HEALTH

HMO Kaiser Plans to Put
Its Medical Records Online

By RHONDA L. RUNDLE
Staff Reporter of THE WALL STREET JOURNAL

In what may be the most ambitious move yet toward electronic medical records, Kaiser Permanente, the nation's largest nonprofit health-maintenance organization, Tuesday will announce plans to spend $1.8 billion to automate its patient files.

Kaiser, with 8.4 million members in nine states, said its goal is to have the automated records up and running in three years. With such a system, the HMO would make portions of each patient's records available online to members, who would be able to check recent medical-test results, see their complete immunization history and review their current medications, among other things.

To accomplish the electronic shift, Kaiser will purchase a system from Epic Systems Corp., a Madison, Wis., software concern, and abandon a decade long effort to develop such a system itself.

Health-care policy experts in recent years have been urging medical institutions to convert their paper records to electronic form as an important step to avoid medication errors and other mistakes caused by incomplete patient information. Electronic systems also facilitate evaluation of individual doctors and the effectiveness of new treatments. But the technology's enormous cost and the difficulty of persuading busy doctors to change the way they practice, as well as privacy concerns, have slowed its adoption.

The U.S. Veterans Health Administration has been a pioneer in using electronic records, and some health plans, hospitals and medical groups have made the switch. But the Kaiser-Epic project, which would make online records accessible to 12,000 Kaiser doctors, could set a new standard for American medicine. "Many problems in patient safety arise not from poor actors -- doctors and nurses -- but from the lack of a good system in place," said Carolyn Clancy, acting director of the U.S. Agency for Healthcare Research and Quality in Washington.

"We have the potential to have the most complete set of medical information about patients, and a population of patients, of anyone in the world," said George C. Halvorson, chairman and chief executive officer of Kaiser, Oakland, Calif.

A distinguishing feature of the Epic system is its ability to link members to their medical records through the Internet, said Jay Crosson, executive director of the Permanente Federation, which represents independent medical groups that deliver care to Kaiser's members. "It is entirely conceivable that some interactions that now go on between doctors and patients" will move online, he says. Patients need to be wired to their own health information, he said, or it would be like "trying to do online banking with a bank that didn't have any information about how much money you had."

Kaiser doctors began developing a clinical-information system in the early 1990s, working with software engineers from International Business Machines Corp. A successful system was installed in Colorado in 1997, and a couple years later Kaiser decided to roll it out nationally, starting with Hawaii. But the region-by-region approach has been slow, full implementation wasn't expected for years, and commercial alternatives with more capabilities and features have emerged in the meantime.

When Mr. Halvorson took the Kaiser reins last summer, he ordered a review of the HMO's information-technology strategy. His previous employer, HealthPartners, a smaller HMO in Minneapolis, used Epic's medical-records system. Mr. Halvorson says that the decision to go with Epic was based on Kaiser's own analysis of the commercial alternatives and wasn't influenced by him. Kaiser expects to save $1 billion by using Epic rather than pursing the internal-development path, Mr. Halvorson added.

Terms of the contract between Kaiser and Epic weren't disclosed. In addition to the electronic-records effort, the project includes a range of information-management functions, including scheduling and billing features. Epic had about $107 million in revenue in the fiscal year ended in October and employs about 800 people.

Other medical institutions using Epic's product include Geisinger Health Systems, which operates a medical network in rural Pennsylvania, Palo Alto Medical Foundation, a nonprofit organization in Palo Alto, Calif., and the Cleveland Clinic.

Write to Rhonda L. Rundle at rhonda.rundle@wsj.com³

$1.8B IT Rollout Is Rx for Kaiser

By Bob Brewin

FEBRUARY 10, 2003

Kaiser Permanente Health Plan Inc. last week announced a $1.8 billion project to deploy an automated medical records system for its 8.4 million members, its second attempt to use technology to eliminate paper-based charts and files.

Analysts said the new system, which is intended to be used by Kaiser's 11,000 physicians and their patients, would be the largest health care IT system ever developed outside the federal government in terms of cost, scale and scope.

Oakland, Calif.-based Kaiser, the largest nonprofit health maintenance organization in the U.S., plans to use software developed by Epic Systems Corp. in Madison, Wis., to store medical records electronically. Epic's software provides a repository that integrates all types of data, including patient charts, physician order entry forms, clinical notes, nursing documentation and pharmacy information.

Kaiser had previously worked with IBM to develop its own automated record system. David O'Grady, a Kaiser spokesman, said the HMO started that project in the mid-1990s because comprehensive off-the-shelf software didn't exist then. Versions of the internally developed system have been rolled out in states such as Colorado and Hawaii.

But Epic has developed its software to the point that Kaiser officials believed it would be more cost-effective to switch, O'Grady said. He wouldn't disclose what Kaiser has spent on the initial project but said press reports in the 1990s pegged the expected cost at close to $1 billion.

IBM spokesman John Bukovinsky said his company has worked with Kaiser on a number of successful projects and expects to continue to be involved in IT work at the HMO, which uses IBM's systems and its DB2 database.

Andy Wiesenthal, associate executive director of the Permanente Federation, the national governing organization for Kaiser's medical groups, said it's expected to take three years to fully roll out the new system to the health plan's facilities, located in nine states and the District of Columbia.

When it's completed, the system will let Kaiser's health care workers electronically access the records of any patient, Wiesenthal said. In addition, health plan members will be able to use the system via the Internet to schedule appointments, seek referrals or request prescription refills.

Kaiser hasn't finalized the system's topology, said Wiesenthal. But, he added, the electronic medical records will be housed in Kaiser's Corona, Calif., data center and tied to servers in the facility that will handle processing for different regional operations. Kaiser officials should decide by the end of this month whether to use thin-client terminals or PCs and workstations to provide access to end users, Wiesenthal said.

Carl Dvorak, Epic's chief operating officer, said the company's software can store 45,000 data elements that cover all aspects of patient care. Dvorak added that Kaiser's system will manage all end-user interactions through Cache, a multidimensional database developed by InterSystems Corp. in Cambridge, Mass., for use in transaction-processing applications.

It's unusual for a large health care organization to rely so heavily on one vendor, said Ralph Reyes, senior vice president at Klas Enterprises LLC, an Orem, Utah-based company that measures the performance of health care IT systems. But, Reyes added, Epic has topped Klas' list of more than 200 IT vendors for the past three years, based on performance reports from 3,500-plus health care facilities.

Thomas Handler, an analyst at Gartner Inc. in Stamford, Conn., said the Kaiser deal poses a challenge for Epic, which has annual revenue of about $100 million and hasn't worked on such a large-scale project before. But if the rollout succeeds, it will put pressure on other health care providers to deploy paperless record systems, he added.

Francis J. Crosson, executive director of the Permanente Federation, said the Epic system will help Kaiser satisfy all the requirements of the federal Health Insurance Portability and Accountability Act, due to take effect in April.

Source: Computerworld