Wednesday, March 18, 2009

Electronic Health Records from Wal-mart

Many folks who read Steve Lohr's New York Times column last week "Wal-Mart Plans to Market Digital Health Records System" emailed me and asked - how can this be? The cost seems low, the products seem outside of the scope of Wal-mart's expertise and clinicians may not receive the expert implementation assistance and support that has been well documented to result in successful adoption of EHRs.

To answer this question, I spoke today with the CEO of eClinicalWorks, Girish Kumar, Linda Dillman, Executive Vice President of Benefits and Risk Management for Wal-Mart Stores, and Marcus Osborne, who leads Wal-Mart's healthcare business development team.

Here's the detail:

The cost for a full implementation of the eClincalWorks EHR purchased through Sam's Club is $25,000 for the first clinician in an office and $10,000 per additional clinician. It is a Software as a Service model, leveraging the cloud computing infrastructure that eClinicalWorks has deployed throughout the country. The price includes:

*Office hardware (desktops, laptops, printers)
*Installation of the hardware
*Installation of the eCW software clients which Dell includes as part of the operating system image on the hardware
*Data Center support
*e-Prescribing integration
*Specialty specific templates i.e. cardiology, pediatrics
*12 weeks of project management
*5 days of onsite training by eCW staff
*Free unlimited online webinars (offered 30 times/week)
*The first year of support

After the first year, all support and service is $500/clinician/month.

My experience implementing software as a service models at large scale in Massachusetts has achieved very similar pricing for hardware, software, implementation and support. It's a good deal.

Wal-mart is working on lab interfacing, so we'll hear more about that soon. In addition to the services provided directly by Wal-mart's vendors, Marcus told me that they will encourage complementary community implementation efforts (Regional HIT Extension Centers) to provide additional health information exchange, quality measurement, and local program management to ensure clinicians achieve meaningful use of this new technology. The cost of our BIDMC implementations is about the same as Wal-mart implementations when these additional services are considered.

Wal-mart believes healthcare information technology is within their realm of expertise because of their rich experience with acquiring and implementing IT for their own operations. Their supply chain savvy enables them to achieve best pricing from eCW, Dell, and other vendors in a single package that takes the guesswork out of buying an EHR. There is no RFP and no consulting expense for system selection.

Marcus also told me about their extensive process to select eCW and Dell. They reviewed dozens of vendors and technologies before choosing these partners.

Wal-mart hopes this effort to package hardware, software, implementation, training, and support services together will be disruptive. No longer will clinicians be spending over $60,000 per person to get started with EHRs. This is not turning EHRs into a commodity, it's achieving the best value for clinicians by leveraging economies of scale, cloud computing, and the supply chain.

There you have it - a complete EHR plan from Wal-mart. They've really thought through this one. I have great faith in their ability to make it a success.

13 comments:

Ray said...

I had to suppress a smirk when I first read about the Wal-Mart/eCW partnership, and while I still have my issues and doubts, your blog post makes clear that this is in fact a well designed package deal for EHR hardware, software, and implementation services for a well-regarded product. My initial smugness came from thinking of a Wal-Mart greeter, but I should have been thinking about their IT and operations savvy.

I think it's great that the market is responding with entirely new value propositions. Having said that, I still worry that under the stimulus bill all of the adoption risk and up-front funding is on the provider, and I worry that the smallest practices will need more support than the earlier adopters, many of whom have had the assistance of a local hospital.

Kudos to Wal-Mart/eCW/Dell for making such an aggressive and creative offering. But count me among those who think we will still have to come up with state-level and community-level services and support structures if we want to get most small practices to the "meaningful user" finish line over the next five years.

Brian Ahier said...

Despite the bias many seem to have against Wal-Mart, particularly with regards to the healthcare arena, I think this is going to be a very good thing.
Competition is good, and we will see many other players competing in this space, keeping costs down.

Wayne said...

I always thought that WalMart's IT advantage was because they did in-house application development and drove the hardware industry to offer specific features and price points.
Having WalMart choose another vendor is a quick way to get into the market, but does not leverage all their core IT advantages.
Of course, maybe there will be a closer relationship between WalMart and eCW if this suceeds.

savant said...

Hey whats the difference between a virtual office and real office? Does that mean I own the virtual office too? Is there space allocated?

Chris Longhurst, MD, MS said...

So when will eClinicalWorks integrate with personal health record providers such as Google Health or Microsoft HealthVault so that patients can have portable data?

Wes Rishel said...

Congrats on nailing the specifics of the deal better than any reporter or analyst I have read, including me.

I wonder, though, if this endorsement is a bit sanguine about the implementation process and the formation of e-enabled communities within specific regions. Further thoughts at To Halamka on Sam’s Club eCWdeal

Sam said...

One of the foundations of security is Authentication, Authorization, and Accounting. Can you autheticate users, grant authorized access and account for each user accross the country? Can you protect information on multiple systems and platforms? Thoughts please?

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Football Matches said...

Congrats on nailing the specifics of the deal better than any reporter or analyst I have read, including me.

I wonder, though, if this endorsement is a bit sanguine about the implementation process and the formation of e-enabled communities within specific regions.


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