Comp14_unit3_audio_transcript.doc - Lane Community College



Special Topics in Vendor-Specific Systems: How Do Organizations Select an EHR? Lessons From the Front Lines

Audio Transcript

Slide 1: How Do Organizations Select an EHR? Lessons from the Front Lines

This is component 14, unit 3. We will be discussing how organizations select an Electronic Health Record (EHR), Lessons from the Frontlines. A tremendous amount of work is involved in selecting an EHR. We can't cover all the topics today but we will be discussing four of the principle tasks involved in selecting an EHR.

Slide 2: Lecture Objectives

This unit will prepare students to be able to:

1. Demonstrate concept knowledge of the request for proposal (RFP) process

2. We will talk about stakeholders’ involvement, and their roles in selecting an EHR

3. Then we will review the costs that needed to be calculated when selecting an EHR, the capital, the maintenance and staffing costs.

4. Lastly, we will discuss the importance of evaluating the financial strength of each vendor being evaluated.

Slide 3: Request for Proposal Process

A request for a proposal, or RFP, is a document that is sent to suppliers. It invites them to submit a proposal to provide goods and services. Remember that it's only to be used for complex projects that require the vendor or supplier to be creative. Very importantly it assists with internal alignment. It's one of the best means to force an organization to describe its needs before involving a vendor. Assembling the responses to the RFP helps an organization compare vendors and understand potential project risks.

Slide 4: Request for Proposal Process (cont.)

However, you need to remember that the RFP process is very time consuming for both the purchaser and the vendor. And it is always difficult to accurately describe all the requirements and, and even when you get all of the results in. Additionally, it's hard to make the comparisons and score responses.

Slide 5: Request for Proposal Process (cont.)

What does an RFP include? It will include an overview of the business issues, what are you trying to accomplish? It will include a description of the product or the services that you require. It needs to detail all the business requirements. It requires specific instructions on how the proposal will be formatted, when it will be returned by the vendor, detailed instructions on how to select the vendors, what is the required timeline and many, many questions and must include who to contact for the vendor if they have any questions.

Slide 6: Other Request Formats

In addition to RFP's, there are other request formats that could be useful during your search for an Electronic Medical Record (EMR). There's a request for quotation, when you actually know exactly what you want and you're looking to find out what the prices are when price is the main factor.

Slide 7: Other Request Formats (cont.)

You can issue a request for information, which is used to find out who's a potential seller of products and knowing the capabilities of those sellers in the market.

Slide 8: Other Request Formats (cont.)

Before a request for proposal goes out, a request for qualifications (RFQ), an RFQ could be issued to find out who you would send the RFP to.

Slide 9: RFP Sample Documents - HIMSS

HIMSS is an excellent source for sample RFP documents. They're meant to act as tools used by health organizations and other healthcare providers in developing it’s own RFP. Remember they're meant to be starting points for your RFP. The questions and requirements are meant to be illustrative and not exhaustive. You cannot take an RFP from the HIMSS site and simply issue it. It's meant to help you get started in developing your own after extensive meetings with stakeholders and detailed determination of your own specifications.

Slide 10: RFP Sample Documents - HIMSS

And remember that access to the sample RFP documents requires active HIMSS membership.

Slide 11: RFP Sample Documents - HIMSS

As an example, I was able to find, on the HIMSS website, an ambulatory EHR sample RFP. Remember, it's provided as a tool for your organization to use and develop its own RFP. It's a structured approach to listing the various criteria that may be relevant in the RFP process. It's part of the series of documents that list the common features and questions that need to be answered for enterprise systems that are normally evaluated by an RFP but require extensive editing by you and your organization. Now that we've discussed the RFP process, let's move on to stakeholders, another important aspect of selecting an EHR.

Slide 12: Stakeholders Involved

Involving stakeholders is a crucial aspect of the project. The notion of stakeholder dates back to a 1963 internal memorandum at Stanford, which defined stakeholders as quote, those groups without whose support the organization would cease to exist, close quotes. It was later championed by Edward Freeman in the 80's and gained wide acceptance in business practice.

Slide 13: Stakeholders Involved

Stakeholder theory is a theory of organizational management in business ethics that talks about morals and values and managing an organization. Management needs to give due regard to the interest of groups. Stakeholder theory addresses the principle of who or what really counts.

Slide 14: Stakeholders Involved

Every organization and every type of organization has its own set of stakeholders. In addition, every project will have its own stakeholders. In selecting an EHR, the project won't involve everyone in the organization but it will involve many of the principal stakeholders. Here we list a set of stakeholders who may be involved in an EHR selection process: physicians, nurses, clerical staff, lab staff, management, and you also need to remember your product suppliers and even patients and the community as you research your needs to select an EHR. All of these groups should be involved, at least at some level, in your discussions and in developing your detailed selection specifications. Knowing who to involve is the first step. It’s important to know exactly how to engage your stakeholders.

