Ann Fishman, with EHR TV, interviews Raul Villar, CEO of President of ADP AdvancedMD.
Ann Fishman:I am Ann Fishman with Raul Villar, President of ADP AdvancedMD.
Raul Villar:Hello, Ann. How are you?
Ann Fishman:Hello. So we’re at HIMSS 2012. Last time I saw you was MGMA 2011.
Ann Fishman:And I think you have some news.
Raul Villar: Yeah. So we have some exciting news, Ann. In late December, ADP AdvancedMD purchased PhyLogic Healthcare which is a leading provider of revenue collection management services for small private physician practices. So we’re excited to be in a new category and we’re going to market right now.
Ann Fishman: Is the acquisition a big part of your strategy for growth?
Raul Villar: Yeah. I mean we have a dual approach to growth. I mean we can, in our growing significantly organically. We continue to add sales people to our organization, and there are such market demand for our solutions, we are getting over a 100% growth year-over-year just organically but being part of a large worldwide organization like ADP, acquisitions are definitely part of our future both in the revenue collection management side that we just completed in December but also new practice management, electronic health record, or even small companies that have services that we could bolt on to our solutions to add more value to small private physicians.
Ann Fishman: How big a role will the RCM play in your overall picture?
Raul Villar: We think the RCM market is actually bigger than the practice management market. So we view the categories worth $23 billion and the largest provider in the category today generates $400 million in revenue. So we think it’s a wide open category that’s something that we’re going to aggressively go after.
Ann Fishman: Well, you were quoted in this Healthcare IT News.
Raul Villar: Fine.
Ann Fishman: And I just thought we should go over some current events.
Raul Villar: Sure, great.
Ann Fishman: And then you could tell me what ADP AdvancedMD is doing on these issues.
Raul Villar: Sure.
Ann Fishman: So the first headline, “2012 Brings New Meaning to Meaningful Use.” So there’s been such a small achievement of Meaningful Use 1 and they’re already imposing Meaningful Use 2. What’s your thought on that?
Raul Villar: Yeah. I think the objectives of Meaningful Use Phase 1 and Phase 2 are great objectives. I think that when you take a step back and think about what’s going on today in the physician’s overall business, I think it’s a – the results have shown that people are struggling to meet Meaningful Use. It’s not a high priority. The incentives or stimulus isn’t a driving force for most physicians. So yes, if they can find solutions that enable them to achieve Meaningful Use, I think they do. But it’s not something that it’s keeping physicians up at night.
Ann Fishman: What is ADP doing to push it forward?
Raul Villar: Yeah. I mean our solutions are Meaningful Use certified and we have services that enable physicians that use our solutions to become Meaningful Use certified. But physicians still has to do things on their end to be certified and that’s kind of where the rubber meets the road. And so we’ve had hundreds of physicians certified and get the stimulus money from the federal government and we’ve had others that are available to do that, they just haven’t done it yet, so, the jury is still out. And I think Phase II is just more noise in the system to compound with all the other regulations that are currently in process with physicians today. It’s overwhelming.
Ann Fishman: It’s overwhelming. Do you see Meaningful Use as giving us better medicine or as giving us better data collection?
Raul Villar: Yeah. I think its better data collection. I think if you look and talk to physicians, the regulations are not about necessarily quality care. I think the impetus was quality care but its more data collection, regulation, compliance and I think the benefits of those outcomes are years away. And so today, there is no benefit in care. Potentially tomorrow, but the systems and the network is far away from that.
Ann Fishman: So let’s go to another issue that I thought was very interesting.
Raul Villar: Sure.
Ann Fishman: The Mobile Revolution Comes to HIMSS 2012.
Raul Villar: Sure.
Ann Fishman: So I’m a late person, but my question is do we really want Dr. Jones to be practicing medicine from the golf course? How far is too far with mobile medicine?
Raul Villar: It’s fair. I think mobile medicine from our perspective is giving physicians the opportunity to do some of their administrative work outside of the office, right? So they can disconnect from the facility that they work at, whether it’s scheduling, whether it’s reviewing patient charts, and doing paperwork, I think providing those capabilities enables them to step away from the office and be more productive. I think the workflow of using electronic health record in a mobile application is still kind of work in process. Physicians don’t like electronic health records, they don’t necessarily embrace technology, and it’s not designed to be workflow related. So if you take a step back, the electronic health records are designed to meet government regulations, not to make physicians more effective. And so as we design our mobile applications, we’re trying to find ways to improve the physician’s workflow so they want to embrace the tool and they can still have patient care – face-to-face patient care instead of turning their back to their patient trying to fill out a tool that they’re not necessarily familiar with.
