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Monday Morning Update 9/24/12

September 22, 2012 News 8 Comments

9-22-2012 7-25-13 AM

From Eddie T. Head: “Re: Forbes 400. They’re pulling Judy Faulkner’s net worth out of the air, seeming to make up their numbers based on an alternate reality where Epic is publicly traded and the stock price is based on the nonsensical P/E ratios of companies like Cerner (35) or athenahealth (195). For comparison, Google and Apple have P/E of 21 and 16.” My first thought on seeing that Forbes estimated Judy’s net worth at $1.7 billion: they couldn’t possibly know what she’s worth since none of her assets, including Epic’s ownership structure, have been publicly reported. Epic has previously corrected reporters who referred to Judy as a billionaire – they say she’s not. Cerner’s market capitalization is five times revenue, and by that formula, Epic would be worth about $6 billion if (and it’s a huge “if”) it went public and was able to earn stock market credibility as Cerner does without screwing up the operation. Judy supposedly owns 40% of the company, so that would value her stake in the theoretically publicly traded Epic at $2 billion. That doesn’t mean she has $2 billion in the bank, but it’s safe to assume that she’s not overdrawing regularly.

From Milkshake: “Re: Forbes 400. Now I know why Judy and Neal are always smiling. I wonder how long they will keep their smiles once Grassley catches wind of the ubiquitous up-coding scams their instruments facilitate.” I don’t think they have a lot to worry about from Chuck since, despite the high expectations I had for him, seems to excel only at writing stern letters and then moving on to whatever headline grabs his attention next. Someone intent on scamming Uncle Sam in any fashion (medical or other) would probably find it more efficient to use a computer, but that’s hardly a good reason to ban computers. I’m somewhat anti-gun, but I still laugh at the folks at the anti-gun rallies who carry signs saying “Spoons made me fat.” In other words, the problem is people, not their choice of inanimate objects.

From Thinking Ahead: “Re: Epic. What’s their succession plan? Judy is almost 70, few people on the planet could afford to buy her out, and she doesn’t have much appetite for going public. Employee-owned models are nice in theory, but few if any have really worked, and to my knowledge Judy doesn’t have family engaged who could take over. The succession plan is important to a hospital that has paid tens or hundreds of millions for a product with a shelf life of decades.” I’ve talked to people who have seen the succession plan and they are comfortable with it. Epic would certainly change without the presence of the visionary and sole public face of the company who is personally involved with even the most trivial company decisions. However, I said the same about Apple and Steve Jobs and they seem to be doing just fine without him, although it’s been just a year since he died.

9-22-2012 7-26-34 AM

From The PACS Designer: “Re:Information Week 500. This year’s InformationWeek 500 finds Beth Israel Deaconess Medical Center at the #1 position. TPD salutes CIO John Halamka, MD for guiding his institution to the top of the IT world with innovative solutions, such as their search tool called Clinical Query which can be emulated and used by other healthcare organizations to improve processes.”

From Looking Deeper: “Re: HIStalk Advisory Panel on patient-facing technologies. I’m loving it. Finally we get some honest opinions on a topic that hasn’t been discussed to death like EHRs.” I agree — it was interesting information. EHRs get 90% of the attention these days, but they don’t address every problem. I’ve really enjoyed hearing what the Advisory Panel has to say. I send them a topic or two once a month, so you can look forward to more frontline reports. Thanks to those panel members who take the time to provide thoughtful answers – the industry benefits.

From Cache’ Jedi: “Re: Epic, MUMPS, and Cache’. VC and software guru Paul Graham describes a kind of momentum like Epic has now in this article.” The 2001 article describes why a less-popular programming language might actually be a “secret weapon” that stymies competitors because — geek arousal factor aside — it might allow companies to develop software better and faster. “In business, there is nothing more valuable than a technical advantage your competitors don’t understand … the people who understood our technology best were the customers. They didn’t care what language Viaweb was written in either, but they noticed it worked really well … the only programmers in a position to see all the differences in power between the various languages are those who understand the most powerful one … they’re satisfied with whatever language they happen to use, because it dictates the way they think about programs … the median language, meaning whatever language the median programmer uses, moves as slow as an iceberg …the more of an IT flavor the job descriptions had, the less dangerous the company was. The safest kind were the ones that wanted Oracle experience. You never had to worry about those.”

9-22-2012 5-39-33 AM

Most of us haven’t requested and reviewed copies of our EHR information. New poll to your right: McKesson announced Better Health 2020 in December 2011. Since then, how has its position in healthcare IT changed?

