Vendor Selection Due Diligence

Section3.7Select

Section 3Select—Vendor Selection Due Diligence - 1

Vendor Selection Due Diligence

Use this tool to serve as a guide for distributing requests for bids (RFBs), analyzing bids upon their return, and conducting further due diligence as you select the vendor for your electronic health record (EHR), health information exchange (HIE), or other health information technology (HIT).

Time needed: 2 hours
Suggested other tools: Section 2.4 Visioning, Goal Setting, and Strategic Planning, Section 3.4 Soliciting Bids for EHR and HIE: RFI, RFB, RFP

RFB Distribution

After compiling information for your RFB or RFP you will be ready to send it to a short list of vendors. Send the request to approximately four to six vendors. A larger number will be overwhelming to compare; fewer will not help you appreciate the range of capabilities. The following are some considerations for how to select these vendors for RFBs:

Include your incumbent information system vendor for any financial/administrative systems,even if you know you really want your EHR or other HIT to come from a different vendor.This ensures that your incumbent is:

Evaluated to determine whether it is a good fit.
Given an equal opportunity to bid, eliminating its right to complain and minimizing the potential for disruption to your current operations.

Include vendors that are:

Within your price range
Have application(s) you are looking for up and running in at least a few sites
Used by others in your community
Certified for earning federal incentives for meaningful use (MU)

If you are interested in considerating options for maintaining your own systems, using remote hosting from the vendor, or acquiring an EHR through an application service provider (ASP) or software as a service (SaaS) model, be sure that all vendors receiving the request supply these options.

RFB Response Analysis

Once you send RFBs to vendors, allow four to six weeks to receive responses. During this time:

Ensure that only one person serves as the communication point with vendors so that all are treated the same. If one vendor has questions, you may need to send a modification to the request to all vendors. If one vendor wants to visit your facility prior to responding, you need to decide whether to give all vendors this opportunity or decline the request. Vendors have many ways of attempting to ingratiate themselves within your organization, such as cultivating internal sales people. Alternatively, you can invite all vendors to a bidders’ conference over the phone or have each of them come separately to your site for assessment. Inviting the vendors to your site may be helpful in getting the most complete and accurate bids possible.

Decide how to approach review of the bids:

Small organizations typically set up a Steering Committee comprised of representatives from each stakeholder group to evaluate the bids. Assigning parts of the bids to domain specialists for in-depth review can be helpful. For example have your:

Clinical staff review functionality
IT staff or an IT contractor review the technical part of the proposal
Administrator review sections that speak to vendor viability and support, including whether references have been listed, what the vendor’s vision is for product enhancements, etc.
CFO or other person with an accounting background review the sealed price quotes. This ensures that the rest of the steering committee can make an apples-to-apples comparison. You will not start a contract negotiation process yet, but putting all prices on a spreadsheet so that the vendors can be compared on price later. This reviewer should not reveal any aspect of the quotes to the HIT steering committee members for two reasons: prices in a proposal are highly negotiable and do not always reflect the opportunity for return on investment.

Once the bids are reviewed in depth, reviewers may summarize their reviews by adding a score to the key differentiators tool. Use the rating scale below:

0 = product does not address the differentiator and there is no indication that it will in the future

1 = product does not incorporate the differentiator today but appears very likely to be available in near future

2 = product is marginal and lacking in some but not all aspects of the differentiator

3 = product is satisfactory in terms of the differentiator

4 = product fully meets or even exceeds requirements for the differentiator

Modify the key differentiators table described in Section 3.4 Soliciting Bids for EHR and HIE: RFI, RFB, and RFP to score each vendor (e.g., A – E):

Vendor Bids: / A / B / C / D / E
Functional Requirements

Case management

Ability to search narrative notes

Compliance with Rule 29

DSM-5 to ICD-9-CM crosswalk

Appointment scheduling within EHR

Generation of clinical summary for clients

Technical Requirements

Supports DIRECT protocol for email

Interface with ABC billing system

U.S.-based cloud computing

Operational Requirements

Updates patient consent information based on push from HIE

Transitional Requirements

Template for pre-load of key data

Incorporation of scanned documents

On-site training

Based on the analysis of the bids, your steering committee should be able to narrow the field of vendors to two or three on which you will focus the rest of your due diligence. Note: your steering committee still should not have reviewed prices. Unless there is one vendor that the CFO has deemed completely out of line, prices still should not be a factor at this time.

Communicating with Vendors

Once you have narrowed the field, you may want to contact the rejected vendors. Many organizations prefer to make some contact to avoid distracting calls from vendors who want to know whether they can conduct product demonstrations, etc. From this point forward, do not communicate further with these vendors. You do not need to elaborate or explain your decision.

