Monday Morning Update 5/1/17

Top News

From the Athenahealth investor call, which follows disappointing revenue and earnings quarterly results that sent shares down 19 percent Friday:

• CFO Karl Stubelis blamed the miss on lower-than-expected claims. lower collection volumes, and slow onboarding of new customers.
• The company lowered revenue, earnings, and bookings guidance for the fiscal year and expects a lower operating margin for 2017.
• Jonathan Bush says office visits and payment per visit are both down for the first time, bucking the trend caused by hospitals buying practices and increasing their prices. He attributes the drop to consumer uncertainty around the Affordable Care Act and higher deductibles that consumers are unwilling or unable to pay.
• Bush said, “When we get into a meeting with a prospect and that prospect decides to do something, 80 percent of the time they go with Athenahealth. That doesn’t suck. That does not suggest retrenching, going to cash flow, ceasing the entry of the hospital market. It suggests breathing into the beating until things get better, which we believe they will.”
• Bush says the company had planned for doubled customer attrition for the year after its rollout of the Streamlined clinical product, but Net Promoter Scores have since rebounded.
• The company was not considered in some deals due to its lack of a viable inpatient product, but Bush expects that to change as it expands its inpatient EHR, which he describes as, “For a one-year-old product, kicking ass” that more than pays for itself with elimination of capital expenditures and an improvement in collections.
• Future drivers of what Bush says will be a restored higher growth rate are improved scalability of the inpatient product implementation, a cost guarantee for doctors, and automating practice tasks beyond previous government-mandated functionality.
• Bush disagreed with an analyst’s slightly combative observation that the company’s guidance is aspirational and often at odds with actual results, thereby reducing investor confidence, saying, “While our goals remain ambitious, our guidance is something that we think is a balanced handicapping of what we think will actually happen on the field. My goals, my team, the guys who are out there in the field still think they can get this number, but they’re not prepared to reassure you in that regard … One thing we all took for granted is that Athena would know its revenue a year out … The one place that we all need to get our confidence back is understanding the activity in the practice. And believe me, we’re studying it.”
• Bush concluded the call with, “Metamorphosis hurts. We’re feeling the crunch of several coming-of-age moments all at once here at Athenahealth. Attrition hangover from last year’s Streamlined rollout and the customer service issues, adjustments to Trumphealth from Obamahealth, a totally new guard at our senior management team, a tale of employee disruption from the change to it. Adjusting guidance hurts us, but it’s mostly the shame of coming to grips with that hurt. Our strategy is right, our traction against our challenges is better than ever, and optimism at the senior-most levels of this company is at an all-time 20-year high. Hence we enter execution mode.”

Reader Comments

From Carrot Bottom: “Re: MUMPS. Curious, you mentioned a blog post about developers complaining about MUMPS. It wasn’t very long after your post that you changed the link from Hacker News to some academic professor’s personal wiki on MUMPS. Now when I go to the original Hacker News link, it also has been taken down. Were you pressured to remove this information by an unknown legal team from Wisconsin?” I didn’t change the link in my original post from Hacker News and that link still works. However, in trying to figure out what you are referring to, I noticed that Lt. Dan (who writes the daily headlines) inadvertently used a different link in his headline. I actually didn’t get any private feedback on that post.

From Harry Angstrom: “Re: Jonathan Bush’s Instagram. This was quickly removed a few minutes later.” Unverified. The screenshot shows JB’s comment to Friday’s huge ATHN share price drop as, “K Thanks Bye.” Regardless, his other photos provide a glimpse into what life is like being raised rich and living hyperactively smart and quirky (like being one of a tiny number of trust fund kids to commendably serve in the Army).

