Hospitals Start EMR Steps, Struggle with Charging Overhead to Doctors

Hospitals across the country are evaluating if, when, and how they will subsidize electronic medical record technology purchases for community physicians in light of relaxed Stark anti-kickback regulations. While a few hospitals have begun rolling out programs, most are still developing strategies.

“I see a lot of hospitals still trying to figure out what to do,” says Mark R. Anderson, CEO of healthcare technology advisory firm AC Group, Inc. of Montgomery, Texas. “Hospitals need to learn about the different advantages and disadvantages of the project before offering a service.

Some of the many considerations include whether to provide a hosted solution, whether to offer multiple applications, and how much financial assistance to provide.

St. Francis Emphasizes Integration, Offers One System

St. Francis Care in Hartford, Conn. chose the ASP model. “Our model is one of integration,” says Jess Kupec, president and CEO of the St. Francis physician-hospital organization. “One of the key differences is that when doctors opt for our solution, they have only one medical record. That is what makes our solution so unique – it links the community-based physicians with all the hospital-based systems.”

St. Francis is offering its 600 community physicians the Vision practice management solution from Misys Healthcare Systems of Raleigh, N.C., integrated with the TouchWorks EHR electronic medical record system from Chicago, Ill.-based Allscripts Healthcare Solutions. “What we have developed here is a master patient index interfacing Misys PM and Allscripts EMR and the hospital’s CPOE, along with radiology, lab, etc.”

Kupec believes its model is more cost-effective than offering several EMR solutions. “It would be cost-prohibitive if you tried to integrate multiple products. Plus, the ASP model hosted by the hospital IT shop puts the technical functions with the experts that know how to manage those functions.”

Hoag Gives Physicians Multiple EMR Choices

The St. Francis strategy contrasts with that of Hoag Memorial Hospital Presbyterian of Newport Beach, Calif. “When the Stark exceptions came out, we said we would take a different approach from what most hospitals are doing,” says Rebecca Armato, director of ambulatory information services for the 1,200-physician facility. “We realized that one size doesn’t fit all. There are qualifying multiple vendors and their EHR products, so physicians can select the technology platform, features, and functionalities that best meet their needs.”

Hoag spent a year evaluating EMR solutions for its approved vendor list. “We have a set of criteria the vendor has to match,” explains Armato. “They have to be CCHIT-certified to ensure the functionality and interoperability is there and that the vendors are providing the most up-to-date version.”

Doctors want choices, but most hospitals limit EMR alternatives to three or four vendors due to data exchange issues, Anderson notes. “You have to have clinical integration between multiple entities. If you are not sharing data, you are losing the real benefit of EMR.”

Kupec agrees. “If you don’t integrate into a larger system, you have providers going from paper silos to electronic silos. Data sharing is the key.”

To assure the exchange of health information, Hoag is committing IT resources to build an interoperable infrastructure. “Hoag’s vision is the creation of a virtual community of clinical information, a network of interconnected physicians, hospitals, and other healthcare providers,” says Armato.

Rules for Charging Hospital Overhead Unclear

The amount of financial subsidy to physicians varies across hospital programs, but by law is limited to 85 percent of covered services. Those services can include software and implementation costs, but not hardware installed in physician offices. The treatment of overhead is unclear. “Just because a hospital pays 85 percent of the cost, the physician needs to understand what’s included,” explains Anderson. “Does the 85 percent include hospital overhead or is it just vendor cost?”

“We are starting with 60 percent of covered services,” says Armato. “No one is sure what donor cost means and if our departmental costs are included. We don’t want to run the risk of breaching any laws, so we are subsidizing a lower percentage.”

Both Armato and Kupec are pleased with the response from their physician communities. “We are getting really positive responses,” says Kupec. “The EMR is very inexpensive with the hospital absorbing 85 percent of the cost.”

“Our physicians like that we are offering several levels of functionality, from EMR-light to robust options,” says Armato. Physicians also appreciate Hoag’s EMR readiness assistance program. “We meet with physicians and their staff and help evaluate their functional and technology needs. The physicians are very happy to have our help identifying what they should be thinking about when selecting a vendor.”

Hospitals Should Offer EMRs, Despite Doctor Distrust

Even with financial and support staff assistance, Anderson believes many physicians will resist hospital offerings. “The initial reaction might be that they don’t necessarily want an EMR or they want their own,” says Anderson. “Most doctors just don’t trust hospitals.”

Regardless of physician resistance, Anderson is convinced hospitals need to develop programs for providing physicians with EMR technology. “It is a great use of their money if they think it all the way through,” says Anderson. “There are some great financial benefits to the hospital and it bonds the doctor to the hospital. And, it can improve the quality of care.”

Anderson advises hospitals to review best practices and talk to experts who have already implemented successful programs. “It is risky business to support community physicians who can decide to take away their business tomorrow because you somehow messed up their business,” warns Anderson. “But it can provide great rewards.”