Since establishing JGo Labs, I have had the opportunity to speak with many of the key decision makers in the world of HIT. It has been a rather eye-opening experience, one that has created a new understanding and appreciation for the challenges this industry faces long term. My discussions have involved hospital leadership, physicians, nurses, employees, leaders of HIT companies, and industry analysts.

One of the consistent things I hear from everyone I speak to is, "You know John, we just aren’t sure about this market. When we talk to the vendors and industry analysts, they all paint this awesome picture of their companies with strong financial performance and huge upside. Yet when we talk to the clients and ask about their future plans, they don’t match up with the vendors’ and analysts’ views. What do you think?"

This polar view of HIT, specifically in the EMR sector, may seem typical of the client / vendor perspective. But when you dig deeper, you find that it is all but typical. Vendors will paint rosy pictures and clients are going to be cautious of vendor claims. That is normal.

What isn’t normal is that when you probe clients (IDN, academics, community and physician groups) you quickly learn that their hope is to get through Meaningful Use certification as fast as possible and then get back to what they know best. That often means not investing in EMR products.

Most clients I speak with state that the biggest issue they have with HIT products is that they don’t deliver on the promises. They may improve patient safety to some extent and help streamline some processes, but clients aren’t seeing those products as a means to cut their operating costs or improve their revenue. Why this is the case would make great content for another article, but what is important here is that there is a general feeling among clients that the EMR is a distraction, not something they want to continue evolving over time. Simply stated, they want to meet the guidelines and focus on the things in their business which drive real revenue and change.

In speaking with the vendor leadership side of the HIT world, what I typically find is a world of fear, with many leaders confidentially stating that, “I am not sure how we survive the long term.” Keep in mind that my discussions are with middle and senior managers, not the executives. My experience is that speaking to those on the ground gives you a much more realistic view of what is happening in a company than what you learn from executives, boards of directors, and financial filings.

The last area of input is the sector analysts. Although they typically focus on public companies in the HIT sector, many of them will evaluate all companies as means to gauge opportunity and test the claims of those companies in which they are considering investing. More and more analysts are finding that over the long term, the return on investment for HIT companies is not as promising as hoped. There are some shining stars and if you use diligent tactics you will make a return, but if you compare HIT ROI for public companies versus other industries, the return is not glowing.

As you can see, this doesn’t paint a really exciting picture of the market. Although I believe we are seeing a mini financial bubble, I do think there is hope, and I’ll address that shortly. Right now, I want to continue to flush out why a bubble may exist and provide some insight into the dynamics of this market and how it affects vendors, which ultimately affects healthcare institutions and their decisions.

Most healthcare vendors operate in a US market, or at least their portfolio is dominated by US clients. The US healthcare market, from an HIT perspective, does not grow each year as do other industry sectors. There are more patients every year, but unless the vendor’s licensing model increases their payment for each patient visit or transaction, the majority of HIT vendors don’t see this upside.  

The market size for the vendors is typically the number of beds in the US.  If we want to translate this to a math formula, it would be

Total US Hospital Beds – Already Committed Beds

That is your market. Committed beds are those where the institution has already selected an HIT vendor for that line of business offering.

Most hospitals have made a commitment to, say, an EMR vendor (with Epic and Meditech having the lion’s share) and are facing sheer difficulty in successfully implementing the systems. This is not a very transient market — clients will stick with their choices for years or decades. This makes vendor growth difficult and impedes new vendors from entering the market.  

Secondly, not many new hospitals are being added each year. Not only is it a limited market opportunity, it is also a limited market in terms of its organic expansion.

Those two points alone are cause for concern. We have companies struggling to make their way in a rather limited market. Just like in the real world, if you put a few predators in a pond that exhaust the food supply, they either turn on each other (merger) or they die off (stalled growth, no innovation, go on life support.) These foundational characteristics  establish the foundation for our bubble. Lots of excitement, sudden infusion of growth, tons of market hype, very limited market.

The next challenge is that many of the companies in HIT are experiencing extremely rapid growth. You might be thinking, “Wait, John. Isn’t rapid growth a good thing?” It is if the growth is balanced.  

If a company is growing its top side (new profitable sales) while slowly expanding its costs (people, infrastructure) then growth is great. But if you pay attention to the vendors in HIT, they are growing their costs at a rate that outpaces their top line.They are adding tons of people for services and support, yet you don’t see a tremendous number of net new sales. They are offering this expanded capacity as proof that they are in demand, but without net new sales, it is probably because they misjudged their products’ quality and capabilities, not because the company is gaining market share.

Secondly, if you aren’t seeing a company hire an incremental number of engineers and product people, then they aren’t adding new products to fuel the future. Healthy companies have a long-term focus, which is critical for surviving a bubble — growing and investing in their future products.

The concern here is that eventually, given a limited market (pond), vendors will eventually need to slash costs to continue operations ( the first pin prick in the bubble).

Slashing costs can be termed many different things: optimization, efficiencies, consolidation, synergy, and reorganization. Fancy terms aside, it is simply good old fashioned cost-cutting in hopes of making a financial plan  People lose their jobs and the company is in the first throes of trouble.  

As an industry, we have seen a few companies begin to take this tack and go into maintenance mode. Others will not cut costs so as not to signal the market that they are having challenges, but their margins will dwindle or their stocks will stagnate. No matter how you slice it, these are the outcomes of a limited market and companies with limited innovation.

So what does this mean to you? What should you be thinking or asking?

As a client, investor, or employee of an HIT vendor, you need to make long-term bets and evaluate whether a particular vendor is truly positioned for the long term. Now more then ever, you need to verify that your vendor is transparent about their finances, operating plans, and roadmaps.  

A vendor shouldn’t just talk about their history. It’s more important to know how they are financed and structured for the future. Be careful of fancy talk regarding reorganization, the use of external consultants, or restructuring. This is often the first sign that a company is in flux, either poorly positioned for growth or unable to understand their own market.

(Also, as important as cash reserves are to any company, if any company continues to point to their cash reserves as part of their long-term survival strategy, I would be concerned, but that’s just me.)

If the company is publicly traded, look at how Wall Street has rewarded their stock over several years. A stock that doesn’t have a history of long-term incremental and sustained growth reflects a company that hasn’t earned Wall Street confidence, but rather is a company that most analysts use to do short sales. This is not a company whose products you want to own for the next decade. 

Consider also that many companies put a lot of time and thought into their analyst calls — to the point of scripting them, hiring PR firms, and using other tactics to paint a glowing picture of poor performance. Don’t get fooled by fancy words and great presentations. Look at the long-term stock performance and discount what you hear on analysts calls. They are like first dates — everyone is on their best behavior and most analysts don’t ask hard questions. Your time is better spent elsewhere.

Simple math can give you clues to your vendor’s position for the future. Ask how many new new sales they have made in the past three years. 

I am defining net new sales as those that bring completely new clients to the table — clients with which the vendor has no preexisting relationship. Many vendors will classify a new sale as any new item bought by an existing client. If you listen to the analyst calls or sit in a vendor presentation, you might hear them say, “We had 50 new sales last year.” You think, “Wow, these guys and gals are on fire. Let me get some of that!” 

In actuality, they may not mean “net new sales,” they mean, “We sold stuff to the clients we already have.” This is important. You want existing clients to buy from their vendors. But if a vendor isn’t breaking out sales between net new clients and existing clients, it’s sleight of hand, often used to hide that the vendor isn’t expanding their market. That isn’t good.

Vendors love to talk about their sales pipeline and product roadmaps. This is good, but in a market with limited number of clients, a vendor needs to really talk in detail about their product pipeline. What products are they bringing to market? Who will buy them? If they are just offering the same products they have for the past several years or decades, be wary. If they are talking about new products in the pipeline but aren’t hiring tons of engineers and domain experts, be wary.

Look for details about when, how and why. Does their pipeline make sense? How much are they investing? Is it a committed investment? What do they need to do keep investing in the pipeline?  I bet it is linked to net new sales. If new sales stop rolling in, the company will either cut their costs or cut the product. Neither is good for you.

Why do cuts matter to you? If a vendor is cutting people, you may be in for a bumpy ride when it comes to service levels, which affect you the client directly. It also may mean that the vendor couldn’t predict accurately how to manage their business through the economic challenges of the industry.  

Look behind the marketing and get a clear understanding of why the vendor is cutting costs. Cost-cutting because of a new process may make sense. Adding robots to an assembly line would provide the same level of service with a need for less humans and less costs over time, but just cutting people or taking a quarterly write-off are not signs of a healthy company.

Listen closely to your vendor for signs of cannibalization. Be wary if they plan to grow their business by going after the business of stagnant companies that are closing, downsizing, or freezing their products. What the vendor is saying is, "Thank God those other guys screwed up, because without that, we would be in trouble."

