Capitol Health Associates, LLC
Thursday, March 30, 2006
Vermont State Legislature
Health Care Reform Commission
Representative Janet Ancel
Representative Steve Maier
Representative Francis "Topper" McFaun
Senator Ann Cummings
Senator Jane Kitchel
Senator Kevin Mullin
John Bloomer, Jr.
Table of Contents
|Blueprint for Health Study Findings
Overview of Findings
Questions and Answers: Below are questions CHA asked of the Blueprint after receiving the revised budget.
Budget Issues: Technical Budget
Budget Issues: Staffing Issues
Budget Issues: Legal Issue
On February 21 of 2006 the Vermont State Legislature requested Capitol Health Associates (CHA) conduct a review and make recommendations on the Blueprint budget request. A sizable portion of the request is slated to fund technology in support of a statewide Chronic Care Initiative. Over the past month CHA has met with the Leadership of the Blueprint and attended a joint executive committee meeting of Vermont Information Technology Leaders and the Blueprint in order to collect information concerning the programs technology needs. We have conducted meetings with individuals involved with both projects and have reviewed the RFP responses of the vendors to assist in determining a fact based budget that reflects the needs of the Blueprint for fiscal year 2007.
Currently a number of assumptions exist making it difficult to develop recommendations, however recent activities in vendor selection have made it somewhat easier to grasp the needs of the project and produce a more evidence based approach to building a budget. In summary, the new budget numbers contained in the table below submitted by the Blueprint reflect a reduction from the original budget request of approximately $500,000 which reflects the availability of facts and changes in overall assumptions for deployment of an information system. The legislature may want to also examine project staffing levels and legal fees contained in the Blueprint budget request. As an award to Wellogic IBM would present considerable risks to the project CHA recommends a dual contract award to GE/IDX – Orion.
During the process of discovery we found the original Blueprint technology budget to be primarily based on assumptions as opposed to hard numbers, and derived from the belief that:
Another contributing factor to the inability to develop a fact based budget was a request from the Legislature that VITL and the Blueprint ascertain the feasibility of the two entities utilization of a joint technology solution for their respective projects.
During the past three months progress has been made on the selection of a vendor to support the two projects. The original RFP fielded by VITL for the medication history pilot was called back and reissued to allow for the inclusion of specifications to support the Blueprint Chronic Care Initiative (CCI). At that point 4 vendors remained in the selection process; GE/IDX, Orion, Wellogic, and Quovadx, each revised their offerings to include the additional specifications which included a pricing structure from which the Blueprint could determine a more targeted set of numbers.
Though there was a basis to construct a more factual based budget, it was still difficult to develop a hard budget because of widely varying numbers and some “to be determined” items in proposals from the four vendors. For example, Orion’s RFP response itself included assumptions in several important and potentially expensive areas of their proposal that could cause the Blueprint to have a shortfall on their budget projections by, in our opinion, as much as 35%. These assumptions included the addition of 3M as a teaming partner on the project, offering their vocabulary engine as a solution to a particular shortcoming of the Orion proposal.
Another example is 3M, who offered a pilot price for the technology which was substantial, but failed to include a price for a full rollout of the technology. Additionally, Orion failed to present a hosted solution in their proposal leaving the respective projects at risk and open to a potentially expensive and untested solution. As of 3/24/06 further advancement in the selection process has produced a more defined set of numbers through a series of negotiations between Greg Farnum and the vendors.
This realization narrows variables in possible budget numbers for deployment, but fails to present a concise set of facts from which to work. The need for the 3M engine contained in the Orion response has likely been dismissed as either GE/IDX or Wellogic posses the technology needed to meet the projects requirements. Issues of hosting the CCIS solution still remain as Orion has yet to offer a reasonable solution, however there remains a possibility that GE will agree to take on that task.
Of note, a significant issue has been solved. Through a cooperative effort between the Blueprint and VITL the selection process has been opened to the possibility of a duel award allowing the selection of best of breed for the particular requirements and integrating the solutions into a virtual single platform.
That stated, CHA feels although it is possible to obtain a number closer to actual dollars needed for deployment, many assumptions in actual deployment costs still exist
Below are the most recent budget projections from the Blueprint. In response I have submitted several questions which are listed below the table.
Questions and Answers: Below are questions CHA asked of the Blueprint after receiving the revised budget.
Q: The budget calls for $400k in Configuration and
Deployment Services; I assume these are contracted services from the vendor
for requirements gathering, documentation, any system personalization and
installation. Am I correct?
Q: I am also assuming that the $400k for Electronic Medical Record
Interfaces includes engineers and specialists for the requirements gathering,
documentation and development of the interfaces and field engineers for the
Q: In reference to the added four Vermont Department of Health employees
and the consultant can you please let me know the duties of the two requested Requirements/Implementation
Analysts as opposed to the contracted implementation services described above.
