By many accounts, most small, rural hospitals across the country lack the upfront capital that would position them to take advantage of federal funds intended to boost the uptake and use of information technology.

One IT manager described the federal plan as a rebate. The hospital buys and installs the technology, and gets a piece of it back later under the HITECH provisions of the American Recovery and Reinvestment Act (ARRA), provided it can demonstrate meaningful use.

Small hospitals, though, face a double whammy. They don’t have the money upfront – EHR projects can cost millions, and it’s also hard to find a vendor that caters to the smaller hospitals.

Karen Moore, vice president and CIO, of the 331-bed Southern Regional Medical Center in
Riverdale, Ga., said in April while attending the Healthcare Information and Management Systems Society’s annual conference in Chicago she did not expect Southern Regional would be able to take advantage of the stimulus funds.

“I don’t think we can demonstrate meaningful use in that amount of time,” she said. “And, I don’t think the vendors are ready.”

While Southern Regional’s 331-bed facility might not be considered small by some standards, Moore noted that about a third of the patients admitted are poor, and most IT budgets took a hit as the economy took a downturn.

Today, Moore is working with both the hospital’s management and board to make sure they are aware of the deadlines and time necessary to reach meaningful use before penalties kick in.

“At the moment access to capital for our organization continues to be more of a barrier than the vendors or organization.”

Southern Regional has what Moore calls “a mixed environment with limited clinical documentation.” It employs Mckesson technology for financials and several ancillary systems and a GE Centricity Perinatal system for documentation.

Safety net hospitals that serve a disproportionate share of indigent patients such as the Rush Health Systems in Meridian, Miss. and Sinai Health System in Chicago also are on the EHR brink.

“We still do not have a fully integrated electronic health record system,” said Cathy Robinson, the corporate compliance officer and vice president of medical staff and support services at Rush Health. She said an EHR would make collecting data for the P4P pilot program that Rush and Sinai Health are part of, a lot easier than the manual accounting Rush employs now.

“There’s a big place for health information technology,” she said.

However, a recent study from healthcare IT research firm KLAS reveals that the right vendor may be hard to find – at least for the very small facilities.

Closing the IT Gap: Critical Access to 50 Bed Hospitals highlights the experiences of more than 300 healthcare professionals at hospitals with 50 or fewer beds. Providers at these critical access facilities generally reported an appetite for software capability that exceeds vendors’ ability to deliver, particularly in areas like computerized physician order entry (CPOE).

Only a handful of electronic medical record vendors specifically serve the critical access market, with CPSI, Healthland and HMS showing the most market share, according to KLAS. Of those companies, Healthland received the highest performance rating but none of the vendors’ solutions earned high marks for adequate functionality.

“Among the three vendors rated in the report, Healthland’s EMR solution earned the highest score for having the needed functionality,” said Paul Pitcher, KLAS research director and author of the report. “But that score was still relatively low, with only 55 percent of customers satisfied.

 “In addition, for all of the rated products, only about 50 percent of the provider comments regarding functionality and upgrades were positive, suggesting significant gaps with the current offerings,” Pitcher said.

    Beyond the three leading vendors, a few companies that have traditionally served larger community hospitals are also having some impact among facilities with 50 or fewer beds. Hospital executives in smaller spaces are increasingly considering McKesson Paragon, and QuadraMed has a few Affinity clients, most of which are financial customers, in critical access hospitals. Although Meditech is known as a community hospital vendor, the cost of the Meditech EMR prevents the smallest hospitals from seriously considering it, according to KLAS.

Citizens Memorial Hospital may be a happy anomaly in the world of small, rural hospitals.

The 76-bed hospital in Bolivar, Mo. rolled out its Meditech EHR in 1999 in better economic times, and according to CIO Denni McColm, it has been reaping the benefits since – better patient care and greater efficiencies. As for ROI, Wellesley, Mass.-based Nucleus Research figured a 1,321 percent return on investment in its first year. Over three years, the hospital’s ROI came in at 2,912 percent. Citizens was the 2005 winner of the Nicholas E. Davies Award from HIMSS, and the hospital has achieved Stage 6 in the seven-stage HIMSS Analytics model for healthcare IT adoption.