Comp14 Unit3 Audio Transcript

Special Topics in Vendor-Specific Systems: How Do Organizations
Select an EHR? Lessons From the Front Lines
Audio Transcript
Slide 1: How Do Organizations Select an EHR? Lessons from the Front

Lines
This is component 14, unit 3. We will be discussing how organizations select an
Electronic Health Record (EHR), Lessons from the Frontlines. A tremendous
amount of work is involved in selecting an EHR. We can't cover all the topics
today but we will be discussing four of the principle tasks involved in selecting an
EHR.
Slide 2: Lecture Objectives

This unit will prepare students to be able to:
1. Demonstrate concept knowledge of the request for proposal (RFP) process
2. We will talk about stakeholders involvement, and their roles in selecting an
EHR
3. Then we will review the costs that needed to be calculated when selecting an
EHR, the capital, the maintenance and staffing costs.
4. Lastly, we will discuss the importance of evaluating the financial strength of
each vendor being evaluated.
Slide 3: Request for Proposal Process

A request for a proposal, or RFP, is a document that is sent to suppliers. It invites
them to submit a proposal to provide goods and services. Remember that it's
only to be used for complex projects that require the vendor or supplier to be
creative. Very importantly it assists with internal alignment. It's one of the best
means to force an organization to describe its needs before involving a vendor.
Assembling the responses to the RFP helps an organization compare vendors
and understand potential project risks.
Slide 4: Request for Proposal Process (cont.)

However, you need to remember that the RFP process is very time consuming
for both the purchaser and the vendor. And it is always difficult to accurately
describe all the requirements and, and even when you get all of the results in.
Additionally, it's hard to make the comparisons and score responses.
Health IT Workforce Curriculum Special Topics in Vendor-Specific Systems 1

Version 3.0 / Spring 2012 Certification of Commercial EHRs
This material (Comp14_Unit3) was developed by Columbia University, funded by the Department of Health and Human Services,
Office of the National Coordinator for Health Information Technology under Award Number 1U24OC000003.
Slide 5: Request for Proposal Process (cont.)
What does an RFP include? It will include an overview of the business issues,
what are you trying to accomplish? It will include a description of the product or
the services that you require. It needs to detail all the business requirements. It
requires specific instructions on how the proposal will be formatted, when it will
be returned by the vendor, detailed instructions on how to select the vendors,
what is the required timeline and many, many questions and must include who to
contact for the vendor if they have any questions.
Slide 6: Other Request Formats

In addition to RFP's, there are other request formats that could be useful during
your search for an Electronic Medical Record (EMR). There's a request for
quotation, when you actually know exactly what you want and you're looking to
find out what the prices are when price is the main factor.
Slide 7: Other Request Formats (cont.)

You can issue a request for information, which is used to find out who's a
potential seller of products and knowing the capabilities of those sellers in the
market.
Slide 8: Other Request Formats (cont.)

Before a request for proposal goes out, a request for qualifications (RFQ), an
RFQ could be issued to find out who you would send the RFP to.
Slide 9: RFP Sample Documents - HIMSS

HIMSS is an excellent source for sample RFP documents. They're meant to act
as tools used by health organizations and other healthcare providers in
developing its own RFP. Remember they're meant to be starting points for your
RFP. The questions and requirements are meant to be illustrative and not
exhaustive. You cannot take an RFP from the HIMSS site and simply issue it. It's
meant to help you get started in developing your own after extensive meetings
with stakeholders and detailed determination of your own specifications.

And remember that access to the sample RFP documents requires active HIMSS
membership.

As an example, I was able to find, on the HIMSS website, an ambulatory EHR
sample RFP. Remember, it's provided as a tool for your organization to use and
develop its own RFP. It's a structured approach to listing the various criteria that
may be relevant in the RFP process. It's part of the series of documents that list
the common features and questions that need to be answered for enterprise

systems that are normally evaluated by an RFP but require extensive editing by
you and your organization. Now that we've discussed the RFP process, let's
move on to stakeholders, another important aspect of selecting an EHR.
Slide 12: Stakeholders Involved

Involving stakeholders is a crucial aspect of the project. The notion of
stakeholder dates back to a 1963 internal memorandum at Stanford, which
defined stakeholders as quote, those groups without whose support the
organization would cease to exist, close quotes. It was later championed by
Edward Freeman in the 80's and gained wide acceptance in business practice.

Stakeholder theory is a theory of organizational management in business ethics
that talks about morals and values and managing an organization. Management
needs to give due regard to the interest of groups. Stakeholder theory addresses
the principle of who or what really counts.

Every organization and every type of organization has its own set of
stakeholders. In addition, every project will have its own stakeholders. In
selecting an EHR, the project won't involve everyone in the organization but it will
involve many of the principal stakeholders. Here we list a set of stakeholders who
may be involved in an EHR selection process: physicians, nurses, clerical staff,
lab staff, management, and you also need to remember your product suppliers
and even patients and the community as you research your needs to select an
EHR. All of these groups should be involved, at least at some level, in your
discussions and in developing your detailed selection specifications. Knowing
who to involve is the first step. Its important to know exactly how to engage your
stakeholders.

