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Monday Morning Update 8/8/16

August 7, 2016 News 18 Comments

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Hackers breach the servers of Newkirk Products, which issues BlueCross and BlueShield insurance cards in several states, exposing the information contained on the cards of 3.3 million people. This will be one of the largest breaches ever, although the information stolen is not extensive.

Newkirk was acquired in 2011 by IT outsourcer and consulting firm DST, which sold its customer communications business to Broadridge Financial Solutions for $410 million just a few weeks ago.

Reader Comments


From Jett Cloud: “Re: Epic. I just returned from training and was shocked by the amount of activity that has nothing to do with healthcare, software, or any professional endeavor. There were constantly people playing games outside, sports, Pokemon Go, or similar things. As part of an organization that’s struggled financially and is really stretching to afford Epic, I’m a bit disgusted by the physical lavishness of the campus.” Epic people put in a lot of hours, so I wouldn’t worry that the tiny percentage of its 10,000 employees you saw playing around means they don’t work plenty hard. Most of them don’t even go out for lunch. They’re also mostly in their mid-20s, so just be amazed that despite being the offspring of hovering, overly indulgent parents they show up and get stuff done in what is the first real job many of them have had. I agree that Epic’s campus is unnecessarily extravagant, it’s part of the company’s culture but nobody put a gun to the head of customers to sign those gazillion-dollar Epic contracts that pay for it. At least both customers and Epic employees can enjoy the orchestrated whimsy instead of just the company’s executives – it’s Mahogany Row and reserved parking spots that annoy me. At one of my previous health system employers, we had to keep reminding our executives not to go off script at employee meetings and talk about their reserved parking lots, plush offices, company-paid cars, travel budgets, and big bonuses – they would genuinely forget that those in the room were working for no perks or bonuses, just a paycheck.

HIStalk Announcements and Requests


Poll respondents were fairly evenly split on whether CMS’s new hospital star rating system has value. Furydelabongo says it’s at least a good starting point even though lower-rated hospitals are predictably shooting the messenger. Mobile Man agrees that if you want healthcare to run like a business, this is how business works. Cosmos disagrees, saying hospitals are too complex to be rated by a single rating, and Michael Murphy explains further that the rating doesn’t reflect procedure volume.

New poll to your right or here: will the cost and quality impact of hospital and medical practice consolidation be good or bad? Vote and then click the poll’s Comments link to explain why.

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We funded the DonorsChoose grant request of Mr. G in Wisconsin, who asked for two tablets and a programmable robot. He reports, “As many of our students are new to the field of computer science, these materials have helped to inspire them to build a strong foundation of programming knowledge as they enthusiastically dive into the content that is being taught, and seek out opportunities to help Dash and Dot complete new challenges. The pair of robots have also been a way to illustrate programming concepts that would otherwise be confined to a computer screen. For many students, this opportunity to observe and interact with the robots is key to mastering these programming skills. Finally, the robots and tablets have served as an excellent incentive to encourage positive behaviors in the classroom.”

Thanks to the following sponsors, new and renewing, that recently supported HIStalk, HIStalk Practice, and HIStalk Connect. Click a logo for more information.


Last Week’s Most Interesting News

  • Advocate Health Care Network pays $5.55 million to settle HIPAA charges following an OCR investigation of three 2013 breaches in just a few weeks.
  • Cerner dismisses Athenahealth’s efforts to penetrate the inpatient market in its earnings call.
  • Banner Health (AZ) notifies 3.7 million people that their information was exposed in a breach of its food and beverage systems in one of the largest healthcare breaches ever.
  • Theranos CEO Elizabeth Holmes didn’t address any of the company’s business-threatening issues in her presentation to the American Association for Clinical Chemistry and instead uses her podium time to pitch new blood analyzer hardware that has not yet been released or approved by the FDA.
  • The FTC reverses an earlier decision to drop data security charges against LabMD.
  • Apple publishes a patent that would allow iPhone users to connect with a physician, transmit their HealthKit-collected information, and then initiate a telemedicine session.


