Electronic Health Reporter

By Helen Waters, executive vice president, MEDITECH.

What would you do if you won the lottery? Regardless whether or not you play, you’ve surely pondered the question. Recently, during the frenzy around one mega jackpot or another, I had an interesting conversation with a friend. She told me if she were to win she’d replace everything she owned with the “very best” version of every item. When I asked how she’d know a product was the best, she told me she’d simply choose the most expensive option. In her thinking, she would have money to spare, and buying the products with the highest price tag would guarantee high quality. She admitted she might spend a little more than necessary, but she’d be able to afford it.

My reaction—which I didn’t express quite so bluntly—was, how wasteful and misguided!

As Americans we like to think that the market, uncorrupted by human influence, effectively sets prices for products and services that are in line with their value. But there are many reasons that markets don’t always work this way, particularly in the complex world of healthcare.

The more I thought about it, the more I realized that this kind of thinking guides some of the ways we make purchasing decisions in healthcare. Many patients, for example, feel that brand-name drugs must be superior to their generic counterparts—even when clinical trials demonstrate comparable effectiveness—simply because they’re priced higher and accompanied by persuasive advertising. Patients often lobby their physicians for expensive tests or procedures that have little to no evidence of efficacy for their conditions. And yes, even in our industry, otherwise-savvy executives can spend much more than necessary for healthcare information technology.

Over the past decade, the cost of electronic health record software and services has skyrocketed, far outpacing inflation and becoming untethered from real value. It’s understandable how this began, as the ARRA and HITECH Act infused cash into the market along with strong incentives to adopt the technology (as well as disincentives for falling behind). But those days are long gone. Hospital margins have continued to shrink. To the best of my knowledge, no healthcare facility has won the lottery lately.

Whether you’re buying a new appliance, a new car, or a new EHR, it’s important to do your homework. Look at the data. Perform a real comparative analysis. This means more than simply perusing marketing literature, conducting feature comparisons, or reviewing anecdotal feedback. It means looking at outcomes. Unlike many other products, software is abstract. You can’t touch it or see it to assess its value. You need to evaluate the impact it has and the satisfaction levels of the organizations that use it.

Just like a good physician wants to see evidence of the benefits of a drug, procedure, or care protocol by evaluating patient outcomes, healthcare executives must demand proof that an EHR is improving clinical and financial outcomes at organizations like theirs. Some important questions to ask:

• How are customers doing on quality measures?
• What kind of returns are they seeing in value-based programs?
• How are they performing financially one, five, and 10 years after their EHR purchase?
• Did the total cost of operation of the software align with their estimate and the vendor’s promises, or were there hidden costs and fees eating away at their margins?
• And what kind of impact does an EHR have on staffing levels, during and after installation? (This can have enormous long-term fixed cost implications from the human resource perspective.)

Without this kind of outcomes-based analysis, healthcare executives can’t know if their EHR will be sustainable in the long run. Many are not. Some vendors want you to believe that if you pay more for your EHR, you will get more, but the opposite philosophy holds another important truth: Spending less and getting the same or even better outcomes puts you on a more sustainable path. It also frees up financial resources so you can focus on your most important job—caring for patients.

We work hard to help our children recognize things like peer pressure, dubious advertising claims, and “the herd mentality.” We expect them to make their own decisions based on facts and what’s best for them as individuals. Now it’s time for us to practice what we preach, and help our own organizations make wise business decisions based on data. Don’t simply follow the herd and assume other organizations did their homework before making their own decisions.

Study the data yourself and validate which vendors are producing results—and at what cost. Look at both the clinical and financial performance of healthcare organizations using each product you’re considering, and extend the time horizon as far out as you can. Examine carefully how an EHR is helping organizations generate new revenue, lower costs, drive greater efficiency, and create a more positive user experience.

And don’t spend your lottery winnings until you’ve done your research.