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Monday Morning Update 5/30/16

May 29, 2016 News 3 Comments

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NantHealth’s previously postponed IPO will happen this holiday-shortened week, with insiders taking the majority of the $91 million offering. The company’s IPO documents don’t specify how it will spend the money, saying only that it will be used for “general corporate purposes.” NantHealth’s filings indicate that the company lost $72 million on $58 million in revenue in 2015, with $291 million in liabilities.


Meanwhile, shares of Patrick Soon-Shiong’s cancer therapy company NantKwest have dropped 79 percent since its July 2015 IPO, erasing $3.1 billion of the company’s $3.7 billion first-day valuation and creating a legal boom as law firms line up offering to represent shareholders in class action lawsuits. Above is the share price of NK (blue) vs. the Nasdaq (red).

Reader Comments

From Mutton Dipper: “Re: the ‘Women in Health IT’ section of that industry rag. I don’t think they’re doing women any favors by carving them out as a special interest curiosity.” We’ve talked about this previously, but perhaps it’s time to see the content they think women in health IT need that isn’t available elsewhere. Stories on the site are: (a) the Gates Foundation donates money to study gender inequality, which has zero to do with health IT; (b) HIMSS celebrates nursing informatics, apparently in the gender-biased belief that it’s a female-only profession; and (c) two women took new jobs, something us menfolk apparently wouldn’t care about. Every story was just a padded out rehash of a press release (without crediting the press release).

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It is Memorial Day, created not as a nonchalant summer kickoff, but rather to set aside time to remember those who died while serving in the armed forces (unfortunately, people usually forget to observe the latter in celebrating the former). 

In Flanders Fields
By John McCrae

In Flanders Fields the poppies blow
Between the crosses row on row
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.


More than half of poll respondents say exposure of their financial and contact information would be the worst part of a medical records breach, while 22 percent say they would be most upset about having their mental health history made available. The results don’t surprise MobileMan, who says he’s always believed that people worry more about their money than their health. JaneOrJohnDoe just lies when clinicians ask about potentially embarrassing behavior, avowing that he or she never has sex, smokes, drinks, or uses drugs because co-workers and the HR department don’t need to know. Missy C22 takes the opposite approach, saying people can get any information they want, so she doesn’t worry about breaches.

New poll to your right or here: what level of unexpected medical expense would you struggle to pay?


My insurance company told me my travel-related malaria prevention medication was covered and would cost $80. The Walgreens pharmacist said no, actually it’s not covered, so he offered me the cash price of $268. I looked online while standing at the Walgreens counter and found a coupon on GoodRX that Walmart accepts. I called Walmart from the Walgreens parking lot and asked them to call for a copy of my prescription, which they priced at $140 for cash-paying customers. It was ready when I arrived – I just showed them the coupon on my phone to make my final price $70, saving me nearly $200 for just a couple of minutes of effort since I was going to Walmart anyway. This is a great example of screwy American healthcare for several reasons:

  • The old drug is unreasonably expensive and going up all the time.
  • The insurance company would apparently prefer to treat me for malaria than to pay upfront to prevent it (the same lack of logic that leads them to decline to pay for birth control pills).
  • Prices are all over the place – how can Walmart sell the same drug for half the Walgreens price?
  • A less-persistent customer would have wasted a lot of money by not shopping the drug price and not being aware of GoodRx.
  • Sometimes a discounted cash price is cheaper than using insurance.
  • GoodRx makes money by using an unspecified PBM’s negotiated discounts, passing the savings along to their customers while taking a transaction fee for themselves and giving the PBM big volume. That’s a brilliant business model in which everybody wins.
  • The price varies wildly even when using the GoodRX coupon – Walgreens actually accepts the same coupon but charges $127, while the PillPack online pharmacy tops the price curve at $275 (the first two examples lead me to assume that the PBM’s discount on this drug is 50 percent since it cut the price in half at both Walmart and Walgreens).
  • Maintenance drugs offer even more savings. A month’s supply of generic Lipitor whose cash price ranges from $90 to over $400 depending on the pharmacy is just $19 using a GoodRX coupon.
  • Healthcare is the only example I can think of where paying cash carries a penalty rather than a discount. I remain unconvinced by arguments saying it’s not reasonable to force providers to give cash-paying patients the lowest price they’re willing to accept from any other payer.

