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10/16/2012
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Allscripts Files Complaint Against NYC Hospital System

After losing a $303 million contract to competitor Epic, EHR vendor Allscripts fires back.

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Allscripts recently filed a complaint against the New York City public hospital system. The complaint stems from the company losing a bid last month to replace the system's medical-records system with an integrated system that would connect hospitals, clinics, and doctors together using one platform.

The $303 million contract instead went to Epic Systems. According to a recent article in The New York Times, Allscripts claimed that when ancillary costs were included, its system "would be more than $700 million cheaper to build than the $1.4 billion cost over 15 years that the hospital corporation has estimated it will take to build the Epic system."

According to a draft press release that was not released but was recently sent to InformationWeek Healthcare by Ian Michaels, director of public affairs for the New York City Health and Hospitals Corporation (HHC), the Epic electronic medical records (EMR) system will be implemented in 11 HHC hospitals, four long-term care facilities, six diagnostic treatment centers, and more than 70 community-based clinics. The 15-year contract includes software, database licenses, professional services, software maintenance, and database support and upgrades, and "is not to exceed $302.8 million," the release read. The cost of the system, it continued, will be offset by federal funding that HHC recently qualified for.

According to the release, a selection committee worked to narrow the system's decision to three finalist vendors after full proposals were submitted and evaluated. Site visits were conducted, and at the end of the process, the committee proposed Epic as the preferred vendor to the HHC board of directors.

Alan Aviles, president of the New York City public hospital system, said in the New York Times article that Allscript's cost analysis was "false and unrealistic." Aviles was cited as saying the corporation's choice, "made after considering nine vendors over four years, had been validated in the last few months as Allscripts experienced management and financial problems."

InformationWeek Healthcare contacted both Aviles and Allscripts CEO Glen Tullman for comment. In a statement sent via email from Michaels, the system's selection committee "clearly preferred Epic Systems Corporation, a company widely acknowledged as providing outstanding electronic medical record systems throughout the U.S."

[ For commentary on PHRs, see Why Personal Health Records Have Flopped.]

"Epic was chosen for its functional superiority, outstanding level of integration, its strong corporate foundation, and for being more able to service the diverse needs of HHC," the statement continued. "Allscripts' allegation that its proposal is significantly less expensive than Epic's is false and fails to acknowledge all of the costs HHC considered to support its integrated, patient-centered model of care. HHC anticipates that the Allscripts complaint will be found to be without merit."

The statement echoes Aviles' claims that Allscripts analysis was indeed unrealistic, and when asked to respond, Claire Weingarden, public relations manager at Allscripts, said in an email to InformationWeek Healthcare, that "The information presented to the Board, which was published, shows both systems would cost $1.5 billion, but the truth is that Allscripts would cost only $750 million."

As part of the cost analysis, Aviles said in the New York Times article that Allscripts estimated an application-support team needed for the contract would cost nothing, while the NYC Health System estimated a cost of $357 million. When asked to clarify, Weingarden said, "Our application support team costs are wrapped into two other line items--professional services and implementation support."

Weingarden also said the complaint is not an attempt on Allscripts' behalf to delay the contract. "We're asking that NYC HHC give our protest a fair hearing and that they ultimately agree to reopen the process to evaluate the competing proposals fairly and on equal footing."

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