GUERRA: So customers that take advantage of this offer will have to pay you back, regardless of whether or not they actually receive government funds.
WANCHOO: If they don’t do the things that they should be doing to achieve meaningful use — something blatant like not implementing a portion of the product — paying us back is still their responsibility. It’s a joint responsibility, but we have to hold their feet to the fire to implement the system in the right way.
A lot of the focus on meaningful use is around quality reporting. We actually have great experience with our EMR already, as I mentioned, through these other bodies, like NCQA, where we essentially generate these reports and they’re published automatically on whatever schedule that organization requires. So we’ve really automated the process on how we can get data to these organizations.My belief is that’s really what CMS is going to look for, because there is no way you can do this manually, it’s going to be too complex; therefore, they’re going to want these quality reports generated and sent to them through some electronic mechanism, and that’s probably the way it’s going to be rolled out, and we feel very good about that in terms of where we’re at.
GUERRA: Are you structuring the contracts so that the responsibilities on each party (GE and the hospital/practice) are clear, just in case something goes wrong?
WANCHOO: Absolutely. We’ve gone through that in a lot of detail. We’ve spent the last two to three months, as we’ve been working up to this program, making sure that the language is clear, simple. It’s a simple contract in terms of what our obligations are and what our warranties are and what the customers’ responsibilities are. So it’s very well spelled out. We’ve already signed up a customer (The Hazard Clinic, Eastern Kentucky) on this program, so we’ve been through it. We got very positive feedback in terms of what the roles and responsibilities are with GE and the customer.
GUERRA: I’m going to ask you a little bit about that customer in a second. One more question about the financing, you said that the hospital, for example, will get the payment from the government and then they will pay you. Is there a formal mechanism there? You don’t envision it going directly from the government to GE?
WANCHOO: No, the payment would come directly from the customer to GE. Let’s just take an example, say there is a $5 million cost on the EMR, just random numbers here. The way it’s structured is that when they get the first reimbursement from the government, they would pay us a portion of the $5 million, they essentially pay it in installments. Now, it’s very likely that they may actually come to us and say, “I would actually like to even finance that,” because that is not financed, that lump sum payment, let’s say. And certainly we could do that as well. But the way it’s structured today is that there are some very clear guidelines, they get the first reimbursement, they pay us X%, a year later they pay us another X%. So that’s the way it’s laid out.
GUERRA: When you talk about Hazard Clinic, which is your first customer, the language used is that they’re the first to “qualify.” Can you explain a little bit to me about what it means to qualify and how one goes about applying?
WANCHOO: The customers would essentially apply to us, to GE, and they would make an inquiry typically to GE that they’re interested in this program and want to participate. As with any financing that we do through GE Capital, the first thing they would undergo is a very rigorous mechanism for risk assessment and risk management, so they would assess the customer for their credit quality. If it passes that test, we would look at the customer side to see if an EMR implementation here makes sense, are they the right kind of customer, with the right commitment on their side – and that’s the typical scenario that we go through with taking on an EMR customer. And if that’s the case, then we would enter into discussions and negotiations with the customer.
GUERRA: You have indicated this program might be particularly attractive to small practices and facilities in rural areas and inner cities, and that seems to speak to the financing arm, but the customer also gets the guaranteed certification promise. So this might be appealing to more than people who need the financing because you do have that guaranteed certification part.
WANCHOO: Absolutely, without a doubt. Really, it’s part of the healthymagination launch that we had — there was an emphasis on quality, cost and access. We are very cognizant of providing good, quality healthcare available to all of the country, to the extent that community health centers and rural parts of the country need better technology to provide better access to healthcare, we’re certainly going to help with that.
GUERRA: Two things happened this week that I’d like your reaction to. One, as you mentioned, was the issuing of some information around what meaningful use could be, what they’re looking at. Do you have any reaction to what you’ve seen so far?
WANCHOO: Anthony, I can’t share that yet. We certainly are pouring through the documents. We are formulating a response, and what I’d prefer to do is hold off on that. We obviously have our impressions, we’re going through it and also discussing it with our customers and other stakeholders. We’re obviously going to issue a formal response, and so I’ll hold off on that comment for now. But, directionally speaking, what we were pleased with the fact that the government has actually moved fast to issue this document, and secondly, that there is – and we’ve been lobbying for it – a focus on quality outcomes, that organizations are really looking at quality reporting as a key metric for meaningful use and we’ve seen that, which we’re pleased about.