From Sweet Thang: “Re: Blue Shield of California. Pulling out of Emdeon on November 1. It’s been mentioned nowhere, including on Emdeon’s site, but it’s on the Blue Shield site.” Seventeen claims vendors remain, among them Allscripts Payerpath, Navicure, and RelayHealth.

From The PACS Designer: “Re: Office 2010 Web Apps. If you haven’t purchased Microsoft Office 2010 yet, you can download a free trial copy of Office 2010 Web Apps to get an idea of what’s new in Microsoft’s business software offering to all of us HIStalkers.” 

From e-R Nurse: “Re: Pittsburgh. Congrats to fellow Pittsburgher Rich Goldberg, a tireless worker. And last week, 90-minute waits for meds at the UPMC Shadyside Hospital ED when the vacuum tube system got plugged for hours. It is used to facilitate efficiency between ED and Pharmacy with the CPOE system.” Not uncommon. Tube systems are in many hospitals and serve as the lifeline from far-flung patient areas to pharmacy and lab, not just for paper orders, but for meds (at least the non-hazardous and non-fragile ones that can be tubed). I can say from experience in multiple hospitals that a CPOE or pharmacy system downtime is nothing compared to a tube system outage, which requires finding people to act as couriers to run stuff back and forth constantly. If anyone ever makes the Star Trek transporter a reality, hospitals will be an instant market. And like CPOE systems, sometimes you find a lot of missing items that got waylaid in transit from Point A to Point B (the tube system is the ultimate interface).

From Katrina: “Re: kudos. Keep up the great work. I owe a lot of other people’s perceptions of my brilliance to HIStalk. .” That’s a nice comment — thanks! Inga and I don’t get to look brilliant ourselves since we’re anonymous (and might well look a lot less brilliant if we weren’t), so we’re happy when readers say they benefit from reading. Our favorite stat is from our annual reader survey earlier this year, in which 82% of readers said reading HIStalk helps them do their jobs better. We console ourselves with that when someone insults us.

From Lisolette: “Re: VA’s VistA. A good blog article.” It a book review of sorts, covering the well known Best Care Anywhere. It makes some good points (VistA doesn’t get used enough because it doesn’t generate profits like proprietary EMRs) and some questionable ones (VistA is being adopted in other countries because the VA model works so well, not mentioning that many of them grab it because it’s free). Minor quibbles aside, it’s a pretty good read, especially the nice, simple overview of how MUMPS and Cache’ work. It’s also true that the VA care model is one that would be perfect other than providers are paid for procedures instead of improving health: lifetime patient care, a data-driven approach, and having incentives to improve health and not just healthcare.

Changes to the Health Information Act in Alberta, Canada bring up a question for debate: should chiropractors, dentists, and optometrists be allowed to access the full electronic health records of patients?

I’m awaiting the official announcement before naming names, but the Yale-New Haven CIO job has been filled. Readers who sent me the rumor were correct. I’d ordinarily just blast out the name since it’s confirmed, but I’m bending my own muckraker rules since it’s a friend of HIStalk and the announcement is immediately forthcoming anyway. It’s a great job for the new person and a great hire for the hospital. More to come.

A Florida medical news site profiles Sushoo (bless you!), which claims to be the first independent HIE. It was started by a Florida entrepreneur and his physician wife as a small side project, but now has 40 employees.

Hilary Worthen, MD is promoted to CMIO of Cambridge Health Alliance (MA).

I didn’t scour the entire list of Inc. Magazine’s Top 5000 Fastest-Growing Companies, so here’s another HIStalk sponsors that made it: Culbert Healthcare Solutions, coming in at #988 in its first year of eligibility. Also: GetWellNetwork.

Keith Boone, “Standards Geek” for GE Healthcare, did some good sleuthing in noticing that the public health notification standards in Meaningful Use are incorrect. It uses standards intended for state reporting to the CDC, not for providers reporting to states. It’s also an obsolete version and describes only the message standards, not the content. Apparently his observation made its way to ONC, with John Halamka stating that ONC will issue a correction. Let’s hear it for the geeks (including both Keith and JH), the unsung heroes of HIT often deprecated among the Alpha Male sales jocks and cutthroat MBAs who climb their backs to reach the organizational pinnacle.

