Hospitals as Software Service Providers

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Health systems are stepping into a new role, offering software as a service to realize value from EMRs.

It's no secret that small physician groups and community hospitals are going to be hard-pressed to meet the meaningful use requirements in 2011. Not only do they lack resources—financial and workforce—to purchase, implement, maintain, and use these systems effectively, but their options for electronic medical record products are limited, as well. Many of the vendors that support smaller hospitals began by offering financial systems and now are adding the clinical components to those systems.

There are approximately 4,000 hospitals with fewer than 250 beds, and the products for those hospitals will take a lot of heavy lifting to get them certified for meaningful use, says Chuck Podesta, senior vice president and chief information officer at Fletcher Allen Health Care, a 562-licensed-bed academic medical center in Burlington, VT. "These smaller systems don't have a good clinical track record—especially with computerized physician order entry," he says.

As a result, some hospitals and health systems are stepping into the role of service provider to give physicians and smaller community hospitals in their region access to their EMR system. It benefits the larger hospital or tertiary referral center because all of the patient information is in a single database making it easier for providers to care for patients across various healthcare settings. It benefits smaller hospitals and physicians, because they gain an EMR system that is more likely to qualify for meaningful use and is more affordable.

Fletcher Allen plans to extend its software licenses to independent community hospitals and physician practices through PRISM Regional LLC—a wholly owned subsidiary. The health system uses an EMR from Verona, WI-based Epic Systems Corporation and rates 6.02 on HIMSS Analytics EMR Adoption Model, which evaluates hospitals' progress toward an advanced EMR environment through an eight-stage system (0-7), with seven being a completely paperless environment. "There is no reason why a 25-bed or 50-bed hospital using the PRISM product can't be at 6.02, as well."

The hospitals and physicians would all be connected through a fiber-optic network, and each healthcare facility would be considered a service area in the Epic system. So if one hospital wants to change a standardized care plan or add an order set, it doesn't have to consult with Fletcher Allen or the other hospitals and physicians, explains Podesta. But if there is a major database upgrade, then every facility would have to upgrade at the same time. "We have a grid that shows what you can do as an individual hospital and what you need to do collectively," says Podesta.

Fletcher Allen has pricing information out to 10 hospitals and is in contract negotiations with four of those hospitals. "The cost savings for them is because they are not dealing with a vendor," says Podesta. "We don't view this as a money-making operation. We are passing through all costs. We don't discount the cost or raise the price," he says.

Similarly, the Cleveland Clinic, which has about 2,200 employed physicians, 10 regional hospitals, as well as family health centers and surgery centers, began offering a software-as-a-service product to physicians in 2007. The health system manages the continuum of medical care from the physician office to the inpatient stay to the skilled nursing facility and back to the patient's home. But delivering that type of coordinated care can be a daunting task given that approximately 10,000 different physicians refer more than 100,000 patients to the Cleveland Clinic each year. "We depend very heavily on health information technology to manage the continuum of care," says CIO C. Martin Harris, MD, MBA. So it began exploring the SAAS model in an effort to better connect with physicians so it can deliver optimum care to its patients.

Physicians who occasionally refer a patient to the Cleveland Clinic can sign up for DrConnect, a free service that enables referring physicians to access their patient's information in real time from any location with Internet access. When a doctor using this service refers a patient to the Cleveland Clinic, for example, the health system's EMR network prompts the front desk receptionist to ask the patient if he or she would like to have information shared with the referring physician. If the patient says yes, then from that point forward, the referring physician will have access to that patient's information. In addition, the Cleveland Clinic sends a message informing the referring physician that new information on that patient is available on a daily basis.

For physicians who use the Cleveland Clinic's facilities more frequently by admitting patients to regional hospitals or referring patients to subspecialists, the health system offers access to its complete EMR as a service. When these physicians are called to the hospital, they can still access their ambulatory EMR from any computer within the hospital. "The reverse holds true, as well," explains Harris. Physicians can access all of the test results and orders for their hospitalized patients from their outpatient office.

Physicians who opt for the full-service feature pay a monthly flat-rate fee. More than 200 physicians are using this service now, and the health system is bringing more physicians online, says Harris. "The advantage is [smaller physician practices] don't have to pay the capital cost for acquiring hardware or software—essentially they are leasing it," he says. "SAAS is a powerful model because it allows an individual physician to leverage the expertise of an organization like the Cleveland Clinic to get up to the exact same state in terms of technology."

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