Compilation shows US Veterans Administration spent the most at $16B
Clinical laboratory leaders and pathologists will be interested in which hospital systems are making the largest investments in electronic health record (EHR) technologies. Especially considering laboratory information systems (LIS) must interface with these platforms and require extensive reworking when hospitals change their EHRs. For example, hospitals moving to the Epic Systems EHR often require their laboratories to implement the Epic Beaker LIS as well.
According to information sourced by Becker’s Hospital Review, the top 16 hospital systems each spent $500 million or more on EHRs, adding, however, that the information is “not an exhaustive list.”
Number three on the list is Kaiser Permanente which operates multiple hospitals within its nine healthcare networks across the United States serving 12.5 million members. For that reason, its total investment in EHR technology represents a much larger number of hospitals than the other health systems on the list.
Of the 16 providers on the list, 12 installed EHRs provided by Epic Systems of Verona, Wis. Four of the providers implemented EHRs from Oracle Health (formerly Cerner), North Kansas City, Mo., and Meditech of Westwood, Mass.
“Looking forward, there are many advantages in terms of investing in the future and how we will be aligned with technologies including digital and AI applications,” said pathologist Angelique W. Levi, MD (above), vice chair and director of pathology reference services at Yale School of Medicine, in a news release following a site visit to Geisinger Diagnostic Medicine Institute in Danville, Pa., to see Epic Beaker in operation at Geisinger’s clinical laboratory. “But what we gain immediately—having all the patient information accessible in one place in a linked and integrated fashion—is very important.” (Photo copyright: Yale School of Medicine.)
Provider, EHR, Investment
Becker’s list below shows the total amount invested by the 16 healthcare systems was approximately $38.32 billion. The average EHR implementation cost is $2.39 billion for a large healthcare provider.
Becker’s stated they assembled this list from public sources and that there may be other EHR/hospital contracts with a total cost that also would make the list. It is not common to see a list of what hospitals actually spend to acquire and deploy a new EHR.
Epic added 153 hospitals to its client base in 2023. Epic’s EHR competitors—Oracle and Meditech—both experienced declines in client retention rate, Healthcare IT News reported based on the KLAS data.
“Both current and prospective large organization customers are drawn to Epic because they see the vendor as a consistently high performer that provides strong healthcare IT [information technology], quality relationships, and the opportunity to streamline workflows and improve clinicians’ satisfaction,” Healthcare IT News said of the KLAS report’s findings.
In a blog post, authors of the KLAS report explained that in 2023 Oracle added specialty hospital clients and Meditech “saw several new sales” which included healthcare systems and independent providers.
In the next few years, the industry is “ripe for disruption. Another vendor could come in and turn everything on its head,” the KLAS blog article concluded. “Even those who choose Epic want to have more competitive options to choose from.”
Preparing for an LIS Change
Clinical laboratory leaders who may be transitioning their LIS during a new EHR installation may learn from colleagues who completed such an implementation.
Angelique Levi, MD, vice chair and director of pathology reference services at Yale School of Medicine, who was part of the pathology team, noted that one challenge for labs is addressing “information that’s from many different places when we’re talking about cancer care, prognostic testing, and diagnostics.
“It’s become much more complicated to manage all those data points,” she continued. “Without being on an integrated and aligned system, you’re getting pieces of information from different places, but not the ability to have linked and integrated reports in one spot.”
EHR implementations are among the most labor-intensive, expensive projects undertaken by hospitals. Therefore, it is crucial that clinical laboratory and pathology leaders research and learn why an EHR (and possibly LIS) change is needed, what is expected, and when results will be received.
Half of the people tested were unaware of their genetic risk for contracting the disease
Existing clinical laboratory genetic screening guidelines may be inadequate when it comes to finding people at risk of hereditary breast-ovarian cancer syndromes and Lynch syndrome (aka, hereditary nonpolyposis colorectal cancer). That’s according to a study conducted at the Mayo Clinic in Rochester, Minn., which found that about half of the study participants were unaware of their genetic predisposition to the diseases.
