SPECIAL SECTION: EHR CONVERSION

EHR: Are You Ready to Deal?

Knowing what your contract should include will save you both dollars and headaches.

BY René Luthe, SENIOR ASSOCIATE EDITOR

For practices interested in collecting government bonus dollars for EHR implementation, this year is the last to qualify for the full Medicare incentive. And according to some vendors, many practices are busy trying — the rush to buy and implement an EHR is definitely on. “Rush” and “expensive” and “new technology,” however, are frequently a disastrous combination. Many practice owners are understandably nervous.

“It’s a big investment and it is something that is going to change the practice forever, so it’s a very serious business decision that they have to make,” says Jim Messier, vice president of sales and marketing at Medflow. “If they go through the appropriate steps, then I think they end up with what they want out of the sales process.” But what are those steps? Which details should a practice focus on to make sure this “very serious business decision” — and the money that accompanies it — don’t go awry? Here, EHR experts explain what to look for.

Before You Go Shopping

Saving your practice money and headaches begins before you get down to the nitty gritty with an EHR vendor — in fact, it begins before you even start shopping for a system. A lot of practice owners equate the best product for them with the lowest price — and that’s understandable, given the very hefty prices for an EHR system. However, that is a potentially very costly misconception, according to Mark Rosenberg, executive director of Barnet Dulaney Perkins Eye Center of Arizona.

The EHR you select, he points out, is most likely the one you are going to have to live with for the rest of your career. Cost differences are a trivial issue over the long haul when you have to deal with the headaches an ill-chosen system can bring you on a daily basis. “Select the right product, irrespective of cost,” Mr. Rosenberg advises. The trouble is, says Chris Johnson, a medical IT consultant with Untangled Solutions, those new to EHR usually don’t know what an EHR vendor may be leaving out when they discuss their system requirements.

In essence, they don’t know what they don’t know. This lack of deep product knowledge coupled with lack of direct EHR experience can cost a practice far more than not squeezing out the lowest prices from the vendor. Too often they approach the EHR buying process from a “want” rather than a need perspective. “They start window shopping and buy on impulse,” says Mr. Johnson. But once the implementation process begins, they realize that the system doesn’t do what the practice needs it to do. “If you don’t know what you need, you are going to get sold something you can’t use,” Mr. Johnson says. And it’s likely that six months or a year later, you will be spending money again in an effort to get something you can use.

To avoid that kind of financial catastrophe, it is crucial to understand specifically what your practice needs its EHR to do. “Ask yourself what you hope to get out of it, once you’ve adopted the product,” says Mr. Johnson. “Why are you going to EHR?”

Once you can answer those questions, you do still have a bit more homework to do before you begin talking with vendors. Mr. Rosenberg says practice owners need to delve into such seemingly arcane topics as SQL databases, and considering whether the EHR vendor is part of a public or private company (public companies offer more transparency). Of particular importance is the issue of the vendor’s ability to provide the functionality that a practice will need in order to qualify for “meaningful use.”

“Meaningful use reimburses you for the expense of implementing EHR,” Mr. Rosenberg explains. “But if you don’t do it correctly or your vendor doesn’t support that the way that you need, you’re going to miss out on that money. And what an individual vendor says they can do, and what they can actually do, may be two different things.”

Similarly, Mr. Messier urges potential EHR buyers to look at the vendor’s implementation process — how the vendor gets the practice up and running in the shortest period of time, and what the vendor does to ensure the process has no effect on the practice’s productivity. “That’s the greatest fear practices have, that this is going to kill their business, so not only are they going to have to spend $100,000, but they’re only going to be able to see eight patients a day, instead of 50 a day.”

How a vendor charges for their solution is another important consideration, according to Mr. Johnson. “Do they charge per provider, or per user?” he asks. “We are starting to see a shift where the EHR vendors are charging per user. In many cases it’s actually less expensive to charge per user. That’s because it’s more of a subscription-based model than it is a complete acquisition model.” Hosted solutions don’t require servers and other expensive infrastructure, therefore the expense rolls into an ongoing operating expense instead of a capital expenditure.

