Vendor as lender (HIMSS meeting)

Worried about the cost of health information technology? Some companies are offering their own financing, including payment plans, and stimulus money could help you make your payments.

By — Posted May 18, 2009

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Upfront costs have long been a major barrier to health IT adoption. So some technology vendors are prepared to offer credit.

Vendors who already have a financing mechanism for larger clients buying multimillion-dollar systems are now extending their credit lines to small practices that spend an average of about $30,000. Other vendors are partnering with finance companies to offer deferred payments.

The vendors figure that with physicians able to get money from the federal government for investing in technology, doctors will be able to pay the loans back.

"There's a good comfort level that this stimulus money is, in fact, going to flow and will actually be provided as incentives to physicians and hospitals," said Vishal Wanchoo, president and CEO of GE Healthcare Information Technology.

Buy now, pay later

The stimulus package, which will provide $17 billion in incentives for health IT adoption, passed just weeks before physician and health IT leaders convened in Chicago April 4-8 for the annual meeting of the Healthcare Information Management Systems Society. The news created buzz around the conference site.

While physicians listened in on several sessions geared toward what the stimulus package incentives mean to them -- about $44,000 per physician paid out over four years -- several shared this conclusion:

"When you're working day to day ... it's hard to think of incentives two to three years out," said Timothy Zoph, vice president and chief information officer of Northwestern Memorial Hospital in Chicago, which is helping some of its affiliated physicians adopt electronic medical record systems.

Until now, the financial return on investment for an EMR has been questionable at best. Physicians were unwilling to take on loans they weren't certain they could repay.

And now, even though the incentive plan offers the hope of a financial return, traditional loans are harder to come by thanks to an overall credit squeeze.

But physicians can't put off the investment until the economy turns around.

Because qualifying for the incentives requires "meaningful use" of the systems, most experts presenting at April's conference agreed that to meet those requirements by 2011, when the incentives are scheduled to kick in, adoption needs to happen much earlier.

"What we expect is there will be financial mechanisms through which the vendors will mimic what the physicians will be getting through the incentive program, and we expect that to develop very rapidly," said David Classen, MD, chief medical officer for Falls Church, Va.-based technology services company CSC.

Larger companies were quick to offer financing plans, which leads many to believe smaller vendors will soon follow suit to stay competitive.

What many, including GE, are offering, through their own financing departments, are delayed payment plans that will require no money for the first few months then monthly payments, in the range of a few hundred dollars per physician per month, rising incrementally over two to three years.

Like most traditional loans, interest rates would apply, and many are set according to the practice's credit history.

Lynne Durham, manager of marketing and communications for Sage Software, said her company has offered financing options through a partnering finance company for some time but now makes it part of the pitch to potential clients as a result of the stimulus package. And practices are responding, she said.

"From a marketing perspective, our in-bound leads have jumped tremendously. We are setting records for the number of calls we are getting specifically inquiring about our electronic health records," Durham said.

"Meaningful use"

Wanchoo said GE had monitored the stimulus legislation closely and knew physicians and hospitals would have two main concerns: when the payments were coming and how "meaningful use" would be defined.

The definition of the term, which will help determine the amount of reimbursement, is expected to come out later this year and change over time.

Vendors are being called on to ensure that their products meet and keep up with the changing criteria.

Physicians need to stipulate in their contracts that vendors must make the necessary updates to their products to keep them compliant.

Zoph said two-way conversations between practices and vendors need to take place when physicians are shopping for systems.

"You must be positioned in your implementation plan and your investment and strategy for your organization to say, 'Let's not go down this path unless we are confident we can demonstrate meaningful use,' " Zoph said, speaking as part of a media panel that was held during the HIMSS conference.

Vendors say they are acutely aware of physicians' concerns over meaningful use and are doing everything they can in their contracts to make potential clients feel more at ease.

Wanchoo said GE has been creating systems with functionalities they know will be a part of meaningful use, such as quality reporting mechanisms.

Durham said financing and meaningful use are both key points Sage has bundled in its post-stimulus pitch to physicians, even to those that already have adopted health IT but still could qualify for the incentives.

"We have customers who say they don't know anything about any incentives even though we have been doing active outreach on this topic," Durham said.

