Caveat Emptor:BIG Vendor Bails On EMR Install, Keeps $$$$

The Wall Street Journal's Joel Schectman relates a rather ominous tale of EMR adoption and abandonment:

Girard Medical Center, a rural hospital in Kansas which services mainly uninsured patients and the elderly, wanted an electronic medical record system to better share information with its clinic offshoots and to claim federal incentives. But a year-and-a-half and more than a million dollars later, the hospital says it’s no closer to having electronic medical records, and is blaming its vendor for the failure of the project.

Whether the fault for the failed project should rest on the big corporate vendor or the small hospital is unclear. But Girard’s story illustrates the risks for organizations of all kinds when they attempt to innovate by bringing in new, and unfamiliar, technologies and vendors.

The hospital brought in Cerner Corporation in September 2010, one of the biggest vendors of electronic medical records, to provide an all-in-one fix that would allow doctors to prescribe medicines and order tests electronically, and for administrators to fulfill HR functions like tracking time and attendance. But the hospital claims that instead of Cerner “providing one throat to choke,” the company provided “many products to buy,” said Frankie Forbes, an attorney for Girard.

According to a complaint filed in U.S. District Court in Kansas City by Girard, Cerner raised its charges, instead of doing all the work for the original price, and then abandoned the project when (Girard) complained and eventually suspended payments. The 25-bed rural health-care provider claims in a lawsuit that despite paying Cerner more than $1.2 million in fees, it still has no electronic medical record system and still doesn’t qualify for federal monies to pay for one. A spokeswoman for Cerner, in an email, declined to comment. The case is now in court-ordered arbitration.

“We just kept running into things that weren’t included,” in the original $2.9 million price tag the hospital initially agreed to pay, said Holly Koch, the hospital’s chief financial officer. “They weren’t holding up their end of the bargain.”

But Koch and other hospital officials also acknowledge that neither they nor the board had a complete understanding of the contract on which they signed off.

“It was incredibly complex and difficult to understand,” Koch said. “We relied on them to explain to us what the contract represented.”

Koch and board members say they relied on a presentation in Fall 2010 from Cerner which promised a “fully integrated” patient records and administrative system. That presentation was included by Girard with its complaint and has been reviewed by CIO Journal.

After initially promising these features were included in the $2.9 million price, Cerner later told the hospital that attendance-tracking features, lab test functions, and electronic billing would increase Girard’s annual costs, for the five year contract, by around $100,000, according to Mike Payne, CEO of Girard.

After failing to reach an agreement last summer over pricing, Payne said he began to stop paying invoices from Cerner.

“I didn’t see any way to get where we wanted to go unless I got their attention,” Payne said.

The hospital did get Cerner’s attention: in September 2011 a Cerner employee emailed administrative staff to say they were walking away from the project, according to the complaint.

Girard’s tale illustrates the inherent risk as health-care providers of all sizes move towards implementing electronic medical records. While hospitals are eager to pick up some of the $19 billion in funds the Obama Administration made available in 2009 as part of the stimulus package, they often lack the in-house expertise to contract with and supervise vendors on the complex implementation of records systems.

“Health-care systems are putting in these systems with all due haste to try to get this money,” said Dave Garets, executive director of the Advisory Board Company, a health-care research firm. “But you’ve got to have the people in-house who really understand this process and these people don’t come cheap.”

The federal government predicts a shortage, by the year 2015, of 50,000 healthcare IT specialists, like healthcare informaticists and chief medical information officers — the type of experts that would have helped Girard to manage the implementation of its electronic records system.

Any company hiring outside IT vendors faces this type of risk, said Chris Andrews, an analyst at Forrester Research. Companies often look for the best quote for a new technology product, but fail to allocate enough internal staff to supervise the process.

“There is an unrecognized cost to just making any relationship work,” said Andrews.

When Girard hired Cerner, the hospital had just two IT staff members – neither with a specialty in electronic medical records, said Koch.

Payne, Girard’s CEO, says he has since brought in an outside “vendor neutral” consulting firm to help the hospital make an unbiased decision on what’s next for the hospital’s EMR program.

“It means swallowing your pride and knowing what you don’t know and finding someone who does know it,” said Payne.

This is bad on so many levels, it's hard to know where to begin to lay blame. But I'll give it a try anyway.  I lay the blame about 90% on Cerner. Assuming Mr. Schectman, the author of the above article, has his facts straight, and WSJ writers usually do, Cerner knew they were dealing with electronic neophytes at Girard. Come on, folks, this is a 25 bed hospital, and they aren't going to be able to muster a great deal of IT expertise. Granted, Girard should have grasped the concept a bit better before setting off down the road, but they didn't, and therein lies their share of the blame. A rather vague analogy might be the case of a little old lady wandering into the Chevy store and laying down cash to buy a Corvette with a manual transmission (do they still make those?) while not knowing how to drive even an automatic, hoping they would teach her how to drive. And, oh, by the way, she never took delivery on the car, but the dealer kept her money.

I don't mean to insult the brass at Girard, but perhaps they should have done a little more due diligence. But wait, they probably thought they did by hiring the biggest name in the business. How could they go wrong?

Sadly, bigGEst is not necessarily best, and paying top dollar might not guarantee anything but a lighter wallet. Again, assuming the veracity of the above report, Cerner pretty much executed a bait-and-switch scam on Girard. You would think a company of this size and this reputation wouldn't do such a thing. You would be wrong.

I have the joy of Cerner in one of my hospitals, courtesy of an IT department that wanted to change things, and of course didn't get much if any opinion from the end users. It is about as user-friendly as Form 1040, and nowhere near as well-written.

I am a staunch capitalist, as you are all well-aware, and I firmly believe in letting the market do its thing. Therefore, I'm doing my feeble best to bring this situation to light, which should inspire those in the market for an EMR to look elsewhere. Cerner pocketed some money on this unfortunate situation; it stands to lose a lot more once word of its behavior is widespread. Until they make this right, or come up with a satisfactory explanation (which I will be glad to publish), I would suggest that one not buy anything from Cerner. Anything.

THIS is what happens when the government urges, forces, or taxes us into buying things like EMR's, or insurance. Caveat emptor, caveat civis.