Mr. Rosenberg advises researching which EHR vendors have the most installations in ophthalmology, though he also thinks practices must consider the future in order to make a wise investment in their EHR. Given the direction of healthcare in the United States, he believes that in the near future it will grow increasingly necessary to communicate with physicians in other specialties. An EHR tailored to one specialty that doesn’t adequately connect with non-ophthalmic EHR systems, he believes, would probably be a poor choice.

Finally, look at multiple vendors. Make them compete for your business. Though this point may seem obvious, Stephen Cracknell, chief executive officer of US Medical IT, says that in his experience, physicians often wait for an EHR vendor to approach them. “They wait for the phone call and then ask the vendor to come in for a demo.” The upshot is that the physician only looks at one system — and the vendor knows this and so realizes that no real discounts are necessary to woo them. There needs to be more than one vendor in the mix, Mr. Cracknell says, for the practice to be in a stronger negotiating position.

The Devil’s in the Details

When it comes to saving money, a carefully constructed agreement is much more important than a low price tag. According to those well-acquainted with the workings of EHR deals, overlooking certain essential points can more than outweigh any discount the vendor gives you at signing.

Remember that there are other things a vendor can offer that provide value, points out Mr. Cracknell. Getting a local EHR implementation specialist as part of your agreement can save you thousands in travel and expenses. “If you ask for it after you sign, the vendor may or may not give it to you, based on convenience,” Mr. Cracknell notes.

You also want to give particular consideration to the number of training hours you purchase. Mary Ann Fitzhugh, vice president of marketing for Compulink Business Systems, notes that practices often focus on the software fees, ultimately a small cost of implementation, instead of obtaining sufficient training for staff. She believes that practices should negotiate in as much training as they can. Too little training “is the key obstacle, in a lot of cases, to getting your staff to transition,” Ms. Fitzhugh says.

Vendors often underestimate the number of hours required, Mr. Cracknell says, and since it is not until after the practice has signed on the dotted line that they realize they need more training, the practice has to purchase additional time — typically sold in blocks. A possible solution, he says, is to stipulate in your agreement that you will purchase X number hours of training, and that the practice will be billed for the first segment immediately, and for the latter segment when the practice uses them. Unused hours will not be charged.

Alternately, Janna Mullaney, chief operations officer of Katzen Eye of Baltimore, recommends taking some of the hours allotted to implementation and adding them to the training component. This is a particularly viable option for practices that have a project manager to help with the implementation process, Ms. Mullaney points out.

Still another possibility is for a practice to go the “train the trainer” route, in which the allotted training time is used to instruct a few staff “super users” who will then train the rest of the staff, thus reducing the likelihood of having to purchase extra hours.

Another issue to be sure to iron out in the service agreement, according to Mr. Cracknell, is precisely when implementation begins. And stipulate what penalties the vendor will pay if they are not on site and beginning implementation on the date agreed. “This is something that gets overlooked all the time,” he explains. “Practices will sign a contract and they’ll be expecting that tomorrow, someone is going to be rolling in there to do the deployment and the vendor says they’ll be out there in three months!” The lag is due to the problem of vendors being overwhelmed with demand, Mr. Cracknell says, and since there is probably nothing in the contract stating they have to get something done by a particular time — they don’t.

Something that does start right away, however, are maintenance fees. Practices that don’t plan on beginning implementation for a given period, Ms. Mullaney says, may find themselves making maintenance and support payments immediately — unless their agreement says otherwise. “You buy all the products at once, but you don’t start it for six months, and if you don’t start using the product right away, the maintenance shouldn’t kick in until it’s fully implemented. Because there is that time period where they transition you from implementation to support, but sometimes you are transitioned before you start the second product. You want to make sure that if you buy it as a whole, that the maintenance takes effect in pieces,” she says.

Establish Mutual Interest — and Seek Counsel

Being specific about dates for transition milestones not only reduces aggravation for the practice, it ensures that the vendor is contractually obligated to make the practice successful. Ms. Fitzhugh believes this is key to getting a truly “good” deal on EHR.

