that the provider/hospital was meeting the stepped up implementation of their EHR. For example, in Stage One, the CPOE requirement is for 30% of patients to have at least one order via CPOE. In proposed Stage 2, the requirement is 60% of patients. No new software functionality is required, just more physicians trained on how to use CPOE. Stage 2B would address those MU requirements that are new and requiring additional EHR functionality (e.g., record a longitudinal care plan for 20% of all patients).

What is likely to happen?

Looking into its analyst’s crystal ball, Chilmark foresees the following:

1. Stage Two will be delayed in some form or fashion as there has been a lot of grumbling by healthcare providers who have struggled to meet Stage One (and even Stage One was significantly water-downed from what was first proposed).
2. Halamka’s scenario of Stage Two being broken up into two makes sense as it addresses both legislative issues (keeps ball rolling) but also allows the industry time to add new functionality and subsequent training to ensure safety.
3. The delay in full Stage Two MU requirements will put significant pressure on Stage Three with Stage Three subsequently pulled. Those requirements outlined in Stage Three will be achieved through other approaches that HHS has at its disposal, e.g., payment reform.

Consumers will not sign on to most Personal Health Platforms (PHPs) or services due to the issue of trust.
- Leading researcher and developer of an open PHP.

Provider sponsored PHPs and patient portals will dominate the market for they offer services that patients/consumers want such as appointment scheduling, prescription refill requests, etc.
- Leading CIO who is also actively involved in HIT policy development.

The only people who care about a PHP, PHR, whatever you wish to call it are those who are struggling with a life-changing illness.
- Co-founder of leading site for those with serious illness to gather and share experiences.

Chilmark’s thesis is an amalgamation of the last two statements (we’ll get to the first one shortly).

By and large, people do not care about their healthcare until they have to, either for themselves or a loved one. Even then, if they are very sick, it may be far more than they are capable of to set-up and maintain a PHP. These systems are still far too hard to create and manage, let alone trying to get doctors and hospitals to feed complete records and updates into them in some automated fashion. There may be an opportunity in providing a system for baby boomers to help manage their aging parents health issues from afar. We have yet to find a PHP, PHR, whatever you wish to call it that ideally fits this market need and may be an opportunity for an enterprising entrepreneur.

A common theme that repeated itself numerous times over the course of the day was the lack of business process maturity in the healthcare sector. Meg McCarthy, EVP of Innovation at Aetna was the first to make this statement citing this issue as arguably the number one challenge for this industry sector to overcome. (McCarthy provided some interesting details on the Medicity acquisition but we’ll save that for a later date.)

Later that day, Jessica Zabbo, Provider Technology Supervisor at RI-BCBS gave a very detailed presentation on her company’s experiences working with providers on the adoption and use of EHRs. Over the last several years RI-BCBS has done a couple of small pilots. In both cases a defining parameter of success was business process maturity. For example, the company did a Patient Centered Medical Home (PCMH) pilot that coupled pay for performance metrics (P4P) with EHR use. Basically P4P measurements were to be recorded and reported through the EHR. One of the key lessons learned was that P4P program success was highly dependent on the EHR being fully implemented and physicians comfortable with its use (process maturity). But in a Catch-22, to successfully incorporate P4P metrics into the EHR requires a very deep understanding of practice focus and workflow. Without that understanding, failure of the P4P program is almost certain.

Thus, it is with some dismay that when one goes to the HHS site to view the recently released ONC Strategic Plan for HIT adoption one sees the figure below:

What’s the problem you ask?

Where is “Process?”

Nowhere in this figure is there any mentioned of business process/workflow. Technology is but a tool. The proceses by which clinicians collect and securely share health information is where the focus needs to be with technology in the backseat, not in the driver’s seat. But this figure goes beyond just flipping the equation, it completely ignores “process” altogether putting technology squarely at the beginning, at the start to all things grand and possible if only clinicians would simply go adopt and use the technology. (Despite some wishful thinking and pronouncements, e.g. “the era of EHRs is upon us” providers are not necessarily chomping at the meaningful use bit.)

Now to ONC’s credit, they are in a bit of a bind here for to admit that business processes and change thereof need to be taken into account would most assuredly require a major rethink of what is truly possible in the next several years as ONC tries to empty the HITECH coffers of its billions and demonstrate to Congress that this program is indeed a success and is creating jobs (remember, this was passed as part of the Stimulus Act and creating jobs was priority numero uno). Unfortunately, being a job creation bill is not conducive to providing the time necessary to create and implement new business processes that are supported by IT. Business process change takes a tremendous amount of forethought before any contract is signed for any EHR, but HITECH works counter to that with aggressive adoption and reimbursement schedules leaving very little time for thoughtfulness in re-architecting processes.