Slide 15: Stakeholders Involved

One of the most important roles that stakeholders can play is to help develop communication plans, which are targeted to the specific stakeholders involved. Using stakeholders to review all communication is very important. They also know how to develop the benefit discussions and plans and track the benefits for their specific groups. A stakeholder will also know the business processes involved and assist in developing a gap analysis between the current situation and the desired outcome, which then is described as a gap and which will be filled by the new system. They will also help develop policy and procedure changes. As business processes change, policy and procedures need to be adapted and specific stakeholders will assist. Most importantly is their assistance in developing targeted lesson and learning plans for the specific groups. Physicians will be trained differently than nurses, will be trained differently than clerical staff.

Slide 16: Project Cost

An important aspect of selecting an EHR is the determination of the total project costs. I cannot understate how important it is to do a good job of determining project costs. Many projects fail due to inadequate funding. There are several types of costs involved in a project. The first that will be dealt with is the capital costs. These are onetime costs to set up the system, to purchase products and materials, and to hire consultants. It involves software, hardware and labor. These can all be capitalized because they're onetime costs. Capitalized costs are amortized such that the recorded cost of that asset is distributed over the estimated useful life of the system. Another aspect of the project cost is that of license. A license is an official legal permission to use or own a specific thing. It principally applies to software projects and involves application software and also the operating systems for the hardware on which the software products run.

Slide 17: Project Cost

After a project goes live, maintenance costs kick in. These are the recurring operational or running costs of a system. It includes labor costs, license costs and various OTPS, other than personnel costs. Maintenance costs for licenses typically incur about 15 to 20 percent costs annually. A very, very critical component of a project is the staffing costs. You need to also remember to include all the costs of staff, including fringe benefits and other administrative overhead costs such as desktop computers, laptops, administrative overhead, cell phones, travel costs, and training. Remember adequate funding can make or break a project.

Slide 18: Project Cost - Example

On this screen is a very detailed list of staffing costs and OTPS costs that come from an actual ambulatory EHR project. This project was an enterprise scaled project with costs estimated to be 65 million dollars over 10 years. On the staff costs, at the top is, physician champion, application, coordinators, database administrators, network support, trainers, go live support, help desk support and at the bottom, it includes the very important calculation of fringe benefit for all the staff.

Slide 19: Project Cost - Example (cont.)

From the same project, on the OTPS side, is a full range of costs from software license, and notice that it includes the maintenance cost. This was a 10-year cost projection for the project. Implementation fees are estimated because it depends on the actual number of incurred hours. Contingencies are listed here and are a very important component of project costing and include, contingencies for software, hardware, network, data center, consulting fees and even desktop scanners.

Slide 20: Financial Strength of Vendor

An often-overlooked aspect of selecting an EHR is the performance of a financial strength analysis of the involved vendors. Many companies supply credit information on businesses corporations but Dunn & Bradstreet may be one of the most famous and in fact a colloquial term is to do a Dunn & Bradstreet on a company. But available are other companies such as Experian, Equifax, MarketWatch, InfoUSA and even Yahoo! Financial. On this page is listed their websites. For a fee these companies perform financial strength analyses. It's an important aspect and should be remembered that it needs to be done before signing a contract with the vendor. It’s not a onetime purchase of a product from a company. Instead a very long relationship will be developed with these companies. You need to know how strong the financials are since you don’t want to be purchasing an EHR system from a company that will go out of business.

Slide 21: Financial Strength of Vendor

In addition to hiring a company to do a financial strength analysis, there are other steps that can be performed. Vendors should be willing to share an audited financial statement. This is a lot easier with publicly traded companies because they're available on their website by law. But even a non public company should be willing to share audited financials. It’s essential to review the management team. What is their tenure? What is their industry experience? And importantly, what is the turnover in the company? How long has the management team been with the company? Does the company turnover senior management almost annually? Does the company generate cash? This is known as liquidity. Cash is important in all companies and helps during economic downturns so that they are able to continue to develop software and deliver services. In addition it’s crucial to check references on companies. It will be useful to call on the phone and most importantly visit customer sites. Talk directly with current users of the system and check references carefully. An often-overlooked step is to talk directly with the CFO of any company before signing a contract. You can ask very direct and pointed questions about the company’s financial strength and a CFO will answer those questions. We've gone through several aspects of selecting an EHR but by no means has this been an exhaustive list of steps involved in selecting an EHR. These are just some of the most important steps and unfortunately too often overlooked.

Slide 22: Summary

In this lecture, we have covered just a few of the most important steps that an organization carries out when selecting an EHR. First and foremost, we talked about the value of the RFP. We covered the importance of involving the key stakeholders. Finances are always critical so we discussed cost considerations, both capital and operating. And finally, we reviewed the importance of ascertaining the financial health of vendors involved in the project.

Slide 23: References

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