Is Your Organization Making the Right Investments for Your Successful Transition to Value-based Care?

I have come across several provider organizations that, in response to requirements of accountable care, have decided to upgrade their EHRs. They believe these newer EHRs will solve their interoperability challenges and help them meet PHM goals. The implementation costs associated with painfully ripping and replacing their older EHRs are in the tens of millions, if not hundreds of millions of dollars, over several years. One CMO actually scoffed at my mention of “a $100 million bill” – he said it was multiples of that in reality.

But I have also come across another set of provider organizations that seem to be separating themselves from the herd and are committed to moving from an EHR-centric strategy to a PHM-centric strategy for their value-based care initiatives. One of our clients who has nearly three dozen disparate health data systems across their facilities decided to implement our HIE to connect all the EHRs instead of spending huge sums of capital to replace them. The HIE strategy’s total cost? A miniscule hundreds of thousands versus tens of millions of dollars when compared to a new EHR implementation. Another large provider client of ours has not one but four EHRs upon which they have standardized. They also chose our PHM care coordination platform, not the PHM offering from their top-tier EHR provider, to be the infrastructure they use to manage patient outcomes and measure their organization’s performance on various value-based care contracts.

So what drives very experienced health system executives to arrive at two dramatically different conclusions? Who will prevail?

The first group appears married to some strong beliefs:

  1. Implementing a new EHR across all facilities will solve interoperability problems because every provider in the organization will be on the same system.
  2. A new EHR is necessary because the old EHR will not be MU compliant.
  3. A single-vendor strategy can deliver economies of cost and minimize risk. (The sunk-cost myth: “We already spent millions with the EHR vendor, why bother with another PHM vendor solution because that means more cost, not to mention how difficult/costly the EHR vendor will make it to get the integration going?”).
  4. Choosing a leading EHR, especially ones that are rated well by agencies like KLAS, is a safe bet – something with which the Board cannot find fault. As the archaic cliché goes, “No one ever got fired for hiring IBM”.

The second group’s choices appear rooted in different yet equally strong beliefs:

  1. An EHR, however broad its suite of capabilities, will not help solve interoperability challenges of working with entities and people outside the organization. Instead, it will introduce more change management issues as physicians will need to be convinced to swap out their favorite EHRs, to which they already are accustomed and well-versed in its use.
  2. It is not about MU requirements, but rather about managing clinical and financial risk of the patients for the best health outcomes, lowest cost, and patient satisfaction. Even the leading EHR vendors are simply not ready to deliver the capabilities required for managing clinical and financial risk because, having come from a fee for service world, they have never before been exposed to the complexities of solutions that manage such risks. Therefore relying solely on EHRs for a transition to value-based care/PHM is a huge, unnecessary, and potentially enterprise-crippling risk.
  3. A best-of-breed vendor approach is driven by a couple of factors:
    1. A best-in-class solution will see greater adoption because it solves a particular problem very well. (The ACO client of ours that chose different EHRs upon which to standardize did so because they recognized the unique strengths of each EHR for a particular care setting.)
    2. Minimize change management issues (i.e., “Why battle with physicians to change out their favorite EHR, when the problem we need to solve is simply getting the right information into and out of their EHRs?”).
    3. The opportunity cost of deploying solutions that are not best-in-class is extremely high. Betting on EHR vendors’ inadequate PHM capabilities with hopes of future delivery will be more costly in the long run as inadequate risk management capabilities today will actually cause a bigger hit to today’s bottom line…which can rob an organization’s ability to position itself well in a world of value-base care. Having a best-in-class PHM/care coordination solution that excels at managing clinical and financial risk today is a competitive differentiator for the provider organization.
    4. The opportunity cost of lagging behind the market’s rapid transition to value-based care. Nimble providers that take calculated risks and respond to the rapidly evolving needs of value-based care will excel in their markets. But they cannot do so without flexible technology platforms.

While this is not necessarily a black-and-white framework, there is an intriguing contrast between the two approaches. I am not a gambler. But if I were to place a bet on who will succeed, I would wager on Group 2. Technology is a key part, but still not the whole solution. It is the people, processes, the change management, and the vision to see a year or five years or ten years from now – or as hockey great Wayne Gretzky once said: “Skate to where the puck is going to be, not where it has been.” The second group of health system leaders gets what Gretzky meant – they seem to get a better handle on where healthcare is heading, and the real risks and challenges that their organization will face in its transition to value-based care, and are picking their battles carefully. Senior executives that are passionate about their organization’s future will not hesitate to think and act boldly – but prudence in how they go about it also serves them well. Their success is well deserved!