Top Ten Essential Vendor Behaviors in Today’s Market

A few weeks ago, a noteworthy healthcare consulting firm asked for input that they could pass-on to vendors that would help those vendors understand the relationship imperatives that are critical to a healthcare CIO, right now, in today’s market.  After giving this topic a few days of background thought, I concluded two things:  (1)  At least 60% of the imperative relationship advice that I give today, applies at any time in history; and (2)  My current Cerner account representative, Lisbeth Fabiny, was a great source of reference.  I found myself asking, “Why do I value Liz’s support so much?  What does she do that makes her feel so valuable?” 

It is worth noting, I have nothing to gain by offering meaningless compliments to Liz or by association, Cerner.  Cerner and Liz will both tell you that I can be very demanding and uncompromising in my expectations and criticisms of products, services, and expenses.  But, it’s also important and proper for me to praise the positive, not just complain about the negative, and in that vein, Liz Fabiny is a role model for vendor support and customer relations.  The best I've ever had in my 30 year career.

Here are the Top Ten:

1.       Help Me Compete:  Help me build my "Annual Report for Information Technology" as if my IT organization were a separate, stand alone business that could be outsourced.

2.       Help Me Hire:  The market for healthcare IT employees has never been more competitive.  If you know I'm having a hard time recruiting for a critical position that is important to the success of your product in my organization, help me find a great match. 

3.       Help Me Measure:  The Age of Analytics in healthcare is just beginning.  Our industry is way behind in the proper use of data to drive costs down and quality up.  Help me address my short term analytic needs, but do so within the scope of a longer term strategy. 

4.       Help Me Save: Simplify your licensing, billing and contract administration.  Make it as easy as possible for me to manage my expenses with you, and especially make it easy to predict and budget for increases in prices due to inflation, increased number of users, transactions, etc.  When you give me new contract to sign, put a face sheet on it that summarizes the key issues and terms.  Don't make me read 15 pages of legal jargon.  Likewise, if you know of a creative way for me to reduce licensing fees, try to be motivated by our long term relationship instead of your immediate potential loss of commission.   You will win more of my business, easily.

5.       Help Me Listen: Be proactive in extracting the ROI and value from your products.  Help me look good and thus make your product look good, too.  If you know that I'm under-utilizing your products or have them configured improperly in some way, pester me until I fix it.  I'm busy and juggle lots of priorities.  Be the squeaky wheel until I listen.

6.       Help Me Expand: Annual conferences and blogs are not enough for me to keep up with everything going on in healthcare right now.  Help me build close relationships with a limited number (3-4) of peers or mentors who have a similar organization, product mix, and profile so we can learn from one another.  Force us to meet and hold a conference call every once in awhile.  Facilitate the meetings.  Help us reuse strategies, policies, and technology as much as possible.

7.       Help Me Plan: Help me build my strategic roadmap by overlaying the needs and culture of my organization with your products and the future outlook of the industry.  Look ahead for me and pester me until I build that roadmap with you.  I am particularly concerned about the growing sophistication of cyber attacks.  And I'm also concerned that I'm not leveraging mobile computing as well as I could.  Push me on these two issues, please.

8.       Help Me Migrate: Help me build the cheapest, safest, quickest path to ICD-10 adoption for my company and critical partners in the insurance industry.

9.       Help Me Prove:  Help me build the cheapest, safest, quickest path to Meaningful Use qualification for my company--  And don’t charge me anything extra because this is something that you should have done for every customer, a long time ago.  The Meaningful Use legislation forced it, but like HIPAA, we should have been doing this all along.

10.   Help Me Evolve:  ACOs are coming; one way or another.  Even if they are nebulous right now, we know that there are certain characteristics that will survive, regardless.  In particular, you better have a product strategy for engaging patients in greater accountability for their own care, and the changes in the revenue cycle required for managing the risk of bundled payments.

The ROI of Evidence Based Protocols

A new study from Johns Hopkins reveals the value of standard protocols (aka, clinical practice guidelines) on reduction of central line infections in the ICU--  $1.1M per year. If I were CEO of an insurance company or major employer paying for healthcare, my contracts would require my healthcare providers to show proof that they’ve implemented evidence based protocols to achieve the best patient care and at the lowest cost possible.