From Causative Agent: “Re: charity for sale. Given your stance on charities, I thought you would find this highly offensive and in-your-face advertisement interesting.” An unnamed Dallas charity offers itself for sale for $2.4 million, urging prospects to “do the math” since they can “legally keep $200,000 as a salaried director.” Beyond enriching the new owner, the charity sends handicapped children to Orlando theme parks “and helps other charities as well,” with the owner helpfully suggesting expansion via new fundraising offices, telethons, squeezing business for donations, and running galas. I couldn’t figure out which charity it is, but I’d be curious about its reviews on Charity Navigator, Guidestar, and CharityWatch. Most surprising to me is that somebody can just “sell” a charity to whomever ponies up the cash, although I supposed the owner can simply install the buyer as board director and then resign even though the assets can’t be transferred short of a merger with another non-profit. For that reason, paying $2.4 million to buy a $200K job seems like bad financial planning, and hopefully the new owner will reap what they sow. 

From Soiled Skivvies: “Re: suck-up writers. This writer lost objectivity and it’s obvious they were star-struck.” Much of the health IT content out there is written by newbies, underachievers, and raging introverts who are way too easily influenced by the phony, smarmy charm of some Type A industry bigwigs who turn it on knowing they’ll get uncritically positive PR as a result. It’s kind of like being that cubicle-bound programmer who mistakes minor casual exposure to the boss as newfound social acceptance. The inhabitants of mahogany row did not ascend to the throne being unaware of the org chart caste system and they are not like you. Which is probably OK since someone has to have the swagger, however misplaced, to get everybody else to follow orders.

HIStalk Announcements and Requests

Poll respondents predict that the VA’s biggest problem if it decides to implement Cerner or Epic will be budget overruns, with lack of internal resources being another potential problem. Red Tape goes with “none of the above” in predicting that governance and bureaucratic decision-making will create an impossible struggle to stay on track. Daddio62 warns Cerner clients that if the company wins the deal, it will pull their experienced consultants off to the VA and replace them with greenhorns. Art Vandelay (welcome back, Art) says VistA was built around requirements that have no equal in the rest of the healthcare world and says user acceptance of a COTS will be a problem, possibly requiring a wrapper solution around the core product to support the VA’s unique needs. Cerner User also warns of the limited availability of skilled Cerner consultants and the pressure on the VA to increase productivity that will conflict with clunky software workarounds that reduce productivity.

New poll to your right or here, based on a reader’s comment: Have you ever bypassed your insurance and paid cash to choose a better ongoing PCP? It’s often depressing to have to settle when choosing a new PCP from your insurance company’s provider list (which is usually not only outdated, but fails to note that most of the docs listed aren’t taking new patients for their particular low-paying plan). You are often out of luck if you want a doctor who’s been out of school long enough to not be dangerous yet who isn’t past normal retirement age; one who attended a decent US medical school and residency; or a PCP whose Healthgrades reviews are better than appalling. In other words, you might not want to join a club that would accept you as an insurance-wielding member, while plopping down cash opens up endless (but expensive) possibilities. I suspect most of us just grit our teeth and choose the best-sounding of the substandard choices who will accept our insurance.

We funded the DonorsChoose grant request of Mrs. R in California, who asked for egg shakers and a rhythm set so her elementary school students can have fun with music as a break between tough subjects. She reports, “We have Fun Friday every week and I have been able to give a small music and rhythm class using the instruments and shakers. It is a hit! The students love it! Sometimes we make our own music and sometimes we follow along to child-friendly versions of today’s radio hits. Other teachers have noticed the fun and have borrowed the instruments and shakers to enjoy with their students. It has been a true blessing to have the instruments and shakers as a stress reliever for both the students and myself!”

This Week in Health IT History

One year ago:

• Nokia announces plans to acquire consumer health device vendor Withings to create Nokia Digital Health.
• CMS releases the warning letter it sent to Theranos in which it stated that, “The laboratory’s allegation of compliance is not credible.”
• Verks Analytics agrees to sell its Verisk Health business to Veritas Capital for $820 million.
• Caradigm quietly announces that Microsoft has sold its 50 percent stake in the company to JV partner GE Healthcare.
• A science publication questions the privacy and exclusivity terms contained in the agreement between NHS and Google’s DeepMind.
• Quintiles merges with IMS Health.
• Joint Commission gives its OK (later reversed) to send orders via text messaging.