Mr. Johnson concurs. The agreement should clearly spell out the consequences of what happens if the project plan changes scope or slips. For example, if the training doesn’t reach 100% completion with 95% of employees reaching capable level of software mastery by X date; does the practice get money back? “Yes, a lot of the responsibility for being trained falls on the practice, but I think a lot of responsibility also falls on the vendor when they are asking for you to hand over all that money to be trained,” Mr. Johnson says. Similarly, if the server goes down and the vendor doesn’t respond within X hours, does the practice get money back? How that gets calculated should be specified in the contract.

Medflow’s Mr. Messier notes that milestones can be effective in making the transition to EHR efficient — provided that they are not one-sided. “If there is not a complete buy-in on the practice side, then certain things are going to happen that are going to lead to delays, or to things not getting done correctly, etc. It’s a pretty tricky process to make sure both parties are equally engaged to get the system in and up and running in as short a period of time as possible,” he says. Still, he concedes, milestones are good for establishing that both parties have skin in the game.

Once details are ironed out and milestones spelled out, take the contract to a lawyer for review. Surprisingly, that detail is frequently overlooked, according to Mr. Cracknell. Yes, it costs money — but it could save you much more. “Given that the contracts were written by the vendor, they are not going to have a bunch of friendly language in there in case something goes wrong on the client’s side.” It is not unusual for smaller vendors, especially, not to have developed very detailed, robust contracts yet. Legal review can protect you from inadvertent oversights as well.

A lawyer who is experienced in protecting physicians, for example, would make sure the contract contained an anti-sunset clause, so that if your small vendor was bought up by a larger one after you’ve gone through the time and trouble of training your staff on the one system, you will have at least 24 months notice before you must abandon your solution. “That won’t be in a standard vendor agreement,” Mr. Cracknell says.

Ensuring the presence of a data-extraction clause would also be well worth the attorney’s fees. This would protect the practice from unreasonably high fees if it decides to move to another vendor and needs to get their data out to be imported into another system. Otherwise, your vendor “can essentially hold your data hostage,” Mr. Cracknell explains. “So just make sure that it’s clearly delineated how that data gets extracted and what it’s going to cost.”

Haggling for Dollars

For those who love to bargain, however, there definitely are areas in the EHR agreement where you can put your passion to use. When it comes to training, for example, there’s not only the number of hours you will get to consider, there’s also how much you will pay for them. According to Mr. Rosenberg, fees for training are often inflated. Be sure to negotiate the hourly rate. “Once you’ve got a trainer, they don’t do a better or worse job based on the hourly rate that you gave the company,” he says.

License fees are another area suitable for haggling. When it comes to counting the number of providers for whom a practice will need licenses, Mr. Johnson says that many practices will include all the relevant employees. What they may not realize is that the EHR vendor identifies different levels of licenses for the MD, the physician’s assistant, etc. — at different fees. “For a PA, the vendor may charge half of what it would for an MD. So practices should make sure that they are clear when they talk to an EHR vendor who is billable as a provider and who is billable under a different job role.”

At Katzen Eye, which has both part-time and full-time providers, Ms. Mullaney says they negotiated full-time equivalents. “We would take two providers who work an average of 40 hours together, and we negotiated one fulltime equivalent, so we didn’t have to pay for part-time providers,” Ms. Mullaney explains. And because ophthalmology tends to have more ancillary staff per provider, the practice negotiated more users per provider. “Instead of the normal four to five, we negotiated eight. We have your front desk, billing, a scribe (or sometimes two), diagnostic, and several work-up technicians per doctor. Four or five users per doctor would not work for us.”

In addition to these insider’s tips for getting a good deal on an EHR, there’s another simple trick that anyone who has bought a car knows — doing the deal at the end of a vendor’s quarter, or year, can definitely strengthen your negotiating position. “Every public company has always got a sprint to the finish line to bring in their quarter,” notes Mr. Rosenberg. “If you are one of the last deals that they have that will make or break their quarter, they are going to be much more flexible with you about pricing.” OM