Can we make it even more meaningful and useful?

As part of the American Recovery and Reinvestment Act (ARRA) of 2009, the Health Information Technology for Economic and Clinical Health (HITECH) Act was created to fund and support a paperless national health information network through the adoption of electronic health records (EHRs).  Congress appropriated over $30 billion dollars for doctors and hospitals to receive if they install EHR systems that meet minimum standards. Doctors qualifying for the meaningful use incentives in stages over five years can earn up to $44,000 per physician. Hospitals’ incentive vary but start with a $2 million base payment.  The map above shows payments made through April 2012.

This is a huge infusion of money into the hardware and software sector that serves doctors and hospitals, amounting to about a 50% expansion of the entire national installed base of these computer systems.  The result has been a windfall for those few big firms that dominate the business, like Cerner and Epic.  They promise a lot and are getting paid a lot and are recruiting a lot of software engineers and the like.

The talk in the industry is that these firms are getting over-extended because of the size of the contracts and the need to quickly recruit, train, and assimilate staff.  I do not have a way to judge that, but I do notice that there is already a parallel growing industry of firms like Arcadia Solutions that, among other things, are brought in after the big guys come through and help the systems actually deliver the promised benefits.

One thing is for sure, though.  The major firms offering EHRs are not in a position to offer much in the way of customizable systems.  In part, they simply have too much to do just to meet the market demand for the basics.  But some of the firms have adopted a strategy that, in essence, says, "This is what we offer.  We will enhance it and/or customize it on our timetable.  Don't call us.  We'll call you."  This is not a surprise, given both the required schedule for meaningful use and the dominant market position of these suppliers.

Meanwhile, though, there are hundreds of entrepreneurs and small firms -- often, but not exclusively, based in Silicon Valley and Cambridge -- who have developed apps that could dramatically enhance the delivery of care.  The rub is that these apps need to be integrated into the EHRs to preserve the integrity of the patient records.  If you have a stand-alone system on which a clinician is relying for decision support or enhanced hand-off management, for example, the results of that transaction should often be documented in the EHR.  But the big firms are too busy or commercially unwilling to prepare interfaces to make it possible for this integration to be carried out.

In a recent article, Forbes writer David Shaywitz and co-author Tory Wolff cite the special dominance of Epic in this marketplace and offers two scenarios of what might happen in the future.  They does not propose that the big vendor give up proprietary information and make its system the equivalent of open source programs.  Their proposal instead is that the vendor should adapt its systems to permit portal entry of data, in the format it desires, from these stand-alone apps into the EHR.

The optimistic scenario would be that Epic could take inspiration from Apple’s approach to apps, using its dominant market position to provide a clear set of operating standards and expectations, and cultivate a far-flung innovation ecosystem based on its established platform.  In this scenario, Epic could keep its products relevant and stay on the leading edge by adapting quickly to evolving market needs. 

Alternatively, if Epic . . . decides to maintain an essentially closed system, and to drive all innovation internally, this could prove stultifying, limiting the development of novel ideas, and forcing the many high-profile adopters of Epic to accept stagnation or pay the staggering costs of switching.  The restrictive mindset might drive determined innovators – entrepreneurs, developers, and eventually even clients — straight into the arms of competitors.

I don't buy the authors' argument that Epic's competitors will be any more nimble or willing to open up their systems, but I do agree with them that Epic is uniquely suited to set the standard for doing so.  However, they worry that:

Epic’s “capture all the information” approach certainly feels at odds with a distributed world; moreover, if Epic manages to dominate the market using their existing approach, they will enjoy significant “locked-in” revenue, and may simply not see a lot of incremental profit in rapidly changing.

I hope this is not the case.  As a privately held company with an inspirational and thoughtful leader who truly cares about the future of health care in the country -- and enough revenue and profit to carry it through for years to come -- Epic has the potential to accelerate change more than anyone in the country.  What will it be, Judy?