Athenahealth, BIDMC Ink EHR Development Deal

The software provider will use Beth Israel Deaconess Medical Center's electronic health records system as the basis of a commercial product.

Athenahealth Tuesday said it has purchased WebOMR, a cloud-based, meaningful use stage 2-certified EHR. It was developed by and has been in use at Beth Israel Deaconess Medical Center across three decades.

Financial terms of the sale were not disclosed, but Boston-based Beth Israel Deaconess will continue to use WebOMR, retains licensing rights to the software for the next 20 years, and will make available five of its EHR developers to Athenahealth for the next year as Athenahealth pursues the development of a commercial product based on WebOMR.

Beth Israel Deaconess Medical Center CIO John Halamka, MD, differentiates the deal from similar EHR technology sales such as when GE purchased technology from Intermountain, or when McKesson bought Vanderbilt technology.

"In those cases, it was more about taking code and making that a commercial product," Halamka said in an interview. "In our case, it's more about taking… 30 years of know-how of workflow, and algorithms, and business logic."

The deal originated four months ago when Athenahealth, based in Watertown, MA, approached Halamka, which he deemed "a wonderful alignment of incentives."

By turning over its code, Beth Israel Deaconess IT resources can focus on innovations, while Athenahealth acquires what chairman and CEO Jonathan Bush has sought since the inception of the company: Eventual entry into the mainstream, cloud-based, inpatient EHR market for hospitals.

"On a scale of one to ten, this is an 11 for us," said Bush in an interview. "Our pattern as we've gotten a little bigger has been the sort of acqui-hire process, where we acquire some customers, acquire some folks who have already spent 5 or 10 years perfecting an idea, and then build it into our larger network and sales footprint."

Further Into the Cloud
As part of the agreement, the 58-bed Beth Israel Deaconess Hospital-Needham community hospital will serve as the alpha development site for Athenahealth's new inpatient offerings. BIDHC, comprised of 185 providers across 38 Massachusetts locations, will begin a phased implementation of Athenahealth's athenaOne suite of EHR, revenue cycle management, and patient engagement services.

WebOMR's roots stretch back to 1998, when Halamka became CIO of BIDMC. "Our approach has been cloud-hosted, but we didn't call it cloud then, we called it multi-tenancy Web hosting," Halamka says.

The deal comes as healthcare IT, and corporate IT in general, continues to expand into cloud services. "It becomes much more like an app store for health. It's worked so well for Facebook and Apple and Google," he says, "why not healthcare?"

Traditional inpatient EHR software is locally hosted and is updated infrequently, with two years typically passing between versions. Cloud-based software such as Athenahealth's can support frequent updates via centralized hosting, requiring no local software reinstallation in the process.

Both BIDHC and Athenahealth are integrating other components into their respective systems. In BIDHC's case, it will continue to run Meditech EHR software in community hospitals, and eClinicalWorks EHR software in private practices it does not own, but has partnered with, Halamka says. "We'll deploy the inpatient functionality in Needham when it's ready."

"We'll watch how successful Athena's implementation of our intellectual property goes, and then let the best man win. We'll continue to run Meditech in our community hospitals, and later on, the Athena services as they become available."

"Five years from now," he says, "I go for value—whatever vendor is offering the agile, cloud-hosted, high-quality, low-cost platform. It's too early to tell what that will mean for any incumbent vendors, but I would hope that we get to parsimony—the smallest number of vendors providing us the services we need."

Making It Scale
In Athenahealth's case, it will be integrating not only its own ambulatory and care coordination suites, but also its recently-acquired, cloud-based RazorInsights EHR software for hospitals with 50 beds or fewer. RazorInsights does not yet handle all the paperwork, patient handoffs, and insurance coordination that it will when fully integrated with the rest of Athenahealth's software and with WebOMR, Bush says.

A major marketing push into larger hospitals will come only after Athenahealth has proven the technology at scale through its efforts in smaller hospitals and by alpha testing for quality, safety, and efficiency at BIDHC, he adds. The new services "won't be released to the world until we're sure they're usable and that the clinicians are satisfied with them."

"If we only sold to smaller institutions for the next two or three years, that would sort of be fine with me," Bush says. But Athenahealth will rapidly ramp up its development cycle as it progresses. "The major change to Razer will be the physician user experience, the screens the doctor sees, will be athenaClinicals screens.

"Most of our stuff is actually seeing operational workflows and opportunities for improvement that the client would never have the vision to see. Not that they lack personal vision, but they actually can't see all the work across all the institutions that are like them in one view," Bush says.

Not Like Epic
"You sign up for Epic, you drop $200 million today, and in four years you're live on everything. If it takes us three and a half years to get to the same feature parity that you're looking for, with all of the service and none of the capital expenditures, then you could conceivably go live on the same day."

Established, traditional client/server EHRs such as Epic and Cerner are here to stay, Bush notes. "Epic and Cerner are dominant players of a prior era. We'll never be as whatever as Epic is, whatever they are. They've got their 31 systems, the one database, and the special way they get all the departments to come out to their special resort and get trained on working together like the Outward Bound program. They're the best in the world at that, and no one could take them on, including us. It's just that that is not an industry category that society needs or should want anymore."

"My hope is, that you're going to get this agility in [the] service that is going to make a highly usable, increased efficiency, safe, quality EHR experience for all—inpatient, outpatient, skilled nursing facility, urgent care," Halamka says. "It shouldn't matter where you are, or what you're running.

"If this all succeeds, we'll innovate and the core will be developed at scale by a much larger organization."

Halamka noted that there are no royalties involved, and after money flows from the software purchase to BIDHC, the organization becomes a paid subscriber to Athenahealth's services. He also noted that the deal "does not afford any personal benefits to me or any of my staff from the transaction."

Over the course of its three-decade existence, webOMR was recognized as one of the first hospital-built, inpatient and outpatient EHR systems, as well as the first self-built EHR system to achieve meaningful use certification by the federal government, the two organizations said in a joint statement.