Hospitals are getting ready to give

February 23, 2007

Remember the Stark exception that the Department of Health and Human Services carved out last summer? It allows hospitals to donate up to 85 percent of the value of EHR software to community physicians. Few institutions have taken advantage of it so far, but that may be about to change, says Keith MacDonald, a health care consultant with First Consulting Group (FCG) in Lexington, MA. Despite lingering uncertainties about what Congress or the IRS might do, he says, some hospitals see an advantage in being the first on the block to offer EHRs to their physicians.

Remember the Stark exception that the Department of Health and Human Services carved out last summer? It allows hospitals to donate up to 85 percent of the value of EHR software to community physicians. Few institutions have taken advantage of it so far, but that may be about to change, says Keith MacDonald, a health care consultant with First Consulting Group (FCG) in Lexington, MA. Despite lingering uncertainties about what Congress or the IRS might do, he says, some hospitals see an advantage in being the first on the block to offer EHRs to their physicians.

There are still a few obstacles. One is deciding which physicians to gift first. Since most hospitals can't immediately help all physicians on their staffs, let alone in the community, they have to prioritize, notes MacDonald. While hospitals can't legally favor high-volume admitters, a recent FCG report suggests that they can base their decision on practice size or volume, the amount of technology used in a practice, or its level of uncompensated care.

As expected, MacDonald notes, many hospitals are considering an extension of their current inpatient EHRs to the outpatient sphere. Under that scenario, a facility's computer server would host ambulatory EHRs and serve them via the Internet to physician offices. That's the most cost-effective way to go, but not the easiest route to acceptance by community doctors, he says. Recognizing this problem, he notes, Partners Healthcare in Boston is giving local physicians a choice between its homegrown LMR system and the GE Centricity EHR, which Partners will integrate into its network.

But integration between inpatient and outpatient systems is a real challenge for most hospitals, MacDonald points out. Aside from the technical challenges of interoperability, they have to think about designing a master patient index for both environments, and they have to make decisions about what kinds of data they want to exchange with physician offices.

Physicians will also have problems with the integration between EHRs and practice management systems. Experts agree that such integration is preferable to expensive, tricky interfaces between clinical and administrative programs. But, MacDonald observes, a physician accepting a remotely hosted, integrated system from a hospital will have to give the hospital access to his financial data—not something most doctors want to do.

To overcome that objection, says MacDonald, some hospitals are talking to third-party ASP vendors about having them host ambulatory EHRs that would be interfaced with hospital systems. "That's a smart idea, because hospitals aren't in the business of supporting EHRs," he notes. "They have their hands full managing Eclipsys and Cerner and the other inpatient applications. Understanding office workflow, doing the training, doing the site assessment, supporting the application—it's a different animal. So hiring a third party who can do that well is not a bad idea."

x