Inga and I pride ourselves on making all viewpoints available on HIStalk, not just ours. How that works: you are welcome to post article comments, send in a Readers Write piece, or suggest items we should cover or people we should interview. We’re always especially interested in hearing from provider-siders, who tend to be underrepresented simply because they don’t hire PR firms or have products to pitch.

Ingenix Consulting announces its Strategic Technology Solutions practice, which offers services related to IT strategy development, technology procurement, and implementation. 

Weird News Andy muses, “Does the C in C-section stand for ‘clean’?” A maternity ward in Sweden, short on help, tells a newly delivered mom being discharged to bag up her laundry and tidy up her room before leaving. Two midwives in the hospital confirm her story: “You can’t leave a mother while she’s giving birth. It’s true that we sometimes need to make use of the parents and that doesn’t feel good at all.”

BridgeHead Software releases a healthcare disaster recovery white paper.

Clay County, West Virginia pilots HealtheMountaineer, a PHR system modeled after the VA’s MyHealtheVet project and tying into the state’s open source systems (Medsphere’s OpenVista and the Resource and Patient Management System from the Indian Health Service). This is pretty impressive, especially if you’ve ever been to Clay County.

Sponsor jobs: Epic Certified Consultants, Account Manager. Jobs from Healthcare IT Jobs: Executive Director Epic Systems, Lab Systems Project Manager, Medical Information Officer Acute.

Businessweek sees competition between the deep pockets of UnitedHealth and McKesson to sell updated insurance company systems (enrollment, care management, and claims processing) and those moving to ICD-10. Here’s an interesting quote from a VC guy: “Every healthcare payer in the world needs an upgrade. You or I are talking about getting an iPad. They are still getting off mainframes.” Potential acquisitions mentioned are Click4Care and ZeOmega.

OakBend Medical Center (TX) chooses the Corepoint Integration Engine for its Paragon implementation.

I got a pop-up message in my Gmail account offering free calls for the rest of the year, which must mean that the very Skype-like Google Voice is live.

An two-year NHIN pilot project will test (warning: PDF) sharing of clinical information between the Indianapolis VA and the Indiana HIE.

Senator Max Baucus, a key player in writing the healthcare reform bill, admits that he hasn’t read all of it. He hasn’t said whether he knew about the unrelated tax change attached to it that will require businesses to send out 1099 forms to any supplier selling them more than $600 worth of goods or services.

Odd lawsuit: Marin General Hospital announces a lawsuit against Sutter Health, claiming Sutter siphoned off $120 million before turning control back over to the county this past June. Equally odd: a couple sues SeaWorld of Orlando for traumatizing their ten-year-old son by trying to resuscitate a trainer who was killed by a whale during a performance they attended.

E-mail me.

HERtalk by Inga

University HealthSystem Consortium (UHC) collaborates with Carefx to provide business intelligence dashboards and analytic tools for UHC’s Clinical Data Base (their spelling). UHC members include about 90% of the nation’s non-profit academic medical centers.

Passport Health Communications launches Payment Navigator to provide upfront financial triage when patients are admitted to hospitals.

The CNO of Covenant Hospital (TX), which is implementing Meditech, says it will advance Covenant’s “Design for Perfect Care” strategic initiative, with goals of “perfect care, sacred encounters, and healthiest communities.”

Epic takes top honors in yet another KLAS report. KLAS’s latest project looked at the EMR buying experience of 146 healthcare organizations and examined such elements as the true cost of ownership, scope, how well vendor kept promises, and getting one’s money’s worth. Epic was the only vendor with high ratings for money’s worth, contracting, and costs. Epic’s projects also had the largest scope of any vendor. Meditech fared OK, with clients saying they got what they expected in terms of contract, delivery, and post-live selling events. However, Meditech’s clients were disappointed in the company’s lack of proactive help in getting their money’s worth. GE earned lackluster ratings, with customers saying that GE has been on a downward trend since it bought IDX in terms of keeping commitments.

A new study finds that hospital EHR adoption in hospitals grew slightly from 2008 to 2009 (8.7% to 11.9%) and that only 2% of hospitals meet Meaningful Use criteria. In addition, small, public, and rural hospitals are less likely to have adopted EHRs compared to larger, private, and urban hospitals. Thirty-one hundred hospitals participated in the survey, which is more than half the country’s hospitals, and researchers claim their reporting methods were conservative. Even if these results significantly understate reality, it’s probably still safe to say that HIT adoption has a long way to go.

