Glen Tullman, CEO – Allscripts
Glen Tullman, CEO – Allscripts – June 16, 2009
Length: 26 Minutes
Eric Fishman MD: We’re here today at the Allscripts sales kick-off meeting with Glen Tullman, the CEO of Allscripts. Glen, I thank you for taking the time to sit and chat with us.
Glen Tullman: Sure. Thank you for coming. It's a pleasure to be here.
Eric Fishman MD: As I understand it, it was quite a number of months ago and Lehman Brothers was going bankrupt. You had quite a few hundred million dollars of their money that was earmarked for the Misys Allscripts merger and there was a lot of skepticism that the deal would go through or in fact, if a deal did go through, that it would be successful. You've done a phenomenal job. Can you tell us about the transition from that point and time?
Glen Tullman: I think there were two stages. One, we had to get the actual deal done in what turned out to be the worse financial market in history. We had approached the deal saying that we wanted to have everything ready to go day one. So we had even crossed-licensed our software and we said, “We know we're going to do this.” Then, literally one week from when we expected to close, Lehman Brothers went bankrupt and we had a short fall of a few hundred million dollars. So our chairman, Mike Lawrie, actually went out and had to resell the deal, all in a matter of about a week to a market that wasn't very receptive. But ultimately, the rationale behind the deal, which was putting these two companies together in what was such a good fit, made sense. We ended up getting it financed and I think the rest is history. It was called one of the most successful mergers of the year. I think it was a success because Allscripts was the leader in electronic health records and they were the leaders in practice management. Out of their 110,000 physician users, 90,000 didn't have an electronic health record, so this was a very natural fit and it was very little fallout when we put the companies together.
Eric Fishman MD: Have those 90,000 physicians been an easy customer group for you to be approaching?
Glen Tullman: Well, you know physicians and I think ‘easy’ is probably a bit of an exaggeration. That said, they are very receptive. We are approaching them and to date, we have exceeded our conversion ratios. We expect that to continue and in fact, accelerate now that we have the stimulus dollars.
Eric Fishman MD: That certainly is very helpful. When somebody is using the Misys Practice Management System and then they convert - they're utilizing Allscripts MyWay, Allscripts Professional or Allscripts Enterprise -- do they continue to use the Misys Practice Management System or, is it a data conversion so that moving forward, all of the data is maintained on one database, which is the combined electronic health record practice management system?
Glen Tullman: Well, the nice thing is, we’ve given our clients a tremendous amount of flexibility. We've said for those who aren’t ready to move, we're continuing to support them and will support them into the foreseeable future. We've said for those who are ready to move but don't want to change their practice management system --because in this economy, a lot of physicians are saying if it's working, don't fix it --from that perspective, a lot of those physicians are saying, “I need an electronic health record, I want to get the $44,000 stimulus incentive or, “I don't want to change my practice management system at this time.” We are very happy to accommodate them. We're already billing them each month, we're already servicing them. The same numbers that they have always called for service on their practice management system will be available to call for their electronic health record. We just layer it on top.
Eric Fishman MD: So there’s an interface that allows --?
Glen Tullman: Absolutely. And it's more than an interface. It’s actual integration where the systems work together very tightly knit. Now that said, the most tightly knit, of course, are the systems that are designed that way and we have those as well. Some of the newer practices that are coming on board are starting with a full integrated system whether it be a MyWay product, our Professional product or a full enterprise product. In certain communities, they're using a combination of all three and the nice thing is, they all talk to each other; they're all connected. That's a big part of where health care is going, that connectivity.