Again, look for the totally net new sale. If clients are buying the vendor’s products without a sentient event — such as other companies going into maintenance mode — chances are the vendor is doing great. If a vendor is relying on the failure of others to keep growing, that’s a big warning signal.

Look over there and ignore the man behind the curtain. The industry relies on KLAS, Gartner, and others to evaluate vendor performance, client satisfaction, and overall product quality. I don’t believe any of these organizations is perfect. They should not be the ultimate voice of your decision. Still, when any vendor asks you to ignore these reports, you should have serious concerns.

No consumer or vendor reporting agency is perfect, but you can make it close to perfect. Take the report cards offered by these agencies and do your own analysis. Ask your vendor to answer the questions in the report. Randomly sample their client base, employees, and partners. It’s just like buying an appliance or car — if you bring the Consumer Reports article with you and ask about the report on your own, you will get better facts to help you make a decision.

So what’s the net?

I believe that we are in the early formation of a bubble. Whether it bursts or not, I don’t know. As an industry, we need to be wary and proactive. At the end of the day, the companies with strong product pipelines, net new clients being added to the roster, and growing conservatively will be the ones left standing. 

We will see consolidation, experimental business models, and some vendors fading away as the market settles and government funding levels. Don’t get taken in by mergers and consolidations. Most vendors don’t have the ability to successfully pull them off, although some have succeeded.

I have been wrong about more things in my life then right. I hope I am wrong about the future of HIT and the landscape of companies. There are real people that walk the halls of those companies, with families and dreams. My hope is that the leadership of those companies think long term, put aside vanity and ego, and do the right things to weather the storms.

Is there hope?

Yes. I don’t believe that this industry is doomed. I do believe there are going to be some serious growing pains, some flushing out of the industry (which has already started – Google, Microsoft, etc.) and unfortunately, many people losing their jobs as Meaningful Use levels out.

Once the industry works through that, I think we will be left with a really strong base of companies that are highly innovative, financially stable, nimble, and led by really smart professional leaders who truly understand the needs of the client and have a long-term focus. There is tremendous opportunity in this industry. We just need to separate fact from fiction.

John Gomez is CEO of JGo Labs.

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Top News

It was announced Thursday evening that the 27% Medicare physician pay cut that was scheduled to take place January 1 will be delayed for at least two months.

HIStalk Announcements and Requests

Mr. H and I are already working on our HIMSS-related details, including our Must-See Vendor listing, our sponsors-only luncheon (where Mr. H, Dr. Jayne, and I will make personal but disguised appearances if we get brave,) our first-ever HIStalk Booth Crawl, and HIStalkapalooza. And then there is the charity shoe drive, which I hope results in hundreds of pairs of donated shoes. Mr. H says he also wants to schedule a HIStalk flash mob doing The Wobble, but who knows if he is serious. If you are a sponsor, look for my name in your inbox so you don’t miss any important details. And if you enjoy dressing to the nines and winning fabulous prizes, keep reading here for HIStalkapalooza details. In the mean time, shop those after-Christmas sales to find some hot new shoes and your party attire.

Looking for last minute gift ideas? You won’t find them on HIStalk Practice, but you will find plenty of other goodies to stimulate your mind as you nourish your body with fruitcake and other treats of the season. Some highlights: Canadian EMR Nightingale Informatix purchases US-based PM company Medrium. A troubling headline. A CIO seeks recommendations for EHRs suitable for surgery-based practice (send your recs my way.) ARHQ releases a guide for EHR implementations. Still on the naughty list? If you sign up for e-mail updates on HIStalk Practice, I promise to put in a good word for you with the jolly guy in red. Merry Christmas, Happy Hanukkah, or best wishes for whatever holiday you may be celebrating!

You may have noticed considerably less visual assault when reading HIStalk lately, as sponsors are busily swapping out their animated ads by the January 1 target date. We appreciate their support of the new policy and hope you do as well.

We need your HISsies nominations. It’s like a primary election: those with the most votes get on the final ballot to run for Most Influential, Most Effective, Worst Vendor, etc.

On the Jobs Board: Clinical Systems Analyst, Cerner and Epic Resources. On Healthcare IT Jobs: Pharmacy Business System Analyst/SME, McKesson STAR Analyst / Consultant, Cerner PathNet Consultant.

Online life is not a cabaret, old chum. What good is sitting alone in your room in front of an HIStalk keyboard if you can’t hear the music play, in the form of the pathetic metrics that Inga, Dr. Jayne, and I focus on in the absence of any other source of validation of our questionable societal worth? Right this way, your table’s waiting: (a) subscribe to the e-mail updates; (b) Friend and Like us in the appropriate places (on the Internet I mean, not our actual bodily places); (c) send us news and rumors; (d) give the Resource Center and Consulting RFI Blaster a look if you are in need of products or services; (e) admire and occasionally click the decreasingly animated sponsor ads to your left, marveling along with us that real companies with suit-wearing employees working in fancy offices support pajama-clad, crotch-scratching spare bedroom bloggers not only financially, but personally as we toil deep into the night after working hospital day jobs. We’re not naïve or full of ourselves , though – we fully understand that we’re just the convenient conduit for our desirable readership, so thanks for being included in that number.

Listening: jangle rockers The Connells, which flamed brightly but briefly over the 1980s global skies from Raleigh, NC. Even less appreciated than the band is Bandwagon, the tune-filled 1996 movie they had a hand in. I strayed on it and loved it this week on Netflix. Its total gross was $22,000, so it’s a safe bet you haven’t seen it. 

I will be working as usual this weekend, so there will indeed be a Monday Morning Update even though few folks will be reading it Monday. My handful of readers and I will be huddled like weary travelers making small talk in an out-of-the-way diner during a Christmas Day snowstorm. I don’t expect much news to report, but you never know. Regardless, Merry Christmas, Happy Hanukkah, or a joyous whatever it is you celebrate this weekend. If you’re out next week, Happy New Year as well (not to offend those who follow the Chinese calendar, who won’t be celebrating until January 23.)

Acquisitions, Funding, Business, and Stock

Citing challenging economic conditions, Thomas Reuters announces that it has changed its mind about selling its healthcare business.

Nuance Communications signs an agreement to acquire rival Vlingo, a Siri alternative for Android smart phones that offers better social networking capabilities. That company was found not guilty of infringing on a Nuance patent earlier this year and later sued Nuance for unfair business practices, alleging that Nuance’s CEO offered three Vlingo executives $5 million each to persuade their boards to approve an earlier acquisition offer. All pending lawsuits are now “stayed.”

PatientKeeper raises $6 million in growth capital from existing investors to support product development. Chip Hazard of Flybridge Capital Partners has been named chairman of the company’s board.

The company behind MyMedicalRecords.com announced a $30 million sale of its patents last week, but the newly filed 8K indicates that the transaction is not quite that straightforward (not surprising given that the company’s market cap is only $16 million and its products don’t seem particularly innovative.) Expert interpretation welcome.

Sales

Biggs Gridley Memorial Hospital (CA) selects the Prognosis Health Information Systems ChartAccess EHR and HIE.

INTEGRIS Health (OK) selects MedVentive Population Manager and Risk Manager to manage risks and quality performance.

Charles Anastos, Jr. joins PwC US as a principal in PwC’s Health Industries Group and co-leader of the firm’s EHR/HIE practice.

The Indiana HIE appoints Josh Nelson, MD as CMO. He was a physician executive fellow at WellPoint.

Bayada Nurses completes implementation of Homecare Homebase across its 50 home health service offices.

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Government and Politics

The VA announces that it has established Facebook pages for all 152 of its medical centers. It has also created 64 Twitter feeds, a YouTube channel, a Flickr page, and the VAntage Point blog.

CMS warns that its computer systems could crash under to a backlog of claims unless Congress stops the scheduled Medicare pay cut at the end of the year. The agency is advising contractors to hold physician claims for the first 10 business days of 2012.

ONC will build an online database to measure the effectiveness of grants given for a variety of HIT purposes, including those to individual physicians and hospitals, RECs, state HIEs, community colleges for HIT training, and vendors tracking HIT adoption.

The government project to develop a single EMR system for the VA and Department of Defense gets a $100 million appropriation even though the agencies’ request came in after the deadline. The VA gets $3.11 billion to spend for IT in FY2012, of which $580 million is for software development that includes a benefits management system ($107 million), veterans relationship management ($70 million), Virtual Lifetime Electronic Record ($50 million), and miscellaneous applications ($48 million.)

FDA goes on record in suggesting that it’s not really a good idea to buy another mother’s breast milk for your baby, even though Web sites offer it and some mothers make up to $2,000 per month selling their excess supplies. Breast milk is theoretically healthier for babies, but only if it doesn’t come from HIV and hepatitis-infected crack addicts anxious to feed their habit by selling whatever body product commands street value. Hospitals get sued regularly for mixing up breast milk, to the point that several vendors offer bar code scanning solutions to match milk to baby.

