Health Business Blog

In his latest column, Kaiser Family Foundation president Drew Altman analyzes The Message From Massachusetts. Health care reform was a top issue for voters, he concludes, but their message wasn’t a simplistic “no” to reform.

What do Massachusetts voters want their newly elected Republican senator to do on health reform when he goes to Washington? According to [a Massachusetts Special Election] poll, seven in ten voters, including nearly half of Brown supporters (48 percent), want Senator Brown to work with the Democrats on health care reform. The same opinions held for independents: nearly two thirds of independents (64 percent) say they want to see Brown work in a bipartisan way on the health care proposals put forward by President Obama and the Democrats in Congress.

Altman’s conclusion is that many voters in Massachusetts don’t oppose the substance of the legislation, but they oppose the process, in particular its closed-door nature and perceived payoffs to individual legislators. He also points out that Brown emphasized that Massachusetts already has health reform, so why should we pay more taxes to support the rest of the country in this endeavor.

Altman makes good points but doesn’t tell the whole story. It seems to me Brown won because he campaigned effectively while Martha Coakley was an unattractive candidate who ran a terrible campaign. Brown said and did all the right things. Coakley said and did almost everything wrong.

Even people strongly in favor of health care reform had a hard time getting excited about Coakley. After all, in the primary election she said she’d vote against the House version of the health reform bill. She chastised her opponent Michael Capuano’s vote in favor of the bill because of its inclusion of the Stupak amendment restricting coverage for abortion.

As fellow-primary candidate Steve Pagiluca said in November in relation to the Coakley/Capuano fight:

Senator Kennedy spent 40 years fighting for this opportunity, and today it appears that the two candidates for his seat are risking the greatest opportunity we have had in a generation to make health care reform a reality.

That was prescient.

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This is the transcript of Part 2 of my recent podcast interview with Dr. Robert Wachter and Dr. Arpana Vidyarthi of UCSF.

In Part 1, Vidyarthi and Wachter provided an overview of the traditional case review process and discuss their progress in shifting to a new, technology-enabled process. They discussed key principles of their approach, along with the relationship between culture and technology.

David Williams: Are you using this system outside of UCSF or does it have that potential? With the electronic platform and security it seems like there might be the potential to use it across different institutions.  Is that something that you would want to do or that would have any value?

Dr. Arpana Vidyarthi: We’re using Acesis for our local case review process and a peer review process. I don’t see any value necessarily in collaborating with other institutions regarding the case review process itself. I definitely see value in communicating with other institutions regarding some of our data analysis and the trends, value in disseminating what we’ve been doing so that other institutions can learn from the stumbles that go along with building something brand new.  I think there is also value in using Acesis not only in our division, but across divisions and departments within our own institution.

Dr. Robert Wachter: Nationally, the question I think you’re getting at is one of the very big questions in patient safety. As individual institutions –everything from a three-person doctors office to a 1000 bed hospitals– begin analyzing their errors, or their outcomes weren’t as good as they should have been,  how do you disseminate that information?  How do you benchmark and compare one place to another to look for best practices or see who needs to improve?

Presently most institutions are not particularly enthusiastic about doing it because they worry about disseminating data –where you’re looking at things that didn’t go well– beyond their walls.  It’s hard enough to get people to do it even within your walls, but there are some legal protections about that in terms of the malpractice system.  There are data that are peer reviewed under this framework for quality improvement purposes that are not subject to being sequestered for a malpractice case for example.

Congress passed a law a few years ago that allowed for the creation of Patient Safety Organizations (PSOs) that create a scaffolding for multiple organizations to come together for quality improvement or patient safety improvement. The Agency for Healthcare Research and Quality (AHRQ) in Washington was put in charge of managing this process.  It’s still in the fairly early phases. At this point maybe more than 100 organizations have applied to become PSO’s.  Some of them are already members of other affiliated groups.  They might belong to the same hospital network or have the same owner.

Some of them are using the same computer system to do order entry.  Once PSOs come into being they will be looking for data sharing tools that create all the attributes that Arpana described: a secure environment, facilitate moving data around, analytical tools, those sorts of things.  So we’re doing it thinking quite locally about how to analyze cases in our own division, thinking about how that might roll up within a 600 bed hospital to be used more broadly through the organization. But fairly soon if the tool continues to perform well, organizations that are forming networks will be thinking about using it or something like it to try to promote this kind of activity across the silos.

