Good for business
Remember the old days? Way back before 2009? Healthcare had some catching up to do. But no one quite knew just how to do it.
Much of the industry was still paper based. Where technology was deployed, it was often siloed systems in ancillary hospital departments, or rudimentary software helping to run physician practices.
"For such a knowledge intensive industry, healthcare had done a terrible job at leveraging IT to manage and distribute such knowledge," says John Moore, founder and managing partner of Chilmark Research. "There were very low adoption rates. Very poor – on the order of 10 or 15 percent depending how you wanted to count it."
"Ten years ago, what this industry was in need of was a catalyst," says Sean Wieland, managing director and a senior research analyst at Piper Jaffray. "The ROI for implementing these very expensive systems is questionable. I think that has never been a very compelling aspect of the sales proposition – especially for electronic health records."
In the wake of the 2008 financial collapse, an opportunity presented itself. As Michael Grunwald, author of The New New Deal: The Hidden Story of Change in the Obama Era (Simon & Schuster), which tells the story of the 2009 American Recovery and Reinvestment Act, told Healthcare IT News in 2012, disbursing money for health IT adoption through the HITECH act was a "no brainer."
After all, he said, "It's preposterous that you have to fill out the same 20 forms every time you go to the doctor's office. And that two doctors who aren't in the same room can't look at the same file. And that if you show up at a hospital on the weekend they have no way of seeing the test that you took on Wednesday and you have to retake it. And that your doctor could kill you with his chicken-scratch handwriting. It's just crazy."
Fixing that "appealed to Obama, who really is this sort of rationalist, pragmatist, sort of policy guy," he said. "People had been squabbling over the details for several years; the prospect of $27 billion really did focus the mind."
It also turbocharged an entire sector of the economy.
"Obama's stimulus was the catalyst that lit this industry up five years ago," says Wieland. "We haven't looked back since."
In a busy decade for healthcare, meaningful use would seem to be the signature event. "As much as I have some misgivings about it, I would have to say it has been," says Moore.
"It has dramatically accelerated the adoption of IT," he says. "But there's been a lot of unintended consequences as a result of this."
For one thing, Stage 1 criteria had hurdles that were fairly low. Understandable, sure, since widespread adoption was the goal. "But I believe also that these artificially low barriers allowed a lot of EHR vendors that frankly should have gone the way of the dodo to continue to exist," says Moore.
The stimulus was "a huge shot in the arm" to a lot of companies that may not have deserved it, he says. "Unfortunately a lot of providers were just going out and buying whatever they could find that was certifiable for Stage 1. And now they're stuck with systems that really don't fit what they need."
Certain vendors may find Stage 2 more of a challenge to manage. As Rob Tagalicod, director of the eHealth Standards and Services office at the Centers for Medicare & Medicaid Services said during a recent meeting of the Health IT Policy Committee, HITECH "has allowed 1,000 flowers to bloom."
But "the question remains," he added, "which of these blooms will be hardy enough to meet the challenges of summer," referring to Stages 2 and 3.
But some companies have aced the past decade, taking every advantage of the opportunities presented by meaningful use.
"You really can't say anything without saying something about Epic," says Moore. "They have done a very good job on capitalizing on this. Their technology is fairly dated. But they've really focused on things that tend to be pretty important in this market: issues around workflow, and trying to have systems that are somewhat consistent. A lot of vendors have paid less attention to that and have suffered as a result."
Cerner is another winner. "Ten years ago, they understood the perspective of the hospital but I think underestimated the complexity of the ambulatory environment," says Wieland. "And they figured that out. They also figured out the value of a single platform across inpatient, outpatient, clinical and billing. Over the past 10 years, Cerner has absolutely caught up with Epic."
"I gotta’ throw MEDITECH in there, so call it a seven-horse race," he adds. "But in terms of competing for new market share today, I still think it’s a two-horse race."
The have been stumbles, too. "The first one that comes to mind is Allscripts," says Wieland.
The company's growth-by-acquisition strategy – most notably with its $1.3 billion merger with Eclipsys in 2010 – has not worked out as planned. "I don't think they truly appreciated the challenges of trying to make these systems interoperable," says Moore.
All in all, it's been an interesting 10 years – especially the past five.
"There's been billions of dollars poured into this industry the last ten years,” says Kent Gale, founder of KLAS. “Huge amounts of money. Some of it’s gone to great success, and some of it has been wasted."
No question, though, we're in a better place than we were 10 years ago.
"In the aftermath of the stimulus, we are now seeing an acceleration in the innovation cycle here, because these companies can afford to invest their money in R&D," say Wieland. Specifically, he's referring to Epic and Cerner, who have become "the Coke and Pepsi of this market."
Not long ago, health IT was a fragmented space, with a miniscule penetration base. "Now what we have is a more concentrated market share, so these companies invest the appropriate amount of money in research and development to drive innovation," he says.
"This industry has based its innovation on what today is a five-year-old piece of government regulation," says Wieland. "Meaningful use was written before the cloud and mobile were really invented. As this industry evolves, there's going to be more innovation over the next 10 years as there has been over the past 10 years."