Other

athenahealth’s Jonathan Bush takes some direct swings at Allscripts and CEO Glen Tullman, calling him a symbol of “atrophy” and likening Allscripts to an “Orwellian bureaucracy.” In an article in the online investor publication Minyanville, Bush positions athenahealth as nimble and cutting edge, compared to the behind-the-times Allscripts. I’d say it’s pretty safe to assume that Tullman will not be sending Bush a Christmas ham this year.

The local paper writes up the self-implementation of the VA’s VistA by Oroville Hospital (CA), which earned it a $2 million Meaningful Use payout. We wrote earlier about that project, citing Roger Maduro’s Open Health News, which said Oroville spent $10 million on the project (which included hardware, replacement lab and medical equipment, and iPads) and $500K to have VistA enhanced to meet its needs.

Lee Memorial Health System (FL) gets a story in its local paper for implementing Epic’s bedside barcoding.

A network switch outage at Upstate University Hospital (NY) forces a several-hour return to paper systems and hand-rung patient bells.

An article says Cleveland Clinic’s fifth-highest-paid employee made over $1 million in each of the last two years despite having left the organization under “cloudy circumstances” in 2009. The Clinic declined to answer questions about David Strand’s severance or whether he’s still on the payroll. He and his also-resigned wife founded patient satisfaction and quality consulting firm ExperiaHealth (sold to Vocera) and he’s now CEO of LifeNexus, which sells consumer PHR smart cards.

KLAS says more providers are taking advantage of application hosting services to reduce capital expenditures and to tap into a higher level of technology. At the same time, more hosting providers are providing hosting services to applications other than their own.

All 69 IT workers in Louisiana’s Department of Health and Hospitals are notified they will lose their jobs early next year. The University of New Orleans and the University of Louisiana at Lafayette have been contracted to provide IT services for the state agency and may hire 50 of the displaced workers.

The sale of the Chicago Sun-Times to an investment group led my Merge Healthcare chairman Michael Ferro, Jr. has been completed.

A new non-profit, Patients for Fair Compensation, proposes a worker’s compensation-like system that would replace lawyer-enriching malpractice lawsuits with an administrative process by which patients would receive reasonable compensation quickly without turning most of the money over to attorneys.

Weird News Andy says he had a friend with an experience similar to that of this story, in which a man partying hard with two hookers at a Knights Inn motel in Orlando takes an AK-47 round to the chest. Doctors treating his wound find a large mass, removing part of his lung but likely saving his life.

WNA calls this story “Crack Cocaine.” Police car video records the back seat conversation of two handcuffed brothers as the older one implores the younger one to eat the one-ounce cocaine stash hidden in the older one’s rectum, telling him, “I can’t get no more strikes. Eat that sh*t so I can get out.” The younger brother eats the cocaine, tells the older brother he loves him, and dies of cocaine intoxication.

A Chicago malpractice law firm, cheered by the recent article suggesting that doctors are screwing around on their smart phones during critical medical procedures, says anyone who suspects they were injured by “distracted doctoring” should give them a call (probably while driving.)

Sponsor Updates

• Healthwise offers a white paper entitled Patient Response: Giving Voice to the Patients.
• Tom Stephenson, president and CEO of HMS, discusses healthcare technology as a tool for better patient care in a blog post.
• Passport Health Communications will participate in next month’s MEGA and HFMA MA-RI conferences.
• eClinicalWorks and the American Society of Plastic Surgeons (ASPS) announce a three-year initiative to provide eCW’s products to ASPS members.
• HealthStream and GE Healthcare announce a partnership to offer Centricity University, a subscription-based service for online and classroom training on Centricity products.
• Microsoft will participate in the 2012 Military Health System Conference January 30 – February 2 in National Harbor, MD.
• Brian Woods MD, chief medical officer of NorthStar Anesthesia, wins a magazine’s award for implementing Shareable Ink in the hospitals that his group serves. Prognosis CEO Ramsey Evans was also named for his work creating the Prognosis HIS.

EPtalk by Dr. Jayne

The hot news around the doctor’s lounge the past few days (other than the fountain soda machines that were recently purchased to feed the habits of those non-coffee drinkers on the medical staff) is the Medicare pay rate debacle. As most of you know, the House of Representatives rejected a Senate bill this week that would have avoided the pending 27% cut in Medicare rates. As a result, pay rates are in limbo and CMS responded by saying it would suspend claims processing for the first 10 business days in 2012 to avoid having to deal with retroactive reprocessing should Congress remedy the situation.

Make sure you don’t use it as an excuse to slack on your charges, though, because come January 17t, CMS will start processing those claims (at the reduced pay rate if Congress doesn’t act) on a first-come, first-served basis.

And for the curious, they installed both Coke and Pepsi dispensers, but my southern sensibilities are highly outraged by the lack of respect shown to my esteemed colleague, Dr. Pepper.

Interestingly, one of the stories I read that covered this issue was right next to an article titled Physicians Must Make Any Changes to Medicare Participation by December 31. That means if you’re tired of all the shenanigans, you have the opportunity to opt out of Medicare if you wish. The AMA offers a Medicare Participation Kit that offers more information on the various options.

I love it when Inga sends me snarky comments about stories she’s reading, and this week she didn’t disappoint with this one. To Get Meaningful Use Payments, Urologists Must Address Workflow. I wholly agree with her that the words “flow” and “urologist” should never go in the same headline.

Sending more happiness our way, CMS also released a proposal for rules around the Physician Payment Sunshine Act. The rules require that gifts, consulting fees, travel reimbursements, payments, grants, and pretty much anything worth more than $10 that is given to physicians or teaching hospitals be disclosed by manufacturers annually. For those of you who may not know, this is part of the Affordable Care Act, which really does seem to be the gift that keeps on giving. CMS also announced a comment period open through February 17, 2012, so be sure to weigh in. HIMSS has also released a fact sheet and plans to convene a working group to formally respond.

NCQA releases a “save the date” for the 2012 Health Quality Awards to be held March 27, 2012 at the National Building Museum in Washington, DC. Nothing on their website yet that I can find, but I did get a nice e-mail soliciting sponsors.

The Wall Street Journal runs a nice piece on researchers who are using “virtual patients” to leverage technology to test medical devices and procedures when real patient testing isn’t practical. Computerized modeling can help with estimates of radiation exposure to a fetus or with technologies which may perform differently in children (who aren’t typically the subjects of very many research protocols) as compared to adults.

Sometimes low-tech is best: Archives of Dermatology publishes a study that shows that maggots debride non-healing wounds “significantly faster” than traditional scalpel-based techniques. Additionally, there were no differences in pain or crawling sensations between the two treatment groups. Maggots have been approved for medical therapy since 2004, but availability of so-called “bagged larvae” varies. Out of curiosity, I checked with our pharmacy and am happy to report that yes, we’ve got maggots in our arsenal.

I’ve enjoyed seeing the pictures of holiday giving and charity activities submitted by our readers. I recently heard about WorldScopes, a philanthropic project of the AMA Foundation that distributes new and gently used stethoscopes to clinics and hospitals world-wide. If you donate more than 20, the AMA covers your shipping costs. My package is already on its way. If you decide to participate, put HIStalk on the shipping label since we’re a lot more fun than the other choices for identifying where you heard about the project.

That’s it for me tonight. I’m off to bake some holiday cookies with my main man. Have a question about automated patient recalls, why baking soda and baking powder aren’t interchangeable, or what those little silver metallic balls are on holiday cookies? E-mail me.

Contacts

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

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We asked several HIT vendor executives the following question: What was the biggest HIT-related news or event in 2011 and why?

Ray Dyer, CEO, Acusis

The industry has experienced continued mergers in 2011 (Allscripts/Eclipsys and Medquist/M*Modal, to mention a couple), the federal government has come to a ruling on how ACOs should work, MU payments were issued, and we have seen a rise in the use of and demand for mobile devices in healthcare, including new medical students being issued iPads.

I don’t think a singular event could be identified as the biggest moment in HIT in 2011. However if mapped across a timeline, we could certainly mark these as significant highlights during this past year.

Dan Herman, Founder and Managing Principal, Aspen Advisors

McKesson Provider Technology (MPT) division’s Better Health 2020 strategy announced on 12/9/11. MPT has publicly announced what has been rumored for some time – that it will curtail further development of its Horizon software product line and invest heavily in its Paragon product. This decision affects hundreds of hospitals throughout the country. Some long-term McKesson customers have already seen the writing on the wall and have made strategic and financially significant decisions to move away from McKesson’s non-integrated Horizon clinical platform. However, many other customers (medium-sized community hospitals and multi-entity integrated delivery networks) are faced with a critical decision: do we stay the course with McKesson or rethink our EMR strategy and pursue an alternative course?

Reading between the lines, this change in direction will have a huge financial impact on current McKesson Horizon customers, and it brings McKesson’s credibility in the EMR market into question. Although the market for EMR technologies has grown, the Horizon product line has experienced decline in market share, system development delays, poor product integration, and significant customer dissatisfaction.

