Healthcare leaders in a semi-rural region of northern Indiana are making strides pioneering an approach to clinical information systems that allows community hospitals to build a shared medical record at a fraction of the going rate for cutting-edge software.
The structure and economies of the initiative, called the Michiana Health Information Network, are so innovative that sponsoring organizations are able to foot the bill for free use of a clinical data repository by their physician customers. The hoped-for payoff is better service, eventually at a lower clerical cost.
Michiana is a moniker for an area that includes northern Indiana and southern Michigan.
As a broad example of information technology's leading edge, the initiative in South Bend, Ind., offers a window on inroads and setbacks associated with remote delivery of sophisticated clinical computer applications-complicated by the practical problems of aligning the aims of independent players in a healthcare market.
Although the model for sharing implementation and operating costs is applicable in other markets, the specific terms for software license and maintenance agreed to by the Michiana network's technology partner are a one-time deal.
A significant aspect of the deal is a master software license granted five years ago by Cerner Corp., the Kansas City, Mo.-based vendor of an integrated set of clinical computer applications dubbed the Millennium product line. Lacking a strong sales presence in nonmetropolitan areas, the company was willing to be flexible on opportunities to bring its products to such regions, says Richard Flanigan, Cerner's senior vice president.
The arrangement authorizes the regional network to sign up medical facilities and doctors for the full scope of Cerner's products as they're phased in at a central data center, for which the network charges a monthly subscription fee according to the degree of computerization each customer selects.
The fees cover the monthly software-license charges with enough left over for operating expenses and capital investment, says Jay McCutcheon, who directs the operating company. The MHIN contract with the software vendor prohibits disclosure of the payment formula, but it has enabled doctors to gain access to clinical information for a minimal monthly charge after initial network connection expenses ranging from $8,000 to $20,000.
"The demonstration involves some economics that are not going to be easily replicated," Flanigan says.
That's partly because in the intervening years, the vendor has scored more than a hundred sales among community hospitals that were considered priced out of the market for clinical automation at the time the master-licensing idea was hatched to deal them in, says spokeswoman Ashley Davidson. "People are finding ways to spend the bucks on it."
Recent sales include a substantial contract with Memorial Health System, owner of a major hospital in South Bend, for much the same package of clinical applications that the regional network is trying to implement universally to increase its information impact and spread fixed costs. That situation has added political as well as operational challenges to the quest for a single-source electronic medical record in the region.
"Today, we have Millennium products packaged specifically for community hospitals and have a deep, dedicated sales force for this segment," Davidson says, adding that "demand from community hospitals was a strong driver of growth for Cerner in 2001." The company is expected to post record revenue for the year, reaching $500 million for the first time.
Cerner's recent success notwithstanding, the upfront licensing and implementation costs of clinical information systems are obstacles for many hospital organizations, according to the latest Modern Healthcare survey of information systems trends (p. 57).
Cerner is "willing to entertain" the master-license approach further, Flanigan says, and "will work to define other markets that share community characteristics that we found in the South Bend market." Those prerequisites would have to include a lineup of healthcare stakeholders highly motivated to collaborate.
Centralizing clinical information
Prime movers of the MHIN project in South Bend saw software expense as a barrier but not the only one preventing healthcare facilities and their physicians from using technology to its fullest in clinical care.
Early on, the two founding sponsors championed the pivotal role of an access-controlled central database of information, organized by patient rather than by the facility where the data originated.
Besides aggregating and comprehensively presenting historical information from many potential sources, the database would allow the latest reports on test results and treatments to be posted once and available immediately to doctors and other clinicians awaiting them.
For South Bend Medical Foundation, a not-for-profit laboratory company that handles 70% of the specimen testing and lab results reporting in the region, it made sense to promote a cooperative effort to share the development and costs of a common repository that could receive medical test data and be accessible to all provider customers, says Robert King, the foundation's vice president of marketing.
The lab company now manages a piecemeal network of 290 connections to computer terminals or printers, and it also fields 1,000 calls per day about the status or results of tests, King says. If the operation could transmit and receive information through a single source instead, it could provide instantaneous delivery of information while eliminating much of the current overhead, he says. The cost-savings objective is a gamble, though, because the network first has to be used by enough lab customers to merit disconnecting current connections and reducing the number of staff answering phones, area officials say.
South Bend Medical, a customer of Cerner's laboratory information technology since the late 1980s, brought the vendor and 10 area provider organizations together in the mid-1990s. Each organization contributed $5,000 to a test of the feasibility of clinical databases and workstation computers to enhance the efficiency and effectiveness of patient care-an open question at the time.
Only one provider, Saint Joseph Regional Medical Center, opted to join the lab company for pilot tests of a centralized network in 1996 and 1997, during which they also developed initial software and service contracts with Cerner that enabled the regional network to be financed and operated on a subscription basis.