Cayuga Medical Center (NY) contracts with Summit Healthcare for its Summit Apex integrated product suite, which will facilitate patient data exchange between Cayuga’s Meditech system and physician office EMRs.

Quality IT Partners says it’s leading the Meaningful Use analysis efforts for one of the largest multi-facility health systems in the country.

New this week on HIStalk Practice: a pretty darn funny video that pokes fun of a clueless CEO trying to set up an ACO; highlights of an MGMA letter to CMS, including e-rx recommendations; and, news on a couple of New York practices that each earned $100,000 leveraging data from their NextGen systems. Make sure you are signed up for e-mail updates so you don’t miss the upcoming interview with ACO expert Chet Speed of AMGA. It’s a good read, especially if you are an ACO newbie.

Premier healthcare alliance says 150 hospitals and healthcare systems saved over $120 million in labor and supply costs participating in Premier’s LaborConnect program. It tracks labor productivity, performance, and costs.

The AHA spent $4.2 million lobbying the federal government during the second quarter, up 20% from the same period last year. Most of the activity centered around Medicare fraud and health care reform.

Allscripts, eClinicalWorks, e-MDs, GE, NextGen, and Sage all donate EHR systems to the University of Texas at Austin’s HIT program. I noticed that a few students in UT’s program had a chance to spend two weeks this summer working at the Gulf Coast REC. One project involved spending a day in a non-profit clinic that relied completely on paper records. By the end of the day, students had created a new database system for tracking the health of diabetic patients.

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The views and opinions expressed in this blog are mine personally and are not necessarily representative of current or former employers.

A Sacred Calling

“The Human contribution is the essential ingredient. It is only in giving of one’s self to others that we truly live.”

— Ethel Percy Andrus

Someone asked our chief medical information officer, Ferdinand Velasco, MD, why he would leave his skyrocketing career as a cardiac surgeon at New York-Presbyterian to become CMIO at TexasHealth. I will never forget his answer: “As a heart surgeon, I could help about 200 people per year. As CMIO, I am helping the 6.2 million people in our region.”

Whether we give direct care or support someone who does, we are fulfilling a sacred calling — touching human lives. Don’t discount information technology because it’s only computer stuff and nobody really knows where cyberspace is anyway. You could’ve practiced IT in any industry, yet you chose healthcare. Or perhaps healthcare chose you.

Sacred callings come in various forms. Although healthcare IT is nothing unique in itself, the element of sanctity is why I stay. If we want to live a life of significance, we must understand the depth of our calling and then perform as if our work matters. Grasp the privilege of serving humanity with your skills and talents. That is sacred.

In using our hands for work — answering service desk calls, pulling cables, creating order sets, managing projects, developing strategies, creating apps — we are helping care for the patients and clinicians. We’re telling them, “You are important to us and we value you.”

Stop for a moment. Re-read the above paragraph then hold your hands in front of you. While studying your hands, reflect on what they do each day that contributes to caring for the health needs in your community. Seriously. Have you not chosen to bless others through the work of your hands?

Wherever people are involved (life), challenges and frustrations exist. Healthcare is beset with issues. What can keep us focused during those difficult circumstances is remembering our purpose.

Let me share with you one recent technique we developed to maintain the heart-to-head connection.

Blessing of the Hands

It is not unusual for hospitals to conduct non-denominational “Blessing of the Hands” ceremonies. Here is video example from MetroHealth in Cleveland.

I had seen this done for clinicians at one of our hospitals and it got me thinking. What about IT? What we do is no less critical to the healing process. Our hands may not touch patients, but they do touch their lives in ways unseen. Arguably, IT is the only segment that touches the entire healthcare continuum.

I contacted our chaplains, and they were excited about the concept. For the first time this spring, we conducted a Blessing of the Hands ceremony exclusively for IT. The chaplains first shared with our team the sanctity of what we do in serving people and the impact we have on the lives of both patients and caregivers. They prayed over us. They prayed a blessing over a special vial of oil then used it to anoint our hands.

One at a time, we rose from our seats and approached the chaplains. While we held open our hands, they anointed them and gave us each a verbal blessing. I sat back down and simply soaked in the moment. I imagine many others encountered the same refreshing.

All I can say is that it was a holy moment for all who chose to participate, regardless of their religious orientation or belief system. We emerged inspired and empowered. We walked out of there knowing that we were making a difference in lives every day.

