A federal mandate has been set. Electronic health records are coming. And companies like Syndicus and eCast are getting an earlier, rather than later, start toward working with the new rules.
That’s the motivation for companies like Annapolis-based Syndicus Inc. Scientific Services and Raleigh, N.C.-based health care solutions provider eCast Corp. to forge strategic alliances. In this case, it’s to offer health care providers nationwide access to a combination of services that will help the doctors comply with the coming local, state and federal electronic health record/electronic medical record (EHR/EMR) regulations.
Together, the two companies will promote and sell eCast’s EHR-hosted solution, which features unique aspects like individualized patient reports that include 350 data points, covering everything from body mass index to mental, cognitive and functional assessments, among other features.
Peter Bechtel, president and CEO of eCast, pointed out that his company’s move represents just one of the dominoes that has fallen in the industry’s lengthening row.
“There’s a flurry of activity that’s starting,” he said. “Setting up an EHR system can be expensive, but the first deadline for the doctors to qualify for the incentive is December 2012.”
Early Adapter
Michael McNees, president and CEO of Syndicus, saw this wave coming and set out to start riding it a few years ago, before any bandwagon had a chance to rev its engine.
“We came from the nuclear energy sector, where we worked with Constellation Energy, and we’ve also worked in cybersecurity,” said McNees. “We try to keep diversified. When we saw what was happening in the medical industry, we looked to the future and started working in the electronic health record space” about four years back.
Fast forwarding to this summer, Syndicus set up the alliance with eCast “to provide turnkey solutions, as opposed to providing smart people/staff. That allows us to further our offerings beyond those of a staffing firm,” he said. “For instance, if a small doctor’s office is trying to incorporate EHR, most are on to stage one,” which is also known in the industry as meaningful electronic use.
However, getting to stage two hasn’t been easy for many physicians. “Most doctors are in various stages of paper hell and electronic goodness,” said McNees, “so we try to move them along in the electronic age. However, they often have no extra money or time for EHR.”
Another reason the doctors need to get with the EHR program, he said, is that “they should be focusing on patient health. So our goal is to improve health care and save lives, while reducing cost.”
Price Range
While employing EHRs sounds like sensible move, what’s held the doctors up from doing so, as McNees noted, is cost.
According to Gene Ransom, CEO of MedChi, The Maryland State Medical Society, EHR systems can cost as much as $250,000 for a large medical practice with extensive needs, to as little as $5,000.
What can make setting up a system costly is that the physicians have to buy servers, machines, routers and expensive software products from the likes of Oracle and Microsoft. “Asking how much the typical system costs is like asking how much a car costs,” said McNees, “but on average, for a primary care physician, it’s about $18,000 per doctor for the total cost of the solution. That encompasses the hardware, the software and the services to establish it and maintain it.”
But $50,000 is more of a median price for an entire office, said Peter Bechtel, president and CEO of eCast.
“The federal government put out a reward system for physicians about two years ago where it promised private physicians $44,000 back (paying $18,000 up front and distributing the rest of the reimbursement over five years) if they would buy a certified EHR product, which can come from any of about 200 vendors nationwide,” said Bechtel.
While picking out a company to do business with from the vast number of vendors that offer the products and services can be a daunting task, Syndicus offers a platform that eCast felt would accentuate its product. Thus, the alliance was formed.
“The Software as a Service (or SAAS) application is a cloud-based EHR system that keeps the acquisition cost down to a fraction of what it would normally cost a participating physician,” said Bechtel of the subscription model, which runs $250 per month.
The other offering that Syndicus brings to the table is a product called annual wellness and care surveillance (AWACS), which is a Medicare-sponsored program “that helps doctors increase their incomes substantially, while taking extremely good care of their Medicare patients,” he said.
“Doctors can now bill Medicare for what is called a wellness visit,” said Bechtel. “It has very strict requirements that can be discouraging for the doctors because it’s so complicated. AWACS helps with filing the paperwork. That’s a huge differentiator for Syndicus.”
Increase on the Way
While any trend has been slow to take hold, Sarah Orth, chief of the Health Information Technology Center for the Maryland Health Care Commission (MHCC), in Baltimore, said the organization “has definitely seen an increase by physician practices in the adoption of EHRs.”
In 2007, Maryland’s rate was around 16% EHR/EMR adoption for physician practices, but by 2010 that figure had reached about 25%.
Orth also offered her views on the slow adoption rate. “There have been too many barriers to entry,” she said. “It hasn’t just been cost, but skepticism about their importance, and other issues related to privacy and security.”
She also commented on the vast number of programs that are available on the market (a number of which are now in use at the MHCC) that health care providers adopt and implement.
Noting the various federal programs that call for users of EHRs to receive the $44,000 rebate, Orth noted that Maryland is the first state to build on federal EHR incentives by requiring certain state-regulated payers, such CareFirst BlueCross BlueShield, AETNA and Coventry, to provide incentives to select health care providers.
“We’re hoping that EHRs will become used more frequently in the future and begin to create synergies and efficiencies in electronic health information,” she said. “They will result in cost savings and greater access to care, and improve the safety and quality of that care.”
It’ll Happen
Ransom added that getting good technical and legal advice is imperative when making the expenditure for EHRs “because users enter into a contract that encompasses many different aspects, data issues, and length of term and privacy issues.”
And he, too, noted the sometimes overwhelming nature of making the addition.
“I think there is considerable confusion in the marketplace concerning EHRs because of the large number of companies that are offering products,” Ransom said, “but the Federal HI TECH Act created federal financial incentives for physicians and defined penalties for doctors who do not comply by 2015.
“So clearly, there’s real incentive to act sooner rather than later,” he said. “If [doctors] choose not to, it will become more difficult for them to practice medicine as a result of state and federal regulations.
“Physicians are often slow to change,” he said, “but whether they want to do it or not, it’s going to happen.”
“That’s where we are today,” said McNees. “We’re just starting to address the field and the total number of primary care physicians. Right now, we’re broadening the horizons for EHS.”
Like Ransom, he noted the physicians are slow to change “and many of them are not into the business side” of their practices, either, “so, there’s an information gap,” he said. “But we’re not trying to change the world here. We just want to get the doctors to efficiency.”
