Cerner shares fell 4.5 percent Friday after the company reported lower-than-expected revenue for the quarter and also warned of slightly reduced revenue expectations for full-year 2015. From the earnings call, the acquired Siemens Health Services business contributed $176 million in the quarter of the company’s overall revenue, about 18 percent of the total, with “minimal bookings contribution from Health Services” and minimal sales expected for the year. HS is now on track for $1 billion in annual revenue vs. the originally expected $1.1 billion, but Cerner wants to stop talking about that business separately since it now isn’t.
Cerner has set aside $35 million in Q2 for a voluntary separation program that will affect 2 percent of the workforce, which works out to around 400-500 people from both the Cerner and Siemens sides. Cerner also called out its Business Office Services for physician practices, which the company says can display an unnamed cloud-based competitor (presumably Athenahealth) because Cerner’s lower staffing requirements cost 20 percent less and “many of these larger and more sophisticated clients are facing several challenges with our competitor’s solution, such as having 50 to 60 percent of the claims requiring manual intervention because they don’t fit the cloud configuration.” Cerner says three former Siemens clients committed to Millennium in Q1, although it admits that those decisions had probably already been made before the acquisition announcement just sped them up.
Speaking of the Cerner earnings call, a Morgan Stanley stock analyst set a world record by sprinkling the maddeningly meaningless “kind of like” liberally throughout questions that were buried somewhere under an avalanche of verbal crutchery:
You talk about the contract with Intermountain and really kind of like a new way of doing business , so when you think about kind of like other health system that are similar in size, can you just kind of like share with us how kind of like that pipeline is looking and do you need to kind of like first implement all the 22 hospitals of Intermountain or should we expect to see a deal, kind of like that looks at that type of intelligent systems before that? … When we look at kind of like your new contracts, what percent of your new contracts have kind of like a Population Health feature to them? And how should we think about kind of like what is an average Population Health deal in terms of revenue contribution?
From Interesting: “Re: John Hammergren. He gets a lot of negative press, but this story (which doesn’t identify Kayla Hammergren as his daughter) gives a different perspective on the family life of America’s highest-paid CEO.” A Boston College newspaper article notes the meeting of senior Kayla Hammergren with the four-year-old boy to whom she donated bone marrow in 2013 after she signed up for a donor registry at a campus recruitment drive. Her donation of bone marrow (and later blood) led to the boy’s being declared free of leukemia a year later.
From Greg Marmalard: “Re: Castlight Health. Our company just rolled it out to employees this week. I searched on a common surgery for glaucoma and it came up empty. Then I searched just on glaucoma and got information on eyeglass exams, low back pain, acne surgery, culture bacteria, and vaccines. A teammate looked up follow-up visit costs for PCPs in his area (including his own) and there was some range shown although it wasn’t large. Then he checked out hip replacement surgery and it came back with over 50 hospitals and surgical centers in a 25-mile radius showing the same cost for all of them. It asked for my email address so they can send me endless emails, so I unsubscribed.”
From Barb Dwyer: “Re: MyChart on Apple Watch. Photos attached.”
HIStalk Announcements and Requests
Forty percent of poll respondents say a medical bill has caused them financial hardship within the past two years. Two readers (one Canadian, one on Medicare) said no, while two others said that high-deductible plans put them much more at risk than before. New poll to your right or here, for those who work for a health system: how would you grade your most recent encounter with your employer’s service offerings? I would, of course, love to get more details if you’d leave a comment after voting.
Listening: new from Mikal Cronin, summery but sometimes growly power pop on the trustworthy Merge Records label. Also: addictive melodic ballads from James Blunt, a former British Army captain and current Doctors Without Borders supporter who cranks out pretty amazing music. One more from a reader: jangly, tied-dyed psychedelic prog from Temples, young English guys who sound like like old English guys did in 1972.