Five years ago:

• Allscripts shares lose more than one-third of their value following announcements of poor quarterly results, the departure of its CFO, the firing of board chair Phil Pead, the resignation of three board members who supported firing Glen Tullman, Tullman’s erratic defense of his performance in the investor call, and the company’s loss to Epic in two UK decisions.
• Merge Healthcare shares shed 36 percent on poor quarterly results, with the company announcing that it will divide itself into two operating divisions, the traditional Merge imaging business led by Jeff Surges and a consumer kiosk and clinical trials division under Justin Dearborn.
• Chicago Mayor Rahm Emmanuel pressures the state’s attorney general to back off its investigation of Accretive Health’s strong-arm patient collection tactics.
• New health system CIO hires include Jocelyn DeWitt (University of Wisconsin Health) and Pamela Banchy (Summa Western Reserve Hospital).

Weekly Anonymous Reader Question

I asked readers to who have either considering quitting HIMSS or who have actually done so what motivated them:

• Almost useless organization. What Epic has done to hospital IT cost should never have happened. HIMSS needs to be more than a vendor show.
• Simply cost vs. benefit. HIMSS motives are suspect anyway.
• Annual conference was my main involvement. It’s gotten too big to be useful. One cannot do anything of substance on the exhibit floor. Classes have been good, but it’s just too much. I’d rather be involved in a more focused group, like ATA (telemedicine) or something like that. Cramming it all into one show dilutes things.
• I have been an individual member for over 20 years. No longer! Not continuing membership or attendance at national events. HIMSS is just about money, vendors, and more money. But the main reason is association with Federal government and DOD has taken over focus. Government nerds are not technological leaders. They have nothing to offer healthcare technology … boring bunk. Finally just bored with the agenda.
• Increasing irrelevance ever since HIMSS changed from a member-driven org to a "mission"-driven one. Individual members have little impact or recognition, even those who donate numerous hours on committees. Smaller specialty associations provide more return on the membership fee. Also hard to justify the annual conference cost when the only value is networking.
• Retirement.
• I considered quitting until I changed my expectations from education and knowledge acquisition to it being a huge shopping mall. It fits that bill, not the other. It’s a reasonable way to keep in touch with product domains.
• It has become such a racket. It has become nothing more than a vendor forum, which is very disappointing.
• I left HIMSS about 15 years ago because: (a) the organization became exceedingly political with no requests for input from members, and (b) the focus shifted from users to vendors and thus had little value to me.
• I did not renew in 2017 because of the increasing power of the vendor. The last straw was that the head of my state chapter was a vendor who behaved very badly in my organization (e.g. contacted board members when he didn’t get what he wanted from me). I prefer CHIME over HIMSS because I don’t feel like I’m a sales target every time I am on a phone call or in a meeting.
• Haven’t quit yet, but working at an HMO presently, I don’t see a lot of value in HIMSS other than interacting with members from the provider side. While that is of great value to me, over half of the new people I meet are consultants or contractors.
• The cost outweighs the benefit.
• HIMSS educational and networking offerings had value for me early in my career. Now, I have experience in the field and am not a decision-maker in IT investments. HIMSS repeats the same "Informatics 101" and "Learn about TIGER!" webinars every quarter and they seem to be efforts to market products rather than educate members. I don’t know if this is a change from past years, if I was less aware of the context in early days, or if I’ve just grown old and jaded. Now I only renew membership in years in which my employer sends me to the annual conference, since registration + membership is more affordable than registration as a non-member. Otherwise, I see no return on the investment. I’d rather pay membership dues to AMIA.
• Former HIMSS member here. I quit because as an IS analyst supporting the revenue cycle side of operations, the HIMSS focus is clinical. I wasn’t seeing the value.
• Too much focus on vendor revenue.
• Worthlessness of HIMSS CPHIMS certification. They sell it relentlessly but don’t even support it with networking at the annual conference or advertising to employers.

