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Monday Morning Update 10/31/16

October 30, 2016 News 3 Comments

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McKesson’s poor earnings report, released after the stock market’s close Thursday, resulted in a Friday shareholder bloodbath as MCK shares shed 23 percent of their price and continued to slide in after-hours trading Friday.


The company’s $290 million EIS write-down was barely mentioned in the analyst call since technology isn’t a key McKesson business; it’s dumping out of healthcare IT anyway; and its failures there are insignificant compared to its exposure to a changing pharma market, uncertainty about which hit the shares of all its drug distributor competitors as well.

Drug companies can credit the unapologetically capitalistic Martin Shkreli — whose drug pricing practices at Turing Pharmaceutical created a public backlash — for their potentially less-profitable future.

Pharma is scared to death of California’s Proposition 61, which if passed will require that state agencies pay no more than the VA’s heavily discounted price for a given drug. Drug companies have spent $100 million trying to defeat it.

Reader Comments


From HL7 Interface Engineer: “Re: FHIR. Sorry to vent, but after years of implementing HL7 and being able to do just about anything with an HL7 message, FHIR can’t solve the underlying problem of trying to connect old EHR systems as each uses the fields differently. Real-life examples I’ve experienced: (a) connecting a system with a 23-character patient ID with one holding only 12; (b) systems that may or may not allow spaces between first and middle names; and (c) a system vendor that wants ADT^A16 (pending discharge) and ADT^25 (cancel pending discharge) transactions and our system can’t send either one. Hoping someone at HIStalk will understand and either validate my feelings or explain why I’m wrong.” I don’t think  you are wrong, although that’s not what the non-techies who naively believe that FHIR will create world peace want to hear. My thoughts:

  1. Providers understandably have no incentive to exchange data with their competitors, no different in healthcare than any other big-money industry. If customers don’t care, neither will their vendors. You can’t create interoperability demand by simply developing new standards or asking for it as a downstream customer (patient). Providers would lose more business in sharing data with their competitors than they would just declining to do so since it’s not usually a patient must-have.
  2. Dissimilarly designed systems make it hard to even batch-convert data, much less handle real-time, bi-directional data exchange where errors cause missing data elements that might impact patient care.
  3. HL7 as a standard was successful, but could have been even more so if vendors hadn’t kludged their systems (and thus HL7 messages with endless custom extensions) as a lazy, check-the-box way to approximate interoperability support without enthusiasm. FHIR without discipline could turn out the same way if customers don’t demand better.
  4. The value of interoperability isn’t to the EHR or ADT systems, but rather to those systems that want their information. That stifles innovation as the smaller, newer vendor can’t get a hospital foothold without integrating with core systems and their foot-dragging vendor. The bigger, more expensive, and older system is always the transaction boss because it’s the most entrenched at a given customer site.
  5. ADT transactions are standard, but even then exceptions exist, such as those you mentioned. ADT is easy compared to clinical domains. Healthcare is a lot more complex than financial transactions that were based on standard accounting practices.
  6. Exceptions always come up due to unsynchronized upgrades among systems or corner cases, meaning someone has to monitor the error logs. That’s easier for a hospital’s IT department than a small practice with no technical resources.
  7. Paradoxically, the inflated expectations for FHIR may make it successful since everybody from the federal government to insurers and researchers is pressuring its use, giving vendors less ability to ignore it. I don’t have the expertise to say whether it’s better or worse than HL7, but we’re a lot smarter about interoperability now than back in the late 1980s when HL7 combined with interface engines instead of point-to-point custom interfaces was considered the holy grail of system-to-system communication. Maybe we’ll learn from those mistakes and do better given a blank slate. The witless punsters that put FHIR in their headlines (for which it is inarguably sexier than calling it HL7 Version 4) highlight the value of FHIR as a public relations and political tool rather than a technical one.
  8. Interface engineers got us through the days when best-of-breed systems ruled the earth and hospitals had to patch them together within their four walls. The change to single-source systems has moved the battleground outside those walls, where instead of tying together departmental systems whose vendors are equally motivated to make it work, the challenge is making competing and vastly different EHRs talk to each other in an equally competitive and inherently distrustful provider environment, something even clever engineering can’t fix.

