Time Capsule: Hospitals Need to Learn From Failed Transformation Missions

I wrote weekly editorials for a boutique industry newsletter for several years, anxious for both audience and income. I learned a lot about coming up with ideas for the weekly grind, trying to be simultaneously opinionated and entertaining in a few hundred words, and not sleeping much because I was working all the time. They’re fun to read as a look back at what was important then (and often still important now).

I wrote this piece in March 2006.

Hospitals Need to Learn From Failed Transformation Missions
By Mr. HIStalk

Michigan’s Trinity Health has put its seemingly successful $315 million clinical system implementation on hold. The announced reason: it is fine-tuning its plan to drive clinical improvements and implement evidence-based medicine.

The industry has been hard-selling “clinical transformation” for years. Hospitals repeat the mantra dutifully, although none ever seem to declare themselves transformed. Like vendors’ claims of integration, it’s always just around the corner. Post-implementation hospitals aren’t necessarily improved clinically or financially. The only predictable transformation is that hospital dollars unfailingly get transformed into vendor dollars.

Who do you blame? Surely not all vendors and hospitals are incompetent. Is clinical transformation (assuming such a thing exists) simply impossible to manage successfully? Maybe the best analogy is the space shuttle.

The space shuttle orbiter is supposedly the most complex machine ever built, despite its now-antiquated technology (there’s a parallel right there). It’s not just a flying machine – it’s an industry of pork-barrel politics, fat-cat contractors, jobs, and national pride. Somewhere in the mix might be a smidgen of science that bears little resemblance to the original promise of an inexpensive fleet self-funded through technology commercialization. (Tang, anyone?) We walked on the moon, but settled for a scientifically irrelevant low-orbit taxi.

Like the space shuttle, clinical system projects rarely unfold as optimistically planned. They require painstaking planning, unerring execution, outstanding change management, and unwavering focus. None of these are strengths of the typical health care organization. Instead of a handful of astronauts, thousands of busy employees have to be convinced to change their comfortable routine. When the going gets tough, the formerly committed VPs disappear and leave the battle to the IT techies.

Sometimes the project explodes while you watch, like Challenger or Columbia. Even when it doesn’t, interest wanes once the flashy launch is over.

If the shuttle crashed 90 percent of the time it took off, would we keep launching and irrationally hoping for success? No, we’d send the engineers back to the drawing board, or maybe even get some new engineers, or ground the program. Or, perhaps we’d just declare the whole thing undoable and settle instead for a high-value subset of the grand plan more within the scope of our capabilities.

Where hospitals are different from the space program is that we don’t learn from the industry’s widespread failures. Hospitals quietly shell out precious millions and unreasonably hope that they’ll find the success that has eluded a long string of predecessors buying the same short list of products. Reality eventually sets in, expectations are lowered, and attention moves on to something else.

Sometimes imaginary victory is declared at the HIMSS conference, proclaimed by ventriloquist vendors whose lips barely move when their customer speaks. One thing is certain: you’ll seldom hear a discouraging word from consultants, member groups, or rah-rah magazines. They make money from the illusion of mass success.

We need success stories that go beyond a glitzy lift-off. We need someone to actually be transformed, not just implemented, and for those who weren’t transformed to tell us what went wrong. The path to clinical transformation is lined with the smoking debris of earlier missions, each of them offering lessons for those willing to listen.

News 5/13/11

Top News

VA CIO Roger Baker, who advocates an open source approach, tells a House committee that replacement of its VistA system with commercial software would cost $16 billion. But in a good example of bad timing, the GAO says the VA’s historically weak project oversight caused a $127 million appointment scheduling application to fail.

Reader Comments

From Court Jester: “Re: Society of Hospital Medicine. Here’s a picture of the action at the SHM meeting.” The action looks a bit light, but perhaps the picture is deceiving. SHM expected 2,500 physicians to attend the four-day event in Dallas.

From Bmore: “Re: Johns Hopkins. I know they have an old version of Epic scheduling, but has Epic always been its own job category? Or is this a sign of something to come?” I’d speculate B, despite no announcement so far. One thing I’ve learned about Epic: there isn’t always that dramatic moment of taking the two vendors of choice down to one and then heading off for extended contract negotiations, followed by the big public lovefest. Somehow, everybody sees the Epic demos and just assumes it’s a done deal, often gearing up for the project even before a contract is signed. I thought Cerner’s Vision Center was the ultimate mass hypnosis selling machine until people started telling me about being bewitched by Epic, with any IT-advocated precautions thrown to the wind as the operational people salivate at kicking out the incumbent vendors at any price and maybe taking down what they see as an unresponsive IT department along the way. That may just be my inaccurate perception, so please weigh in if you’ve been run over by the Epic train at your place.

From BadgerGrandma: “Re: Epic. A few weeks ago, attendees at Epic training were told that this was the biggest week ever, with over 1,000 people onsite for training.” It would be an interesting case study to review how formerly tiny, privately held Trojan horse Epic came late to the inpatient game, then in less than 10 years, totally ate the lunch of everybody in their target market of large academic medical centers. Cerner gets an occasional sale and Allscripts is doing recently better than Eclipsys did at selling Sunrise (which isn’t saying a whole lot), but that’s about it, at least unless the only hope of a worthy contender (Soarian) can move from nice idea to significant sales. It violates every economic principle that competitors haven’t developed something equivalent or superior to Epic without its high price. They’ve just handed the market over to Judy without a whimper, with customers happily plunking down dozens or hundreds of millions of dollars, in some cases replacing systems whose contract ink is barely dry.

From Just a rumour: “Re: Epic. Heard that Lakeland in St. Joe, MI signed up. No reference on their site.” Unverified. Actually, I’ll call it verified since I found the item above in their physician newsletter.

From Rodeo: “Re: hospital hiring. Are they going crazy? I’ve had 10 calls and e-mails from recruiters who dug my resume out of the dungeon – it isn’t posted anywhere. Is May 1 a significant date?” My phone is ringing a lot too, and I dread new LinkedIn connection requests because they’re always from recruiters (my magnetism is apparently entirely occupational).

From Clyde Dale: “Re: Siemens. A. Gregory Sorensen, MD. Director, Center for Biomarkers in Imaging Associate Director, Martinos Center for Biomedical Imaging at Mass General. Going to Siemens to head up Med for US/ Canada.” Verified by Siemens.

HIStalk Announcements and Requests

Welcome to new HIStalk Platinum Sponsor Practice Fusion, vendor of the free, Web-based EHR that Brown-Wilson’s Black Book ranks as the #1 EHR product in customer satisfaction among primary care specialties. The company announced last month that its product is now used by 80,000 medical professionals managing 10 million patients, with another one million patients being added monthly. They say “Live in Five,” meaning users can start charting within five minutes of signing up, using the provided test data for practice if they want. Total cost is $0, which includes patient import, specialty modules, lab integration, scheduling, billing, a connected PHR, e-prescribing, and free unlimited US-based support. Thanks to Practice Fusion for supporting HIStalk.

Here’s a Practice Fusion video I found on YouTube, with a user (and Desert Storm veteran – thanks for your service, Doc) doing all the talking.

I mentioned that I would be showcasing (at the suggestion of readers) small, innovative companies you might not hear about otherwise. Around 40 companies applied, my volunteer committee (provider, investment banker, financial services VP) chose nine to participate based on size and perceived level of innovation, and I have the first one nearly finished. The end result will be a company profile, interview, customer statement, and a pitch video. I was already overwhelmed, devoid of free time, and definitely not looking for new work, but this seems worthwhile.

The things you do for love (of HIStalk, hopefully): (a) sign up for e-mail updates to your right, giving me direct access to your brain jack so I can project my electronic power of suggestion; (b) send me news, rumors, secret documents, comments, and guest articles; (c) connect with HIStalk, Inga, Dr. Jayne, and me on your favorite social not-work; (d) peruse with wide-eyed wonderment the mosaic of ads of sponsors who support the “HIT information wants to be free” concept by supporting my endless toil, and who would greatly appreciate in return clicks and/or consideration if you are in the market for that which they offer; and (e) beam occasional positive karma our way since we don’t go public with our fears, mistakes, and disappointments, but we’re loaded with them just like everybody else. And for you, a double-barrel index finger point (I’m thinking Isaac the bartender on Love Boat since I’ll be mentioning Doc down the page) — thanks for reading.

Acquisitions, Funding, Business, and Stock

Cerner will acquire Resource Systems, the 30-year-old Concord, OH company that sells CareTracker, an electronic documentation system for skilled nursing and assisted living facilities.

HCA launches Parallon Business Solutions, a business services subsidiary that will offer services for revenue cycle, workforce management, supply chain, and group purchasing.

Secure healthcare network vendor Ability Network (formerly VisionShare) closes on nearly $20 million venture capital, led by Lemhi Ventures and Bain Capital Ventures.

Cleveland Clinic spinoff Explorys closes $11.5 million in Series C financing. The company’s cloud computing data warehouse aggregates and curates EHR data from multiple systems to allow population analysis, with customers that include Cleveland Clinic, MedStar, Summa, and MetroHealth.

Sales

Anthelio Healthcare Solutions (formerly PHNS) contracts with MedQuist to implement its DocQment enterprise platform at eight of its client hospitals.

The New York City Health & Hospitals Corporation signs a five-year, $20 million support contract extension with QuadraMed for the QCPR inpatient clinical system.

People

GE Healthcare’s Health Systems division CEO Omar Ishrak is named chairman and CEO of Medtronic, replacing the retiring William A. Hawkins. He’ll be replaced at GE by Tom Gentile, moved over from GE Aviation. The division sells medical technology, such as CT, MR, life support systems, and home health. GE also announces that it has created a new business called Global Services that will take over GE Healthcare’s services strategy, to be led by North American services leader Mike Swinford.

Announcements and Implementations

Business analytics software vendor SAS forms the SAS Center for Health Analytics and Insights, an internal incubator that will focus on applying analytics to patient data with the goal of improving healthcare quality and lowering cost. Areas of interest include evidence-based medicine and cost analysis. To which I’ll also add for you PR types: this is how press releases should be written — short, straightforward, chunked into easily readable paragraphs, and not turned into mind-numbing mush by overzealous, trademark symbol-wielding marketing people determined to collectively suck the life out of what started out as something interesting.

Corepoint Health’s integration engine receives ONC-ATCB Modular Ambulatory EHR and Modular Inpatient EHR certification.

Crystal Cruises goes live with Emergisoft Maritime, an EHR specifically for cruise ship crew and guests. I’m picturing the sleazy, shorts-wearing Doc from Love Boat (c’mon, you know you want to sing it with me: “Loooove, exciiiiiiting and new …”) having even more time to letch around with bimbettes half his age, apparently unrestricted out there in international waters of any ethical or legal concerns that would prohibit him from putting his smoove moves on patients.

Government and Politics

CHIME and AMGA announce their opposition to several provisions in the proposed ACO rule. CHIME objects to a privacy provision that would allow patients to opt out of data sharing while maintaining their ability to see primary care physicians within the ACO. It also takes issue with the requirement that 50% of an ACO’s primary care providers must meet MU standards by the ACO’s second year. Meanwhile, AMGA says 93% of its members would not enroll in an ACO based on the proposed framework, which AMGA considers “overly prescriptive, operationally burdensome.” Top concerns center around risk-sharing, static risk adjustment, retrospective attribution, quality measurement, and minimum savings.