In a prescient way, Chilmark predicted that the issue of process re-engineering would be one of the greatest challenges in adoption and use of EHRs and recommended to ONC in our 2009 comments that ONC consider relaxing the schedule to allow to allow sufficient time for process re-engineering. Unfortunately, it appears that it remains full-speed ahead with HIT driving a weaving HITECH truck down a narrow and winding road.

• Providing a patient only limited access to their records. There are no clear and consistent policies in place today as to what a healthcare organization is obligated to provide a patient access to.
• Do not support portability that allows the patient to export personal health information (PHI) to another site/repository that they can then control (e.g., Google Health, HealthVault or other PHR).
• Do not allow for patient entered data nor the ability for a patient to annotate records.
• Rarely support transactional processes such as online appointment scheduling, Rx refill requests, eVisits.
• Are just about as user friendly as a clinician’s EHR.

The problem with patient portals is that they are not seen as an integral part of the care process. In fact, we would argue that the use of the terms PHR and EHR create an artificial division – let’s just call it a CHR (Collaborative Health Record) and be done with it. But alas, such is not the case. Ask your local HCO where funding for their patient portal comes from – 9 times out of 10 they’ll say the marketing budget. As we reported from this year’s HIMSS conference, sure there was talk of patient engagement via portals but the message was one pitched to the Chief Marketing Officer (CMO) and not the other CMO, the Chief Medical Officer.

Yes folks, today the patient portal has very little to do with the patient being an integral part of the care team. No, the patient portal is all about improving consumer/patient satisfaction scores and more tightly linking the consumer to a given HCO. Therefore, is it any wonder then that if a patient portal is not viewed as an integral part of the care process then physicians are unlikely to actively advocate its use leading to a market where consumer adoption and use of patient portals remains at a paltry 6% or so nationwide.

As with anything in life, there are no absolutes and in the case of patient portals there are some stellar examples of HCOs using a patient portal to actively engage their patients. The most publicized example is Kaiser-Permanente with adoption at roughly 35% of all patients served. Primary to K-P’s success is providing its members not only access to their PHI, but also the ability to perform a number of transactional processes, e.g., appointment scheduling, online consults, etc. Up in the Pacific Northwest, the Group Health Cooperative (GHC) has also been very proactive and reports patient adoption and use of their patient portal at over 60% (that’s an order of magnitude greater than the national average!). The May 2010 research paper that GHC published in Health Affairs is pretty clear on what has driven such high adoption: the patient portal is not about marketing, but forging tighter links between the patient and physician to improve the efficiency and effectiveness of care delivered.

Now both K-P and GHC are somewhat unique in the healthcare market for both are “vertically integrated” being both the insurer and the provider. They assume the full risk of managing their patient/member populations and thus will seek out solutions and concepts that will lower medical loss ratios (MLRs) and keep their members in less costly care settings. Therefore, it is to their benefit to actively engage members in managing their health and both of these organizations have found their patient portals to be a critical piece in the engagement puzzle. With pending changes in payment models moving from fee for service to bundled payments, HCOs of all sizes will need to adopt business strategies similar to KP and GHC, including deeper, more meaningful patient engagement.

Thus, it is with disbelief that some of the recent comments to proposed Stage 2 Meaningful Use requirements state that it is unreasonable to expect physicians to have 20% of their patients using a patient portal. Now, we do agree that it is silly to ask every physician practice in the country to provide a patient portal, but it is not unreasonable for large physician practices, hospitals and clinics to provide such. Unfortunately, it appears that the medical establishment does not see the writing on the wall; that their future success is not contingent upon another marketing initiative but in truly and thoughtfully engaging the patient as part of the care team for if they were to do so, as KP and GHC have demonstrated, achieving that 20% target is not beyond reach.

Is your HCO rising to the challenge?

These findings and quite a bit more are part of Chilmark Research’s latest report that is being released today: mHealth in the Enterprise: Trends, Opportunities and Challenges. The report is the result of roughly three months of dedicated research by lead analyst Cora Sharma who has interviewed numerous leading adopters of mHealth Apps (Beth Israel Deaconess, Children’s Hospital Boston, UPMC and others) as well as both traditional HIT  vendors, best-of-breed mHealth vendors and consultants.