Williams: How do you expect the case review process to evolve over the next five to seven years and how will be supported by technology?

Wachter: It’s important to see this peer review process as one of the building blocks of a robust quality and safety enterprise. I almost divide them into two separate buckets.  One is: how does an organization know where its problems are, what’s going wrong?  That can range from patients having bad outcomes (tracking outcomes that are veering off from expected outcomes.) It can include ‘trigger tools’ where patients needed, for example, an antidote to a certain medication. That gives you a clue that maybe the medication was given incorrectly or at the wrong dose.

Two: self-reports coming from providers or from patients.  There are a lot of different signals that organizations are going to need to tap into in order to find out what’s actually happening out there that’s not perfect. Then on the back end, once they find that out, the question is how they analyze it, how they move the information around, how they create stories that motivate people to learn how they create new processes or structures that ensure that the care gets better.

What is very clear is that the motivation to do this kind of work has grown tremendously in the last ten years as the public, the media, Congress and others have become more interested in it. Part of this was a recognition of the quality and safety defects in American health care.  There is much more pressure to do this kind of work from a lot of different pathways: regulatory, accreditation, media scrutiny, public interest. The business case to do this work is growing.

We need new tools, new models, and new ways of educating people on how to do this work, new cultures of openness. It’s all pretty new for us.   Arpana went to medical school ten or 15 years ago.  I went 25 or 30 years ago, but I can say that neither one of us learned hardly anything about all of the things that we’ve talked about today in terms of how you analyze this kind of data, how you change organizations, leadership, and so on.

So the tools become an absolutely critical part to try to answer both of these questions. How do we collect these signals in a balanced way?  It can’t all just be from self-reports by providers.  There have to be other mechanisms. You only find out certain things that way.  Then, how do you analyze it? And much more importantly than anything, how do you then make changes that work and stick and change that doesn’t create unintended consequences?  I think the tools are an absolutely critical part of that, but it has to be embedded in a culture where people are doing the right thing and where you have true experts who know how to do this kind of work.

Vidyarthi: The majority of case review or peer review processes won’t cut the mustard moving forward.  Just having a one-off processes where you look at a few cases here and there, not only is it not going to meet the letter of the law as those will be changing over time, but it’s also not going to give you the information you need.  So I think all sorts of health care organizations from very small clinics to very large organizations are going to need to start thinking about how better to learn from their cases, building a robust process and having some sort of technology assistance to be able to make that process efficient, effective and allow for real change.

Wachter: And the technology of course is not in a vacuum.  You have a system like Acesis that facilitates case review increasingly in hospitals, particularly as the Federal government throws $20 billion or  $30 billion at this. Hospitals will also have more robust information technology systems and medical records and computerized order entry and bar coding systems.  Ultimately all of these systems have to speak to each other. It may be that the generation of a case that needs to be reviewed is not coming from a patient or a provider raising a concern but from some signal that comes out of the computerized medical record that shows the patient had a very bad outcome or violated some norm.

It still requires a human being to review it.  I don’t think we’re anywhere near the point where this is so straightforward and clear cut that the review can be based on all measurable parameters.  There is a lot of judgment that goes on here. Sometimes you really need an expert in the area to look at it to know whether there was actually a problem in the care the patient had.  So we need tools for all of these things, but ultimately, we then are going to have to make sure that they speak to each other in a way that’s really seamless.

Right now, we’re still in a mode of creating individual tools for individual functions. I think we’re going to go through a fairly gangly period where those tools don’t work very well together and you’re kind of moving data, porting data from one electronic tool to another. Part of what the Federal Office of Health Care Information Technology is trying to do is create these interoperability standards. Part of that is designed so that when you have different ways of collecting data about patients, it can move from System One to System Two to System Three in a way that’s appropriately private and in a way that uses the same language for the same thing so that you don’t have railroads with different gages trying to connect to each other.

We’re really at the early stage of that kind of interoperability, but that’s what we need where all these things really create or serve a unique function.  For example, I can’t envision a world anytime in the next decade or two where the electronic tools that you get to do medical charting or computerized order entry also serve the functions that Acesis serves and vice versa. But ultimately all these tools have to interdigitate so that you don’t have wasted time and effort, the information moves seamlessly from one to another when necessary.

Williams: I’ve been speaking today with Dr. Robert Wachter, Chief of the Division of Hospital Medicine as UCSF and Dr. Arpana Vidyarthi, Director of Quality.   Thank you both for your time today.

