The Truth About Selling Healthcare IT

By Lisa Terry — November 13, 2012

The carrot is giving way to the stick. Doctors who accept Medicare had until this past October 3 to begin demonstrating that they are participating in the incentive program to be eligible for the full $44,000 in Electronic Healthcare Records (EHR) system reimbursement. If they don’t get started by 2015, their Medicare payments will be reduced by 1 percent, and that goes up 1 percent a year to a maximum of 5 percent.

But multiple reports on adoption find that just half of U.S. physician offices are using EHRs. The smaller the practice, the less likely they are using an EHR/EMR. Since practices with five or fewer doctors make up two-thirds of physician offices, that’s a lot of non-participation.

So what’s up? IT solution providers on the front lines of selling healthcare to physician practices shared their insights into what’s delaying adoption, and how to succeed in the challenging but growing healthcare IT market.

Truth #1:  Doctors have a lot of good reasons for not adopting yet

Cost is always the top reason doctors say they haven’t purchased EHRs. The $44k doesn’t go far, and it’s paid over time as long as the doctor meets increasingly stringent requirements. Nearly three quarters of doctors surveyed by CompTIA call cost a major factor. They’re also worried about ongoing costs. Small practices often have a relative or part-timer handling IT, which is inadequate for EMR support.

Another significant issue is disruption to their regular workflows. That’s well-warranted, says Mike Jones, CEO of ETG (, an MSP focused on healthcare in Birmingham, Ala., because many EHR systems are not set up to accommodate individual differences in how doctors like to work, even within practices. “Ever since the stimulus dollars, there has been a severe degradation in customer service, especially by the name brand providers” of EHRs, Jones says. “There is a market starting for high service solutions.” After several years of supporting the EMRs their clients had selected, ETG recently began also reselling an EMR, and is considering a second one, that he says fits these parameters.

Truth #2: Doctors also have a number of fears about EHR

Failure: Doctors don’t want to absorb the upfront cost and impact to their practices and then be wrong about their selection, because it doesn’t fit their workflows or the company goes out of business. “If they are a two- to three-physician practice, it’s not cheap, there is no one to run it for them, so they’re slow to make a decision,” says Michael Humke, executive director, sales, vertical markets for Ingram Micro U.S. (
That can be tough to argue with. Untangled Solutions, a L.A., Calif.-based healthcare-focused MSP, addresses that concern by delineating all the benefits investing now will have for the practice, and noting that it will be a lot easier to migrate to a new solution in the future than it was to implement EHR the first time.

Big Brother: Doctors “know the government wants pay-for-performance versus fee-for-service,” and view EHRs as the first step in gaining the transparency that’s required in healthcare,” says ETG’s Jones.

Penalties: The threat of penalties is looming, starting with those who accept Medicare. “Since insurance companies base their decisions on what Medicare and Medicaid are doing, they could see it impact regular reimbursements,” says Untangled’s Johnson.

Data Security: EMR is coming on just as focus increases on the privacy and security of data, making doctors nervous about penalties. One of the requirements for EHR meaningful use is a HIPAA risk assessment and plan. “Most have not done that,” says Joe Dylewski, practice director for Healthcare Management (, a medical and technology consulting solution provider in Grand Rapids, Mich. “They’ve attested, but not done that.”

Politics: A number of physicians are holding off until after the current election season, some believing requirements may change as a result.

Truth #3:  Many physician offices need much more than an EHR

Smaller doctor’s offices have lagged in technology adoption even as healthcare grows increasingly IT dependent and IT regulated. Many need help with billing and practice management, as well as compliance to meet HIPAA and HITECH requirements, in addition to a way to automate medical records and exchange them with other healthcare practitioners. Practices also need to cope with the delayed but still looming new medical coding system, ICD-10.

“Compliance is the elephant in the room in every medical practice in America,” says ETG’s Jones. Bill Currier, co-owner at Synergy Technology Partners (, agrees; in fact, the start-up MSP in Adair Village, Ore., is building a practice around governance, risk and compliance for physician practices up to 25 users. That typically opens the door to other IT work, but selling compliance is also an education sale. “They feel their EMR is HIPAA compliant, but if their practices, policies and training do not meet HIPAA, then it doesn’t matter about the software,” he says. Addressing GRC invariably involves EHR systems—most practices in Synergy’s market are on NextGen EHR ( via a local physicians’ association.

