EHR ROI: a case study

I recently heard an interview of John Cougar Melencamp during which he discussed what it was like writing a song to be used by Chevy.  The song, Our Country, proved to be one of his most successful commercial ventures.  The interviewer asked him what it was like having Chevy as a record producer.  To me, his answer was filled with meaning.  Melencamp answered, “Chevy was a better record producer than Columbia ever was.”  When asked why he said, “When they said they were going to do something, they did it.”

From what I’ve seen, that statement underscores the difference between EHR that portend to meet Meaningful Use and Certification, and the small handful that actually deliver an ROI to your business.

Let me present you with a real-life example, an EHR ROI case study.  The data shown on these graphs is real.  It was developed by analyzing how many times a certain provider moves patient charts.  It starts at the chart room, is touched many times until it gets to the doctor, and is touched many more times prior to being refiled.  Charts are handled more than fifteen discrete times and undergo more than fifty unique manual processes.

This chart shows the 5-year cumulative cost benefit of implementing the specific EHR.  It does so by calculating costs around the Average Handle Time (AHT) of each time the chart is touched.  To reinforce the point, AHT per touch was calculated at 3 minutes, 2 minutes, and 1 minute.  AHT also includes spent time walking around; to the printers, the copiers, the scanners.  To the chart racks, back to the desk, to another clerk.

The interesting thing about walking time, and AHT, is the clerks are being paid to exercise even though their walking and copying do not add any value to the patient’s chart.  That’s where the ROI lays.  Without a good EHR—one that creates savings—your business costs are overstated by having a dozen or more people sitting, standing, walking, talking, copying, filing, processing, two-hole punching, stacking, inserting, writing notes, and refiling.  What happens to all of those ‘ing’activities if you install a good EHR?  All of the value from those activities still takes place, but it occurs in a fraction of a second.  It appears on your screen in much the same way that 60 Minutes is plucked off a satellite and appears on your television.

The purple line shows the total five-year cumulative cost of implementing this EHR.  The vertical axis shows dollars.

There used to be a management style practiced by Ivy-League MBAs called Management by Walking Around (MBWA).  A good EHR is like being able to multiply MBWA by negative one.  It cancels out all of the walking and all the other ‘ing’ activities that incur costs without adding value.

The most relevant EHR/EMR piece you will ever read

According to the New England Journal of Medicine, somewhere north of fifty percent of EHR implementations fails.  Your odds of success are no greater than the flip of a coin.

What if there is a tool whose use can stop the failure of most EMR system implementations?  The purpose of this post is to let you know that there is a definitive solution to help small providers, clinics, IPAs, and hospitals.

What tasks of the EMR process is the primary cause for failure?  They are the tasks that are under budgeted, neglected, haphazardly addressed, or addressed by people who have no earthly idea how to perform them.

They are the same tasks that cause systems projects in other industries to fail.  If you do these tasks wrong, nothing else you do will make any difference—do-overs cost twice as much as your first failure.

The laundry list of those tasks is:

  • Defining your requirements—for physicians, nurses, staff—all of them.
  • Putting those requirements into an operable framework.
  • Ranking the requirements in a way to enable you to pick a good solution.
    • Technology Evaluation
    • Clinical Workflow Evaluation – Analysis of current clinical workflows.
    • Gap Analysis – Comparing current technical capabilities to desired capabilities.
    • EMR/Practice Management needs evaluation
    • ARRA Incentive Estimation
    • Qualified EMR vendor list
    • Vendor competitive bid assessment
    • Hardware requirements

I recently asked a hospital CEO, “What would you have done differently regarding your EHR selection?”

Here is a paraphrase of his response.

  • Invested much more time in understanding what system we should select and how we would use it.
  • My peers assumed someone else had already done all the up-front stuff (see the above list), and they selected their system solely on what others were using.  Alternatively, they picked a system based on a golf course conversation or something they saw at a trade show.