9-22-2012 2-26-50 PM

Rumor from a couple of readers is that McKesson has closed on the acquisition that I mentioned several weeks ago. I won’t run the target’s name since MCK is publicly traded, but above is a graphical hint.

Condolences to Intermountain Healthcare VP/CIO Marc Probst, whose daughter Heather died of leukemia last week. She was 16.

9-22-2012 7-50-20 AM

St. Rita’s Medical Center (OH) eliminates 60 jobs, some of them transcription positions that are no longer needed after its Epic implementation.

The finance minister of Ontario, Canada proposes legislation that would cap the salaries of public sector employees at around $400K per year. Most of the 150 employees who would be affected are hospital executives. Ontario Hospital Association is “deeply disappointed” since it says hospital leaders manage half of Ontario’s annual budget and therefore should be the most skilled and experienced leaders instead of those willing to work in “an arbitrary compensation environment which bears no relation to the job market.” I thought we were the only country where non-profit hospitals and high-profile charities pay on par with publicly traded companies in competing for the apparently immense talents of the altruism-free executive hired guns who are available only to the highest bidder.

Cerner speeds up construction of its new campus in Kansas City, KS, deciding to start immediately on the second nine-story tower instead of waiting until later. Construction will be completed 18 months earlier than originally planned, with the first tower opening next year and the entire campus finished by mid-2014.

Georgia Tech and Emory University are developing Remotoscope, an otoscope-like iPhone attachment that allows parents to take a picture or video of their child’s eardrum and send it to a doctor for review instead of heading off for the ED to be checked for an ear infection.

New River Medical Center (MN) is looking for a buyer after financial problems following a spat with a large physician group. The doctors took there business to a competitor hospital, with one of their stated reasons being that the other hospital used the same EMR they use and OMC recently chose a different product.

The New York Times publishes another story insinuating that EMRs inflate hospital and medical practice Medicare bills through up-coding. It includes vague references to fraud and OIG’s complaints that EMRs make it easy to bill for work not performed. Nobody seems to blame a screwy, code-driven payment system, the lack of CMS vigilance, and the strong possibility that providers are submitting accurate bills that just happen to inconvenience payers who have structured their operations around perpetually under-billing providers who are now armed with better tools. Fraud is fraud regardless of the tools used and haven’t seen CMS prosecute anybody or change its hopelessly complex payment rules. This would be like the IRS complaining that tax collections are down because taxpayers are using TurboTax to file more accurate returns. Instead, the IRS audits tax returns electronically, goes after cheats, and hopes that the majority of taxpayers it won’t audit will stay honest for fear of incurring its wrath. Some folks are raising an out-of-the-box question: why aren’t doctors paid by the hour instead of by the procedure? They could inflate their time spent, but that wouldn’t be as hard to detect. Are those Chicago-area pathologists really worth $2 million a year in taxpayer money just because they oversee big labs?

A Johns Hopkins surgeon and author starts out his Wall Street Journal opinion piece on hospital errors with the tired “jumbo jets full of patients harmed” cliché, but gets quickly to some interesting transparency measures that could improve safety. Specifically, hospitals should: (a) post dashboards of infections, readmissions, surgical complications, “never events,” and patient satisfaction; (b) post the results of anonymous safety and teamwork surveys of their employees; (c) record video of procedures and other process to review for quality improvement opportunities and as a permanent record if questions arise later; (d) use “open notes” where patients see what is written about them and correct any mistakes or add their comments; and (e) eliminate the use of gag orders that prevent patients from speaking about negative experiences and malpractice lawsuit settlements.

9-22-2012 8-56-56 AM

Wood River Health Services (RI) goes live on NextGen’s EMR. The Federally Qualified Community Health Center was already live on patient billing and dental services.

The surgery waiting room of the replacement Kaiser Permanente Fontana Medical Center (CA) that opens in May will have a computer bar where visitors can use their technology and the hospital’s WiFi network.

The board of Olympic Medical Center (WA) approves a $1.5 million hardware budget request for its Epic implementation, which the board approved two weeks ago in a $7.6 million agreement with Providence Health and Services. Epic will replace five OMC systems. The hospital hopes to earn $7.2 million in HITECH payouts over four years and chose to affiliate with Providence’s Swedish Medical Center because it needed help with its implementation.

