Friday, March 21, 2008

Electronic Health Records for Non-Owned Doctors - Funding

Over the past two months, I've written about Electronic Health Record project management, architecture, planning, technology, and staffing, but the hardest part of the entire project is "What's it going to cost and who's going to pay". Stark safe harbors allow hospitals to support up to 85% of startup and implementation costs, excluding physician office hardware.

I asked the leaders of every major EHR rollout project in Eastern Massachusetts to comment on their funding model. Here's their feedback by institution:

BIDMC and Beth Israel Deaconess Physicians Organization have selected eClinicalWorks as the EMR, have outsourced desktop/centralized hosting to Concordant, and have a combination of insourcing/outsourcing to the Massachusetts eHealth Collaborative for practice consultation. BIDMC financial modeling of all these costs is consistent with the industry standard experience of $40,000-$60,000 per clinician including office hardware. Subsidies will come from BIDMC and local hospitals. With maximum Stark allowable subsidies, our computation of the minimum legal cost per clinician is $15,000, so clinicians will be asked to pay at least that much.

Caritas has selected eClinicalWorks as the EMR. Caritas would like to subsidize 85% of the allowable costs. However, Caritas leaves the amount of the subsidy up to local hospital CEOs, since they will ultimately pay the bill and decide which community practices are the most strategic for rollout.

Children's Hospital Boston
Children's and Pediatric Physician's Organization at Children's have selected eClinicalWorks as the EMR and the hospital is hosting the application in their data center, maintaining it via existing IT staff. Six new FTEs in the primary care network will provide practice consulting and implementation services. Children's has outsourced desktop support to The Ergonomic Group. Children's experience has paralleled the BIDMC financial model and has roughly the same cost structure, subsidizing costs to the maximum that Stark allows.

Mt. Auburn Hospital
Mt. Auburn and Mt. Auburn Cambridge IPA have selected eClinicalWorks as the EMR and the physician's organization is hosting the servers in a co-location facility. The hospital has subsidized allowable costs and physicians are paying for all office hardware. The proportion of subsidy for costs of hosting, licenses, training and implementation is still a work in progress. Mt. Auburn notes that part of the cost equation should be consideration of loss of productivity during initial implementation. This is a good point and no other organization has computed this as part of the cost equation.

New England Baptist Hospital
New England Baptist hospital and its physicians have selected eClinicalWorks as the EMR and the hospital is hosting the application in a co-location facility. The hospital has hired 4 FTEs, managed by the hospital CIO, to assess office needs, install hardware and implement software. An MOU has been developed detailing the relationships between the parties, services to be provided, and funding allocation to ensure compliance with Stark. The hospital currently subsidizes 80% of the Stark allowable costs. The physicians are funding their portion of the costs via a combination of payer withholds, PHO funding, and direct physician payment.

Partners Healthcare System
Partners Healthcare offers their home built Longitudinal Medical Record or GE Centricity as the EMR. LMR is hosted centrally and GE Centricity is hosted in clinician offices. As a system, Partners uses withholds in its pay for performance contracts to fund EMRs. EMR adoption is a criterion for remaining in the PCHI network. No subsidy is provided from the central corporation. However, on the local level, Physician Hospital Organizations are subsidizing EMRs. Thus, Partners docs who are in community receive their subsidy and their incentive through pay for performance contracts, which could be a Partners physicians-hospital organization like Newton Wellesley, North Shore or could be a non-Partners physicians-hospital organization like Emerson, Hallmark.

Winchester Hospital
Winchester Hospital has committed to assist its physicians with the EHR implementation process and has budgeted $5 million, including $1.5M for a 4 FTE implementation support team, portal infrastructure development and associated connectivity. The remainder of the money is available for affiliated physicians to purchase and host the EMR of their choice. Winchester will subsidize up to 85% of the cost of EMR licenses and implementation. The support team primarily offers project management and is staffed out of a joint venture funded by the hospital and the IPA. Winchester hosts the hardware for the 15 practices that are under the corporate umbrella (Winchester Physician Associates). The remainder of the practices are hosting applications in their offices with support from number of hardware/networking vendors. The IPA has its own incentive program unrelated to the hospital donation.

Thus, the overall consensus in the community is to subsidize the maximum or nearly the maximum of Stark allowable costs and to provide centralized project management with either insourced or outsourced implementation/practice consulting services. Most organizations are providing central hosting in a hospital or co-location facility.

In two weeks, I'll provide an overview of the funding and staffing model for ongoing support of these practices once they are live.


Steve Waters said...

The challenges facing a hospital led EMR implementation for non-employee physicians are significant. What’s it going to cost and who’s going to pay? The implementation will take time and money and at best be a distraction for the hospital. In the end they will have a system that works great for some practices and not so much for others.

Months and significant money will be spent on simply managing and planning the project. There is also the current instability in the ambulatory EHR market that will lead to a significant consolidation of products on the market as well as a number of failures. This could lead to a whole new implementation with a few years of roll out.

A strong alternative approach, particularly for smaller hospitals, would be partnering with an entity that has the technology and business model to provide these services at a much lower cost than the hospital. The provider could make available a broader range of services and choices to meet the needs of the individual medical practices and integrate them with the hospital IT systems.

The result would be a solution with a shorter delivery time and reduced capital expenditures that will better meet the needs of the medical practices themselves.

John Halamka said...

BIDMC has chosen a similar approach. Partnering with external firms to ensure scalability while doing contracting centrally to ensure consistency and clinical integration.