GUERRA: Give me some background on your organization.
SWAB: I think our name (Systems) may be a little misleading. At one point, we did have a hospital, two nursing homes, ambulance service and home health, but a few years ago we sold off the two nursing homes. Now we’re just a fairly small rural hospital, but we still have the EMS and home health.
GUERRA: How many beds?
SWAB: This is licensed for 48.
GUERRA: Can you give me a sense of your payer mix? Is it a lot of Medicaid, Medicare?
SWAB: We’re probably over 50 percent Medicare, 10 percent Medicaid, maybe closer to 60 percent Medicare, I’d say, and maybe 5-10 percent self-pay. The rest have some form of commercial insurance.
GUERRA: Let’s talk about the physician population; are they all independent community doctors that have admitting privileges at the hospital or are there any employed physicians?
SWAB: We don’t have any employed physicians. We have some employed nurse practitioners who work for one of the clinics and an employed physician assistant who works in the emergency room.
GUERRA: How many community physicians send patients to the hospital?
SWAB: I’ve got about six who regularly admit. It’s a pretty small medical staff, and we have several doctors who come in and do procedures on an outpatient basis.
GUERRA: Reese, you report to Joe?
BAKER: Yes, sir.
GUERRA: How many people do you have under you, Reese?
GUERRA: One person. Can you tell me your annual IT budget?
BAKER: Not enough. (laughing) We run about 130 PCs and about 13 servers.
SWAB: We probably, on a routine basis, spend about $100,000 a year on capital, but that’s in a routine year. With all the stimulus money out there, we’ll probably spend $1 million or so next year.
GUERRA: What’s the yearly operating budget for the IT department?
SWAB: I’m trying to pull it up on the computer, it will just take a second. It’s huge. (laughing)
GUERRA: Massive, I bet. Reese, tell me about your IT environment, prior to specific HITECH work.
BAKER: Currently, we do have CPSI, but we do not have the systems at the point of care. We do have order entry, and we do have all the financials.
GUERRA: When did you get that?
GUERRA: Are the physicians now, and have they been, putting in their own orders electronically?
GUERRA: Are you looking at a new system today?
BAKER: We are looking at a new system and/or looking at adding to the system we currently have. CPSI does have point of care functionality, does have all the modules that it’s going to take, but we’re looking to add on the rest of their stuff or to go with a new vendor.
GUERRA: And that’s what you’re working with Vince (Ciotti) on?
BAKER: Yes, and our current vendor is one of those vendors that’s in the selection process. Going back to your other question, our operating budget is about $300,000 a year.
GUERRA: So that’s going to go up as well as the capital budget?
SWAB: Yes. We’ll have more expenditures just to maintain the enhanced systems.
GUERRA: Are you looking for a new system because of HITECH?
SWAB: More or less. I came from another hospital, and in 2000 we had a “year 2000 noncompliant system” and we hired Vince to help us through the selection process to get a compliant one. This time around, I called Vince again.
GUERRA: How many vendors have you narrowed your search to?
SWAB: We’ve got five. We’ve got, of course, CPSI, we’ve looked at Meditech, we’ve looked at IntraNexus, Opus, and we’re going to bring in Medsphere. We haven’t brought them in yet. That’s the last one. Regarding the last three, we would just be using their clinicals (with CPSI financials) if that’s the route we went.
GUERRA: What do you looking to spend on this project?
SWAB: I’m hoping to keep it under $1 million.
GUERRA: Regarding your six admitting physicians, have you had any preliminary discussions with them regarding the software you’re considering? Do you think they will embrace the idea of putting in their own orders?
SWAB: Yes and no. We’ve invited them to all the demos and we had two of the six show up. Regarding those two, one of them has electronic medical records in his office, and he’s very enthusiastic. The other one does not but he wants it, and the others are not enthusiastic, let’s just put it that way.
GUERRA: Is that going to be a long term project, getting them to embrace putting in their orders?
SWAB: It’s probably fair to say that. It’s requiring a little arm twisting. I think maybe the fact that they’ll also have to put electronic medical records in their office will help.
GUERRA: You’ve run the numbers on the stimulus, how much are you eligible to receive?
SWAB: I think maybe $2 million and some change.