On one hand, I laud MPT for coming clean on the challenges it has had with the development and support of the Horizon product. However, it appears that MPT’s go forward strategy is “déjà vu” – a poorly thought out approach to integrate disparate platforms, enhance a product that has experienced success in a focused market place (Paragon), and promise customers that MPT is committed to delivering “a fully integrated core clinical and revenue cycle IT system.”

Regardless of McKesson’s direction, healthcare providers need to evaluate their needs against the software available to support them and make decisions that are in their best interests.

Jay Deady, CEO, Awarepoint Corporation

The biggest HIT-related news of 2011 is that 1,211 eligible hospitals and 21,425 eligible professionals (EPs) have successfully attested and collected $1.84 billion from Medicare and Medicaid through the end of November for meeting Stage 1 meaningful use of electronic health records (EHRs).

The news, disclosed at the December 7, 2011 meeting of the Health IT Policy Committee, is significant for several reasons. First, it indicates the transformation of the health system and national commitment to improve access, quality, coordination, and efficiency of care through information technology have begun in earnest.

Second, it ensures providers adhere to baseline quality standards that can be measured and compared, including: using CPOE for medication orders, implementing decision support rules, exchanging key clinical information, and protecting electronic health information.

Third, attesting hospitals and EPs had to meet reporting requirements that some providers have characterized as challenging, onerous and time-consuming. Those that haven’t attested or plan to attest to Stage 1 in 2012 will benefit from lessons learned by early attesters.

Fourth, the payments demonstrate the meaningful use program is real, which will motivate providers to automate sooner rather than later in order to subsidize or recoup the cost of an EHR. As they automate, however, providers must remember that EHRs alone won’t address every problem afflicting healthcare. To accomplish that and aid throughput, they must complement EHRs with other technologies such as real-time location systems.

Don Graham, General Manager, Billian’s HealthDATA

I would have to say it’s been the extreme focus providers seem to be putting now on enterprise healthcare analytics and business intelligence, especially when coupled with the recent release of final ACO regulations. They realize that healthcare transformation requires more than the implementation of an EMR. As providers move more towards the coordinated care model (PCMH, ACOs and beyond), the challenge will be to meet the analytical needs to support this model. It will be critical to deliver an integrated view of clinical, financial and operational data not only across the enterprise, but across the community as well. Access to this data will enable providers to move into new areas of care.

In acknowledgement of the importance of analytics and its role in healthcare transformation, Billian’s HealthDATA and affiliate Porter Research have decided to focus one of our Provider Perception studies on Enterprise Analytics early next year. It’s something that our healthcare vendor customers are in turn paying more and more attention to, and appreciate the insight into.

Stuart Long, President, Capsule

I think the biggest HIT-related news this year is ARRA. It seems that all hospitals are just looking at how they are going to meet the criteria and qualify for the stimulus dollars. They are looking for any and all news on the topic. They are looking for help in sorting through and interpreting the legislation and what they specifically need to do to qualify. They are setting up cross-functional teams within the hospital to sort through it all. And they are looking to their vendor partners to prove how their technology and solutions fit within ARRA and therefore whether or not they will make it to the hospitals short list or not.

In fact, it’s one of the biggest areas we’ve been working on at Capsule and with our EMR partners — to help define where device integration fits within meaningful use and CPOE. I believe that ARRA and CPOE have hit all areas of the HIT space, from hospitals, to vendors, to system integrators, and to the publishing community at large – whether that be new publications, journals, trade shows, blogs, and even social media.

I just believe that the entire healthcare IT world has been turned upside down with ARRA. And of course it’s not over. We will all continue to be focused on it as Phases 2 and 3 roll out in the years to come. It might be a bumpy ride, but all we can do is hold on tight and keep on moving forward.

Mac McMillan, CEO, CynergisTek

I’m sure from an overall HIT perspective the answers will be quite different, but from a privacy and security perspective, it had to be one of two announcements from the federal government.

The first is OCR announcing it will finally initiate its regular audit program to conduct routine, random compliance audits of organizations accountable to HIPAA. The initiation of the audit program completed OCR’s menu of compliance and enforcement-related activities by adding to its existing practices: investigation of breaches and response to complaints. The OCR will likely disclose more information about these audits and their outcomes next year.

The second candidate for the biggest HIT-related event is the ONC announcing a delay in Meaningful Use Stage 2 in order to give organizations more time to meet Stage 1 requirements and to further support adoption of EHR technologies.

Both of these have a direct impact on the industry and its move to privacy and security readiness. We at CynergisTek are working with a lot of healthcare organizations to achieve compliance goals and improve their overall security posture. We’ve seen Meaningful Use increase attention to security and work to provide the support covered entities need to accomplish their risk analysis and implement the security features of their EHR/EMR effectively. This approach is consistent with OCR’s guidance on risk analysis and produces a step-by-step action plan that guides remediation efforts. In addition to that, we understand the partnership model desired in healthcare and we provide ongoing advice and assistance throughout the remediation process and beyond.

Michael O’Neil, CEO, GetWellNetwork

2011 was the year that the healthcare industry fully recognized patient engagement as a business imperative. Driven generally by the reality of a shift to a value-based US health system — and specifically by the requirements for patient engagement in Stage 2 Meaningful Use and the push by ONC to support consumer health IT adoption — leading providers moved aggressively to develop strategies, find partners, and adopt solutions to help.

Due to the confluence of regulatory, business, and technology transformation underway, patient engagement emerged as a core strategy for performance improvement for providers. Leveraging HIT, patient engagement solutions can take the form of Web-based portals and interactive patient care (IPC) education and communication solutions, or as simple as an online patient guide or patient bill of rights. It’s education. It’s entertainment. It’s empowerment. In fact, it’s all aspects of being involved in care.

One thing is sure: providers must work to ensure that the principle of patient engagement permeates clinical and business workflow and every aspect of care delivery. In 2012, there is no doubt that a focus on patient engagement will take greater hold throughout the continuum of care.

Peter J. Butler, President and CEO, Hayes Management Consulting

Attempting to identify the biggest HIT-related news item is difficult. However, based on research from the Ponemon Institute, which  conducted detailed interviews with executives at 72 healthcare organizations, the economic impact of information breaches can be far reaching and should be considered one of the top news items. Consider the following breach survey results:

• On average, organizations surveyed have had four data breach incidents in the past two years, up from three in last year’s study.
• The average number of lost or stolen records per breach is 2,575, up from 1,769 in the previous study.
• The top three causes for a data breach are lost or stolen computing devices, third-party mistakes, and unintentional employee action.
• Insufficient budgets and inadequate risk assessments are cited as the two greatest breach prevention weaknesses.
• Some 81% of those surveyed use mobile devices to collect, store, or transmit patient information, but 49% say they’re doing nothing to protect these devices.

There hasn’t been a slow news day in healthcare this year, but the topic of breaches is the alarm bell for the industry. With the onslaught of new technology, the most important data – patient health information – is not safely secured. It reflects the cracks in the frantic attempt to catch up with all the unintended byproducts of the industry changes.

For example, just when the industry secured all its laptops, mobile technology took off. Now, smart phones, mobile carts, tablets, and thumb drives need to be monitored and secured. Not a day goes by where a laptop has been lost or stolen. HIPAA’s reporting policy means that the clock is ticking when the breach happens, organizations are responsible for business associates’ breaches, and the fines pale in comparison to the impact on reputation.

Healthcare organizations must put privacy and security at the top of their 2012 priority list. They must develop policies and procedures for reporting in a timely manner on breaches. Further assessments need to be conducted on a timely basis – annually at least.  This protocol must be understood by every employee and monitored to ensure compliance across the enterprise. Training and communication of HIPAA regulations need to incorporated within each healthcare organization and monitored. Micky Tripathi’s blog post on this topic gives a stunning insider view to what it’s like to have a breach happen in your organization. No one is immune – and it takes a village to rectify it.

Tiffany Crenshaw, President and CEO, Intellect Resources

Meaningful Use and ICD-10 are what everyone is talking about, but surprisingly, no one is talking about what Meaningful Use and ICD-10 mean from a human resources standpoint.  Incentive deadlines have created an industry-wide shortage of experienced healthcare IT professionals, specifically those with Epic experience. Think about it — everyone in the industry is working towards the exact same deadline!

Countless planning hours are put forth to ensure a successful go-live and meet incentive deadlines. Technology, equipment, infrastructure, training and other task related functions are all meticulously planned in advance with the intention of those tasks being carried out by future experienced healthcare IT hires. But what if you can’t find those future hires? What happens to your plan then?

Meaningful Use and ICD-10 have created a huge demand for experienced healthcare IT professionals and there simply aren’t enough experienced individuals to fill these much-needed positions. Now is the time to think creatively about hiring solutions and start planning.

