Southwestern EHR Implementation Project

Student International Business CouncilUniversity of Notre DameDecember 2, 2016

Fall 2016 Deloitte Consulting Project Team

Andre ElblingFinance

Class of 2019

Jasmine MadrigalFinance & Psychology

Class of 2019

Chris JungITM & ChineseClass of 2018

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Frank ChungAccounting

Class of 2019

Arturo PrestamoMechanical Engineering

Class of 2019

Marina HroszFinance & ACMS

Class of 2019

Matteo Muehlhauser Political Science

Class of 2019

Kibaek LeeAccounting

Class of 2018

Case Overview: Southwestern Hospital requires the implementation of a new EHR system

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What Who

How Why

• Assist upgrade in Electronic HealthRecords

• End-to-end plan• Current system is outdated,

inefficient and lacks robustness

• Streamline core business processes• Enhance patient record tracking• Optimize efficiency and

performance in hospital

• Southwestern Hospital:• Chicago-based• Change averse• Understaffed

Significant volunteer staff

• Proposing software solution and implementation strategy

• Outline requirements and risks of method

Considerations Cost, ease-of-use, flexibility, scalability, reporting and forecasting capabilities

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Executive Summary

Recommendation

Southwestern hospital should purchase the Allscripts product, an off-the-shelf EHR solution with low upfront costs, huge flexibility, and systematic simplicity.

Analysis

Definition of EHR Types of Product Implementation

Benefits Risks In-House Off-the-Shelf

Risk Mitigation

Staff Training

Allscripts

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Recommendation

Southwestern hospital should purchase the Allscripts product, an off-the-shelf EHR solution with low upfront costs, huge flexibility, and systematic simplicity.

Analysis

Definition of EHR Types of Product Implementation

Benefits Risks In-House Off-the-Shelf

Risk Mitigation

Staff Training

Allscripts

Southwestern’s new EHR system should increase the efficiency of health record storing processes, yet needs to be customized for change-averse employees to avoid potential malfunctions caused by inexperienced manipulation of the system.

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Successful EHR implementation should satisfy the specific expectations and preferences of the client

Sources: School Health Center

The client is looking for: New EHR system is expected to:

The client additionally prefers:

- A system that is not prone to user-entry errors and poorly structured data

- A system that does not include the complicated manual processes of the hospital’s current system

- Improve current operational efficiency and customer-based relationships

- Introduce the user-friendly training materials

- A system that requires minimal amount of staffs, as the current health record database department is understaffed

- A system that is not too much different from the current system, as the staffs are accustomed to the old system and change-averse

Source: Allscripts

Today’s web-based EHR will change the way health record is shared and boost the data accessibility

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Benefits of Web-based

EHRC. User Friendliness- Most web-based EHR

system offers mobile and desktop applications on Apple and Windows devices

- Users can easily be added onto the existing technical infrastructure

A. Mobile Integration- Integrate all types of

mobile devices, including phone, tablet, and laptop computers

- Users can manage daily activities and updates status remotely

- e.g. Allscripts Wand

D. Increased Connectivity- Users can securely log

on to their system with just a gadget and the internet connection

- Web-based EHR provides better connectivity with clinical healthcare and patients

B. Cost-saving Features- Web-based EHR doesn’t

need the installation of hardware, software and expensive maintenance

- Web-based EHR doesn’t have the risk of losing data due to hardware malfunctioning

Sources: IBISWorld, Yahoo! Finance

The implementation process should address the operational, financial, and technological risks

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Breakdown of Potential Risks

Operational Financial

Technological- Security breach: electronic records are at risk of being

stolen, while health records are up to 10 times more valuable than a credit card number for hackers

- Advanced security will be needed if EHR is implemented

- Delayed return on initial investment can expose the client to potential bankruptcy problem

- Disrupted workflows can increase the operating cost

- Redesign of infrastructure is necessary, including billings and program coding

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Recommendation

Southwestern hospital should purchase the Allscripts product, an off-the-shelf EHR solution with low upfront costs, huge flexibility, and systematic simplicity.