Interesting to note that development of this singe protocol/CPG at Johns Hopkins was $160K.  Repeat:  $160K to develop a single protocol.   In the Cayman Islands, we are in the midst of implementing an Evidence Based Practice Strategic Initiative, anchored by a collaborative effort with the British Medical Journal and Cerner.  In only a few months time—which could be compressed to a few weeks with the proper focus-- we already have four protocols prepared and those will soon be embedded in Cerner’s PowerChart and reflected in Cerner’s Chronic Condition Management reports.  Our cost-per-protocol will be a fraction of $160K as will the Time to First Value.

I find it more and more amazing that anyone practicing medicine today could possibly argue against the adoption of standardized evidence based protocols, CPGs and order sets, because, as the argument goes, adopting them represents a threat to “independent thinking by the doctor.”  (Yes, that’s a real and recent quote from a physician).  Further, I find it even MORE amazing that anyone would argue that these same protocols should be developed internally, rather than through an orders-of-magnitude less expensive service such as that we enjoy through BMJ and Cerner-- which will also, by the way, produce a better product than could be produced internally because of the robust process and resources available to BMJ that cannot (and should not) be replicated at every hospital in the world.

Accountable Care Organizations: Measurement and Management

This recent JAMA article (link below) on ACOs is a very common sense, succinct summary of healthcare’s future challenges.  As recently described by Francis Crosson, senior fellow at the Kaiser Permanente Institute for Health Policy, and despite the justifiable criticisms of the Affordable Care Act, Accountable Care Organizations cannot fail.  They will, in some form, define the future of healthcare, and underlying their success is the collection, measurement and feedback of data to healthcare organizations and patients; and the management of cultural change driven by that data.  The title of the JAMA article’s last paragraph sums it up nicely--  THE WAY FORWARD: MEASUREMENT AND MANAGEMENT.

As dramatic as the changes feel now, the data ecosystem of healthcare needs to change even more dramatically, but current healthcare IT vendors and systems are saddled with application architectures that simply can’t keep up with the rate of change.   It’s like trying to transform an office building in a manner of days that is built of concrete inner walls--we need modular inner walls to meet the needs and deadlines.  As one vendor CEO recently bragged—ironically-- 60,000 labor hours were required to change their application to meet Meaningful Use requirements.   And Meaningful Use is an easy hurdle to clear in comparison to what lies ahead. 

If ever there were a ripe market opportunity for disruptive innovation to displace entrenched, concrete walls of old-school thinkers and technology, now is the time.

Implementing Accountable Care Organizations

Nurture Dissent

In ancient Mesopotamian judicial systems, it was against the law to convict a suspect of a crime without a dissenting judge or juror.  In other words, the system recognized the imperfection of human judgement and ensured that every suspect and different point of view should have at least one advocate.  A 100% consensus judgement of guilty was not allowed.

Every major business decision should include at least one major dissenting opinion in the debate.  If not, there's something wrong with the decision making culture... and leadership would be better served to find a dissenter.

RFP: Cayman Islands Enterprise Health Information System

The Health Services Authority of the Cayman Islands is engaging in the selection of a core vendor to supply an Enterprise Healthcare Information System. HSA defines a “core vendor” as an extension of its senior leadership who shares the same vision and values to constantly evolve and improve clinical, financial, and administrative operations.  Qualified vendors are encouraged to respond with their proposal no later than noon, 23 September 2011. 

At present, the core enterprise applications are provided by the Cerner Corporation.  The contract for those services expires in June 2013.  The RFP begins a re-compete process for the award of that contract. The intent is to evaluate other vendors and products, and determine if it is in the best interests of the Cayman Islands to remain in partnership with Cerner. Cerner will be invited to participate in this re-compete. 

The RFP can be downloaded from the Central Tenders web site here.