While this report has plenty of charts and figures providing details as to what mHealth App categories will see the strongest growth in the healthcare enterprise and just how big those specific App markets will get, one area that will reach saturation in the very near future is medical content. Companies such as Epocrates, Medscape and Skyscape have been providing this capability for a number of years to physicians and we peg current adoption and use north of 60%. By the end of 2013, this market will reach saturation. This may partially explain Epocrates’ acquisition move yesterday, picking up Modality for $13.8M. Modality will provide Epocrates with critical relationships to many health content publishers and further solidify and strengthen its position in this market. But of Modality’s some 140 iOS-based Apps, only half are heath and life sciences related. Might Modality provide Epocrates the opportunity to expand into new markets now that the health content market is reaching saturation?

But we digress as health content Apps are strictly physician-driven – they do not connect into the enterprise’s health information systems (HIS) and are of limited value to a healthcare enterprise. What is of value to an enterprise is providing physicians with immediate access to the information they need to deliver the highest quality of care in the most efficient manner. This report specifically targets those enterprise mHealth Apps that link into a healthcare enterprise’s HIS including EHR, CPOE, eRx, CDS and Charge Capture. Providing physicians mHealth Apps that will enable them to deliver higher quality at the point of care will rapidly become an important competitive differentiator as healthcare enterprises look towards not only meeting meaningful use requirements and structuring themselves for payment reform, but also improve internal workflow leading to higher efficiencies and more competitive positioning in the broader market.

To obtain a copy of this report head over to the Chilmark Research Store.

ADDENDUM:
Have received a few private comments requesting Table of Contents, List of Figures, Table etc., which is now provided below:

Table of Contents

• Executive Summary
• Why mHealth in the Enterprise
• Early Adoption Strategies and Trends
• Initial mhealth Offerings a Mixed Bag
• Barriers to mHealth App Adoption in the Enterprise
• Proliferation of Devices and Macro Forces Promise Strong Growth
• Conclusion and Recommendations
• References
• Appendix

Figures

• Figure 1: Physician Adoption of mHealth Apps in the Enterprise, EOY 2010
• Figure 2: mHealth Apps Market Diffusion EOY 2010
• Figure 3: Physician Smartphone Adoption EOY 2010
• Figure 4: Physician Smartphone and Content App Adoption
• Figure 5: Worldwide Touchscreen Tablet Units Sales Forecast
• Figure 6: Physician Touchscreen Tablet Adoption Forecast
• Figure 7: mHealth Apps Market Size Forecast
• Figure 8: mHealth Apps Market Diffusion Forecast

Tables

• Table 1: Crucial Information Gathering Physician Usecases
• Table 2: Meaningful Use Stage 1 and mHealth Apps
• Table 3: Early Adopters of mHealth Apps
• Table 4: Usability Comparison by App Category Smartphones vs. Touchscreen Tablets
• Table 5: Architectural Deployment Tradeoffs: Benefits vs Costs
• Table 6: Representative Sample of Current Vendor Offerings
• Table 7: mHealth App Growth Forecast
• Table 8: Vendor Recommendations
• Table 9: Enterprise Recommendations

1) ONC Chief, David Blumenthal’s article in the New England Journal of Medicine that was published on the same day wherein Blumenthal provides a clear abstract of the rules (the actual rules are 864 pgs in length and not a bad read if you have the time) in a easy to read and understand format.

2) Next, head over to the Dell website for a post by their own Dr. Kevin Fickenscher who gives an excellent background on the broader HITECH Act, the origination of the MU rules as well as taking a look at companion rules for Certification of EHRs and the new Privacy & Security rules that were also recently released.

3) Last, but certainly not least is a visit to John Halamka’s site where he provides a freely available, with no need to provide attribution, deck of slides that gives the big picture view of the final MU rules.

With such great resources out on the net, we at Chilmark Research see little need to write an in-depth review of these rules. That being said, we will provide some quick points of analysis.

1) Clearly, HHS listened to the market and the 2,000 comments it received and has relaxed the final MU rules significantly.  If any provider or hospital is still complaining, well they may be the type to complain no matter what.  These rules, while still challenging for some, are certainly doable.  Time to stop talking and get down to work.

2) Thankfully, probably to the chagrin of payers, the requirements to conduct administrative functions (eligibility checking and claims processing) from within the EHR has been removed.  This has always been a fairly silly requirement as today, much of this process is already done electronically through the Patient Management (PM) system. So no need to duplicate it within the EHR, besides which it would have been tough for many an EHR company to build out this functionality in such a relatively short timeframe.

