Becker's Hospital Review

10 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 "We definitely saw compression in profitability, but it was expected," Mr. LeBuhn says, noting that Providence's EHR rollout has been successful. "This was projected by management. They came to us and said this is what the impact is going to be. "We understand anytime you run a business, especially a business as complicated as healthcare, there are going to be challenges that come up in the process of the implementation," Mr. LeBuhn adds. "From our standpoint, when a problem does arise, communicate that to us. We understand these are not easy installs." Ms. Goldstein of Moody's says these projects inevitably lead to more costs for routine maintenance, equipment replacement and new staff. However, hospitals and health systems that plan ahead for every possible financial impact of a health IT installation are generally the most successful. "One could write an encyclopedia on strategy and execution in healthcare, IT being just one [component]," Ms. Goldstein says. "For hospital EHR installs that have appeared to have gone smoothly, there has been an incredible amount of upfront planning before they flip that switch." Several health systems with advanced data capabilities and established EHRs — including Danville, Pa.-based Geisinger Health System, Salt Lake City-based Intermountain Healthcare and Evanston, Ill.-based NorthShore University HealthSystem — are strong "AA" category organizations, Mr. Arrick of S&P says. In May, S&P also upgraded San Diego-based Sharp HealthCare to a positive outlook and affirmed the system's "A+" credit rating. He admits the high ratings, as well as Sharp's outlook upgrade, are not solely due to good IT infrastructure, but it serves as an important foundation. "Is [Sharp's] rating improvement because they have good IT? I'd be hard-pressed to say yeah, it was the IT," Mr. Arrick says. "But a good IT system provides the means so these organizations can do a better job" with clinical management and population health. IT goes beyond the finances The high capital and operating costs associated with health IT, specifically EHRs, have put some hospitals in a difficult position. Do they absorb the financial hit now, even if they know they can't afford it? Most organizations are doing so, either independently or by joining a larger system, in part because they can only recoup meaningful use incentive dollars from Medicare until next year. And starting in fiscal year 2015, Medicare will penalize hospitals that do not demonstrate meaningful use of a certified EHR system. Meaningful Use Outside of the Metropolis: The Challenges of Rural Health IT Adoption (continued from cover) "The challenge has been the tremendous workload that I'm juggling and expectations that I'm continuously striving but successfully overcoming all obstacles." In a community of about 9,000 people in rural Colorado, he says it's "extremely difficult" to recruit individuals that have the required health IT background. And that's not the only challenge rural hospitals face. Implementing an electronic health record system isn't very affordable, and the pressure is on for rural hospitals to turn the increasingly large sums they have spent into a worthwhile investment that will eventually improve quality, safety and efficiencies and reduce health disparities; engage patients and their families; and improve care coordination and population and public health, all while maintaining the privacy and security of patient health information, Mr. Archuleta says. "In order to become fully successful in implementing an EHR, while also meeting meaningful use, we all need to work together toward the common goal at hand, as a team," he says. "We need to make sure that we complete these tasks in a timely manner, while remaining as efficient as possible and, most importantly, we must provide the best patient care for our community." Mt. San Rafael is not alone in facing these obstacles a successful health IT adoption. According to the ONC, CAHs and other small, rural hospitals — which serve the approximately 60 million Americans residing in rural communities — can face hurdles when it comes to funding, personnel and other resources needed to implement EHRs and other forms of health IT. However, the situation isn't as grim as it might seem for rural providers. The ONC and other organizations such as the Health Resources and Services Administration's Office of Rural Health Policy have provided resources and launched efforts to keep smaller, rural hospitals from falling behind in health IT. However, the overall goals of health IT projects are more pertinent than the upfront capital and maintenance costs — and the potential shortterm effects to a hospital's credit profile. "From Fitch's standpoint, we've been wiling to absorb some of [health IT projects] knowing you got to have these systems," Mr. LeBuhn of Fitch says. "Strategically, these are going to pay dividends over the long term. Without these systems, you can't have clinical redesign or clinical best practices or essentially monitor your clinical quality. They're going to more than make up the cost of investment." If anything, hospitals may experience more financial pressures in the future if they don't embrace EHRs and evolving technologies now. "Without data to figure out what that particular care protocol is or treatment procedure is, you simply won't be able to do it how others will," S&P's Mr. Holloran says. "The benefits of IT are still to come," Mr. Arrick adds. "How do you go from just a better record to better medical management? How do you use what new information you're getting and turn that around to improve care? I think that's the Holy Grail where everyone wants to get to." n "My mandate is to make sure that rural communities and rural healthcare providers aren't left behind in the push to leverage technology in healthcare," says Leila Samy, the ONC's rural health IT coordinator. "These rural safetynet hospitals are anchor institutions. They are often the largest or second largest employers in their communities. Health IT in these rural communities is really a tremendous opportunity to fuel economic development." The challenges: Lack of resources, funding stand in the way of IT adoption All hospitals and health systems — not just rural ones — face significant incentives to adopt health IT, especially EHRs. The American Recovery and Reinvestment Act of 2009 authorized CMS to award incentive payments to eligible healthcare professionals and hospitals that demonstrate meaningful use of EHRs. Through the Medicare and Medicaid EHR Incentive Programs, eligible hospitals, including CAHs, can earn $2 million or more, according to the ONC. At the same time, Medicare and Medicaid providers that don't adopt EHRs will face financial penalties starting in 2015. Demonstrating meaningful use involves using certified EHR technology to improve quality, safety and efficiencies and reduce health disparities; engage patients and their families; and improve care coordination and population and public health, all while maintaining the privacy and security of patient health information. The scheduled meaningful use objectives will be implemented in three stages involving first capturing and sharing data, then advancing clinical processes and, finally, showing improved outcomes. Attestation for both incentive programs began in 2011. Rural communities have the potential to benefit enormously from adopting EHRs, according to the ONC. In rural areas, health IT can help increase access to care, improve disease monitoring, target health education and compile regional data. It can also help reduce travel time for patients and their families and provide instant access to key information such as lab results, medication interaction and allergy safeguard details, among other benefits.

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