I was thinking about how consumers created a huge but questionable market for herbal and vitamin products whose manufacturers make medical claims without FDA oversight. That happened largely because doctors ignored the demand and refused to educate themselves and their patients about those products, so consumers sensed that traditional medicine was stonewalling them and bypassed the medical system entirely in favor of “alternative medicine” (some of which actually works) and created a great business for chiropractors and other non-physicians who jumped all over the new income source. The same thing happened with weight loss, sexually related products, acupuncture, etc. My conclusion: clinicians need to educate themselves on wearables and health apps because consumers will just sidestep them if they don’t. Unfortunately, short and brusque PCP encounters don’t leave much time for discussions about general health and doctors are often ill prepared to participate in those discussions anyway since their focus is often myopic, standardized, and focused on symptom alleviation via drugs or procedures. For me at least, the ideal team would be a generalist health coach (whose knowledge is broad but not necessarily deep) who is supported when needed by a physician. Many patients don’t believe doctors have the time, objectivity, or economic incentive to serve as their ongoing health partner.
Last Week’s Most Interesting News
- Cerner and Allscripts turn in unimpressive quarterly results.
- President Obama nominates National Coordinator Karen DeSalvo, MD to the post of HHS assistant secretary for health, in which she has served in an interim capacity for several months.
- Harris Corporation restructuring suggests that the company may be planning to divest its healthcare business.
- Cognizant reports impressive quarterly financial results that were significantly driven by the former TriZetto business it acquired in November 2014 for $2.7 billion.
May 12 (Tuesday) 1:00 ET. “HIStalk Interviews Regina Holliday.” Catch up with Regina Holliday and her recent patient advocacy efforts as she chats with HIStalk’s Lorre and Jenn about the HIMSS conference, The Walking Gallery, her upcoming advocacy events, and her new book. Regina will talk about how providers and vendors are working to make the patient voice heard.
May 19 (Tuesday) 2:00 ET. “Lock the Windows, Not Just the Door: Why Most Healthcare Breaches Involve Phishing Attacks and How to Prevent Them.” Sponsored by Imprivata. Presenters: Glynn Stanton, CISSP, information security manager, Yale New Haven Health System; David Ting, CTO, Imprivata. Nearly half of healthcare organizations will be successfully cyberhacked in 2015, many of them by hackers who thwart perimeter defenses by using social engineering instead. The entire network is exposed if even one employee is fooled by what looks like a security warning or Office update prompt and enters their login credentials. This webinar will provide real-world strategies for protecting against these attacks.
May 20 (Wednesday) 1:00 ET. “Principles and Priorities of Accountable Care Transformation.” Sponsored by Health Catalyst. Presenter: Marie Dunn, director of analytics, Health Catalyst. Healthcare systems must build the competencies needed to succeed under value-based payment models while remaining financially viable in the fee-for-service landscape. This webinar will outline key near-term priorities for building competency at successfully managing at-risk contracts, with a particular focus on the importance of leveraging data to drive effective decision making
Acquisitions, Funding, Business, and Stock
From the Allscripts earnings call:
- The company added 200 clients even as revenue declined due to lower professional services sales, a trend the company expects to continue given the lack of new government mandates.
- Gross margin was “disappointing” because of the decline in client services margin, some of that due to the one-year delay in New York’s mandatory e-prescribing program.
- The company sold two new Sunrise clients: 51-bed Palo Verde Hospital (CA) and 53-bed Grand Lake Health System (OH).
- No new international sales were made in the quarter.
- The company reported severance payments of $6 million during the quarter and told analysts to expect more severance payouts in Q2.
- The company hopes to have one or two referenceable clients running the full suite of Allscripts products, including Sunrise Financial Manager, by the end of the year.
- On the possibility of acquiring population health management companies, CFO Richard Poulton said, “That’s definitely an area that is high on our list of areas to invest in. Whether it’s purely an acquisition, though, is a different question. I don’t have to tell you that some of the companies that are out there, fairly immature companies, are with advertised capabilities are trading at crazy valuations. We’ve looked at a bunch and we’ll continue to look at a bunch, but right now, we have a pretty good plan that is not heavily dependent on acquisitions.”
Vince Roach, founder of Technology Management, Inc. and later an executive with Daou Systems, died May 8 in Indianapolis. He was 71.
A Web petition at GetMyHealthData.org urges politicians, providers, and insurance companies to ensure that patients have access to their own health data.
India-based Tata Memorial Hospital works with a for-profit company to offer free, evidence-based online second opinions for cancer treatments. Patients submit their medical records online and receive expert opinions within a few days. Commercial partner Navya offers a patented “analysis engine” that reviews best practices, expert opinion, and patient preferences to provide treatment options. Navya co-founder Naresh Ramarajan, MD has a Harvard undergrad, Stanford MD with community health emphasis, and is completing a critical care and pulmonology fellowship at UCLA along with a PhD in medical informatics.
