From Sam Shem: “Re: mammograms. An independent body, after review and analysis of eight clinical trials, comes out with EVIDENCE that mammogram screening in under-40-year-olds has little or no value. What happens? The radiologists are up in arms and the Obama administration, in the person of DHHS Secretary Kathleen Sebelius, tells patients to just keep doing what you did last year. And they want to cut costs by a billion dollars over the next decade to pay for national health insurance? If anyone really believes this country will ever control the costs of health care, they are living in a dream land!” Interesting, too, that nobody’s paying much attention to the study that showed that electronic medical records haven’t improved outcomes or cost so far, even as the government is spending lots of money on those, too. At least EHRs have potential. In an economy where jobs are dying out, politicians don’t have the guts to make serious change since the people unhappy with healthcare don’t have the clout of those who like it just fine. I cited statistics here years ago saying that healthcare was making a staggering economy look robust because of rising costs, profits, and high employment, all unsustainable in a global economy.
From Fred: “Re: Lattice. Lattice has been threatening to sue KLAS for the past few months. I guess Lattice didn’t like their ratings.” Unverified. I hadn’t really heard of the Wheaton, IL company, which sells point-of-care systems to hospitals. Far more interesting to me is its company history. I’d heard the name in seemingly wildly different contexts, but it’s the same company: they wrote the first C compiler for the IBM PC in 1982, sold the company to SAS in 1987, developed programming systems for the System/36 and AS/400 in the 80s and 90s, then went private again in 1993 and started selling application software. I haven’t seen their scores.
From Interoperator: “Re: SNOMED-CT and ICD-9-CM crosswalk. Here’s a guided tour.”
From J. Lo: “Re: Epic. Do they have or will they soon have patient registry functionality? If so, will it meet NCQA standards for Patient-Centered Medical Home designation? Some say it’s coming in February, others say never.” If you know, please post a comment.
From Nasty Parts: “Re: another Sage resignation. Maureen Peszko, SVP of strategy and business development, resigned last week.” Unverified since I didn’t have time to ask Sage.
Charlie McCall is finally found guilty. I’m flabbergasted that his ultra-expensive legal team couldn’t get him off since that’s usually how it works (although they may wangle a light sentence). To paraphrase the otherwise ineloquent Gerald Ford, our long industry nightmare is over. And now that he’s as officially guilty as everybody unofficially knew he was, I hope he will be as uncomfortable in prison as McKesson’s shareholders were watching the stock drop due to his actions (with the help of inept McKesson management who paid premium dollars for what was obviously a house of cards).
A hospital in India is piloting software that will send retinal images to the iPhones of specialists, allowing quick diagnosis and treatment of retinopathy in newborns. The software was developed by i2iTeleSolutions, a Singapore-based telemedicine software vendor. As the company says, the iPhone is now an EyePhone.
Ministry Health Care (WI) starts its implementation of Marshfield Clinic’s CattailsMD EHR, a $40 million project.
Ben Rooks didn’t sound too keen on Healthport’s business model, saying it was trying “to convince portfolio managers and buy-side analysts that even though over 85% of revenues are related to release-of-information services, it really is a revenue cycle management company and should be valued as such.” Those efforts apparently failed, as Healthport withdraws its IPO citing poor market conditions, but almost admitting that having never made a profit might have diminished some of the market’s enthusiasm. The always-vigilant Ben, however, floated the possibility that maybe a bidder emerged to buy the company outright, which he called the “dual path” in filing the IPO as “stalking horse.” I love that Gordon Gekko talk. Blue Horseshoe loves HIStalk.
The MyMedicalRecords people announce their partnership with a Chinese technology company to build PHR and document imaging applications for that country. That might make more sense there than here since I’ve read that in China, it’s the responsibility of patients to bring their paper medical records with them when seeking medical services. I don’t know if that’s necessarily worse than our way of having each provider keep their little chunk of a given patient’s medical record, never to be combined.
The UK division of UnitedHealth acquires ScriptSwitch, a prescribing decision support vendor.
Greenway Medical Technologies starts up a series of Webinars covering HIT Regional Extension Centers.
