Healthcare Innovation: We Need to Fix EMR/EHR Procurement

Computers and software get faster and less expensive at a dramatic rate. Healthcare systems implementing computers and software gets slower and more expensive at a dramatic rate. Why is buying the thing getting so much worse at the same time as the thing being bought is getting so much better?

There is only one explanation: the procurement process used by the large organizations is broken. Badly. It doesn't need "improvement" or "innovation." Today's standard procurement system needs to be thrown out. We need to start over.

Improving Computers: Incredibly complex, successful

It's just unbelievable how much better, faster, smaller and cheaper computers get. The rate of improvement is unprecedented in human experience. Nothing comes close.

Even software that used to be unavailable or expensive to buy is free! Think "open source," for example.

Procurement of computers: Basically simple, a worsening mess

Most large organizations are just awful at building, acquiring and implementing computer hardware and software. It's not getting better.

How do these organizations respond to their screw-ups? They look closely at what went wrong, "improve" the process ... and make it even worse.

Back to paper

Organizations really try to make it work. The US Coast Guard, for example, embarked on a project to plan the implementation of a leading EMR in 2010, and committed $14 million just to do some planning. Six years later they cancelled it:

They knew something was really wrong, not just the usual wrong stuff. You know things are tough when they go back to paper:

On the other hand, they can provide all the health services their members need with paper alone! Tells you something about today's EMR's, doesn't it?

New York City's HHC EMR procurement

NYC's public hospital system is big. They're also a pioneer in using EMR's. They've won awards because of it, and gotten $200 million from the feds for achieving full "meaningful use" status with it. They go way beyond just electronic recording; they manage diseases, do screening, and lots of advanced things. See this from a January 2013 HHC press release:

By their own report and by the judgment of important institutions, HHC has this EMR thing nailed!

HHC has bigger problems than EMR. It is in big financial trouble, and it's getting worse. See this report from late 2013:

They've got an industry-leading, award-winning, value-enhancing, WORKING EMR, and huge financial troubles. Sounds like an ideal time to buy a new, system-wide EMR, right??!!

Well, that's what they did. In same early 2013 press release in which they bragged about their wonderful existing EMR, quoted above, they announced they were buying a new one:

A close reading of the press release leaves one wondering why they had to have a new one: the touted wonders of the new system line up pretty well with the wonders of their award-winning existing system. I guess they really hankered after that new-EMR smell. And with the big award from the feds, $200M of the $302M is already paid for, leaving just pocket change to pay for it!

But then, less than a month after this press release, HHC issued an RFP for extensive additional services. Here is a list of the consultant skills they wanted to hire:

Strange. I got the distinct impression from reading the press release about getting Epic that the $302 million covered everything. What's this about?

The July 2015 board meeting of HHC had an update on how things were going. Things weren't working out too well on the cost side; those numbers are millions, by the way:

Wow. Just a bit more that $302 million. Digging a little further in the Board minutes, we find a little about the $113 Million. Here's the summary:

Or maybe not -- this $119 million is for consultants, not FTE's, and it's per year -- the surprise on-going cost of getting that shiny-new-EMR-system smell into the hospital! And you have to notice that 20 vendors will be awarded contracts -- because everyone knows that having lots of temporary people from lots of vendors working on a single project is the proven way to maximize coordination and minimize surprises. Sure.

Oh well, at least things are "under control." Or maybe not. Just a month later, in August 2015 we learned:

And the dates? Let's talk about something else, because "full operation by 2017 for all users" is history, along with the $302 million cost and lots of other things for this troubled system.


HHC is a nice, big, fat example -- but it's not unusual. This is what EMR procurement is like, over and over again. The buyers just keep shuffling ahead to the painful and prolonged slaughter, like cattle. Few organizations are as smart as the US Coast Guard, and decide that paper is just fine. Big-organization procurement in general is broken, and EMR procurement in particular is badly broken. Every attempt to "fix" it seems to make it worse. The procurement process needs to be thrown out. We need to start over.

But start over with what? I will summarize how in forthcoming posts. But it's not mysterious. It's just an application of the proven methods described in my books and summarized in various posts on this blog.