Analysis

Definition of EHR Types of Product Implementation

Benefits Risks In-House Off-the-Shelf

Risk Mitigation

Staff Training

Allscripts

Sources: IBISWorld

Considering the key factors in the choice of EHR software, e.g. streamlining tasks, reducing errors, and saving implementation costs, an Off-the-Shelf software is the better choice for Southwestern.

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Off-the-Shelf software has strong competitive advantages over its In-House software rival

Advantages• Readily available

support staff• Level of customization

available• User-friendly interface

Shortcomings• Lack of knowledge to

handle errors and bugs• Hard to maintain up-to-

date technological trends

Advantages• Readily tested by other

companies• Fast deployment• Smooth integration with

current system

Shortcomings• High support and

maintenance costs• Price can fluctuate by

vendors• Long waiting period for

technical support

Develop In-House Software Purchase Off-the-Shelf Software

11IBIS World, Google, Yahoo! Finance

Allscripts stands out among other Off-the-Shelf products with low costs and short installation period

Cos

t-sav

ing

Time-saving

Factors Taken Into Account:• Length of implementation• Cost of implementation

• Cost of implementation: ~$40,000 per physician

• Length of implementation: 3-6 weeks

• Cost of implementation: ~60,000 per physician

• Length of implementation: 1-2 months

• Cost if implementation: ~150,000 per physician

• Length: 1-2 months• Cost of

implementation: $90 million for 500 beds

• Length: 2-5 months

• Cost of implementation: $1.5 billion over 5 years (2015)

• Length of implementation: 3-6 months

Allscripts is the ideal provider with the lowest average implementation costs as well as a very short implementation time period. Allscripts is also heavily focused on small/mid-size hospitals, ensuring the satisfaction of Southwestern hospital.

Source: Allscripts, Black Book Rankings

Allscripts offers many features that cement its place among the best EHR software. Its interconnectivity capabilities, cost-effectiveness, flexibility, and ease of use make it a viable target of purchase.

• Has many templates catering to varying medical specialties

Templates

• Prescribing application connected to over 50,000 pharmacies and laboratories.

• Cloud capabilities

Connectivity

• Offers a Patient Portal• Patients can access

records, appointments, and billing

Patient Use

Unique Features

Relevant to Southwestern

• Designed for medium size clinics and hospitals

• Flexible and easy to utilize• Scalable

• Cost-effective• Interconnectivity and cloud-capabilities• Headquarters located in Chicago

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Designed for small and mid-sized hospitals, Allscripts can satisfy every expectation of Southwestern

Upgrade Costs

Allscripts Cerner Epic0%

10%

20%

30%

40%

50%

Source: Modern healthcare

Example from Catholic Health Initiatives presents potential success of Allscripts within Southwestern’s infrastructure

Scored the highest in customer

satisfaction for large hospitals

Aimed towards mid-sized

hospitals, but has various large

clients

Ranked “Best of the Best” in

Interoperability & Communications

in 2014

Lower price compared to the

market rivals

Allscripts has smaller market share than other players in the EHR industry, however they have a relatively short implementation timeline and works well in hospitals like Southwestern Hospital.

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Case Study: Catholic Health Initiatives- Signed for ambulatory EHR run by Allscripts in 2010- Has 75 hospitals nationwide with annual revenue of 8.6 Billion & over 1050 doctors- Catholic Health Initiative decided to expand its relationship with Allscripts in 2015, allowing it to

provide complete support- Overall very positive partnership, showing potential successful partnership with Southwestern

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Recommendation

Southwestern hospital should purchase the Allscripts product, an off-the-shelf EHR solution with low upfront costs, huge flexibility, and systematic simplicity.

Analysis

Definition of EHR Types of Product Implementation

Benefits Risks In-House Off-the-Shelf

Risk Mitigation

Staff Training

Allscripts

15Sources: Norcal Mutual Insurance Co., Hitech Answers, Healthcare IT News.

