# Presentation: 334751

##          AHIC Presentation 

- Mark D. Jacobs, MD
- Chair, Board of Directors
- EHRRI
- October 13, 2006

**Notes:**
Hello everyone, my name is Mark Jacobs and I am a practicing internist and President and CEO of Coastal Medical Inc, an 85 provider primary care corporation in Rhode Island. It is an honor to speak to you about the development of health information technology and electronic health record adoption by physicians in Rhode Island. 

## How It Began

- RIQI’s Laura Adams convenes CITLC mid-2004
- Steering committee of physician leadership begins to discuss collaboration
- RI, the 50 X 50 miles city-state, receives AHRQ grant to develop MPI, later to become a RHIO

**Notes:**
I will take you back to the summer of 2004, when Laura Adams of the RIQI co-chaired with Dr. Andrew Snyder of Hasbro Children’s hospital the CITLC, whose charge was to investigate and then educate the physician community regarding electronic medical records. Leadership of the most important physician groups in the State attended and participated. At the same time, my company, Coastal Medical, was engaged in a corporate analysis of our IT needs, and we examined and vetted over 15 of the best ehr software products for our doctors. Discussions with other committee members made us all realize that we could agree to narrow the field to a choice few, and it wasn’t long before we realized that there were advantages to volume discounting through group purchasing. 

## The Vision

- Imagine if a majority of the practicing physicians in a State could agree on one software vendor’s EHR? A product with all key functionalities that was easy to learn, flexible, and user friendly. One that could be used by all specialties and practice sizes.

## The Barrier: Cost

- Imagine if the greatest obstacle to  adoption i.e. cost, could be mitigated by a group purchasing effort that included all the major physician organizations in the State.
- Could key stakeholders understand the ROI, and support this financially?

## Electronic Health Records of RI

- Who is EHRRI?
- Founded as a Unique Collaboration Between Historical Competitors
- Founders:
- Coastal Medical, Inc (70 Physicians)
- Lifespan PSO (800+ Member Physicians)
- Care New England’s 2 PHOs: Kent and W&I (400+ Member Physicians)
- ThunderMist Health Center  (35+ Physicians)
-    (approx 2300 practicing physicians in RI)
- All With Equal Capital and “Sweat” Equity
- All With Equal Governance

**Notes:**
 This is the story of a company called Electronic Health Records of Rhode Island, or EHRRI. I wical IT Leadership Committee, co-chaired by Andrew Snyder, whose charge was to examine the fundamentals of electronic health

## Electronic Health Records of RI

- Why?
- Bring Down Costs Through Volume Discount
- Participate in the Selection of One Product
- Simplifies Interconnectivity, support, training and Interfaces
- Build Local Service & Training Components
- Develop Uniformity of Reporting for P4P and Disease Management
- Provide Leadership and Build Relationships with Other Physicians and Groups

**Notes:**
We have established communication, trust, and a working team with very important physician groups. I believe that this will open the way for us to collaborate on other critically important projects, such as quality improvement, health care system redesign, and fair physician reimbursement. 

## EHRRI is Leading the Way in Rhode Island

*May ‘06*
- Five prominent physician organizations –representing half the office based physicians in the state– have come together over the last year with the goal of moving Rhode Island to the forefront of EHR adoption
- The physician groups have founded Electronic Health Records of Rhode Island (EHRRI) and invested $200,000 in seed capital to launch the business
- Founders are leading by example, becoming customers of EHRRI on the same terms as everyone else

## Company Operating Model

- EHRRI will act as a value added reseller of eClinicalWorks products and services
- Offering a complete, integrated EHR and Practice Management System (PMS) solution as well as a stand alone EHR to office based physicians in Rhode Island
- Marketing and conducting sales activities
- Managing the relationship with the vendor
- A key objective is to build up local training and support resources in Rhode Island

## EHRRI Will...

- Reduce Cost of Purchase
- Aggregate critical mass of providers to negotiate lower pricing from a vendor
- Provide an effective funding conduit for identified “stakeholders” who benefit from adoption i.e commercial payers, med mal carriers, hospital systems, large self insured, State (Medicaid) and Federal (Medicare)
- Increase Physician Demand
- Reduce R&D time and risk of bad decision
- Increase Pace of Rollout
- Simplify Interfaces and Connectivity
- One EHR Platform

## EHRRI Benefits Multiple Stakeholders

- A key reason that EHR adoption has been slow is that the costs are typically borne by physicians, but benefits are diffused throughout the system
- Center for Information Technology Leadership estimates that ~90 percent of benefits flow to external stakeholders
- EHRRI offers the opportunity for stakeholders to fund some share of the benefits

## EHRRI Provides a Robust Value Proposition for Health Plans

| Business objective | EHR RI impact |
| --- | --- |
| Address MD technology needs systemically | One entity for majority of MDs in the state |
| Identify and reward quality physicians | Provide clinical data for P4P programs |
| Improve quality of physician practice | Use of EHR leads to adoption of evidence based medicine |
| Reduce unnecessary utilization | Reduce unneeded utilization of drugs, labs, radiology |
| Assist physicians in managing complex patients | Provide clinical data for predictive modeling and physician-led disease management |
| Increase administrative efficiency | Cleaner claims and reduced number of PMS to interface |
| Identify and reward efficient physicians | Provide clinical data for efficiency measures, especially specialists |
| Enhance image in community | Collaborative relationship with founders, grant funding  |
| Enhance national reputation / NCQA standings | Participation in leading edge initiative  |

## Payers realize significant savings when physicians use EHRs

| Category | Annual expenditure pre-EHR/MD | Reduction post-EHR (%) | Reduction post-EHR/MD ($) |
| --- | --- | --- | --- |
| Drug utilization | $109,000 | 15.0% | $16,350 |
| Radiology utilization | $59,100 | 14.0% | $8,274 |
| Lab utilization | $27,600 | 8.8% | $2,429 |
| Adverse drug events | $6,500 | 34.0% | $2,210 |
| Total | $202,000 |  | $29,263 |
|  | Discount to be conservative | 50% | $14,631 |

- Source: Wang, et al., New England Journal of Medicine, 2003

## Financial Plan

- Vast majority of EHRRI funding is payments from physician customers
- There is still a financial gap to be filled to cover the cost of providing local support, while providing attractive discounts to customers to boost adoption
- The larger the discount, the higher the rate of adoption, but also the higher the funding gap; this financial shortfall needs to be bridged by stakeholders

## Where Are We Today?

- We began as a for-profit LLC (easiest) and recently converted to 501c3
- We have only one stakeholder financial backer, BCBSRI. We seek support through grants or from other interested parties.
- We have a nine member Board that has worked hundreds of hours to put this company together

## Where Are We Today?

- We recently used seed money to hire a part time executive director and a full time project manager
- Since officially opening for business in June 06, we have 25 implementations, 90 signed physician contracts, 61 pending contracts, and 235 “evaluating”, 80 planned demos, and 34 “leads”
- We are considering offering other services i.e. pre/post implementation assistance, data analysis, and performance reporting.