Conduct Due Diligence

Due diligence refers to further evaluation of a select few vendors. Ideally, after each form of due diligence is concluded, an analysis similar to the analysis of the bid is conducted by the steering committee and one or more vendors can be rejected to further shorten the list. It can be helpful to use another version of the tool above for each form of due diligence. Due diligence may include:

Product demonstrations. Arrange for either a Web-based or in-person product demonstration that is tailored to your specific requirements. You should be able to ask questions, be shown alternative pathways, and discuss different options. Some behavioral health facilities will create a scenario of a client experience that they would like the vendor to demonstrate. Steering committee members and other representative end users should prepare questions. The purpose of the demonstration is to get a sense of how it is used at the point of care, how well reports can be generated, etc. The factor that will not be able to be demonstrated is interoperability. The vendor cannot write an interface between the EHR and your billing system, or connect its EHR demonstration tool to your state-based health information exchange organization (HIO).

Site visits – although site visits mean travel costs must be incurred, consider using site visits if it is becoming difficult to differentiate between products. Because most sites will not “expose their dirty laundry” during a site visit, many facilities find that focusing on reference checks yields as much information and more people can be contacted. If conducting site visits, plan for the visit in a manner similar to that for conducting reference checks.

Reference checks – should be performed for all vendor products you consider close to being finalists. Reference checks should focus on questions you have that have not been answered during other forms of due diligence, or for which you are getting conflicting answers. Reference checks can also be great resources for tips on implementation and even contacts for future use. The vendor should supply you with a complete list of references. If the list is limited, this may be telling in itself. You may need to work your own personal network or contact a local chapter of any associations or other support groups with which you belong to find additional references. It is advisable to use a tool to structure your reference check interviews so you don’t forget any key points. Note that the tool below includes a few similar questions asked in slightly different ways. This strategy enables you to “break the ice” at the start of the conversation and then re-ask questions at the end after rapport has been established—usually yielding more complete answers.

Reference Check Guide

Site: ______Host: ______Product: ______
Person(s) contacted at reference site: ______
Caller(s) from your organization: ______Date: ______

Establish similarity with your organization and learn about implementation:

Verify which of the following reference criteria are met by this call:
 Similar client volume Similar number of staff Similar in type of services
 Same base system Other similar source systems Same version of product

Establish basic understanding of the agency’s level of implementation and adoption:

Is the application fully deployed – all components for all users? If not, why not?
What interfaces do you have that connect this vendor’s product to other applications from different vendors?
What other products from this vendor and others do you have installed?
Did you have to upgrade any other aspects of your HIT in order to use the product, such as your network, input devices, other applications?
What do you like most about the product you acquired from this vendor?

Determine how successful the implementation was:

How long did the vendor take to begin implementation after the contract was signed?
How long did the vendor take to fully implement once the implementation began?
Describe the implementation team you put together from your organization. How many people? What skills? What were their primary roles? How much did you customize the application?
How long did users take to learn how to use the system with full competency?
What training methods did you use to successfully get users into a productive mode quickly?
If you had to do the implementation over again, what would you do differently?
What does your organization like least about the product, and what have you had the most problems with? How did the vendor respond to your concerns?

Learn about ongoing maintenance and use:

What kind of staff do you have on an ongoing basis to maintain and enhance the use of the application?
Does the vendor supply regular upgrades? Is the vendor responsive to requests for changes?
When you have had to contact the vendor for support, how long did it take for a response that resolved the issue?
What savings have you achieved with the implementation of the product, and how did you go about achieving them?
Is there an enhancement to the product that the vendor has been promising but has not delivered that we could include as a contractual condition for us that might also benefit you?
Is there anything else that you would like to tell us about your experience with the product?
Any lessons learned or good advice?

Follow up on any specific questions from demos or site visits:

Vendor viability assessments. Some vendors may invite you to visit their corporate headquarters or meet their CEO or other staff via phone. This is more common for large vendors. It can be a way for you to learn about the culture of the vendor and the nature of its staffing. For example, does it have clinical staff who have used an EHR in a behavioral health setting? Many EHR vendors for behavioral health are small, with staff wearing multiple hats. Many are also virtual companies; there may not be a corporate office. If you are not interested in making a visit or one is not offered yet you have any concerns about the viability of the company or its capacity to meet your needs, you should request a call with key staff members. Some organizations acquiring an EHR may even request financial statements from finalist candidates. Most public, non-profit HIEs are more transparent than private, for-profit EHR vendors so more of this information is available.

Section 3 Select—Vendor Selection Due Diligence - 1