August 10 (Wednesday) 1:30 ET. “Taming the Beast: CDS Knowledge Management.” Sponsored by LogicStream Health. Presenters: Luis Saldana, MD, MBA, CMIO, Texas Health Resources (THR); Maxine Ketcham, clinical decision support analyst, THR; Kanan Garg, senior applications analyst, THR; Patrick Yoder, CEO, LogicStream health. This presentation will review THR’s systematic process for managing clinical decision support assets, including identifying broken alerts, addressing technical and clinical issues, modifying order sets, and retiring tools that have outlived their usefulness. Attendees will learn how THR uses a robust knowledge management platform to better understand how clinicians are interacting with their clinical content to maintain their order sets and reduce the number of alerts fired.

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

Acquisitions, Funding, Business, and Stock


Outsourcer Cognizant Technology guides revenue and profit lower due to Brexit, banking, and US healthcare consolidation and spending cutbacks.


Honor, which matches seniors to home caregivers, raises $42 million, increasing its total to $62 million. One of its VC investors said his firm learned their lesson with Oscar Health, and unlike Oscar, Honor doesn’t just offer online matching – the company remains the intermediary with the user as its customer. It keeps in touch with families with its own app that also populates notes that each assigned caregiver can review. The company also offers a wellness check visit in which observational data is sent back to the user’s doctor. Services are offered only in the Bay Area and Los Angeles, but an expansion to Dallas is planned.


From the Allscripts conference call:

  • Sales increased 39 percent for the quarter, or 22 percent without the contribution of the acquired Netsmart.
  • The company added one new Sunrise customer.
  • Allscripts expects to sell more consulting services after implementation of the “staggeringly large” number of MACRA and QPP reporting requirements.
  • The company responded to an analyst’s question about how much revenue Northwell Health contributes to the total, with the answer being a single-digit percentage.


Caradigm provided this response to FlyOnTheWall’s rumor report that I ran Friday in which he said the company let 30 percent of its workforce go this past Wednesday:

Since Neal Singh was named CEO in April 2016, he has worked with Caradigm’s senior leadership team to drive our mission of accelerating the healthcare revolution with innovative solutions to promote better care, smarter spending and healthier people. In keeping with its mission, Caradigm is proactively reorganizing to provide clear accountabilities and streamline efforts to improve teamwork, drive simplicity and deliver quicker results – in order to better serve its customers. Caradigm has reorganized Product teams by key solution focus, with the aim of reducing its customers’ total cost of ownership and reducing time to go-live. Its Services organization has been reorganized to focus exclusively on customer implementations, product support, and driving the relationship and partnership experience that customers have with Caradigm. And in recognition of the fact that customers require deep clinical and technical support and expertise through their lifecycle, Caradigm has expanded the charter of the Care Transformation team. These changes required Caradigm to make difficult layoff decisions. The new organization will put Caradigm on a path for innovation to better support healthcare initiatives and enhance its customers’ experiences. Employees who had their positions eliminated have received both severance and resources to help them with their transition. Caradigm is not disclosing further details about the layoffs.

Privacy and Security

Marin Medical Practices Concepts, a California physician billing and EHR services company, pays a hacker’s unspecified ransomware demands regain access to its data. The company’s medical practice customers, which include the county’s public health clinics, had been unable to access their EHRs for a week.

More breach news from DataBreaches.net:

  • Carle Hospital announces that an unnamed vendor placed files containing the information of 1,185 patients on its procurement document sharing site, unaware that other vendors could also view the information.
  • Nordic Consulting notifies New Hampshire’s attorney general that one of its HR employees emailed current and former employees who were affected by a previous data breach to remind them to sign up for identity theft protection, but inadvertently attached a worksheet containing the demographic and patient information of employees covered by Nordic’s health insurance.
  • Athens Orthopedic Clinic (GA) confirms that hacker The Dark Overlord has placed patient information from its breached system for sale on the Dark Web after the clinic declined to pay $335,000 to keep their records private. The Dark Overlord claims to have already sold the information of at least 5,000 of the 400,000 patients contained in the database he downloaded. He made a good business case to the clinic in pricing his services competitively with the alternative since just offering credit monitoring protection will cost more than his price.



Mayo Clinic researchers will climb Africa’s 20,000-foot high Mount Kilimanjaro this week, monitored by sensors from Philips that will help them understand the oxygen deprivation that occurs during both mountain climbing and heart attacks. A drug company is footing the bill.

