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October 9, 2007 News 9 Comments

From Will Weider: “Re: EMR. You mentioned the Marshfield Clinic as a developer of their own EHR. I have blogged about them in the past.” Link.

From Economist: “Re: pricing. I am trying to figure out how pricing for software applications usually works in this industry. There are two issues I am unclear about: Is pricing usually done according to the number of users or in another way? If it is done by users, is it usually done by named/registered users or concurrent/active users? Do vendors offer a set of predefined software packages or do they offer a variety of modules and let you “pick and mix” according to your needs?” I’ve done a lot of contracts and they were almost always based on occupied or licensed beds, although Epic and Cerner started the trend of increasing fees based on volume of lab tests, patient days, etc. (I dislike that a lot because you can’t budget for it and you are paying more for exactly the same product and service, a disincentive to use it more widely). I’ve seen concurrent users listed on occasion, although that’s more common for underlying technologies like database licenses. All vendors I’ve seen offer a long list of applications, for which one can likely negotiate a discount (from the fictional list price) for purchasing multiples of them. The main thing to remember is to look at total cost over an expected life of 7-10 years since implementation services, annual content fees, maintenance fees, and third party licenses quickly eclipse the upfront capital cost.

From Sanka Coffie: “Re: Intel. Intel recently launched a website to help it keep abreast of industry trends. It had used it internally, but decided to open it to the public. My point is, if you click on the Healthcare site, there are no entries. Kind of says it all for leading software technology – zip, nada for healthcare. Just had to share.” Link.

From Cigarettes and Water: “Re: Micromedex. Rumor has it that Thomson Healthcare is looking to sell its Micromedex business unit, which generates approxiately $40 million in earnings on $120 million in revenue. The problem is that it’s not growing significantly and is probably at its most valuable. Thomson continues to organize itself around solutions for preformance management.”

From The Cooler King: “Re: a certain UK practice management company not named Misys. The rumor inside is that the whole company is up for sale this time, but the healthcare division may have a better breakup value to interested parties.”

From Just Asking: “Re: HIT Summit. I am surprised to see your support for HIT Summit. Seems like just another boondoggle for CIOs and vendors at one of the most exclusive hotels around. Sounded like you were going to go?” I’ve been to two conferences like this one and found them worthwhile for executives with broad strategic interests, networking interest, and budget. It’s very much like flying in first class: great for making important contacts in a much more intimate setting than the usual conference, a more relaxing and upscale experience, but not necessarily for everyone. With the HIStalk discount, the registration fee and hotel will run less than $2,000. Not cheap, but not way out of line, plus you could always pick a less expensive hotel. I won’t be there, but at least one reader is going and offered to report back. The speaker lineup is impressive.

From Whitby Bevil Sr.: “Re: WebMD. I heard from a reputable source that Google is in acquisition discussions with WebMD. This would be an interesting counter move to Mr Softie’s HealthVault. It may also explain why Google’s top healthcare person recently left without much explanation.” Wouldn’t surprise me a bit. I’ve heard similar rumblings.

From Josef Grool: “Re: EMRs. Isn’t there a software entrepreneur out there who would fund an X-prize for hospital EMRs, then sell it through a non-profit? The current 12 vendors all have such significant shortcomings that a well-funded team could probably build a much better system without all the baggage. Ambulatory EMR systems are much better than any acute systems.”

Barry Schoenbart, MD, medical director for Reliance Software Systems and an old friend of HIStalk, wrote me about Care Plus Next Generation, the clinical system his company is developing for Henry Ford Health System. It will include a full-featured EMR for both inpatient and outpatient care venues. Modules include EMR/EHR, result delivery, order entry, clinical documentation, physician portal, document imaging and document management, and care coordination and reporting. Community physicians will be able to order labs and rads electronically. User acceptance testing is starting and Ford will go live in May. RelWare will sell the system commercially as RelWare’s OneRecord. Good update.