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Where health IT is headed

Each year, the Healthcare Information Management Systems Society conducts a survey of health IT leaders to find out the trends in health information technology adoption and use. The 2009 survey included 304 health IT professionals this year. The following are among the report's findings:

Top IT priorities for next 2 years
Focus on clinical systems51%
Optimizing current systems18%
Focus on ambulatory systems11%
Leveraging information7%
Interoperability between in-house systems5%
Providing patient-centric solutions4%
Integration of IT and medical devices2%
Focus on supply chain1%
Primary clinical IT focus
Ensuring organization has full EMR31%
Installing computerized physician order entry17%
Closed loop medication administration9%
Creating physician documentation6%
Focus on data warehouse5%
Installing ancillary applications4%
Installing a clinical data repository4%
Creating clinical documentation flow sheets4%
Establishing clinical protocols in clinical decision support systems3%
Installing clinical decision support for physicians3%
Installing clinical decision support for nurses2%
Installing radiology picture archiving and communication system2%
Role of clinicians
Participate in system evaluations87%
Project champions for other clinicians82%
Participate in development of policies66%
Involved in clinician training61%
Employ hospitalists to use clinical systems55%
Explore innovative ways to use IT51%
Business project leaders during implementation50%
Employed by information systems department50%
We have a chief medical information officer29%
Clinical department managers pick IT systems20%
No role5%
Top security concerns
Internal breach of security37%
Compliance with HIPAA and CMS22%
Inadequate support for security20%
Data leakage16%
Limits of existing technology12%
External breach of security10%
Connecting IT at remote locations10%
Unauthorized use by third party9%
Inadequate security systems in place8%
Patients' lack of confidence in securing information7%
No concerns3%

Source: "20th Annual 2009 HIMSS Leadership Survey," conducted via the Web between Feb. 1 and March 6. Respondents represented 250 unique health care organizations and nearly 700 hospitals. (link)

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Better communication can lead to decreased cost

Many health IT leaders have drawn the same conclusion about electronic medical record systems. Their usefulness is not about what kind of data you enter, but rather how they help you coordinate care and communicate with patients.

"Sick patients often complain of feeling abandoned ... left to themselves to navigate what is known as a difficult system to understand," said Peter Basch, MD, medical director for ambulatory clinical systems for MedStar Health, a health system in Columbia, Md. Dr. Basch delivered the keynote address at the Physicians' IT Symposium, a pre-meeting session of the annual conference of the Healthcare Information Management Systems Society held in Chicago in April. This feeling of abandonment, Dr. Bausch said, has direct financial consequences, including overuse of the emergency department and hospital re-admittance. Better coordination could help alleviate those problems, he said.

Although some practices have adopted the patient-centered medical home approach with an EMR as the foundation, many also have found success by adopting stand-alone systems that are focused on patient-physician communication.

Stephen Rosenthal, president and chief operating officer for The Care Management Company of Montefiore Medical Center in Bronx, N.Y., facilitated a session about installing a messaging system for patients that is separate from the hospital's EMR. He said patients, with the help of a care coordinator, were better equipped to make decisions on their own care, without visiting EDs or even the physician's office. Revenue also was raised from increased visits from patients receiving wellness reminders for vaccines and routine exams.

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Connecting doctors without an EMR

Saint Luke's Health System in Kansas City, Mo., decided in 2007 that streamlined care was the way to remain competitive.

It decided to deploy a systemwide messaging and data exchange that would make it easier for physicians to refer patients to other physicians within the system without losing continuity of care.

The problem, however, was that 90% of its affiliated physicians did not have electronic medical records.

How to solve it?

The result was a Web-based messaging technology that is patient-centered but deployed as a way to improve communication between physicians as well as create a shared record for every patient.

The system met its goal of having 200 connected physicians within 14 months. But lessons it learned the hard way were shared during the annual conference of the Healthcare Information Management Systems Society in April.

Deborah Gash, vice president and chief information officer of Saint Luke's Health System, said the system was a way to get physicians without an EMR engaged in technology use.

But sometimes the roadblocks are those physicians' staff members. Gash said practice staff, who will use the system just as much as the physicians, need to be engaged in the process and educated on the potential benefits.

The hospital system also learned that more functionalities, not less as a way to introduce the system, might not be a bad thing.

Finally, Gash said, marketing of any new system must be customized to each practice. Physicians are the ones who have to sell it to their patients. So the more in-line the benefits are to both parties, the more successful deployment will be.

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