Wachter: A pleasure.

Vidyarthi:  Thanks a lot.

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This is the transcript of Part 1 of my recent podcast interview with Dr. Robert Wachter and Dr. Arpana Vidyarthi.

David Williams: This is David E. Williams, co-founder of MedPharma Partners and author of the Health Business Blog. I’m speaking today with Dr. Robert Wachter, Chief of the Division of Hospital Medicine as UCSF and Dr. Arpana Vidyarthi, Director of Quality.   Thanks for your time today.

Dr. Arpana Vidyarthi: Thank you.

Dr. Robert Wachter: Pleasure.

Williams: What is the medical peer review process?

Vidyarthi: David, every hospital, every division, every group, large or small, reviews cases on a regular basis.  Bad things happen everywhere, and bad things and perceived bad things also happen in the hospital.  And when those happen, you need to take a look at what the details of the case were.

They’re usually based on some patient complaint or there is something that we didn’t expect to happen in the hospital that did happen. So someone in my position or someone in a clinic or any health care system reviews cases to identify the cause of what went wrong and also to assess the individuals.  Was there something that the individual could have done differently to change what happened or what didn’t happen?  So that’s what case review broadly is – just trying to use the experience of the patients and their cases to be able to assess what’s happening and try to make the system and individuals better.

Wachter: I’ll chime in and say something contextual. This is an extraordinarily challenging thing to do in medicine generally.  We know that errors harm and kill many patients in United States medicine and that reviewing cases where things didn’t go as well as they should have becomes extraordinarily important.  The question then is how do you that?

You want an environment where doctors and nurses and others are comfortable raising concerns even saying: here is something that didn’t go well.  In a case of mine I like it to be reviewed because I like to learn from it.  You’d like there to be accountability and responsibility if someone really screwed up.

On the other hand we understand that most errors relate to systems that are dysfunctional. Then you build into that the problem of peer review.  These cases in general in American medicine are reviewed by colleagues or peers who know a lot about that kind of medicine. Peer review is fundamentally tricky in that this person who is reviewing your case may be someone you work with all the time or in some environments might actually be a competitor.  This is a hot issue in patient safety where we both work. Part of why we’re so enthusiastic about the kind of work that we’re doing is we’re trying to move the ball forward here, not only in the technology and the process, but also these larger, socio-cultural issues of how do you get it right.

Williams: How are cases typically identified for review? What’s the typical time lag between something happening and the review process being initiated and then completed?

Vidyarthi: So traditionally, and I would say in the great majority of places across the country, what happens is that someone in Bob’s position might hear about a case. It would come either from patient relations or someone mentioning something or sending him an e-mail saying something just didn’t go right. He will either pull the chart and review the case himself or ask me to do it or have someone else in our group do it.

It’s really individualized.  I would individually be reviewing a case and trying to figure out what went wrong.  It’s independent, so I wouldn’t necessarily be speaking with Bob or even a number of other folks working with us to be able to come up with solutions together.

It’s a little bit haphazard.  It’s kind of one-off and you deal with cases in this individualized or independent manner.  So I would review a case.  It might take me a day or two.  I would come up with a solution, whether that is a discussion with the family because they have some questions or an analysis of what went wrong. Then we would just come up with solutions in this one-off manner.

But in the Division of Hospital Medicine we’ve re-engineered our case review and peer review process, taking this haphazard system of reviewing cases and trying to bring some standardization to it and trying to push forward. We built a system where there is a centralized process where the cases all come to one person, where Bob hears about it or patient relations hears about it or there is quality initiative that means that we have to review certain trigger points.

It comes to one place. Then we have a committee of folks who are trained to review cases. We give them a format to be able to do it, to systematically go through the case and answer certain questions that we actually think are important in understanding these cases and then they come together with that information after doing that independent review and we talk about it in our committee.  It is a committee of our peers and a larger group who then have input into what went wrong, assessing the system and also the individual and then also having a say in what are we going to do about it.  What are the next action items?

That allows us to do this in a more systematic, efficient, and effective manner and actually learn more from our cases.  A second aspect of it is that we were then able to think about cases pushing forward our quality improvement strategy.  Let me tell you what I mean by that.  There are a lot of things that we need to do in terms of quality improvement all across the country from a small clinic of two people to the largest of institutions.  Much of what we put our time and effort into is externally driven. The Joint Commission comes out with something new that we need to take a look at and manage. Those sorts of things are where we put our efforts – the core measures.