Ann Fishman: Do you think we’re going to see the EMR on an iPhone or on Android device?
Raul Villar: No question. I mean that definitely is going to be part of the future. Again, it’s the – the demographics in the marketplace don’t necessarily meet the technology of today. So if you look at a scattergram of ages of physicians, they tend to be on the older side. We’ve got a gap on the younger side and technology tends to go hand-in-hand with age. So I still think we have work to do to get the physicians today comfortable with the technology to enable to embrace it and leverage it for productivity gains.
Ann Fishman: When do you think we would see that?
Raul Villar: I still think we’re probably 3 to 5 years away from mobility being a de facto standard. I think we have a lot of work to streamline and it’s really about workflow. If it was simple and easy, they would use it, okay, so. And it’s not, so I think that’s why we’re seeing a lot of pushback on the tools.
Ann Fishman: Well, the questions are going to get a little harder. This was a nice headline.
Raul Villar: It’s like my teacher from middle school.
Ann Fishman: Well, I always felt current events was valuable because we can discuss.
Raul Villar: Sure.
Ann Fishman: Could a Republican president slow health IT? So my question to you is how political an issue is healthcare in the United States?
Raul Villar: Healthcare is one of the most political issues in America. I think if you pickup a newspaper any day, you’ll see healthcare headline like that. And I do think administrative changes will definitely change the course of healthcare. And I think that’s one of the challenges that we have is that we’re on a course, the course gets changed, and as a provider of solutions in the marketplace, it’s hard to keep up with the regulatory changes. You have to have significant amount of flexibility in your innovative IT staff in order to continue to comply with the solutions, it requires lots of resources. So there are thousands of small providers in this category of healthcare that can’t keep up. And so I think a Republican, Democrat doesn’t really matter. Healthcare is a mess and legislation is not necessarily the way to fix any of the problems.
Ann Fishman: Now the Affordable Care Act is going to be reviewed by the United States Supreme Court in March. How closely do you, as a vendor, have to monitor those types of developments?
Raul Villar: Well, I mean they’re critical. I mean we have to monitor all of the legislative changes and the reason why we focus on small physicians? All small physicians are impacted by these legislations. So if they want to participate in a health network, or an ACO, or being a HIE, we have to be there for them to provide those services and solutions. So I think it’s critical and ADP has a team of lobbyists that is also keeping an eye on the legislative outlook. And I think it’s critical, and it impacts everyone. While the legislation maybe for larger health systems, they have an impact all the way down the line to the small physicians that we focus on that are impacted everyday and they don’t have the resources to be aware or educated on the situation.
Ann Fishman: If that law is struck down, which some people think may happen, how will that change any plans that you might have?
Raul Villar: I don’t think it’s going to change our plans because we built our plans to be flexible. I don’t believe that the future healthcare environment has been defined yet whether it’s an Accountable Care Organization or not. I do believe and we believe that our requirements to serve our small practice physicians optimally is to provide them with tools, and enable them to move data to any kind of network they want to and that’s what’s critical. Whether it’s an ACO, an HIE, whether it’s just a large health system that wants to purchase them. We have to be able to move their health records and their data wherever they need to and it has to be simple, flexible, and it can’t cost a lot.
Ann Fishman: Does the government drive technology or is technology driving government policy?
Raul Villar: The government is driving technology today in this category and I think that’s the problem. I think technology could drive a lot of regulation.
Ann Fishman: Okay well, now I think the next article is the most important because it’s sort of your showcase. I was reading this with my coffee and it was a very provocative headline.
Raul Villar: Sure.
Ann Fishman: And then I saw a very familiar name quoted at length, “A train wreck coming: HIPAA 5010.”
Raul Villar: Well, I mean, I think, I was right. And part of the issue is that there are so many interrelated pieces in this health system and ecosystem that in order to make a requirement, that evident – at the end of the day it impacts the physician’s wallet. It has become a major issue. Health systems aren’t ready, carriers aren’t ready, private payers aren’t ready, providers in our category aren’t ready, and so what’s caught in the middle is the physician. He is not able to collect the wages that they earned as reimbursement in this system and it has really put a lot of burden in the industry. People aren’t ready. People are upset. Physicians don’t have the cash flow. I mean we are seeing physicians calling us, looking for Lines of Credit, right, in order to float their businesses while the large payers sort through reimbursements, and send back the monies that they have earned. So it’s a major issue. You’ve seen that they gave a delay of 90 days. It didn’t really have that much of an impact because systems that switched from 4010 to 5010 aren’t processing the claims on 4010. So if you’re not ready and you can’t be flexible to move it in the 4010 format or the 5010 format, you’re ultimately not going to get paid and that’s a big issue in the entire category today.