Mayo found that 550 people who participated in the study (1.24%) were “carriers of the hereditary mutations.” The researchers also determined that half of those people were unaware they had a genetic risk of cancer, and 40% did not meet genetic testing guidelines, according to a Mayo Clinic news story.
The discoveries were made following exome sequencing, which the Mayo Clinic news story described as the “protein-coding regions of genes” and the sites for most disease-causing mutations.
“Early detection of genetic markers for these conditions can lead to proactive screenings and targeted therapies, potentially saving lives of people and their family members,” said lead author Niloy Jewel Samadder, MD, gastroenterologist and cancer geneticist at Mayo Clinic’s Center for Individualized Medicine and Comprehensive Cancer Center.
“This study is a wake-up call, showing us that current national guidelines for genetic screenings are missing too many people at high risk of cancer,” said lead author Niloy Jewel Samadder, MD (above), gastroenterologist and cancer geneticist at Mayo Clinic’s Center for Individualized Medicine and Comprehensive Cancer Center. New screening guidelines may increase the role of clinical laboratories in helping physicians identify patients at risk of certain hereditary cancers. (Photo copyright: Mayo Clinic.)
Advancing Personalized Medicine
“The goals of this study were to determine whether germline genetic screening using exome sequencing could be used to efficiently identify carriers of HBOC (hereditary breast and ovarian cancer) and LS (Lynch syndrome),” the authors wrote in JCO Precision Oncology.
For the current study, Helix, a San Mateo, Calif. population genomics company, collaborated with Mayo Clinic to perform exome sequencing on the following genes:
BRCA1 and BRCA2 genes (hereditary breast and ovarian cancer).
Mayo/Helix researchers performed genetic screenings on more than 44,000 study participants. According to their published study, of the 550 people who were found to have hereditary breast cancer or Lynch syndrome:
387 had hereditary breast and ovarian cancer (27.2% BRCA1, 42.8% BRCA2).
163 had lynch syndrome (12.3% MSH6, 8.8% PMS2, 4.5% MLH1, 3.8% MSH2, and 0.2% EPCAM).
Participants recruited by researchers hailed from Rochester, Minn.; Phoenix, Ariz.; and Jacksonville, Fla.
Minorities were less likely to meet the NCCN criteria than those who reported as White (51.5% as compared to 37.5%).
“Our results emphasize the importance of expanding genetic screening to identify people at risk for these cancer predisposition syndromes,” Samadder said.
Exome Data in EHRs
Exomes of more than 100,000 Mayo Clinic patients have been sequenced and the results are being included in the patients’ electronic health records (EHR) as part of the Tapestry project. This gives clinicians access to patient information in the EHRs so that the right tests can be ordered at the right time, Mayo Clinic noted in its article.
“Embedding genomic data into the patient’s chart in a way that is easy to locate and access will assist doctors in making important decisions and advance the future of genomically informed medicine.” said Cherisse Marcou, PhD, co-director and vice chair of information technology and bioinformatics in Mayo’s Clinical Genomics laboratory.
While more research is needed, Mayo Clinic’s accomplishments suggest advancements in gene sequencing and technologies are making way for data-driven tools to aid physicians.
As the cost of gene sequencing continue to fall due to improvement in the technologies, more screenings for health risk factors in individuals will likely become economically feasible. This may increase the role medical laboratories play in helping doctors use exomes and whole genome sequencing to screen patients for risk of specific cancers and health conditions.
Expanded genomic dataset includes a wider racial diversity which may lead to improved diagnostics and clinical laboratory tests
Human genomic research has taken another important step forward. The National Institutes of Health’s All of Us research program has reached a milestone of 250,000 collected whole genome sequences. This accomplishment could escalate research and development of new diagnostics and therapeutic biomarkers for clinical laboratory tests and prescription drugs.
The NIH’s All of Us program “has significantly expanded its data to now include nearly a quarter million whole genome sequences for broad research use. About 45% of the data was donated by people who self-identify with a racial or ethnic group that has been historically underrepresented in medical research,” the news release noted.