When it comes to compliance, physicians “don’t really understand what that means,” confirms John Hill, president and CEO of TechSage Solutions (, a San Antonio MSP with several medical clients. “I think that gets driven home with more EHR investments. They have to lock down tighter so they can’t be compromised.”

ETG addressed several common medical practice challenges at once by buying a cloud-based billing software company and offering that in a bundle with other software and IT support. Instead of a flat monthly fee, ETG charges a percentage of collected revenue. “That’s very attractive to physicians concerned about Medicare cuts,” says ETG’s Jones.

Truth #4: The EHR marketplace is not well-prepared to serve smaller practices

There are more than 2,500 ambulatory EHR packages listed on the official website for certified software applications. Some are even free. But just a small fraction are set up to service small practices at the level they really need, with training, customization and change management, not to mention basic infrastructure issues such security and a robust network. Even cloud-based EHRs have gaps. “So many are moving to cloud, but they still need help with firewalls and security, and they all need computers,” notes TechSage’s Hill. His company has a medical equipment client running a cloud-based solution on laptops, but they still needed heavy-duty security for those devices.

Here’s what often happens, says TechSage’s Hill. The physician selects an EMR. The EMR provides specs for the server they will need. The practice orders the server directly, and then it arrives. And the doctor says, “now what?” and does a web search for a solution provider.

A number of solution providers are making up for those shortcomings by
providing the on-site support these practices need for an additional fee, becoming vendor-agnostic consultants rather than representatives of a particular solution. Solution providers report mixed results in working with EHRs on behalf of their clients in this way, with some EHRs more responsive than others.

Few EHR ISVs maintain channel programs, and those that do have them are not strong.

“Some vendors demand that partners be exclusive, and some try to throw 100 percent of the service and support on partners,” says Ingram’s Humke. “Some are channel friendly, but none are running out the door to be channel friendly.”

Untangled Solutions was formerly aligned with two EMRs, and has now chosen to be vendor-agnostic, helping clients assess the market and find the right solution for their needs. “Being vendor-neutral makes us more interesting to vendors out there,” reports Chris Johnson, healthcare consultant for Untangled. “Most successful EHR companies are only 30 to 40 employees with usually four to five support people to do implementation and installations. They have to hurry up and find a company like ours” for help with a client install. Untangled also consults for other solution providers and helps lead CompTIA educational programs on EHRs.

Acting as a practice’s outsourced IT department, advising EHR selection and supporting that going forward is “a great model,” says Ingram’s Humke. So is helping hospitals or physician groups build out solutions that will really work for their member practices.

Truth #5: A number of physicians already using EHRs aren’t happy and need help

The gap in service for smaller practices is also opening up another opportunity: rescuing current EHR users. “We realized the biggest challenge at most practices is not whether EMRs will be sold to them but whether they will be implemented properly,” says Untangled’s Johnson. Deploying an EHR requires a significant amount of change management, and that’s even more difficult if the doctor and staff are not open to the change.

Healthcare Management has transformed this issue into an opportunity: its EMR recovery program is designed to help doctors get waylaid EHR implementations back on track. Most often the breaking point is an accounts receivable/cash flow problem stemming from delays in processing claims properly, says Dylewski.

Synergy’s Currier expects some practices to end up seeking replacement solutions to the one advocated by local physician groups, and turn to trusted solution providers such as his for help.

Truth #6: Succeeding in healthcare and EHR isn’t easy

The healthcare market is in the midst of a major consolidation. Hospitals are buying up local practices. Practices are forming into buying groups. Older physicians are retiring rather than face the onslaught of new technology requirements.

It can be challenging for solution providers to win the business of individual practices or break into physician or hospital groups that have their own internal folks or an entrenched vendor. Some hospitals or even offering cash incentives for doctors to adopt their preferred EHR solution, on top of the government subsidy.

But there is plenty of opportunity even within those conditions for solution providers that can offer the credibility and candid approach doctors appreciate. “Be honest and upfront,” says Healthcare Management’s Dylewski. “Don’t try to undersell. Let them know what is really in store for them.”

Truth #7: Opportunity awaits

Healthcare providers not yet involved in EHR are the ones best served by solution providers—smaller practices. While the opportunities are not as ready-made as in industries with strong ISV channel programs, the needs are clear and compelling. What’s missing are enough healthcare-savvy solution providers willing to invest the time and resources to build up the knowledge and credibility required to succeed.

“There is clearly a talent shortage,” says Healthcare Management’s Dylewski. “For solution providers it’s an opportunity.”

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