Healthcare Musings October 2009

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Why Can't My Software Talk to My Other Software?
by Philippe d'Offay

With the growing adoption of EMRs and e-prescribing, many small and medium-sized practices are discovering that software - which has the ability to eliminate costly manual processes - also can introduce inefficiencies.  How will the patient's electronic chart include the prescription that a doctor entered on her iPhone, or the lab that she ordered in the hospital's system, or a text message that she sent to the patient's PCP?  How will she access her appointment calendar and call schedule on the go?  How can the billing for her hospital visits find its way into the practice's billing software?  Whereas paper can be carried, copied, faxed and filed, it can be oddly challenging to get electronic medical data everywhere it needs to go.

These practices have three options to make these scenarios work:  

  1. They can establish manual processes whereby their staff or physicians re-enter information from one system into another.  This offsets the efficiency gains of adopting an automated system, distracts from patient care, and can become unmanageable as the practice grows.
     
  2. They can try to find an all-in-one system that does prescriptions, charts, labs, appointments, call schedule, secure messaging, billing, and whatever else they need.  These exist; however, the components of an all-in-one solution will vary in quality, so the practice may eventually choose to supplement the all-in-one system with an independent solution.  Therefore, an interface will likely still be necessary at some point.
     
  3. They can buy their software from companies that are willing to create interfaces with each other, choosing the solution for each area that best meets their needs.

The truth - ugly as it may be, in the eyes of many medical software companies - is that interoperability is not optional.  But is it feasible for vendors to create interfaces for every customer?

The State of the Art

The variety of different medical software solutions on the market, and the variety of workflows among different practices, can make interfacing complicated.  Figuring out how to transfer data from point A to point B is already tricky, typically involving some combination of permission-restricted file shares, secure TCP/IP tunnels, or HTTPS clients and servers.  On top of that, each interface with a new partner is essentially a from-scratch software project because of the drastic variations between companies' implementations of the HL7 standard.

As a result, the initial desire to - for example - "share patient demographics" between systems eventually becomes a highly customized exchange of diverse information as the practice's true demographic needs emerge.  This can lead to a lot of time and frustration, especially if either of the two companies working on the project is not able to make rapid adjustments based on customer feedback.  Some companies respond to this frustration by refusing to perform any interface customization, requiring the other system to write to their specifications.  Needless to say, the odds are not good that any two companies with this philosophy will be able to interface with each other.

That is the bad news.  The good news from the software company’s view is that existing interfaces can often be re-implemented with minimal effort.  Interfaces can be an opportunity as well as a development cost.

Many small and medium-sized private practices - that is to say, more than 60% of physicians in America - have no practical choice except to connect their various software systems.  It stands to reason that these practices should favor solutions that interoperate willingly, well, and inexpensively.  An interface that is highly customized and works well is an important piece of infrastructure for the practice.  So, interfaces have value to the software companies as well as to the customer.

What is the Cost of an Interface?

Medical software companies typically charge between $5,000 and $20,000 each to create their half of an interface, depending on the complexity of the project and whether they have any products that compete with the other system, resulting in a total cost of $10,000 to $40,000.  It seems reasonable to charge for a custom project that consumes valuable developer time; yet companies that do not customize their interfaces at all still charge for them.  So where is this money going?

Interface projects are a profit center for many medical software companies, an additional revenue stream alongside the core product, add-on modules, training and technical support.  For such a company to charge less for interfaces would hurt its bottom line. Accordingly, these companies will typically charge the same amount for an interface whether it is a new project (requiring extensive testing and possibly customization) or a re-implementation.  There is no connection between the development cost to the company and what it charges - the interface is simply more profitable the second time around.

Furthermore, if the company has a dedicated team of interface analysts, it must pay their salaries, a fixed cost.  This applies to companies that do not customize their interfaces, as well as those that do.  These analysts are not trained to innovate, only to implement, and they have no incentive to automate away their jobs.

So for a company that considers interfaces an accessory, they become both a cost center and a profit center, and the company is unlikely to innovate in the area of interoperability. Interfaces are expensive for these companies to create, and even more expensive for the customer to purchase.  The net effect of this strategy is that small and medium-sized practices struggle to afford an interface.

The Interface is Part of the Product

The medical software marketplace is changing.  Interoperability is no longer a "nice to have" because practices are driven by decreasing reimbursements to automate their labor-intensive manual processes.  They are also better educated about their options; and any practice, knowing that interfacing is possible, will prefer its software systems to work well together.

This has created a profound sales challenge for companies that profit from a boutique add-on aftermarket: their interfaces, priced like a luxury addition, are now being factored in to the product's total price tag up front.  As a result, these companies are losing deals to savvy competitors who understand that, from the customer's perspective, the interface is part of the product.

What is the quiet revolution that these savvy competitors are ushering in?  If interoperability is not an add-on, but rather a part of a company's core solution, then a company must learn how to interface quickly, well, and inexpensively if it is to flourish.

By implementing many interfaces at minimal cost, it eliminates sales barriers, makes its customers happy, and at the same time gains experience with this type of project.  It leverages economies of scale, amortizing development costs across a large customer base.  It finds the common patterns in what customers seek and builds these into its specification, thereby reducing the amount of customization work that is required.  It shaves days, weeks, or months off of its interface projects by publishing its specifications online and developing many different options for message transfer.  In other words, this company learns how to create interfaces inexpensively, and passes the savings along to its customers.

Every software company must decide what it is selling.  Standalone solutions are increasingly unattractive in today's marketplace. A solution that interfaces poorly, or expensively, might as well be standalone.  There is a counterintuitive advantage to charging less - or not at all - for interfaces: it improves customer loyalty, boosts sales, and drives innovation. It benefits the customer, the company, and the industry as a whole.

About the Author

Philippe d'Offay  is the CEO of pMDsoft, Inc., a medical software company that has focused on mobile charge capture since 1999.  At pMDsoft, he helps physicians: capture billing opportunities that otherwise would have been lost, especially in the inpatient setting; share information effortlessly while rounding; and access their call schedule and outpatient appointments while on the go.  pMDsoft has never charged to create its dozens of interfaces with EMR, PMS, billing, and hospital information systems.

You can reach Philippe d'Offay at pmdoffay@pmdsoft.com or call 800-587-4980.

 

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