Apple joins the “bug bounty” movement in which it will pay outside hackers who find and report security flaws in its products. The company will pay $50,000 for bug reports that involve gaining access to iCloud data.



A New York Times article ponders whether it makes sense for hospitals to include a “did we control your pain” question on their patient satisfaction survey that might encourage doctors to over-prescribe the narcotic drugs that already have led a big chunk of America into addiction. Doctors say patients demand specific drugs and use their satisfaction surveys to retaliate if they don’t get them, cutting into the paychecks of the medical staff whose compensation is partly driven by those satisfaction scores.


A study finds that heavy, detailed media coverage of mass shootings causes more gun violence almost immediately afterward, as would-be mass killers see the fame earned by the shooter. The researchers suggests following the “Don’t Name Them” campaign in which mass murderers are deprived of their moment in the limelight by not publishing their names, photos, writings, and details about their past. That would be a fantastic idea except for the sorry state of “eyeballs at all costs” American journalism, where indeed if it bleeds it leads and no amount of public goodwill can offset those Internet page views.


A lawyer credits the autopilot feature of his Tesla Model X for saving his life when he has pulmonary embolism while driving and instructs the Tesla to take him 20 miles to the hospital ED. He’s still not sure that he shouldn’t have called an ambulance instead, but says he figured he could get to the ED faster on his own. Pricing for the Model X starts at $80,000, probably about the cost of his ED visit.


NPR profiles iNaturalist, a social network for wildlife in which users post photos of animals they’ve seen and share them with other to identify them in a form of gamification. At least one previously unknown species has been identified as a result.

Alameda County, CA replaces its long-time jail healthcare contractor after inmate deaths and allegations of poor care. One of its nurses cited inexperienced management and the implementation of new software that wastes clinician time.


I don’t think I was aware of this: the Ragon Institute of MGH, MIT, and Harvard, which has been working in HIV/AIDS vaccine research since 2009, is also supporting Zika virus research. I hadn’t heard of the institute, which is funded via a $100 million commitment from InterSystems founder and billionaire Phillip “Terry” Ragon. 


Drugmaker AbbVie tries to block introduction of a biosimilar drug that is a lower-priced competitor to Humira, which generates 60 percent of the company’s revenue. AbbVie has also filed new patents hoping to delay the entry of the new drug to the market. It’s a good reminder that the sole mission of drug companies is make profits for shareholders, not to perform societal good or to help patients. Companies by definition are not capable of having a collective conscience no matter how much their slick marketing suggests otherwise.

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Somerset, PA police arrest a man caught wandering the local hospital’s halls by a nursing supervisor. He was wearing a white coat and claiming to be a doctor in the IT department, which might have been more convincing if he hadn’t then asked her for directions to that department or responded, “Yeah, are you?” when she asked if he was a doctor. Todd Knisely then claimed to be testing the facility’s security for an online journal write-up. He might be telling the truth: Googling him turns up his alter ego (the not very creative “Shadow”) and Shadows [sic] Government, where he wrote up his planned social experiment. He also offers IT security services and website management. He says he wondered about the hospital’s security when he was a patient a year ago and found that he had free run of the place – including computers and paper patient records – since the hospital had no security officers on duty. Knisely (or is that Shadow?) says his legal research indicates that he broke no laws, an interpretation not shared by officers who locked him up for impersonation, theft by deception, and receiving stolen property.

Vince and Elise introduce their “Rating the Ratings” series and offer one last chance to providers who have read or contributed to a report from KLAS, Black Book, etc. to complete my survey for future installments.

Sponsor Updates

  • Experian Health will exhibit at the Illinois Rural Health Association Annual Education Conference August 10-11 in Effingham.
  • PatientMatters will exhibit at HFMA Arkansas: Summer Institute August 17-19 in Hot Springs.
  • The SSI Group will exhibit at the OASCA Annual Conference and Trade Show August 11-12 in Portland.
  • Stanson Health enables provider compliance with the PAMA imaging clinical decision support mandate.
  • VisionWare achieves Microsoft Gold Partner status.
  • Huron Consulting Group closes its acquisition of HSM Consulting.
  • ZirMed will host its 2016 User Group August 22-23 in Chicago.