Making Small Healthcare IT Start-Up Easier

Many friends and professional colleagues are taking advantage of the growth in healthcare IT spending to start their own companies, which I think is great.  Quite a number of them call me for a sympathetic ear to lament about their administrative burdens.  In the mid-1990s, I was a founder and partner in a very successful IT consulting and software development company... but the idea of doing it again makes me shudder.  The administrative paperwork, payroll taxes, and corporate taxes were a NIGHTMARE to manage-- one of the most stressful and distasteful uses of my time, ever.  Equally stressful and expensive was providing affordable, high quality healthcare coverage for our 50 employees.

More and more, I am convinced that the most effective way to stimulate the economy and efficiency of small business employment and innovation would come through the elimination of payroll and corporate taxes for companies with less than 100 employees... with an eye on eventually eliminating payroll and income taxes for all companies and employees...and replaced with a national, simple sales tax.  No more IRS, no more tax loopholes.  You buy something, you pay taxes. End of story.  Seven states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) and virtually all US cities operate on this "no income tax" economic model.  Can you imagine filing a tax return for your city?  Of course not... we've come to expect a sales tax as a means of funding local government and infrastructure.  Likewise, making no-frills, affordable healthcare coverage available through a government-run program-- i.e., making Medicaid/Medicare available for purchase-- would be enormously helpful to small businesses.  I am absolutely convinced that these two concepts would jump-start small business growth like we've never seen before.  And I'm equally convinced that the concepts would find support among enough Republicans and Democrats to make it happen.

Why not, during this time of economic and unemployment crisis, try this "tax free status" for small companies as a federal experiment for five years?  How about a five year experiment for small employer buy-in to Medicare and/or Medicaid?

Below is a great excerpt from a related blog in The Economist.  The full blog can be found here.

"We need to stimulate the prospects for employment, but we also need to make it easier for people to just work in ways that may not show up in the official unemployment stats. You can think of this as tearing down barriers to "self-employment", if you must. Clearly, decoupling health benefits from employment would help a lot. Less obviously, but at least as importantly, we need to eliminate the insane patchwork of regulations that keep folks from legally cutting hair for money in a kitchen, or legally making a few bucks every now and then taxiing people around town in a 1988 Ford Escort. De-formalising and de-bureaucratising labour certainly makes it harder for government to track who has paid what to whom, who owes how much in various taxes, and so forth. But it would be truly pathetic if the legal/economic organisation of our society was optimised for government surveillance and tax collection and not for the exercise of autonomy in pursuit of a meaningful life."

HITECH the Only Bright Star in $1T Darkness?

Arguably, the only investment from the US federal stimulus money that might have a long term return on investment (ROI) is the money being invested in healthcare computerization which should eventually drive down costs and improve quality.  Unfortunately, that money-- the HITECH (Health Information Technology for Economic and Clinical Health) Program-- is being spent on mediocre but very expensive health information systems products, so the ROI will be minimal and require at least 5 years to appear...at least 5 years.

In the US, we continue to elect politicians who make promises to maintain and/or increase federal spending and/or reduce taxes.  We can't have both.  As this chart below clearly indicates, we've been on a steady mismanagement of tax revenue vs. tax spending since the early 1980s-- when the rate of the curve started to take off under the Reagan administration.  In the past three years, the curve has gone straight up under the Obama administration.

Federal spending can only improve the situation described in this graph if that spending is invested to increase business productivity.  Unfortunately, the Obama administration spent--not invested-- $1T in stimulus money on short term job creation--hiring for the sake of hiring-- not long term investment to aid local economies and business productivity (new technology for manufacturing, more efficient transportation; business venues that generate jobs, taxes and local economies; lower cost fuel, less burdensome tax laws, new software engineering techniques, scholarships (not student loans) in critical skill areas, etc.). That $1T in stimulus money is now gone and so are those short term jobs.  In my hometown, the Civilian Conservation Corp, born from the federal stimulus money of the Great Depression, built the county fairgrounds.  That venue hosts innumerable events that continue to contribute to the local economy, 80 years later.

Anyone who campaigns and suggests for one moment that we can change the direction of this curve without cutting Medicare/Medicaid, Defense, and Social Security benefits...AND raising taxes is running for short re-election, not long-term leadership of the United States.

Credit to the US Federal Reserve, St Louis for this graph, Kevin L. Kliesen and Daniel L. Thornton.