Doug Burgum, President and CEO, Intelligent InSites

The biggest healthcare IT event in 2011 was the Department of Veterans Affairs’ decision to improve healthcare efficiency with a national investment in Real-Time Location Systems (RTLS.)

The VA has the nation’s largest integrated healthcare system: over 150 medical centers, almost 1,400 community outpatient clinics, and 53,000 independent licensed healthcare practitioners, serving more than 8.3 million Veterans every year. Eric K. Shinseki, Secretary of the VA, has identified 16 transformational initiatives for the VA. One of these initiatives, Health Care Efficiency, directly includes RTLS to improve care while lowering costs.

The Government Executive reports that the VA views a planned $550 million National RTLS implementation as a way to improve efficiency, track equipment, and properly sterilize medical instruments.

We are thrilled that our industry has the opportunity to contribute to this groundbreaking effort. Intelligent InSites’ customers have improved patient satisfaction and patient safety, while decreasing hard-dollar expenses, through their use of RTLS solutions for asset management and patient flow. They do this by automatically collecting real-time data from throughout the hospital, processing that data, then using actionable intelligence to make fundamental improvements to how they run their hospitals. By using RTLS, they can process the location and status of every critical piece of medical equipment, patient, and staff in a healthcare facility, then use this data and intelligent workflow automation to improve their healthcare processes.

The next few years are going to be amazing—not just the RTLS industry, but also for the transformational benefits to the delivery of care.

Mike Sweeney, President and CEO, maxIT Healthcare

This was such a busy year in the HIT industry, it would be difficult to name just one event, so I will limit myself to three.

First, Epic’s continued dominance in new account sales along with the recent trend of their customers’ rolling the Epic applications out to their affiliate networks (acute and ambulatory) has had a major impact this year. Second, McKesson’s announcement of their product direction with Horizon and Paragon will have a significant ripple effect in the market as we get into 2012. Finally, the government mandates and programs surrounding Meaningful Use, ICD-10 and ACOs are driving so much demand and activity in the market, those can’t be left out of top events for 2011.

It’s definitely an exciting time to be in our industry, and I can’t wait to see what’s in store next year.

Tom Carson, CEO and President, MD-IT

The clear emergence of physician preferences for mobile applications to interface with their HIT systems has huge implications for systems criteria and future workflow demands. Most legacy HIT systems were developed with the idea that physicians would sit in front of desktop computers for their documentation and care-planning tasks. After years of physician reluctance to adapt to these defined work processes, the relatively rapid increase in popularity of applications for smart phones and tablets suggest that doctors are beginning to participate on their terms in EMR adoption and use, and that HIT vendors are due for a re-think in their approach to product solution design and delivery.

This is significant because it marks a maturing of the EMR industry in that products will have to be more customer-driven going forward, as opposed to regulatory-driven to succeed.

Patrick Hampson, Chairman and CEO, MED3OOO

The biggest news related event was just recently announced by the Kathleen Sebelius, the HHS secretary. By relaxing the time frame for meeting Meaningful Use Stage 2 requirements, physicians, EHR vendors, HIE projects, and most all operators of healthcare will all get more time to adapt to the rapid expansion of electronic health care delivery.

Changing healthcare to a more seamless, interconnected health system in the US is absolutely critical. Doing it right and not just doing it fast is even more critical. Why have providers go from a paper mess to an electronic mess? Why just add technologies without the strategy, knowledge, and planning needed and the provider level knowledge necessary to actually get a return on your investment? How about a return in care for your patient?

Physicians and hospitals were forced to scramble to adopt new work flows, new processes of care delivery, and at the same time, implement new technologies (EHR systems) and install patient portals to meet the requirements for Stage 1. If these same providers want to stay viable, they have to maintain productivity, fight competitive forces in their markets and pre-pay, for most of this while the government gives them an IOU. Throw in the current economic conditions of our depressed economy and it is all too much for providers. Great for vendors, not so great for providers.

Relaxation of the Stage 2 requirements deadline is less about not wanting to get somewhere, but it is more about getting there efficiently. A pet peeve of mine is why have financial penalties should you not do it fast? Why not financial incentives for doing it right?

Hopefully we will all take this delay as a continued opportunity to improve the designs of technology, not just to process a bill or serve as expensive transcription, but provide technology that can really support providers and the coordination of care across the populations they serve. While Accountable Care is touted as the next big step for many, MED3OOO as a healthcare management and technology company has provided technologies and operations for physicians and hospitals and communities are already accountable for care and for managing risk and been doing it successfully for more than 15 years.

For those that haven’t, the learning curve and the costs are steep. These organizations will require more than just production systems like accounting systems, practice management systems, and electronic health records. Organizations will require and we will provide strategies, systems, and operations economically. Organizations will need to have capabilities that include integration of disparate systems and disparate centers of data. Organizations will need the ability and systems to disseminate population data and then distribute that same data efficiently back to the point of care for its best use.

MED3OOO is uniquely position to partner with providers and provide our existing packages of system, software, and knowledge infrastructure to make this next journey a successful one for new Accountable Care providers. In doing this, we will continue our mission and make absolutely sure that the patient has a better outcome. We do believe that outcomes matter!

Peter Kuhn, CEO, MEDSEEK

With Microsoft partnering with GE, Google exiting the PHR market, and more payers entering the provider market, the events of 2011 have significantly changed the healthcare industry. How patients respond to payers acquiring providers depends on whether they perceive an improvement in care coordination or feel that quality of care is mitigated by payers influencing physicians. With access to both risk models and clinical information, how well these acquisitions work also depends upon the ability to analyze that data to create effective business strategies.

Analytics, particularly predictive analytics, has been in the healthcare news this year. At MEDSEEK, we understand that analyzing data and creating actionable strategic plans will help our clients set themselves apart. That’s why we made the decision to acquire Third Wave Research, Ltd. We’ve subsequently integrated what we believe to be the most advanced predictive analytics technology into our strategic patient engagement and management solutions.  With the commoditization of patient portals and patient outcomes and wellness driving revenues, the major market differentiator will be how well hospitals engage new and existing patients, manage costs, and coordinate care.

Hospitals’ success will increasingly hinge on using predictive analytics to match high-value patients with appropriate, profitable services when and where they need them and make informed investment decisions based on population health propensities. Combined with factors such as demographic, financial, and insurance data, predictive analytics will play a larger role in executing cost-effective, personalized marketing campaigns that influence patient behavior and improve population health.

Jeff Surges, CEO, Merge Healthcare

With new federal policies to reduce reimbursement and foster information sharing, the question is not if, but when a healthcare system should implement an enterprise imaging strategy that focuses on providing electronic access to medical images. Hospital CEOs, CIOs and physicians can no longer ignore:

• Patient safety issues around radiation exposure
• Competition to attract and retain the best physicians
• Compliance with Meaningful Use guidelines
• Support for an ACO strategy
• The push for interoperability in EHRs across healthcare systems and HIEs

These issues are driving the need for a new paradigm of image sharing and enterprise-wide imaging strategies.

An enterprise imaging strategy must focus on image storage, the ability to ingest images from outside of the enterprise, and provide accessibility to any type of medical image, anywhere across the continuum of care, anytime, by anyone. It should include three components:

• Storage. A vendor-neutral archive (VNA) to create a patient-centric record of images across all sites and modalities.
• Gateway. An intelligent DICOM gateway, capable of receiving and morphing studies from outside the enterprise.
• Viewer. A universal viewer that can be used in any environment on any device and is accessed via the browser, thus requiring no software to be downloaded.

There really is no wrong way to proceed with an enterprise imaging strategy as long as decision-makers fully understand the capabilities of each technology component, relate the capabilities to meeting their top business challenges, and look at the enterprise imaging strategy as a solution that can grow and evolve over time.

Jay Mason, CEO, My Health DIRECT

I see the roll-out and clarification for Accountable Care Organizations this year as being a significant event or turning point. While there is yet to be much to determined in how they will play a role in reimbursement and delivery, it has forced organizations — both payers and providers — to rethink how they function and how they look at themselves. Infrastructure, resources, and relationships will be reshaped.

This means they must commit to new ways to work together as providers, as well as how they are engaging, informing, managing, and directing patients. The silos that have been built up over the past decades will soon come crashing down.

Janet Dillione, Executive Vice President and General Manager, Nuance Healthcare

ICD-10 came onto the scene in 2011 in a big way. It received enormous attention throughout the year and has even been compared to Y2K. In short, it’s a monumental shift from what is documented, coded, and billed against today in healthcare and what level of specificity will be expected to be documented, coded, and billed against come 2013.

As a result of this major transition in medical coding, the reimbursement process will get more complicated and will expand. At Nuance, we believe that ICD-10 success begins with the physician at the point of documentation. In turn, over the past year we’ve allocated resources to develop, in partnership with 3M, next generation ICD-10-ready clinical documentation and coding solutions. In 2012, we’ll bring to market Computer-Assisted Physician Documentation, a new category of solutions that will interact with physicians at the point of documentation to review and prompt for the level of specificity required to achieve reimbursement in correlation with ICD-10 standards. Simply put, it turns clinical language (doctor’s spoken words) into codable language.

