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HIMSS: Providers View IT as a Revenue Generator

 |  By smace@healthleadersmedia.com  
   February 25, 2014

Cleveland Clinic is increasing its ROI on the EHR infrastructure it has invested in by working toward becoming, in effect, the new data center for a growing number of other, otherwise non-affiliated, providers.

Traditionally, information technology has been one of healthcare's more expensive cost centers. But for some large players, and even a few smaller ones, that is changing, and at HIMSS this week we are seeing birth of healthcare IT as a revenue center for those providers.

The first clue I received this week was when I was briefed on an announcement between Cleveland Clinic and Dell made at the show in Orlando.

Cleveland Clinic will provide practices and smaller hospitals help with planning, implementing and customizing electronic health record software, as well as training those practices and smaller hospitals.

Growing out of its experience with some regional practices, Cleveland Clinic is now taking it national, and leveraging Dell's HIPAA-compliant cloud to become, in effect, the new data center for a growing number of other, otherwise non-Cleveland Clinic affiliated providers around the U.S.

You've heard of software as a service. Maybe we should call this hospital IT as a service.

"Over the last few years we've had more and more requests for other organizations to help them with their own implementations to offer advice on how to optimize and build strategies to best utilize EHRs," says Mitchel Krieger, MD, associate chief information officer at Cleveland Clinic.

"My practice, Health Care Solutions, was really developed out of that need, and essentially it's a practice to provide sort of a suite of solutions for other organizations that range from strategic guidance to design, implementation, even the actual provisioning of software for their own use in their own health systems," Kreiger says.

Over the past 8 years, Cleveland Clinic has performed a large number of ambulatory installations for its local partners. In the past four years, Cleveland Clinic expanded this work to non-affiliated physicians, and 18 months ago, did the same for a freestanding, nonaffiliated 200-bed hospital in northern Ohio. Currently, Cleveland Clinic is also doing some work on the ambulatory side with a hospital in upstate New York.

"We get a lot of inquiries from systems all over the country to offer assistance with their own planning and design," Kreiger says. "We're just starting to test the waters."

In effect, it's not only a way for Cleveland Clinic to increase its ROI on the EHR infrastructure it built in the past decade or so. It's also a new model for revenue growth, and possibly growth in influence as well.

I also learned at HIMSS this week that the move apparently has the blessing of Judy Faulkner, CEO of Epic Systems, maker of the EHR software that Cleveland Clinic runs.

I learned this from an ex-Epic employee, who I met in one of HIMSS's long taxicab lines. This person told me that Faulkner hopes to see others replicate Cleveland Clinic's enterprising initiative.

Coming as I do from the old world of client/server software, I find it amusing that a software customer, which in a bygone age would be dinged for exceeding the provisions of its software license agreement by subletting its infrastructure to others for a profit, instead may be getting a nod of approval from the publisher of said software.

I haven't contacted Epic yet for an official comment on Cleveland Clinic's announcement, but if true, the Epic chief's favorable view could be a nod toward a world where Epic technology, like all other healthcare IT infrastructure, moves into the cloud, albeit a private one at first.

As for Cleveland Clinic, I am certain the system would not mind in the least if these new customers spur the number of referrals of patients from other areas of the country to receive specialized care at Cleveland Clinic. Kreiger says such synergies may come to pass.

He also notes that Cleveland Clinic will only install those Epic applications that it has experience with, which leaves out, for instance, Epic's Cogito business intelligence software. Cleveland Clinic had already developed its own such software, which the company spun out a while back into a company known as Explorys. The software remains in use at Cleveland Clinic.

As for Dell, it is only too happy to add Epic installations to its ever-growing stable of data centers it runs for hospitals nationwide. "Very soon, as the leading-edge organizations like Cleveland Clinic who work with genomics, you're talking about terabytes of information for one individual patient, that will quickly overrun most data centers that are currently being built, and certainly within the next couple of years," predicts Cliff Bleustein, MD, who leads the global healthcare consulting practice for Dell Services.

Another megatrend this may represent is the movement of provisioning of health IT services away from strictly the domain of companies such as Dell and toward those organizations that best know how to provide those health IT services, namely, the large hospitals and health systems who have to live with this technology on a daily basis.

A similar trend may be underway in the operation of private health information exchanges. In the past couple weeks I've come across two large medical practices standing up their own HIEs as part of ACO models, appealing to physicians and patients alike that medical records should still be entrusted to doctor-led organizations, just as they were when they were on paper.

Recent concerns about the security and privacy of personal health information stored by organizations not governed by physicians may be helping this trend along. And those concerns may hamper the efforts of any number of other tech companies attempting to act as the HIEs of choice for ACOs.

It is too early to tell whether all these shifts will have a lasting effect on the way large healthcare organizations view their healthcare IT assets. Economics of scale in the cloud could still disrupt things further. Who is to say that at some point, Amazon cloud storage won't be cheap enough, secure enough, and simple enough to trump all these offerings?

But I will leave that portion of the great cloud computing debate for another day. In the meantime, I'm eager to see how many providers opt to bring their information management assets under Cleveland Clinic's wing, or those of other players of a similar size.

Scott Mace is the former senior technology editor for HealthLeaders Media. He is now the senior editor, custom content at H3.Group.

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