There are many other external forces, but what we have determined through the tremendous research that we’ve been doing in the Division of Hospital Medicine at UCSF is that culture is local. The fact that culture is local means that a lot of your issues will be locally defined as well.  Because we have the systematic case review process, we’re able to analyze what’s happening. We can find trends and figure out what areas of improvement we’ve doing again and again. We can take those pieces of data –once we define the trends– and then have that feed into where we’re going to be putting more and more of our efforts.  Not only are we using it to review cases, but we’re also using this more systematized process to push forward our quality priorities and our quality agenda.

Williams: A lot of what you’re describing sounds like a change in the process and making it more robust.  I also understand that you have introduced a software platform that helps enable some of this.  Can you give me a sense of what that platform does and whether you’re just automating and simplifying the existing paper process that you have or does using a software platform add something extra?

Vidyarthi: It definitely adds something extra. I’ll explain a couple of aspects of that – the first caveat is that there’s really no tech solution that can improve a bad process.  So you can automate something and make something that doesn’t work well, not work well faster. But it can also help you understand your process, help you with your process re-engineering and bring more value to that process. That’s really what Acesis has done for us.

We started the restructuring of our case review process slightly before we found Acesis and we developed a partnership with them.  As we developed our case review tool, which we call iCare, we were also thinking about how to best use that tool and how to pool these resources of people and how this whole process would run.  Bringing in the Acesis platform really forced us to think about process re-engineering in a much more discreet fashion, because when you bring a tech solution in, it leaves little room for hand waving.

A great example was when Acesis asked us to put together a decision matrix of how everything runs.  We couldn’t just say, “Well we might hear about a case from here or there and then I might take it or somebody else might take it.”  It forced us to be incredibly specific in how this process runs, what are the best practices and how we would do that.  That partnership of process improvement plus the tech platform really helped us focus on process improvement.

Acesis allows us to do a couple other things.  One is that it really added efficiency into this whole system.  All of the case reviews are now done using Acesis.  They’re logged into this platform, so in real time I am able to see the information the independent reviewers are using.  I’m able to look at any supporting information, which is all logged into Acesis, and I’m able to track actions.

It not only has the assessment aspect, it also brings all the information into one virtual place for the conversations. It actually acts as a project management tool.  Once we move from the assessment into the improvement aspect of things, it allows us to track these improvements and trend these improvements. Acesis also gives us access to the data in real time. At any given time I can look into our database and identify trends.  I can take a look and say, “Hey, what have we been seeing?  What are the causes of some of these?  Where has it actually been happening?”

And it allows me to say, “You know what?  We’ve had about five cases where we’re having some trouble with our transition from the ER to the floor or we’re having some readmissions within certain patient populations.” It allows us to slice and dice this data in many different ways in real time.  And a newer aspect of what Acesis has done for us, which was unanticipated, but has been a huge boon, is that it allows all of this to happen in a very secure environment.

So traditionally, as I mentioned, in the haphazard way of doing this, much of this information was communicated over e-mail and phone calls.  Really e-mail was the way we would exchange information. There have been tremendous changes recently in physician and hospital practices around security, but with Acesis we don’t have to worry about information transfer in non-secure fashion, because everything is held within Acesis in a secure manner.  We always log in to get that information, so we’re not sending patient information or information about case review through e-mail or other unsecure means.

Williams: Are there aspects of your new process or the fact that you’ve got this secure tool to enable it that have helped in terms of getting cases to come forward that might not otherwise have been there? Have you improved the analysis or sped up the analysis of the cases to find trends that previously you wouldn’t have seen at all?

Vidyarthi: All of the above with the exception of one.  The cases that we hear about and we see, that really hearkens back to what Bob was talking about initially around the contextual framework. This is about culture.  This is about creating a culture where people are able to report.

The great majority of our cases come from our own physicians — our physicians, our residents, our chief residents– that just let us know that something didn’t go right or could have gone better. Those folks that let us know about these challenges, they have to know that it’s a safe place to report, but they also have to know that something is going to be done about it.

That’s where the link is between our culture and our process and software platform. But I think the great majority of the reporting culture is about hard work and making sure people understand what you’re doing and really creating something where they’re comfortable in reporting, along with accountability.  What it has done in the latter couple of pieces is it has definitely helped us with efficiency.

