As part of an exclusive partnership, HCI will be presenting more information on KLAS reports than anyone in the industry. The following story breaks down the KLAS Mid-Term Report, while early next year we'll break down the Year-End edition. But that's not all. HCI will now feature a regularly appearing section in each issue — KLAS Reports — highlighting specially selected interim reports that come out each month.
Executive OverviewWhen evaluating vendors and their KLAS scores, it is important to understand what the market is capable of delivering, as some market segments perform better than others. For the Mid-Term Performance Review, the highest-performing software market segments were Enterprise Scheduling and Ambulatory EMR (2-5 Physicians); the lowest was Pharmacy. For professional services, the highest-performing market segment was Revenue Cycle Transformation; the lowest was Financial Implementation.
In its mid-term performance survey, “Mid-Term Performance Review: Software & Professiona l Services,” executives at KLAS (Orem, Utah) recently found that a few areas of software products have achieved relatively high approval from healthcare users over time. Among these, outpatient EMR products seem to have done particularly well, says Adam Gale, KLAS's chief operating officer.“There's a lot of debate I see about why the adoption rate is so low (for ambulatory EMR software products), and why physicians don't like the systems and are upset over them,” says Gale. “But while there certainly are challenges and dissatisfaction, that turns out to be one of the highest-scoring areas in our database. So we think that the ambulatory EMR systems area is really going to take off, because once physicians do use those systems and get used to them, they really do see benefits.”
But that's not the only area that's looking up. Speech recognition products, Gale says, are producing a great deal more satisfaction than previously. Vendors have launched back-end speech recognition tools, which have eliminated the need for transcriptionists (replacing them with editors at a lower cost).What about product areas with significant customer dissatisfaction? A few areas continue to struggle, Gale says. Two in particular with “significant challenges,” he says, are pharmacy systems and enterprise resource p lanning (ERP) solutions. Those are areas in which customers are still not getting what they're looking for from vendors. “In the ERP space, you have a lot of big vendors who don't provide much personal service, and with expensive solutions that haven't done a great job of making sure clients are successful. It's not a product issue; it's a service and support issue. As for pharmacy, it is a difficult area to automate because of patient safety, and, until recently, an area where the vendors haven't expended enough effort and understood the importance of integration.”
But what about individual vendors? Have any had dramatic changes in their standing?One vendor that hasn't scored as well with customers recently, Gale says carefully, “is GE in the core clinical space, where healthcare providers are looking to see if their vision comes together. GE has a good vision of where they want to take their clinical products based on their development with Intermountain Healthcare, and that needs to play out long-term. Short-term, there's some client frustration” (see chart). On the other hand, says Gale, “We're amazed that Epic has continued to perform at such a high level, even though they continue to grow and their scores are slightly down. But across the board, they continue to strongly satisfy their customers” (see chart).
Meanwhile, Gale says, “If you look at a vendor like a Meditech or a Siemens, they have some up or down.” But, he adds, “I would say the vendor that's made the biggest turnaround in the past five years is McKes-son — they were really struggling about five years ago, and they've made major efforts to improve” (see chart).
Glenn Galloway, CEO of the Minneapolis-based Healthia Consulting, says he's not surprised by some of the trending with regard to individual Glenn Galloway vendors. In the Twin Cities, most of the client organizations he works with are Epic shops, and they have generally been highly satisfied. Though he doesn't often work with organizations that use GE (see chart) or the Kansas City, Mo.-based Cerner Corporation, he has heard of some issues with both of those vendors in terms of service over the long term, he says.
Areas in flux
The whole area of implementation services, which is critical to project success, has been in great flux, notes Mike Smith, KLAS senior research director, particularly because of mergers among consulting firms. Smith, who handles the services area, adds that vendors are increasingly realizing that potential software customers are looking very closely at the quality of implementation services provided by potential vendors. And whether customer organizations turn to their vendors for additional help with implementations or turn to consulting firms (or both) for those, satisfaction with implementation services from both vendors and consulting firms remains decidedly mixed overall, with some significant downturns recently.
“There's been a lot of consolidation that's happened in the industry since we started measuring this back in 2004,” Smith notes. “Back in 2004, some of the major consulting firms that played in this space included Healthlink, Superior, Capgemini, and First Consulting Group; and all of those companies have since been acquired” (by IBM, ACS Healthcare Services, Accenture, and CSC Corporation, respectively).
“We've also seen a little additional consolidation — JJWild, which does Meditech implementation work, was acquired in 2007 by Perot Systems,” he says. “We've seen some turnover as a result of all the consolidation that has happened in the industry. In some cases, some very capable people have left their former organizations and started up firms of their own or joined smaller consulting firms. So we've seen a little bit of a decline in the level of satisfaction with implementation services provided by some of these larger firms, which I think is to be expected. Now you've got providers who may historically have been happy with one of these mid-sized consulting firms that were very flexible and nimble and had some very talented people that have not had that same experience with their parent companies. The relationship is different, there's more red tape and bureaucracy, and in some cases a different focus.”
Among the organizations that have experienced drops in satisfaction rates post-acquisition in the area of clinical implementation services are Healthlink and Superior, he notes, though Superior (now ACS) has done well in the financial ERP implementation services side. Meanwhile, Perot and Epic have done particularly well in terms of customer satisfaction in recent surveys, he adds.
One of the elements of the KLAS reporting system that is often scrutinized is the fact that the organization's reports are based entirely on input from users. The upside of this aspect is obvious; but some in the industry caution that there is a downside as well. Some CIOs and other IT executives have noted what they consider the potential for the results of any particular survey to skew subjectively in one direction or another.
With regard to concerns over methodology, Kent Gale, KLAS's CEO, tells HCI that “most of the professionals in this industry have good integrity, and they'll report what really is performing … KLAS interviews everyone that gives us data and finds out what position they have. Is this a legitimate measurement, have you had good experience with the vendor?”
Still, the appearance of KLAS in the industry has changed some aspects of the IT solutions purchasing landscape, say industry observers.
“KLAS doesn't do function and feature reporting. But once you get beyond function and feature questions, the value of having KLAS is that, say for example, if I have two vendor products that are both relatively strong on functions and features, how do their customers rate them?” says Fran Turisco, principal researcher in the Lexington, Mass.-based Em erging Practices division of the CSC Corporation (Falls Church, Va.). “If they have a great product, but poor service, you wouldn't want to get stuck with them.”
And increasingly, long-term service is becoming one of the major differentiators for customer organizations, Turisco points out. She says that, “Of course, vendors only take you to their 'primo' customer sites.” KLAS reports are helping CIOs and IT executives to cut through some of that fog, she notes. Thus, she says of the KLAS reports, “I use them as sort of the baseline for what you're going to get when you work with this vendor. And I think it's very valuable, because you can look at scores over time.”
Such ratings really matter, say Turisco and Galloway; indeed, both CSC and Healthia are rated for their consulting services. “For us as a service industry,” Turisco says, “the KLAS rating is even more important. For us in consulting, our service is our product, so KLAS has big weight for us.”