Healthcare Management Systems: Thomas M. Stephenson, President & CEO

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Companies in the business of providing IT products and services to the medical community are acutely aware of the oncoming rush to have their offerings certified for “Meaningful Use” under the American Recovery and Reinvestment Act of 2009 (ARRA), which includes billions of dollars in Medicare and Medicaid incentive payments to providers and hospitals for the meaningful use of certified health IT products.

Healthcare Management Systems (HMS), Inc. is among the mix of IT companies racing to deal with this new twist in the ever-changing federal funding spectrum. The company, headquartered in Nashville, Tenn., provides integrated information systems to hospitals and healthcare systems. The HMS product line includes about 45 different applications for the community and specialty hospital space – everything from revenue cycle and patient access to computerized physician order enter (CPOE) and ambulatory EHR for physician practices.

According to company president and CEO Thomas M. Stephenson, meaningful use is a “main driver” throughout the industry. While HMS has gone through the development process with its products to make sure they meet the requirements, many in the industry are struggling to come up with the capital necessary to invest in the technology.

“It’s a double-edged issue,” he said. “They know what they need to do but finding resources, both financial and human, to make that happen is a challenge in the market.”

HMS currently has about 650 customers throughout the US and Puerto Rico, acquired primarily through direct marketing efforts implemented during the company’s 26-year history. With meaningful use, and the stimulus associated with it, clients are looking to the company for guidance on how they can implement new systems, particularly around CPOE. This is creating a challenge for a lot of organizations, Stephenson said.

“We’re working with our customers to plan for that, begin the implementation process and ultimately drive adoption,” he said. “This is what’s driving our business right now.”

New Product Highlights

The company is focused on products that are in keeping with the meaningful use criteria, specifically its CPOE product, which Stephenson said has seen increased interest from clients over the past 12 months. In addition, HMS recently introduced an interoperability product called HMS ConnexSM that allows customers to meet the meaningful use requirements of interoperability by enabling the exchange of clinical data between third-party systems, health information exchanges, and public registries.

Two other new offerings that have garnered interest from clients are the ambulatory EHR and emergency department products, Stephenson said.

“They help us round-out our product suite and hit some areas that we did not have solutions for prior to this year, giving us a more complete product set,” he said.

Changes in government regulations can play a major role in driving new product development. “Listening to customers also plays a role, Stephenson said. They want to become more efficient, as well as incorporate new technology, such as the iPad, into their everyday operations. Another factor, he said, is considering what it will take for the hospital to communicate better outside its four walls.”

“We need to look at how they can ‘talk’ to other entities and service providers,” he said.

While not a new service, Stephenson noted that HMS subsidiary Sentry Healthcare Services has been providing professional services such as revenue cycle management and accounts receivable for the past 10 years. However, it was just last year that the company spun off this addition to its business’ offerings. Community hospitals in particular utilize this service, allowing them to conserve limited resources while meeting demand.

Differentiators in the Marketplace

Stephenson said they stay attuned to what the competition is doing and remain competitive with their products. He said HMS measures-up well against its competition in terms of product functionality, particularly when it comes to clinical applications.

The CEO also cites the company’s experience helping community hospitals with the adoption and use of the technology, as well as its track record in the corporate, for-profit marketplace, as differentiators for HMS.

“Our ability to continually meet the needs of the customers, as their needs and requirements change, has been a big plus for us,” he said.

Successful Implementations

While completing product implementations is not “rocket science,” Stephenson said there are keys to making the process successful. For example, when the hospital’s senior management is engaged in the process, driving the process and explaining the value of the technology to the organization and its community, that enthusiasm goes a long way toward driving the success of the project. When senior management is disengaged, not involved and delegates management of the project to others, it becomes challenging to work through the process when problems arise.

The second tip, particularly related to the implementation of clinical solutions such as CPOE and EHR, is to include a clinical resource in the project, whether that is a clinical informatics person or someone from the clinical staff who has an IT background. With that person on board, the implementation typically goes much smoother, he said.

“You have someone who, from an IT perspective, can work with the physicians and the nursing staff throughout the implementation and understand it from a clinical perspective, not just an IT perspective,” he said.


Capital for IT initiatives continues to be a challenge for hospitals, which then becomes a challenge in the sales process for HMS. The company brings in financing partners and works with customers to define a payment stream to make purchases manageable. Stephenson also noted a slight increase in its ASP business, which is a little easier on the up-front costs and the on-going staffing required to manage much more complex systems.

“We’re actually seeing some of our long-time customers who typically purchase a turnkey system now moving to our hosted solution,” he said. “It enables hospitals to implement the technology and functionality with a lower up-front cost, spreading out the cost over time.”

The second challenge Stephenson identified is the lack of clarity and definition around the meaningful use criteria.

“There’s still a great unknown out there as to what meaningful use is going to mean to people,” he said. “But, we can’t wait until the last minute and pull the trigger, with everybody trying to get through the door at the same time.”

Finding Clinical Resources

Another area of the business impacted by the meaningful use criteria is human resources. Overall, HMS employs about 400 employees, most of which are located in Nashville, but Stephenson said, “it has become challenging to locate clinical resources. As other medical entities gear up for the impending implementation of new criteria, employees with this type of experience are becoming more in demand.”

While healthcare IT has challenges that remain constant, it is variables such as ever-changing government regulations that keep companies like HMS evolving and growing to meet business objectives and clients’ needs.

-by Kathy Knaub-Hardy

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