Ann Fishman: Where is AdvancedMD on the 5010?
Raul Villar: Well, we’re 5010 compliant.
Ann Fishman: Okay.
Raul Villar: But again, we have clients that are having the same issue because if we’re moving the information to a payer that’s not ready or has changed their formats, it creates issues again in that piece and so it’s created this entire issue in the category where no one – everyone is pointing fingers about where the issue lies. Is it in the software? Is it in the payer? Is it in the formats? Et cetera and so it’s created a lot of pressure in the industry which is why I think you’ve seen people now come back and delay ICD-10.
Ann Fishman: Well, speaking of ICD-10, when I saw this headline “A train wreck coming: HIPAA 5010,” I was going to say, “ICD-10: A Nuclear Disaster Coming.”
Raul Villar: Well, I mean it is definitely, Ann, a bigger issue because not only are the payments at risk in 5010 but now you’re changing the workflow of the private physicians. We have 650,000 private physicians out there who have been doing business for X number of years, quoting claims the way they should be and now we’ve decided to introduce a standard which is significantly different which is going to create tons of issues at documentation stage and reimbursement stage which is why we’ve seen the signaling of a delay of ICD-10 but ultimately, for companies like ADP AdvancedMD, we have to do the work. We have to be prepared in order to move on a dime if the government comes back and says; yeah it was going to be October, now we want it to be December. Well, 60 days isn’t going to do anything for anybody. So unless it’s a significant material change, there’s going to be lot of pressure in the industry still.
Ann Fishman: How significant is it that the AMA was actually asking for a moratorium, so to speak?
Raul Villar: Yeah. Well, they’re listening to their constituents. I mean people are not happy. They can’t keep up with it and if we thought that Meaningful Use and these regulations were going to improve care, when physicians are staying up night wondering how they’re going to keep their doors open, I think that presents a much bigger issue. We’re seeing people opt out of the category. People don’t even want to be a doctor and they’d rather retire than comply with all the changes in the category. So I think it’s a significant issue. AMA is standing up for their constituents and, and it’s a major problem that we face.
Ann Fishman: Is it realistic do you think of the AMA to think that they could have that kind of effect on the policy?
Raul Villar: I think they have. And I think they definitely have a big voice and they represent a big group, a big constituent of that category. And I think if we move forward on top of what we’ve seen in 5010, we’re only going to put the healthcare into crisis.
Ann Fishman: I think I have one more.
Raul Villar: Sure.
Ann Fishman: And I think it might be telling and it is that the British government decided to scrap the national IT program after about £7 billion investment. Any lessons to be learned there for us?
Raul Villar: Yeah. I think the lesson learned is that federal government can’t dictate technology to drive performance, and productivity, and improvement in the healthcare system. It has to come from private enterprise, companies like AdvancedMD, coming up with creative solutions to make it easier for physicians to comply and for the healthcare system to be more effective.
Ann Fishman: Every year, there’s like a theme for HIMSS whether it’s interoperability or Meaningful Use. What do you think the theme is this year?
Raul Villar: I think its regulation and if you talk to, like when I talk to my peers across the industry, I think people are very frustrated with all the regulations going on. Instead of being innovative, so instead of me spending 70% of my engineering budget on innovation, things to make the category more efficient, we are spending 70% on regulation and compliance which really doesn’t make anything better. So I think that is number one. I think interoperability is you are overarching. I think everyone agrees it’s the right thing. I don’t think anyone can decree on what the flavor is. It’s kind of like Baskin-Robbins right now; there are 31 out there so – but I like ice cream, so.
Ann Fishman: So do I.
Raul Villar: Yeah.
Ann Fishman: Well, my final question to you, what is it that ADP is bringing to the table for the group size that you service?
Raul Villar: Yeah. So I think what we bring to table is we’ll be there for our constituents. ADP is a large $10 billion organization that’s committed to making sure that there are tools that meet all the requirements that the government provides us but also enables physicians to be more effective. We are laser-focused on the small physician category and our solutions enable our physicians to do it themselves with our cloud-based software or if they want us to do it for them, with our new acquisition of PhyLogic Healthcare, we’ll be able to provide those revenue collection management services for them. So if they want to do it themselves, we’re there. If they want us to do it for them, we’re there.
Ann Fishman: Anything to add?
Raul Villar: That’s it, Ann.
Ann Fishman: Awesome.
Raul Villar: Have a great show.
Ann Fishman: Thank you very much. Raul Villar, AdvancedMD ADP. Thank you.
Raul Villar: Thank you.