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We providing kits and equipment for the inaugural robotics team of Ms. Sobosan’s Nevada  high school in funding her DonorsChoose grant request. Team member Bryan concludes, “The robotics resources changed the way I looked at programming. I’m not very good, but it has inspired me to learn even more when I program apps, robots, and games. Although it won’t be easy, I will push myself to keep learning. The robot we are building is taking a while to assemble, but so far it is going very well and I expect to have fun with the projects you have sent.”

I was thinking about CMS Acting Administrator Andy Slavitt’s comment that interoperability isn’t like sending a man to the moon. Actually, it is — if you told the 1960s-era US and Soviet Union that it would be optional but nice if they shared information for the good of their respective space travelers even while they are desperately trying to beat the other in getting there first.

Last Week’s Most Interesting News

  • A federal appeals court finds that Epic’s mandatory employee arbitration clause violates federal labor law.
  • A renowned cognitive science expert says IBM Watson Health should stop “making up nonsense” about analyzing cancer and admit that its technology doesn’t really use cognitive computing.
  • Apple CEO Tim Cook says health use of the Apple Watch is a major company priority.
  • Kansas Heart Hospital pays ransomware demand but declines to make further payments as the hackers demand to release its files.
  • The ACLU sues a genetic testing company to force it to give patients their complete results rather than just a subset.


June 28 (Tuesday) 2:00 ET. “Your Call Is Very Important.” Sponsored by West Healthcare Practice. Presenters: Cyndy Orrys, contact center director, Henry Ford Health System; Brian Cooper, SVP, West Interactive. The contact center is a key hub of patient engagement and a strategic lever for driving competitive advantage. Cyndy will share how her organization’s call center is using technologies and approaches that create effortless patient experiences in connecting them to the right information or resource. Brian will describe five key characteristics of a modern call center and suggest how to get started.

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

Acquisitions, Funding, Business, and Stock


Cerner says in its annual shareholder meeting that:

  • More hospitals run its systems than anyone else’s.
  • The company has 22,000 employees who are paid an average annual salary of $80,000, with an average age in the mid-30s.
  • Cerner will spend $750 million on population health management R&D.


Last Thursday’s Chicago federal appeals court ruling that Epic violated federal labor laws in requiring its employees to agree to arbitration clauses is reverberating throughout the country. The three-judge panel ruled that the National Labor Relations Act gives employees the right to band together even if they aren’t represented by a union. Conflicting previous rulings in other cases may take the issue back to the US Supreme Court. Studies have found that mandatory arbitration clauses often result in employees simply giving up their complaints, while federal and state officials worry that forced arbitration allows companies to hide employment wrongdoing. Cerner is certainly watching closely since it told employees in December 2015 that they had to choose between signing arbitration clauses or giving up future salary increases.

Announcements and Implementations


The board of ETMC-Tyler (TX) approves the purchase of MedHost, Athenahealth, and Novarad.

Privacy and Security


A dozen FBI agents, one of them armed with an assault weapon, raid the home of a Texas software security researcher and take him away in handcuffs after he reports to dental software vendor Eaglesoft that the information of 22,000 patients on their servers is freely visible over the Internet. The company, instead of thanking him, notifies the FBI that he illegally accessed its server and thus violated the Computer Fraud and Abuse Act, leading the FBI to haul him away from his family in his underwear. The same researcher previously alerted the FTC that Henry Schein Dental was misleading customers by claiming it encrypts their data. He had also alerted a Pennsylvania dental practice in December 2013 that their patient information was visible online, only to receive a cease and desist letter from the practice demanding that he never mention their practice or doctors again.


A ProPublica study finds thousands of examples where doctors, dentists, or their employees responded to negative Yelp patient reviews with information that included PHI. The HIPAA violations ranged from the simple (acknowledging that the Yelper was indeed treated, for example) to posting extensive medical, dental, and family information.



