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April 19, 2016 News 7 Comments

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Federal prosecutors launch a criminal investigation of Theranos, seeking to determine whether the lab company misled regulators and investors about its technology. Founder Elizabeth Holmes said during her squirmy and somewhat creepy “Today” show appearance on Monday (sans her trademark black turtleneck, but sporting her equally common deer-in-the-headlights look) that she was “devastated” to learn of extensive company failings of which she was previously unaware.

Holmes confidently told “Today” that the company will survive because the world needs it, although I wouldn’t be so sure. She says Theranos will “rebuild this entire laboratory from scratch.” Maybe the show’s label of Holmes as “billionaire” (on paper, anyway) was correct before the hydrogen-filled Theranos zeppelin went down in flames, but I doubt anyone would buy the entire, permanently tarnished Theranos for anywhere close to $1 billion at this point.

The mistake Holmes made in starting Theranos as a rich, Stanford dropout (at 19) was proclaiming it to be a high-valuation, disruptive Silicon Valley tech startup rather than a tiny entrant into the boring back office lab system business that is dominated by Quest and LabCorp, failing to put reasonable clinical oversight in place and competing with them mainly on price (although the sustainability of even that business model has yet to be proven). It’s  OK and maybe even desirable to be quirky, obsessively focused, publicity-shy, and inexperienced when you’re starting a faddish website for easily amused 20-somethings, but less so when you’re running a federally regulated medical business with lives on the line.

Reader Comments


From CarrolltonObserver: “Re: Greenway Health. Tee Green is stepping away and another 100 employees were let go last week. My guess is that Tee is slowly stepping away to get into politics.” See  my mention in the People section below. The company says Tee “will remain in an active, full-time role as executive chairman, focusing on innovation and growth initiatives,” which sounds like work more appropriate to the position he left than the one he’s taking. 


From Blue Horseshoe MD: “Re: cholera in Haiti. This article that describes the US implications is mind-blowing, but it also demonstrates the power of data visualization in epidemiology and thus in medicine.” Haiti’s cholera epidemic, which has killed nearly 10,000 people and infected 775,000 others, was apparently caused by UN peacekeepers from Nepal who brought the disease with them and from whom it spread due to negligent sanitation practices. The article says the CDC and the US administration are trying to hide the outbreak’s source by using questionable public health tracking measures. No cases of cholera had ever been reported in Haiti until the peacekeepers arrived and geo-mapping of reported cases points directly to the UN facility, with a CDC official going on record in unscientifically characterizing its response as, “We’re going to be really cautious about the Nepal thing because it’s a politically sensitive issue for our partners in Haiti.”


Speaking of the value of data visualization, the Johns Hopkins Bloomberg School of Public Health launches a fully online, part-time masters in spatial analysis for public health.

From How EMRya?: “Re: the EMR replacement market. All the vendors thought the high EMR dissatisfaction rate would keep the market going with replacements. I don’t think it evolved that way. Physicians burned themselves out with their selection process within the past five years and don’t want to go through it again with vendors that seem about the same. Companies like NextGen and Greenway are retooling their business to an EBIDA strategy of just holding onto the base in running a profitable company in a saturated market.” I agree that it’s not likely that large numbers of physicians will want to go through choosing and implementing a new EHR no matter how unhappy they are with their current one. Even if they do eventually switch, it would be tough to build a stable business based on what they might do and when they might do it. I predicted early in the HITECH days that vendors would scale up to meet temporary demand, but then find it hard to shrink back down once they had blown through their share of the taxpayer billions. Maybe that’s why everybody from Allscripts to EClinicalWorks is trying to pivot into something fresh that’s outside their historic core competency, which usually ends up being population health management for lack of alternatives.

HIStalk Announcements and Requests


Welcome to new HIStalk Platinum Sponsor PokitDok. The San Mateo, CA-based company (its name is pronounced “pocket doc”) offers a healthcare API ecosystem that meets consumer-driven healthcare market demands. APIs include clearinghouse (enrollment, eligibility, authorizations, claims, claims status, referral – all of those X12 APIs are free); patient scheduling (across all major PM/EHR systems); identity management (EMPI queries); payment optimization (medical financing qualification tools); and a Private Label Marketplace for provider search (scheduling, eligibility, payments).  Customers use these APIs to connect doctors to patients, to help payers and providers develop new business functions, and to connect EHRs and other digital health services. PokitDok’s APIs allow startups to scale immediately with lower cost, encouraging innovation and connectivity. Thanks to PokitDok for supporting HIStalk.

Here’s an overview video of PokitDok that I found on YouTube.

My latest pet peeve: people who say “pop health,” apparently challenged to find time in their day to enunciate the three additional syllables. They probably mean “population health management technology” anyway, so maybe their 10-syllable avoidance is worth it. 