Saint Joseph and South Bend Medical each put up $630,000 to found MHIN in June 1998 as a limited-liability corporation chartered in Indiana. A clinical repository was posting and storing data from Saint Joseph's 310-bed South Bend campus by April 1999.
Software pricing considerations aside, the founding organizations say the regional concept offers a means to solve important area business challenges, including:
* Avoiding the duplication of expensive computer capacity and network infrastructure.
* Enabling the region's physicians, most of whom are on staff at all hospital facilities, to receive and eventually transmit medical data from multiple locations.
* Providing low-cost information access to physicians, but in a neutral arrangement that precludes accusations of inducements in return for patient referrals, a violation of federal law.
* Establishing a comprehensive computer foundation for medical-error prevention that increases the likelihood of having all the information on a patient necessary to avoid medical mistakes.
Making the network viable
The project's regionwide objectives date back to the impetus for organizing community health information networks, a technology adventure popularized in the mid-1990s but abandoned as unworkable for many political as well as technical reasons (See Modern Healthcare's Eye on Info, March 5, 2001, p. 26).
In South Bend's case, the concept was envisioned as a means of powering a set of health-status goals targeted by a program called Healthy Communities of Saint Joseph County, launched in 1994 by local businesses in conjunction with healthcare providers, says Robert Beyer, Saint Joseph's president and chief executive officer.
Most CHIN efforts could not get past political opposition to putting proprietary information in a common database or relying on an outside source to manage a critical asset and provide top-drawer technical performance.
But a lot has changed in a half-dozen years, says Luis Galup, M.D., president of the medical foundation.
The advent of faster and faster computers, combined with the technology to store data as discrete elements but group them in millions of different ways, made it possible to gather data from many sources, tie them to one person and still provide quick response to queries, Galup says.
And leading-edge software such as the applications developed by Cerner enabled pinpoint control of data in repositories, allowing information to be accessed or sealed off according to rules of ownership and authorization, he says.
That addressed the challenges of getting providers to support using a central database while maintaining individuality of participants and guaranteeing security of patient information, Galup says. Without such assurances, the public "would insist on using the old technologies" of phone, fax and point-to-point data lines.
Part of the original $1.3 million in startup funding was spent on policies and programming to manage confidential relationships between patients and providers, McCutcheon says. That was before regulations implementing privacy provisions of the Health Insurance Portability and Accountability Act of 1996 became final early in 2001 and highlighted the issue, he says.
With the data relationships established, the lab company more than a year ago began forwarding results to the MHIN data center, where they are available to physicians who sign up for secure access to information on their patients.
As of early January, Saint Joseph had signed more than 200 of the 500 physicians practicing at Saint Joseph facilities in South Bend, Mishawaka and Plymouth, Ind., including the system's 60 employed physicians. Another 150 independent doctors have sign-on privileges, and about 50 of them are using it regularly, McCutcheon says. A mailing will go out in February to the remaining staff physicians offering sponsorship of their access fees by the lab company and medical center, McCutcheon says.
Besides viewing lab results, physicians also can retrieve clinical data contributed by Saint Joseph's South Bend campus, including patient discharge summaries, consultation notes and information about how surgical procedures went.
Doctors pay the costs of their own computers and telecommunications, but Saint Joseph picks up a network charge of $20 a month per physician for rights to all the results available in the database that a doctor is authorized to see. The medical center also pays $50 monthly per bed, McCutcheon says.
And later this year, Saint Joseph will pay to have 400 nurses signed on to view results, he says.
The next level of computerization involves supplying a range of other Cerner applications for specific purposes, such as surgical, scheduling and physician practice automation.
A scheduling capability recently installed in the MHIN data center is in operation at the Saint Joseph facility in downtown South Bend and is expected to be up and running by midyear at its Mishawaka facility, 100-bed St. Joseph Community Hospital. In the same time frame, Saint Joseph Regional Medical Center-Plymouth will implement the surgical application, which was recently implemented at the South Bend campus.
The medical center also plans to bring clinical data-management applications to its employed physicians this year. An additional monthly fee of $75 per doctor to the MHIN will buy entry-level services including registration, transcription and automated feeds to the data repository, McCutcheon says. Future enhancements at additional monthly cost include such options as order entry, rules and alerts, structured clinical documentation and management reporting.
The project includes some upfront costs of implementing the software, but ultimately the project will pay for itself in 21/2 years in reduced labor and transcription costs along with improved revenue through more effective practice management, says Frank Smith, vice president of information services and chief information officer. And the result will be a fully electronic patient record, he says.
Matching doctors with data
Acceptance by physicians is the strategic centerpiece for advocates of the regional network. To fulfill its promise as a one-stop information source, the online service has to get agreements to receive data from all major hospitals as well as ancillary facilities such as diagnostic and surgery centers, McCutcheon says.
Once a clear majority of physicians is on the network, their interest in getting what they need from it will help melt resistance and build a foundation of comprehensive information and broad participation, he says. Now that the database is tested, loaded with lab data and ready for business, "awareness is the next hurdle."