One of the most important roles that stakeholders can play is to help develop
communication plans, which are targeted to the specific stakeholders involved.
Using stakeholders to review all communication is very important. They also
know how to develop the benefit discussions and plans and track the benefits for
their specific groups. A stakeholder will also know the business processes
involved and assist in developing a gap analysis between the current situation
and the desired outcome, which then is described as a gap and which will be
filled by the new system. They will also help develop policy and procedure
changes. As business processes change, policy and procedures need to be
adapted and specific stakeholders will assist. Most importantly is their assistance
in developing targeted lesson and learning plans for the specific groups.
Physicians will be trained differently than nurses, will be trained differently than
clerical staff.
Slide 16: Project Cost
An important aspect of selecting an EHR is the determination of the total project
costs. I cannot understate how important it is to do a good job of determining
project costs. Many projects fail due to inadequate funding. There are several
types of costs involved in a project. The first that will be dealt with is the capital
costs. These are onetime costs to set up the system, to purchase products and
materials, and to hire consultants. It involves software, hardware and labor.
These can all be capitalized because they're onetime costs. Capitalized costs are
amortized such that the recorded cost of that asset is distributed over the
estimated useful life of the system. Another aspect of the project cost is that of
license. A license is an official legal permission to use or own a specific thing. It
principally applies to software projects and involves application software and also
the operating systems for the hardware on which the software products run.
Slide 17: Project Cost

After a project goes live, maintenance costs kick in. These are the recurring
operational or running costs of a system. It includes labor costs, license costs
and various OTPS, other than personnel costs. Maintenance costs for licenses
typically incur about 15 to 20 percent costs annually. A very, very critical
component of a project is the staffing costs. You need to also remember to
include all the costs of staff, including fringe benefits and other administrative
overhead costs such as desktop computers, laptops, administrative overhead,
cell phones, travel costs, and training. Remember adequate funding can make
or break a project.
Slide 18: Project Cost - Example

On this screen is a very detailed list of staffing costs and OTPS costs that come
from an actual ambulatory EHR project. This project was an enterprise scaled
project with costs estimated to be 65 million dollars over 10 years. On the staff
costs, at the top is, physician champion, application, coordinators, database
administrators, network support, trainers, go live support, help desk support and
at the bottom, it includes the very important calculation of fringe benefit for all the
staff.
Slide 19: Project Cost - Example (cont.)

From the same project, on the OTPS side, is a full range of costs from software
license, and notice that it includes the maintenance cost. This was a 10-year cost
projection for the project. Implementation fees are estimated because it depends
on the actual number of incurred hours. Contingencies are listed here and are a
very important component of project costing and include, contingencies for
software, hardware, network, data center, consulting fees and even desktop
scanners.

Slide 20: Financial Strength of Vendor
An often-overlooked aspect of selecting an EHR is the performance of a financial
strength analysis of the involved vendors. Many companies supply credit
information on businesses corporations but Dunn & Bradstreet may be one of the
most famous and in fact a colloquial term is to do a Dunn & Bradstreet on a
company. But available are other companies such as Experian, Equifax,
MarketWatch, InfoUSA and even Yahoo! Financial. On this page is listed their
websites. For a fee these companies perform financial strength analyses. It's an
important aspect and should be remembered that it needs to be done before
signing a contract with the vendor. Its not a onetime purchase of a product from
a company. Instead a very long relationship will be developed with these
companies. You need to know how strong the financials are since you dont want
to be purchasing an EHR system from a company that will go out of business.
Slide 21: Financial Strength of Vendor

In addition to hiring a company to do a financial strength analysis, there are other
steps that can be performed. Vendors should be willing to share an audited
financial statement. This is a lot easier with publicly traded companies because
they're available on their website by law. But even a non public company should
be willing to share audited financials. Its essential to review the management
team. What is their tenure? What is their industry experience? And importantly,
what is the turnover in the company? How long has the management team been
with the company? Does the company turnover senior management almost
annually? Does the company generate cash? This is known as liquidity. Cash is
important in all companies and helps during economic downturns so that they are
able to continue to develop software and deliver services. In addition its crucial
to check references on companies. It will be useful to call on the phone and most
importantly visit customer sites. Talk directly with current users of the system and
check references carefully. An often-overlooked step is to talk directly with the
CFO of any company before signing a contract. You can ask very direct and
pointed questions about the companys financial strength and a CFO will answer
those questions. We've gone through several aspects of selecting an EHR but by
no means has this been an exhaustive list of steps involved in selecting an EHR.
These are just some of the most important steps and unfortunately too often
overlooked.
Slide 22: Summary

In this lecture, we have covered just a few of the most important steps that an
organization carries out when selecting an EHR. First and foremost, we talked
about the value of the RFP. We covered the importance of involving the key
stakeholders. Finances are always critical so we discussed cost considerations,
both capital and operating. And finally, we reviewed the importance of
ascertaining the financial health of vendors involved in the project.

Slide 23: References
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Special Topics in Vendor-Specific Systems: How Do Organizations

Select an EHR? Lessons From the Front Lines

Slide 1: How Do Organizations Select an EHR? Lessons from the Front

Slide 2: Lecture Objectives

Slide 3: Request for Proposal Process

Slide 4: Request for Proposal Process (cont.)

Health IT Workforce Curriculum Special Topics in Vendor-Specific Systems 1

Slide 6: Other Request Formats

Slide 7: Other Request Formats (cont.)

Slide 8: Other Request Formats (cont.)

Slide 9: RFP Sample Documents - HIMSS

Slide 10: RFP Sample Documents - HIMSS

Slide 11: RFP Sample Documents - HIMSS

Health IT Workforce Curriculum Special Topics in Vendor-Specific Systems 2

Slide 12: Stakeholders Involved

Slide 13: Stakeholders Involved

Slide 14: Stakeholders Involved

Slide 15: Stakeholders Involved

Slide 17: Project Cost

Slide 18: Project Cost - Example

Slide 19: Project Cost - Example (cont.)

Health IT Workforce Curriculum Special Topics in Vendor-Specific Systems 4

Slide 21: Financial Strength of Vendor

Slide 22: Summary

Health IT Workforce Curriculum Special Topics in Vendor-Specific Systems 5

Health IT Workforce Curriculum Special Topics in Vendor-Specific Systems 6

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