Possible REC Business Model

Posted on April 22, 2010 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

As I said before, I’m finding the EHR RECs very intriguing right now. Thus a few extra posts about the RECs. First, thanks for those who have been helping update the EHR REC wiki page. There’s still a ways to go, but little by little we’ll get all of the RECs listed in one space.

From what I can tell, and as evidenced by this CalHIPSO REC blog, these REC organizations have A LOT on their plate. First, they have to meet the mandates of the government (which I’ll talk about more another time). Second, they have to create an organization that didn’t really exist previously (for the most part). Third, they have to look at a long term business model for when the government funding for EHR RECs runs out. Not a simple task.

I find the third item pretty interesting since it might be the hardest of them all. In the post I did yesterday about rating top EMR companies, Brad made an interesting comment about the RECs providing this type of EHR implementation feedback loop.

Makes sense that these RECs are going to work with 1000 of doctors to meaningfully implement an EMR. Why not have these doctors whom they’ve helped (for free I might add) provide some feedback on the EMR software they implemented. This feedback on its own has little value, but in aggregate could be very valuable and could provide part of the business model for the REC going forward.

Let’s also make clear that even after these EHR RECs do great work and help thousands of doctors we’re still likely to only to be at 50% adoption range. Even if we reach the 70% EHR adoption as some EMR analysts predict, there will still be thousands of doctors that need to implement an EMR. Plus, there are going to be thousands of other doctors who didn’t like the first EMR they implemented and will want information on what other EMR software might be better.

Unfortunately, I see three potential problems with this idea. First, as part of the RECs requirements they have to help so many people. Yes, that means that we’re going to see many RECs obsessing over the number of people they can count on their numbers for the government. It’s just kind of a feature of government grant work. So, RECs will have to tread lightly in what they require from doctors. Remember the RECs are suppose to help the doctors and not the doctors help the RECs. Certainly in a perfect world it should go both ways. Definitely a challenge that RECs can overcome if they are careful in their approach.

The second problem is if RECs only end up recommending a small handful of EMR vendors (which sadly it seems many are going to do), then the RECs will only get back feedback for that small handful of EMR vendors. That makes the EMR implementation data much less valuable than if it were spread across a larger number of EMR vendors.

The third problem was something mentioned by Brad who inspired this post. In his comment he talked about many of the current ratings organizations rating based on “under the table offerings rather than credible data.” Sadly, this same thing could happen with RECs. It will depend on if the REC decides that it’s business model is built on the backs of the EMR vendors or on the backs of the credible data they get from the doctors they’ve helped. I could see it going either way.

Of course, this is just one possible business model. I’d love to hear people’s ideas on other sustainable revenue models for these EHR RECs.