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July 19, 2011 News 15 Comments

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7-19-2011 9-03-57 PM

image The FDA releases draft guidance on the oversight of mobile medical applications. The two categories of apps that would qualify for oversight include those that serve as an accessory to an FDA-regulated device (for example, one that connects with a PACS) and those that turn a mobile platform into a mobile device (the smart phone is used as an EKG device.) In some cases, software developers would have to demonstrate that their mobile apps work comparably to their non-mobile versions.

Reader Comments

image From Vince Ciotti: “Re: Epic’s 75 wins in 200+ bed hospitals. All of Epic’s clients are multi-hospital IDNs since ‘normal’ community hospitals simply can’t afford their epic fees. Judy won’t even condescend to bid to single facilities under 200 beds. If the typical multi has 5-10 hospitals, that represents about 10 wins for Epic. Still, at their incredibly high prices, this was enough to drive Epic to over $800M in revenue last year. Add in the hundreds of millions in hardware fees even bigger implementation ‘consulting’ fees they generate and Epic alone may represent our long-lost economic recovery!”

HIStalk Announcements and Requests

image Thanks to Inga for capably holding down the fort while I was away. It was good to be gone and almost as good to be back. I’m behind, but that’s not unusual – the only change is that I’m determined to stop feeling guilty about it since it’s too many jobs, not sloth or lack of time management skills, that’s responsible. I’d go part time at the hospital if that was feasible.

image Listening: the first new Yes album in 10 years. I’ve been a fan for much of my life and I saw them live not long ago, so I like it even as I acknowledge that prog rock isn’t everyone’s cup of tea. Reading: Life by Rolling Stone Keith Richards (excellent, either he and/or his hired gun co-author is a genius), so I may need to crank some B-side Stones.

Acquisitions, Funding, Business, and Stock

image Healthcare Growth Partners releases its quarterly HIT market report, with merger and acquisition activity recovering well from low activity a couple of years ago. Here’s a quote:

Generally, sub $100 million companies have three valuation inflection points: proof-of-concept, initial scalability, and expansion scalability.  Proof-of-concept is value created when a company shows that its product can be successfully sold and deployed in a commercial setting.  This inflection point is generally of more value to venture investors than it is to acquirors, as companies at this stage tend to be too early to realize significant value through a sale.  Initial scalability occurs when an earlier stage company begins to show strong profitability at high levels of growth,  although the organization is still small and lean. Expansion scalability takes place after a company has matured to a level where it takes on real infrastructure, and the company begins to show strong profitability after building out a mature corporate organization. 

Although the size of a company at each inflection point can vary significantly based on a company’s product or services and sector, the general rule of thumb in HIT is that proof of concept occurs at revenue of less than $1 million, expansion scalability in the $5 to $10 million revenue range, and mature scalability in the $20 million revenue range.

7-19-2011 8-45-26 PM

Philips reports Q2 numbers: revenue down 2.6% and a loss of $1.9 billion, with the CEO announcing cost reductions and share buybacks. Its healthcare business fared better than the company overall, with an 8% sales increase.

7-19-2011 8-47-00 PM

Apple announces Q3 numbers: revenue up 82%, EPS $7.79 vs. $3.51, wildly beating analyst expectations of $5.82. The company sold more than 20 million iPhones and 9.25 million iPads in the quarter.

7-19-2011 9-06-47 PM

image Shares in WebMD Health recovered a bit on Tuesday following Monday’s drop of more than 30%, which was triggered by the company’s announcement of lowered revenue expectations. The one-year share price graph looks merely unimpressive until you notice that the straight vertical line to the right is not the margin of the graph.

7-19-2011 8-47-54 PM

Lawson Software, whose $2 billion acquisition by Golden Gate Capital and Infor was completed last week, has begun restructuring and employee layoffs.

Australia’s federal court approves CSC’s acquisition of iSoft for $202 million after 97% of shareholder votes were cast in favor of the proposal.

image A major player in HIT consulting will announce its acquisition later this week. I’m holding back specifics until the announcement comes out. It’s going to be a pretty big deal (no pun intended).


ADVANTAGE Health Solutions signs an agreement with IGIHealth for its ORBIT Clinical Exchange and portal to support ADVANTAGE’s ACO infrastructure.

7-19-2011 12-58-39 PM

Children’s Medical Center Dallas selects the Enterprise Data Warehouse business intelligence tool from Health Care DataWorks .

Final Support chooses EMR-Link from Ignis Systems to provide lab-EMR integration for its GE Centricity customers.


7-19-2011 10-52-29 AM

The board of Franciscan Hospital for Children (MA) fires CEO Paul J. DellaRocco, citing financial irregularities that include the inappropriate submission of expenses.