Allscripts can successfully mitigate all the presented risks that can be occurred during the implementation

Data Entry Errors

Breach of Confidentiality

“Curbside” Consultations

Inadequate EHR Training

Failure to Check EHRs

- Saving data in the wrong patient’s charts- Checking the wrong box- Typing the wrong dose

- Inconceivable level of potential data breach caused by hacking, more severe compared to old-fashioned paper records

- Easy access to patient database can let doctors view colleagues’ patients for personal, unofficial medical consultation

- Change-averse culture at Southwestern Hospital- Lack of technical competency of the independent

contractors

- Turning off system’s warning messages- Failure on behalf of patients to properly heed to

important news

Double checking, avoid abbreviations, regularly update information, ensure proper EHR policy on behalf of employees

Mitigation

Mitigation

Mitigation

Mitigation

Mitigation

Access restrictions, set up appropriate access level, forbid password sharing, change passwords frequently, audit usage of records

Formally consult with specialists when necessary, include correspondence to colleague doctors in patients records

Have a realistic and well communicated transition plan, provide regular training and testing, regularly assess mistakes

Develop a system that allows doctors to convey their urgency, set up a policy describing how frequently users must check their emails

Source: HealthIt.gov

Effective employee training is essential to the success of an EHR implementation

Super User Training

Super users have knowledge of entire system

Role-Based Training

Specific training sessions for immediate responsibilities of

staff

Process-Based Training

Helps staff understand new workflows such as providing clinical summaries to clients

Vendor Training

Internal Training

Cost-Effective Training

Effective EHR System implementation should include different types of user training, especially the “Super Users,” a small group of staff who know the entire system. Other staffs will receive specialized, role-based training. Southwestern should take advantage of resources provided by the EHR vendor.

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Sources: Allscripts, EHR intelligence

Southwestern should plan out the project through 24-month time period for flawless systematic transition

1-12mo.

• Make a solid plan for training and other crucial steps• Get support from the hospitals leadership

13-18mo.

• Decide on a project team, including an overall leader• Provision necessary hardware and software needs

19-21mo.

• Install hardware (crucial to start at least at the 3 month benchmark)• Assign super users, and start scheduling training sessions

22-24mo.

• Build and test interfaces, also should test readiness of the system• Adjust staff, and patient schedules according to EHR

After

• Create a network for support and feedback with other hospitals• Maintain a healthy relationship with vendor, to help the flow of the overall program

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Conclusion

Implement Allscripts to streamline core business, enhance patient record tracking, and optimize performance in Southwestern.

Ultimately

Strategic Rationale

Feasibility and Execution

• Purchase Allscripts, an off-the-shelf, flexible, cost effective, and comprehensive EHR system that suits Southwestern’s needs.

• Follow 24 month plan of training and implementation strategies for Southwestern staff.

• Carefully manage risks through mitigation strategies.

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Comparison of IRR assuming investment into Allscripts Vs. Epic in 5-year period- Assumptions

- Allscripts and Epic have similar, basic functionalities, no difference in annual cost and saving- Exclude detailed training fee for nurses and volunteers as cost varies in large spectrum- Savings are primarily attributed to automating time-consuming paper-driven and labor-intensive

tasks, potentially take care of more # of patients in a given time (including potential revenue gain)- Apply 10% annual growth rate since Southwestern is expanding rapidly within the US

- Initial Investments- Epic EHR Software = $52M for a mid-sized (~150 beds) hospital * 7 (~1000 beds) = $364M- Allscripts EHR Software = $5M for a mid-sized (~150 beds) hospital * 7 (~1000 beds) = $35M

- Annual Cost and Saving Breakdown - Annual Cost = Monthly $1K per physician * 12 * 200 (Southwestern’s # of physicians) = $2.4M- Annual Saving = Average $48M in 5-year period / 5 = $9.6M- Annual Benefit = 9.6 - 2.4 = $7.2M per year

- Scenario 1. Southwestern purchases and implements Epic (w/ 10% annual growth)

- Scenario 2. Southwestern purchases and implements Allscripts (w/ 10% annual growth)

Year 0 1 2 3 4 5

Cash (364M) 7.2M 7.9M 8.7M 9.6M 10.5M

IRR -43.54%

Year 0 1 2 3 4 5

Cash (35M) 7.2M 7.9M 8.7M 9.6M 10.5M

IRR 7.58%

Appendix A: IRR Analysis of Allscripts implementation in Southwestern presents the best potential financial return

Sources: Healthcare Financial Management