GUERRA: So, this could pay for itself. If you’re going to spend $1 million and you can get $2 million on the backend, this could be worthwhile financially.
SWAB: I think, over the long term, it’s going to break even because we’ll have more operating costs. The hidden factor is that when they get the electronic medical record in place, the idea is to eliminate duplicate tests and procedures and so that’s going to reduce our revenue streams. So in the long run, that $2 million will probably hurt us financially, but we’ll have a more enhanced computer system, and I think that would be better for patient care. So, it maybe overall is a good thing.
GUERRA: It’s really the insurance companies that actually save money.
SWAB: Yes. Of course, Medicare will be a significant saver and the insurance companies will get a free ride.
GUERRA: So you would think there’d have to be payment reform along with all of this?
SWAB: I keep hearing that’s the plan, to eliminate some waste in the system, duplicate tests, but one thing they haven’t talked about is noncompliant patients. They talk a lot about preventative care, but how do we get noncompliant patients to start taking good care of themselves so they stop driving up healthcare costs.
GUERRA: Reese, I would imagine you’ve been very involved in looking at these systems, do you have a sound infrastructure to support these application or are you in need of upgrades?
BAKER: The amount of new servers we need will depend on the system we choose. Past that, we’ll be in decent shape. As far as wiring, wireless, that kind of stuff, we’re in good shape there. We’ll have to add, obviously, PCs with virtual devices and handhelds (depending upon, again, what system we select). I’ve already got the right kind of switches in place, I’ve got the right kind of wiring, we’re wireless throughout our system.
SWAB: It’s more of a software than a hardware issue at this point, I would say, and obviously a lot of training of the staff will be required.
GUERRA: And there are some expenses there, right?
SWAB: Yes. There’ll be some significant training costs.
GUERRA: It’s a big project.
SWAB: It’s a good thing, but this is going to require a lot of work and headaches to get there.
GUERRA: It sounds like you can manage this financially.
SWAB: Yes. We can swing the $1 million. I think some of the vendors are either aligning themselves with third party vendors or trying to offer some creative financing. I think CPSI had talked with us about financing the purchase with a no interest loan. So, I’m assuming they’re probably offering that to other hospitals.
GUERRA: Do you think some hospitals just won’t have the money?
SWAB: There may be some. The thing is there is no guarantee that you’re going to get the stimulus check because there’s still some hoops to jump through on meaningful use. It could be tricky for some of the hospitals that don’t have any cash, and there’s a good number of them out there in that situation.
GUERRA: If, for whatever reason, you’re not able to prove you’re using the technology meaningfully, then you might be in some real financial trouble.
BAKER: One of the things we fear about proving meaningful use is that regarding these doctors that are not employees of ours, you know as well as I do, they’re going to do what they want to. Not having a lot of control over that, my fear is how can we control meaningful use? There are a lot of small hospitals that have the same fear. A lot of your larger hospitals have the doctors on staff, and they do what they’re told.
GUERRA: Would you be able to say to some of these physicians: “If you don’t put your orders into the system yourself, you will not be able to practice here.”
SWAB: We don’t have that kind of leverage. That would be suicide.
GUERRA: Any idea how it will play out?
SWAB: It’s going to be tricky. Hopefully, the system will be user friendly and give them some more timely information, which will allow them to practice medicine better. They’ll embrace it, but there are some big “ifs” at this point.
GUERRA: HITECH is affecting everyone, so it’s not like they can go down the street and handwrite their orders.
SWAB: We’ve got a hospital within 10 minutes of us that has a lot of economic clout. The physician’s pen is the most expensive tool in the hospital, so they can make or break you if they want to. I’m not saying our physicians would do that; I’m just saying that we don’t have that much leverage to say, “You must do this.”
GUERRA: But you’re in a position to have to say that.
SWAB: Well, it may come to that. I guess we’ll see what plays out.
GUERRA: If you could speak to directly to the national coordinator what would you tell him?
SWAB: My concern is what we just talked about. Bear in mind, when you only have six physicians, making things mandatory is not as easy as it sounds. Bear in mind that we’ve got two IT people and six docs, so we have very limited ability to mandate what they do. We need some flexibility in complying.
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