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October 27, 2015 News 10 Comments

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FDA declares the proprietary nanotainer blood draw containers used by Theranos to be an “uncleared medical device” following a Wall Street Journal report that the company had voluntarily already stopped using the finger-stick containers for all but one test. A September FDA inspection of the company’s Alameda, CA facility noted a number of deficiencies, including shipping its nanotainer collection tubes across state lines without having them approved by the FDA; not performing quality audits; and documenting required software validation on a shared Excel worksheet. Meanwhile, Theranos says it will now publish data proving the effectiveness and accuracy of its methods.

Reader Comments


From Prostetnic Vogon Jeltz: “Re: ICD-10. Georgia Medicaid is denying claims that use unspecified ICD-10 codes even though CMS said that wouldn’t happen. When I first see a patient with atrial fibrillation, I might not know whether it is paroxysmal, persistent, or chronic – that’s what the unspecified codes are for. I think this is important for HIStalk readers to know about.” The agency didn’t say it wouldn’t be ready for ICD-10, so it appears to have simply made the decision that it will not conform to CMS’s policies.


From Unbridled: “Re: PatientSafe Solutions. They have parted ways with CEO Joe Condurso.” Joe is still listed as president and CEO on the company’s web page, but an internal email sent my way says he resigned last Friday in a mutual decision and that Chief of Staff Si Luo will take over as president. The company announced last Wednesday that it has acquired readmission technology vendor Vree Health.

From Publius: “Re: VA. I predict the VA will go full Epic, forcing Epic and Cerner to get serious about developing interoperability with each other since DoD will be on Cerner. This will benefit all customers. A Cerner-Epic ROI exchange will be as seamless as Care Everywhere (Epic to Epic ROI module).” Politicians seem to be fretting that since VistA uses old technology (just like Epic), it therefore should be replaced with a commercial product despite the VA’s decades-long satisfaction with its internally developed system. The VA and DoD always seem to find reasons to not work together, so perhaps choosing Epic would prolong the hostilities.


From All-Around Good Guy: “Re: Lee Marley, SVP/CIO, Presbyterian Healthcare Services in Albuquerque. She has left and will be missed. The data center was built and Epic was installed during her tenure.” Unverified.

HIStalk Announcements and Requests


A reader who wishes to remain anonymous donated $250 to my DonorsChoose project, to which I applied double matching (from my anonymous vendor executive and from charitable foundations) to purchase materials for Mrs. Sandler’s elementary school class in Aurora, CO (math games), Mrs. Jones’s K-2 class of intellectually and emotionally disabled students in Galivants Fry, SC (math manipulatives), Ms. Sobczak’s Grade 1-3 class of students with communication disorders in South Holland, IL (math games), and the elementary school class of Mrs. Bowers of Oklahoma City, OK (headphones for online math intervention programs).

I’m regularly puzzled when people email me story links that I covered days before, apparently thinking that because other sites ran the news days later that I missed it. I don’t think I’ve ever missed a significant story, so I can only implore you to read all of HIStalk each time I post news on Tuesday and Thursday nights and over the weekend. Reason: other sites keep repeating the same news over and over trying to get more clicks, while I assume readers are smart enough to only need to see it once and therefore I don’t run repeats. Obviously my logic is incorrect if folks are either skimming or skipping certain posts. My other suggestion is to avoid assuming that just because I can summarize a big story in a few sentences doesn’t mean it’s not important – I don’t pad out the content with a lot of filler.

Who should I interview? Tell me someone who: (a) doesn’t work for a for-profit organization; (b) is smarter than most people; (c) is interesting and opinionated; and (d) I haven’t already interviewed recently. I like to expose fresh viewpoints, but those who possess them don’t always volunteer to be interviewed.

I was thinking that what we need to learn in this country that advancing health for a tiny percentage of the population (via precision medicine, expensive celebrity surgeons and surgical gadgets, and dramatic and expensive interventions) is the wrong goal. Our overall health (and health expense) isn’t driven by new developments for the wealthiest and best informed, but rather how well we can move the public health needle for the most people who are involved alongside the medical experts. Research and new medical technology aren’t needed when we can’t even broadly roll out basic services such as prenatal care, end-of-life counseling, mental health treatment, and addressing the social determinants of health. I worry that we irrationally celebrate advancements that are very narrow in scope and outcomes.

Gag Clauses: I Find No Evidence They Exist


Some of the worst and most sensationalistic healthcare IT reporting I’ve seen (and I’ve seen a ton) involves so-called gag clauses, where IT vendors supposedly insert standard contractual terms that prohibit users from openly discussing patient-endangering software errors. That inflammatory topic, like the Loch Ness monster, has generated a lot of rhetoric (some of it political) despite the lack of proof that gag clauses actually exist.