An in-depth Washington Post piece says wearables have become big business, but questions the value of the data they create, especially by “life loggers” who obsessively try to quantify their every move in a quest for “self-perfectability” in the “narcissism of the technological age.” A professor says it’s a lot easier to collect information than to do something useful with it, while the article also points out possible privacy concerns, such as in 2011 when Fitbit users realized that their publicly shared data made it easy to determine the frequency, duration, and vigor of their sexual activity. My most recent pet peeve is people who have their fitness apps set to proudly tweet out their latest run or bike ride, which I can personally guarantee no fellow earthling cares about.
An Esquire writer who tried the Apple Watch says it “seems to be designed to be a thing you can’t get overly excited about” and is mostly useful for ignoring unimportant text messages and for the all-important fanboy bragging rights, adding that the watch itself has decent battery life but it sucks the iPhone battery dry quickly since it’s conversing via Bluetooth. It will, he says in stating the obvious, become obsolete quickly and will require buying it all over again, also stating the obvious that Apple zealots never seem to mind.
Half the ophthalmologists working for Indiana University School of Medicine have quit since construction of a $30 million eye institute began in 2008, with key issues apparently being a forced practice integration, disputes over their share of the $12 million the eye clinical brings in each year, and aggressive fundraising in which doctors were sent lists of their upcoming appointments by the fundraising director (who is also the wife of the department chair) who flagged high net worth people so they could be given extra attention and hit up for donations. One of the doctors filed a HIPAA complaint over that practice, which the medical school says it has since fixed.
Idiotic lawsuit: a Raleigh, NC police officer who spilled his coffee in his lap is suing Starbucks for the maximum allowed $750,000, saying the emotional damage aggravated his Crohn’s disease and that he was served a large cup without an insulating sleeve as required by the chain’s policy. He told the jury that he really should get $10 million. He didn’t even pay for the coffee since officers in uniform aren’t charged, a benefit he had taken advantage of 50 times in two months. The officer admitted under questioning that after the spill, he went back to the police station to get his truck, drove home, had his wife take pictures of his burn, and finally sought medical attention 2.5 hours later. He says, “I knew it was hot, but not that hot,” indicating his prime candidacy for a Frappucino.
Weird News Andy calls this story “Doctors Acting Badly.” In England, an OB-GYN and his RN wife are charged with slavery after a Nigerian man claims the couple hired him 24 years ago at age 12, but then altered his passport so he couldn’t leave and then forced him to be their unpaid and beaten babysitter and butler.
- Medicity’s Brian Ahier contributes “5 things we have to do to make health IT work.”
- Nordic focuses on pharmacy in the sixth installment of its “Making the Cut” video series on Epic conversion planning.
- MedData offers “Go All In on Early Out.”
- Versus Technology offers “Nursing’s Impact on Patient Care Transcends the Bedside.”
- West Corp. offers a Storify tweet recap of its time at ATA 2015.
- PMD outlines the benefits of “The Developer Carpool.”
- Netsmart wins the Smile for Team Spirit Award as part of its annual Kansas City Corporate Challenge.
- Voalte offers “Have faith in nurses.”
- New York eHealth Collaborative’s Anuj Desai and David Jacobowitz contribute to the third edition of “Medical Informatics: An Executive Primer” from HIMSS.
- Orion Health offers “The Importance of Chronic Care Management (CCM).”
- PeriGen offers an interactive history of labor and delivery nursing in honor of National Nurses Week.
- QPID Health offers “3 Key Insights From Dr. Robert Wachter, Author of ‘The Digital Doctor.”
- Sandlot Solutions will exhibit at the SoCal HIMSS 7th Annual Clinical Informatics Summit May 15 in Irvine, CA.
- Shareable Ink and The SSI Group will exhibit at the Ambulatory Surgery Center Association Annual Meeting May 13-16 in Orlando.
- TeleTracking offers a new blog on “National Nurses Week 2015.”
- TransUnion hosts Philippine President Benigno Aquino III at its corporate headquarters.