How many of your business and clinical requirements do you need to meet for your EHR selection to have any chance of succeeding?  The best answer is “All of them”.  How many requirements are needed to define your needs; one hundred, two hundred?  Not even close.

Try this exercise.  Search Google for “CRM RFP” or “ERP RFP”.  There are hundreds of useful responses.  Now search Google for “EHR RFP” or “EMR RFP”.  There are no useful responses.  (If you cannot find something on Google, it often means it does not exist.)  The healthcare industry is usually very good at sharing useful information.

I’ve been coaching executives for thirty years about how to get these tasks right.  In doing so, I developed something that made the software selection task winnable.  (This piece is not a Tony Robbins narrative, it is not about me; I am not selling anything.)

Here is what I did.  I built a Request for Proposal (RFP) for CRM and ERP.  I started with 1,000 requirements for each.  I license it to clients and work with them to edit it, to add new requirements, to delete requirements that did not apply to their organization.  They would use the result to select the application best suited to their firm.

This process never failed to benefit my clients.  I would take whatever new requirements they created and add them to my RFP.  My RFP became more robust.  Each time the RFP was issued I collected the responses from each of the vendors and built a database of what their applications could deliver.  I now have a few thousand functional and technical requirements, and up to date responses on what the applications vendors could deliver.

Why did I build this RFP?  The answer is simple.  I needed to create a reason for a firm to hire my firm instead of hiring one of the name-brand multi-national consulting firms.  The RFP served as a cost differentiator.  Instead of spending a million dollars to hire a name-brand firm to develop something from scratch, they could be months ahead, and at a lower cost by using a proven tool.

Therefore, here’s my point.  There is a firm that built a tool similar to mine, a tool to add to the probability of you selecting the best EMR/EHR for your firm.  It will not guarantee your success, but it will significantly reduce the chances of failure.

Clearly, even if you select the right system there are still many opportunities to fail.  The converse is that if you select the wrong EHR, it will fail.  That statement is not an opinion; it is a fact.

I’ve arranged a Go-to-meeting conference call with the CEO of that firm for the week of July 26.  This organization has built what I described; an RFP with more than a thousand unique requirements, an automated way to analyze the vendor responses, and a way to match your prioritized requirements to a short list of EHR vendors.  It will not be a sales pitch.  It is designed to be a question and answer session.  Who should participate?

  • Smaller providers whose only other option is to hire the person who set up their web site to manage their EMR selection
  • IPAs whose members are looking for advice about selecting a system to meet their specialization
  • Hospitals struggling with finding a defensible position for their selection.

If you are involved in the selection of an EMR/EHR, you should find an hour to assess the tool.  If you do not have the resources to make use of the tool, they do.  They can help you help yourselves.  I promise you, this will be the best use of sixty minutes you have had in a long time.  If you know someone who might benefit from this session, please forward this and have them contact me.  If you could benefit, simply respond to me.

saintPaul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942

Revising your work flows?

revised work flowAs a parent I’ve learned there are two types of tasks–those my children won’t do the first time I ask them, and those they won’t do no matter how many times I ask them.  Here’s the segue.

Let’s agree for the moment that workflows can be parsed into two groups—Easily Repeatable Processes (ERPs) and Barely Repeatable Processes (BRPs). (I read about this concept online via Sigurd Rinde.)

An example of an ERP industry is manufacturing. Healthcare, in many respects, is a BRP industry. BRPs are characterized by collaborative events, exception handling, ad-hoc activities, extensive loss of information, little knowledge acquired and reused, and untrustworthy processes. They involve unplanned events, knowledge work, and creative work.

ERPs are the easy ones to map, model, and structure. They are perfect for large enterprise software vendors like Oracle and SAP whose products include offerings like ERP, SCM, PLM, SRM, CRM.

How can you tell what type of process you are trying to incorporate in your EHR? Here’s one way. If the person standing next to you at Starbucks could watch you work and accurately describe the process, it’s probably an ERP.