No matter what your area (supplier, payor, or provider), I highly encourage you, the leader, to make this voluntary ceremony available for your teams. You’ll witness a demonstrable impact and you’ll be reminded that what you do is significant. Your calling is sacred.

***

Here is a sample Blessing of the Hands prayer. A simple Bing search will bring up other samples.

· Blessed be these hands that have touched life.

· Blessed be these hands that have felt pain.

· Blessed be these hands that have embraced with compassion.

· Blessed be these hands that have been clinched with anger or withdrawn in fear.

· Blessed be these hands that have drawn blood and administered medicine.

· Blessed be these hands that have cleaned beds and disposed of wastes.

· Blessed be these hands that have anointed the sick and offered blessings.

· Blessed be these hands that grow stiff with age.

· Blessed be these hands that have comforted the dying and held the dead.

· Blessed be these hands that develop applications that improve quality of care.

· Blessed be these hands that answer the phone and empathize while solving issues.

· Blessed be these hands that reprogram the broken network.

· Blessed be these hands that enable life-saving technology.

· Blessed be these hands, we hold the future in these hands.

· Blessed be our hands for they are the work of Your hands, O Holy One.

Update 8/29/10

I appreciate all the comments. Thank you.

The point I do not want readers to miss is to know that what we do in healthcare IT is significant, impacting the health of our communities and nation.

You can broaden the definition of spiritual to include your overall sense of purpose and mission. For me it is birthed in my faith. For others it will take on a different look, but either way I maintain that healthcare IT is sacred work.

As long as your views are not forced on others or go against the values/culture of your employer, I see no reason not to allow for individual expression. I happen to work for a faith-based health system and enjoy the freedom this brings to everyone, regardless of religious or secular orientation.

 

Ed Marx is a CIO currently working for a large integrated health system. Ed encourages your interaction through this blog. Add a comment by clicking the link at the bottom of this post. You can also connect with him directly through his profile pages on social networking sites LinkedIn and Facebook, and you can follow him via Twitter – User Name “marxists.”

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From Teaberry: “Re: Verizon vs. Comcast. To provide the secure backbone for HIEs.” I keep hearing that Comcast will make some big healthcare moves soon, so we’ll see if that’s one of them.

From Eclipsys Observer: “Re: Allscripts and Eclipsys leaders. Under fire and intense scrutiny as the merger unfolds. The Newco has not identified a single product management leader, with John Gomez and Jon Zimmerman vying for power. Rumor is that Gomez is in the lead.” Unverified.

From DigiGuy: “Re: Roche/Ventana purchases BioImagene. You probably knew about it before it happened.” The Swiss drug maker will pay $100 million in cash to acquire the privately held California-based BioImagene, which sells a digital pathology system (slide scanner, biomarker analysis software, workflow, etc.) for tissue-based cancer diagnostics. The drug makers are struggling for some reason (prescription prices make that hard to believe) and are all over personalized medicine.

From WhatDoYa Know: “Re: Yale CIO job. [name omitted] is in line for it.” I left out the name while I wait to hear back from that person. Lack of response usually means confirmation. I’m waiting on that rumored Siemens surgery system vendor acquisition since John Glaser didn’t reply when I e-mailed.

From Toomer: “Re: Ingenix. I bet their next acquisition will be iSoft.” That wouldn’t surprise me, although I don’t know how interested they’d be in a company with minimal US presence.

From Wildcat Well: “Re: NJ’s HIE program. They held a conference call Friday for fielding questions from EMR vendors. The good Garden State showed themselves to be sometimes unyielding, under-informed, and at times down right combative with EMR vendor participants.” Unverified. I can’t decide if that’s necessarily a bad thing.

From Oregon Lab Guy: “Re: Portland weekly tabloid article about open source and HIT’s ‘gold rush.’ It suggests that we have ‘thousands’ of EHR experts roaming the streets of the Rose City – OHSU must have a big lecture hall!” The article says that Portland is the country’s open source capital even though the big companies took ideas and people from there and moved elsewhere. It bemoans the lack of follow-through with good ideas born there, mentioning that Portland’s techies have a reputation for wanting to head out at 5:00 each day (kudos to them). It’s a pretty good article, using the cynical mandatory EMR analogy that I thought I made up — requiring restaurants to use electronic order-taking and processing to improve their efficiency and reduce mistakes. Above is a July OSCON lecture on open source in HIT from Deborah Bryant of the OSU Open Source Lab.