Odd lawsuit: a hospital surgery tech is suing her former employer after she was fired for complaining about unsanitary OR conditions that included bugs, holes in the walls, rusty surgical instruments, mold, and biological fluids splatter in the rooms. She took pictures. What will become fodder for lame morning zoo radio shows is her claim that a scrub nurse “actually defecated inside her clothes during a surgery and continued to work with fecal matter pouring down her legs and onto the floor.” She didn’t get pictures of that, I guess.
E-mail me.
HERtalk by Inga
University Hospitals Geneva Medical Center and University Hospitals Geauga Medical Center (OH) go live on ISirona DeviceConX. The technology delivers patient medical device data to Eclipsys Sunrise EMR.
API Healthcare announces that Version 9.0 of its Navigator payroll and HR system is now in GA. Enhancements include a new user interface designed to facilitate integration with other API Healthcare applications.
HHS awards CSC an IDIQ contract, which has a three-year base period and four, one-year options. CSC will have the opportunity to compete with one other vendor for specific IT tasks defined in the IDIQ.
ACL Laboratories selects Accenx Exchange to provide EMR integration between ACL Labs and its customers. Accenx is a wholly owned subsidiary of Initiate Systems.
The OMB says about 5% of federal spending was paid improperly in 2009, including $54.2 billion for Medicare and Medicaid programs. Those programs actually had improper payment rates of 15.4% and 9.6%. I believe OMB Director Peter Orszag wants Americans to feel encouraged because better detection methods have uncovered more improper payments than in previous years. Orszag cites the example of an invalid doctor signature, which was much more likely to trigger an improper payment in 2009 than 2008. I wonder how much sooner I could retire if Mr. H improperly overpaid me 15% every month.
Yet another health insurer loses financial, health and personal information on patients. Health Net says an unencrypted portable drive went missing and contain data on 1.5 million patients. The company took more than six months to report the breach, leading Connecticut state attorney to chastise it for “incomprehensible foot-dragging.”
Informatics Corporation of America captures "Best of Show" honors across both Provider and Insurance categories at Everything Channel’s 2009 Healthcare IT Summit.
Florida’s online medical records system for the state’s 2.6 million Medicaid recipients is now live. The site, developed with Availity, allows patients and their doctors to access 18 months of Medicaid claims data.
Trinitas Regional Medical Center (NJ) settles with the federal government, agreeing to pay $3 million in a Medicare fraud lawsuit. The hospital admits no wrongdoing. Meanwhile the whistleblower who originally alleged Trinitas illegally inflated charges gets a nice paycheck from taxpayers.
Image Movement of Montana, a grassroots organization that includes 30 Montana healthcare facilities, plans to implement DR Systems’ eMix, a cloud-based technology for the secure sharing of radiology images and reports.
E-mail Inga.
A San Francisco jury has found former McKesson chairman Charles McCall guilty of five of six counts of securities fraud. He was acquitted on a single charge of falsifying records.
Federal prosecutors said the former chairman, president, and CEO of HBO & Company covered up that company’s fraudulent activities, allowing it to be acquired by McKesson for $14.5 billion in January 1999. The fraud was discovered three months later, sending McKesson shares into a nosedive.
Former McKesson general counsel Jay Lapine was acquitted on all three charges he faced.
McCall was originally tried on the charges in 2006, but a mistrial was declared. He will be sentenced in March.
Submit your article of up to 500 words in length, subject to editing for clarity and brevity (please note: I run only original articles that have not appeared on any Web site or in any publication and I can’t use anything that looks like a commercial pitch). I’ll use a phony name for you unless you tell me otherwise. Thanks for sharing!
Let’s Send Mom On A Cruise – Forever
By Peter Longo
Dear Siblings,
With all this chatter about healthcare, I started to think about Mom. It dawned on me that, at some point, Mom is going to need some sort of nursing home (that or she lives with one of you four). Either option is not cheap or an exciting alternative for her. We all know she wants to keep her independence and maintain her zest for life.
Recently reading one of the confusing healthcare articles, I deciphered that the cost of care for elderly is way up. Now, I thought “up” might mean a higher co-pay or more expensive bingo. No, we are talking big monthly costs. The article pointed out that putting an elder parent into a home in Tennessee costs, on average, $72,000 a year. Can you believe that? What possibly do you get for all that money? From my view of working in the healthcare software world, I have no idea where all that money goes. It sure does not go to buying my software.