So, why discuss ERP and BRP in the same sentence with EHR? The reason is simple. The taxonomy of most, if not all EHR systems, is that they are designed to support an ERP business model. Healthcare providers are faced with the quintessential square peg in a round hole conundrum; trying to get BRPs into an ERP type system. Since much of the ROI in the EHR comes from being able to redesign the workflows, I think either the “R” will be sacrificed, or the “I” will be much higher than planned.

What do you think?

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942

My profiles: LinkedInWordPressTwitterMeetupBlog RSS
Contact me: Google Talk/paulroemer Skype/paulroemer Google Wave/paulroemer

The User’s Role in EHR–a PowerPoint presentation

This link will take you to a slideshare,net presentation that defines how healthcare providers can take control of the EHR project.  I welcome your comments.

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942

My profiles: LinkedInWordPressTwitterMeetupBlog RSS
Contact me: Google Talk/paulroemer Skype/paulroemer Google Wave/paulroemer

EHR: Is your scope wrong? I bet it is.

The hand-written note, scrawled in the best penmanship of my nine-year-old daughter, lay next to the plate of sugar cookies and the warm glass of milk.  It was eleven PM.  Three kids lay in their sleeping bags, asleep on the floor of the play room—cameras ready to capture images of the annual intruder.

Illuminated by the glimmering lights from the tree, I scanned her note.  Two pages.  Itemized.  Fifty-three lines, fifty-three items.  Requests.  The letter begins, “Dear Santa.  I wrote this list today.  I know you already got my letter.  These are other things you could give me.  Please leave them under the tree with the rest of my presents.”

There are a number of ways to view her letter.  It certainly is cute—it’s probably cuter if you’re not her parents.  You know what occurred to me at 11 PM as I stood there in my slippers eating the cookies and drinking the warm milk to reinforce the message to my children that Santa exists?  Two words.  Scope Change.  Plain and simple.

Weeks of thoughtful planning, buying, and wrapping possibly shattered by the scratchings of a number 2 pencil.

Make no mistake; this will happen to you on your EHR project.  Scope change.  Where will it come from?  Users, vendors, the CFO, reform.  Most projects fear change.  Change is feared because the project team never quite got their arms around the original scope.  Most change means more dollars and more time.

Scope change can be healthy.  Why?  I bet most EHR projects are under-scoped.  Did you read that correctly?  Yes.  I bet if an independent party assessed your scope document and work-plan you will find you are under scope in these three areas:

  • Change management
  • Work flow improvement
  • Training

If that’s the case, you will have spent tens of millions of dollars building something slightly more functional than a rather intricate Xerox machine.

Stilleto Change Management







I just returned from the Prada show in Milan. Not really—that was the opening line from a piece on NPR. Apparently this year’s runaway hit on the runways has to do with high heels, with the emphasis on the notion of high.

The following comes from the UK Telegraph: The girls looked like rabbits trapped in the headlights; their faces taut and unsmiling, their eyes wide with fear and apprehension. Were they about to undertake a parachute jump? Abseil down a 1,000ft mountain? None of the above. All they were doing was trying to negotiate the catwalk at Prada during this week’s Milan fashion shows in shoes that were virtually impossible to walk in. At least two models tripped and fell on to the concrete floor; others wobbled and stumbled, teetering and tottering, clearly in agony, and all the while their minds were fixated on just one thing: reaching the sanctuary and safety of the backstage area without suffering a similar fate.

According to the NPR reporter, the heels are so high that regular people—women people that is—can’t seem to walk in them without falling. This problem has led to the creation of an entirely new micro-industry. In L.A. and New York, there are classes to teach ladies how to walk in very high heels without hurting themselves. These classes are being offered through dance schools that couldn’t fill their dance classes—they are now booked solid.