Intelligent InSites mentions that its RTLS software is one of the technologies mentioned by a local TV station mentioned in covering last week’s opening of the new 50-bed Texas Health Resources hospital in Fort Worth. Intelligent InSites will integrate with Epic, Cen Trak, LodgeNet, Rauland-Borg, Siemens, TeleTracking, and Vocera. You would think that with all the emphasis on hospitality that THR would have chosen a more patient-friendly name than Texas Health Harris Methodist Hospital Alliance. Quick, shut your eyes and say the name you just read. See? Even the apparent shortcut name – Texas Health Alliance – doesn’t actually include “hospital” in its name, and sounds more like a vaguely threatening lobbying group instead of a place of healing.

Strange: a physician’s former office manager (also her landlord) sues him for sexual harassment, claiming he made her take an Internet sex test, sent her obscene text messages, offered her a watch in return for sex, and asked her to hand him a “Happy Birthday” teddy bear from his children to cover his face while he watched live sex on a webcam via Skype. She says he fired 40 percent of his employees and then fired her when she complained about not being paid overtime to cover. The doctor collected $5.3 million in 2008 as a Medicare fraud whistleblower after turning in University Hospital for using unlicensed beds to treat addiction payments.

More on QuadraMed in this week’s HIS-tory from Vince, with help from alumnus Frank Pecaitis.

E-mail Mr. H.

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Currently there are "8 comments" on this Article:

  1. Regarding Hopkins Surgeon: Until the administrators face sanctions for being disruptive to safe care because of their profit motive, the 5 recommendations are soft and laden with unintended consequences. For instance, when NYS published death rates at heart surgery, many hospitals sent the sickest cases, those that needed it most, out of state.

    Regarding NY Times: How do you expect doctors to pay for all of the extra time required to click in simple medications after expending more then 1.5 minutes every time they log on? How do you expect vendors to sell their EMRs if they did not tell doctors how to construct a complete progress note?

  2. Regarding my point about Epic succession planning, I don’t think the comparison to Apple is valid. Apple was a publicly owned company during its renaissance and when Jobs passed away. From an equity ownership, the transition was really a non-event because they were publicly traded.

    Epic on the other hand, with Judy owning a reported 40%, will have a profound shake-up when she steps down or when anything happens to her. The only people with the means to buy her share would be a) the public through an IPO, b) a major private equity firm, or c) another company.

    The equity piece of succession planning is more of what I am concerned about, not the business vision. I am sure Epic has smart people (as most strong companies do) who are capable of running the business piece of it.

  3. @Thinking Ahead – is there a reason to assume that the Epic succession plan does not include an equity succession plan? I would be surprised if a solution for that issue is not already in place.

  4. Eddie T – I am sure there is a plan in place. As a customer, what that plan is is rather important to me.

    If 40-50% of Epic is acquired by a private equity firm, that would affect my long-term user experience. If Epic stock is sold in an IPO, that would affect my long-term user experience. If Epic is acquired by, say, GE (just a random example), that would affect my user experience.

    Some of the developments with each scenario would be positive, some negative, but it is relevant. This isn’t exactly an Iphone I’m buying. I hope to have a relationship with this company for a decade or more, and what they look like in 10 years is important.

  5. “I’m somewhat anti-gun, but I still laugh at the folks at the anti-gun rallies who carry signs saying “Spoons made me fat.” In other words, the problem is people, not their choice of inanimate objects.”
    Guns and Spoons if left to their own devices just lay there. Computers function on their own and while the source of those functions in human driven, a computer will malfunction where a gun or a spoon if left alone will not. You’ll take my PC away when you pry it from my cold dead hands….

  6. Regarding Epic succession plan and future…

    If you have been reading Vince’s HIS history (or lived it like I have) there are no large successful HIT companies that have not gone through some kid of ownership change- over. And eventually it will happen to Epic as well, just a matter of when and why.

    That being said – what difference does it make?? If you are intent on buying a system from a vendor that will never experience an ownership change-over you will buy nothing.
    Or if you require in a contract a statement that the vendor will not be acquired, or experience an ownership change over while you are a customer, you won’t be signing any contracts. On the hand, if a vendor is agreeable to signing such a contract – better look elsewhere.

    Point is, the HIT world is a world of change and if you can’t deal with that – better find a new career.

  7. Thanks for your rebuttal / discussion of the NY Times EHR story. We did a study at an Upstate NY hospital, looking at 2 years of history before and after EHR go-live, and found the facility was now coding accurately, rather than under-coding. In our new-term negotiation with an HMO, we offered to go back two years and re-code the manually-coded transactions to provide them with new, more accurate billings. They, ummm, backed-off.







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Reader Comments

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