I understand the basics you get for some of that money. For instance, it comes with medical care. Apparently there is a doctor who stops by periodically to check medications. Great. Also, there are nightly activities. I assume bingo, Pictionary, and probably crossword challenges. The money also pays for Mom’s food. Jell-O choices, Pasta Night, and caloric smart desserts. Don’t forget the occasional outings or field trips (I bet they go to see Graceland once a year). I did check and the one near me does not provide free Internet.
I love Mom just as much as you guys. She took care of us for years, so we have to take care of her. We have to be there for her and we will have to split this cost no matter how tough it will be. But wait, I found something even better! Right there in the newspaper next to the article I was pondering.
Next to the picture of several Senators claiming victory on some healthcare issue was an ad for a cruise. Think about it — the cruise can be Mom’s floating nursing home. A higher level of quality care at a lower cost. Yep, Brother Peter found the answer — send Mom on a cruise, forever.
The advertisement touted a cruise for as little as $250 a week. It you think about it, that would be $12,000 a year to live on the cruise ship, with food, Vegas-style entertainment, skeet shooting, and even slot machines included.
Yes, Mom will need some healthcare attention, but hey, these boats all have a doctor onboard. A real, live doctor. I hear they give a free trip to the doctor and their family in exchange of services. (Maybe Medicare should consider a program like this. Free trip, they give back free care for a week).
All those medications she is on … she can buy them at the ports of call! No mail order from Canada or another country. Every foreign port the ship docks in, she can refill her meds on the cheap. We all know medication is cheaper in every country other than America. The ship even keeps a supply of certain medications on board. Even surgeries are less expensive at these foreign stops.
But wait, there’s more. Food. Medicare-subsidized food or all-you-can-eat buffet. On the cruise, Mom can have her choice of restaurants each night. For lunch, she can have an outdoor barbecue by the pool or grilled salmon in the formal dining room. Breakfast of eggs the way she wants or maybe a trip to the omelet bar! If she can’t sleep, then how about a stroll pass the midnight buffet? All included in the price. (Tough decision — midnight buffet or choice of Jell-O tonight.) There is even a gym with a trainer to work off the extra calories!
I know nursing homes have magicians and comedians stop by, but think about a live, Vegas-type show. The stages on some of these cruise ships are huge. When is the last time you saw Billy Crystal stop by a nursing home to perform? Every night, Mom can get dressed up and really be entertained. Remember, all for a fraction of the cost of a nursing home.
I known we all live in different parts of the country, making it hard to visit Mom in a nursing home. But if she was on a cruise, we could make a fun trip out of it. We could bring the kids. “Hey kids, you guys want to spend a week at a hotel across from a nursing home or a week on a cruise playing with Grandma?”
This cruise idea saves us money, puts Mom in better care, better food, better entertainment, and a place to interact with friends. Now I see why so many old people are on those cruise ships. This is brilliant.
Let’s try to keep this idea a secret. We would not want the government to find out. They might choose to debate a “cruise” idea in Congress for several months. Then the next thing you know, we will see a picture of some Senators celebrating a victory for “CruiseCare” that only costs $120,000 a year. Money our taxes will pay. Let’s keep this idea low key for now!
Next stop for me; let’s see if the cruise will buy some medical software. Boss, I need to expense a couple of cruise trips …
Peter
From Xper: “Re: Cedars Sinai. The ED is live, including the docs — yes, CPOE at Cedars! — seems like anything really is possible. Nurses are live on the system now and so is registration and billing. They appear to have more food and PR junk than support calls, probably a good thing. Many Epic folks are on site to make sure this goes well, but it’s kind of cool to see all the leaders here during the 40 hour go-live and sitting in the actual command center. One of the better projects I’ve seen as a consultant.”
From Kate Spayed: “Re: Windows 7. Anyone know which EHRs are compatible?”
From Dick Scrushy: “Re: Mark Leavitt of CCHIT. You should interview him.” I asked this week. He said no.
From Industry Watcher: “Re: Cerner. More bad news for Cerner in the US. Saint Peter’s University Hospital in NJ has decided to replace all Cerner Millenium clinicals for two primary reasons: (a) Cerner continually presented work orders for work outside scope and, (b) physicians were starting to admit elsewhere because of issues with Cerner CPOE. McKesson’s Horizon was selected as the vendor to replace Cerner. By my count, that means Cerner has been replace seven times in the last 18 months.” Unverified.