Cumberland Consulting Group is named to Inc. magazine’s Top 5000 Fastest-Growing Private Companies for the second straight year, a nod to its 34% growth and its increase from 53 to 91 consultants in the past year.

Former Allscripts COO Ben Bulkley is named president and CEO of Fluidnet, an Amesbury, MA maker of what looks like a pretty sweet IV pump.

PerfectServe announces its Clinician iPhone application, which works with its system to allow doctors to make calls using the internal directory and manage their on-call schedules and notification preferences.

Ingenix completes its acquisition of Picis. That didn’t take long.

Industry longtimer Rich Goldberg, formerly of Misys and Confluence Medical Systems, joins TeleTracking as SVP of strategy and business development.

HITECH and MyEMRChoice.com are written up in the Philadelphia paper.

McKesson CEO John Hammergren is chairing the search committee of HP’s board that will choose a successor for ousted CEO Mark Hurd.

Dana-Farber Cancer Institute implements Informatica for data integration.

NIST’s approved testing procedures for temporary certification of EHRs are here.

Clairvia announces GA of mobile open shift alerts and scheduling for its physician scheduling system. The Durham, NC-based company, which sells resource management and scheduling systems, has executives from Atwork and Per-Se. It changed its name from AtStaff this past spring.

Northern Virginia RHIO will use GE Healthcare’s Global eHIE system to bring patient medication histories into Inova Alexandria Hospital’s Picis EDIS.

A PHI-containing and apparently encryption-free laptop is stolen from the University of Kentucky Medical Center.

E-mail me.

HERtalk by Inga

From KISS: “Re: (Company X). Is it me or do these guys have the worst elevator pitch ever?” I left out the vendor’s name, but I agree that it’s a pretty bad pitch when you can’t figure out what the company sells. It’s a shame that so many companies get caught up with using all these non-descriptive but trendy buzz words in an attempt to pitch their products. As Mr. H says, “they get too highfalutin’”. Note to marketing types: Keep It Simple Stupid for those of us who don’t want to read/hear your pitch more than once just to understand what you’re offering.

Community Hospital of the Monterey Peninsula (CA) selects RelayHealth’s HIE solution to connect and exchange clinical data with physician practices. RelayHealth, by the way, just achieved full EHNAC accreditation for its e-prescribing services.

Sage North America adds its healthcare division products to Sage’s Partner Advantage program, meaning its EHR/PM/EDI are now available through resellers.

McKesson names Eisenhower Medical Center (CA) and HealthFirst Care Systems (MN) the winners of its 2010 Distinguished Achievement Award competition for outstanding use of McKesson’s HIT products.

Intermountain Healthcare (UT) contracts with The Advisory Board Company for its OptiLink patient acuity solution.

BayCare Health System (FL) confirms news we reported over a month ago: Tim Thompson, most recently CIO at the Methodist Hospital System, is BaycCare’s new CIO.

Children’s National in Washington DC successfully implements the AuditACE compliance solution from Streamline Health Solutions.

CHRISTUS Health premiers a MEDSEEK-developed enterprise website that consolidates its 16 sites.

Mahaska County Hospital (IA) fires two employees for snooping in patient medical records for purely personal reasons. The violated patients included the ex-wife of a current boyfriend, an ex-husband, a husband, the mother of an adopted child, and a hospital volunteer. Ah…it is so tempting to ignore the law and common sense and just be nosy.

Epic moves into Heaven and the local papers have photos to prove it. The Madison and Verona papers provide updates on Epic System’s newest building (Heaven), which includes a curving, stainless steel slide that lets employees shoot from the first floor down to underground parking. With Campus 2 scheduled for completion next year, Epic is now contemplating a third campus. Judy — send me an invite because I really want to try out the slide.

Lenox Hill Radiology (NY) contracts with Professional Data Systems to manage Lenox Hill’s IT department.

The University of North Carolina Health Care System signs a contract to implement the Lawson Health Resource Management suite.

The North Texas REC selects WaveTwo, LLC as an official agent, tasked with helping physicians to implement EHRs and qualify for economic incentives.

I’m guessing that someone at Methodist Le Bonheur Healthcare (TN) has not signed the Oprah No Phone Zone pledge. The hospital says it will post updates on ER wait times every two minutes. The information can be accessed via Methodist’s Web site or by texting ERwait on a mobile phone. OK, I know they are not the only hospital offering this type service and I don’t mean to pick on them, but for some reason when I read their announcement, I envision a driver speeding down a highway while texting for wait times while looking in the rear view mirror to the back seat at a child holding his arm and screaming in agony. But really, I am sure it is a great service. So great that I see that MetroWest Medical Center (MA) is launching a similar program.