3) The consumer engagement sections of the MU rules also saw some relaxation, but it was reasonable.  What may prove more interesting here is the new requirement within the certification rules for EHRs that they provide health education resources for consumers within the context of their platform.  This may prove to be a real money maker for the likes of health content providers such as A.D.A.M, Healthwise, WebMD, among others.

4) While understandable that there was some pull-back on health information exchange as we saw in the draft MU rules, we were quite surprised that it was completely eliminated in the final rules for Stage 1.  HHS claims that this was done due to the lack of maturity in the HIE market.  Well, yes and no.  There indeed may not be a lot of multi-stakeholder, publicly-led HIEs today that are actively exchanging data, whether regional or state level, but there is a robust market for private HIEs.  It is unfortunate that HHS pulled back on this one for “information sharing for care coordination” was one of the primary precepts of the original HITECH legislation.  Sure, will likely see something within Stage 2, but that does not get clinicians familiar with the concept today.

5) What really caught us by surprise is a reference in the MU rules (pg 39 to be exact) wherein HHS states that they will not discuss the future direction of Stage 3 at all.  Nothing. Nada.  Does this portend a complete pull-back from Stage 3?  Hard to say, but it is clear that HHS wants to see how well Stages 1 & 2 go over in the market before it makes any further demands on providers and the EHR vendors that serve them.

6) Along with the release of MU rules, HHS also released the final rules for EHR certification.  While having not delved into these deeply, yet, the whole concept of “certification” is fraught with challenges, primary among them, technology lock-in.  It is here where Chilmark believes we will see the greatest challenges to indeed create an environment that fosters innovation, providing clinicians with tools they will readily wish to use while at the same time providing some level of certification. Frankly, we do not believe it can be done. Congress really wrapped an albatross around the neck of HHS when they wrote that into the legislation.

What were they thinking?

A Couple of Thoughts on the Pending Release
A significant amount of effort by many a talented and dedicated individual has gone into providing the initial policy framework and ultimately the final language for these rules.  Hats-off to them for their service for what they may have done is defined much of the future core elements of healthcare IT systems in the decade to come.  Granted, this is only Stage One rules, we have only an inkling of an idea as to what to expect in Stages 2 & 3, but there is no doubt in our minds that these rules will have an impact on the HIT market, more broader technology adoption and use in healthcare and even more broadly, a fundamental change in healthcare delivery and the role of the citizen/patient.

While these rules will have a noticeable impact, we are less confident that they will have a lasting impact for two primary reasons:

1. It remains to be seen just how many physicians will take the bait (incentives) to buy a “certified EHR” and jump through all the hoops to demonstrate their meaningful use of said EHR.  Yes, $44k may seem like a lot initially, but when you start digging a little deeper into what the total cost of ownership is for an EHR and the number of hoops you must jump through to get that incentive payment, that attractive $44k starts looking less attractive in a hurry.
2. Looming on the horizon, just beyond the street noise that is meaningful use and the HITECH Act, is a far larger change agent, the Healthcare Reform Bill that was passed into law earlier this year.  Tucked into that legislation are a number of significant changes, primary among them, payment reform via CMS’s Innovation Center.  Following the old adage, “follow the money,” we at Chilmark foresee a restructuring of the healthcare delivery system that will necessitate the adoption of IT not for the aforementioned “meaningful use” but to more efficiently and effectively run operations.  (Over in the radiology world, an article on Aunt Minnie clearly directs radiologist to start thinking efficiency.) This is what organizations both large and small, and not just radiologists, need to be thinking about as meaningful use, in retrospect, may be seen as more of a distraction than anything else.

Needless to say, the site does provide a wealth of information, though you may have to dig to find what is most important to you.  The site may also become prone to being dated, so be careful and double check other sources for more current info.  For example, the section on certification of EHRs stated that certification rules will be released in “late spring/early summer” – well they are already out, having been released on June 18th.  Hopefully, HHS, CMS and ONC can work more closely going forward to insure that information on this new, and what may become an important site, is truly current.

In launching this site, CMS is trying to get ahead of the curve and likely onslaught of requests for information once the final meaningful use rules are released. While this website states that these rules will be released, again, “in late spring/early summer,” we are now placing our bets that these rules will be released at 4:55pm on July 3rd, unless of course someone in the administration decides to postpone such an announcement until the opportune moment comes along to generate some positive press for what is currently an embattled administration.