Editor's Corner

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Meanwhile, back on the ranch, it's been an interesting week for the health IT business. I assume that most of you have gotten a snout full of news on Kaiser Permanente's well-publicized IT investment scandal, which led to the departure of CIO Cliff Dodd. (Hey, but Dodd wasn't fired--he just resigned "effective immediately" when everything went kablooey).

In case you haven't caught up with the story, last week an employee blast-emailed a letter spelling out his concerns about the non-profit's staggeringly expensive ($3 billion) health IT system to the entire Kaiser staff of about 180,000. The letter was written by a brave 25-year-old soul named Justen Deal, who argued that Kaiser's HealthConnect EMR implementation was down more than up and didn't scale. The EMR system vendor, Epic Systems, has had a big fat nothing to say about all of this, but Kaiser's CEO is defending the whopping investment.

For background, bear in mind that Dodd, a former technology head with Ameritech and Qwest Communications, was originally brought in to salvage another hugely expensive project, this one intended to link up Kaiser regional networks using home-brewed software. One of Dodd's first high-profile steps was to cancel that project, taking $442 million loss, and bring Epic on board. Looks like that didn't work either, though. And now, in retrospect, we have reason to wonder whether his choice was exactly, er, objective (see below, regarding Dodd's possible million-dollar relationship with a company paid to provide IT advice). It's not a pretty picture.

I have little else to say on the subject--this kind of sturm und drang is too rich for words!--but here's some more context from the blogosphere and business publications:

"Epic signed the 10-year, multimillion-dollar deal to provide its healthcare record management software to Kaiser in 2003. At that time, Epic founder and CEO Judith Faulkner (said): 'I think that the Kaiser implementation would be challenging for any company, but I don't think there's any company better suited in the world to do it than Epic. It's a matter of scaling it up and just hunkering down and doing the installations. There's not much customization involved.'"
- The Capital Times

"We actually went through an extensive and very inclusive review of our system options. All the major issues--including the capacity issues (Justen) mentioned--were raised and carefully reviewed in that process. Experts were hired. Site visits were made. Credible people--including the KLAS independent system review organization--concluded that EPIC has the best automated medical record, the best billing system, and the best inpatient hospital system available to us." - Comments by George Halvorson, Kaiser CEO, in response to Deal's email message (.pdf)

"Let's be clear--Epic does not scale. Kaiser has at least 15 separate instances of Epic running individually. So much for an integrated system! (And) they talk about adding more instances--possibly tripling this number." - Anonymous post on HISTalk

"'There's absolutely no connection between that employee sending out the e-mail and the (Dodd) resignation,' said Matthew Schiffgens, director of Issues Management for Kaiser Foundation Health Plan. 'The timing is not fortuitous.' He declined to comment on the reason for Dodd's departure." - The Sacramento Business Journal

"It's worth noting that the presumed reason that Cliff Dodd resigned on such short notice (i.e. was canned) is not because HealthConnect (Epic) doesn't work--it's because the story that he was a director of the consulting company paid $1 million in fees by KP while he was CIO is presumably true! That's such a visible conflict of interest, it's bizarre that he and the rest of the board thought they could get away with it." - Matthew Holt, The Health Care Blog

Ultimately, we may never know to what extent financial hanky-panky, willful ignorance or conflict of interest played a role in the selection and implementation of the Epic platform. But clearly, something's amiss. How many years and dollars will Kaiser spend on IT before they create a system everyone wants to use? - Anne

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