Detailed information on this and future data releases is available at the NIH’s All of us Data Roadmap.
“For years, the lack of diversity in genomic datasets has limited our understanding of human health,” said Andrea Ramirez, MD, Chief Data Officer, All of Us Research Program, in the news release. Clinical laboratories performing genetic testing may look forward to new biomarkers and diagnostics due to the NIH’s newly expanded gene sequencing data set. (Photo copyright: Vanderbilt University.)
Diverse Genomic Data is NIH’s Goal
NIH launched the All of Us genomic sequencing program in 2018. Its aim is to involve more than one million people from across the country and reflect national diversity in its database.
So far, the program has grown to include 413,450 individuals, with 45% of participants self-identifying “with a racial or ethnic group that has been historically under-represented in medical research,” NIH said.
“By engaging participants from diverse backgrounds and sharing a more complete picture of their lives—through genomic, lifestyle, clinical, and social environmental data—All of Us enables researchers to begin to better pinpoint the drivers of disease,” said Andrea Ramirez, MD, Chief Data Officer of the All of Us research program, in the news release.
More than 5,000 researchers are currently registered to use NIH’s All of Us genomic database. The vast resource contains the following data:
245,350 whole genome sequences, which includes “variation at more than one billion locations, about one-third of the entire human genome.”
1,000 long-read genome sequences to enable “a more complete understanding of the human genome.”
Analysis of drugs effectiveness in different patients.
Data Shared with Participants
Participants in the All of Us program, are also receiving personalized health data based on their genetic sequences, which Dark Daily previously covered.
“Through a partnership with participants, researchers, and diverse communities across the country, we are seeing incredible progress towards powering scientific discoveries that can lead to a healthier future for all of us,” said Josh Denny, MD, Chief Executive Officer, All of Us Research Program, in the news release.
“[Researchers] can get access to the tools and the data they need to conduct a project with our resources in as little as two hours once their institutional data use agreement is signed,” said Fornessa Randal, Executive Director, Center for Asian Health Equity, University of Chicago, in a YouTube video about Researcher Workbench.
For diagnostics professionals, the growth of available whole human genome sequences as well as access to participants in the All of Us program is noteworthy.
Also impressive is the better representation of diversity. Such information could result in medical laboratories having an expanded role in precision medicine.
Medical laboratories and anatomic pathologists may need to squeeze into narrow networks to be paid under value-based schemes, especially where Medicare Advantage is concerned
Pathologists have likely heard the arguments in favor of value-based payment versus fee-for-service (FFS) reimbursement models: FFS encourages providers to order medically unnecessary procedures and lab tests. FFS removes incentives for providers to order patient services more carefully. Fraudsters can generate huge volumes of FFS claims that take payers months/years to recognize and stop.
Studies that favor value-based payment schemes support these claims. But do hospitals and other healthcare providers also accept them? And how is value-based reimbursement really doing?
To find out, Chicago-based thought leadership and advisory company 4Sight Health culled data from various organizations’ reports that suggest value-based reimbursement shows signs of growth as well as signs of stagnation.
Value-Based Payment Has Its Ups and Downs
Healthcare journalist David Burda is News Editor and Columnist at 4Sight Health. In his article, “Is Value-Based Reimbursement Mostly Dead or Slightly Alive?” Burda commented on data from various industry reports that indicated value-based reimbursement shows “signs of life.” For example:
More doctors are accepting pay-for-performance payments: 44.5% in 2020, up from 42.3% in 2018, according to an American Medical Association (AMA) biennial report on physician participation in value-based reimbursement, titled, “Policy Research Perspectives: Payment and Delivery in 2020.”
On the other hand, Burda reported that value-based reimbursement also has these declining indicators:
39.3% of provider payments “flowed” through FFS plans in 2020 with no link to cost or quality. This was unchanged since 2019. (HCPLAN report)
19.8% of FFS payments to providers in 2020 were linked to cost or quality, down from 22.5% in 2019. (HCPLAN report)
88% of doctors reported accepting FFS payments in 2019, an increase from 87% in 2018. (AMA report)
Does Today’s Healthcare Industry Support Value-based Care?