Take the above hype-filled story, in which the reporter not only provides no examples of the gag clauses he claims to have seen, he completely confuses standard intellectual property (IP) terms — like not being allowed to post source code or product documentation on the Internet — with prohibiting EHR-using providers from speaking publicly about product problems via a non-disparagement clause.

The folks at HIMSS Analytics gave me access to its CapSite Database, which contains actual vendor contracts they obtained using Freedom of Information Act requests. I reviewed dozens of contracts from Epic, Cerner, Meditech, Allscripts, EClinicalWorks, Athenahealth, and several other vendors.

I didn’t see a single clause that prohibits customers from speaking out about software problems. I had previously challenged readers to give me a real-life example of a gag clause and I didn’t receive any there, either.

My experience working for providers is that any pressure to keep quiet about software problems is self-imposed. Health system executives don’t want to jeopardize an expensive implementation or annoy their vendor “partner,” so internal policies require that employees obtain approval before making any public comments or publishing articles. The CIO of one of the health systems I’ve worked for said outright that nobody in the IT department (including clinicians) was allowed to publicly comment on anything without his explicit review and approval (“I’ve been burned by that before”) or they would be subject to termination, which may give you insight as to why I remain anonymous.

Epic has raised the most ire by enforcing the intellectual property provision to include screen shots. Customers can’t publish or share Epic screen images – even those involving customizations of Epic they perform themselves – without approval from Epic. The company’s rationale is that screen design exposes IP, where just seeing what fields are captured provides a lot of insight as to what’s happening under the covers such that a competitor could steal the logic. They give permission to publish the screenshots when that isn’t the case.

That doesn’t prevent users from talking about or describing Epic software problems. It just means they can’t publish screen shots, documentation excerpts, or source code (yes, Epic customers receive source code) to make their point without the company’s permission. I saw nothing to prohibit or even discourage that kind of discussion in any of the contracts I reviewed. Perhaps it is included elsewhere, such as in the particulars of Epic’s support fee rebate program where customers get money back for voluntarily following Epic’s suggestions, but I haven’t seen it or heard of a real-life example. I’ve also not heard of a vendor taking formal action against a provider for making unflattering software comments.

I’ll throw out one more challenge and them I’m calling gag clauses a Snopes-like false rumor spread by misinformed people. If you’ve seen an example of a vendor software contract that includes anything resembling a gag clause that prohibits customers and their users from talking about product or company problems, send it my way anonymously and confidentially. I would also like to hear of examples where a provider has spoken unfavorably about a company or product and was pressured to stop, either from the vendor or from their employer, since I suspect that information pressure is far more common.


November 12 (Thursday) 1 :00 ET. “Top Predictions for Population Health Management in 2016 and Beyond.” Sponsored by Medecision. Presenters: Tobias C. Samo, MD, FACP, FHIMSS, CMIO, Medecision; Laura Kanov, BS, RRT, MBA, SVP of care delivery organization solutions, Medecision. With all the noise and hype around population health management, the presenters will share their predictions for 2016 and their insight into meeting the mounting pressures of value-based reimbursement and the tools and technology needed to manage care delivery.

Contact Lorre for webinar services. Past webinars are on our HIStalk webinars YouTube channel.

Acquisitions, Funding, Business, and Stock



Sunquest owner Roper Technologies acquires CliniSys Group and Atlas Medical, which offer laboratory information systems to 2,000 labs in Europe and lab-customer connectivity in the US, respectively.


Walgreens is rumored to be preparing for a Wednesday announcement that it will buy competitor drugstore chain Rite Aid for up to $10 billion and will take on its $7.4 billion debt load. The deal would give Walgreens 17,800 stores worldwide vs. the 7,800 owned by CVS. Walgreens would also gain Rite Aid’s walk-in clinics, wellness stores, and EnvisionRX pharmacy benefits business. Italian-born businessman Stefano Pessina became the CEO and majority shareholder of Walgreens when it acquired his British pharmacy chain Alliance boots Group in 2012, giving the 74-year-old net worth of $14 billion.



Xerox reports Q3 results: revenue down 10 percent, EPS –$0.04 vs. $0.22 following a $385 million write-down after pulling out of two state Medicaid system contracts. The company says it won’t sell itself, but “a comprehensive review of structural options for the company’s portfolio is the right decision at this time.” Above is the one-year share price chart of XRX (blue, down 28 percent) vs. the Dow (red, up 4 percent). Shares dropped 8.3 percent Tuesday to a 52-week low on 13 times average volume.