Canton-Potsdam Hospital (NY) names Jorge C. Grillo its new CIO. One of his priorities will be the implementation of a $2 million EHR system (Meditech, I believe.) He’s the former CIO of the Island of Bermuda’s Hospital System (sounds like a nice gig),

KLAS takes a look at RIS, awarding the top satisfaction rating to Epic Radiant in the 200+ bed hospital market. Avero interWorks and NovaRad tie for the number one spot in the community hospital market segment and FUJIFILM Synapse IS is the leader in the ambulatory market. The top four functionality items on providers’ wish lists include management reporting tools, flexible scheduling, rollout of mammography tools, and critical test results management functionality.

Modern Healthcare readers vote President Obama the most powerful person in healthcare. Lots of politicians and policy wonks fill out spots 2 through 100 on the magazine’s annual ranking of the 100 Most Powerful People in Healthcare. Rumor has it that Mr. H came in at #101.

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?

First, let me offer my apologies to all, especially Mr. H. and Inga, for the heinous length of time between posts. It won’t happen again.

It’s been an interesting time with multiple industry-shifting M&A transactions (but not much in the way of public equity activity). The big question on everyone’s minds these days is not “Who is Salt?” but rather, “What is Ingenix?” (a) a drunken sailor? (b) a whale at the HCIT casino? (c) just too darned wealthy? (d) a genius assembling parts in a way that has yet to become clear? I would submit it’s actually (e), all of the above.

Let’s take each in turn. Ingenix, as all likely know by now, is the wholly-owned IT subsidiary of UnitedHealth Group, one of the largest publicly traded managed care companies. Mr. HIStalk himself recently posted a list of its recent buys.

The first thing that’s noteworthy to me is its dramatic movement from only managed care-focused companies — such as Symmetry, Claredi, or AIM — towards first the hospital business office (CareMedic, Executive Health Resources) and then towards the clinical side of the healthcare system (Picis and, most recently, Axolotl).

When Ingenix tried to buy managed care claims system vendor TriZetto a few years ago, it was going to make the questionable bet that its competitors would purchase their core systems from them. A stretch, but one with precedent. Now it’s betting that hospitals and physicians will not only pay real money to the Great Satan of Managed Care, but that they’ll entrust their clinical data to it as well.

(A provider-focused HIE vendor I know was recently licking their virtual chops over the prospect of selling against a managed care company. Even consumers will likely start to wonder if they want UnitedHealthcare to have the moment-by-moment deep clinical data inherent in some of the recent purchases).

Let’s talk valuation for a moment. As a buyer, Ingenix is, in many ways, ideal for a number of reasons. First, recall that by SEC regulation, public companies have to disclose any material information to their shareholders. The definition of material, however, is open to some debate.

When you’re owned by a company with a $35.5 billion market capitalization that expects to generate $5 billion of cash this year, materiality is a blessedly high bar (by way of comparison, Cerner’s total market cap is $5.7 billion). What this means is that outside shareholders can’t second guess the prices paid. It is, in effect, like a transaction between private companies.

Let’s imagine for a moment that Eclipsys was a private company. Because of their relative sizes, Allscripts still would have had to disclose the purchase price. It would also have been held, at some level, accountable to its shareholders for what it paid, imposing an additional layer of market discipline. Ingenix/United, in contrast, doesn’t view any of its acquisitions in the space as financially material, which no doubt helps loosen the purse strings.

An even better attribute in a buyer than ability to remain silent is ability to pay. At the time of its last earnings release (Q2), Ingenix’s parent United raised its guidance for cash from operations by $200-600 million (or almost as much as CPSI’s enterprise value). I’m sure Bill Gates’ kids would concur — when your parent generates that kind of money, you can pretty much buy what you want if they’ll let you! So when your business generates cash of almost $14 million per day, money is just not a problem.

Now I wonder is this a casino whale or a drunken sailor? One smart HCIT company president opined to me that this characterization was offensive to drunken sailors everywhere, but perhaps he’d just been outbid. Personally, I’m leaning towards whale. Unlike Misys in the 90s, United clearly understands healthcare and Ingenix clearly understands HCIT. Even some of the prices paid, if scuttlebutt is to be believed, aren’t totally irrational (though they are unquestionably aggressive).

