The health care industry faces its risky ERP moment

The No. 4 top sleeper tech story of 2010

When businesses started deploying large ERP and CRM systems in the 1990s, it didn't take long to learn that deriving a significant return on investment would take far longer than vendors promised and customers hoped. Indeed, many early deployments were failures.

Now there's a push to digitize health care records and automate data collection and billing by doctors and other medical personnel. It's early days, but there are indications that these deployments will also be far more difficult than vendors -- not to mention some politicians -- would have us believe.

[ Learn the key lessons of failed ERP in InfoWorld's Insider report. | The traditional big ERP paradigm has reached its end. Instead, expect ERP systems to become modular, distributed, and a lot more nimble as they break apart. ]

Like ERP, the deployment of electronic health records and systems depends on more than the software itself. Good applications may perform poorly if not carefully customized and integrated.

Consider the well-publicized debacle suffered by San Francisco when it deployed an electronic medical records system called Avatar, designed to streamline billing for state-supported behavioral health programs. As recounted by the New York Times, "providers struggled to use the new software, causing health officials to lose track of millions of dollars of services." Although some officials thought they had gotten through the worst of a shakedown period, others simply saw Avatar as a failure. In any case, the deployment has been extremely difficult and expensive.

However, as the Times story missed, Avatar has also been deployed in Monterey County, a few hours south of San Francisco, and the project "came in on time and under budget," says Amie Miller, supervisor of quality improvement for the county's Department of Behavioral Services. She says that the county IT department, the software vendor, and the clinicians worked closely to customize the program before it went live.

Miller, herself a therapist who worked directly with the IT department, said a key step in the deployment was a careful audit of functions needed by clinicians, followed by intensive training of users. It appears that San Francisco opted for a top-down approach with little input from users.

That type of deployment echoes what caused many of the ERP failures in the 1990s: imposition of the software's internal processes, or of management's "official" processes, without thought to the real-world situation in a business or agency. (The other major reason for ERP failure was overcustomization, which made ERP systems too brittle and hard to adapt as needs changed. That's why EHR systems like Avatar are designed to separate customizations from the core software.)

That's not to say there were no glitches in Monterey or in San Mateo County, another government that had success in deploying Avatar. Any project this complicated will inevitably run into problems and unexpected needs, and smart IT hands will make allowances for that before promising a delivery date or locking down the functionality.

It's easy to forget that ERP-like systems are alien in most health care organizations. "You're talking about a professional population that was slow to adopt technology in the first place and is suspicious of it in some ways," says Ingall Bull, a clinical implementation analyst and licensed clinical social worker at San Mateo County who works on its behavioral EHR program. "So it's key to work with them directly in setting expectations, dispelling the 'magical thinking' many have around technology, and working with them on the processes being automated."

Although some large medical providers have learned from earlier experiences in billing and pharmaceutical processing systems, Bull says, for the rest of the profession "this is a really big change."

Meanwhile, there's a push to bring somewhat different electronic systems that collect patient data into doctors' offices and hospitals. Those efforts too are meeting with mixed success.

Robert Tholemeier, a veteran software analyst now focused on health care IT, says adoption has been slowed by "terrible user interfaces based on a Microsoft .Net paradigm, which focuses on building screens to capture data into an SQL database instead of building applications, which automate and improve doctor's workflows and time management."

Tholemeier notes that "anything that adds time and labor to the workflow adds frustration and dissatisfaction for the doctors. It is not uncommon for primary care docs to work an extra hour or two per day clicking around in the EHR [system]."

Also, Tholemeier says, most EHR systems don't do an adequate job of protecting patient privacy, and until they implement a standardize interface (most likely based on XML), it will be difficult to exchange vitally needed patient information while protecting integrity and privacy.

None of these obstacles is impossible to overcome. But cash-strapped governments, small medical practices (which comprise the majority of providers) inexperienced with IT systems, and a looming 2015 deadline for EHR deployments for providers that bill the government are a potentially dangerous combination for such a critical infrastructure effort. Thus, as we saw in ERP, we'll see both failures and successes -- and they'll affect caregivers, patients, and provider organizations alike.

Additional reporting by InfoWorld Executive Editor Galen Gruman.

>> Read the next story

The top underreported tech stories of 2010:

  1. Apple quietly became a key enterprise provider
  2. Server virtualization has stalled, despite the hype
  3. URL-shortening services gave hackers a new entry point
  4. The health care industry faces its risky ERP moment
  5. Deferred IT maintenance is a ticking time bomb
  6. Energy-efficient Ethernet has arrived, with real savings
  7. A major Internet security hole was finally plugged
  8. Social media messaging is getting around traditional firewalls
  9. Businesses are resisting the XBRL mandate

This article, "What you missed: The health care industry faces its risky ERP moment," was originally published at Get the latest insights in business technology issues and trends at

Copyright © 2010 IDG Communications, Inc.