In the UK, Prime Minister David Cameron says the government may cancel some or all of CSC’s $5 billion contract to install iSoft’s Lorenzo. CSC has been threatened previously for missing deadlines, and if it finally gets the boot, only BT will be left of the original four big contractors (Accenture and Fujitsu already bailed and were fired, respectively).

Innovation and Research

A University of Arizona study finds that 72% of the software used by retail pharmacies in the state cannot detect all significant drug-drug interactions.

Other

Thirty-four percent of all office-based prescribers were using e-prescribing by the end of 2010. Cardiologists had the highest adoption rates (49%) followed by family physicians (47%.) Providers created 326 million e-prescriptions in 2010, up from 190 million in 2009.

The Triangle/Eastern NC Chapter for the Juvenile Diabetes Research Foundation recognizes Allscripts and EVP Diane K. Adams, who along with CEO Glen Tullman, has family members with juvenile diabetes. Allscripts has contributed over $1 million to JDRF since 2004.

Weird News Andy celebrates what he calls “the breast app ever!” A plastic surgeon develops an app that uses 3D imaging to allow prospective breast implantees to visualize their new protuberances, followed by easy posting of the “check these out” pictures directly to Facebook so that cyber-acquaintances, business associates, and elementary school aged nieces and nephews can weigh in on the proposed alterations.

This came in my work e-mail from some vendor. Somehow I don’t have a lot of confidence in their “HIPPA” wisdom.

SCI Solutions provides laptops and cash donations from its employees to a project run by some surfer buds (one of them SCI SVP Vinnie Whibbs) and some non-profits to provide resources to students and for community projects at Playa Gigante, Nicaragua.

The LBJ School of Public Affairs and the Patient Privacy Rights Foundation will hold the one-day Health Privacy Summit: Getting IT Right: Protecting Patient Privacy in a Wired World on June 13 in Washington, DC, a public forum to address health privacy. Speakers include quite a few folks from government and academia, along with HIT-recognizable names Barry Chaiken (former HIMSS board chair and Imprivata CMO), Mark Frisse (Vanderbilt), Deborah Peel MD (founder, Patient Privacy Rights), Joy Pritts (chief privacy officer, ONC), Michael Stearns (president and CEO, e-MDs), and Latanya Sweeney (the Carnegie Mellon professor who proved that it’s not that hard to re-identify de-identified data when you match it up to a second database). Registration is $100 general, $75 government or academic, and $50 for students. I’d go if it wasn’t tough to get time off from work on relatively short notice, so if you’re attending and want to report from there, do it.

A coroner in Australia rules that a woman’s death after gall bladder surgery was due to medical error. Her gall bladder had been removed 10 years before, but radiology staff misidentified intestinal gas bubbles, the surgeon overlooked the medical history entry about her previous surgery, and everybody noticed but nobody questioned the scar on her abdomen. She died of post-surgical sepsis. Her granddaughter says she hopes the medical system will change so that clinical documentation is shared among physician practices and hospitals.

Sponsor Updates

• Onze Lieve Vrouwe Gasthuis hospital in Amsterdam deploys iMDsoft’s MetaVision to provide tele-intensivist monitoring.
• Moore Regional Hospital (NC) picks ProVation MD for gastroenterology procedure documentation and coding.
• CareTech Solutions launches iDoc Savings Calculator, which estimates savings from implementing its iDoc document imaging and management product.
• Universal American Corp., a Medicare health benefits company, collaborates with NextGen to offer participating physicians access to NextGen’s EHR in multiple markets
• The Texas e-Health Alliance appoints ICA CEO Gary Zegiestowsky to its board.
• The Centre hospitalier Pierre-Janet in Quebec adopts the Vocera voice communication system.
• DIVURGENT announces new hires: Matt Curtain (client services VP), Sarah Rourke (recruiter), and Christina Pena Jones, DHA, (nurse educator).
• Nashville-based iPractice Group will resell Greenway’s PrimeSUITE.

EPtalk by Dr. Jayne

The Centers for Medicare and Medicaid Services (CMS) recently launched the first phase of its Physician Compare Web site, which is supposed to display physician address information, medical education, credentials, gender, etc. as well as whether physicians reported quality data to CMS.

Like any good Internet junkie, I of course had to search myself. Not surprisingly, my listing has errors, as does the listing which appears below mine alphabetically (it happens to be a former colleague of mine whose details I know as well as my own).

My listing includes a practice address where I haven’t provided patient care for more than four years, as well as practices where I have never provided care. There’s even a location listed for me that belongs to a practice that used to be owned by my group, but was sold more than a year ago.

This does not give me great comfort in the skills of CMS to accurately portray my ability to report quality data (especially since they can’t accurately portray my address). Phase Two of the site will launch later this year and identify whether physicians are e-prescribing or not. Quality data will be available by 2013. I hope in that time frame they can figure out where I practice.

Speaking of government, for those of you who missed it, Newt Gingrich is officially seeking the Republican nomination for President. Gingrich has been dabbling in the healthcare space for some time, largely through his for-profit Center for Health Transformation (CHT), so this should be interesting.

CHT has a white paper about Accountable Care Organizations that features some well-known examples of ACO-type organizations. It’s pretty basic, but a decent read for those that need a quick study of ACO 101.

Newt’s proposed healthcare reforms are detailed on his Web site and include rewarding quality care, incentivizing health behaviors, stopping fraud, and educating patients on price and quality. For those of us in healthcare IT, the good times will continue to roll as there is more and more focus on data mining to support these efforts.

By the time the 2012 election rolls around, I’ll be sick and tired of the politics along with everyone else. On the other hand, I won’t have to worry about having enough material for HIStalk. Round and round health reform goes; where it stops, nobody knows!

Contacts

Mr. H, Inga, Dr. Jayne, Dr. Gregg.

HITlaw 5/11/11

Termination Means Never Having to Say You’re Sorry, Right?

A good learning situation sprang to the forefront of my creative thoughts the other day. I was representing a great EHR vendor (a great client and a great EHR) in a substantial deal and ran into a surprising request from opposing counsel regarding the default / termination process and procedure. In the end, the issue was resolved quite simply and quickly by taking a different path, but I will save that for the end.

The provider / customer side did a very good job of establishing certain milestone events, such as the operational date for e-prescribing, the vendor’s EHR certification deadline, and go-live for the then-certified EHR. Kudos to them because they set the bar precisely where they needed it. The vendor realized the importance and accommodated.

You can guess where this is leading. Failure to meet a milestone event gives the client the option to terminate.

A very straightforward default procedure was included in the standard vendor agreement — one party provides written notice to the other regarding any alleged default, then the supposedly defaulting party has 30 days to cure the problem. If the problem is not cured at the end of the 30-day period, the party that alleged the default has the option to terminate the agreement.

Termination was specifically addressed to include terms such as:

• All licenses granted terminate and all rights automatically revert to the granting party
• Payments due at date of termination must be made within 30 days of termination
• Each party returns the other party’s confidential information, including the software and all associated documentation

Simple, no? No.

The other side wanted to bifurcate the issue and create two sets of “termination” procedures. The first (same as above) required that all licenses and rights granted under the agreement return to the grantor and the agreement terminates. Everything is over and done and the parties go their separate ways. The second proposed that there were conditions where the agreement could be terminated due to certain actions of the customer/user, but that the EHR software would remain in use by the customer/user.

It took two document turns, some polite but blunt e-mails, and two conference calls to assure the negotiators on the other side that there was no scenario under which the license could be terminated and the customer could retain use of the software.

For those of you shaking your heads in amazement, there was credible rationale behind the request, which was basically, “We understand the need to terminate absolutely in most situations, but we don’t want the vendor to be able to walk away for seemingly small issues that could rise to the level of default.”

The conversation between us attorneys at the end went very quickly. If I would add language stating that termination of ongoing maintenance support is at the customer’s option, and that terminating maintenance will not terminate the licenses and other rights granted under the agreement, then we would be all set and the default / termination provision would be acceptable as drafted.

That was it. All we needed was a clarification on maintenance cancellation and the whole issue was put away.

As for me, familiarity with an agreement sometimes begets a comfort that anyone picking up the agreement immediately adopts your perspective and interpretation of the terms and conditions. Not always the case — sometimes I need a reminder.

Lessons for the Day

In the SaaS model, there is no separate license fee and maintenance fee. Both are rolled into the recurring subscription fee. Termination means termination. Everything is over. No access to the software, no service, no maintenance.

On the other hand, in the perpetual license model, the ongoing maintenance features and obligations can be cancelled separately.

Note that I used the term “cancellation” to make a point. The customer in this model pays the fee for perpetual use of the software. Cancelling maintenance does not (should not) alter in any way or manner the license of use previously granted to the client. But general termination is the same in both models — terminate the entire agreement and you terminate use of the software.

Finally, what you believe is plain understandable language might not be to everyone. So keep the terms (and with respect to termination, options) clean and clear in your agreements. It saves time and money up front and in the long run by eliminating confusion.

Please note the above was intended to be short and sweet. There are many other issues that pertain to termination, such as transition services, data extraction, and historical system access — the list goes on. My point is straightforward. Keep it clean, clear, and above all, understandable. If termination, then XYZ.

William O’Toole is the founder of O’Toole Law Group of Duxbury, MA.

News 5/11/11

Top News

Q2 numbers for Nuance: revenue up 17%, EPS $0.01 vs. -$0.05. Revenue was up 13% in healthcare, its largest segment. The company announced that it will acquire document management and print management solutions vendor Equitrac for $157 million in cash. NUAN shares hit a 15-year high Monday on rumors of a potentially expanded relationship with Apple.

Reader Comments 

From MEDITECHer: “Re: Howard Messing. Wins the town’s annual award.” Meditech’s president and CEO wins the annual community service award from Town of Westwood, MA, where he has lived for 21 years and for which he has served on several committees and provided technology expertise. Meditech long-timers are definitely give-back types.

From ArkieHorn: “Re: JPS Health Network. The CIO resigns only a few months after taking on the full-time role from his interim role. The tax-supported hospital in Fort Worth selected Epic to make MU in 2009. Rumor has it they contracted with Accenture for a CIO to manage the Epic project … also being implemented by Accenture. The fox is in the house.” Unverified.

From Anonymister: “Re: Alameda County Medical Center, Oakland, CA. A nice article on turning around a failing public hospital.” Fast Company profiles ACMC CEO Wright Lassiter III and calls him a “medical wonder” in turning around the “shockingly mismanaged” inner city hospital (as its tenth CEO in 11 years), which is mostly remembered for a patient beating one of its doctors to death and “nurses who followed doctors’ orders only when they felt like it.” Lassiter brought in a new management team, cut costs, fired underperformers, and got union concessions (and signed up for Soarian, as we just mentioned). I like that he holds an MHA instead of the more common and less healthcare-specific MBA. His stated goal:

I want to make this place as good or better than the private hospitals. I believe ACMC has to be a real third choice in this community, a place where an elected official or a corporate executive would come for care. It’s not just the quality of medical service; it’s the helpfulness. Are people looking you in the eye and saying, “What can we do for you?”  — anticipating your needs, instead of saying, ‘’Just go in the corner and wait. We have too many people to deal with today.”