7-19-2011 6-57-49 PM

Former Allscripts COO Eileen Martinson is named CEO of Sparta Systems, a provider of quality and compliance management software.

7-19-2011 6-56-57 PM

RTLS vendor Versus promotes Susan Pouzar to VP of sales.

7-19-2011 7-00-05 PM

Practice Fusion hires Zachariah Gursky as its first VP of ad sales. He was previously with Coupons Inc.

7-19-2011 7-12-00 PM

Todd Cozzens is promoted to CEO of Accountable Care Solutions, a new business unit of Optum. He was previously with the company’s OptumInsight business, the former Ingenix that bought Picis, of which Cozzens was CEO. He mentions his new job and some thoughts on “virtual Kaisers” and their data needs in his latest blog posting.

Announcements and Implementations

The Georgia Health Information Technology REC selects Halfpenny Technologies to develop a lab hub demonstration project for the exchange of clinical data.

image Banner Health (AZ) completes its pilot of MyHealthDirect and will be implementing the service across all its facilities. This news clip explains how Banner is using MyHealthDirect to book appointments at low-cost clinics and thus reduce unnecessary ER visits and wait times.

7-19-2011 6-43-20 AM

Middle Park Medical Center in Kremmling (CO) begins implementation of Healthland’s EHR and anticipates a go-live by the end of the year. The 19-bed hospital expects to qualify for up to $250,000 in EHR incentives.

7-19-2011 8-53-35 PM

Johns Hopkins Medicine begins recruiting for over 60 people to implement Epic. Positions for the initial ambulatory rollout will focus on clinical documentation, analytics and research, and scheduling and registration.

LodgeNet Interactive restructures LodgeNetHealthcare into an independent but wholly-owned subsidiary. Gary Kolbeck, who was previously GM of LodgeNet Healthcare, will serve as president.

7-19-2011 1-21-04 PM

image Microsoft establishes a Web page for Google Health users interested in transferring their data to Microsoft’s HealthVault record. The site includes step-by-step instructions on how to move the data.

Government and Politics

image HHS’s Office of Inspector General finds that 12 of 13 states do not plan to verify all the eligibility requirements for paying Medicaid EHR incentives to doctors and hospitals . The reason: most states lack the data necessary for complete verification because data collection requires too much effort and too many resources.

image The federal government files a complaint against a Kentucky nursing home for fraud, but also alleges that five residents died from “worthless care.” Nurses were accused of failing to administer diabetes meds, diapering patients who had normal bladder function, ignoring physician orders, and not showing up at all for one 2.5 day period in which the nursing home had no RN coverage at all.

Innovation and Research

7-19-2011 6-53-37 PM

The Industrial Designers Society of America awards Silver recognition to Seattle-based Artefact for its design work on the prototype of the Seattle Children’s Patient Information System.

image Use of a real-time alerting system for patient deterioration reduced LOS 9.7 to 6.9 days and increased clinician response from 29% to 78% in a UK study. The $1.5 million Patientrack system was developed by an intensivist in Tasmania, but no Australian hospitals were interested in trying it. The weak link seems to be that it requires the nurse to manually enter the vital sign values.

7-19-2011 8-57-47 PM

image The VA offers a $50,000 prize to a developer who implements Internet-based technology similar to the government’s Blue Button program, which allows patients to download a summary of their health records. The competition started Monday and ends when a winner is chosen or on October 18, whichever comes first.


7-19-2011 3-52-28 PM

image According to the local paper, independent physicians wanting to tie into Lee Memorial Health System’s Epic EHR would have to pay $15,000-$16,000 for the software license plus $25,000 to $80,000 per practice to cover implementation fees. Annual maintenance is an additional $4,500 per provider. Depending on the size of the practice, that could be a hard sale. Independent physicians in the area control about 84% of outpatient care.

UPMC removes 29 of its 51 directors following a consultant’s recommendation for improving the board’s effectiveness. Its membership had swelled over the years as representatives were added from acquired hospitals.

image Memorial Health System (CO), the hospital whose electronic patient records were breached by a city-employed nurse and part-time psychic, says it has fired 22 employees in the past three years for privacy issues. One of them was caught looking up the records of friends so she could create a birthday database.

image Odd: a woman sues a Pennsylvania hospital and the county child protection agency when her newborn baby is turned over to foster care after testing positive for opium, which the mother blames on her own ingestion of poppy seed-containing salad dressing. Both organizations had been sued by another mother a few months ago for exactly the same thing, except that particular mom blamed a poppy seed bagel.