Tell me this isn’t the same as trying to walk and chew gum at the same time. Multitasking. Now before I make fun of some thirty year-old that has to relearn how to walk, let us turn our attention back to those dancing—cum—walking schools. From a consultant’s perspective what makes this story interesting is that those businesses saw a need and re-engineered a part of their operation to meet that need, sort of like we’ve been discussing regarding the impact EHR and reform can have on your organization.  With the implementation of EHR, many things will change.  If they don’t require change, you probably wasted your money on the EHR.  What’s important is having a plan to define the change and manage it.  Rework work flows, remove duplicated processes and departments.

Now I’m going to go saw the heels off my wife’s shoes before she hurts herself.


EHR: there’s a difference between finished and done


The phone rang last fall. It was the school nurse asking me if I would come pick up my seven year-old son. When I inquired as to the reason she informed me he exhibited the classic symptoms of the crud; tummy-ache, non-responsive, crying. She’s the nurse, so without better information, who was I to question her diagnosis?

We got into the car and the tears started to come again. “Do you feel like you’re going to be sick?” I asked as I looked at the leather upholstery. He didn’t answer me other than to whimper. He didn’t seem sick at breakfast. I remembered that he was crying last night, but that had nothing to do with his stomach. At first I thought it was related to the thunder. Nope. He was hugging his favorite dog, a five year-old Bichon.

We had learned a few weeks prior that the Bichon is ill and won’t ever be a six year-old Bichon. The person having the most difficulty with it is my youngest. I asked him if that was why he was crying in class and he confirmed that it was. Dads know everything, at least some times.

So, here’s the deal. The school nurse had done all the right things to diagnose my son’s problem, but she stopped short of determining what was wrong. Let’s try a more relevant situation from the perspective of an EHR implementation.  The word implementation sort of suggests that when you reach the point of having implemented that there’s nothing left to do.

There’s finished and then there’s complete.  Finished doesn’t mean the task is over until the system does what it was supposed to do.  If you didn’t do a good job of defining it up front you may never know the breadth of what was intended for the EHR.  In the case of EHR, done includes change management, work flow engineering, training, and user acceptance.
The point is, if it looks like you finished the EHR implementation, double check that you have before you take a bow. Technology alone will not an EHR implementation make, it is simply a part of the overall task.


Work Flows–learn to color outside the lines


Somewhere out there is the person or persons who invented Chuck e Cheese. I am convinced that whoever deserves the credit either does not have children, or if they do, does not take their children to Chuck e Cheese under any circumstances. If you’ve never been, it’s one of those places whose true cacophony must be experienced first-hand. The FDA should conduct clinical trials of blood pressure medicines there. The formula is simple; machines that make noise plus kids that make noise equals happy kids. Some parents are immune to the noise. I’m not some parents–never have been, don’t see it happening any time soon. I could feel the pressure build, the parents around me were coping the best they could. One father whose eyes looked like those in Edvard Munch’s painting “The Scream” was popping Xanax like they were jellybeans.

I collected a group of parents and we sequestered ourselves behind the skeet-ball. “We’ve got to come up with something to ensure we never have to do this again,” I whispered, trying to rally my charges.

“I can’t do this anymore,” replied a frail-looking man who had developed a nervous tick.

I paused and pondered as an idea flittered past my id. Then I started a smile which soon covered my face.

“What?” asked Tick man.

“Yes, tell us,” implored The Scream.

It was a coloring outside the lines idea if there ever was one. “WebEx,” I barked as the idea began to take shape. “We do virtual birthday parties on WebEx. We each login our children from the comfort of our home. No screaming kids, no cold pizza, no spilled soda. It’s perfect. While they’re doing that, we can be in another room watching football.”

The idea had legs right up until the point where my wife overheard it. “You old Grinch. Get back over here with your son.” I caved, but I’m holding the idea in reserve.

