An e-mail from an IT staffer at Kaiser Permanente alleges dire technical and fiscal problems with its electronic medical records systems; shortly after, the company's CIO resigns.
Shortly after a Kaiser Permanente project supervisor circulated an internal e-mail to more than 180,000 employees denouncing the companys electronic health record system and the alleged financial waste associated with it, Kaisers CIO has resigned.
Kaiser Foundation Health Plan has been praised as being advanced of its peers when it comes to rolling out its large-scale EMR system, dubbed HealthConnect.
But in his e-mail to fellow Kaiser employees, project manager Justen Deal alleges that the company is stalled and that the current system is not scalable.
He argues that Kaisers EMR system, based on technology from Epic Systems, has reached its limit and cannot handle current user demands let alone a further rollout.
"Can we continue to support the existing users? No. And we cant continue to roll out the system," said Deal in an interview.
According to Deals memo, "outages have increased from just over 9,000 user hours per month in June to over 59,000 last month."
In an internal e-mail to staff following the e-mail incident, Kaisers chairman and CEO George Halvorson responded that the system is available 99.5 percent of the time.
For copies of Deals original e-mail and the CEOs responses, click here.
Deal, 25, who is based in Los Angeles, said he first brought his concerns to an internal investigator who dismissed them and refused to present them to the company board.
Halvorson says that the issues raised by Deal were given proper internal review.
Deal in the past has enthused on his blog
about Kaisers "Live Long and Thrive" ad campaign and the values it seeks to promote.
He also claims to have contributed extensively to the Wikipedia profile on Kaiser. His background
is in IT management for non-profits.
"The e-mail writer initially raised the very same set of concerns he noted in his current broadcast e-mail directly with our Board last August. As we do in those cases, a full and objective investigation followed, with a report made back to the Board by both our compliance staff and our legal staff," Halvorson said in the e-mail.
"The Board concluded that the charges were theory, not fact. He was then asked to provide any actual facts or evidence that he might have. He did not comply with that request. Instead, he wrote the e-mail that you may have read."
Several years ago, Kaiser ended all work on the home-grown EHR system it had developed and was planning to roll out in several states under the direction of its then-brand-new CEO George Halvorson.
Click here to read more about Kaisers software development process.
Deal says the first system was scrapped because it didnt have the electronic billing functionality Kaiser needed.
"Features are important, but it has to be able to scale or features dont matter," he said.
"Were spending recklessly, to the tune of over $1.5 billion in waste every year, primarily on HealthConnect, but also on other inefficient and ineffective information technology projects," he noted. Kaiser has already spent $3.2 billion on the current iteration of its EMR system.
Kaiser, a nonprofit company that reports solely to a board of advisers, recently reported its financial results for the third quarter.
Net income was $417 million, up from $305 million in the same quarter last year, driven by a one-time adjustment for reductions of liabilities for self-insured risk.
Operating revenue for the quarter totaled $8.7 billion, up from $7.8 billion in the third quarter of 2005. Kaiser has 8.6 million members.
In its release of quarterly results, the company remained enthusiastic about its EHR offering.
"Two of our important goals have been to continue expanding our portfolio of health care solutions and to bring more features of KP HealthConnect online in our regions," Halvorson said in the statement.
"Through these key avenues, our members, customers and communities are gaining greater choice and flexibility in they way they manage their health."
"Any kind of a new system has challenges as this goes forth, but were meeting it as they come one by one," said Kaiser vice president of media and external relations Mike Lassiter in an interview.
"The program is working and working well. This is just one individuals opinion."
Lassiter said Kaiser is on-track to have a full implementation of HealthConnect by 2009.
On the same day, quarterly results were released and only a few days after Deals memo was circulated, Kaiser CIO Cliff Dodds resignation was announced.
"Theres absolutely no connection between that employee sending out the e-mail and the resignation," said Matthew Schiffgens, director of issues management for Kaiser, in the Sacramento Business Journal.
"The timing is not fortuitous."
Kaiser has declined to comment on the reason for Dodds departure.
Deal, currently on paid administrative leave while Kaiser evaluates whether his mass e-mail distribution violates company policy, said he is sorry to see Dodd go.
"I think its a shame we lost his abilities. Cliff Dodd didnt make this decision to tie the success of EMR to a single vendor."
"He is a very talented man," said Deal. "Kaiser has lost his ability to help remedy the situation."
"Our physicians have been adamant that they need an EHR system. We need one, but this is not it. Every day that we try to make system work is a waste," said Deal.
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