Blog Posts


Mr. H, Lorre, Jennifer, Dr. Jayne, Lt. Dan.
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Currently there are "18 comments" on this Article:

  1. Re: Epic. Notwithstanding some valid points by Mr. H, more than one of my ex-colleagues have commented to me about a general idleness they’re seeing and being a bit overstaffed in some areas. Reasons vary from speculation that they may have hired up in advance of the DoD project that didn’t materialize (which I hear from Implementation friends) to a general sense of bureaucracy getting in the way of action, and a sense that executive leadership doesn’t see that side-effect to their processes (which I hear more on the TS and Development side).

    It’s troubling to me from what it means to Epic’s clients, because they mostly tend to feel there’s important stuff to get done, particularly after the debacle with the most recent release. They just sense too much uphill battle in doing what needs doing, and that there’s now a large group of newer people who are being raised on those restrictions, so they play during the day and aren’t necessarily keeping the hours many at Epic are known for.

  2. As someone who pulled many all-nighters and worked many 100 hour weeks so we could get your implementations back on track after you hired idiot consultants that ruined the build and didn’t want to follow best practices or just were the laziest IT shop in the country…. I think I deserved my 10 minutes I spent outside doing nothing.

  3. Re: Epic

    I don’t think it’s possible to know the workload of others based on these types of actions. There is a perception that can be given, but that doesn’t necessarily translate to the reality. It could be a team building activity or it could simply be a pressure release valve to prevent people from burning out. Whatever the case, the idea that in a knowledge industry, the only productive time is spent head down banging on a keyboard is outdated. Ideas are frequently collaborative and are frequently born out of discussion. The only way to do that is by being social. Where that sharing happens, whether in a conference room with a white board or while walking about the campus using the world’s most successful pedometer (Pokémon Go), should be of little consequence.

    I say this all not being a fan, supporter or even customer of Epic. I don’t care for judgment of others productivity without insight or context.

  4. Be happy Epic has the workers they need. You could have went with a vendor with a CEO raking in millions while shareholders, customers, and employees lose.

  5. RE Jett Cloud’s Epic comments:
    Does this person think we live in a socialist/communist society? Perhaps I’m wrong but I’m reading an inference that Epic should charge less and make their workplace more miserable just to make it easier for them to afford it. This person is put off by seeing people having fun at work and thinks that others should share the struggles of their organization. There are numerous less-expensive options in the marketplace for this “struggling organization” to choose from. Epic is free to treat their employees in any way they see fit and you, Mr. HisTalk, and others should not feel compelled to defend their choice to do so with statements of how hard they work.

    I hate to get even slightly political here but this attitude of “I’m not having fun so nobody else should either” is not healthy for our society and needs to be corrected.

  6. Maybe the originator of this comment would have been more content to attend class under a tent and sitting on a bench made up of a 2 x 12 lying on top of overturned 5 gallon buckets…….

    Seriously – I was there last week and I marvel at the whimsical nature of the campus. Everywhere you turn there is something to be discovered and typically the discovery brings a smile to your face. Judy could have just built a bunch of basic buildings and left the difference in cost in her bank account. To me the campus speaks loudly about her understanding of how to encourage the level of creativity needed to create and manage the tens of millions of lines of code that make up their solutions. And as a student in training there I appreciate the degree of detail and planning that went into the training center – not to mention the always excellent food.

    I agree with Mr H – no customer is forced to do business with Epic, and those that do have every opportunity to understand what they are getting into….

  7. It feels a tad extreme to say that the writer wants nobody else to have fun, or that “nobody put a gun to the head of Epic’s customers”, as some other commenters or Mr. H have said. I’m also ex-Epic, now working for a client. It’s an interesting position to be in, because you become more sensitive than ever to the needs of healthcare organizations you used to support, but you still have an inside scoop on what’s going on back on the farm at Epic.