Thinking outside the box. In creating the vision for re-engineering your work flows, why start there? That’s where everyone starts. Remember, if everyone’s thinking outside the box, all that means is that the box has moved and everyone is back in it. Why not create a vision that includes something like re-engineering all non-clinical patient-facing activities? A stretch goal is not trying to reduce billing calling by fifty percent. That’s what world class providers are trying to do. Other stretch goals might be asking questions like;

1. What would have to happen to the practice to be able eliminate eighty percent of all patient complaints?
2. What would it take to move half of all patient contacts to the web?
3. What would happen to first patient satisfaction if you set a goal to use social media to explain how to resolve claims problems?

So, where are we? We need a project champion, who has executive sponsorship, and who is willing to create a vision that has some legs.

Oh, I forgot to mention that after we left Chuck e Cheese we had all the seven year-olds over to our house for a sleep over.  I should have stayed at Chuck e Cheese; it was quieter.


EHR: the cost savings can be tremendous


I was at the beach with my family for the week.  There’s something magical about hanging out at the shore with three children ten and under.  There was so much sand in the house that we could have made a laudable entry in any sand castle contest.

For some reason, there is an unspoken understanding that Dad will unload the car, wash of the toys and hand the beach towels while everyone else showers.  By the time I reached the shower the hot water was long gone and enough grains of sand were embedded in the bar of soap that it felt like I was washing with pumice.  I toweled off from my shower with the only remaining dry towel, a pint-sized piece of linen bearing the likeness of Shrek–standing in your-all-in-all face-to-face with the green faced ogre sort of makes one a little less pompous.

My Shrek fan club was watching SpongeBob for the umpteenth time. I pretended to be interested and made the mistake of asking a question about the show. “I don’t get it,” I offered. “It seems like every show is about the same thing, it has something to do with SpongeBob making Krabby Patties for the Krusty Krab.” To which my youngest replied, “They keep making them until they get it right.”

No excuses. Do it until you get it right.  A single line job description for EHR?  I hope not.  There’s not enough money to do it until you get it right.  There is however, plenty of money to do it right the first time.  I call that the DIRT-FIT principle.  That’s where the saving are.

I’d better go; my kids are eating all of my Twizzlers.


What does it take to be the best hospital?

Below is a reply I wrote to a question raised on Hospital Impact, “What does it take to be the best hospital on the planet?”

I’d like to hear what you think it would take.

Great question and one that needs to be asked with much regularity.  I target my comments at the healthcare business as opposed to the business of healthcare—the clinical part.

May I begin with a statement that may have many readers reaching for their delete keys?  As one who has consulted to many industries, to me the healthcare business appears to be stuck in a 0.2 business model and is being forced to rapidly reinvent itself in a 2.0 model—my use of the term 2.0 does not imply the Internet.

My comments are based on observations, conversation, and inference.  My executives have told me privately that world-class physicians do not necessarily become world-class business executives.  Many lack the depth of experience that is needed to know what aspects of the healthcare business is broken, duplicative, wasteful, or in need of repair.  While discussing EHR, I was told recently by a former CEO of a large hospital that his peers were making multi-multi-million dollar decisions without any sense of the data needed to support those decisions, basing them on what a friend had decided, what they read in an in-flight magazine, or a conversation they had at a convention.

There seems to be significant faith placed in the notion of, “That’s the way we’ve always done it.”  That expression surfaces often when one raises the issue of why a hospital has multiple IT departments, multiple HR groups, payroll, registration, and so forth.  Why do something once if you can do it less well five times.

There seems to be enough waste that for some hospitals looking at moving forward with EHR, my first piece of advice is instead of aiming for best practices, let’s aim for a single practice.  Evaluate how to implement a shared service or managed services approach to business functions that are not part of your core business model.

I close with the notion of what other businesses call customer relationship management (CRM).  For a hospital, patient relationship management (PRM) is one of the unspoken wins waiting for someone to lead the charge.  Add a social media effort to it, and all of a sudden it’s like the hospital gave itself a facelift, at least from the perspective of the patients.