A survey of 680 physicians conducted by the Deloitte Center for Health Solutions suggests the answer could be “not yet.” In “Equipping Physicians for Value-Based Care,” Deloitte reported:
“Physician compensation continues to emphasize volume more than value.
“Availability and use of data-driven tools to support physicians in practicing value-based care continue to lag.
“Existing care models do not support value-based care.”
Deloitte analysts wrote, “Physicians increasingly recognize their role in improving the affordability of care. We repeated a question we asked six years ago and saw a large increase in the proportion of physicians who say they have a prominent role in limiting the use of unnecessary treatments and tests: 76% in 2020 vs. 57% in 2014.
“Physicians also recognize that today’s care models are not geared toward value,” Deloitte continued. “They see many untapped opportunities for improving quality and efficiency. They estimate that even today, sizable portions of their work can be performed by nonphysicians (30%) in nontraditional settings (30%) and/or can be automated (18%), creating opportunities for multidisciplinary care teams and clinicians to work at the top of their license.”
Hospital CFOs Also See Opportunities for Value-based Care
This could be problematic for clinical laboratories, according to Robert Michel, Editor-in-Chief of Dark Daily and our sister publication The Dark Report. According to Guidehouse, “Nearly 60% of health systems plan to advance into risk-based Medicare Advantage models in 2022.”
Medicare Advantage (MA) enrollments have escalated over 10 years: 26.4 million people of the 62.7 million eligible for Medicare chose MA in 2021, noted a Kaiser Family Foundation brief that also noted MA enrollment in 2021 was up by 2.4 million beneficiaries or 10% over 2020.
The graph above is taken from the Kaiser Family Foundation report, “Medicare Advantage in 2021: Enrollment Update and Key Trends.” According to the KFF, “In 2021, more than four in 10 (42%) Medicare beneficiaries—26.4 million people out of 62.7 million Medicare beneficiaries overall—are enrolled in Medicare Advantage plans; this share has steadily increased over time since the early 2000s.” Since MA employs narrow networks for its healthcare providers, it’s likely this trend will continue to affect clinical laboratories that may find it difficult to access these providers. (Graphic copyright: Kaiser Family Foundation.)
“The shift from Medicare Part B—where any lab can bill Medicare on behalf of patients for doctor visits and outpatient care, including lab tests—to Medicare Advantage is a serious financial threat for smaller and regional labs that do a lot of Medicare Part B testing. The Medicare Advantage plans often have networks that exclude all but a handful of clinical laboratories as contracted providers,” Michel cautioned. “Moving into the future, it’s incumbent on regional and smaller clinical laboratories to develop value-added services that solve health plans’ pain points and encourage insurers to include local labs in their networks.”
Medical laboratories and anatomic pathology groups need to be aware of this trend. Michel says value-based care programs call on clinical laboratories to collaborate with healthcare partners toward goals of closing care gaps.
“Physicians and hospitals in a value-based environment need a different level of service and professional consultation from the lab and pathology group because they are being incented to detect disease earlier and be active in managing patients with chronic conditions to keep them healthy and out of the hospital,” he added.
Value-based reimbursement may eventually replace fee-for-service contracts. The change, however, is slow and clinical laboratories should monitor for opportunities and potential pitfalls the new payment arrangements might bring.
Faulkner was surpassed on Forbes’ list only by roofing material magnate Diane Hendricks, co-founder of ABC Supply Co., whose net worth of $11 billion puts her squarely in the top spot.
Richest Self-Made Women in Healthcare
Becker’s Hospital Review highlighted the seven richest “self-made” women who ran healthcare-related companies. They include:
Judith Faulkner, founder and CEO of Epic, ranked 2nd, net worth $6.5 billion.