    In my customer role, it’s clear that a lot of us have been noticing a slow decline in Epic’s speed and responsiveness over years, and it’s reached something of a crescendo for those of us that were impacted by that forementioned debacle with 2015. That had real costs for us in how delaying our upgrade pushed other projects back. Costs Epic isn’t reimbursing us for, and even with the delay I can’t say I’m particularly impressed with the stability of this new version.

    Like your first commenter above, friends still at the company have confided to me a similar lethargic feeling lately that they are in so much better a staffing position than they’ve been in in years (it kind of helps when you’re not gratuitously firing employees like they did for years after the recession), but that work isn’t evenly distributed to the newer hires and that they feel less empowered than they ever have to take initiative. If we’re experiencing deficiencies in our more recent experience with Epic, it doesn’t feel good to hear this.

    Look, at the end of the day when you’re working for a client in this industry you have challenges all over the place with the increased costs of doing business, and you have a far more direct responsibility as a care provider to patients than Epic does. Nobody put a gun to our head to “choose” Epic, literally. But there was that whole HITECH thing that many in the industry had to pursue if they didn’t want to be competing at a disadvantage to competitors who might put them out of business (what was that about a gun?). When one talks about “choice”, there’s not much of a choice in this industry, just less than a handful of vendors that parlay that advantage into big profit margins; profit margins that haven’t kept Epic from being in debt in recent years, in direct violation of a commandment to never take on debt that Judy was rigidly strident about in my time there.

    When one considers all these factors, you can at least recognize the optics are not good when one is experiencing declining reliability in the software and maintenance experience to see how far over-the-top that campus is. If the stated purpose of that campus is to improve the quality and productivity of employees, the optics are even less pleasing when you see adults playing kickball and Pokemon at the same time as your friends are telling you they fear Epic’s about to release an even more problematic version later this year. My current employer finds ways to have fun, and I want Epic employees to enjoy their jobs too, but that kind of stuff just is not happening at my current employer. I’d be interested to see if some of the problems we’ve more recently experienced would be there if Epic’s ship was a bit tighter.

  8. While the campus is great and all, there is no doubt it’s overly and unnecessarily extravagant. They could still maintain a beautiful campus and not blow billions of dollars on quirky stupid things like trains outside the new cafeteria and pass that on to the customers.

    They will be in for a shock once these new signings dry up and they are raking in less cash

  9. Lets get real here for a moment.
    1. Hospitals are basically forced to purchase a certified EHR.
    2. Second, most physicians, nurses, staff, work tirelessly to care for their patients, and if our patients were failing with satisfaction, like EHR vendors, then we would be in big trouble. Its not so easy to rip and replace EHRs. Plus, what one is so great that every EP EH is thrilled about its cost, ROI, usability, safety, security, interop, etc.
    3. There is nothing more aggravating to think that while we are basically beta testing EHR software with people’s lives at stake, that our hard earned money is being used for lavish and idle activity.
    We wait MONTHS to YEARS for fixes that never come. Get to work.
    4. I have no problem with people making money, but at the behest of a policy market driven by the US government, well that is a big problem. Remove requirement for certification, and agile innovated startups return, watch out Epic and Cerner. This market will NOT last forever. You have been warned.

  10. Regarding the comment from PM_From_Haities Says:
    August 8th, 2016 at 1:37 pm
    Be happy Epic has the workers they need. You could have went with a vendor with a CEO raking in millions while shareholders, customers, and employees lose.

    My apologies, by I can’t contain myself. I am beyond annoyed every time I hear someone say “I/You/He/She could have WENT… The correct grammar is GONE.
    See below for a further explanation, and hopefully choose the more appropriate going forward. You’ll sound smarter. And maybe others will use the proper form, too. I know, I know, I’ll start hearing from the haters anytime now!


  11. Let me see.

    1. Patients are basically forced to purchase certified insurance products.
    2. Most patients work tirelessly to afford these insurance products and take care of themselves and their families. If we fail to take care of those things, we’re in big trouble, and it’s a real pain to switch insurance.
    3. We’re basically constantly beta testing some new terrible insurance policy that bends us over to the advantage of the insurance companies.

    Therefore the consumer should be able to tell the insurance companies how to come up with policies, run their company, and how much break time their employees take.

    This argument is completely bunk.

