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<br />From that process, five PM/EMRs stood out as highly recommended. The Orange County
<br />Health Department demonstratedthree of those five systems (Greenway, AllScripts, and
<br />Patagonia Health) with management and then again with all staff. Surveys were collected that
<br />assessed functionality of all three products.In consultationwith key Information Technologies
<br />staff, and after a comparative analysis of services and products offered, upfront costs, and
<br />implementation framework, the clear choice was Patagonia HealthPM/EMR.
<br />DHHS and multiple counties have already established a vendor relationship with Patagonia,
<br />meaning that state and federal forms are already built in and it complies with DHHS reporting
<br />requirements. User surveys for functionality and user-interface/ease of use were universally
<br />better for Patagonia. Patagonia is a national companyheadquartered in Cary, North Carolina.
<br />FINANCIAL IMPACT:
<br />Unlike many pieces of software, Patagonia is a subscription system
<br />based on the number of usersat an annual cost. After an initial start-up year cost of $98,713,
<br />estimated annual cost for years two to sixis between $60,000 and $70,000. This amounts to a
<br />total software cost of $430,202 for the first six years.
<br />The cost of the Patagonia system is expected to be offset by two sources: (1) annual, federal
<br />“meaningful use” incentives based on purchase of Patagonia (as a certified EMR - e-chart -
<br />software system); and (2) an increase in revenue from more accurate and efficient billingof
<br />services.With the implementation of the system, theHealth Department’s goal is to recoup at
<br />least 70% of potential billable revenue beginning next fiscal year(vs. historical average of 40%
<br />with the old system), and to increase the percentage of recoupment in subsequent fiscal years.
<br />Purchase of this system is intended to increase Health Department net revenue (add increased
<br />billing, add eligible incentives, less software cost) by $914,995 over the first six years.The
<br />table below represents these incentive reimbursements, software costs,and expected
<br />additional Health Departmentnet revenueincrease.
<br />Existing Medicaid Cost Settlement funds in the amount of $98,713 are available within the
<br />Medicaid Maximization Capital Project to cover the initial cost of the system in Year 1, which
<br />includes implementation, staff training, and ongoing support. On-going annual costs to
<br />Patagonia will also be covered by annual Medicaid Cost Settlement funds.
<br />Total
<br />ANNUAL CASH FLOWYear 1Year 2Year 3Year 4Year 5Year 6
<br />2012-2017
<br />MU1 Incentives (@ 3 providers) $ 63,750 $ 25,000 $ 25,000 $
<br />Payment Patagonia $ (98,713) $ (61,543) $ (64,621) $
<br />Net Software Cash Flow$ (34,963) $ (36,543)$ (39,621)$ (41,495)$ (43,423)$ (45,407)$ (241,452)
<br />Projected Revenue Increase (@70%)$ 105,132 $ 210,263 $ 210,263 $ 210,263 $ 210,263 $ 210,263 $ 1,156,447
<br />Net Projected Cash Flow Increase$ 70,169$ 173,720$ 170,642$ 168,768$ 166,840$ 164,856$ 914,995
<br />Table represents “Stage 1 Meaningful Use” – payments to Patagonia continue after 2017, but Stage 2 and 3 Meaningful Use
<br />correspond with different (and higher) federal software incentives.
<br />RECOMMENDATIONS:
<br />The Manager recommends the Board approve the purchase of the
<br />Patagonia Health Electronic Medical Record/Practice Management System with existing
<br />Medicaid Cost Settlement funds.
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