Let’s consider Picis as an example. The company was widely rumored to have sold for about 3x 2009 revenue or about 12x 2010 EBITDA. By way of comparison, Eclipsys is selling to Allscripts for 2.1x trailing revenues and 10.5x forward EBITDA. Who’s getting the better deal? Eclipsys has a much broader product offering, but Picis’ products have great depth in the few areas of the hospital in which it plays. Both companies are coming off difficult years with fairly robust growth forecasts. Both have a great ARRA/Meaningful Use story to tell, which pushes their multiples upward.

Bottom line, to me, it appears to be a very aggressive, but not totally absurd price. Now, on the pricier side, Executive Health Resources was purchased for over $1 billion, and I’ve heard Axolotl went for as much as 9x trailing 12-month revenues, which seems a different story.

Finally, there’s the matter of motivation, which I expect is multi-fold. I have no doubt that there’s a grand strategy at play here that will be likely be revealed by the company once the pieces are assembled. But in addition to that, each year the operational dollars that are deployed towards these IT solutions are almost certainly to be counted towards patient care (as opposed to other business purposes). This will have the effect of making the optics of its medical loss ratio appear more attractive to government regulators. Further, I believe there will ultimately be some actual patient care improvements in many cases.

Ordinarily I’d say time will tell if the prices paid are fair, appropriate, or even reasonable; but in this case absent a total implosion, lack of materiality will likely make it difficult ever to learn. I’m aware of a few assets that Ingenix is on the hunt for. I’m sure, to their current shareholders, that the price paid will quite material indeed.

Ben Rooks is the founder of ST Advisors, LLC, a consultancy which works with HCIT companies and their sponsors typically on issues around strategy, financing and outcomes/exit planning . He earned an MBA in healthcare management from The Wharton School of the University of Pennsylvania, was a leading healthcare IT equity research analyst and then worked as an investment banker in over 25 successfully closed healthcare and medical technology transactions valued from $40 to $365 million.

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From The PACS Designer: “Re: Yale’s Epic cost. $250 million!” TPD, who tells me he works for Yale in some capacity, sent over a copy of the Certificate of Need response for Yale New Haven Hospital’s Epic implementation. No wonder it took them awhile to find the money.

From Anon: “Re: VA and DoD. I’m not sure Epic is the frontrunner, but I think you are close. InterSystems is the likely winner with their TrakCare product. Take a poke around and see the massive size of their new implementation workforce and the sizable country-based contracts. It’s worth noting the rumor that InterSystems is allowed to sell Trakcare in only two ways to avoid waking the sleeping Wisconsin cash cow: outside the US and to the US government.” Interesting … InterSystems is strong at integration and of course has endless expertise in Cache’ and MUMPS, not to mention that as a big and very profitable company can probably make believable promises to the military. I notice they’ve also been steadily increasing their annual lobbying expense, over $200K in 2009 and much of that going to VA database issues. InterSystems acquired the Australia-based TrakHealth in 2007, rolling the Web-based enterprise system into their integration and HIE offerings. You may be on to something. Even if not, I like your thought process.

From Soliloquist: “Re: Epic and the DoD. I just can’t see a scenario for this working. This would be the ultimate culture clash, as you state. I also am having trouble envisioning how the government could take the heat for forking over billions for such a system. It wouldn’t fly when the media got wind of the deal and Epic would be unwilling to cut a deal. They don’t need the business.” See new poll to follow.

From Book ‘em Danno: “Re: HIMSS and Forbes HIT magazine insert. A full-page ad costs $37,000. The lowest price option is a 1/6 page ad for $7,000.” Verified – BED forwarded pricing information.

From Traveler: “Re: Siemens. I heard they are buying [surgery software vendor’s name omitted]. Have you heard anything?” I e-mailed John Glaser now that he’s in charge at Siemens, but I haven’t heard back so far. I’ll leave out the vendor’s name for now since it annoys me that unscrupulous competitors immediately start flashing the rumor to prospects to create FUD, but I’ll update when/if I hear.

From CTCIO: “Re: two Connecticut academics lose data. Our attorney general is on it!” A UConn laptop containing information on 10,000 undergraduate applicants is stolen from an IT department cabinet. Then came another stolen laptop at Yale School of Medicine, that one with information on 1,000 patients. Encryption was not mentioned in either case.