This week’s question: What’s the best career advice you’ve received that goes beyond the usual platitudes? In other words, not just “work hard, learn, market yourself” and other obvious recommendations.

Last Week’s Most Interesting News

• Greenway Health is hit with a ransomware attack that affects customers of its hosted Intergy systems.
• Cerner announces good quarterly results., while Athenahealth shares drop sharply on missed earnings and revenue expectations.
• Leapfrog Group’s hospital patient safety participants report nearly universally available bar code medication administration scanning systems, but with inconsistent usage.
• The Coast Guard issues an RFI for an EHR following its failed attempt to implement Epic.
• Ambulatory EKG monitoring services vendor CardioNet pays $2.5 million to settle HIPAA charges following the 2012 theft of an employee’s laptop.
• The Trump administration dismisses US Surgeon General Vivek Murthy, replacing him in interim with Deputy Surgeon General Rear Admiral Sylvia Trent-Adams, who is a nurse.

Webinars

None scheduled soon. Previous webinars are on our YouTube channel. Contact Lorre for information on webinar services.

Acquisitions, Funding, Business, and Stock

Meditech announces Q1 results: revenue flat, EPS $0.39 vs. $0.51. Product and service revenue were both basically unchanged over Q1 2016.

From the earnings call of Cerner, whose Q1 results beat expectations for both revenue and earnings and sent shares up 8 percent Friday:

• Domestic revenue increased 13 percent, while non-US revenue was basically flat excluding currency fluctuations.
• The company noted several wins over Epic, which it says is in a defensive stance following more coverage of its client cost overruns.
• Cerner says its advantages over Epic are predictable total cost of ownership, more modern architecture, better ability to demonstrate value, and strong population health management capabilities.
• The company says its Department of Defense work “is making Cerner better” in ways that will benefit all of its customers, adding that the remaining three DoD pilots are on track .
• President Zane Burke says IT is the best way to drive down cost, which hasn’t been addressed by either party’s healthcare platforms that focus instead on access and insurance reform.
• The company sold no new ITWorks IT management contracts in the quarter, but expects record sales of that product in 2017 as larger health systems conclude that some aspects of IT aren’t their core business.
• Burke declined to specifically say if Cerner is taking ambulatory business from Athenahealth, saying only that, “We’re taking share from all competitors.”
• Burke also declined to provide an update to previous comments that Cerner is seeking a CRM partner.

Sales

In the UK, Burton Hospitals NHS Foundation Trust expands its agreement with Summit Healthcare following its Meditech 6.1 go-live to include continued management of interface strategy, education, modifications testing, and developing additional interfaces as needed.

Decisions

• OhioHealth Mansfield Health (OH) switched from Infor to Oracle PeopleSoft supply chain management in December 2016.
• Franklin Memorial Hospital (ME) will replace Meditech with Epic in 2018.

These provider-reported updates are provided by Definitive Healthcare, which offers powerful intelligence on hospitals, physicians, and healthcare providers.

People

Nordic promotes Vivek Swaminathan to president of its managed services division; Katherine Sager to EVP of consulting services; and Matt Schaefer to EVP of strategic services. 

Other

In Canada, 15 internists at Nanaimo Regional General Hospital go back to paper medication ordering in defiance of Island Health’s mandated use of its Cerner system dubbed IHealth. Doctors have long complained that the system causes medication errors. One of the internists was given a one-day suspension and another faces disciplinary action. The hospital says it can’t support paper orders and therefore has assigned other doctors to enter their paper orders into the EHR. Island Health previously tried bribing doctors to use IHealth, while the hospital’s ICU and ED doctors had gone back to paper in May 2016 — nine weeks after rollout — because of patient safety concerns. Island Health shut the CPOE system down in February 2017 following a 75 percent no-confidence vote by the medical staff, but restarted it a month later in saying it is too connected to other systems remain offline.