From Coolio: “Re: physician practices. There is strength in numbers. It is hard for an independent physician to leverage size while negotiating reimbursement contracts (and even larger organizations often do not use their decision support applications well in determining whether a contract makes sense). Independent physicians are just at a disadvantage when dealing with payors. Plus, is it really worth being on call every night or every third night? And not being able to spread back office costs among more providers? That is a question for physician to face. (And it’s the primary care doc who usually loses out.) For years and years, hospitals have focused on physician outreach and links/alliances (for referral business). Software apps are one of those links. Why would a physician want the headache of implementing an EHR with clinical content tailored to her practice when she could share the cost of it?”

From The PACS Designer: “Re: using iPhone for dictation. Another iPhone app that looks interesting is one that provides dictation capabilities. Not sure how accurate it can be, but with the development of an iPhone dictation platform by Integrated Document Solutions called Voice2Dox, it’s probably worth a try in clinical applications.”

 HIStalk Announcements and Requests

I thought it odd that Reuters cited “particularly weak” Medical Manager sales in its review of Sage Healthcare’s recent performance. I didn’t think Medical Manager would have that much influence considering that Sage’s go-forward product is Intergy, but I figured Reuters must know something I don’t. Turns out they don’t — my Sage executive contact tells me that Medical Manager hasn’t been actively sold for quite some time, even though Sage continues to support and enhance it. I’m not sure what Reuters was thinking.

Listening: Shinedown, Leave a Whisper. Solid, radio-friendly hard rock from Jacksonville, FL.

Acquisitions, Funding, Business, and Stock

Elsevier acquires Fisterra. com, a Spain-based clinical reference solution.

Microsoft will acquire free phone calls software vendor Skype for $8.5 billion, its largest acquisition ever. My reaction: (a) they’re paying way too much for a company that has always managed to lose money even with high penetration and big revenue, maybe just because they didn’t want Google to end up with it; (b) most Skype users don’t pay anything, and have plenty of free alternatives to prevent MSFT from simply charging for its use, so the best use of it will be as an add-in to other MSFT offerings; (c) it’s kind of bittersweet to remember when Microsoft was the brash innovator instead of the cash-rich, reactionary follower (remember when they wanted to pay eye-popping dollars to buy the hoarily irrelevant Yahoo, which has dropped something like two-thirds in value since then?); and (d) as an occasional Skype user (I use it for doing interviews) and I hope they don’t mess it up.

I’m suddenly getting e-mails from some pay-membership site aimed at healthcare CIOs, but apparently written by folks with limited understanding of healthcare IT and English as a first language. Here’s a sample: “Wolters Kluwer’s Buys Lexicomp: An Acquisition of Importance to The Realm of Meaningful Use. Wolters Kluwer Health (WKH) acquired Lexicomp. What is the big deal? Why is this any different than say Allscripts and Eclipsys?” It misspells both company names in the headline, mangles punctuation in several creative ways, and throws in some truly puzzling choices of wording (you don’t often see “What is the big deal?” in an article aimed at executives – that odd wording made me immediately think of SNL’s wild and crazy guys, “After all, there is no other pair of Czech brothers who cruise and swing so successfully in tight slacks!”). The graphics are randomly chosen stock photos (like a Meaningful Use analysis featuring the Jefferson Memorial). The site takes great pains to provide no information about who owns it, where it’s located, or what the annual subscription costs (even on the signup form where you’re committing).

Sales

Muenster Memorial Hospital (TX) picks Custom Software Systems’ ChartSmart Electronic Medical Record for its critical access facility.

St. Joseph’s Hospital Health Center (NY) contracts with MedQuist for clinical documentation outsourcing services.

Advocate Trinity Hospital (IL) will use PerfectServe’s clinical communication system.

Dallas Medical Center (TX) chooses HMS’s EHR and remote hosting services from its HMS Direct subsidiary.

People

Netsmart Technologies names former Cerner EVP/COO Michael Valentine as CEO. He replaces the retiring James Conway.

iSirona appoints Polly Mulford, formerly of AHA, as VP of account management.

Cape Regional Medical Center (NJ) appoints Dianna Derignan, MD to the role of CMIO.

Precyse names Chris Powell to the newly created position of president. He was previously with GE Healthcare and IDX.

Former Hillcrest Medical Center (OK) CEO Steve Dobbs joins the board of advisors for PSCI, a provider of analytics and decision support tools.

Billing service provider MedData names Frank B. Murphy to is board. He is president and CEO of Perimeter Health Advisors and was formerly president and CEO of HealthPort Technologies.

I see from my LinkedIn updates that HIStalk friend Mark Andersen, former CIO at Yale New Haven who I think is doing consulting work now, is interim chief technology and health information office at University of Virginia Health System.

Announcements and Implementations

PwC earns top ranking in a new KLAS report on extended business office service firms, followed by Firstsource (MedAssist) and Deloitte Consulting. Providers said the most important factor in selecting and keeping a vendor is, not surprisingly, its ability to keep receivables low and cash collection high.

CSC announces that it has brought all prisons in England live on the SystmOne clinical software.

Other

A Florida woman diving for coupons in a recycling bin finds a variety of paper records from an oral surgeon’s office that contain medical histories and Social Security Numbers. The doctor could be penalized even though the documents were placed in the recycling bin in error. Quote from a patient: “Thank God for the coupon lady. Without her, anybody could have gotten their hands on this."

A hospital volunteer sues Longmont United Hospital (CO) after being hit by a food cart during her shift, causing a fall and a compression fracture. She wants more than $100,00 to cover medical expenses and “loss of enjoyment of life.” I personally have felt compelled to sue various folks (a couple of ex-boyfriends come to mind) for loss of enjoyment of life, but never took action.

Sponsor Updates

• Culbert Healthcare Solutions hires Jeff Wasserman to lead the company’s strategy and executive services team. He was previously with The Bard Group.
• Southeast Eye (GA) selects NextGen EPM PM and EHR for its eight-location practice. TSI Healthcare will provide implementation services.
• Surgical Information Systems (SIS) recognizes four clients with its 2011 SIS Perioperative Leadership awards for significant advancements in operational, financial, and clinical initiatives. The company also announces that Huntsville Memorial Hospital (TX) has selected the SIS system to interface with its current Meditech HIS.
• The Ohio Health Information Partnership selects Medicity to create the technology infrastructure for its CliniSync HIE.
• e-MDs is named a Tier 1 EHR vendor by the Kansas Foundation for Medical Care, the REC for the state of Kansas.
• Allscripts makes a strategic investment in clinical analytics company Humedica. The companies will collaborate to market Allscripts Clinical Analytics Powered by Humedica, a new module which Allscripts will integrate into its acute and ambulatory EHRs.
• MED3OOO wins 2011 top honors in customer experience and satisfaction among all EMR systems focusing on multispecialty clinics. Other top performers include NextGen Healthcare, Allscripts, Dr. First/Rcopia, Sage, Epic Systems, LSS Data, and Greenway Medical.
• Childs Medical Clinic (AL) successfully attests as Greenway Medical’s first client to receive payment for Meaningful Use.

Contacts

Mr. H, Inga, Dr. Jayne, Dr. Gregg.

Readers Write 5/9/11

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!

Nurse Buy-In Essential to ACO Success
By Lisa Reichard, RN, BSN

Though the healthcare technology landscape has changed greatly over the last 10 years, what the clinical nurse cares about most has not: delivering the best care possible to the patient. As National Nurses Week celebrates the caregivers that most would agree form the backbone of healthcare, it is interesting — as an RN who now works on the vendor side of things — to watch the leadership role of nurses evolve, especially in light of the policies behind accountable care. The ACO model will directly affect a nurse’s role at the bedside, or, as mobile technologies may have it, over the phone, via text, or by Skype.

The pending ACO model will be physician driven, true, but it must also include nurses and other providers to improve the quality of healthcare services and reduce costs. Regardless of whether an organization pilots an ACO, gets ready for the Medicare Shared Savings Program, or even chooses to wait and see how ACOs develop, the main cornerstones of ACOs — assumption of clinical risk, improvements in quality care measures, and decreasing costs — will be required of all organizations as the healthcare industry moves through reform. Therefore, nurses will be required to enhance their overall accountability and embrace the role of patient advocates in the ACO model, especially with regard to management of patients’ chronic conditions.

As CMS statistics show, 75-80% of healthcare costs are related to chronic conditions. The impact of the clinical nurse on continuity of care, from emergency room to clinic or physician office to home care, will be crucial to accountable care’s success. So how will this need for greater accountability work its way into a nurse’s already pressure-filled shift? How can administrators, doctors, payers, and even vendors get a nurse to buy in to an ACO?

Vendors tend to emphasize new technology and cost containment surrounding ACO policy as the biggest pieces of the pie when going into a clinical setting. It is important to understand, however, that at first glance, the clinical nurse may be inclined to view ACOs as roadblocks to patient care since they are used to the “treat the illness and hope that patients will comply at home” model now in place. This is where vendors and policy makers can point out and emphasize the benefits of the ACO model – improved patient outcomes and higher quality patient care, which, after all, are what nurses value most.

The time is ripe for nurses to take the lead in defining the way ACOs will deliver. Opportunities abound, including:

• Identifying patients at risk for 30-day and multiple readmissions;
• Assisting in developing clinical criteria and benchmarks around “The Right Care At The Right Time,” which is central to ACOs;
• Increasing the usage and compliance with regards to home monitoring devices;
• Ensuring timely care coordination between hospital and community-based providers;
• Involving nurses as change agents to improve quality indicator scores;
• Taking an active role in delivery models that focus on ongoing care coordination and resultant evaluations of clinical and financial effectiveness;
• Developing nurse peer groups and support around new technologies like EMRs and PHRs; and
• Helping with the development of quality measures not currently being tracked by CMS. These could include measures for the treatment of cancer, arthritis, osteoporosis, or chronic pain. It will be challenging to create outcome measures that capture all key attributes of successful treatments.

Vendors can assist in this process by walking in the nurses’ shoes, understanding their world and what is at the heart of their work — helping patients to get well and stay well. Coming from this angle of understanding and cooperation, friends will be made, and yes, care will even become accountable.

Lisa Reichard, RN, BSN is director of business development at Billian’s HealthDATA.

Meaningful Use: A Case for Choosing Cloud-Based Technology
By Russ Keene

On Monday, April 18, a moment that was once among the most hyped in recent health IT memory passed almost unnoticed. That day, the Department of Health and Human Services opened the process for physicians to attest to demonstrating Meaningful Use of an EHR system so they could qualify to receive Medicare incentive payments.

Of the estimated 95,000 physicians now using an EHR system, just 150 stepped forward to attest to achieving Phase 1 Meaningful Use measures.

What gives?

As Douglas Foreman, DO, one of those 150 physicians learned, demonstrating Meaningful Use isn’t difficult. In fact, he exceeded the requirements, and did so within the first 90-day eligibility period.

Foreman’s (and his staff’s) commitment to his patients and to meeting the Core and Menu Set requirements cannot be discounted. But a decision he made in 1997 to use a cloud-based practice management and EHR system gave him a head start.

The term cloud computing is a recent entry to the IT lexicon, but the technology has been around for a while. Cloud-based health IT systems don’t require client-server hardware or for physicians to install special software on each computer. They deliver advanced health IT capabilities through a simple Web browser. System maintenance and upgrades are included in a monthly subscription rate, and delivered seamlessly.

Foreman’s example offers a clear case for physicians to consider cloud-based technologies for their health IT systems and to rid themselves of the archaic client server-based systems which are difficult to upgrade and costly to support.