Eric Fishman MD: I was going to get to that in a few minutes, but I'll start right now with this. A recent article came out that said, in order to get the $44,000 in stimulus money, you needed to have interoperability, you needed to connect with people, you needed to be able to receive and send healthcare information in an electronic fashion. It further went on to indicate that while maybe now, and certainly in the future, that's not an exceptionally difficult thing to contemplate. It's probably much easier for two physicians in different parts of town and different practices to communicate with each other if they are both using exactly the same software product. It was my perception therefore that Allscripts would be in a wonderful position to go into a community where it already has a meaningful footprint and tell them that -- I think it's self-evident-- that you will have all of the qualifications, but that one step further, you already have it because you have the interconnectivity between yourself and another physician using the same product. Would you agree with that concept?
Glen Tullman: Not only would I agree with it, we’d love to hire you. That is a big part of the rationale of why we did the merger: we wanted the footprint. We have roughly 1 out of every 3 physicians in the United States using some of our software, whether it's Practice Management, whether it's in Emergency Department, whether it's Electronic Health Records, whether it's E-prescribing. Our intention is to connect all of those physicians together to allow them to exchange information and we expect to do that.
In certain states, like North Carolina, we have 70% of the physicians. So, if you're not on that network, once we enable those networks, we think it's going to create not only a tremendous competitive advantage for Allscripts, but remember, at the end of the day, we're talking about better health care. When you have a connected system, we know you get better health care. So that's very, very important for us. I want to say one other word about this stimulus legislation. We believe this was very well done and the government really did a great job. You have the three elements that you always need for change. You had a great vision set out by President Obama for an interoperable electronic health record and an electronic health care highway. Then from there, the next stage from once you set out that vision is you then go to setting standards to make sure that people know how to implement the vision. So we have the Certification Commission on healthcare information technology and the Commission has done a great job in my view and I should mention that I’m a trustee. That said, it’s much more than a small group of trustees. This is a very large group of diverse interests represented who have set standards. The government has said we need even more aggressive standards. Then finally, the incentive to change and that’s the $19 billion stimulus which comes out to about $44,000 per physician. What was done especially well is the government understood two things. One, it didn't make sense to give physicians an incentive to simply buy an electronic health record. You needed to get them to use it to provide better health care so all of the incentives are related to use and not just purchase. That's number one. Number two, which I think is also very interesting, was the government said, “We don't want to replace the paper silos we have in health care today with electronic silos. We want interoperability. We’re going to require interoperability between competitive systems, between electronic health records and hospitals and labs and pharmacies, and also -- and this is something that Allscripts pushed very hard for -- the patient. What I had said when I was testifying was what we can't have is an electronic healthcare highway without an on-ramp for the patient. That's in fact what was starting to be built so I'm very pleased with the legislation.
Eric Fishman MD: I want to get to the patient portals that I think are critical in this situation but I'll do that in a moment. Just yesterday, June 15, the president giving a speech to the AMA said that there are a number of things that are necessary to fix the healthcare system. He mentioned once again as the first one, health information. Is it your opinion, and you can categorize it anyway you want, the $19 billion -- or some people say $35 billion when the penalties and the savings come in, it goes down to $19 billion -- do you believe that that’s sufficient to accomplish the goal or do you think that that’s a down payment for the next decade?
Glen Tullman: Well, I think we have a bit of a contrarian view here. First of all, the way that it is set up is there’s a $38 billion expenditure, but the government then has subtracted out about half of it for savings. So the net expenditure is actually more than 19 because they’re going to spend 38 but they assumed $19 billion. So they’ve netted it out and said it’ll only cost the taxpayer $19 billion.
Eric Fishman MD: Understand.
Glen Tullman: But in fact, the expenditure is much larger.
Eric Fishman MD: And do you think the expenditure, and I’ve seen $35 billion, $36 billion, $38 billion, do you think that that’s sufficient or --?
Glen Tullman: We do. We believe that’s a sufficient amount. We think the competitive market will go to work. We’ve seen prices come down and there’s been a consolidation, so systems have become more standardized. Remember, when moving from the initial 20% of a market that are earlier doctors and those are people who are innovators, who want to change health care, who have a broad vision. Now, we go to the next 70%.
Eric Fishman MD: And you’re going to take them kicking and screaming.