University of Utah Health Care CEO Vivian Lee, MD, MBA resigns after she fired its cancer center director by email and following her acceptance of questionably motivated donations from NantHealth’s Patrick Soon-Shiong. Billionaire donor and cancer survivor Jon Huntsman’s threat to withhold his planned $250 million donation to the cancer center named after him forced the university to reinstate the fired director and to rearrange the org chart so that she reports directly to the university’s president. Huntsman called Lee a “one-person wrecking crew” and “the least ethical, least disciplined woman in the world.” Meanwhile, Utah House Speaker Greg Hughes has asked state auditors to review Soon-Shiong’s $12 million donation – which a STAT report suggested came with strings attached in requiring the university to buy products from his various companies – to determine whether a formal state audit is warranted.

NBC News covers the often expensive consumer confusion between doc-in-the-box urgent care centers and freestanding emergency rooms, highlighting the case of a mother who pulled in what looked like a retail clinic in getting antibiotics for her daughter’s chest infection that ended up costing her $1,700 (later reduced to $1,000). She was flabbergasted when her insurer told her that PrimeCare Emergency Center is actually an ED, replying, “It was next to a nail place!” The report says 35 states allow freestanding ERs, most of them as off-campus hospital locations, but some are operated by for-profit companies. A class action lawsuit claims that now-bankrupt Adeptus Health, which runs 99 freestanding ERs, intentionally tricks patients into thinking they’ve entered a cost-effective urgent care center. A couple who took their child to an Adeptus ER racked up a $7,700 bill for an X-ray and pain reliever for what turned out to be constipation. 

Here’s Vince and Elise with their HIS-tory of the top 10 physician practice EHR vendors. 

Sponsor Updates

• QuadraMed, a division of Harris Healthcare, will exhibit at the CHIMA Annual Meeting May 4-5 in Westminster, CO.
• The SSI Group will exhibit at LA HFMA Annual Institute April 29 in Lafayette, LA.
• SK&A publishes the “2017 Guide to Effective Email Marketing.”
• GE Healthcare partners with Partnerships for Affordable Health Access and Longevity to address the healthcare needs of underserved communities in India.
• Sunquest Information Systems releases a video celebrating Medical Laboratory Professionals Week.
• Surescripts will exhibit at the annual Health Plan and Payer Summit April 30-May 4 in Washington, DC.
• Wellsoft will exhibit at Emergency Medicine Update May 3-5 in Toronto.
• ZeOmega will host its annual client conference May 2-4 in Plano, TX.
• ZirMed will exhibit at ASCA 2017 May 3-6 in Washington, DC.

Blog Posts

• The VA Healthcare System: A Broken System with Superior Quality (Definitive Healthcare)
• How to Make an Impact in the First 100 Days as a New CIO (Culbert Healthcare Solutions)
• 3 Keys to Establishing an Authentic Conversation with Your Audience (Salesforce)
• Healthcare Payers Uncertainty Lingers Following Demise of AHCA (The SSI Group)
• How virtual reality is changing patient care (Advisory Board)
• MEDITECH’s Global Digital Exemplar Customers Leading UK’s Healthcare Revolution (Meditech)
• Do You Know How Your Patients Really Feel? (Solutionreach)
• Alerts & Notification Platforms in the Future of Patient Communications (Sphere3)
• Industry Collaboration is Key to Improving Patient Safety (Surescripts)
• UltraLinq and the Great Ape Heart Project (UltraLinq)
• How does data analytics curb healthcare spending? (Verscend Technologies)
• A decade makes the difference (Voalte)
• More Evidence That Evidence-Based Care Works: North York General Hospital (Zynx Health)

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne, Lt. Dan.
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