From Irene: “Re: LTC. I am the VP of IS for a small non-profit that serves adults the ages of 20-60 with severe physical disabilities. Although the organization falls under the Long Term Care regulations and is almost solely Medicaid reimbursed, the consumers are not typical of a LTC skilled nursing facility (frail elderly). Average length of stay is 10 years. We are entering work for EHR readiness and I am looking for any/all vendors that implement solutions outside of the Acute Hospital space, that have flexibility in their design and integration between clinical and financials, and ability to data warehouse long term health data. Any information would be appreciated.” If you have advice for Irene, please leave a comment.

From BackToOurRoots: “Re: EncounterPro EMR. Going open source. Wondering what this means for their current customers …” I don’t get the strategy even after reading their reasons the product went open source, only a couple of which seem to be relevant.

From WNA Wannabe: “Re: paperless at the VA.” What a strange story … a VFW claims representative makes “a unilateral decision to go paperless” and shreds all the files he has without making electronic copies. Or at least that’s the claim – the story gave me headache as everybody involved in handling the paperwork of veterans seems to blame everyone else for missing documents that are shuffled from one group to another. I didn’t realize that VFW helps veterans with that kind of paperwork, either. Paperless, done right, would be an apparent improvement.

From HITGeek: “Re: NHIN. See Twitter #newNHINnames.” Some pundits make up witty NIHN replacement names. My acronyms are always sophomoric semi-profanities, so I’ll keep quiet even though mine are funnier.

It seems that we can never reach consensus on the CIO education issue, still divided equally among “it doesn’t matter", a BS, or an MS. New poll to your right: would Epic be a good replacement for the DoD’s AHLTA?

A reader sent over the paper evaluating hospital EMR usage in California, which concluded that EMR usage was associated with higher costs and lower nurse productivity. The methodology was as I expected and have seen in other studies conducted by people outside of healthcare (the authors are business school professors): take some conveniently available but questionably useful databases, match them up, and try to find generalizable conclusions. It just didn’t work for me. The analysis started with the HIMSS Analytics database (which I wouldn’t trust too far since it’s a self-reported sampling), assumed that EMR implementation started a year after contract signing since that date wasn’t known, and then matched that information with cost and nurse staffing databases. It covered nine years and ignored all other relevant events that occurred during that time (mandatory nurse staffing laws, changing reimbursement, individual hospital quality improvement projects, shift of patient load from inpatient to outpatient, etc.) Some of the conclusions make the data relationships questionable: EMRs were associated with reduced nurse overtime, sophisticated EMR usage was associated with higher costs and longer stays (ignoring the fact that certain kinds of hospitals are more likely to be sophisticated EMR users), and high-level EMR usage increased complications but decreased mortality. EMRs are categorized only by usage level, not how well they were implemented, what level of integration they have, and which vendor’s product was involved. And of course, the biggest problem: “associated with” is a long way from “caused by.” I just can’t get excited about the article, but if you can, feel free to send in your analysis.

The same primary author, by the way, used similar survey data noodling to conclude that EDs with sophisticated EMRs have a lower length of stay for eventually admitted patients by nearly 25%, but admitted another finding that seems to invalidate the entire premise: basic EMRs didn’t really help. I’m not buying that, either. I’d be more convinced by a short-term, one-hospital case study that measured LOS before and after an EDIS implementation. I’d also be highly wary of assuming that inpatient admission times reflect ED efficiency (instead of inpatient efficiency in having available beds, for example).

Cerner adds nearly 400 employees so far this year, bringing their total to 5,185. 

CEOs of the five largest health insurance companies made $200 million in 2009. Cigna’s outgoing CEO got $111 million in retirement benefits, while the not-retiring CEO of UnitedHealth Group received salary and options worth $108 million. Apparently those of us actually working in non-profit hospitals made the wrong career choice in choosing to deliver care rather than administer it, although wildly overpaid CEOs are hardly unique to healthcare.

Maybe the folks at Zacks Investment Research need to update their spell check dictionary.

Another stolen laptop containing patient information, this time from Cook County Health and Hospitals System. They vow to review encryption practices. Honestly, can’t someone come up with an encryption method that’s easy to implement and invisible to the end user? Organizations clearly understand the value of encryption but aren’t doing it, so that tells me it’s too much of a pain.

E-mail me.

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