Lexmark announces Q3 results: revenue down 7 percent, adjusted EPS $0.57 vs. $0.96. The company’s board has authorized “the exploration of strategic alternatives to enhance shareholder value and unlock the intrinsic value created by the company.” Shares dropped 13 percent following Tuesday’s announcement before the market’s open. Above is the one-year share price chart of LXK (blue, down 25 percent) vs. the Dow (red, up 4 percent).


San Francisco-based, 15-employee medical image analysis vendor Enlitic raises $10 million from an Australian diagnostic imaging company.


HCA announces Q3 results: revenue up 6.9 percent, adjusted EPS $1.17  vs. $1.18. The company blames lower profit on patients who were previously insured but stopped paying their Affordable Care Act premiums. The board authorized the repurchase of up to $3 billion of the company’s shares.



Emerson Hospital (MA) chooses MedAptus charge capture.

Dialysis Clinic (TN) chooses the EClinicalWorks EHR.

UNC Health Care (NC) and UF Health Shands Hospital (FL) choose Lexmark’s vendor-neutral archive.

Catholic Health Initiatives will expand its agreement with Allscripts to include managed services and its FollowMyHealth patient engagement platform. Mineopie reported as a rumor on October 21 that CHI had signed managed service agreements with both Allscripts (outpatient) and Cerner (inpatient). CHI signed a  three-year, $200 million infrastructure outsourcing deal with India-based Wipro in March 2013 with little fanfare since except for IT employees complaining on Glassdoor that outsourcing, layoffs, and marginal management has put IT in shambles. The CEO said in 2010 that the organization would spend $1.5 billion on EHRs and other IT systems.



Jyotishman Pathak, PhD (Mayo Clinic) is named chief of health informatics at Weill Cornell Medicine.

Announcements and Implementations

IBM releases Datacap Insight Edition, which can classify and route scanned documents using advanced imaging, natural language processing, and machine learning. It provides an unconvincing healthcare example: “Where doctors and hospitals are transferring hand written notes and images into electronic health records for analysis or filing.”


Truman Medical Centers (MO) and Cerner will work together in piloting healthcare IT and giving Cerner employees on-site experience.


Peer60 publishes “Into the Minds of the C-Suite 2015.”

The American Dental Association’s ADA 2015 conference chooses DataMotion to provide Direct Secure Message and secure e-mail solutions as the technology backbone for secure digital exchange demonstrations.

Privacy and Security


In a remarkable statement, an FBI cyberattack expert says the agency often advises people to just pay cybercriminals the demanded money when a PC is infected with ransomware, which locks their computer information until payment is made to release it. He suggests that the malware is so sophisticated that payment is the best option, with the others being to revert to a backup or pay a security expert to try to remove the malware. Knowing that most people never make backups means they’ll pay either way. It’s a bit surprising that people still store their one single copy of valuable data on their local hard drive, which is a problem we’ve always had in hospitals where employees ignore strong suggestions (or policies) to store everything on the shared drive only. You can easily determine those who didn’t by the volume of their whining when they report a problem that requires immediately replacing or re-imaging their laptop or desktop.

Investigators conclude that China-based hackers breached insurer Anthem because the Chinese government is desperate for ideas on how to care for its aging population. Chinese citizens were promised universal access to healthcare by 2020, but they are not satisfied with the cost, quality, and gaps between the rich and the poor. Somehow the hackers missed the fact that the US has failed equally spectacularly on those same issues despite spending many times more than China and everybody else, so perhaps our cyber-retaliation involves hoping they follow our pitiful example.


Celebrity gossip site TMZ says several employees of Sunrise Hospital (NV) have been fired for trying to take photos and look up the medical records of former NBA star and comatose brothel patron Lamar Odom.



A observational study by Massachusetts General Hospital finds that medication errors were made in half of its surgeries, a third of which caused patient harm. The most common errors involved mislabeled drugs, incorrect doses, failing to treat situations indicated by vital signs, and documentation mistakes.


In Australia, the Queensland government will provide an extra $4.2 million to support the Cerner rollout at the newly opened Lady Cilento Children’s Hospital, which has had many planning-related problems since its opening including an IT budget estimated at $29 million now standing at $67 million.

A state audit finds that South Australia’s Cerner Millennium pathology information system implementation skipped project steps and will fall short of money to complete the project, as additional costs for an unplanned disaster recovery center, legacy system decommissioning, and absence of an electronic ordering module are expected to exceed originally estimated costs of $22 million by several million dollars.

