Challenges persist with Stark Law relaxation subsidies

By Patty Enrado
09:51 AM

The relaxation of the Stark Law enables hospitals to bear up to 85 percent of the cost of electronic health record (EHR) implementation for community physician offices. Despite the generous subsidy, cost is still a barrier for many physicians, according to panelists at the Economic Stimulus Track session, "Real-World CIOs Who Implemented EHR Subsidies Under Stark."

"Cash is king for physicians," said James Kearns, vice president and CIO of Delnor Hospital in Geneva, Ill. Community physicians were more concerned about support costs than the one-time implementation costs. Still, he said, after several months of the implementation, the common response from physicians was: "I would never want to go through that (implementation) again, but if you try to take it away from me, I'll kill you."

Tom Pacek, vice president of Information Systems and CIO of South Jersey Healthcare System, agreed that the bottom line is the greatest concern for physicians - even with the full 85 percent subsidy. The problem that Pacek saw in his community was that many practice management vendors were not willing to work with the EHR systems. "You have to have a total system suite; the EHR component is a small piece of it," he said.

Presenting a clear business case, therefore, was an important part of driving adoption rates for both Delnor Hospital and South Jersey Healthcare System. "The subsidy needs to demonstrate economic value for providers," said Judy Hanover, panelist and research manager for Health Industry Insights.

Hospitals need to create a favorable financial environment by leveraging volume in subsidy programs, negotiate with EMR vendors to control costs, explore different license options with EMR vendors, offer hosting and software-as-a-service models, minimize IT infrastructure requirements and provide options such as add-on modules.

Addressing potential end-of-subsidy programs in 2013 is "absolutely critical," Hanover said. Having a plan well in place can help physicians figure their monthly payments and eliminate anxiety about future costs.

Delnor Hospital offers the full 85-percent subsidy. It also took advantage of its information systems capability, secure server environment and existing IS team to minimize cost, said Kearns.

Other best practices included creating a multi-specialty physician panel to validate the model, incorporate physician needs, assess vendor options and hammer out the terms of agreement. Having eight "physician champions" - including one that was already live with an EMR system and hosted site visits for the other physicians - was vital to getting community physician buy-in, Kearns said.

Community physicians at South Jersey Healthcare System wanted an EMR system, so physician reception was high, said Pacek. The healthcare system worked with a local consultant to help develop EHR criteria along with the physicians.

By offering both a hosted environment and a turnkey client server model, South Jersey Healthcare System was able to deliver an economical model for those most interested in cost and a model that gave physicians more control over the system, respectively.

The business case is in the expected benefits, Pacek said. The physicians and health system see the EMR system as providing traction towards an electronically connected healthcare community that will enable continuous improvement in patient outcomes and gains in operational efficiencies, flexibility to respond to requests for information regardless of who is asking and the ability to attract and retain talented physicians, nurses and employees.

To ensure success of Stark Law relaxation initiatives, hospitals have to identify benefits for both parties, Pacek said.