Glen Tullman: Well, actually, they’re kicking and screaming to say I want one, but what they really want is the $44,000. So what they’re saying is make this as easy as possible, show me how to do it, I want the $44,000 and if I can get some benefit, that’s great too. But that’s very different. Some of the monolific systems that were out there that emanated from hospitals are written in languages that are 25 years old. Those systems are going to start to have real challenges. One, we have to communicate over the Internet when we have to share information. That software isn’t designed to do that. What people want is very fast, very easy to install systems. The standard I set for our developers is I want this to be as easy to use as the video games my children buy. It’s funny that in this country and worldwide, the best software today, in terms of ease of use, in terms of multiple languages, in terms of graphics -- it’s all the video games. What we have to do is bring the rest of our industries up to that standard.
Eric Fishman MD: Well put. You’ve got a two or three doctor practice that are going to be implementing an ASAP, the software version of Allscripts MyWay. First of all, how many days will your installation and training team be there and then, how long does it take until the practice is up and running properly?
Glen Tullman: There’s a number of ways to answer that because when you implement an electronic health record, the question is, what do you want to accomplish, what is the business objective. If it is simply to use it to keep records, that’s one thing. If you want to have interfaces to your hospital, to the labs, all the different inferfaces, that’s obviously more complicated. If you’re starting from scratch and you say we’re going to start from day one and go forward, that’s different than if you have nine years of history that you want scanned in. Then the question is, are you going to use industry standard templates or are you going to build every one yourself. Now, I hate to add all that complexity in there but literally, we can go from a week’s time or less on a product like MyWay to months and months if you’re dealing with Columbia, the most prominent university in the world perhaps. You’ve got over 100 specialties and you’ve got world-renowned specialists and they want it their way. That’s tougher to do. That said, we were able to do Columbia in just over 12 months. So the idea that these are taking years and years -- and there are some examples of that.
Eric Fishman MD: I think in the last decade that may have been the case more frequently than not.
Glen Tullman: Yeah, but it’s no longer the case. This is a big initiative. We know we have to make these faster and faster to install and smarter and smarter.
Eric Fishman MD: So for a physician who may be interested in doing this or the majority of the physicians in a small practice, a week or two weeks of actual implementation time and they can be up and running full speed ahead.
Glen Tullman: Sure. The actual physician time is the smallest component. We have millions of prescriptions being written from physicians who went on the Internet, went to NationalERx.com, our free prescribing service, were authenticated and started prescribing and routing prescriptions to any pharmacy that they chose all within 45 minutes.
Eric Fishman MD: So with a name like Allscripts, obviously e-prescribing is a fundamental part.
Glen Tullman: Absolutely.
Eric Fishman MD: We know a little bit about the free NationalERx. Can you tell us a little bit more about that?
Glen Tullman: Well, that program really germinated from a report from the Institute of Medicine. Allscripts started as an e-prescribing company and as we gained some success, physicians came to us and said I want to do more, I want to also capture charges, I want to dictate, I want this to be more of a full electronic health record but I want it to be as simple as e-prescribing. I want it to be portable, perhaps on an I-phone or on some kind of portable device. So we really built a modular electronic health record.
Along the way, and remember we’ve been at this for more than 10 years now, the Institute of Medicine published a report. That report said that each year 7,000 Americans die from preventable medication errors and almost a million and a half are injured from preventable medication errors. That word ‘preventable’ was the challenge. We brought our team together and said, we’re in this business; this is a national crisis. Seven thousand people dying is the equivalent of, well, it’s more people than we’ve lost in Iraq. It’s the equivalent of a 737 crashing each week for an entire year. Yet, there was no national uproar. So we commissioned a study and we said, why aren’t physicians using this? It came back with three answers. The first was cost. In other words, it cost too much. The second was it’s difficult to use and the third was there’s no incentives. So with our partners, people like Dell, Microsoft, Google, Fijitsu and others -- visionary companies, high technology companies -- who also have a lot of employees and wanted to keep them safe; they have a vested interest as we do in better health care because we all pay those health care costs. We brought the group together and said, what if we went at each one of those? We made it absolutely free and we made it easy to use; so easy that you could, without any human intervention, go on the Internet and sign up just like you’d use Google. There’s no training, there’s no telephone number to call. Last, but not least, we went to some of the more innovative managed-care organizations, to WellPoint and Aetna and we said, will you put together an incentive program if physicians do this?