So far the effort has attracted the backing of 11 independent specialty practices, which are in varying phases of migrating to the network. The lure of readily available clinical data on a shoestring budget was a strong selling point, says Gary Erskine, CEO of Allied Physicians of Michiana, South Bend.
The medical services organization serves eight practices with a total of 65 specialists and surgeons. Allied physicians also invested in and opened a freestanding surgery center at the north edge of town a year ago.
"The biggest nut to crack to get into the electronic arena is the huge startup cost," Erskine says. "It's a pretty overpowering argument that this is a way to get over the hump that everyone's trying to overcome."
As the MHIN grows from a data-management utility to an application provider, it "has the potential to provide the bulk of the information we would ever need," he says. "That's where the real opportunity is."
The arguments resonate with physician practices short on capital, but it failed to impress executives of Memorial Health System, owner of the biggest hospital in town and Saint Joseph's chief competitor for patients and physician referrals.
Memorial signed a multimillion-dollar contract last September with Cerner as part of a plan to completely revamp its information systems for business and clinical operations. That includes building a separate Cerner clinical data repository for its 405-bed hospital and referring physicians instead of joining the MHIN initiative.
Although Memorial is "seriously considering" the option of feeding patient data to the regional network at some point, "it's not a foregone conclusion," says Wayne Fisher, Memorial's CIO. Any decision is a few years down the road, he says, once the ambitious internal IT plan is implemented.
"At the surface level, the sharing of that information appears to have value-motherhood and apple pie," Fisher says. "But we have serious concerns we want to evaluate."
Memorial officials want to be satisfied about security and confidentiality as well as about the certainty of patient identification, which if not ironclad could pose "the potential for erroneous treatment assumptions" by mismatching patient data, he says.
The health system also wants to concentrate on its own project. "It's a matter of priorities. Dealing with the primary needs of a healthcare organization are daunting enough," Fisher says. "We want to build a world-class facility, and we don't want that to be compromised by being dependent on the MHIN system."
But MHIN backers, especially those doing business with both major hospitals, insist that Memorial's participation is important to the goal of making the network viable, and they'll have something to say about it. "It's hard for a hospital to say no when their physicians are asking," says George Friend, M.D., a surgeon on staff at Memorial and Saint Joseph.
"Right now at St. Joe it's really neat," says Friend, an MHIN user whose office is adjacent to Memorial. Instead of ordering a record and waiting a half hour for it to be pulled from a chart room, "it's boom, already there."
Pathology reports are just as quick to arrive, eliminating time on the phone. "As soon as it's out there, I know we're going to be able to get it," Friend says. "If (the MHIN) did nothing more than that, it would be worth it. But I know there's more coming."
One of the first specialists in the Allied Physicians organization to try out the network, Friend says, "it will expand very painlessly once the usefulness becomes known."
"These specialists (with Allied) have influence as an organization and as individual physicians at Memorial," says Erskine, Allied's CEO.
MHIN representatives have just begun to call on three other hospitals in the target service area: 337-bed Elkhart (Ind.) General Hospital, 113-bed Goshen (Ind.) General Hospital, and Lakeland Medical Center-Niles (Mich.), part of 360-bed Lakeland Medical Center-St. Joseph (Mich.).
Also on the recruitment target list are two radiology businesses and a large physician practice that includes dozens of primary-care doctors.
The message: At an attractive monthly cost, participation "would help bring another level of technology to a community that otherwise would not even dream of it," King says.
Negotiating a clinical edge
The network's founding sponsors maintain, however, that the MHIN initiative is worth the effort, even if they end up being the only participating organizations in St. Joseph County and its vicinity.
At the community level, Saint Joseph executives saw the potential for creating a healthier population through unfettered information sharing of patient histories and test results with physicians independent of the original data source, says Beyer, Saint Joseph's CEO. But if the regional network doesn't catch on, he says, "it doesn't impede the economic benefit we've derived from this."
The consequence of not being able to attract others is that it "limits the communitywide benefit of this initiative," Beyer says. "Every bit of data that enters the repository enhances the value of the repository."
Thanks to the contract negotiated with Cerner, the healthcare system has a tested and industry-leading clinical data foundation for its own internal information system improvements, at no upfront licensing cost.
"We saw this as an opportunity to create a unique way to deal with some of the operational challenges we were facing," Beyer says.
"At the beginning, about five or six years ago, we saw the need to make some fairly aggressive moves in technology," says Smith, Saint Joseph's CIO.
But purchasing the means to computerize clinical operations typically requires half the multimillion-dollar price down before the implementation process even starts, McCutcheon says. And that doesn't include the expense of building zippier telecommunication networks and paying a yearly software maintenance fee totaling at least 15% of the original purchase price.
In practical terms, he says, the traditional facility-by-facility focus of buying and implementing clinical databases is a recipe for duplication of effort, expense and patient records within a healthcare service area such as South Bend's.