Foreman received his Meaningful Use upgrade one weekend in May 2010, along with thousands of other doctors. Within days, he said he could see how well-designed technology contributes to his ability to improve patient care while also making it easier to demonstrate Meaningful Use.

However, as Foreman told Physicians Practice, the EHR vendor needs to support physicians’ efforts to demonstrate Meaningful Use. “Your vendor should have a support team. They need to be familiar with the process and support you,” he said.

He’s right. Health IT providers owe it to their clients to help them be successful at demonstrating Meaningful Use, to make using health IT simple and affordable, and to ensure the technology really delivers when it comes to supporting better patient care.

Dr. Foreman was successful because of his commitment to make technology work for his practice and because of the technology that he chose. As a result, he will receive his first payments soon. Meanwhile, tens of thousands of other EHR users are still waiting for their health IT vendor to get around to upgrading the systems in their offices. As those companies know, scaling to meet that demand is exceptionally difficult.

Physicians shopping for an EHR system should ask a couple of questions. If it’s this difficult for the old technology companies to enable their current clients to meet Phase 1 Meaningful Use requirements, how will they fare in preparing even more users for Phases 2 and 3? And, can they realistically support ICD-10 and future regulatory changes that require updates to their software?

Meaningful Use is just one stop on a long ride of technology advancement. As such, the case for “the cloud” is clear.

• Minimum upfront investment, lower total cost of ownership, and rapid ROI
• Cumulative value and simple interoperability with a wealth of systems and health industry partners
• Adaptability to future demands, from ICD-10 to new Meaningful Use rules to additional performance and quality measurement capabilities

It’s time to focus on the needs of the end user. The cloud offers the easiest, fastest, and most economical means for many physicians to implement and use an EHR system.

Russ Keene is vice president of Ingenix CareTracker.

The Power to Fail
By RJ Dio

As good as the fine novel Spooner is by Pete Dexter, it’s Dexter’s bio on the back jacket that pleases me more. Dexter wrote the bio himself and it states:

Pete Dexter began his working life with a US Post office in New Orleans, Louisiana. He wasn’t very good at mail and quit, then caught on as a newspaper reporter in Florida, which he was not very good at, got married, and was not very good at that. In Philadelphia he became a newspaper columnist, which he was pretty good at, and got divorced, which you would have to say he was good at because it only cost $300. Dexter remarried, won the National Book Award, and built a house in the desert so remote that there is no postal service. He’s out there six months a year, pecking away at the typewriter, living proof of the adage “What goes around comes around” –that is, you quit the post office, pal, and the post office quits you.

What can we learn from this (besides using a sense of humor when we can)? Courage. Not many people admit their mistakes, and few of us would be candid in our assessments of ourselves or our efforts. 

It takes courage, for example, to admit an HIT project was a disaster, and to candidly discuss how it went wrong, lessons learned, and what can be done to avoid this again. The typical post-mortem that all thoughtful projects (even unsuccessful ones) should use at their conclusion. 

Where’s the story on the eight-year Cerner rollout that wasn’t intentionally slotted for eight years, for example? The lowdown on why a vendor would explain poor business intelligence reporting by suggesting the hospital spend close to another million dollars to add CPUs in a database server so the reports will run faster? The honest facts on a clinical workflow software solution that’s a glorified Intranet?

As the woman in the Wendy’s commercial in the 1980s demanded, “Where’s the beef?”

We live in a world where everyone has a raving recommendation on LinkedIn — or maybe 30 — and most of us have written them, too. Meanwhile, we could use a few people to step up courageously with constructive feedback on HIT efforts that lost their way, without permanently judging (or misjudging) those who didn’t succeed.  Some great leaders (but not enough) readily say to others, “Let me share some of my mistakes with you so you don’t have to make them, too.”

After all, failure serves a purpose in life, and business, and sometimes it makes us far better than we ever could have been otherwise. It just takes time to know. “A lot of good things in my life came from half my mistakes,” says the songwriter Radney Foster, and I’m right on board with him, (even if I did use too many parentheses in this piece).

Curbside Consult with Dr. Jayne 5/9/11

My large healthcare system, like many, is in the business of doing everything possible to make friends with independent physician practices. The average primary care physician drives several million dollars in ancillary revenues each year, so we can’t afford not to.

Our system offers discounted access to our EHR product for affiliated physicians. Although we have quite a few takers, many are still skeptical. After all, they’re independent for a reason. If they really wanted to buddy up, they would have been purchased long ago.

In a continuing effort to woo these last few holdouts, I was tasked with checking out some of the resources available to independent physicians seeking an EHR or practice management systems. Since Inga mentioned the new MGMA/AMA effort to create an online directory of practice management systems that are compliant with the 5010 standard, I decided to check it out.

I must have spent too much time with adolescent relatives over Mother’s Day, because my response to the directory is “lame, lame, lame.”

The directory lists only 20 vendors. Some of them aren’t even software companies – one lists its product as “Consulting and Implementation of several PM/EMR”s” [typo on parentheses left in on purpose.] As an AMA and MGMA member, I was embarrassed by this document. Version numbers included “n/a” and “current”, which I found hysterical.

Really? If this data would have been gathered by my intern, I would have sent him back to his cube in shame. They have a link on the page that if you don’t see your vendor, you should e-mail and they will ask the vendor to participate. Does neither the AMA nor the MGMA have the ability to identify the top 100 vendors and survey them to create a useful guide?

Now mind you, none of the vendors I use are on the current directory, so I can’t verify the accuracy of the listings. But in checking out a couple of the individual detailed profiles, I learned the following:

• Cerner PowerWorks PM has 250 customers and doesn’t support Microsoft .NET, does not use a “modern and widely supported relational database for the underlying data structure,” and the database is not ODBC compliant. Kind of a surprise.
• Ingenix CareTracker has one box checked that the “modern and widely supported relational database” is standard. Another is checked that says “does not provide.”
• MCA Systems CodeHERO product was about to get a “best product name” prize until I noticed it “does not provide” the following: appointment scheduling, resource scheduling, claims generation on the CMS 1500 or UB 04, or ability to maintain payer lists including fee schedules. How exactly is this a practice management system?
• Allscripts, GE, eClinical Works, NextGen, Sage, McKesson, and Athena are all missing in action on this list.

If I were a vendor not listed, I’d e-mail them at busdevelop@mgma.com and tell them to get with the program. If I were a listed vendor, I’d certainly double check my data and find out who in my organization submitted it, if it’s not accurate.

So what’s the point of all this? First, I always like to let Inga know I’m reading her material. HIStalk girlfriends have to stick together, you know? Second, whether I work for a monolithic organization or not, I’m still a small-practice physician by training and I care what happens to my friends in the trenches. Third, large organizations like MGMA and AMA who want to actually help said physicians in the trenches need to do better.

Do you have a better source of info for physicians who are shopping for a new PM system or want to verify that theirs will handle 5010? I still have to impress a hospital president with a fancy PowerPoint presentation. E-mail me.

E-mail Dr. Jayne.

Monday Morning Update 5/9/11

 
From Ralph Hinckley: “Re: [vendor name omitted] acquisition. Announcement coming very soon on a core HIS vendor acquisition.” Just for fun, above is a tiny bit of the logo of the company supposedly being acquired (left) and that of the acquirer (right).

From CMIO: “Re: Apple iPad 2 commercial. The medical app shown is almost certainly Great Connection, a Swedish company partnering with Qualcomm.” The company’s site says a hospital can deliver and receive medical images with nothing more than an Internet connection to its cloud server that takes five minutes to connect to an ultrasound machine, allowing them to be sent (encrypted and authenticated) to a smart phone or e-mail. It also says that a US entity was founded in San Diego and took over the Swedish entity in the spring of 2010. It also notes that the product is available in a white label version to mobile operators that want to resell healthcare images and related services to consumers.

From Lucite: “Re: Nuance. As a stockholder in both companies, this would be exciting!” Some rumors suggest that Apple will buy Nuance, while others say an expanded partnership is more likely, with the impetus for either being Apple’s interest in including speech recognition technology in the upcoming release of iOS 5. Nuance has a market cap of $6 billion, with its five-year share performance shown above (Nuance in blue, the S&P 500 in green). Those who timed their NUAN purchase just right by buying on the December 2008 dip would have tripled their money in just over two years, and surely will do even better if either rumor is correct.

From Epic Alum: “Re: Epic non-competes. Legal and enforceable or not, Epic has no-hire agreements with clients that they don’t tell you about in the exit interview. Those seem seem to prevent you from working with Epic clients through third parties, including those that aren’t Epic partners (but you might have better luck than I did). Even if you got a job or contract, Epic will instruct its employees to ignore your phone calls, e-mails, and questions at meetings, which would make your job all but impossible. I’d be concerned about retaliation from Epic when it comes to getting and maintaining certification later, although I don’t know for sure that they blackball anyone. As for what you should do now, every else (a) goes to grad school; (b) does non-Epic programming work if they’re a programmer; (c) does non-Epic healthcare consulting; or (d) works outside of healthcare. There will be plenty of work next spring. Advice to prospective employees, most of which are in their first real post-college job with no money saved: when you leave, you will be pretty much locked out of the one industry you have real experience working in.”

From InovaDoc: “Re: Epic at Inova. I wish that IT departments could be more transparent about their decisions. What will happen to those physicians that spent $30K on GE to integrate with the hospital? De-install, then re-install, foregoing their investment?”

A quick poll … please answer if you would be so kind. Thanks. Just trying to get a read on who’s out there.

Listening: Electric Wizard, Dopethrone. I’m the least-likely demographic for this Sabbath-y sludge / doom /stoner music, but I still think it sounds pretty cool. Also: Blackmore’s Night, renaissance faire rock by the former Deep Purple guitarist and the angelic Candice Night. And Watching: Saxondale, a well-made Britcom about a trying-to-stay-cool 1970s rock roadie turned pest control operator who mumbles his wry, psuedo-intellectual monologues like Johnny Depp’s Jack Sparrow.

I think I may have messed up one of the e-mail blasts Friday night, so apologies if you got something confusing. I put in nine hours at the hospital, ran six miles on the trail, and did another seven hours of HIStalk work after I got home, eating only some peanut butter crackers in the 12 hours from lunch until bedtime. I think the combo of hypoglycemia, slight dehydration, and way too much work made me a little woozy.

My Time Capsule editorial from March 2006 covers open source in healthcare, which I prefaced by promising little: “Since my open source knowledge is right up there with most CIOs and health care executives (I have next to none, in other words), I figured my populist opinions might be as useful as the next guy’s (also next to none).”

An article in last week’s San Francisco Business Times confirms that Alameda County Medical Center (CA) is going with Soarian (clinicals and revenue cycle) and NextGen, with CIO Mark Zielazinski giving the price tag as $75 million, including infrastructure upgrades. The hospital expects to receive $18 million in HITECH money.

Community Health Network (IN) names Ron Strachan as CIO, replacing the retired Ed Koschka. He was formerly SVP/CIO at WellStar.

Valerie Fritz joins the RTLS division of TeleTracking as VP of marketing. She was previously with Awarepoint.

NaviNet promotes Michael Ross MD to chief medical officer and David Kates to SVP of product management and clinical strategy. Both came to the company via its Prematics acquisition in December 2010.

