The Mystery Of The Hospital Industry’s Silence Over EHR Rule Proposal

“To the curious incident of the dog in the night-time.”

“The dog did nothing in the night-time.”

“That was the curious incident,” remarked Sherlock Holmes.

The nation’s largest hospital systems have remained curiously quiet concerning a recent proposal from the U.S. Department of Health and Human Services (HHS) to “support seamless and secure access, exchange, and use of electronic health information.” 

This article first appeared on Forbes.com

The rules in question stem from the 21st Century Cures Act, designed to make it easier for patients to access their electronic health record (EHR) data and for hospitals to share that information securely with other inpatient facilities and medical offices. 

Of course, it doesn’t take Sherlock Holmes to figure out why Epic, a leading EHR company, opposes the provision. The rule, if finalized, would make it easier for major hospitals to switch EHR systems and give Epic’s customers greater negotiating power over prices. 

As easy as it is to understand Epic’s resistance, it’s difficult to explain why hospitals and medical groups aren’t siding with policy experts and patient advocates who are cheering on the rule change. 

Sir Author Conan Doyle, author of the Sherlock Holmes series, was a physician and astute observer of medical practice. To him and his observant protagonist, the lack of support from hospital leaders would seem especially odd given the rule is designed to help and protect the patients they serve. 

If Holmes and Watson were on the case, they’d no doubt uncover an important link between the industry’s silence and our nation’s ever-rising healthcare costs. But as with any good mystery, it’s best to start at the beginning. 

“There is nothing more deceptive than an obvious fact.” – Sherlock Holmes

During the early- to mid-1990s, the overwhelming majority of American doctors were still scribbling notes and orders on paper charts, then storing the health records away on office shelves, where they remained inaccessible on nights and weekends.  

At that time, the leaders of Kaiser Permanente (KP) saw this as a major problem. Without access to the data, physicians had to provide care without knowing a patient’s full medical history, medications or other vital health information. To improve patient care, they saw an opportunity to build their own electronic health record. After five years, and about $1 billion, they realized the effort had failed. They blamed it on bad technology. So, the leaders invested another $1 billion, this time working with IBM to create a new proprietary EHR system. They failed again. 

In 2002, not long after I was named CEO of the medical group, George Halvorson took over as CEO of KP’s health plan (insurance) and hospitals. Working together, we pinpointed the problem. Clinicians in each medical specialty had designed their computer modules to address the unique needs of their own patients, which made it nearly impossible to create an integrated EHR tool that all departments could access and share. 

After extensive research and internal debate, we made (what turned out to be) a wise decision that helped save hundreds of thousands of lives: Rather than investing another billion on a third DIY system, we purchased a turn-key solution from a small Wisconsin-based company called Epic, run by a brilliant CEO named Judith Faulkner. 

The design of her EHR system relied on simplicity and uniformity. In essence, she prioritized integration (within a hospital or health system) over sophistication, insisting that all users work from a single, shared platform—much to the frustration of doctors at the time. 

That clear vision helped turned Epic into a multibillion-dollar private company. Faulkner now ranks among the richest and most influential CEOs in tech and healthcare. She’s also one of the most philanthropic. In 2015, Faulkner signed the Giving Pledge, promising to donate 99% of her fortune to charitable causes in her lifetime.

But in January 2020, patient-advocacy groups slammed Epic’s CEO when she publicly opposed the HHS data-sharing regulations. In fact, Faulkner didn’t just disapprove of the rule change, she orchestrated an attack campaign against it, emailing her customers and urging them to sign a letter in opposition to the new rule. She even threatened to sue if HHS moved forward. 

“There is nothing more stimulating than a case where everything goes against you.”

When the federal regulations were announced in 2019, Faulkner argued that freeing up patient data through interoperability could negatively impact patient privacy. 

The safety and security of private information is of great importance, and not just to Faulkner. The Office of the National Coordinator for Health IT (ONC) and the Centers for Medicare and Medicaid Services (CMS) laid out detailed regulations and security recommendations in their proposals, which total more than 1,000 pages. 

The public and private sectors have long worked together to ensure the safety of sensitive information. Whether you look at ATMs, which connect the bank accounts of people across the globe, or companies like Apple, which previously excluded third-party developers over the same types of privacy concerns, all were able to find reliable solutions for safeguarding interoperable IT systems and protecting consumers. 