UMass Memorial Health Care (MA) will staff its $700 million Epic implementation by moving its 500-employee IT team to downtown Worcester to create room to house the 250 new hires needed. That’s what the local business paper says, although I would bet a lot of those new IT people are assigned there temporarily for the Epic implementation only. A common Epic implementation model is to choose existing IT team members for the Epic project via interviews and scores on Epic-mandated personality tests, hire new people as needed using the same interviews and tests, bring on temporary resources from clinical and administrative departments to provide subject matter expertise, and move everybody to a sequestered location where they won’t be bothered by unrelated IT work. A lot of those folks are borrowed until after go-live, when they return to their home departments. Hospitals usually hire experienced consultants as well to get them through implementation, after which they go away.


I mentioned previously that I had run into problems using Stride Health to look up available health insurance in various parts of the country to see how many plans involve high deductibles (answer: just about all of them). The company quickly responded with a request for details, then let me know that they had fixed the problems, one of which they hadn’t heard of until my report. It’s working great now.


In bizarre irony, the SXSW festival cancels two panel discussions covering the bullying of females in the online gaming industry after it receives threats of on-site violence. Members of Gamergate, whose members claim a lack of game journalism transparency, have threatened gaming industry women, vowing to publish their personal information or to rape or kill them.

Weird News Andy calls this story “You Don’t Know Squat.” A hospitalized woman in labor passes on the nurse’s recommendation that she perform squats to hasten her delivery, instead choosing to dance down the hall to a rap tune.

Sponsor Updates

  • Medecision will sponsor the HIMSS Summit of the Southeast 2015 October 29-30 in Nashville and HIMSS Big Data and Analytics Forum November 5-6 in Boston.
  • AirStrip will exhibit at The Health Management Academy’s CMO and CMIO Forums October 28-30 in Deer Valley, Utah.
  • Bernoulli becomes a sponsoring partner of the AAMI Foundation’s Coalition for Alarm Management Safety and Coalition to Promote Continuous Monitoring for Patients on Opioids.
  • Bottomline Technologies sponsors the nonprofit Leadership Seacoast for the fourth consecutive year. 
  • Divurgent wins Business of the Year and Executive of the Year awards from the Business Intelligence Group.
  • EClinicalWorks will exhibit at the 2015 NJPCA Annual Conference October 28-29 in Las Vegas.
  • Extension Healthcare receives a 2015 Innovation Award in the Technology category from the Greater Fort Wayne Business Weekly.
  • FormFast will host a virtual user group meeting November 3 and 4.
  • HCS will exhibit at the LeadingAge 2015 Annual Meeting November 1-4 in Boston.
  • HDS will exhibit at Summit of the Southeast 2015 October 28 in Nashville.
  • Healthcare Growth Partners advises Lavender & Wyatt Systems on its sale to Netsmart.
  • Zynx Healthcare SVP of Mobile Strategy Siva Subramanian, PhD will participate as a panelist at Partners HealthCare’s Connected Health Symposium October 29-30 in Boston.
  • Burwood Group becomes one of the first Citrix Solution Advisors to complete three Citrix specializations in virtualization, networking, and mobility.
  • CitiusTech will exhibit at the NAHC Annual Meeting 2015 October 28-30 in Nashville.

Blog Posts


Mr. H, Lorre, Jennifer, Dr. Jayne, Dr. Gregg, Lt. Dan.

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Currently there are "10 comments" on this Article:

  1. ONC should be ashamed for asserting vendor gag clauses when a cursory review of the real situation clearly contradicts it.

    They simply seek to generate a false crisis so they can later say they’ve solved it.

    Just getting to be an old joke with them.

  2. This might be of interest to some as if one is insured by Cigna, they are not aware of the fact that they have a new pharmacy benefit management company named United Healthcare. This occurred as a couple weeks after Cigna negotiated a 10 year agreement with Catamaran, United Healthcare swooped in and bought Catamaran, which will be merged with the Health IT functions of Optum RX. Actually, that post might have made Cigna a little happy as it could represent an anti-trust issue to get out of the 10 year contract, but who knows.


    This is the largest PBM combined in the US now and any wonder Cigna wants to hurry up and merge with Anthem? Of course we saw this with United before with Healthcare.Gov when 2 weeks after HHS awarded QSSI a contract, United bought QSSI. That sent Sebelius into overdrive with the SEC filings, only to find out that United followed procedures and laws as laid out at the SEC as not having to record on Edgars as they called it a non substantial acquisition, only later, and a short time later did it become substantial as we know.

    So now enrollees get a “two fer” with Cigna in putting premium money down to the bottom line of two health insurers with this PBM arrangement instead of one, and buy backs too:) You can see here too, that DOJ Loretta Lynch won’t be doing much here as she used to represent Untied Healthcare with antitrust lawsuits.