I mentioned that Camden-Clark Hospital (WV) has signed up for Allscripts Sunrise Enterprise and Enterprise Performance Management. Also announced as new Sunrise Enteprise customers: Hannibal Regional Healthcare (MO) and Lakeway Regional Medical Center (TX).

It’s a fairly even split of which company’s stock looks good to readers. New poll to your right: when will vendors see the peak of HITECH-generated business?

Kaiser’s Q1 numbers: $12 billion in revenue, $921 million in profit, up 9% and 30%, respectively. Membership rose by 208,000 to 8.8 million. Considering healthcare costs, I can’t decide whether this news is good or bad, although I’m leaning toward the former since Kaiser is just about the only provider out there showing success in controlling costs without reducing quality.

Two Allina hospitals fire 32 employees, 28 of them from Unity Hospital, for snooping in the electronic records of 11 teen partygoers who overdosed on a synthetic drug. That surely is a record number of privacy-related terminations. Allina says it knew the patients were high profile, so it did an EMR access review afterward and discovered the digital intruders.

Q4 numbers for The Advisory Board Company: revenue up 22%, EPS $0.30 vs. $0.32. Two new programs were announced: Crimson Care Registry, which prompts physicians based on clinical care guidelines, and Clinical Denials Prevention Program, a best practices approach to pre-certification.

Quest Software acquires virtual desktop scanning and imaging technology vendor RemoteScan. RemoteScan has a pretty big healthcare presence in providing a scanning solution for providers running EMRs on Citrix or Terminal Server.

Froedtert Health (WI) cancels its HIM outsourcing contract with Pyramid Healthcare Solutions, offering jobs to all but three of 118 contractors. Pyramid was acquired a year ago by an India-based conglomerate.

Britain’s Department of Health will reduce CSC’s scope of work involved on the NPfIT project, specifically cutting back on work related to the Lorenzo system. CSC is in the process of acquiring Lorenzo vendor iSoft.

An interesting fact in a story about union nurses at Tufts signing a new contract: the average salary of a full-time nurse there is $115K.

Omnicare Clinical Research, a contract research organization, will use the clinical trials and clinical trials imaging solutions of Merge Healthcare in a large-scale clinical trial.

Hopefully, gentlemen, you did not forget either your mother or your wife on Mother’s Day. The entirely logical but ill-advised insistence that that, “Hey, you aren’t MY mother” will greatly increase the chances of experiencing a lonely night in the dark visually tracing said soulmate’s vertebral column.

E-mail Mr. H.

An HIT Moment with … Brad Swenson

An HIT Moment with ... is a quick interview with someone we find interesting. Brad Swenson is VP and national healthcare leader for Winthrop Resources Corporation of Minnetonka, MN.

 

When you look at the financial environment that most hospitals operate in, which includes low margins and slipping bond ratings, what could they be doing better from a capital standpoint?

It’s really about the right tool for the right job. I’ve seen a segment of healthcare with a bit of one size fits all mentality – hospitals putting most everything on long-term revenue bonds, regardless of the estimated life or use.

I think especially today, with the uncertainties in the economy — capital markets, healthcare reform, future stages of Meaningful Use — cash preservation is an important part of any strategy. Many hospitals have strained days cash on hand and put themselves in jeopardy of tripping bond or bank covenants.

Finally, let’s not forget one of the most important benefits of technology — enhanced efficiencies. Whether we are talking about healthcare providers or other non-healthcare segments, technology can help us more efficiently deliver care. Adoption of these new technologies cannot be put on the back burner. Healthcare must embrace technologies to more effectively deliver care, as well as improve patient safety and clinical outcomes.

In an age of cloud computing, decreasing hardware costs, and shorter refresh cycles, should hospitals consider buying and maintaining technology as a utility rather than as ongoing individual capital purchases?

Every hospital and project is going to be different. It really depends on how the forces of change’may impact the life of each individual asset.

For example, point-of-care devices in the hospital. I’ve seen a strong majority of hospitals change directions on the types of devices based on clinician preferences, software vendor requirements, network infrastructure challenges, and patient room real estate. Other technologies we are seeing that have a high propensity to change are traditional IT technologies and many clinical or lab technologies that are impacted by the ripple effect.  The higher the propensity for change, the more a utility model such as rent, lease or hosting makes sense. These tools provide a great way to create additional agility within a hospital’s overall technology strategy.

A utility model offers some attractive benefits:

• Predictability and consistency of payments — no large capital infusions to catch budgets or the board by surprise. 
• Lowering maintenance fees on older equipment.
• The most modern equipment to be on the ground and in use by your staff.
• The benefit of technology comes from its use, not from owning it.
• Technology is a unique asset class that depreciates rapidly and obsolesces quickly, not a type of asset that lends itself to investment / ownership. These types of assets should be leased or rented.
• Predictable end-of-life technology disposition strategy. 

What potential accounting benefits lead hospitals them to engage your services?

I’ve never met an IT leader who enjoys going back to the CFO to request dollars for unbudgeted or unplanned items, even if it was caused by unexpected change. Healthcare CFOs are challenged in making ends meet on very thin margins.

They also need to avoid penalties associated with violating bond covenants. To date, many hospitals leverage off balance sheet financing to reclassify the costs as an operating expense since liabilities do not have to be reported because no debt or equity is created. This does not negatively affect their bond covenants. 

The key difference is that with an operating lease, the asset stays on the lessor’s balance sheet. The lessee only reports the expense associated with the use of the asset (i.e., the rental payments), not the cost of the asset itself. Another benefit from this type of accounting treatment is creating liquidity while avoiding leverage, thereby improving debt to equity ratios. New proposed accounting changes may negate off balance sheet classification, but for now, it remains a strong benefit. 

The accounting benefits are only one of many advantages of utilizing a true leasing strategy. Others include the ability to:

• Lower the financial and technological risk associated with owning assets that rapidly change and are consumed.
• Utilize cash and capital for strategic and organic growth and purchases of long-term assets.
• Maintain or increase competitive advantage.
• Increase patient safety, quality of care, and efficiencies in delivering care.
• Simplify the acquisition, deployment, and management of technology assets.

HITECH incentives are accelerating purchase cycles, but require significant upfront capital investment in hardware and software long before the federal checks will arrive. What programs do you offer to help them meet the federal deadlines while avoiding the capital crunch?

I refer to it as the Financial Road to Meaningful Use.  By now, most facilities have an estimate for what their MU incentive will be and when they will receive it.  By mirroring this incentive estimate to a lease payment stream for applicable EHR components, a very nice, customized financial strategy can be created. 

Many so-called leasing companies are mere brokers who are constricted in any sort of customized financial strategy such as the one just described. This is further complicated when a change event appears in the healthcare provider organization and their agility is negated — think home mortgages. 

Ultimately, the common wisdom of “use the right tool for the right job” applies. Hospital CFOs have multiple financial tools to utilize. Most simply, long-term assets should employ financial tools that give up flexibility for low-cost, long-term commitments. Technologies that a provider organization has identified as susceptible to change should utilize shorter-term, more flexible financial strategies.

The consumer housing market changed after the financial crisis, causing many people to question the traditional wisdom of buying vs. renting an asset whose value won’t necessarily increase. Are there lessons learned for the technology market?

I think one needs to consider the overall dynamics of the current environment, which is highlighted by the fact that things are changing more quickly and the outlook is shorter and more fluid. The lesson for me is twofold. In the past, one just assumed that buying was the end-all, but I believe you always run the numbers, especially in today’s environment. And secondly, there should be some value placed on flexibility. Even though it is subjective, it should be represented in the numbers.

Time Capsule: Open Source Won’t Break Commercial Vendors’ Hold on Market, Unless…

I wrote weekly editorials for a boutique industry newsletter for several years, anxious for both audience and income. I learned a lot about coming up with ideas for the weekly grind, trying to be simultaneously opinionated and entertaining in a few hundred words, and not sleeping much because I was working all the time. They’re fun to read as a look back at what was important then (and often still important now).

I wrote this piece in March 2006.

Open Source Won’t Break Commercial Vendors’ Hold on Market, Unless…
By Mr. HIStalk

The California HealthCare Foundation released a report by Forrester Research last week titled Open Source Software: A Primer for Health Care Leaders. Its conclusion begins, “conditions are fertile for open source solutions to take root in health care.”

Since my open source knowledge is right up there with most CIOs and health care executives (I have next to none, in other words), I figured my populist opinions might be as useful as the next guy’s (also next to none).

I’d love to see open source take off. Physician offices, small- to mid-sized hospitals, and long term care facilities need software that’s inexpensive, easy to use, and functional. Open source promises support from talented spare bedroom programmers striving for recognition among their community instead of cash. (I don’t get that concept, but apparently it works sometimes).

The reality is, however, that open source in health care has been limited to just a few industry-agnostic, super-techie utilities that aren’t seen by end users: Apache, some Linux, a smattering of PHP and MySQL for Web pages, maybe Firefox or Netscape browsers, and a tiny sprinkling of non-Microsoft Office deployments. Maybe you’ve seen more, but I haven’t.

You’ve read a lot about the VA’s VistA, but it doesn’t fit the classic definition. It most definitely cost Uncle Sam big bucks, even if the government did later place it in the public domain. Will a thriving community improve it and support it, even starting with a finished and tested app? Maybe.

CIOs gripe loudest about Microsoft, so surely they’re jumping on free operating systems, office suites, and e-mail packages, right? Not that I’ve seen. What’s the incentive for a CIO to replace an expensive software application with a free download, an act that could end up being a career-ending move when the merry band of scattered volunteers with cool nicknames doesn’t respond to an urgent plea for help on the support forum?

Open source software ought to be cheaper because it’s free of licensing fees. However, you still have to pay those high costs for implementers, travel, hardware, middleware, and so on. If your $5 million vendor project becomes a $3 million open source project, is the savings worth the risk? For many organizations and particularly for many CIOs, I’m not so sure.

Traditional software vendors could neutralize whatever market pressure that open source brings. They could lower or eliminate licensing fees, make source code available to local developers, use more open standards and tools, and give customers a MySQL option instead of Oracle or SQL Server, all serving to bring new customers on board and work the economy of scale largely missing in our industry.

On the other hand, customers aren’t demanding that. They’re happily buying what vendors are selling, voting for the incumbent. They want people on site with them, attentive project managers, 24×7 support, and free lunches. Aggressive salesmanship and turnkey service beats geeky downloads every time.

The only chance open source has to crack the major health care application areas is if someone creates a vendor-like organization to provide support and enhancements. Customers won’t do it for themselves. Suppose a few dozen or a hundred small hospitals, a bunch of physician practices, or a trade group chipped in a few dollars each to create a shop for the further enhancement and support of an open source app? Or, if those user organizations closed ranks and gave competing vendors a take-it-or-leave-it offer for a one-time license for source code for the entire group and then hooked up with an offshore company… naaah, that’s just crazy talk.

News 5/6/11

Top News

Q1 numbers for Allscripts: revenue up 82% , EPS $0.06 vs. $0.12, but beating expectations by $0.01 excluding non-recurring items. The company announces a $200 million share buy-back.

Alembic Foundation announces the availability of Aurion 4.0, its first release of the open source HIE software based upon CONNECT from the Federal Health Architecture.