Please describe why their functions can not be carried out by the program
manager in conjunction with the contractors, consultant, and the Public
Health Physician - Health Informaticist
Q: Do you have information on current staffing levels
supporting the Information Technology portion of the project as of today? Some
information is included in your last budget request but I am having trouble
identifying the actual number of staff dedicated to IT efforts.
Q: Does the line item for Electronic Medical Record Interfaces include interfaces to Pharmacy Benefit Managers, Labs, Payors or other entities
or are they strictly for practice based Electronic Medical Records
Q: Software Support and Maintenance is slated at 350k,
is this figure for FY 07 or are you banking for 08. Please clarify why, during
an implementation phase of a project this level of support and maintenance
would be required. Is training included in this line item? Do you expect major
utilization of help desk support during the implementation phase?
Q: Application Service Provider – Hosting Registry
Application is budgeted at 240k, I understand the current thinking is that
if Orion is selected that the Vermont Department of Health may host the
solution in its existing data center. In that case would this money be used to
buy additional IT equipment, offset additional services costs in the data
center, and provide for additional telecommunications services, or is the line
item strictly for a contracted solution?
Q: Finally, as far as the Privacy & Security Protocols for
Participants Agreements, am I correct this is a legal fee? Do you think there
is an opportunity to share this cost and the product produced with other State
entities or have other entities had to do the same type of work, is there work
product already produced?
The current selection process has at this point boiled down to GE/IDX teaming with Orion and the Wellogic/IBM team. While each offers a reasonable solution the GE/IDX Orion combination is a stronger offering. Wellogic’s solution to support chronic care is currently in the development stage. Wellogic reports, that it believes, it can have a product available in a 6 month time frame. In my experience with complex systems development, I can report that time frames are rarely met. The fact that the company has presented to the Blueprint only representative screen shots in PowerPoint as opposed to a working prototype and there has been no formal pricing structure for the modules raises a number of risks to the project. If even a portion of the product was in a testing stage I would feel much more confident that the rather tight time schedules for deployment of the Blueprint CCIS could be met. With these facts present I believe the risks of choosing Wellogic over GE/IDX Orion to be formidable.
The new budget numbers contained in the above table from the Blueprint reflect a reduction from the original budget request of approximately $500,000 which reflects the availability of facts and changes in overall assumptions for deployment of an information system.
CHA recommends that the Legislature fund the Blueprint for the Technology portion of the budget at 2.70 million dollars. Our reasoning is slightly different from the Blueprint budget request as stated in the table above for the following reasons:
As it is CHA’s recommendation that VITL accept and award to GE/IDX - Orion team we are basing our funding recommendation on that assumption. The Orion proposal offers two sets of pricing for the Blueprint CCIS one set of numbers for a technology solution for the pilot at $550,000 and one set of numbers for a full implementation at $1,349,564. The project will require an additional $1,325,000 for interfaces, VITL, Hosting contingent and Grants to Providers which carries a total of $2,674,564.
We feel that given the situation that exists today the Blueprint and VITL are in a good bargaining position given the competitive nature of the RFP. This position is not likely to be as strong in FY08 as it is today having fostered a sizeable discount from both GE/IDX and Orion. Therefore we do not recommend accepting the Pilot pricing structure although the numbers are attractive it leaves the programs at risk. We recommend purchasing technology and services for a full implementation of the CCIS platform.
CHA is at a disadvantage in making concrete recommendations to the Legislature on this subject due to a lack of total understanding of the internal workings and business processes of the Vermont Department of Health. However from a business perspective we feel that for the particular phase of this project and the estimated size of the rollout to the communities the project seems to be overstaffed. In the private sector based on the requirements of the project, current staffing levels, contracted services from vendors we would eliminate the two requested Requirements/Implementation Analysts positions. Funding would be better spent in increasing the salary level of the Project Manager and combining the efforts of the Consultant, Public Health Physician, Contractors, VITL, Hosting facility, and existing staff to manage the initial roll out. We would then evaluate the project staffing requirements to support an extended rollout to additional communities for the 08 budget cycle and fund accordingly.
The Blueprint has requested $350,000 for Consultant & legal costs for policy development, privacy requirements negotiations with various partners (providers, patients, data sources, etc.). CHA, while unqualified to make specific recommendations, believes that certain portions of this work have already been accomplished or are well under way. It is our recommendation that this issue be looked at closely to avoid duplication of effort and expense.
The Blueprint with assistance from its members, its own consultant HLN Consulting, and CHA, has come to a number of conclusions concerning an enterprise technology platform capable of a statewide chronic care system deployment.
The Blueprint has made reasonable forward progress in conjunction with VITL to establish the basis for an enterprise wide implementation of a joint technology solution. It is apparent that the two organizations are working out their issues in an open forum and continue to identify requirements that will insure the success of both initiatives.