The Healthiverse and EHRs – Partnering on Core Systems Can Increase Innovation and Profitability

October 11, 2020

Zachary Fox

The Healthiverse and EHRs – Partnering on Core Systems Can Increase Innovation and Profitability

This blog is part of a series introducing the concept of the Healthiverse, explaining why it’s essential to eliminate the siloes between care team members, and exploring the benefits that a more united healthcare universe can deliver to different key stakeholders in the industry.

Things have changed since the frenzy of EHR adoption in the years following passage of the Health Information Technology for Economic and Clinical Health (HITECH) Act over 10 years ago.

The once greenfield opportunities with first-time EHR buyers is now a crowded “rip and replace” market. Legacy EHR business strategies have slowed, creating a requirement to accelerate innovation and grow revenue in new ways. And EHR vendors have had to balance this need to innovate with the resource-intensive demands to ensure their core EHR systems are current and compliant.

So legacy business revenues have slowed, and innovation and new revenue are at a premium, but industry, customer, and state and federal requirements continue to demand significant resources from EHR vendors just to keep their solutions compliant. And what happens when additional macro unforeseen events add to those challenges?

Enter the COVID19 Pandemic

EHRs acted immediately, shifting resources to help meet customer and patient needs. New billing codes, custom forms, telehealth, and analytics are but a few of the ways EHRs raced to assist customers and a healthcare system under unprecedented stress. And this work is not finished. Allocating resources to support these needs has led to delays in planned product development.

Add to this the financial impact on EHRs and their customers because patients delayed elective procedures and medical care for chronic diseases and routine health visits as they stayed home by choice or necessity. Healthcare delivery organizations experienced a dramatic reduction in revenues leading to a cascading effect on EHRs as customers asked for payment relief and delayed purchasing new solutions. Several prominent EHRs have reported a drop of more than 40% in their revenue cycle management business.

Of course, challenges are also opportunities. It can be said that COVID19 provided quite a few for EHRs and HIT companies, as providers required new ways and approaches to care for patients. Adopting or expanding solutions like telehealth and secure care collaboration tools, big data, and artificial intelligence functionality have helped. But these new opportunities have not been large enough to offset the pandemic’s negative impact on their business.

Without unlimited time, talent, and resources, something must change for EHRs to improve their ability to allocate existing resources to strategic business objectives that support revenue growth and profitability.

Keeping up with the “plumbing” versus strategic investments

My discussions with executives of market-leading EHR companies confirm they are grappling with their options and revisiting common questions, such as:

  • Should we consider a third-party technology partner when we’ve historically been unwilling to do so?
  • Can we rely on a technology partner for core system functionality?
  • What would we gain by working with a technology partner?
  • What new capabilities and business opportunities are available to us if we’re willing to consider third-party relationships?

It is the right time to ask these questions as EHRs are increasingly pressed to optimize resource allocation toward strategic pursuits versus continuing with the way things have been done in the past. But that doesn’t make it easy for software companies—many of which are predisposed to think they can do it all in-house and better than others. And perhaps they could if they have unlimited resources and deep expertise across many areas. But I’ve yet to talk with an EHR executive who feels that they have sufficient resources, talent, and time to effectively do all of these things in-house.

Many EHRs are unwilling to conduct a thorough and sincere analysis of the full costs and the pros/cons of partnering. Those EHRs that have thoroughly analyzed the costs of developing and maintaining key system modules and capabilities in-house frequently find that the actual hard and opportunity costs are much higher than anticipated.

As EHRs consider which parts of their solutions and technology may be most viable to work with a technology partner, they have different ideas, situations, and comfort levels on where to look and what to analyze first.

I would advise EHRs there are a couple of clear places to start. One is identifying areas that require significant investment but do little or nothing to differentiate from competitors who are required to implement the same things. I like to call this the “plumbing” or basic blocking and tackling of developing and operating an EHR. Examples includes government regulations and industry requirements. Another is innovative or advanced features that address significant needs that EHR customers typically want their vendor to provide, but EHRs struggle with or have no plans to implement due to lack of expertise, resources, and time. I can illustrate examples of this with e-prescribing.

E-Prescribing is critical functionality used at high volumes in care delivery yet represents only a slice of an EHRs’ overall functionality. Even so, meeting evolving requirements from the government (e.g., controlled substance prescribing, PDMP, and interoperability) and industry (e.g., new script standards and LOA2 identity proofing) necessitates ongoing investments of legal, compliance, product, and R&D resources just to stay current.

And, of course, “current” is not the same as “differentiated.” Tremendous innovations are happening today in e-prescribing that improve efficiency and safety and provide advanced insights to help providers prescribe the right medications, while helping patients understand, afford, pick-up, and stay adherent to the prescribed therapy. Functionality like medication price transparency, proactive adherence alerts and interventions, and automated patient engagement services can improve adherence. Again, this functionality can be difficult for EHRs, on their own, to deliver as a complete solution that connects to industry networks, data, and stakeholders so that it works for all patients. This is an example of how working with third-party technology partners who “go deep” in these areas can help EHRs deliver the innovation and functionality their customers need while creating incremental revenue opportunities for EHRs to grow their business.

I realize that EHRs can differentiate themselves with their user-experience, overall functionality, and implementation of various mandates or requirements. Frequently, EHRs can maintain control of the UI/UX experience they want while outsourcing the cost and complexity of the back-end “plumbing.” However, I am talking about the significant back-end investments EHRs must do to meet industry requirements that customers don’t even see. These ever-present culprits continually rob resources just to implement common, non-differentiated capabilities. The costs are often hidden or underestimated, and take a toll on the business. Finding a technology partner that handles the plumbing, delivers innovation, and allows options to achieve desired provider and patient experiences is key to success.

We are seeing more and more of the industry’s most recognizable, capable, and innovative EHR companies make public proclamations of their intent, or taking action,to use technology partners more strategically moving forward. EHRs are realizing that while it is initially painful to replace internally built systems, the ongoing cost and innovation benefits puts them in a stronger position for the future.

Choosing the right solution and partner

While this strategy makes sense, it’s critical to choose the right solution and partner. Beware of third parties that are unwilling to prove their expertise through a deep-dive consultative process to validate technology, functionality, industry coverage, and a proven ability to execute on the desired integration and customer workflow.

To avoid added cost, complexity, and relationship management, EHRs should look for a single-vendor relationship that can deliver a variety of high-value solutions that align with their product strategy and roadmap. To provide the maximum value for their customers, EHRs should seek technology partners that aggregate the broadest amount of fragmented industry stakeholders, networks, and information into one connection point.

They also should analyze solutions and identify vendors that understand the industry and have worked to solve the root-cause issues that lead to quality and inefficiency problems.. Many problems persist in the industry that “standard” solutions do not address. Third-party solution vendors should show how their expertise “goes deep” in these areas to remove friction from processes, enhanced data insights and improve outcomes.

With the right third-party solution vendor, EHRs can decrease overall costs, regain capacity from existing resources, further differentiate their capabilities with customers, and grow new revenue streams. EHRs that view partnerships as strategic versus necessary will make smarter decisions that lead to more significant benefits for their business and customers.


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About Zachary Fox
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Zachary Fox is Executive Vice President, Partners at DrFirst.