William Crawford from Children’s Hospital Informatics Program in Boston e-mailed about Dossia, for which CHIP has taken over PHR development. “First, factually: Dossia is neither being developed by, or operated by, the employers. It’s being developed by CHIP, based on the Indivo platform. Indivo is open source and always has been, and it will continue to be so. That’s about as transparent as it gets. Founder company employers have no role in operating the system, either – the only people who will have access to the operational system will be CHIP technical operations staff and selected employees of our hosting partner. Just to make it really clear, further in the article you’ll also see that Colin Evans directly goes on record saying that the employers will never have access to the data. Second, philosophically: I find it very hard to believe that anyone from the Dossia Founders Group would have asked for back door access to employee healthcare data. It doesn’t make sense – the entire purpose of engaging outside partners to create the system was to make absolutely sure employees could trust that nobody would be looking over their shoulders. The goal here is to give millions of employees tools to better navigate the healthcare system and make more informed choices about health and wellness. That’s much, much more valuable than any decision that could be made around a single employee–or any value that could be realized by selling data out the back door. So Dossia won’t be doing either of those things, and CHIP certainly won’t be enabling them to do so. One of the main points of alignment between CHIP and Dossia is that the employers would not have access to the information stored by Dossia. That’s why we call it a Personally Controlled Health Record – we really are letting patients make the decisions about who sees their data. And it’s not an obligatory system, either – nobody has to opt into having a Dossia record.” Thanks for that. While I believe patient privacy is in good hands with CHIP’s development efforts, there will always be that patient suspicion (unfounded or not) that centralizing patient information electronically could be tempting to those who could benefit financially from it. Maybe the result will be that fewer users will sign up, or that the information they record will be incomplete. Reassurance will be important.

My newsletter editorial for Wednesday: “Smoking the CIO-Doctor Peace Pipe: Let Practices Choose Their Own PM/EMR Gift”.

EnovateIT signs a big deal with TriHealth (OH) for 125 wall-mounted articulating arms and 125 point-of-care carts.

Mitem announces Blue Iris eLaborate 8.6, its Web-based hospital orders and results application for physician offices.

TeleTracking announces increases in patient flow software sales and revenue over the past six months.

Seton Family of Hospitals upgrades its emergency messaging system from React Systems.

SAP will buy Business Objects for $6.8 billion, guaranteeing software vendors and customers that Crystal Reports will get even more expensive for producing labels and reports.

North Carolina Healthcare Information and Communications Alliance (NCHICA) gets a HHS contract to develop NHIN interfaces and transaction sets.

E-mail me.

Inga’s Update

Three Georgia nurses are fired for HIPAA violations. Apparently the trio was intrigued by a patient in the SICU who had a knife through his skull. They used their cell phones to take pictures.

Ascension Health, Catholic Health Initiatives (CHI) and Catholic Health East (CHE) have joined together to form CHV II, LP a $200 million VC fund focused on investments in the healthcare industry. This is the second fund venture for Ascension and the first for CHI and CHE. They will target expansion to late stage medical device companies, and healthcare technology and service companies.

Siemens announces that they really do have clients using their EDM and Soarian HIM solutions. If you are going to the AHIMA, you can visit the Siemens booth and talk to some of their real clients. (Did anyone else reading this press release interpret their main message as, “We have clients”? Or maybe I am just turning cynical like Mr. H.)

Set your DVR’s to CNBC! Wednesday morning at 9:30 a.m. ET Allscripts CEO Glen Tullman is presiding over the NASDAQ opening bell.

Eclipsys announces that SingHealth, the largest healthcare provider in Singapore, has selected Sunrise Clinical Manager.


E-mail Inga.


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Currently there are "9 comments" on this Article:

  1. Re: Other licensing methods – other than those mentioned, per processor, per seat and per server are other methods. Application Service Providers are another story usually based upon transaction volume or some other volume metric (i.e., visits). The fun with either is in the bundling of third party products and the multiple additional licensing methods those bring to the contract.

  2. The Google-WebMD merger got legs the morning that Adam Bosworth’s announcement was made. This is a “left-field” rumor that started by one of the analysts who covers WebMd (at least what I heard) and quickly some a lot of press that day on the Street. Old news.

    This rumor makes a little sense but there are some pieces of WebMD that Google would have zero interest in including the Plastics segment. Plus it would be an incredibly messy merger. WebMD is still digesting their recent acquisitions including Subimo and Summex. I give this a

    Frankly, it amazes me that everybody is so fascinated by Google Health. For health search it is incredibly relevant but not much else. I am frankly 10x more interested in what a company like Ingenix is doing in Health IT than Google.