From The PACS Designer: “Re: FDA and iPhone apps. Back in February of this year, there was some discussion about the FDA’s role when it comes to using an iPhone for a clinical procedure. Now that the interest in iPhone apps for healthcare is gaining momentum, it would be a good time for comments to be sent to the FDA on if or how the iPhone apps issue should be handled. It’s hoped that the FDA won’t slow iPhone innovation and only regulate iPhone apps that are part of a system design submission seeking FDA approval.”
From Former Colleague: “Re: death of Frank Canestrari. He passed away suddenly on Sunday, November 15th at his home. He was the president of Newbold/Addressograph Corporation. Frank led the organization for the past two decades.” The online guest book is here and services will be at noon Thursday in Roanoke.
David Brailer’s Health Evolution Partners takes an equity position in CambridgeSoft, which offers a long list of life sciences desktop software and scientific databases.
Keane announces that 13-facility Ernest Health has extended its agreement and will be installing Optimum Patcom at all sites current and planned. University Physician Healthcare (AZ) will also install several Optimum modules, including Patcom, HIM, scheduling, and document management.
The National Library of Medicine releases a draft of a crosswalk between SNOMED CT and ICD-9-CM, inviting users to give it a try and let them know how it goes. The intention is to automate much of the work required to turn clinical terminology into billing information. It was developed by SNOMED Terminology Solutions.
Intellect Resources is running a series of interviews it’s doing called IR Beat, kind of a radio show for HIT. The latest one’s on cloud computing and the one before is about Epic certification.
Dee Cantrell, CIO of Emory Healthcare (GA), is named CIO of the Year by the Georgia CIO Leadership Association.
A hematologist and his programmer son, both from New Zealand, are named finalists in a healthcare software contest for their warfarin monitoring system for patients at home. Their blood thinner system works like a glucometer, with patients testing a drop of blood in an INR electronic reader and then receiving electronic advice (along with their doctor) of dosing changes needed. I think there are already warfarin point-of-care test kits for home use, but the software is darned cool.
The London newspaper says Summary Care Records will be uploaded to the NHS spine by the end of next year, also warning that everybody’s records will be available except those who specifically opt out. The timing of that announcement wasn’t so great since NHS Hull announced a data breach by a former employee the same day.
UPMC will manage 30,000 PCs with Verdiem Surveyor, a centralized system that enforces and monitors PC power policies without disrupting users. UPMC says it will reduce PC power consumption by half and save $1 million per year.
Medversant may be crass in using the Fort Hood shootings in its PR pitch, but it still has an interesting idea — continuous credentialing, where provider licenses are constantly checked against OIG and DEA records, but also against general Web information such as social networking sites, articles, and blogs. Also interesting: its recent study found that 1.9% of practicing medical professionals did not have a license and 18.7% had expired or falsified credentials or malpractice judgments.
E-mail me.
HERtalk by Inga
A new study by the Harvard School of Public Health finds that the use of EMRs has not had any effect on healthcare cost or quality. I’m sure some HIT critics will point to the study as proof that we should stop spending billions on EMRs. I personally side with Masspro’s Dr. Karen Bell, who believes the findings highlight the need to focus on helping physicians, hospitals, and the public health system use technology more effectively.
NYU Langone Medical Center launches the first phase of its EHR implementation, taking live its Trinity Center faculty group in Manhattan. Patients can also now access the practice’s SmartChart portal.
The National Institutes of Health’s Fogarty International Center grants Indiana University and the Regenstrief Institute a $1.3 million award to establish the East African Center of Excellence in Health Informatics. The center will focus on increasing the capacity of EHRs in the region and teaching East Africans to use electronic tools to solve healthcare problems. The center’s director claims that Kenyan clinics using EMRs are able to serve two to four times more patients than those using paper records.
GetWellNetwork appoints Michele Perry COO, tasked with helping to “lead the company to a new level of growth.” She was previously involved in three IPOs, so perhaps that’s the “next level” the company has in mind.