Sponsor Updates

  • MEDSEEK announces its fifth consecutive year on the HCI 100 list, based on its 2010 revenue performance.
  • Sentry Data Systems CMO William Kirsh DO, MPH participated as a writer and editor for a HIMSS Revenue Cycle Task Force white paper.
  • Surescripts recognizes  Allscripts as one of seven vendors to achieve Gold Solution Provider Status for e-Prescribing. Surescripts also awards e-MDs its White Coat of Quality.
  • AdvancedMD announces the release of its ONC ATCB-certified EHR 2011 solution that includes an enhanced patient portal, new Meaningful Use reporting tools, and utilities for submitting immunization and health surveillance data.
  • API Healthcare is offering a variety of sessions on creating more effective workforce management at its annual user group meeting this week in Milwaukee.
  • Orion Health’s Rhapsody Integration Engine and Rhapsody Connect earn ONC-ATCB EHR module certification .
  • Providence Health & Services selects Elsevier / CPM Resource Center as its vendor of choice for evidence-based clinical content.
  • Concerro releases a series of white papers collectively called the Workforce Management Wellness Series.
  • Kony hires Peter Buscemi to lead the company’s global marketing efforts.


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

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Currently there are "15 comments" on this Article:

  1. A comment on Vince Ciotti’s very cynical comment regarding Epic and costs. I can tell you first hand that they are not the most expensive game in town. While Vince is very experienced in the HIT field, I find this recent post to be way off base.

  2. On the FDA and devices, they need their own mobile application and perhaps they would understand mobility a little better so I tweeted them today on the topic relative to an article where the Milwaukee Journal quoted me over the weekend about bar codes for drugs, devices and over the counter, and I talked about a patient who was implanted in error with a recalled device that was missed being pulled.

    The big Triad mess is still ongoing and people still have the pads in their medicine cabinets at home and the list was huge as they private label manufactured for so many Fortune 500 companies and even Smith and Nephew in their knee surgical kits had some of their products included.

    What was funny is that J and J actually used the bar codes last month on their baby wipes so perhaps they were thinking about is as they could reprogram for recall notices? I have badgered my tech friends over there and they all know about this little campaign too as well as a few other pharma companies who have taken the idea upstairs from seeing in my tweets.

    So again, the FDA needs a real mobile app of their own perhaps and become real participants in working with drug and device companies as they could have a synchronized data base to make compliance easier to monitor for them too:) On the class one I said if in doubt consider registering with the new rules that came into effect in April.


  3. “Hospitals, which are the core of this new wave of accountable, integrated care, are moving to models where they will take on more risk, and they are in dire need of new expertise and tools to help them manage populations rather than care episodes. This is something that payers have done for over 50 years, and they are now jumping in to help hospitals get there.”

    Thank you Todd Cozzens and Optum aka Unitedhealth for teaching all us hospitals how to manage health the way insurance companies do. All these years, we just had to turn to our friends in the insurance business to tell us exactly what to do. Thanks again for reinforcing why no hospital or clinic in their right minds should trust their patient data being run through software made by a company as benevolent as Unitedhealth. You’re not fooling us with goofy names like Ingenix and Optum – you’re still an insurance company trying to sneak your way into telling us how to do our jobs and monitoring us while we do it!

  4. Saw you comment on the new YES album… no Jon Adnerson – it is hard to get into YES for me sans Anderson.

    As I have seen your musical tastes run a large gamut – something I respect and share to a degree – check out http://www.lfdh.com. You may be surprised.

    All the best – keep up the great work!


    [From Mr. H] I’ve learned as a long-time Yes fan that you have to accept whatever of the dozens of rotating band members are on board at any given moment. The only consistent member in all incarnations of the band has been Chris Squire. Anderson was somewhat the heart of the band, but he was pretty flaky and at 66, he just couldn’t hit the high notes any more. Benoit David seemed like an odd hire and his stage presence wasn’t so great when I saw them, but they had to find someone who sounded like Anderson — can you imagine a deep-voiced singer doing Heart of the Sunrise? Yes could eventually turn into one of those incarnations of 50s doo-wop groups that has no original members since they’ve all retired or died, but the name and songs live on somewhat questionably in live performances.

  5. The healthcare division has been the largest and most profitable division within Lawson for years. Infor has virtually no healthcare penetration. The healthcare division has had and is expecting virtually zero changes inof the execs, support, training, installers and sales and is running independently (as it has for years) from the rest of the organization. Marketing, HR, accounting, resources have been affected but nothing effecting customer facing endeavors. Public sector was hit along with Manufacturing verticals but there is redundancy with Infor in those areas. They’ll certainly be more as time goes on, but healthcare is the crown jewel at Lawson and a huge part of Infor’s significant investment in Lawson (their largest aqcquisition ever made).