By combining Nuance’s speech recognition and Clinical Language Understanding (CLU) capabilities with 3M’s experience in developing and implementing coding products and services around the world, we’re well positioned to deliver solutions that will substantially improve physician workflow and will facilitate more precise, complete coding, and more accurate claims.

Todd Cozzens, CEO, Accountable Care Solutions, Optum

This past year has been filled with game-changers – from Meaningful Use to ICD-10 – but the biggest milestone in healthcare IT had to be the CMS final rule on the Medicare Shared Savings Program, which I believe will be looked back at one day as the event that spawned a whole new generation of health information technology.

Notice that I’ve not include the “care” ending to health. This next generation of IT solutions will focus not just on patients currently seeing doctors and being admitted to hospitals. It will cover a much broader spectrum of wellness and prevention products to comprehensive management of patient populations. The final regs set the tone for the industry and made a statement: accountable care is here to stay.

When I talk about accountable care these days, I am quick to point out I’m talking about the general idea of healthcare providers taking on some form of risk – i.e. being responsible for the outcome AND the cost of that outcome. McKinsey thinks there will be around 750 MSSP ACOs within five years. That sounds about right. But when we at Optum talk about the broader concept of sustainable health communities, we believe that every health system in the country will adopt some form of risk taking – whether it be bundled payments or new risk-sharing health plans with payors, all the way up to fully capitated networks.

Healthcare reform was the catalyst that started the dialogue. The budget deficit, with its inevitable cuts in entitlements, created the sense of urgency. The Medicare MSSP program signaled that CMS is 100% behind the effort. We all know that when CMS coughs, the US healthcare industry has a cold, and that’s why this final rule is such a game changer.

Paul Brient, President and CEO, PatientKeeper Inc.

One of the biggest HIT-related news stories in 2011 was the extension in the effective date of Stage 2 Meaningful Use. At some levels, this was a non-event. ONC’s decision to push back the Stage 2 start date for Stage 1 “early attesters” by a year (to Oct. 1, 2013) corrected a flaw in the original plan that effectively penalized hospitals for being on the ball and attesting for Stage 1 early. Yet the move created a fair amount of confusion in the market and headlines in industry media, and paused some Meaningful Use activity.

That is largely behind us now. The Stage 2 proposed rule will be published in the next month or so, and many hospitals are beginning to focus on the challenge of getting widespread physician adoption of CPOE and documentation software that will be required by Stage 2 and 3 objectives.

Todd Johnson, President, Salar

In a conference this past summer with chief medical information officers and physician informaticists, a physician’s panel was convened to consider the next big challenge for their hospitals. Without question, the conversion to ICD-10 topped the list. As discussed in that conference in Ojai, California, and paraphrased here: “ICD-10 is entirely a physician documentation issue.” While this statement does not to suggest a minimized importance for consultative services, back-end billing systems, or payer reform, it does call to light the critical nature of a physician’s clinical note. All coding starts from the note. Indeed, the note itself justifies all other pieces in this puzzle.

Going into 2011, we believed (as did many others) that Meaningful Use would continue to dominate all discussions. In retrospect, we’ve been surprised to see how quickly ICD-10 has become a front-burner issue though so poorly addressed by the healthcare market. Both hospitals and the vendor community alike seem woefully ill-prepared to address this issue which simply fuels the anxiety and paranoia of this “great unknown.” Just as Meaningful Use taglines blanketed the banners at HIMSS this year and MS-DRG coding dominated the banners in years before, you won’t be able to walk 10 paces without seeing ICD-10 lingo at HIMSS 2012.

Stephen Hau, CEO, Shareable Ink

The growing acceptance of enterprise cloud computing in healthcare has been a persistent and recurring theme of 2011. We are excited by this development because it will help accelerate much needed innovation in healthcare IT.

Hugely successful IT projects in our industry are relatively rare. Some may feel that this reputation is unfair and not deserved. However, who can deny that the industry has a track record of protracted implementation projects, lengthy development / release cycles, and expensive hardware investments that can quickly become obsolete?

Enterprise cloud computing represents an approach that is compelling for small physician practices (with no in-house IT support), large health systems (that require scalability, minimal administrative burden, and stringent uptime commitments), and organizations in between. We have observed shorter deployments, transparent and non-disruptive updates, and removal of hardware obligations from the customer. A cloud-based distribution model allows software providers to respond to market demands more nimbly – and healthcare organizations to take advantage of rapid innovation.

Taken together, enterprise cloud computing has the power to provide a very positive IT experience, allowing healthcare organizations to focus on the benefits of technology and creating a better environment for innovation.

Ed Daihl, CEO, Surgical Information Systems

Hospitals and anesthesia providers are facing reimbursement changes, shifting payment models, increased regulatory reporting, and Meaningful Use. We believe that hospitals will continue to focus on achieving ARRA funding to help combat these challenges.

It is important to us at SIS to ensure that we help our clients respond and prepare for these changes. We were the first perioperative healthcare software provider to achieve ONC Meaningful Use certification in 2010, and more recently, our Anesthesia Information Management System (AIMS) achieved Meaningful Use certification as well.

Evan Steele, CEO, SRS

One of the biggest HIT-related events was the recent announcement by HHS that it was postponing the implementation of Meaningful Use Stage 2. It was important, not because it will directly and significantly impact very many providers, but rather because of what it acknowledges and the positive message it sends.

All that the delay does is to reward early adopters by giving them access to three years’ of incentives under the easier rules of Stage 1 and to remove one of the reasons that might have discouraged some of them from attesting in 2011. Contrary to Secretary Sebelius’s contention, it can do nothing to speed adoption since the announcement came too late to impact any providers who have not already implemented—and been successfully using—a certified EHR.

What the delay does accomplish, however, is to send a heretofore unheard message—one of flexibility and of an acknowledgment of the significant challenges that Stage 1 is posing for many providers and vendors. By delaying the schedule for Stage 2, the government has let them know that the rules are not set in stone, that some things are negotiable, and that it is willing to work with providers and vendors in the interest of accelerating EHR adoption. If this same message is conveyed in the release of the actual rules for Stage 2, the likelihood of the program’s ultimate success will be greatly enhanced.

Rick Stockell, President, Stockell Healthcare Systems

As we have seen and experienced with our customers, the impact of prepping for and addressing Meaningful Use and ICD-10/5010 compliance on the healthcare industry was certainly significant in 2011, and it will continue to be a major factor into 2012 and beyond.

Richard Atkin, President and CEO, Sunquest

Over the past several years, structured reporting of laboratory results has been promoted as a public health priority. Its inclusion as a Meaningful Use objective is helping to drive the accelerated adoption of EMRs.

This past January, Sunquest Information Systems became the first and only dedicated laboratory information system vendor to achieve 2011/2012 Meaningful Use compliance and certification as an EHR Module by the Certification Commission for Health Information Technology (CCHIT.)

Sunquest continues to lead the industry with regard to the HITECH Act and Meaningful Use regulations. Meeting with government officials and continuously monitoring client preparedness are just two of the ways that Sunquest helps its clients complete the three steps for earning incentives: adopt certified electronic health record (EHR) technologies, achieve Meaningful Use objectives, and apply for incentive payments.

In addition to meeting many of the Meaningful Use modules, Sunquest solutions provide the capability to improve the overall safety, quality, and efficiency of healthcare. Our comprehensive Meaningful Use plan includes expanding the use and management of LOINC and SNOMED-CT codes. This initiative is a critical priority for our clients as they plan their LOINC strategy.

Sunny Sanyal, CEO, T-System

The recent decision by the US Department of Health and Human Services (HHS) to delay by one year the start date of Stage 2 Meaningful Use of certified electronic health records (EHRs) is by far the biggest HIT-related development of 2011.

By pushing the compliance deadline from Oct. 1, 2013 to Oct. 1, 2014, HHS recognized that the original timetable was too aggressive. Many hospitals planning to be ready for Stage 1 in 2011 or 2012 would have faced little lead time to prepare for Stage 2 requirements, which will not be finalized until July 2012. This deadline would have made it extremely difficult for both facilities and vendors to upgrade and install Stage 2-compliant EHRs by October 2013.

Prior to the delay announcement, we were beginning to hear rumblings from hospitals about potentially abandoning efforts to qualify for Meaningful Use incentives, instead waiting to attest until 2015 to avoid Medicare reimbursement cuts. The one-year grace period will enable providers who attest to Stage 1 Meaningful Use in 2011 to qualify for three payment years and those attesting in 2012 two payment years. It will give them and their EHR vendor partners additional time to develop a plan for Stage 2 compliance and design and implement optimal software. More importantly, it buys hospitals time to drive adoption of EHRs intended to improve the quality, safety and cost-effectiveness of care.