A new KLAS report takes a look at Allscripts a year after its merger with Misys. KLAS surveyed 200 Allscripts clients and found declining customer satisfaction in several key areas. However, Allscripts remains the “most-considered” vendor in outpatient EMR purchases (which sounds about one step better than always being the bridesmaid, never the bride). The release of v.11 created challenges, though clients on versions 11.1.5 or higher are seeing positive results. About 85% of Misys EMR users who plan to replace their EMR say they’’ll go with Allscripts Professional EHR, which is being offered at a relatively low migration price.
Meanwhile, Forbes has a nice write-up on Allscripts iPhone app, Allscripts Remote, which gives physicians real-time access to patient data, fast communication with ERs and the ability to e-prescribe (the article says “e-mail prescriptions,” but I am assuming the author meant e-rx.) Allscripts Remote also made New York Times columnist David Pogue’s listof the top health-related iPhone apps. Right up there with PeriodTracker. Really.
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Singapore General Hospital actives Eclipsys’ Sunrise Patient Flow solution at its 1,500 bed facility.
Using reporting tools from EDIMS, 22 New York and New Jersey area hospitals are providing their state health departments daily H1N1 influenza data. Details include the number of patients by county with flu-like symptoms and a breakdown of those with respiratory and/or GI symptoms.
Over half a million users are now live on Sentillion’s single sign-on and context management solutions.
Community health organization Neighborhood Healthcare (CA) selects eClinicalWorks’ PM/EMR and Enterprise Business for its 115 providers across 11 locations.
Computerworld releases its annual salary survey of IT professionals. Not surprisingly, the economy has had an impact. Salaries were flat and bonuses and benefits were reduced or eliminated. Nonetheless, IT folks remain satisfied with their career choice, though they may be feeling stress over job security. If you are a CIO, you’ll likely find the best-paying jobs in the mid-Atlantic, with compensation averaging $172,000 a year.
CliniComp contracts with Multi-Services Group to provide training services at military treatment facilities using CliniComp’s inpatient documentation solution.
Cost management company Broadlane acquires Healthcare Performance Partners, which provides Lean Healthcare and Six Sigma consulting services.
Harris Corporation also makes an acquisition, buying Patriot Technologies, a provider of integrated and interoperable HIT solutions for the federal government.
Business associates are largely unprepared to meet HITECH’s data breach-related obligations. One-third of surveyed business associates (billing, accounting and legal services, claim processors, pharmacy chains, and offshore transcription companies) were not aware that HIPAA’s privacy and security regulations applied to them. Comforting.
DigitalPersona says its biometric fingerprint reader, which is incorporated into the Picis ED PulseCheck product, is being used by 150 hospitals.
E-mail Inga.
Update – The IPO Market Return
Or in the words of Santayana, "Those who cannot remember the past are condemned to repeat it."
As I write this post, the IPO market continues to rock and roll. As some confidence returns, investors look for new places to put money, and perhaps dress their year-end performance results with some nice IPO bounces. Wall Street is, of course, happy to oblige, especially in our own little corner of the economy, healthcare information technology.
Accretive Health’s IPO prospectus continues to wend its way through the bowels of the SEC. Management has no doubt endured the begging of numerous middle market firms trying to catch a few crumbs left after the four big banks received 95% of the available dollars. Given the size of the offering ($200 million), 5% economics is still over $800 thousand in fees left up for grabs, so you can’t blame folks for wanting a piece of it.
First of all, it’s an impressive transaction to be on, and nobody wants to blink. Second, there are a few small bragging rights: “They could have picked anyone, but they chose us”, I’m sure managing directors or partners will tell other prospects. But finally, as I said, even if they put two more banks on for $400K each, it’s high margin and extraordinarily easy business.
Recall our earlier discussion on IPOs with organizational meetings, drafting, etc.? That’s all been done before the new bank shows up. All that remains for the lucky new co-manager(s) to do is hold a few basic diligence calls, draft a memo to their firm’s commitment committee (the inter-departmental group that approves participation in equity transactions), and then take some slapping around by said committee as they ask the bankers the ritual hard question in this situation: “Doesn’t this set a bad precedent, to put our name on the cover for only (or perhaps less than) 5% economics?”
