Call it “bad luck”. Call it the “X factor”. Call it whatever you want. The purchase and implementation of health information technology (HIT) continues to exist in a domain that reminds me of the Wild West. Years ago, I experienced this dark corner from both sides of the equation. While working for a large specialty practice it became obvious that the costs of adequate training and necessary interfaces were not included in the initial HIT agreement. Years later, while working as an implementation Project Manager for a large ambulatory vendor, it often fell to me to deliver the bad news to a practice that what they “assumed” had been part of the agreement was not there. Rarely, if ever, did I see an agreement that was truly “soup to nuts”. This is especially true for large complex systems. Currently, it is almost impossible to predict an accurate timeline or to know the final cost of the large-scale purchase and implementation of HIT. A signed agreement can become the rope that drags a hospital or health care system down a rabbit hole that can end careers, force layoffs and saddle the purchasers with unexpected costs and possible bankruptcy.
First, a few painful examples from the battlefront:
A huge project to modernize medical record-keeping for California prison inmates has more than doubled in cost from original estimates, to nearly $400 million in just three years
The purchase of a comprehensive system can easily cost hundreds of millions of dollars and has been known to exceed one billion dollars. It is not usual for the timeline of implementation to take 3 or more years. Unexpected technical issues, training costs, and the fact that a vendor is often forced to compete based on the lowest quote can contribute to an initial agreement that does not fully represent reality. It is not the cost of the technology and implementation that is the issue, it is the misunderstanding and subsequent shock of unexpected delays and additional unforeseen technical requirements that can cause the rabbit hole to open. And when that occurs, anything can happen including layoffs, major charge capture disruption, and on occasion, bankruptcy. Here are six hospitals that have been damaged financially due to EHR costs. The purchase and implementation of a large system can cause such disruption that the leadership of a system can be totally ripped apart. Here are but two examples: Denver Health CIO, COO quit and CEO, CIO resign amidst ‘aggressive’ EHR rollout. So, this is serious business. Perhaps the most serious as a hospital can become trapped in a death spiral. Based on what is being reported in the media I do not believe this is an exaggeration.
With so much at risk, what can a hospital or health system do to limit exposure? Well, first realize that you will be at risk. Second, do not proceed until you have experienced advocates in the process supporting your due diligence. From contract negotiation to the inclusiveness of the agreement you want seasoned expertise on your side. Without that you are flying blind and are headed for the rabbit hole. We will continue to hear these horror stories. The current environment makes it extremely likely this dark corner will not be going away. The greatest risk of all is to be in denial of the complex and critical issues.
There are lessons to be learned from those that have gone before. Forewarned is forearmed but sometimes even that is not enough. Beware of the rabbit hole.
Originally posted at www.mipsconsulting.com