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Mrs. Ulhaque from Texas is happy that we funded her DonorsChoose grant request for a single classroom iPad that is shared by her 24 students. She says they love playing educational games and she is rewarding students who show academic improvement with extra time on it.

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Also checking in is Ms. Munoz, who teaches Grade 5-6 math and science for special education students (intellectual disabilities, Down syndrome, brain injury, autism, etc.) We provided four tablets and cases, which she says have helped the students complete lessons they couldn’t previously tackle before because of their disabilities and motor skills problems.  The students who can’t write or speak are using a communications app that allows them to interact with their teachers and fellow students. Just to give you an idea of how little it costs to fund such a significant classroom project, HIStalk readers paid for half of the $363 total and Google matched that amount.


April 26 (Tuesday) 1:00 ET. “Provider-Led Care Management: Trends and Opportunities in a Growing Market. ”Sponsored by HIStalk. Presenter: Matthew Guldin, analyst, Chilmark Research. This webinar will provide a brief overview and direction of the provider-led care management market. It will identify the types of vendors in this market, their current and longer-term challenges, product capabilities, partnership activity, and market dynamics that influence adoption. It will conclude with an overview of key factors for vendors and solutions moving forward.

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

Acquisitions, Funding, Business, and Stock



A reader provided details on the lawsuit brought by the MetroChicago HIE against Sandlot Solutions. The HIE says Sandlot took away its data access one day after warning it that it would be shutting down but then provided a database copy. The HIE said that was unacceptable since any technical snags in restoring the information could cause the HIE itself to shut down. The lawsuit says Sandlot was insolvent and was closing following a failed merger attempt. Santa Rosa Consulting, listed in the lawsuit as Sandlot’s owner (which I’m not sure is exactly true – the parent of both is Santa Rosa Holdings), was a co-defendant in the lawsuit. Sandlot announced its only funding round ($23 million) about 18 months before it shut down (it’s always a red flag when a company fails to raise new money unless it’s doing so obviously well that it doesn’t need it). Interestingly, the HIE says Sandlot’s actions violated HIPAA since the company is a business associate of the HIE. Also interestingly, the lawsuit claims that Sandlot refused to provide the HIE with its data because the database would contain previously deleted data from other Sandlot customers.


UnitedHealth Group makes good on its earlier threat to stop offering policies on Affordable Care Act marketplaces as it loses $1 billion on those policies over the past two years. The company will offer exchange policies in only a handful of states in 2017, saying that the market isn’t growing and it’s being stuck with sicker patients as younger, healthier ones don’t see the value in buying health insurance. UHG’s policies are rarely the least expensive and it holds only a 6 percent market share.


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Scott Zimmerman (TeleVox / West Interactive) joins Greenway Health as CEO, according to his LinkedIn profile. He apparently replaces Tee Green, who is now listed on the company’s site as executive chairman.


Voalte hires Adam McMullin (SFW Capital Partners) as chairman and CEO.

Government and Politics

A study finds that nearly 3 percent of physicians who provide Medicare Part B services billed CMS for work that would require more than 100 hours per week, with optometrists, dermatologists, and ophthalmologists leading the pack. Those same providers also submitted more high-intensity billing codes than average. The authors suggest using Medicare’s utilization and payments data to flag potential fraud, although they probably underestimate the complexity of how providers use their National Provider Identifier to bill Medicare for services they don’t necessarily provide personally.

Florida becomes the second state to prohibit hospitals from balance-billing patients treated in their network for services rendered by the hospital’s out-of-network practitioners — such as surgeons, ED doctors, and anesthesiologists — for which the patient can’t seek an in-network alternative. The patient will pay the in-network rate, leaving the insurance company and provider to negotiate any additional payments.

Privacy and Security

The computer systems of Newark, NJ’s police department are taken offline for four days following a ransomware attack.



The board of Massena Memorial Hospital (NY) approves $1 million to upgrade its “ancient” Meditech system (or “metatech,” as the local paper spells it) in contracting with CloudWave for cloud-based hosting. The CEO warned the board that their current implementation runs on Windows Server 2003, which he describes as “a big garage door somebody could hack their way through and steal everything.”


A brilliant article in London’s “The Guardian” says unlearned movie stars should stick to pretending to be someone else on screen rather than taking positions on medical science, referencing “Vaxxed,” the new movie about Andrew Wakefield, the widely discredited anti-vaccine doctor who eventually lost his medical license. Robert DeNiro included the film in his film festival with a vague rationale that the documentary “is something people should see,” only to pull it when scientists complained. The Guardian notes:

If “Vaccinating With the Stars” looks a little inappropriate where public health is concerned, so too is the prospect of children falling ill because an actor clearly hasn’t read Wakefield’s Wikipedia entry. Unless, worse still, he has.