  6. Regarding Vince’s Epic comments:

    According to KLAS, Epic’s 75 wins came from 34 organizations. That’s 34 wins.

  7. Vince,

    Although not their original strategy, Epic has sold to community hospitals that are not part of larger systems for years. And in some cases they are all not well off but somehow come up with the money.

    Believe HILO in Hawaii was one of first and Forrest General in Mississippi (Quadramed) reportedly a recent one. You need a full time fact checker.

  8. I am also a long-time YES fan. One of the most classic Hammond organ solos recognized by keyboardists is in Roundabout – amazing!

    [From Mr. H] Agreed, especially given that it was Rick Wakeman’s first album with the group! I even have original Wakeman solo LPs like Six Wives of Henry VIII and Myths and Legends of King Arthur and the Knights of the Round Table – excellent all around, if a bit overwrought. To me, his absence is more acutely felt than that of Jon Anderson, who is certainly less of a singer than Wakeman is a keyboard maestro.

  9. As a consultant i have evaluated Epic vs. other physician practice EMR packages nearly a dozen times in the past year. I have found the costs to implement and operate Epic to be very competitive with the other major packages available (NextGen, Allscripts, Centricity, etc.). In my experience, Epic is equal-to or below the cost of competing vendors. I’m not sure what factors are driving the information in this post, but I’ve had a different experience.

  10. To those posting that Epic is cost-competitive or cheaper, could you post facts please? Nothing trumps opinion like fact. In cost, please include all costs, including software, personnel, 3rd party application licensing, consulting fees, training/education/travel costs, service/maintenance costs, and hardware/networking needs. Please also define the number of beds and patient visits for the organization and define the time period over which these costs are totaled. Note that this still won’t include true cost, like time diverted from other projects to focus on the EHR and lost productivity during build as well as after go-live, but at least those are the measurable costs.

  11. Counting Beans, when was the last time that you posted in public for the world to see something that you were legally bound not to disclose? This isn’t the federal government. It’s very unlikely that anyone can provide you with that information (without violating a NDA). That’s not to say that it’s untrue, which I assume is the conclusion you will take when you get no numbers to prove it.

  12. Counting Beans, if you were serious about wanting facts, you would have questioned those who claim that Epic is much more expensive than the competition. Especially since the information you want is actually easily available for Epic – as an avid reader of HIStalk, I am sure you have seen this: https://histalk2.com/2011/05/14/monday-morning-update-51611/

    Every time there is an announcement that a health care organization is going to spend N million to implement Epic, that amount includes the cost of “software, personnel, 3rd party application licensing, consulting fees, training/education/travel costs, service/maintenance costs, and hardware/networking needs.”

    Now, do you have any facts to show that the costs of an implementation similar in size and scope to one of Epic’s implementations are significantly lower than the ones we keep reading about?

  13. From a guy who has seen a ton of ambulatory EMR RFP response, Epic is simply not ‘cheap’ or ‘cost-effective.’ That just isn’t true.

  14. Was hoping to see some numbers posted by now. I have actually reviewed contracts from multiple vendors including Epic in the recent past. Typically their initial cost projections are 1.5-2x higher than their competition in similar-sized organizations. Typically, mature Epic installations end up running about 3x the initial projections by the time it’s all implemented. That’s not to say that every Epic install runs over budget, but on average many do, and some by orders of magnitude much larger than 3x. Maybe I have only dealt with a limited number of organizations, which is why I was hoping those who have personal experience with cheaper installs would share their numbers. As someone pointed out here, there often are press releases after a new Epic purchase which indicate initial cost projection – numbers like $250 million for Yale don’t exactly sound encouraging for the argument that Epic is cheaper. Epic is many things, but one thing it is not is cost-effective. If others have a different experience, please share the numbers, as there are no publicly-available numbers I have encountered which suggest Epic has ever been cost-effective relative to its competitors.

  15. Counting Beans — here is a typical number: about $1,000 per month per physician for EpicCare when implemented as part of the community connect program (some higher, some lower). This includes Epic license, Epic maintenance, implementation done by consultants, practice infrastructure (PCs, printers, scanners, signature pad, network, etc.) with a refresh every 3 years, allocated hosting charges, allocated hosting maintenance, Citrix license, Citrix maintenance, Cache license, cache maintenance, training, go live support, ongoing post-live support, program management, allocated FTEs for ongoing maintenance and annual upgrades, basic third party licenses, basic third party maintenance. As for the predictability of the implementation costs, I have seen this to be highly predictable and not subject to the kind of overruns you have noted. The Sonnet product, which may be more comparable to Epic’s competitors, can be implemented and operated for less than this. When I have considered these costs on an apples to apples basis with other vendors I have found the costs to be very similar to EpicCare.

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