    People can slam Microsoft’s foray into health care all they want but they have made a serious financial commitment here in terms of personnel and development. Until Google makes a similiar commitment, I am won’t continue to pay them much heed.

    BTY – Adam Bosworth is up and blogging again on his own. Nothing really interesting though about his departure from Google:

    http://www.adambosworth.net/

  3. While I like the philosophy of Josef’s comment, I just don’t see that working in the health-care IT model, for 2 reasons:

    1. On-going support — to be successful, such an EMR would have to have a team of dedicated developers who would support and maintain the product. Then you have to convince customers that you DO have that team, and that you WILL BE THERE when they need you. That could be a tough sell, especially for an EMR based off of some angel-investor x-prize contest. Running an organization successfully, whether profit or non, is a very different ballgame than producing great software, and you (generally) need different kinds of people to make that work – kinds that might not be interested in an x-prize context.

    2. Industry commitment & acceptance — along those same lines, you have to be willing to produce a product that can, literally, mean the difference between life & death. There’s a lot of risk there — risk that you don’t see in other types of “alternative” products (I’m thinking of open-source software here). I’m sure all of the vendors write liability write out of their contracts, but that still doesn’t completely eliminate the risk of a lawsuit that could totally wipe you out.

    It’s not completely without precedent, because there are organizations & teams that have grown up around various projects (Mozilla, OpenOffice.org, Linux, Apache.org), and some of them (particularly Linux & Apache) do run on mission-critical systems, which may be as important (or more, for some people!) than life or death. So there’s definitely models out there to follow — the real question is if they will work in the health care industry? The environment doesn’t really seem right for it… yet. Tomorrow, who knows?

    If we ever do get health-care down to the consumer level, then I see some kind of project like this gaining a lot more traction. When I can download my PHR program (like I download Firefox) , or go online to a PHR website (instead of MySpace), that’s where I see the opportunity for a real out-of-left-field project to take flight.

    2.

  4. Re: Software Licensing, in hospitals I have also seen it based on number of annual discharges. In the ambulatory environment, I have seen it priced by number of providers, number of workstations, and number of concurrent users. For those pricing by providers, there is then another discussion regarding what constitutes a provider. MD? NP? PA?

  5. RE: Pricing of licenses in this industry.
    If “this industry” includes Ambulatory EMR and Practice Management, per provider pricing is becoming more prevalent–depending upon what the vendors definition of Provider is.

    If the

  6. Other licensing methods – in the ambulatory (physician office) market, pricing is usually organized by user license.

    The old fashioned (very nice but usually very expensive) client server systems require an upfront investment, plus an annual license fee. Sometimes this fee includes service and support, and sometimes it does not. In a few cases, there is no license fee, but the user must pay for upgrades (or new versions) of the software.

    The newer ASP (web-based) systems almost never require an upfront fee and almost always charge a per-user subscription fee. In most cases, this is a monthly fee per physician user (medical assistants and other allied health professionals usually receive free access to the system), although some vendors charge an annual subscription fee. In most cases, software upgrades and basic service/support are included in the subscription fee, although on-site training is usually extra. Over the long haul of 5 or more years, ASP systems are not cheaper than client server systems, and are sometimes more expensive, although many physicians cannot afford to invest $50,000 – $250,000 for an expensive client server system.

    Recently, EMR companies (especially the web-based vendors) have started offering free access to their EMR and practice management software systems if the physician uses their billing services, and the vendor withholds a percentage (4 – 8 %) of collected revenue in exchange for their services.

    I hope this is helpful.

    EMR Software Guy,

    http://electronic-medical-record.blogspot.com

  7. RE: Software License Pricing

    As a guy who has worked for two of the largest Healthcare IT companies in sales & consulting…I can safely weigh in on this discussion.

    Most have a model where you price by the Operating Expense of the facility. If it’s a multi-facility sale, then you add up the OE’s. Now clients who have a small OE, pay less than the full price, the majority in the middle pay at or a little above full…and the huge health networks usually always pay double-triple the price for all of their facilities added up (there is a cap and usually these networks go WAY above this cap number). This all correlates with users in a roundabout but acceptable way.

    The other model most commonly used is number of LICENSED beds (not just used beds). Both of these models are used primarily with the largest IT vendors who sell the big multi-software sales of EMRs and specialty integrated software packages.

    3rd party software resell is done usually on a per-user basis.







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