An 87-year-old senior living resident choking on a hamburger is saved by a fellow resident who springs to her side to perform the Heimlich maneuver. That fellow resident was 96-year-old Henry Heimlich, MD, the surgeon who created the technique in the 1970s, who had never actually performed it on an actual choking victim. On a less-upbeat note, Heimlich’s son has bitterly renounced his father for years as a fraud and claims he stole the idea from peers, adding that he has advocated bizarre therapies for AIDS and cancer. Back on the upbeat side of the story, Heimlich’s nephew is 66-year-old Anson “Potsie” Williams from “Happy Days,” whose affected, white-bread musical warblings on the show also caused Heimlich-like projectile vomiting.


In Vancouver, ED and ICU doctors at Nanaimo Regional General Hospital refuse to continue using its nine-week-old Cerner EHR and instead go back to paper due to patient safety concerns. The doctors say Cerner calculates drug doses incorrectly and is causing meds and lab tests to be delayed, adding that it takes them twice as long to enter orders and that serious patient errors are happening every day. Island Health will spend $134 million on the project, which will be rolled out to hospitals in Victoria next year.


In Australia, Cairns Hospital’s budget crisis is so significant that it’s telling doctors to stop using pens and to turn off unused lights. The medical staff says the real problem is its new Cerner EHR, described as slow and impeding accurate documentation for payment.


Blue Shield of California, pressured to review the salaries of its executives as non-profits always do, issues a report showing that its CEO made $3.5 million in 2015, while SVP/CIO Mike Mathias was paid $1.2 million.


Vince and Elise recap the top physician practice systems vendors in their latest installment. Feel free to add comments if you agree or disagree with their conclusions.

Sponsor Updates

  • For the Record magazine features a story about clinical process measurement by LogicStream Health’s Dan Rubin, MD, MHI.

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Currently there are "3 comments" on this Article:

  1. Epic wasn’t doing anything that many other companies weren’t also doing. They are also a perfect target for cases that change the rules to be reasonable towards employees, because these clauses are wrong no matter how many people are doing it. For all the moralizing Judy tries to do about the importance of rules and fair play (rules she does not live by) it is appropriate that she is the one getting the public spanking today.

  2. I find it funny to think that 50 years from now, long after everyone has moved from Epic/Cerner to the next EHR, Epic’s most lasting legacy may simply be serving as defendant in a supreme court case that serves as a precedent for limiting an employer’s right to abuse its power over its labor pool. I’m sure it’s not the legacy they were thinking of when the company first began.

  3. Your malaria medication story perfectly highlights how the industry is not ready for real population health. Your insurer won’t even pay for something that would be exponentially cheaper to prevent in a very clear cut example. It’s not nebulous like trying to promote lifestyle changes and hope for the best, it’s literally as straightforward as taking the medication that’s proven to be the best defense against a common disease. For all the garbage fanfare about population health right now, it’s hard to take it seriously when they can’t make wise decisions around the simplest of use cases: focus resources and remove barriers to very clear cut preventative measures. These asinine cost variances alone (Lipitor was another good example) create serious non-adherence issues on the macro scale and substantial costs down the road. I suppose that I, for one, don’t see the point of fancy software if ultimately a major failure of population health is that one guy is paying $400 for that Lipitor while his neighbor may pay $19.

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Reader Comments

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  • 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...
  • Ophelia: Where are you seeing the 97% MIPS claim? I'm aware of their claimed 97% attestation rate for MU, but I haven't seen anyt...
  • Sue Powell: Re: "airhead". Maybe Q04.9 Congenital malformation of brain, unspecified or G93.9 Disorder of brain, unspecified? #notac...
  • Not Mr. Bush: It is very interesting that they claim to be able to guarantee something that is so dependent on physician behavior....
  • Debtor: Athena has a long history of supporting MU and PQRS attestation. It wouldn’t surprise me if they have insight into the...
  • Frank Discussion: Cerner--the best Visual Basic 5 application our tax dollars can buy! Then there's CCL (*vomits into nearest trashcan)...
  • Stormy MU: Hi, Does anyone have any feedback on athena's claim of 97% MIPs success rate? How can they publish that when 2017 at...

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