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Top News

HHS names the 32 healthcare organizations selected to participate in the Pioneer Accountable Care Organization model. The Pioneer ACOs will test the effectiveness of several payment models to support better care and outcomes at a lower cost.

From Unicorn Hunter: “Re: IT resources. I need people or a company who can extract, transform, and load data from popular ambulatory EMRs to EpicCare, with skill in Oracle programming and Epic Bridges.” We don’t usually get involved with recruiting, but leave a comment if you have suggestions.

From Curious Reader: “Re: Medicomp. Interesting interview with Dave Lareau. Which vendors are using Medicomp?” I checked with Dave, who unfortunately can’t help. “Because of the proliferation of patent trolls in the marketplace and their ‘bulk litigation’ approach, Medicomp does not publish its customer list.” But if you go to HIMSS, I bet he will tell you, and if it’s like last year, several vendors will be bragging on their use of MEDCIN and Quippe.

From Music Man: “Re: your frenetic schedule. Know that your efforts are appreciated by me, my team, and many others. You’ve liberated us from the pay-for-play, outdated, and hopelessly out of touch hegemony of the publications put out by HIMSS and others.” Not only was that a nice comment from a sponsor, it uses a word not often heard. I had to check the pronunciation and definition: hee JEM uh nee, meaning dominance. I’m pretty sure the old guard is still dominant, but we’re happy heel-nippers.

From Harold the Barrel: “Re: [vendor name omitted]. The head of its demo team resigned today. Also, rumor has it that [name omitted], a well-liked executive from before the acquisition, has resigned. Also, [name omitted], who was responsible for driving new acute care sales, has parted ways.” I’m leaving out specifics since I know from experience that the company doesn’t confirm personnel issues and I’m uncomfortable running the names of people without verification.

From Big Sigh: “Re: Cleveland Clinic. Despite its health technology savviness, it still orders tests without regard to best evidence.” The top five tests ordered there are of questionable value, says this article.

From The PACS Designer: “Re: Withings. Since it’s the holiday season, TPD thought it would be nice to highlight a potential gift for someone you know. If that recipient has health issues, the gift of Withings may help start the improvement process. Withings is Wi-Fi enabled, can monitor blood pressures and other body parameters, and also has a baby monitor application.”

I keep mentioning the Resource Center and Consulting RFI functions, so I finally got around to having banners made that link to them (to your left, below the Founding Sponsor ads). I decided to make it confusing by calling the Resource Center “Vendor Catalog” (actually, even though it’s inconsistent, I thought that label was more immediately understandable.) The Resource Center lets you find HIStalk sponsors by category, which is pretty cool, or you can look them up by name or do a full-text search. The Consulting RFI Blaster lets you fill out a really simple form and send it with a click to one, some, or all HIStalk sponsors who offer consulting services. CIO readers came up with the idea for both of these functions, asking for a way to make it easy for them to give sponsors a chance to earn their business.

It’s that time again: HISsies nominations are open. Name the best and worst vendors, choose the Industry Figure of the Year, and of course give thoughtful consideration of your nominee for Industry Figure in Whose Face You’d Most Like to Throw a Pie. The most-nominated winners advance to the final ballot in a couple of weeks, so don’t assume someone else will nominate your candidate. The winners (who, paradoxically, are losers in some categories) will be announced grandly at HIStalkapalooza in Lost Wages on Tuesday, February 21, amidst an embarrassment of jollity, eating, drinking, and edgy entertainment (by healthcare IT standards, anyway, where the 30-year-old third cousin of a former roadie for The Temptations with questionably legal rights to their name can cause near-pandemonium by covering their modest hits that charted decades before he was born). Even if you’re a button-down stiff who doesn’t find The Pie award funny, give some thought to the Lifetime Achievement and Industry Figure of the Year awards, which are serious. That’s athenahealth CEO Jonathan Bush above doing his one-man HISSies awards show at HIMSS 2011 in Orlando, decked out in the beauty queen sash we provided that read, “I’m In the Cloud.”

Acquisitions, Funding, Business, and Stock

VeriTeQ Acquisition Corp. signs a non-binding letter of intent to buy the non-core assets of PositiveID Corporation, including the company’s VeriChip and Health Link businesses that PositiveID has not marketed  for over two years.

Intel’s investment arm makes an investment in Pixeon, a Brazil-based PACS vendor.

Chicago healthcare technology accelerator Healthbox names its inaugural class of 10 startups that will receive seed capital, work space, and mentoring:

• CareHubs (healthcare enterprise social platform)
• CareWire (patient text message for appointments)
• Corengi (matches patients to clinical trials)
• The Coupon Doc (drug discounts)
• DermLink (teledermatology)
• Iconic Data (cloud-based patient list manager for physicians)
• PaJR (identifies readmission risk by self-reported patient status)
• PUSH Wellness (wellness incentives)
• SwipeSense (hand hygiene)
• UnitedPreference (prepaid preventative health cards)

Sales

Silverton Health (OR) contracts with Summit Healthcare for interface and connection tools to facilitate its migration to the Meditech 6.0 platform.

Adena Health Systems (OH) awards a five year contract to Precyse for transcription services and various aspects of HIM administration.

Crescent City Beacon Community (LA) selects Mirth Corporation’s interoperability products.

The Delaware HIN chooses ABILITY Network’s DIRECT Messaging tool for the secure exchange of health information between providers.

Baystate Health (MA) selects ATLAS to provide outreach and connectivity services to manage Baystate’s lab, radiology, and other ancillary orders and results requirements.

East Tennessee Health Information Network will use the Axolotl HIE platform from OptumInsight to connect regional providers, hospitals, labs, and pharmacies.

St. Vincent’s HealthCare (FL) selects Orion Health HIE and Clinical Portal.

Shannon Health (TX) chooses the Rothman Index for patient surveillance.

Harrington HealthCare System (MA) names Harry Lemieux as CIO. He was previously with Morton Hospital and Medical Center.

Craig Joseph MD, is named CMIO of Agnesian HealthCare (WI). He was previously with Epic.

Jim Milligan, previously with Antek Healthware, has joined Baltimore-based PM/EMR vendor Software Unlimited, Inc. as CEO.  Readers voted him as “Best Non-CEO Executive” in the 2006 HISsies when he was with QuadraMed.  

New Zealand businessman Andrew Ferrier, formerly CEO of the country’s dairy co-operative, invests in Orion Health and takes a seat on the company’s board.

Announcements and Implementations

Hoboken University Medical Center (NJ) gets a Meaningful Use check for its use of Medsphere’s OpenVista.

Ohio-based HealthSpot will market its Care4 Station primary care telemedicine kiosk to military facilities. It includes software for scheduling appointments and managing health records.

Government and Politics

MGMA calls for HHS to immediately issue an expanded six-month contingency plan for the Version 5010 transaction standards. MGMA reports that less than a third of its members have completed all the upgrades and testing required for the 5010 transition and is encouraging HHS to allow physician practices to continue submitting Version 4010 transactions

Cedars-Sinai Samuel Oschin Comprehensive Cancer Institute will provide clinical expertise to WellPoint as the insurance company develops a commercial application using IBM’s Watson technology.

Other

The Apple App Store names AirStrip CARDIOLOGY the best US medical application for the iPhone.

A just-published article in Annals of Internal Medicine finds that users of the VA’s My HealthVet are overwhelmingly interested in sharing their PHR information with family members or other providers. Another article finds that primary care providers are mixed about sharing electronic progress notes, with a significant number expressing concern that increased patient worry might outweigh the benefit of improved communication and education. An editorial discusses the two articles, but mostly just asks a lot of cautious questions about what patients might do with the information in their records. 

Rumors say The Chicago Sun-Times will be sold to an investment group led by Michael Ferro, CEO of Merrick Ventures and chairman of Merge Healthcare.

A hospital CEO alerts colleagues that his Facebook friend requests are actually coming from an imposter who set up a Facebook page using his name and photos. The scammer has friended several hospital employees, with at least one of the requests saying, “I love you.” The CEO e-mailed Facebook for help and got the usual prompt, personal service: they changed something so that he can’t see the fake profile, even though everybody else still can.

The laptop of a terminally ill woman in Canada is stolen from her apartment, and along with it the only copies of the farewell message videos she had recorded for her five children under 18 to remember her by.

The New York Times runs an article taken from Micky Tripathi’s HIStalk Practice post describing the experience of his Massachusetts eHealth Collaborative in dealing with a lost laptop. In his own blog, he mentions his annoyance that the paper didn’t credit HIStalk Practice (since corrected, and notice that he still had preemptively slipped it into the photo they asked him for), the article implied that an increasing number of breach reports must mean that more breaches are occurring, and it suggests that electronic records are more susceptible to inappropriate exposure. Most importantly:

Finally, I found it a little ironic, that while the NYT article itself is an important step toward educating the public about the real issues surrounding the loss of electronic patient information, it glossed over the steps we’ve taken to educate the industry – like writing the post that lead the Times to the story in the first place. I think it was a bit of a missed opportunity to encourage organizations that have similar experiences to follow the path of full disclosure that we did.

