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Caution: Your VAR is not your EHR – and other VAR Frustrations

April 18th, 2018

I know I’ve lamented the proliferation of acronyms in healthcare before, but I need to discuss yet another. You’ve likely heard of Value-Added Resellers (VARs); well, I’m here to challenge the “value” component of the name as it applies to Electronic Health Records (EHR). First, here’s a quick VAR definition from Wikipedia to get you up to speed, if necessary.

We learned the hard way when a member practice’s EHR went down recently that it is wrong to assume the VAR has a back-up plan. A physician’s office is dependent on its EHR for not only patient records, but also critical practice management tools like scheduling appointments, billing, phone calls and e-prescribing. It’s like the power grid of the practice. At least when we lose power at home, we can call or text a number to find out how long the outage is expected to last, with status updates provided throughout the process.

When this member physician’s EHR was disabled, the VAR (it reminds me of the mortgage business, where mortgages are sold to third parties) offered no communication – nor proof of a disaster plan. When I repeatedly asked for one, I finally got a PDF of a copy of a generic disaster recovery plan. This is what we get for a $35,000? Not acceptable. Nor is the fine print in the software agreement that the HER software is purchased “as-is”.

Another related frustration? I understand VARs and HER vendors need to make money –but charging an initial fee and then an annual maintenance fee for a task tied to a state or federal government mandate is unscrupulous. A one-time charge for having to update the system to reflect that mandated change is fair and reasonable.  Purchasers should not be charged ongoing additional fees for their software to accommodate, for example, a requirement that physicians log into the Michigan Automated Prescription System (MAPS) to make sure patients aren’t trying to access prescriptions improperly. The inherent value of software is its ability to be regularly updated for better performance or programmed to reflect changes in the law. Surely, much of that is built into the initial price?

Hearing my complaint, a colleague in the payer industry chalked it up to the cost of doing business in Michigan. I vehemently disagree. How can we be expected to reduce healthcare costs when held hostage by the incremental fees of VARs and HER vendors? Multiply each mandate, times each physician in the practice (user), times the number of upcharges and that makes me think I’m in the wrong business!  (Not surprisingly, my VAR research noted it is a high profit margin industry.) So maybe there ought to be a law? That means legislation first. Do we have any elected officials reading this blog who are willing to champion legislation that won’t allow what amounts to financial penalties by VARs each time a physician’s office performs an EHR function that is tied to a government-mandated healthcare reporting change? If so, I’d love to chat. Contact me at

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