Everything is done online now. You log into Acesis to find out what your action items are.  Acesis automatically tells you that you have a case to review.  It gives you a deadline, it sends you reminders, it allows you to efficiently and effectively go through the online tool, which is fairly easy and efficient as opposed to coloring in different boxes and photocopying different pieces of paper.  It also has helped out with our efficiency, not only with the assessment piece as I’m describing, but also helps track improvements.  We give action items to certain people, “Go talk to so and so, gather more information about this,” or, “Let’s talk to another department about X, Y, or Z and find out what the solution is.”

Acesis allows us to more efficiently push some of those together by keeping people on task with project management.  One of the keys that we found in this platform is understanding the data. It allows us to capture all these pieces in their tool and the data analysis piece is easy to use, not rocket science statistics. It is also available to us in real time so that we can quickly take a look at whatever data is in that and cross match the person to the floor or the root cause to the severity of illness. We can examine at these data from many different vantage points, which allows us to make decisions, to put further resources into things where we may not have otherwise. It just gives us a view into what’s going on in our division in terms of our local culture and the patients that we’re taking care of.

Continue reading Part 2.

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Emergiblog hosts the latest edition of Grand Rounds.

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Patient safety pioneer Dr. Robert Wachter is Chief of the Medical Service at UCSF Medical Center and Dr. Arpana Vidyarthi is Director of Quality. They have recently re-engineered UCSF’s medical peer review process and adopted an electronic platform from Acesis to make the process faster, safer and more objective.

In Part I of our podcast interview, Vidyarthi and Wachter provided an overview of the traditional process and discuss their progress in shifting to a new, technology-enabled process. They discussed key principles of their approach, along with the relationship between culture and technology.

In Part II, they discuss the potential to analyze and disseminate patient safety results across divisional and –eventually– institutional boundaries through Patient Safety Organizations or other mechanisms. They also offer their views on how the patient safety movement will progress over the next five to seven years.

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David Williams interviews Dr. Bob Wachter and Dr. Arpana Vidyarthi Play Now | Play in Popup | Download

In Personalized prescription, the Boston Globe chronicles the efforts of the two leading pharmacy benefit managers, CVS Caremark and Medco, to introduce genetic testing into the prescribing process. CVS Caremark is pursuing its strategy through an investment in Generation Health (see my interview with Generation’s founder Per Lofberg) and Medco has been pursuing its own program. (See my interview with Medco’s vice president of personalized medicine research and development.)

The article focuses on the use of genetic tests to reduce drug costs, e.g., by discouraging the use of drugs that don’t work for a given patient and by suggesting lower-cost generics. That’s certainly a logical place to start, but it’s by no means clear that drug cost reduction will be the primary impact of such genetic tests. For example, a test may identify that a patient has a predisposition to a particular disease and trigger upfront spending on drugs or treatment to prevent or delay onset. A test could also show that a more expensive on-patent product is better for a given patient than a lower cost item.

Genetic tests can also have worrisome and expensive consequences. Generation Health is aware of this and its value proposition includes helping employers and health plans figure out which genetic tests are best for specific members, what those tests should cost, and which tests should be avoided. The tests themselves can be pricey, and sometimes provide information that can’t readily be acted upon, cause undue anxiety or trigger additional expensive, invasive and possibly dangerous testing.

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Patient safety pioneer Dr. Robert Wachter is Chief of the Medical Service at UCSF Medical Center and Dr. Arpana Vidyarthi is Director of Quality. They have recently re-engineered UCSF’s medical peer review process and adopted an electronic platform from Acesis to make the process faster, safer and more objective.

In Part I of our podcast interview, Vidyarthi and Wachter provide an overview of the traditional process and discuss their progress in shifting to a new, technology-enabled process. They discuss key principles of their approach, along with the relationship between culture and technology.

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David Williams interviews Dr. Bob Wachter and Dr. Arpana Vidyarthi Play Now | Play in Popup | Download

This is the transcript of my recent podcast interview with Practice Fusion CEO Ryan Howard.

David Williams: This is David E. Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Ryan Howard, CEO of Practice Fusion.  Ryan, how are you today?

Ryan Howard: I’m good. How are you David?

Williams: Good.  Well we’re into 2010 now.  It’s been a few months since we spoke.  Tell me what milestones you’ve been hitting over the last few months and what some of your plans are for the coming quarter.

