SaaS a big winner in health stimulus

One conclusion I was able to draw from last week's HIMSS show is that Software as a Service (SaaS) is the only way clinics and small medical practices are going to get health IT in time to collect that sweet, sweet stimulus cash.

From big SaaS companies like AllScripts to smaller ones like Practice Fusion, the buzz was electric and the lesson obvious.

(Practice Fusion CEO Ryan Howard is shown at his HIMSS reception last week. He's expecting a better year than the Phillies slugger of the same name. Which is saying something. (Then again, I'm a Braves fan.))

Most large hospitals have their solutions in place, or are in the process of implementation. This vendor relationship may be the most important thing on a hospital CEO's plate right now.

From what I gathered on the HIMSS show floor, most of these vendors are lining their customers up to collect cash on investments made long ago.

Collecting on the 2011 meaningful use guidelines, watered down as they're expected to be, will be fairly simple, and lobbying by both hospitals and vendors could water down the 2013 and 2015 guidelines so they don't have to spend anything above current plans to collect on them.

Many small practices have been assuming that the hospitals will bring them their health IT. Admitting privileges are a powerful weapon. If the hospital mandates you go with McKesson, you may have no choice.

But small practices may well ask, what's in it for me? Going with the hospital's IT solution only ties you closer to the hospital. You have your clinic because you want to stay independent. And many hospital systems were not really designed to scale down.

Thus, SaaS. There is little up-front expense, no server in the closet. You can back up records overnight with Carbonite or a USB-linked hard drive -- you can backup 2 terabytes at Costco now for under $300, including software.

SaaS vendors can scale quickly thanks to cloud computing. The biggest problem may be assuring clinics that their broadband connection won't go down mid-day. But a lightweight version of the software, again on a nurse's station, can handle that eventuality.

Services like SharEHR claim to require no training while others like Practice Fusion cost nothing thanks to ads. If the hospital demands your records, you can talk to them about that later.

Contrast that with the cost of putting in servers, wiring your office, training your staff, and learning it yourself, which is what many EHR vendors were offering clinics just a few years ago. The horror stories from that are many.

Personally I am still waiting for the glorious tech revolution to strike the doctors I use most often. My pediatrician has a PC on his desk to help with billing, but the kids' records are still on paper. My internist is also paper driven. My dentist is a computer hobbyist but still brings out a file folder each time I visit. Last time I got new prescriptions I still drove them to the pharmacist.

This tells me there is still an enormous opportunity to automate small practices, but 2011 will be here before you know it and the only way I can see them going is to buy it as a service, stimulus cash or no stimulus cash.