Reader Comments

From RC: “Re: Inova Health System. They’ve announced that they will be going with Epic. They were previously with IDX since before the GE acquisition.” Unverified since I couldn’t find any mention on the Web, but I believe it for two reasons: (a) an official-looking press release was included, and (b) I had little doubt after interviewing CIO Geoff Brown a few weeks ago, even though he didn’t come right out and say anything. Actually, I did just now find a tiny mention in an undated message from the peds chair at Inova Fairfax: “The Joint Commission (TJC) now requires all inpatient chart entries to be dated, timed and signed, with either a provider code or legible name present. This is evolutionary. The Electronic Medical Record will automatically contain this, and many of its other benefits will be transformative in nature. Inova is now going with the EPIC system.”

From Fixer Upper: “Re: Judy Faulkner. Is she selling her house? This must be it – it’s the same architecture and artwork as the Verona campus.” I see the resemblance, but from what little I could find by sleuthing, the $3.9 million, 8,000 square foot home on 173 acres (top) in Oregon, WI is being sold by an owner that isn’t Judy. The same sleuthing suggests that the house in the bottom picture, worth about 10% of the the Epic-looking one, is hers, which would strike me as being more in character. But that’s just casual Internet detective work. Maybe someone who works there knows, not that it’s all that important anyway.
From Maven: “Re: not news, not rumor … just venting. As an HIT industry insider, I get so discouraged when I am a patient. I just registered for a minor procedure at a major teaching hospital that’s a beacon for HIT adoption. I was handed a two-inch, three-ring binder and was told by the clerk to take it with me when my name was called. Only nurses entered information into the computer, while the MDs and CRNAs did their documentation in the binder. I saw no evidence of innovation over what I implemented in 2002. I bet their EMR is mostly a document imaging system. I’ve seen progress behind the scenes at most hospitals, but bedside technology lags far behind.” I’ve worked in big places and IT is usually advanced in some areas, but a disaster of paper and poorly interfaced, outdated legacy systems in most. I’ll stick with my assessment that the big hospitals buy gazillion-dollar systems overseen by huge IT shops and highly compensated magazine-cover CIOs, but it’s often the tiniest ones that deliver the most impressive results from the systems they can afford. The main reasons: (a) fewer prima donna doctors and executives; (b) a more focused environment, both culturally and geographically; (c) better connection to their local community and patients; (d) more urgency to make IT projects succeed since they don’t have the bloated budgets to take a mulligan and buy them all over again a few years later when fads change. All of that offsets the lack of cash and the preponderance of community-based physicians whose EMR participation can’t be mandated.

From Jen: “Re: ex-Epic employees. I’m within the ‘exile period"’ of a year and am curious about my realistic job options. Recruiters lose interest when I explain I can’t staff for a few more months. Any tips on where I should put my considerable skills to use? Perhaps readers who have been in a similar position can offer advice.” Comments welcome. I’ve heard of employers taking on Epic-certified folks even with their mandatory time out, figuring they can let them do general project work until they are allowed to leave the penalty box. It depends on their project timeline and how desperate they are to land experienced people. It may be that recruiters just don’t want to be bothered with explaining your situation even though potential employers might be OK with it. But I’ll shut up and let those who have lived it first-hand chime in.

From California Dreaming: “Re: Alameda County Medical Center. Deep into a Soarian install, I hear.” I found the above in its 2010 annual report.

HIStalk Announcements and Requests

This week on HIStalk Practice: Micky Tripathi shares insights on Meaningful Use Stage 1’s Nasty Little Surprises in his Pretzel Logic column, about which a reader posted, “Adding Micky Tripathi to the HIStalk crew is further evidence of why HIStalk is one of the most worthwhile reads on the Web.” Emdeon acquires EquiClaim for $41 million in cash. St. Jude Medical integrates its Merlin.net Patient Care Network with GE’s Centricity EMR and Scottcare’s Oneview CRM. AMA introduces online tutorials to help physicians select and implement HIT systems. Only about 21% of eligible providers participated in the 2009 PQRS program and only 12% earned bonuses. If you are thinking to yourself that you don’t recall reading any of these stories on HIStalk, you are correct! Sign up for HIStalk Practice updates so you don’t miss a thing.

Jobs on the Sponsor Job Board: Segment Marketing Manager, Product Specialist – Physician, Software/Implementation Engineer. On Healthcare IT Jobs: Senior Systems Analyst – Financial Systems, Director, IT Business Services, Epic Reporting Specialist, Metadata Administrator.

Acquisitions, Funding, Business, and Stock

Start-up eMerge Healthcare receives $650K in investment commitments, including $250,000 from the Ohio state-supported venture development group CincyTech. The company was founded by a group of Cincinnati gastroenterologists who developed intra-operative voice command software to document surgical procedures.

British software vendor Sage reports improving numbers for the six-month period ending in March, although its healthcare business fell 5%, with especially weak sales of its Medical Manager PM/EMR. The CEO declined to comment on rumors that the company is planning to sell Sage Healthcare, expressing a belief that stimulus money will eventually boost demand for Intergy.

Sales

St. Joseph Healthcare (CA) will use Emerge.MD’s OnePlace virtual clinic to support its telehealth pilot project and to expand services into other remote care services.

Downey Regional Medical Center (CA) signs a multi-year agreement with MedAssets to manage its patient financial services, including billing and collections for self-pay and third-party insurance accounts.

Conifer Health Solutions secures a multi-year contract to provide revenue cycle services to Memorial University Medical Center (GA).

Camden-Clark Medical Center (WV) signs for Allscripts Sunrise Enterprise and Enterprise Performance Management for recently acquired St. Joseph’s Hospital, replacing Meditech. Its Camden-Clark Hospital is already using those products.

Salem Hospital (OR) is mentioned as an Epic customer, with a rumored price of $48 million and an expected HITECH payout of $14 million over five years. It’s hard to determine exactly what was being announced, but I think they were Epic before, at least on the ambulatory side, and they did just go live with MyChart.

People

Harris Corporation promotes Jim Traficant from VP and GM to president of Harris Healthcare Solutions. An interesting quote from CEO Howard L. Lance: “Jim’s personal healthcare experience as a two-time liver transplant survivor drives his passion for transforming healthcare and informs his ability to understand the complex needs of patient and provider."

Skylight Healthcare Systems, a provider of interactive patient care systems, appoints Carla Hilts, previously with McKesson, as chief clinical officer.

MedSynergies adds Aaron Garinger and Amy Hartt from Baylor and Wellspring+Stockamp, respectively, as managing directors of its consulting services group.

MEDecision promotes Carole Hodsdon to EVP/COO, reporting to CEO Deborah M. Gage. She was previously EVP/CTO.

Kent Rowe, a former GE Healthcare VP/GM and IDX sales VP, joins Culbert Healthcare Solutions as VP of information technology services.

Announcements and Implementations

CIO Shafiq Rab ceremoniously flips a switch symbolizing the EHR go-live of Orange Regional Medical Center (OH) EHR. It’s moving its two hospitals to Epic as part of a $30 million HIT initiative.

The Varian ARIA oncology EMR receives ONC-ATCB certification as a complete EHR.

In New York, North Shore-LIJ and Montefiore announce a strategic alliance to share best practices, with Montefiore citing one of its own strengths as IT systems that support care management.

Government and Politics

The HIT Policy Committee suggests delaying Stage 2 Meaningful Use one year until 2014. Providers and vendors have told the panel, ONC, and CMS that they need the extra year to develop and implement the new technology since the final Stage 2 rule is not expected to be released until mid-2012. An added benefit of the date push-back: more providers might participate in the Stage 1 qualification process since they would have an additional year to qualify.

Innovation and Research

Interesting healthcare technologies are mentioned in an Indian newspaper: (a) a hospital’s smart card that can be used as a debit card and to store patient information in its 4 KB chip; (b) a Web service that allows finding blood donors by sending an SMS text message, with the same service also posting a message on Facebook and asking users to tweet it; (c) a smart phone-based personal case management system in which teams of experts monitor diabetics, send text reminders and advice, and intervene as needed; and (d) an online results service (Web, e-mail, SMS) offered by a chain of diagnostic centers.

UPMC and Alcatel-Lucent will jointly develop a telemedicine platform, extending their agreement that goes back to 2006. The “virtual exam room” will reach the commercial market in early 2013. UPMC will consolidate its telemedicine offerings, which are used in 16 service lines and 19 facilities.

Technology

The new iPad 2 TV commercial features medical imaging as one of its key uses. I’d guess it’s AirStrip’s app that is shown since Apple features them in nearly every promo, but I don’t know for sure.

Other

Twenty-four percent of hospitals will invest invest in new transcription services, according to a new CapSite study. The report also finds that 61% of study participants currently take or plan to take a hybrid approach to capturing physician documentation to meet MU requirements and 53% would consider their current transcription vendor for data extraction and analysis needs.

KLAS’s latest report looks at the challenges and benefits of an anesthesia information management system (AIMS) and the most talked-about AIMS vendors. The vendors with the largest market share are Cerner, Draeger, GE, Philips and Picis. Similar to findings with other modalities, hospitals tend to prefer enterprise integration over best-of-breed.

Vince Ciotti says you should watch his HIStory Part 7 (above) if you want to know the connection between IBM, men’s hair, and miniskirts.

Weird News Andy can’t decide if a proposed New York law intended to reduce infections is “typical bureaucratic overreaching or actually a good idea.” It would prohibit doctors from wearing ties on the job.

Kaiser Permanente finds that its use of health IT has allowed it to avoid using 1,044 tons of paper for medical charts annually; to eliminate 92,000 tons of carbon dioxide emissions by replacing face-to-face visits with virtual visits; to avoid 7,000 tons of carbon dioxide emissions by filling prescriptions online; and to reduce the use of toxic chemicals by 3.3 tons through the use of digital imaging. Kaiser also claims that despite the increased energy use and waste associated with PCs, its use of HIT has had a net positive effect on the environment.

The ratio of the length of a man’s ring finger to that of his index finger is linked to facial attractiveness, according to researchers in Switzerland (who must have extra time on their, um, hands). Apparently, the longer the ring finger, the hotter the guy. It all has something to do fetal testosterone. I can’t wait to test the theory next time I am at a cocktail party.

Sponsor Updates

• Catholic Health Initiative’s use of the Clairvia Care Value Management solution is presented as a case study in the latest issue of HFMA’s Leadership report. A quote from CHI’s SVP/CNO: “Instead of just sitting there with a list of nurses and a list of patients and trying to figure out how to match them, this system will make assignments that are not only best for the patient, but better for the nursing staff, too.”
• Maury Regional Medical Center (TN) selects ProVation Order Sets as its electronic order set solution.
• CynergisTek will showcase its on-demand and managed security solutions alongside partner Diebold at next week’s 2011 Amerinet Member Conference in Orlando.
• Medicity expresses support for the ONC’s Direct Project specifications.
• Voalté is hosting a one-hour Webinar on May 19 entitled 3 Steps to Get Your Smart Phone Strategy Rolling. Sarasota Memorial Hospital’s CIO Denis Baker is the featured presenter.
• Mobile Anesthesiologists (IL) implements the Shareable Ink Anesthesia Suite for capturing clinical data and streamlining billing.
• Lakeway Regional Medical Center (TX) selects Allscripts’ Sunrise Enterprise suite, including EHR and CPOE.
• Olmsted Medical Center (MN) chooses the Access Intelligent Forms Suite to generate on-demand, pre-filled patient forms from its McKesson Series 2000 system.