Weird News Andy is doing his own end-of-year retrospective, targeting this “high-caliber story” from Italy. A man hit in the head by a bullet fired by a New Year’s reveler is lucky when it lodges in his nasal passage without causing serious damage. His luck got even better as he waited to see a doctor in the hospital: he sneezed the bullet out of his nostril, requiring only eye surgery before being discharged.

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Sponsor Updates

• Providence Holy Family Hospital (WA) uses the Access e-Forms Repository to standardize surgery documentation.
• CBSMedTech joins MD-IT as a Medical Transcription Service Organization associate.
• Practice Fusion releases an infographic to share its record growth and accomplishments for 2011.
• API Healthcare offers a case study on MemorialCare Medical Centers’ (CA) successful integration of staffing, time and attendance, and payroll software.
• Concerro hosts a free January 24 Webcast  on how to avoid burnout in the healthcare management workplace.
• Vermont Information Technology Leaders partners with CapSite to assist its physician practices in adopting EHRs.
• Joel French, CEO of SCI Solutions, discusses four proven methods to improve hospital revenue in 2012.
• Gateway EDI releases a free webinar on how to effectively build a revenue management strategy.
• T-System publishes a white paper on the advantages and disadvantages of ICD-10 and the effects on EDs and hospitals.
• The American Hospital Association exclusively endorses Imprivata OneSign single sign-on.
• Orthopaedic Center of Southern Illinois selects SRS EHR for its nine providers.
• TeleTracking Technologies announces that its Capacity Management Suite is now iPad compatible.

Contacts

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

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I really struggled with what to write about for this week’s Curbside Consult. I thought about being witty or trying to come up with some clever HIStalk version of “Twas the Night Before Christmas,” but the things I saw today top anything I could ever come up with. So listen, dear readers, to the cautionary tale of why each and every one of you who work in health IT can never forget the importance of your role, whether large or small.

As you may have picked up from my columns, when I’m not in the CMIO trenches, I work in various clinical environments. I don’t have to (it’s not part of my contract,) but I discovered during a year-long sabbatical from patient care that I really did miss taking care of people. I missed the simple joys of being able to make a new parent confident that their baby will eventually sleep through the night or helping patients come up with a plan to manage chronic health conditions. I missed the patients who came to me with lacerations because they knew I could patch them up faster than the local emergency room.

I did not, however, miss dealing with insurance companies, RVU compensation models, and administrators who didn’t know beans about running a medical practice.

When I was ready to see patients again, I had to find opportunities that wouldn’t interfere with my CMIO duties and that were flexible enough for me to still have plenty of time to cultivate my hobbies (can one really consider martini drinking a hobby?) I chose to be a non-employed physician. Sometimes I work for a staffing company, covering urgent and emergent care facilities. Sometimes I work as a locum tenens to cover docs who are on medical or family leave. Today was a little of both and to compound the “perfect storm” that was brewing, it was a place I hadn’t worked before.

You know you’re in trouble when you pull up to the designated employee parking garage and it’s essentially a chain link cage with a badge-swipe entry portal that looks like a sally port. As a last-minute fill-in for a physician out on leave, I didn’t have a badge, so I had to phone a security guard, who had to find my name on a list. Of course they didn’t have me on said list, but I must have looked fairly non-scary, so they buzzed me in.

I parked (next to a Corvette and a Jaguar, safe in their cage – go figure) and headed in. The staff was friendly and I had enough time to get fully caffeinated before the patients started rolling in, both of which are usually good signs.

The Emergency Department Information System (EDIS) was one I had worked with before, so I was pretty confident that I was going to be able to roll along without incident. Boy, was I wrong. Today was a veritable textbook of “lessons learned” on what can go totally wrong with software, hardware, and workflow. As I mentioned, this is why it’s so important for everyone who works in health IT to take their jobs seriously. Information Services leadership take note and hold on tight, because here we go:

1. I was given a stock password and told to change my password the first time I logged in. Unfortunately, my security classification doesn’t permit password changes, requiring me to call the help desk, which told me I could tell them what I wanted and they’d load it on their end. Really?
2. Better yet, the PACS system has a generic login and password left on a sticky note taped to the monitor. When I asked about this, I was told they had gone to a generic login because the doctors couldn’t remember their passwords. I can’t imagine what their HIPAA audit policy looks like for figuring out who viewed what data with generic logins.
3. To make things more exciting, the IT team scheduled a planned upgrade of the financial and registration system during the day shift. There were no printed downtime procedures available for staff and no clear communication plans. We were alerted to upgrade status by random people who would walk through the ED shouting “it’s back up” or “it’s down again.” Eventually we figured out that the patients whose names appeared in mixed case were registered using the integrated system, and patients whose names were all lower case were manually registered in the EDIS. That might have been nice to know since those manually registered patients had no outbound orders stemming from their accounts. We figured this out after radiology never showed up to do films on our patients – apparently we were supposed to call radiology to schedule those manually registered patients.
4. I’m usually obsessive about hand hygiene before and after touching patients. Today I actually felt an uncontrollable urge to wear gloves to touch the keyboard. You may have noticed I said “keyboard,” as in singular. There was one computer for me to use in a 10-bed emergency unit and it was a fixed desktop. That means no documenting in a patient-facing manner, thereby leading to rework, possible memory errors, and potential transcription errors. The nurse also had a single fixed workstation. Interestingly, the registrar had a really nice new computer on wheels (wireless) to go with their spanking new financial and registration system. So much for enabling patient care.
5. The software had not been updated to a Meaningful Use-compliant version. Not that being MU certified has anything to do with usability or efficiency, but it has become at least a minimum standard for software to meet. Basic demographic information is required to meet MU and this system had some major holes. I know the vendor has a MU compliant version (I’ve used it before,) but this was not it. The users were unaware of any planned upgrades.
6. I’m fairly certain the EDIS was not JCAHO compliant or remotely adherent to the precepts of the Institute for Safe Medication Practices, either. For prescribing, it was almost entirely hard-coded with physician “favorites.” Unfortunately, many of these favorites included “do not use” abbreviations as well as medications that have been off the market for several years. Users told me the prescribing system was hand-built and doesn’t import data from any of the respected formulary vendors. It was pretty clear no one was updating it, either. There was no appropriate way to prescribe current weight-based pediatric prescriptions. In order to get a non-ambiguous medication order for the pharmacy, I had to find the closest “canned” medication I could then print it on safety paper, finally crossing out the confusing parts and handwriting a traditional script below to clarify the confusing computer-ese. To the pharmacists on the receiving end – mea culpa, I didn’t know what else to do.
7. There was no ability to save any kinds of defaults or templates when documenting patients. I had the choice of either a “brief” history/ROS/exam, which was basically a canned jumble of findings (which I’m sure some committee somewhere worked really hard to agree on, rendering it individually useless) or the ability to check each individual finding box individually. After a full complement of ED patients, I’m seeing individual checkboxes when I close my eyes.
8. Customizations had been placed into the system without logic, resulting in duplicates and user brain fatigue. Most of the follow up clinics were listed as “Clinic – Specialty” but every now and then I’d see a rogue like “Derm Clinic” (even though Clinic – Dermatology was in there) but there was no consistency.
9. Clicking for Spanish patient education materials occasionally printed documents in a language which was distinctly not Spanish. Thank you, Señor B for gently educating the gringa that the discharge instructions were muy mal, because you’re right, I didn’t look at them before I handed them to you or I would have known. Shame on me and my apologies to those who taught me during eight years of Spanish classes.
10. Printers were non-configurable. I could print the discharge summary for the patient, but when I wanted to print additional information (such as sources of free medication for uninsured patients), my only choice was “print to file.”

I could keep going but I won’t. Hopefully you get the point.

As an outsider, the confluence of all the various decision streams at work here created a veritable maelstrom in which we tried to deliver care. It would be tempting to refuse to go back if I’m ever asked to staff that facility again. What’s interesting, though, is that I probably won’t refuse if I’m called. Why? Because the patients were genuinely needy, the care provided was solid despite the challenges, and the staff worked their tails off as a team to get through the shift. Everyone did his or her part and then some.

By the end of the day, it was like we had worked together forever. Hugs were exchanged (as well as recipes for Christmas cookies and empanadas – thanks for introducing me to things I never thought possible with chocolate and coconut) and high-fives given. I learned a nice trick for removing the proverbial rusty nail from the bottom of a foot, courtesy of a provider who shoes his own horses in his spare time. I did a little bit of education on Meaningful Use and information security.

Last, but most important, I helped some people. And that, my friends, is what it’s all about.

Feliz Navidad, próspero año y felicidad.

E-mail Dr. Jayne.

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