    At a time when Cigna is trying to increase enrollments, this might not be a good thing for them, maybe?

  3. “UMass Memorial Health Care (MA) will staff its $700 million Epic implementation by moving its 500-employee IT team to downtown Worcester to create room to house the 250 new hires needed.”

    Just think if every hospital who did NOT implement Epic decided to invest the same amount of dedicated resources, time and money to any EMR implementation? The horror stories would be fewer and perhaps clinician satisfaction wouldn’t be as miserable as it is.

    Instead, most non-Epic hospitals choose another vendor so they can spend less money, but more importantly, invest less in the actual implementation of the product, avoid actual governance that starts at the CEO level and eventually blame the vendor for their failure and lack of leadership. It’s almost laughable how ridiculous this notion of one EMR software being “better” or “worse” than the other. They all, in essence, have the exact same functionality with a different front end. What FAILS an EMR implementation are the intangibles Epic forces clients to try and follow, while ever other vendor simply succumbs to client ignorance.

    If your health system has to rip and replace it’s existing EMR — the commodity of healthcare IT at this point — it should be looking within itself instead of blaming the vendor. I would bet 75% of the time, poor executive and clinical governance, an IT-driven product, and piss-poor leadership are more to blame than the software. If going through a “change management” process because of those things also requires a $700 million rip and replace of your EMR, people should be fired.

  4. Cognitive flaw: restricted disclosure circumvents disclosure. (see Rule 1 and 2 of fight club). Consider that getting no response to a request for PHI and PHI – does not mean that PHI and PII do not exist – all over the place.

    It the concept seems complicated, poll readers as to who would send you unauthorized PHI and PII, Follow-up poll, how do you rate the professionalism of people who willfully disclose restricted information? (and please post names of those who should never be trusted.)

  5. Re: Theranos. The first rule of investing: if it seems too good to be true… it is!
    Can’t wait to see the data release… I’m betting it will be inconclusive and designed to get headlines that the company released information without actually settling any of the science.

  6. Re: GA Medicaid rejecting claims with “unspecified” ICD-10-CM codes. How can they get away with this? It’s in direct opposition to CMS’s approach and AHIMA guidelines. Aren’t physicians and hospitals in Georgia up in arms?

  7. Gag clauses might not exist for most, but it doesn’t mean the vendor (and maybe your employer) won’t still come after you and hurt you. I was out of a job for several months leaving a fully functioning Epic installation in the optimization phase. I worked there many years and made them millions probably. Someone said I was leaving an active install, not sure which side, but the employer side said don’t leave, just come back, or it might not be pretty. No Sh*t. My new Epic job I was going to suddenly disappeared as I have heard happened to several of my colleagues. Yes, you don’t need gag clauses to go destroying lives of the people who have to work with the product.

  8. These “gag clauses” are not just limited to IP protection but can be part of broad confidentiality provisions. For example, in one publicly available EHR agreement with a popular vendor, it defines the vendor’s confidential information as “any information concerning the functionality, operation, use, source code, data structures, implementation, or maintenance of Software…”

    Thus, if physician users discover glitches or errors specific to the functionality or operation of the software, they may be hesitant to go public with this information for fear of violating the confidentiality provision of these agreements.

  9. Contracts going to government customers are going to be different because of potential exposure through Foi requests, auditors, hearings, etc.

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Reader Comments

  • Susan Hassell: You can't simply pile on more work and expect employees to not be stressed. How about not reducing FTEs until you implem...
  • Cindy Gagnon: Excellent article -- I 100% agree. Thank you for consistently articulating the realities of the healthcare informatics ...
  • Randy Bak: Re: Biden's remarks-- I've been letting slide all this talk of patient "data" and access to it, feeling it isn't worth t...
  • Brian Too: It's eerie to hear a healthcare vendor story about Lake Mary, FL. We used to get McKesson support for our Series produc...
  • Janice Willingham: As a recent new reader of this excellent site and former IT worker now on the quasi tech side of the "business side" of ...
  • Another Dave: Orwellian Aeron chair: If sitting is the new smoking, I sure this exercise motivator will have some real health benefit...
  • Art_Vandelay: The instability of the Operating and Capital budgets from year-to-year. Understanding where dollars are sourced, how, fr...
  • SoCal grunt: I for one did select Meditech. The people were welcoming and seemed to be the only ones insterested in having a discussi...
  • Annon: 100% agree, this is vaporware, they are not doing anything remotely close to interoperability. Not the only ones though,...
  • Brian Too: Wait... I thought that any voids in the brain automatically filled up with cerebro-spinal fluid? Wouldn't an air void c...

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