EPtalk by Dr. Jayne

I recently attended a conference where I presented to community-based physicians on Meaningful Use. Now that we’re a good chunk of the way through 2011, it still surprises me that some physicians don’t seem to know much about it. Specialty and advocacy groups have done a good job of trying to educate the general physician population and CMS is also running journal ads, so even those folks who read print journals should have a rough idea what’s coming.

On the other hand, they could be like my colleague who insists on getting the print versions of all his journals even though he never reads them. His office is straight out of an episode of Hoarders. When we first went to tablet PCs for our EHR, he complained about the accuracy of the stylus. Turns out he had the tablet balanced on a giant unstable mound of mail on his desk, causing the tablet to wobble every time he tapped the screen. I jokingly moved the cardiac arrest crash cart next to his office because I’m sure I’m going to find him one day trapped under twenty-odd years of JAMA.

Back to Meaningful Use. I was not only surprised by these physicians’ lack of understanding of MU, but their lack of understanding of the operations of their practices in general. They were a mix of employed and independent physicians, all of them at a minimum on electronic practice management systems and about half of them on an EHR already. Several didn’t have any idea whether they’d even qualify for either of the incentive programs, with no idea of the size of their Medicaid or Medicare panels.

One of the challenges of technology is not just the implementation and adoption, but also optimization. I used existing software systems as an example in a breakout session. We talked about what several referred to as “billing systems” and how the practices use them. One physician sheepishly admitted that he had used pegboard billing until sometime in 2002, but had finally embraced the 1990s after payers forced his hand.

There was an overall lack of understanding of the role of a true practice management system as opposed to just a billing system. These physicians were not using on-board reporting, panel management, disease registry, or revenue-enhancing features of systems that had been in place for years.

If the practice is only using a small percentage of their capabilities, how in the world are they going to be able to implement, adopt, and maximize patient outcomes with an EHR? I guess that’s why consultants do so well. There are plenty of groups poised to drag these folks (kicking and screaming or not) into the Brave New World of healthcare IT.

I sent the group home with some basic homework to discuss with their practice management teams:

• How big is your panel of active patients?
• How big are your Medicare and Medicaid panels?
• What are your top five payers, and are there any problematic trends?
• What percentage of your patients are self-pay, and has it shifted in the last year?
• What is your first-pass “clean claim” rate?
• How many of your active patients have diabetes, coronary artery disease, hypertension, obesity, or another one of the Top 10 chronic diseases based on ICD-9 codes assigned at the time of billing?

Hopefully this homework will spur some important discussions and will set the groundwork for them to determine if Meaningful Use is worth the time and effort in their specific situations. With or without an EHR, these data points provide important information on the health of a practice. Physicians should be conversant about these metrics.

Understanding the “clinical” data already available in their practice management systems can position them to dip their toes into disease registries, quality reporting, and a wealth of other incentive programs that can be put in place with or without Meaningful Use, some even with (gasp!) paper charts. And better understanding of existing technology might just put a few more dollars in their pockets.

Contacts

Mr. H, Inga, Dr. Jayne, Dr. Gregg.

CIO Unplugged 5/4/11

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

Taking a one-post break from my short series, “The CIOs Best Friends,” BFFs who are critical in ensuring CIO effectiveness. Next time we cover the Vendor Account Executive – CIO relationship.

Where Dreams and Fear must Collide*

What is your biggest dream? What’s been in your heart but never attempted?

Fear keeps most people from pursuing their dreams, or even speaking about them. Three years ago, I completed my first Ironman. A physical feat for sure, but also lessons for work and play.

Ironman accelerated my personal and professional growth and to this day serves as a vivid reminder that one can accomplish great things where dreams and fear are allowed to collide. I never thought I could be an Ironman until life events dictated otherwise. My manager actually envisioned me and encouraged me to pursue despite my fears.

These videos explain the story for those interested.

If you’ve followed me for any length of time, you know I view each of life’s parts as one continuous journey. I integrate all aspects of living in order to maximize time and opportunities. Crossover is key to accelerated and sustained growth.

Here is what I learned and how it applies to our careers.

• Training. Many CIOs believe no further training is necessary once they’ve reached the top. To the contrary, requirements increase with elevation. Continually equip yourself or you’ll be passed along the way.
• Embrace change. During Ironman, a racer encounters unforeseen circumstances. Strong winds. High tides. Flat tires. No one is exempt from trials. Do you accept change and make the most of it, or do you spend energy fighting elements you cannot control? Adapt to curveballs thrown your way, and then thrive.
• Guts. It’s not merely the most fit who finish Ironman. It’s also those who want it badly. Crave it. I surpassed colleagues in my career who were brighter than I because they lacked fortitude, desire, and focus to push through challenges. Painful things will happen that tempt you to quit, so harness the power of passion, for passion creates guts and drives success.
• Bust boundaries. A 5K run was a long distance. Running a marathon struck me with fear. Today, however, 10K is a warm-up. Ironman busted boundaries I believed invincible. As CIO, we must continuously bust boundaries lest our organizations become complacent and visions dim. Test boundaries, then break through and grow to the next level.
• Planning. No one wakes up and decides to do Ironman that morning. It takes advanced planning and years of transformation to see grand dreams achieved. Plan similarly for your career and your organization. Proper preparation preludes proficient performance. No greater euphoria will seize you than crossing the finish line – a plan fully executed and realized.
• Rest and refueling. There is a science to Ironman, which includes rest and refueling. Continuous activity leads to burnout. Take time for nourishment and you sustain your energy. Constant action is not synonymous with effective action. Build in time for rest and refueling.
• Followership. Be sure the person you are following has the vision and stamina to keep you on the right track. Great leaders help you overcome fear. “Followership” is a critical talent for reaching dreams.
• Two are better than one. By riding in a pack, you gain 40 percent efficiencies over riding alone. Teams accomplish more. Pushing and pulling together, a team outperforms the loner. Surround yourself with positive people dedicated to your success. They will get you through the loneliness and pain of challenging times.
• First break all the rules. Sometimes you’ve got to shake things up and not do the same things over and over, especially if they’re not working. Focus on strengths not weaknesses. I made the choice to strengthen my strong bike over my weak swim, and it paid off.
• Bigger picture. As a leader, do you have a significant purpose? Put people first. Seek to serve. Dedicate your efforts to others. My Ironman was inspired by and dedicated to cancer victim Ellen. She kept me in the race. In health care, the Ellens are the ultimate endurance athletes running a race that nobody should ever have to run. We are there for them.

Epilogue

An update for those who watched the videos. Ellen traded her earthly rags for a robe of righteousness on July 26, 2009. I will never forget the energy she gave me during my training and our time together at the finish line. She helped me overcome fear and reach my dream. My bike still bears her name.

Pam is in complete remission.

You can’t tell by his energy and attitude, but “Ironman” Sam is still fighting. I hope to accompany Sam on his first triathlon this September. He will be 8 years old. I will help him overcome fear and fulfill a dream.

*Where Dreams and Fear must Collide. “Let me Fall”, Cirque du Soleil, Quidam

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.

News 5/4/11

Top News

McKesson’s Q4 numbers: revenue up 8.6%, EPS $1.62 vs. $1.26, beating earnings expectations by $0.02. Technology solutions sales were up 7%, but the Horizon Enterprise Revenue Management write-down in Q2 hurt the numbers, as did “continued investment in the Horizon product line.” CEO John Hammergren said in the earnings call:

Overall, our Technology Solutions financial results did not meet our expectations as our Horizon product line profitability fell below our anticipated level. It’s important to recognize that this financial performance is not an indication of problems or product functionality … I think that our view is that we’re quite pleased with the progress of the organization, and you know we’ve made many changes in our leadership team there. And frankly, if you go into the organization, we’ve made great progress in our development organizations and our implementation team. So I think we’re doing, frankly, a great job of getting after the issues that we would have faced two or three years ago that are now rapidly behind us. I think from a go-forward perspective, the clinical products are going to be a little less profitable than we had expected primarily because of the work required to make sure that our customers got them installed, got them installed quickly and are getting to Meaningful Use.

Reader Comments

 

From Ms. Blackwell: “Re: golf course fashion. I thought you would appreciate a few pix from yesterday’s GAHIMSS annual golf tournament. The Billian’s HealthDATA team took first place, with a little help from a last-minute recruit from GNAX. Attached are some pix snapped of two guys who were definite standouts in the fashion category, including Mike Mosquito, president and CEO of HealthNovation.” I agree with Ms. Blackwell. There are few things I appreciate more than guys who know how to show some flair at business events.

From David StockMan: “Re: Cerner ‘underperform’ rating from Oppenheimer. That particular analyst has been very negative on HCIT stocks since ARRA was passed. He likes to garner attention by being a contrarian, but conveniently changes employers from time to time and re-initiates coverage with a fresh start.” Unverified.

From Sun Myung Sun: “Re: Cerner. I enjoy this blog like something crazy. We’re a Cerner outpatient site looking into getting kiosks for patient check-in, but the insanely high quote from Cerner made that DOA. Do you know of any places that have implement kiosks with Cerner and like them?” Your non-commercial comments are welcome if you have experience to share with SMS. 

From Wikileaks: “Re: nextEMR. They are displaying the CCHIT 2011 logo on their site even though they only achieved ONC-ATCB certification, not comprehension. That’s a clear violation of CCHIT’s trademark and is confusing to providers.” I forwarded your comment to CCHIT and they say you are correct – nextEMR is using the wrong seal and CCHIT has told them it has to come down immediately. They should be using the one on the left, but are using the one on the right.

HIStalk Announcements and Requests

Welcome to new HIStalk Gold Sponsor AirStrip Technologies of San Antonio, TX. The company gets a ton of buzz for its cool mobile device apps, which give clinicians real-time access to waveforms, alarms, and patient data from patient monitors and other devices. Its FDA-approved systems include AirStrip OB (maternal/fetal waveforms, annotations, meds, progress notes, etc.); AirStrip CARDIOLOGY (12- and 15-lead waveforms), and AirStrip PATIENT MONITORING (waveforms for cardiac, SPO2, ventilator, arterial lines, plus vital signs, meds, labs results, and other EMR data). Hospitals are finding that plain old remote access pleases some users, but not physicians in high-acuity specialties who want easier and more convenient access to data they need to manage critical patients from anywhere. Benefits include tighter physician alignment and higher satisfaction, quality gains, increased efficiency, and reduced risk. Not to mention that its products always show up in Apple’s commercials and you know docs like cool stuff. I interviewed co-founder Cameron Powell MD just over a year ago. Thanks to AirStrip Technologies for supporting HIStalk.

Here’s a live, Steve Jobs-type AirStrip demo I found on YouTube, which I note earned Cameron Powell spontaneous applause (which seemed to embarrass him a little) when the waveform screen came up on the iPhone.

TPD updated his list of iPhone apps, which I moved to a new page. You can find it here.

Acquisitions, Funding, Business, and Stock

Merge Healthcare posts Q1 numbers: revenue $52.7 million, up from last year’s $20 million. EPS -$0.04, unchanged.

Texas-based EDIS vendor MedHost will move its headquarters to a a larger facility after increasing headcount from 90 to over 130 in the past six months.

Q3 numbers from Mediware: earnings of $1.4 million ($0.17/share) compared to $891,000 ($0.11/share) last year. Revenues were $13.8 million, up from last year’s $12.8 million.
 