Howard: Our last quarter was excellent.  We were very excited about how we ended up the year.  We delivered on our partnership with Salesforce.com and we now have a fully integrated personal health record that resides on the Salesforce platform.  The benefit of this is that patients can log into the system and see all their medical history in real time.  So everything from diagnoses to medications to lab data.

One of the reasons this is even more exciting now is that since the meaningful use criteria have been released we have realized that a handful of the criteria are based on patients’ access to information. The Practice Fusion page, which is called Patient Fusion inherently addresses these certification criteria.  So we’re excited about that.  Now we have a fully integrated platform so doctors can sign up for the system get it running and also extend this to their patients, all for free, all in the same day.

In December we closed a round of funding with Morgenthaler Ventures.  We’re very excited about that as well.  They are one of the ideal partners for Practice Fusion on the financing side.  They were one of the original funders of Apple and are just a top tier firm in the valley.  Gary Little and Rebecca Lynn are on our board. They are both very exceptional individuals and are major contributors thus far.  So we’re excited about that relationship. We’re excited to have the financing and capital in place to really fill the company out and also to continue to deliver an exceptional service and experience to our customers.

Beyond that, we released e-prescribing today. We’re now connected to 50,000 pharmacies in the U.S.  It’s a real time connectivity.  All the major guys: CVS, Walgreen’s, Longs.  When a doctor enters a patient’s prescription, the prescription will arrive at the pharmacy before the patient even gets there.  On top of that we just launched clinical decision support as well.

The interest is overwhelming.  It totally bogs us down in a good way.  It’s a great problem to have. We hit our 25,000 user milestone, which is a major milestone for the company, and we continue to validate the model.  We’re making progress.  The growth of the company has been pretty phenomenal.  We’re hiring about four to five people a week so it’s getting more and more exciting each day.

Beyond that, we’re looking forward to fulfilling the criteria for meaningful use and becoming certified. That’s obviously a major priority of the company and we feel that we’re in a position to do so more than any other product out there.  We’re one of the only full web-based solutions out there and a lot of the criteria will obviously thrive and work much better in a fully web based model: communicating to patients over the web, connectivity to labs and connectivity to the pharmacies. There is no one else out there that has a fully web based platform that’s as extendable as ours. I think as far as our size goes, the fact that we’re not just an 800 pound gorilla is a good thing in this situation.  We are much more agile than most of the companies out there and we’ve already started addressing all the issues that we need to become certified.

We have a feature called Chart Share that we’ve had in beta testing for some time. It will allow a doctor to share a patient’s chart with any other physician in the country in real time.  The receiving party will be fully validated, so it solves the problem of interoperability. It’s something we’ve had in mind since day one and it’s really going to be a flagship feature.

Williams: You mentioned early on in this discussion that with meaningful use your personal health record was going to give you some advantage.  First, I haven’t heard that much talk about the personal health record within meaningful use and also why it is that you would have an advantage relative to other companies in fulfilling that criterion?

Howard: Meaningful use consists of about 25 individual features or feature sets that each product must have in order to become compliant. It doesn’t specifically discuss the implementation, so it doesn’t specifically say personal health record but it does say the ability for a patient to access their medical history and the ability for patients to get notifications, to see lab data, medications, diagnoses. These are all specifically spelled out in the criteria and obviously the PHR is an excellent way to achieve that.

The patient interaction is about 20 percent of the overall criteria. PHR is probably the best way and the only way the market knows how to accomplish that. As far as our personal health record I think we have a fundamental advantage in our overall model, with our web-based solution. You notice competitors’ guarantees don’t include their older products. The reason is that with a locally installed product, it’s very hard to get it to connect all the pharmacies, to connect all the labs, to extend that product that’s installed in an office to the web so your patients can see the data.

Is it possible?  Sure. But the effort needed to accomplish that would probably cost ten times as much as a new solution.  A web-based solution that has a personal health record integrated into it is just far superior.  It mainly comes down to exposure on the web, the ability to access it from anywhere.  So these are just some of the reasons why we feel we have a clear advantage.

Williams: It’s great that you’ve hit the 25,000 user mark. But just to play devil’s advocate for a minute, since the system is free, I could image that even maybe a large share of the 25,000 are just dabbling with the service as opposed to really committing to it.  Do you have a sense of that or how do you think about the different gradations of commitment?