An LA Times article quotes University of Michigan’s Karandeep Singh, MD, MMSc, who says unregulated and sometimes poorly design healthcare-related apps can be “like having a really bad doctor.” It points out a recent study of Instant Blood Pressure, a $4.99 app marketed without FDA approval that correctly diagnosed hypertension only 25 percent of the time, with the company hiding behind the excuse that it isn’t intended for diagnosis and treatment, thus rendering its raison d’être questionable.


A New York jury awards $50 million to a woman who says she has become incontinent after her obstetrician performed an unnecessary episiotomy during the birth of her healthy child in 2008. The woman says she was forced to quit her job, has to wear panty liners, and can’t have sex with her husband. The doctor, who insists he did nothing wrong and that the woman never complained about any issues, says, “Someone can just make up a story, cry to the jury, and they will ignore all the records and give her a big award.”

Sparrow Health System (MI), bowing to pressure from the National Labor Relations Board and the state nurse’s union, rescinds its policies that prohibited employees from talking about health system policies on social media and to the press. NLRB says the health system’s policies related to social media, cell phone use, the wearing of unapproved buttons, and gossiping are overly broad and are discriminatory.

Minnesota hospitals report that their emergency departments are becoming “holding pens” for sometimes violent mental health patients, forcing other patients to wait for hours or to be sent elsewhere as up to half of their gurneys are occupied by patients who require levels of oversight and security that few hospitals can provide. One hospital psychiatrist reports, “This is supposed to be a place of peace and security. Instead, we have acute psychiatric patients banging on windows, throwing feces, and assaulting people. It’s deeply unsettling to other patients in the ER.”

In Canada, Alberta Health Services will spend $316 million over the next five years to replace 1,300 mostly non-interoperable clinical systems with a single system that can maintain a single medical record. It will issue an RFP shortly. The College of Physicians and Surgeons termed existing systems “woefully inadequate” in late 2014, with a government official adding that after spending nearly $300 million, Alberta “really got nothing more than electronic isolated file systems. Do we realize we need to have data exchange standards before we start adding systems? We need systems to talk. It blows my mind.”


A study of those Dyson Airblade hand dryers with which business replace paper towels (while claiming unconvincingly that their motivation is your health rather than reducing their restroom expenses) finds that they blast germs onto anyone within 10 feet of the bathroom wall, so you’d better hope the person using it washed their hands well first. Dyson disputes the study, claiming the paper towel cartel is behind it.

Sponsor Updates

  • Aprima will exhibit at the Boulder Valley Individual Practice Association meeting April 26 in Lafayette, CO.
  • Catalyze CEO Travis Good, MD will speak at the HITRUST Annual Summit April 25-28 in Grapevine, TX.
  • Besler Consulting releases a podcast on “IME Shadow Billing.”
  • Crossings Healthcare Solutions will exhibit at the Cerner RUG April 20-22 in Charlotte.
  • Cumberland Consulting Group Managing Director Tom Evegan guest blogs for Revitas.
  • EClinicalWorks will exhibit at the California MGMA 2016 Annual Conference April 22-23 in Sonoma.
  • Isthmus Magazine features Healthfinch and its data partnership with Beekeeper.

Blog Posts


Mr. H, Lorre, Jennifer, Dr. Jayne, Lt. Dan.
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Currently there are "7 comments" on this Article:

  1. Just read the Massena article. The “ancient” system being replaced is the radiology imaging system, which still uses film. The “metatech” upgrade involves moving their server from in-house to cloud-based.

  2. I find it interesting that the press is weighing so negatively against Theranos. Their lab in Arizona which conducts 90% of their testing passed inspection. Just curious if this isn’t being coordinated by the industry giants using the feds as their front man.

  3. I feel for Theranos. Innovation and being a true bastion of innovation is a really messy process. No one talks about this facet of innovation but it is. Apple had their high profile blunder with iPhone antennas. But before Apple existed the Steve’s had their blue box that manipulated Ma Bell’s telephone signals to make free long distance calls. Their so called blue box was clearly illegal, but lead them to continue to build new and innovate things.

    I hope Theranos does re-build their lab because the world really does need real innovation in health care.

  4. …”Maybe that’s why everybody from Allscripts to EClinicalWorks is trying to pivot into something fresh…” Gosh I hope it’s secure text message, alarm management, caregiver communications and collaboration…

  5. I too read the Massena article. At no point is there any mentioned of MEDITECH, or that their MEDITECH system is “ancient,” as your blog post insinuates. The article states that the servers are Window’s 2003 and require upgrading leading to a decision to move to a cloud-based platform.

    [From Mr H] As I pointed out in the post, the local newspaper spelled it “metatech.” Google Massena+Meditech and you’ll see previous announcements about their using it. Plus, CloudWave hosts only Meditech systems. The newspaper article used the term “ancient” in referring to both Meditech and their imaging system, although the only quote they used containing that term referred to the latter.

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