“We put together a pretty good deal to replace the old Healthland system,” Mike Lieb, interim chief executive officer for Powell Valley Healthcare, said last week. “We got favorable pricing for the end of the year.”
Lieb told the board in a special meeting Wednesday that NextGen Healthcare Information Systems knocked $400,000 off its $2.65 million price tag for the system in a deal that was good only until Dec. 31.
In addition, Lieb told the board that Powell Valley Healthcare qualifies or will qualify for about $1.5 million in federal Medicaid and Medicare incentives for purchasing electronic medical records systems.
Some board members hesitated because of the purchase’s unknown effect on the organization’s ability to proceed with needed building projects, but they ultimately agreed it was an exceptionally good opportunity that shouldn’t be missed.
“It is really mixed emotions for us,” Board Treasurer Larry Parker said Thursday, “because we’re not in a favorable cash flow situation. But there’s a bargain out there, and we can’t hardly afford to pass it up. We had to take advantage of it.”
The deal that made the purchase possible came together quickly, but the path to it was lengthy. The need for a new system is longstanding.
“It’s been on the strategic plan forever,” Lieb said last Tuesday. He said the existing system is dysfunctional and must be replaced at some point in the future, echoing what former CEO Rod Barton said for more than a year before he left in September 2010. Prior to leaving, Barton created a committee to evaluate electronic medical records systems and decide which one to purchase.
The committee identified NextGen as one of two finalists in January and later named it as the system of choice. But that decision was set aside for several months while Paul Cardwell, the more recent former CEO, investigated a possible medical records partnership with Billings Clinic — a situation administrators later decided they were uncomfortable with.
“The choice of the staff was NextGen, which they had picked before,” Lieb said. “He (Cardwell) apparently slowed it up.”
Cardwell resigned in September, and administrators elected to move forward with the decision to go with NextGen.
When it looked like he had a deal that would work, Lieb said he contacted each member of the selection committee and asked, “If we can pull off a deal, is this the system that everybody wants?
“The response was 100 percent, ‘Yes,’” he told the board Wednesday. “The response I’ve gotten from employees throughout the house has been, ‘You bet! Let’s rock and roll.’”
Lieb agreed with Barton’s previous assessment that Powell Valley Healthcare’s current electronic medical records system by Healthland likely never will allow the organization to achieve federally-mandated meaningful use guidelines, and that deadline is approaching.
Josh Baxter, PVHC information technology manager, agreed.
“The system we have now is not good,” Baxter said. “It’s terrible. It crashes. I can’t imagine being a nurse or a physician and working with it every day. We will need to replace it eventually,” regardless of the board’s decision last week.
Lieb told the board that Derek Jones, interim chief financial officer, and Baxter realized recently that the organization already qualifies for $920,000 in federal stimulus funding from Medicaid for electronic medical records, administered through the Wyoming Department of Health.
“We didn’t know it existed until a couple of weeks ago,” Lieb said.
In addition, NextGen has agreed to have the new system online by July 1 so Powell Valley Healthcare can qualify during the current fiscal year for additional incentive money through Medicare, which will provide another $600,000 to help pay for the system.
Combined, that adds up to $1.5 million to help with the cost of the purchase, Lieb said.
Those incentive payments will continue through 2015, with smaller amounts paid each year until then.
Another company, Health Information Technology Capital, has preapproved a $1 million unsecured loan as bridge funding between incentive payments, and NextGen has agreed to structure the payment schedule to coordinate with those payments.
Powell Valley Healthcare will pay another $600,000 in estimated costs for buying and setting up the system.
Lieb explained the deal, as well as the timing of the payments and the installation, in detail to board members on Wednesday.
He also outlined the pros and cons.
Pros, he said, include:
• Favorable pricing.
• Unified staff and medical staff support for the system.
• Opportunity to improve the clinical workflow.
• Ability to meet federal meaningful use requirements and receive Medicare stimulus money.
• A positive event for Powell Valley Healthcare after the events of the past year.
• NextGen will send a team to Powell Valley Healthcare to install the system and demonstrate how it works. The project director is a woman Lieb has worked with twice before on similar projects, and she is “as good a project manager as we could get.”
• Powell Valley Healthcare would have to take on debt, and it is unknown what effect that may have on Powell Hospital District’s ability to get financing for needed building projects.
• The senior leadership of the organization is in flux, with an interim CEO and CFO who likely will be gone when the system goes live.
• Signifiant disruption when the system is implemented.
• While financing covers the bulk of the project, some cash outlay will be necessary.
• Installing and implementing the system will require significant staff time.
Board President Dr. Mark Wurzel said, “There is a chance that, in our strategic plan, it may be an either/or thing. By moving forward with this project, we may not be able to do the next.”
Parker said, “I just don’t honestly know that we can do everything we want to do. I know we need an EMR; I know there’s been a lot of effort in picking this system.”
But Parker added he also is aware of the ongoing need for facility improvements in the surgery department.
Dr. Lisa Gwin, emergency room director, said she believes improving Powell Valley Hospital’s facilities is a bigger priority, as that would help restore people’s faith in the organization.
“They need to know that we’re out there for them,” she said.
Powell Valley Healthcare’s strategic plan for facilities identifies surgery and the emergency room as the biggest priorities for expansion and improvement.
But Board Member Deb Kleinfeldt, a former PVHC employee, said replacing the Healthland system is even more important.
“This is a have-to. We have to do this,” she said. “I remember going into the lab a few years ago, and the lab girls were crying, and it was over Healthland (the current system). It needs to be replaced.”
Dr. Valerie Lengfelder, who will serve as medical chief of staff for the coming year, said replacing Healthland will end problems with workflow and billing, thereby increasing cash flow for the organization.
Robin Roling, vice president for patient care services, said the current situation with Healthland affects everyone because it is inefficient and repeatedly requires backtracking and troubleshooting.
Dr. Betsy Spomer said the hospital facility has run profitably in the past, and she believes it can do so again.