Howard: Absolutely.  The vast majority of our users are very active in the system. Beyond that, our model is aligned with the doctor.  Let’s say Allscripts and eClinicalWorks goes and sells the doctor a piece of software.  Once the doctor signs for that software, Allscripts charges $30,000. What are Allscripts’ incentives to get the doctor to use it?  There is none.

So a high percentage of their software actually becomes shelfware.  That’s what they call it.  The doctors pay $20,000 or $30,000 or $40,000 for the software and maybe he even pays a consultant to install it, but he never uses it.  Where we’re totally different is that in our model, if you call in and you register  the product, we validate that you’re a doctor and once we have, you have an assigned account manager. This account manager is yours for the lifetime of the patient.  He walks you through our value proposition, he walks you through our training, being able to e-prescribe for you.  He asks you which labs you’re using.  He enables that.  He enables the personal health record if you want.  So it’s all your choice, but he handles the entire process and you also have proactive support.

Anytime we see you not using the product we reach out to you.  We explain every feature to you individually.  We can train you as much as you want, all at no cost.  The company itself and our revenue model are totally aligned with the doctor. Our account managers are dedicated to you as well.

So our non-user rate is far less than most of our other competitors, but beyond that we proactively reach out to them once or twice a week or so to make sure they don’t have any problems.  If you look at eClinicalWorks, their bottom lines are much better, their margins are much better if you they don’t support you.  So they’re better off taking two days to get back to you whereas our support time is less than an hour, for example.  So again, we’re just in line with the doctor and the vast majority of our community is active. But again, it’s something that we constantly work on because getting the user active is aligned with our model and it’s not for anyone else.

Williams: You alluded to your revenue model, but also talked a lot about things being free.  So how do the funds flow in your model?

Howard: The mass of our model is advertising. Within the product physicians opt into the free model.  There is nothing disabled.  Just to be clear, it’s a free model where you sign up and you get some pieces of the product but not others.

There is an ad-supported version of the product and then there is an ad-free version of the product.  You see exact same product, one just has ads and one doesn’t.  So the user can be up and running on the ad version for free on the same day with no cost whatsoever. No cost for licensing, training, support, hosting. That’s really the main revenue model.

If an ad user is using the product, we derive revenue from everyone ranging from consultants that are looking to get in front of doctors to device manufacturers to pharmaceuticals.  It’s just highly targeted.  As we do this the company’s integrity and reputation are always held to a very high standard.  We do everything from background checks when an employee comes in to security audits internally.

We never sell physician information.  We never list match with pharmaceuticals.  We never give that information up to anyone.  My point is: when we advertise, it’s done in a discreet, no pop ups manner. It’s also done in a way where it’s very private.  You don’t see any complaints about us on the web.  Security and privacy are our top two priorities.

Kaiser had a breach last night.  It was just released last night in the news that tens of thousands of numbers of patients were breached.  So it gives you a baseline to measure.  Again that’s one of our main priorities and also how we run the model.

Williams: Ryan, any other news to share with listeners at this point?

Howard: That’s about it. Anyone who’s interested in the product we would always like to come in and visit with the account managers.  If you sign up, there is no obligation to use the product.  If you’re interested in it, you can be up and using e-prescribing on the same day.  The product is exceptional. Again, we’re one of the fastest growing companies in the country for a reason. We invite everyone to come and check it out.

Williams: I’ve been speaking today with Ryan Howard, CEO of Practice Fusion.  Ryan, thanks so much.

Howard: Great.  Thank you David.  Take care.

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Jaan Sidrov hosts an informative edition of the Health Wonk Review at the Disease Management Care Blog.

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It’s hard to imagine a more negative result for health care reform than Martha Coakley’s loss in yesterday’s US Senate election in Massachusetts. Obviously by failing to hold the seat for the Democrats she lost the filibuster-proof majority. Compounding the damage is the (incorrect) conclusion people will draw that Massachusetts-style health reform is unpopular in Massachusetts, where it’s been enacted, and therefore will be unpopular nationwide. That’s going to make the pending reform bills an even harder sell among jittery pols and the public.

What I had expected was that reform would pass and a lot of people would be unhappy initially, but that by Election Day 2010 Democrats’ popularity would rebound as some of the early benefits of reform (such as a ban on medical underwriting) started to take effect. That looks less likely now.

Mike Capuano would have been a much better candidate.

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