In the end, however, I’m confident Accretive will have its pick of underwriters. A fee’s a fee, especially in this market, and in my experience, the average managing director level banker will spend less than half an hour working once hired, farming it out to VPs, associates, and analysts. (readers who would like a Who’s Who of roles in a bank, please feel free to submit a question).
Meanwhile, HealthPort is concluding its road show this coming week as it works to convince portfolio managers and buy-side analysts that even though over 85% of revenues are related to release-of-information services, it really is a revenue cycle management company and should be valued as such.
Ask the Chair
I really appreciate the comments and questions I’ve received, both posted and e-mailed, so please keep them coming as I aim to inform and educate, not just ruminate. Let’s take a few:
Who coaches the management of publicly traded companies on what they can and can’t say?
It’s actually a combination of people, but last word is given to the lawyers. Part of the role of the board, I believe, is to help mentor first time public company CEOs, helping them strike the right line between promoting their stock (which is, after all, part of their job) and telling only truth. There are also investor relations professionals who do this for a living, though I’ve found their quality varies dramatically. Further, it will come as no surprise that, in both my prior lives as research analyst and investment banker, I’ve always tried to share my views on good Street communication, and I’m sure other bankers and analysts do as well.
At the end of the day, however, given the myriad SEC rules and regulations on stock promotion and our litigious society (and class action lawyers who don’t wait for the phosphors to fade on a negative press release to file a claim), it’s corporate counsel who often has the last word. This has been even truer since the adoption of SEC Regulation FD in 2000. Reg FD (for Fair Disclosure) was adopted to eliminate (really minimize) the phenomenon of selective disclosure that was rife on Wall Street. Companies would often tell their favorite analyst (who usually seemed to have a buy rating on the stock) a material fact before others, allowing him or her to share it with their best clients. Clearly that puts the investing public at a disadvantage, so the SEC adopted FD and lawyers suddenly had a lot more press releases to vet.
Let’s say I’ve been burned by the stock market and would like to invest some money, say $50,000, in a healthcare IT startup. Is that a good idea and how would I go about doing it?
Individuals investing in private, early stage companies are known as “angel investors”. There are pros and cons to making investments like this.
In theory, the readers of this blog, as well as being charming and perceptive, should know more than most anyone about the prospects of a healthcare IT startup. Recall that legendary investor Peter Lynch advised us to invest in what we know. A few things to think about beyond the obvious questions of “is this a good business?” are: “Do I trust and respect the judgment and integrity of the entrepreneur?” “Does this seem like a fair price for the company?” and dozens of other questions.
I think the first question to ask before an individual invests in a private company is, “How much do I care about that $50,000?” If you need it for Junior’s college tuition or your retirement in the next five or ten years, don’t even think it. Venture investing (which is what this is) is extremely high risk, that’s part of why venture investors demand high returns. Further, most startups fail (and HCIT is a tough area for success). VCs protect themselves there by investing in a portfolio of companies to diversify away some of their risk (typically, they expect multiple failures or break-evens for each success).
Also, ask yourself how you’ll get your money back: will the company be sold or go public? How much more money will they need? Angel rounds are usually early in a company’s life cycle, and subsequent money raised could well dilute your investment (lower the percent of the company you own). If you think you have the opportunity to invest in the next Epic Systems or athenahealth and are willing to take a flyer, more power to you, but caveat emptor (and good luck).
And finally, Matthew Holt wrote:
Ben I think you should take Ms. Faulkner on a fake road show, and then write that up.
Judy, if you (or one of your staff) are reading this and you would like the opportunity to hit the road and meet with the high and mighty of Wall Street to share your views of the sector and the publicly traded companies that make it up, I’d be thrilled to accompany you. I am pretty darned confident we could have the trip sponsored by a brokerage firm who’d also make a hefty donation to your favorite charity.
And if you agree, I’ll also go buy five lottery tickets and take a trip to Vegas, because it’s clearly my lucky day 
Thanks for reading, have a great Thanksgiving, and keep those posts and e-mails coming.
Ben Rooks
The Chair
Ben Rooks is the founder of ST Advisors, a strategic consultancy offering long-term and project-relationships to companies and financial sponsors. He earned an MBA in healthcare management from The Wharton School of the University of Pennsylvania, has done healthcare IT equity research, and has worked as an investment banker in over 25 successfully closed healthcare and medical technology transactions valued from $40 to $365 million.