Alice Schwartz, co-founder of Bio-Rad Laboratories, ranked 10th, net worth $2.9 billion.
Heather Hasson and Trina Spear, co-founders and co-CEOs of FIGS (direct-to-consumer healthcare apparel and scrubs), ranked 50th and 52nd, net worth $625 million and $600 million respectively.
Also listed by Forbes was Anne Wojcicki, CEO and founder of 23andMe, a personal genomics and biotechnology company. Wojcicki’s net worth of $1.1 billion puts her in the 25th position, according to Forbes.
In “Genetic Test Company 23andMe Completes Merger with Richard Branson’s VG Acquisition Corp., Stock Now Trades on NASDAQ,” Dark Daily noted that since the Sunnyvale, Calif. direct-to-consumer (DTC) genetic testing company will now be filing quarterly earnings reports, pathologists and clinical laboratory managers will have the opportunity to learn more about how 23andMe serves the consumer market for genetic types and how it is generating revenue from its huge database containing the genetic sequences from millions of people.
Judith Faulkner (left), founder and CEO of Epic Systems Corp., and Alice Schwartz (right), co-founder of Bio-Rad Laboratories, ranked 2nd and 10th respectively in Forbes’ list of the top 100 richest self-made women. In healthcare, Faulkner ranks 1st and Schwartz 2nd. Clinical laboratory personnel will likely be familiar with Epic Beaker, which, according to Healthcare IT Leaders, “is Epic’s laboratory information system (LIS) for hospitals, clinics, patient service centers, and reference labs. The software supports common workflows for clinical pathology (CP) labs as well as anatomic pathology (AP) labs.” (Photo copyrights: HIT Consultant/Science History Institute.)
“I always liked making things out of clay. And the computer was clay of the mind. Instead of physical, it was mental,” Faulkner, who is 77, told Forbes.
Company milestones noted by Forbes include:
Inking a deal in 2004 with Kaiser Permanente for a three-year, $400-million project.
Moving in 2005 to a corporate campus in southern Wisconsin—an “adult Disney World” with the largest underground auditoriums and more “fantastical” buildings.
More recently, AdventHealth of Altamonte Springs, Fla., contracted with Epic for a $650 million remote build and installation.
“Epic’s system has tentacles that go out through amazing networks. You can actually help a person get the care they need wherever they need to get it,” AdventHealth’s CEO Terry Shaw told Forbes.
“I think that what will happen is that a few of them will do very well. And the majority of them won’t. “It’s not us as much as the health systems who have to respond to the patient saying, ‘Send my data here,’ or ‘Send my data there,’” Faulkner told Forbes.
Bio-Rad’s Alice Schwartz an IVD ‘Pioneer’
As Faulkner rose to prominence in healthcare IT, Alice Schwartz of Bio-Rad Laboratories found massive success in the in vitro diagnostics industry.
She and her late husband, David, started Bio-Rad with $720 in 1952 in Berkeley, Calif. They were intent on offering life science products and services aimed at identifying, separating, purifying, and analyzing chemical and biological materials, notes the company’s website.
“They were at the right place and at the right time as they became pioneers in the industry,” International Business Times (IBT) stated.
Bio-Rad Laboratories (NYSE:BIO and BIOb) of Hercules, Calif., offers life science research and clinical diagnostic products. The company’s second quarter (Q2) 2021 net sales were $715.9 million, an increase of about 33% compared to $536.9 million in Q2 2020, according to a news release. Its Clinical Diagnostics segment Q2 sales were $380 million, an increase of 34% compared to 2020.
Norman Schwartz, the founders’ son, is Bio-Rad’s Chairman of the Board,
President, and CEO. However, at age 94, Alice Schwartz, the oldest person on Forbes’ richest self-made women list, “has no sign of stopping soon,” IBT reported.
Lists are fun. Medical laboratory and diagnostics professionals may admire such foresight and perseverance. Judith Faulkner and Alice Schwartz are extraordinary examples of innovative thinkers in healthcare. There are others—many in clinical laboratories and pathology groups.