Eric Fishman MD: There are some federally funded incentive programs now.
Glen Tullman: Well, today there are but back then, there were not. So we came out with this program, and for the first nine months, our biggest problem was no one would believe that it was free. They all thought that there was a hook. So I had to come out and say, we will never charge, we will transport your data, all those kinds of things, and eventually, it caught on. Today, millions of prescriptions are being written much more safely because of that program, and it still exists today.
Eric Fishman MD: Still available as a new physician signing on?
Glen Tullman: www.National ERx.com and physicians can sign on to it. Now, what happened then is that it was a nice little start but it was still small. Then CMS came along and earlier this year, January 1, they introduced a program. What they did was say, we’re going to give you an incentive for using electronic prescribing and that incentive can be between $3000 and $5000 per physician. Then two years later if you’re not using it, we’re going to have a stick, a penalty for not using. All of a sudden, physicians started to say we need e-prescribing. We’ve literally seen that business growing about 30% a month. This year, we’ll do somewhere on the order of 70 to 80 million prescriptions, almost half of the electronic prescriptions written in this country.
Eric Fishman MD: Now, when somebody graduates, to Mysys MyWay or Mysys Professional for instance, is that functionality imbedded into the product they’ll be using?
Glen Tullman: The beauty is it’s a smooth upgrade because it's the same underlying engine. So it's going to look the same, feel the same; the data can get transported. So again, from that perspective, it is a very easy and smooth transition. That said, they can transition and have that same smooth transition to any other electronic health record because our goal was to solve a critical problem in health care today and that is, American’s are dying. The first rule that every physician says, as you know, is “Do no harm”. In fact, today our health care system is harming people and we wanted to provide physicians with a tool, one of the many tools they need, but with a tool to eliminate that problem.
Eric Fishman MD: You talk about helping patients and let’s go now for just a moment to the patient portal which is, I think, an underreported part of the technology. I see it as offering a phenomenal return on investment from the physician’s perspective – phenomenal convenience and helping their health care from the patient’s perspective. Maybe I’m wrong, but it seems like nobody talks about it. I bet you have something to say.
Glen Tullman: Well, I think we’re early. We’re seeing this move very, very quickly. What we’re seeing is physicians have gone from electronic prescribing and now they’re understanding that they will in fact have electronic health records. Then the minute they get electronic health records, patients – and I like to call them im-patients because they are impatient, patients are not patient any more - they’re saying to physicians, we want health care to be like every other consumer service we buy. Consequently, having a portal where they can check their lab information, where they can enter their own information so they won’t have to use that clipboard when they come in is going to become increasingly important. Just as the new kiosk we released is increasingly important. People like self-service; they don’t mind doing it themselves if they’re in charge and they’re in control. We’re going to see a lot more of that. So the portal is going to become more and more important as a link into the electronic health record.
Eric Fishman MD: We had visited your sponsorship down at the National Rural Health Association in Miami a couple of months ago and clearly, the technology is there particularly for people in rural areas to be, for instance, checking their glucose at home and transmitting that information to a physician. Do you find that that’s actually happening and implemented in many instances or are we still in very early on?
Glen Tullman: Again, I think we’re very early on. We just released a GlucoPhone which allows a young kid, or an old kid for that matter, to actually test their blood sugar and then that will be transmitted to the electronic health record. From that perspective, you’ll be able to monitor a population.
