Wal-Mart, eClinicalWorks Deal Exposes Need For EMR Price Transparency

The big health information news is that Wal-Mart's Sam's Club is partnering up with electronic medical record vendor eClinicalWorks and Dell Inc. to sell electronic medical records to physicians.

Sam's Club will offer the package this spring starting at under $25,000 for the first physician in a practice and $10,000 for each additional doctor. Ongoing costs will be $4,000 to $6,500 per year.

The package will include a Dell desktop or tablet PC installed by Dell technicians and software-as-a-service applications from eClinicalWorks. The price also includes five days onsite training by eClinicalWorks technicians.

The reaction to the news of an "EMR-in-a-box" has been remarkable. From the New York Times to a plethora of tech blogs, everybody is talking about what has been called a potential game changer for the EMR market.

"If they can sell these systems and deploy them effectively, it could completely change the structure of the market. I'm sure there's a tremendous amount of nervousness about this in the industry, but this is one of those things that once somebody does it, it's going to be very difficult for others not to follow suit," says David Brailer, MD, former national coordinator for health information technology in the Bush administration and current chairman of healthcare investment company, Health Evolution Partners.

Changing the structure of the EMR market is exactly what eClinicalWorks' President Girish Kumar Navani has in mind. "For too long the EMR has been treated as a niche product. Doctors are told that it takes a year to implement and costs hundreds of thousands of dollars and makes for a very painful experience. The reality is that it doesn't take that long and it doesn't cost that much," says Navani.

Navani says this strategy will remove some of the confusion related to buying an EMR because there will be one set price for the product, with haggling and add-ons taken completely out of the equation.

"Sometimes I'll hear of a small doctor's office that spent $250,000 buying an EMR. I'm left asking, 'How did you get so ripped off?' What happens in our industry is people come up with whatever pricing works. I have seen vendors charge one price for a cardiologist's practice and another for a primary care physician—for the same software. That is unbelievably unethical," says Navani.

One of the main criticisms of EMRs being sold at a retailer is the idea that a doctor can saunter into Sam's, grab some groceries, pick up a prescription, and, oh yeah, might as well buy that EMR too.

That's not how it's going to work.

In actuality, the EMR bundles will not even sold in Sam's stores. "It's something that's going to have an online presence on samsclub.com. The order process will take anywhere from 10 to 12 weeks because there are going to be a series of steps to analyze the practice and determine what the specific practice needs are," says Susan Koehler, senior manager of corporate communications at Sam's Club.

The blogosphere has also been buzzing with the notion that the approximately 200,000 doctors who are Sam's Club members will purchase the EMR and then be left to figure out how to use it on their own.

Also not true, says Navani. "This is the same product and same service we've been offering our 4,000 doctors for 10 years. This is not a situation where you buy some software in a box and never get training or project management. The implementation method will not change," he says.

Though everyone involved insists that this deal was in the works long before the economic stimulus package was announced, the $19 billion in federal stimulus funds is expected to be a boon for EMR vendors nationwide, which would now include Sam's Club. The $44,000 that each physician could receive through the program would be more than sufficient to offset the $25,000 cost of the eClinicalWorks bundle.

It's not clear whether the eClinicalWorks' EMRs will meet the forthcoming meaningful use guidelines; however, the product is certified by the Certification Commission for Healthcare Information Technology, which is expected to be named the federal certification body.

Brailer says that pricing transparency has been a long time coming. "What the Certification Commission did was make product functionality more transparent. We always knew that pricing was next. Once that information is out there, you are going to see some people becoming very nervous," says Brailer.

And Navani says, bring it on. "I expect some retaliation from legacy vendors, absolutely. Because when the status quo is threatened those who want to preserve it are going to react. That's fine with us. Change for the positive only comes when you overcome the status quo," he says.

In what is a highly fragmented market with loads of vendors offering countless solutions, a transition toward price transparency is a good move for providers. If these guys are successful with this venture, the days of vendors being coy about product prices are numbered.