HIMSS: One hospital's cautionary meaningful use tale
ORLANDO, FLA. -- Clarence M. Sevillian II, MBA, president and CEO of Doctors’ Hospital of Michigan, offered a contrarian message during an educational session Feb. 22 at the HIMSS11 conference--his hospital is not going to meet meaningful use because of financial reasons.
“We’re not going to stand here and say that we have all the answers because we don’t,” said Sevillian.
Sevillian, along with Kay Patterson, director of information services at Doctors’ Hospital of Michigan, spoke to HIMSS11 on the reality facing many hospitals that cannot afford the investments required to achieve meaningful use. Given the account of the 336-bed hospital from Pontiac, Mich., the questions of if and how a hospital might meet meaningful use can be an organizational roller coaster.
“It’s an interesting topic,” stated Sevillian. “Our main reason was directed around financial obligations.”
Doctors’ Hospital of Michigan processes approximately 3,200 discharges a year with about 400 physicians and 150 nurses. Its total gross revenue is $61 million, with a bad debt allowance of approximately 5 percent of total accounts receivable.
About 66,000 people live in Pontiac and the city's unemployment rate hovers around 35 percent. Some 34 percent of the population has income below the poverty level, Sevillian stated. “Those numbers are staggering, but does affect our decision-making.”
Thirty-three percent of patients come from Medicare, 19 percent Medicaid, 20 percent Blue Cross Blue Shield of Michigan, 13 percent commercial and 11 percent classified as “other.”
According to Sevillian, from a CEO’s perspective, Doctors’ Hospital's overall strategic plan and direction before meaningful use included quality and safety, marketing and branding, financial goals/capital, business development/growth and physician recruitment. “There aren’t a lot of new positions coming to the area. Some residents are not electing to stay in the area so recruitment becomes critically important,” said Sevillian.
Sevillian mentioned that the investment of capital needed for the organization to consider to fit meaningful use on it’s docket was around $10-$15 million, with infrastructure costs up to $6 million, operating room equipment up to $3 million, an information system costing up to $1.5 million and up to $3 million in investments for other equipment such as CAT Scan machines.
Doctors’ Hospital IT admits it’s low on the EMR Adoption Scale (2.3) and its current vendor is not upgrading its product for meaningful use, said Patterson, who added that approximately 50 percent of the hospital’s technology portfolio in place is up to meaningful use currently.
Currently, Doctors’ Hospital is in compliance with two core meaningful use requirements (record demographics and medication allergy list) and three menu set requirements (drug formulary checks, advance directives and submission to immunization registries).
“You can’t rely on your vendor, you need to put your own work in,” said Patterson. “You need to understand all 24 requirements and consider the technical and process gaps.” Patterson remarked that this is just as much as a process change as it is a strategy for implementing new technology.
After determining the organization was not going to meet meaningful use, alternative solutions from ignoring meaningful use and developing and implementing hybrid software to implementing a full vendor product were discussed before the organization narrowed down its next strategic action to either implementing an open source tool or integrating with another hospital.
In a cost comparison of five years which includes license, software maintenance, implementation and hardware, an open source product would cost Doctors’ Hospital $3.5 million compared with a commercial vendor’s $7 million.
After meetings with its board of directors, the hospital opted for integration; Sevillian stated it was a “realistic approach to long term viability” by combining two facilities under one roof. “We saw projected growth in the new integrated strategy,” he said. This required combining inpatient activities from two facilities into one as well as combining the main assets in that integrated facility.
Unfortunately, as of last week, the integration deal fell through, Sevillian stated. Doctors’ Hospital is now pursuing an open source strategy, he added. The reason for the disintegration was due to its complicated structure, Sevillian noted. Physicians own 60 percent of the to-be-integrated facility while 30 percent belonged to the institution.
The physicians bought out the interests of the institution and as a result, the integration strategy fell apart, Sevillian remarked.
And yet, Doctors’ Hospital marches on toward its goal of meeting compliance with meaningful use. The open source tool is currently in testing for certification, Patterson said.
“We’re not going to stand here and say that we have all the answers because we don’t,” said Sevillian.
Sevillian, along with Kay Patterson, director of information services at Doctors’ Hospital of Michigan, spoke to HIMSS11 on the reality facing many hospitals that cannot afford the investments required to achieve meaningful use. Given the account of the 336-bed hospital from Pontiac, Mich., the questions of if and how a hospital might meet meaningful use can be an organizational roller coaster.
“It’s an interesting topic,” stated Sevillian. “Our main reason was directed around financial obligations.”
Doctors’ Hospital of Michigan processes approximately 3,200 discharges a year with about 400 physicians and 150 nurses. Its total gross revenue is $61 million, with a bad debt allowance of approximately 5 percent of total accounts receivable.
About 66,000 people live in Pontiac and the city's unemployment rate hovers around 35 percent. Some 34 percent of the population has income below the poverty level, Sevillian stated. “Those numbers are staggering, but does affect our decision-making.”
Thirty-three percent of patients come from Medicare, 19 percent Medicaid, 20 percent Blue Cross Blue Shield of Michigan, 13 percent commercial and 11 percent classified as “other.”
According to Sevillian, from a CEO’s perspective, Doctors’ Hospital's overall strategic plan and direction before meaningful use included quality and safety, marketing and branding, financial goals/capital, business development/growth and physician recruitment. “There aren’t a lot of new positions coming to the area. Some residents are not electing to stay in the area so recruitment becomes critically important,” said Sevillian.
Sevillian mentioned that the investment of capital needed for the organization to consider to fit meaningful use on it’s docket was around $10-$15 million, with infrastructure costs up to $6 million, operating room equipment up to $3 million, an information system costing up to $1.5 million and up to $3 million in investments for other equipment such as CAT Scan machines.
Doctors’ Hospital IT admits it’s low on the EMR Adoption Scale (2.3) and its current vendor is not upgrading its product for meaningful use, said Patterson, who added that approximately 50 percent of the hospital’s technology portfolio in place is up to meaningful use currently.
Currently, Doctors’ Hospital is in compliance with two core meaningful use requirements (record demographics and medication allergy list) and three menu set requirements (drug formulary checks, advance directives and submission to immunization registries).
“You can’t rely on your vendor, you need to put your own work in,” said Patterson. “You need to understand all 24 requirements and consider the technical and process gaps.” Patterson remarked that this is just as much as a process change as it is a strategy for implementing new technology.
After determining the organization was not going to meet meaningful use, alternative solutions from ignoring meaningful use and developing and implementing hybrid software to implementing a full vendor product were discussed before the organization narrowed down its next strategic action to either implementing an open source tool or integrating with another hospital.
In a cost comparison of five years which includes license, software maintenance, implementation and hardware, an open source product would cost Doctors’ Hospital $3.5 million compared with a commercial vendor’s $7 million.
After meetings with its board of directors, the hospital opted for integration; Sevillian stated it was a “realistic approach to long term viability” by combining two facilities under one roof. “We saw projected growth in the new integrated strategy,” he said. This required combining inpatient activities from two facilities into one as well as combining the main assets in that integrated facility.
Unfortunately, as of last week, the integration deal fell through, Sevillian stated. Doctors’ Hospital is now pursuing an open source strategy, he added. The reason for the disintegration was due to its complicated structure, Sevillian noted. Physicians own 60 percent of the to-be-integrated facility while 30 percent belonged to the institution.
The physicians bought out the interests of the institution and as a result, the integration strategy fell apart, Sevillian remarked.
And yet, Doctors’ Hospital marches on toward its goal of meeting compliance with meaningful use. The open source tool is currently in testing for certification, Patterson said.