    I agree that we need market driven solutions, and I agree that vendors need to work to make their products work FOR their customers, but that doesn’t mean that the customers have a right to complain about every aspect of how vendors run their own business. Harping on their “lavish” offices and work practices reveals a fundamental misunderstanding of their business. To compete for top-notch tech talent, they have to compete with places like Google, Microsoft, and countless others including start-ups with equally “lavish” perks for their employees. Do you really want the software that you admit has “people’s lives at stake” to be developed, tested, implemented, etc, by a disgruntled workforce that couldn’t get better tech jobs?

    Do you want to get your healthcare from the places that treat their healthcare workers well, or the places that don’t? The same is true for tech, just a different market.

  12. “They could still maintain a beautiful campus and not blow billions of dollars on quirky stupid things like trains outside the new cafeteria and pass that on to the customers.”

    Those billions of dollars spent on quirky stupid things came from taxpayers via HITEC. That’s what kills me. We all paid for that stupid train.

  13. I can’t wait to pick up that train for pennies on the dollar in a few years…gravy train’s not going to last for ever.

  14. Let’s get real. Even if you have a leg to stand on in terms of your complaints about how Epic spends money that came indirectly from taxpayers, they didn’t spend “billions of dollars on quirky stupid things.” According to this article from 2013, the entire Farm campus and Deep Space auditorium are valued at an estimated $400M http://host.madison.com/wsj/business/as-its-farm-campus-opens-epic-systems-prepares-for-even/article_1dab68a0-f3c8-5462-9c47-814206a35b4d.html. So it’s conceivable that they’ve now spent “billions” (albeit the single digit kind) on all of the campuses *combined*, but the fraction of that spent on “quirky stupid things” is extremely slim.

    And I’ve said it before, but I’ll say it again: If Epic is so bad about their lavish expenses, then where exactly is the outrage machine about Cerner’s Trails Campus? That lovely icon of health software is costing $4.5B on its own, not to mention that the good people of Kansas City are on the hook *directly* for over $1B of that? http://www.kansascity.com/news/business/development/article66853627.html

    I guess since they’re not installed a silly train, it’s all good. Double standard much?

  15. The train? Wait, you mean the junkyard train car they slapped a new coat of paint on? They probably spent more on the paint…

  16. Opinions I have on a couple prior comments:

    Regarding PM_From_Haities comment to be thankful Epic has the staff they need – Having enough staff is an assessment that only recently carries any kind of validity. Epic had a very organized, excessive, and unacknowledged program of layoffs for years after the Recession, which was sad for the huge number of customers that were spurred to sign by HITECH incentives. These customers had a very lackluster experience in terms of their installs and support compared to Epic’s earlier years (the years Epic sells itself on). Customers should be concerned Epic is about to revive this program, when it’s probably as likely now as it was in 2008 that work assignments just needed to be spread across more people.

    Regarding Obfuscator’s most recent comment – The $400 million figure you cite is probably just reporting that’s not very investigative. Might be that that’s the assessed value of those buildings from City of Verona, who treats Epic with kid gloves on a certain level. While that figure might matter somewhat more over the longer-term in terms of lower property taxes, the actual construction costs were likely far higher than that. Not sure why Cerner doesn’t get called out for the costs of their campus as much, but I suspect that Cerner customers have never enjoyed higher and more satisfactory experiences with their vendor in the past, so it doesn’t raise the same questions vis-a-vis whether money is being invested in the right things as when you see that level of expense being incurred by Epic concurrent with less satisfaction than you had in years past. Cerner also has a higher number of employees. Just a theory, but when you’re starting off with “Let’s get real”, there are some assumptions in your argument that were not real.

  17. You could be right Anon that campus construction costs are higher. But that’s purely speculative. I’m citing sources and evidence. So far, no one else in the “discussion” has bothered, instead throwing out wild numbers with no backing. Even if it’s true, and even if somehow the Farm Campus+Deep Space cost as much as Cerner’s Trails campus (which would mean that the paper’s estimate was off by more than 10 times) . . . that still doesn’t mean they’ve spent “billions” on “quirky stupid things.” It means they’ve spent billions on offices and infrastructure, and some much, much, smaller amount on things like a train. So I think my point remains valid.

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Reader Comments

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