Meditech hired 618 people in the last year, a 20% increase in employees. The company is planning a new 180,000 square-foot facility on a 135-acre tract in Falls River, MA. A former city councilman estimates that the land cost $80-$100 million.

MEDSEEK acquires Third Wave Research Group, a predictive analytics company specializing in healthcare applications.

Precyse Solutions changes its name to just Precyse, along with a new logo and Web address (precyse.com). The company says the new identity is “designed to more accurately reflect the breakthrough technologies and comprehensive and holistic blend of services that are sparking true innovations in the flow of health information throughout the hospital environment, significantly improving the flow of revenue, work and patient data.” As Bard liked to say, “What’s in a name, that which we call a rose.”

Consulting firm Arcadia Solutions will acquire Concordant, which also provides consulting services.

Sales

eHealthObjects chooses Elsevier/Gold Standard’s Alchemy as its drug database for eHealthObject’s ThinkHIE, ThinkEHR, and ThinkCDM products.

Otto Kaiser Memorial Hospital (TX) picks ChartAccess EHR from Prognosis Health Information Systems. The 25-bed hospital will begin implementation this month.

The 44-bed Tippah County Hospital (MS) purchases Healthland’s EHR.

People

PNC appoints Marlowe Dazley as SVP and senior managing director to lead the company’s new revenue cycle advisory group. He was previously with Premier Consulting Solutions.

HIT consulting firm WPC Services appoints Rebecca Jones (InterComponentWare) VP of sales, Patrick McGrath (MedSolutions) director of technology services, and Larry Watkins (Qaledix) director of business services.

Streamline Health Solutions hires Gabriel Waters (Carefx) as VP of business development.

Former Partners HealthCare CEO James Mongan MD died Tuesday of cancer. He was 69.

Announcements and Implementations

The HealtheConnections HIE in New York says it has connected its first five facilities. Fifteen other community hospitals across Central and Northern New York will eventually join Community General, Crouse, St. Joseph’s and Upstate University hospitals, as well as the Laboratory Alliance of Central New York.

Logansport Memorial Hospital and Woodlawn Hospital (IN) join the Indiana Health Information Exchange.

Singapore goes live on the first phase of its $144 million national EHR system, which will provide a central repository for clinical data collected from different hospitals. Accenture, Oracle, and Orion Health are providing  technology.

The folks at Shareable Ink tell us that Gartner has named them one of five cool vendors in healthcare for 2011. Click on the link if you like, but have $20K ready if you want to actually read what’s behind the teaser page. Congratulations also to another HIStalk sponsor, AirStrip Technologies, for making the list, along with AxSys Technology, DisastersNet, and Health Care DataWorks.

Omnicell announces its G4 platform, which will integrate 11 of its medication and supply automation products onto a single database. New products include a biometrics-capable console with a built-in medication label printer, a redesigned anesthesia workstation, a new controlled substances system, and a system (video above) for delivering meds from the dispensing cabinet to the bedside. The company also announced Q1 numbers: revenue up 5.5%, EPS $0.02 vs. $0.03.

Government and Politics

CMS issues a simplified final rule for credentialing and privileging physicians who provide telemedicine services. Hospitals and critical access facilities can use credentialing and privileging information from the hospital that’s providing telemedicine services instead of making their own privileging decisions for the consulting physicians.

NIST is holding a workshop on EHR usability on Tuesday, June 7 at its Gaithersburg, MD campus. I don’t quite understand the registration page since it says registration closed 6/1/11 (a few weeks from now – maybe it was supposed to say “closes”), there’s no pricing information to allow completing the “amount due” field, and it misspells “usability,” but I’m sure you can work it out with them if you want to attend (it’s not a very usable registration page for a workshop on usability, but that’s just me nitpicking). I didn’t recognize the names of many speakers since most are from NIST, but I did see Charles Friedman from ONC, Arien Malec from Direct, and DrLyle on the list.

The two physician founders of a South Florida software company unleash lobbyists and contribute $3 million in one year to state political groups, hoping to kill a bill that would stop doctors from dispensing medications directly to workers compensation patients at markups that far exceed what pharmacies can charge. Automated Healthcare Solutions sells software to support direct physician dispensing to those patients. A state senator drafted a veto-proof bill to kill the practice, but was told by the senate president’s office not to bring it up for a vote. “I’m just doing what I was told,” the senator says, dashing the few remaining hopes that politicians do the right thing and not what someone with money or power tells them.

Technology

HL7 publishes a standard that will allow insurance companies to transfer a patient’s personal health record information among themselves. They call it P2PPPHR – plan to plan personal health record.

Apple acquires a paging system patent that one expert believes will be used for in-hospital iPhone and iPad communication without using cellular networks, reducing power consumption and potential interference in the same way that RIM pagers work. Why does the expert think it’s intended for hospital use? Because they’re the only ones using digital antiques like pagers and fax machines.

Other

HP commits to spending $25 million over the next 10 years to support the expansion of Lucile Packard Children’s Hospital (CA).

The Office for Civil Rights says more than 10 million patients have been affected by 260 data breaches since September 2009.

A special thank you to the reader who saw this desk plate and sent a photo my way. It brightened my day immeasurably.

Weird News Andy, invigorated after his hiatus, provides his penetrating commentary for this story as, “It might be a little deep.” The cause of the bad cough of the former president of South Korea is found to be an acupuncture needle stuck in his lung. WNA also chimes in on an article observing that it’s going to get a lot harder to see a doctor given that Medicare is paying them less while giving more patients insurance, concluding, “When you lower payments without lowering costs, you get less supply. It’s been that way forever even if you don’t understand Econ 101. The most telling part is the average wait times going from 33 to 55 days in the home of Romneycare.”

I can never figure out why supposedly smart companies (especially ones with cool names themselves) give their products names that can’t be pronounced or remembered, seemingly choosing names intended to make everybody in a conference room full of marketing types happy to get a little piece of the final, unmemorable, Frankenstein-like compromise. Case in point: the new mobile results application of Halfpenny Technologies: ITF-GoDoc MobileOE. It looks like someone’s cat was stretching itself on the keyboard. Know a lot of buzzworthy nine-syllable brands, do you?

Sponsor Updates

• Hayes Management Consulting promotes Robert Drewniak to Director of Strategic & Advisory Services.
• The Anesthesia Quality Institute designates Surgical Information Systems as a preferred vendor.
• Karl Graham of CareTech Solutions co-presented with Brett Norgaard of Kinetic Data at the Technology Services World 2011 Silicon Valley conference this week. Their case study was The Intersection of IT Outsourcing and Healthcare: How CareTech Solutions Achieved Top 20 Best in KLAS Awards Distinction.
• Center for Diagnostic Imaging adopts Merge Healthcare’s RIS v.7.0 to meet Meaningful Use certification requirements.
• 3M introduces its Mobile Physician Solution that integrates coding technology to provide advice to physicians as they enter charges.
• Diversified Clinical Services, a provider of wound care management services, to will use Allscripts EHR and PM products as part of its i-heal 2.0 clinical productivity solution.
• Cumberland Consulting Group promotes Memory Baker to executive consultant.
• Nuesoft posts a video called Reworking Workflow to Maximize Revenue.

Contacts

Mr. H, Inga, Dr. Jayne, Dr. Gregg.

Curbside Consult with Dr. Jayne 5/2/11

This has been a bit of a crazy week for me, with entirely too many hours at the hospital. I had a pounding headache after a particularly chaotic shift. After taking the proverbial two aspirin and trying to unwind with some quality Internet surfing, I came across a blurb about the noise levels in hospitals. Could this be the culprit?

Digging deeper into the Chicago Tribune, the article cited “alarm fatigue,” a significant safety issue for hospitals. If you haven’t experienced this personally and you live in the IT or medical device worlds, you’ve probably heard clinicians complaining about what the article describes as “incessantly beeping devices.” I definitely met this face to face while rounding on the cardiac floor, where every patient has a heart monitor.

The Trib mentions the Food and Drug Administration’s responsibility for regulating medical devices, and the scope of its reach is broad. Ever wonder what all they regulate? It’s much more than X-ray machines and prosthetic knees. A list of the various regulated devices is here. I had no idea they regulated some of the things they apparently regulate. Maybe I can use some of them for trivia at my next cocktail party.

Based on their extensive reach, I’m actually pretty surprised they haven’t yet gotten into the electronic health records arena. Many people are calling for FDA regulation. The Tribune article brings up some important points, however. FDA, in its regulation of devices, hasn’t been able to find the “sweet spot” between specifying the appropriate alarms to adequately support clinical care while reducing the fatigue caused by overly sensitive parameters.

The piece cites a noise researcher from McMaster University as saying, “People don’t pay attention to alarms; they exist as much for legal liability reasons as much as for actually doing anything for patients.” If we have this situation with devices that have been regulated for years, what does that say about the ability of the FDA to improve the performance of electronic documentation systems?

As cited in the article, ERCI Institute has a top ten list of technology hazards. For 2011, alarm-related adverse events is number two, right between radiation overdose (!) and cross-contamination from flexible endoscopes (yuck). Data loss and “other health IT complications” is number five. This is a pretty serious list: surgical fires and misconnected intravenous lines also made the cut.

The Chicago Tribune isn’t the only major outlet to report on this issue. The Boston Globe ran a piece in February. Their investigation revealed 942 alarms per day on a 15-bed unit at Johns Hopkins Hospital — a rate of one critical alarm every 90 seconds. In studies, up to 85% of alarms have been shown to be false alarms. The FDA is apparently stretched thin already, failing to follow up on case reviews with manufacturers in some cases.

Organizations other than the FDA have gotten into the alarm fray. Joint Commission made alarm recommendations part of its National Patient Safety Goals in 2004, but dropped them in 2005. Some safety experts have lobbied to block hospital staff from turning off critical alarms, a move that was rejected by an industry working group due to caregiver objections and the need to “permit the clinical staff to solve the problem in peace and quiet.”

As a clinician, I experience alarm fatigue every day. Cardiac monitors start beeping when patients turn or cough. IV machines beep when infusions are completed (even if the next infusion isn’t due to start for another 23 hours). My hospital’s EHR warns me that the diabetes drug I’m about to prescribe should be used with caution because it might lower blood sugar. Kind of sad, since that’s the main reason I’m prescribing diabetes medications in the first place — to lower blood sugar levels!

I’d love to see some standards put in place. Standards created by rational clinicians based on data and science, not based on the risk of lawsuits or on anecdotal experiences. The FDA doesn’t seem to have a track record in this area and they don’t seem to have the horsepower to take on regulation of another industry. As a physician, if they had additional funding, I’d like to see them tackle the dietary supplement industry first. How many patients are harmed by taking entirely unregulated substances marketed by greedy manufacturers who can say whatever they want because their product is classified as a food rather than as a drug?

Other federal agencies charged with regulating or advising in these areas haven’t fared much better. The United States Preventive Services Task Force is charged with recommending preventive health care services based on evidence-driven criteria. However, their recommendations have been blasted (and undermined) by various disease-centric organizations and professional groups and even the payment policies of CMS. It’s hard to explain to a patient why a test isn’t justified based on mountains of clinical evidence when they can counter with, “Then why does Medicare cover it?”

Let’s say we’re going to tackle alarm fatigue. Who can do it, how should they do it, and where are we going to get the money to pay for it? I’m interested to hear your ideas.

E-mail Dr. Jayne.