In fact, as a result of opening its application programming interfaces (APIs), Apple made it possible for customers to safely download more than 2.2 million applications from the App Store, including many that involve the exchange of money. And, let’s be realistic, the internet’s evildoers are far more interested in accessing our bank accounts than our health records. 

“The game is afoot.”

For years, doctors and hospitals have expressed frustration with the slowness of Epic’s current applications. Many in healthcare are desirous of new features and resentful of the system’s high costs (with rollouts ranging from several million dollars to an estimated $1.5 billion). 

Yet, health systems rarely make the switch to an Epic competitor. That’s because they know that implementing a new EHR is extremely cost- and time-prohibitive. Remember, many of Epic’s larger customers have entered millions of patient data points into their current EHRs. Therefore, the thought of manually transferring that information into a new system is overwhelming. But, were the new interoperability rules to take effect, the process of transferring data would simplify, EHR competition would intensify and Epic’s prices would need to come down. 

With Faulkner’s customer base, revenue and profits at risk, one would expect the CEO to do everything in her power to fight the government’s information-blocking proposal.

But it’s hard to imagine why hospitals or medical groups would follow Epic’s lead. In fact, one would expect healthcare providers to publicly reject Faulkner’s campaign and rally behind greater interoperability. Instead, most have stayed curiously quiet.  

“You have a grand gift for silence, Watson. It makes you quite invaluable.”

Only 60 organizations signed Faulkner’s letter to oppose the HHS proposal. Considering Epic’s massive customer base, which includes thousands of hospitals and clinics, the list of co-signers is relatively short and filled with relatively small hospitals and tiny health systems. 

“Most of their customers did not sign on to that letter,” said Federal health IT leader Donald Rucker, M.D., speaking at a recent health data conference. “If you parse out the big academic medical centers, only three out of 100 AMCs signed on.” 

It’s likely these larger health systems understand that clinical outcomes improve when doctors have access to comprehensive medical information. They know that, according to independent research groups like the National Committee for Quality Assurance (NCQA), multispecialty medical groups with access to integrated EHRs—aggregated in one easily accessible location—lead the nation preventing heart attacks, strokes and cancer, as well as avoiding complications from chronic diseases. 

But we have yet to resolve the question of why these larger health systems remained mum on the issue. 

“My name is Sherlock Holmes. It is my business to know what other people do not know.” 

In “The Adventure of Silver Blaze,” Sherlock Holmes solves the disappearance of a missing racehorse by putting together a series of seemingly unrelated clues. The key piece of evidence—what nobody else managed to stumble upon—was a dog, living in the stables, who didn’t bark on the night of the equine abduction. Called in to investigate, Holmes tells Watson that the responsible party had to be someone known to both the dog and its owners. 

Applying this same puzzle-solving logic to “The Mystery Of The Hospital Industry’s Silence Over The EHR Rule Proposal,” Holmes would conclude that there’s only one possible explanation for the refusal of hospitals and heath systems to speak up: These institutions have too much to lose. 

You see, doctors and hospitals recognize that interoperability is a two-way street. Although it would be better for patients and their overall health if all clinicians in a community had access to a safe and central repository of medical data, it would also make it easier for patients to switch providers—not unlike Epic’s fear of losing customers. In essence, the rule change would be bad for business.  

At present, doctors in large healthcare organizations and hospital systems are able to raise prices with relative impunity, knowing patients will be reluctant to endure all the added paperwork, tests and hassles that come with changing providers. So, like Epic, doctors and hospitals want to make it as painful as possible for people to leave. 

As an industry, healthcare thrives on inertia. Hospitals and EHR companies alike don’t want to stir up competition or put their revenues at risk. They like the way things are. 

In the end, their silence is no surprise. Some might say it’s “elementary.”  

Dr. Robert Pearl is the former CEO of The Permanente Medical Group, the nation’s largest physician group. He’s the bestselling author of “Mistreated: Why We Think We’re Getting Good Health Care–And Why We’re Usually Wrong” and a Stanford University professor. Follow him on Twitter @RobertPearlMD.