Eric Fishman MD: I’m not an endocrinologist, but it would be my impression that if I were, all day long, I’d have patients coming in to do almost nothing other than having their glucose tested and discuss the results with them and that can all be done now without an office visit.
Glen Tullman: That’s not why they would come in the office but I think what can happen now is they have much more data to use and that’s really the big difference there.
Eric Fishman MD: One of the issues that many physicians have is documentations and having implemented an electronic health record certainly the first week and maybe many, many, many weeks, it takes longer to document the clinical encounter than it does the old way where you sit and talk into a hand-held recorder or to a telephone. What types of functionality has Allscripts done to minimize the work flow problems for a physician who is just implementing the product and wants to be able to document quickly?
Glen Tullman: One of the things you have to do is pre-populate the electronic health record so from the first day, they’re seeing the information in that record. Second, we have some technology called One Touch that literally allows you to kind of create a set of linked behavior. So for something that you see day in and day out, what you can do at that point is you can simply say sinusitis. For every sinusitis I see it triggers four different actions and I just press one button because I see it regularly. You can build macros so to speak that make it actually faster especially if you’re writing multiple prescriptions. We’re going to see more and more of that come in, but the reality is day one, like with any technology, it’s going to take a little longer. We have physicians who will tell you that it saves them a tremendous amount of time but they have to get proficient on it.
Eric Fishman MD: What about the unique, the orthopedic surgeon? The templates won’t have where the accident occurred, what intersection it was. How do people enter into that?
Glen Tullman: Again, you can enter that in a variety of ways. You can enter that by dictating it, you can enter that by typing it or you can use a template. There is always going to be some part of health care that does take some time and that you’ve got to figure out what you’re most comfortable with.
Eric Fishman MD: Thank you. Another problem that physicians face is the complexity of implementing something like an electronic health record. You recently had an arrangement with Senix in which they put together a turn-key solution. Can you describe that a little bit?
Glen Tullman: Senix is a great partner. We have a number of great partners. We built a distribution network called the Allscripts Distribution Network. The lead partner there is Henry Schein. Henry Schein has a group of over 400 sales representatives, 200 callers. They are a trusted partner. They’ve been going into physician offices and selling to physicians for years. So when they walk in the office, the physicians have a level of confidence. That’s the same thing with Cardinal or with Senix or with many of our other re-sellers. They give the physician a sense of I’ve got a trusted partner who will help me whether it’s the equipment, whether it’s the training, whether something goes wrong, they’ll help me work through that and that’s great news. We decided to invest the time and the energy to build trusted partners that physicians like to deal with and deal with already and we have a variety of relationships with them. So Senix looks at that and says we have a prepackaged offering and physicians like that. Just like all of us like something that’s already preset for us.
Eric Fishman MD: And that includes hardware and routers and all of the things so a physician doesn’t have to be thinking about 29 items?
Glen Tullman: Exactly. What you’re going to see is a combination. You’re going to see some physicians who say we want it all outsourced and so they’re going to do software as a service. You’re going to see some physicians who say I want the server sitting in my office, I feel better about that. And you’ll see some physicians who are part of an overall network where it’s hosted by a hospital. The unique thing about Allscripts is from the largest to the smallest groups, from the hand-held technology, the software, the service, the client server to hosted, we have all of those choices and they all work together. So when you’re building a network, as we get integrated communities, Allscripts is the easy answer because whatever you need, we have it.
Eric Fishman MD: Glen, it’s been very enlightening. Is there anything else left you’d like to add?
Glen Tullman: I just think we’re at a very unique time and I appreciate you taking the time to talk about it and to educate your readership and you’re viewers because this is a time that we’re going through dramatic change but we have an opportunity to make strides in health care that we haven’t had ever and I think if we use that technology wisely, we can get there. The paradox is we have the best physicians in the world, we have the best technology in the world and somehow we haven’t yet put that together to get the best outcomes. I believe we will.
Eric Fishman MD: We’ll go in the right direction. Glen, thank you very much.