HIStalk Announcements and Requests


Epic’s supposedly non-existing marketing program is the most effective of all inpatient EHR vendors, according to poll respondents.

New poll to your right or here, triggered by the reader’s comment above: what impact will FHIR have on interoperability? Those taking the non-committal choice of “some” might want to click the comments link after voting to explain so that we know that you have modest expectations rather than limited knowledge.


Welcome to new HIStalk Platinum Sponsor Haystack Informatics. The Philadelphia-based company’s security technology, created at Children’s Hospital of Philadelphia, detects hospital employee EHR snooping. Healthcare security professionals warn that insider breaches are the greatest single privacy threat, beyond the more highly publicized hacker or ransomware incidents. Instead of fixed rules, the company’s dynamic and static anomaly detection engines learn normal user behavior and call out exceptions, providing investigation workflow those incidents as well as for lost laptops, theft, and improper disposals, creating the necessary documentation for the compliance department and OCR. I sponsored their recent webinar that addressed insider threats. I was slow to notice that the company’s name comes from “a needle in a haystack,” which I assume references those few nefarious insiders among the majority of employees and staff who do nothing wrong. Thanks to Haystack Informatics for supporting HIStalk.

I found a YouTube overview of Haystack Informatics featuring CHOP AVP/CMIO Bimal Desai, MD, MBI, who is also the company’s co-founder.

Listening: new from AFI (an initialism for A Fire Inside), a hard-rocking, punk-leaning four-piece from Ukiah, CA that hasn’t changed members since 1998. They’re hard to categorize, but easy to listen to. The new single is a lot more richly polished and smooth than some of their earlier stuff.

I was thinking that instead of everyone racing for the cure or wearing pink in October for breast cancer awareness in a self-congratulatory show of support, perhaps those dozen or two Americans who aren’t already aware of it could instead wear pink and we could just take them offline individually to explain and invest the extra time and energy into public health projects.

Last Week’s Most Interesting News

  • McKesson turns in bad quarterly numbers, lowers guidance, sees shares shed nearly 25 percent of their value, writes down $290 million on its Enterprise Information Systems (EIS, which includes Paragon) business, and lays off an unspecified number of EIS employees.
  • Vocera acquires Extension Healthcare.
  • Netsmart acquires HealthMEDX.
  • Apple’s 15-year streak of increasing sales is broken due to falling iPhone demand.
  • Athenahealth misses quarterly revenue expectations and admits that its promised 30 percent bookings growth is no longer like to be achieved due to a changing (i.e., non-Meaningful Use-driven) market.


November 8 (Tuesday) 1:00 ET. “A CMIO’s Perspective on the Successful 25 Hospital Rollout of Electronic Physician Documentation.” Sponsored by Crossings Healthcare. Presenter: Ori Lotan, MD, CMIO, Universal Health Services. UHS rolled out Cerner Millennium’s electronic physician documentation to its 6,000 active medical staff members — 95 percent of them independent practitioners who also work in competitor facilities — across 25 acute care hospitals. UHS’s clinical informatics team used Cerner’s MPage development toolkit to improve the usability, efficiency, communications capability, and quality metric performance of Dynamic Documentation, embedding clinical decision support and also using Nuance’s cloud-based speech recognition product for the narrative bookends of physician notes. This CMIO-led webinar will describe how UHS achieved 70 percent voluntary physician adoption within one month of go-live, saved $3 million in annual transcription expense, and raised EHR satisfaction to 75 percent. It will include a short demonstration of the software that UHS developed to optimize the physician experience.

November 9 (Wednesday) 1:00 ET. “How to Create Healthcare Apps That Get Used and Maybe Even Loved.” Sponsored by MedData. Presenter: Jeff Harper, founder and CEO, Duet Health. Patients, clinicians, and hospital employees are also consumers who manage many aspects of their non-medical lives on their mobile devices. Don’t crush their high technology expectations with poorly designed, seldom used apps that tarnish your carefully protected image. Your app represents your brand and carries high expectations on both sides. This webinar will describe how to build a mobile healthcare app that puts the user first, meets their needs (which are often different from their wants), creates “stickiness,” and delivers the expected benefits to everyone involved.

Contact Lorre for webinar services. View previous webinars on our HIStalk webinars YouTube channel.

Acquisitions, Funding, Business, and Stock


Athenahealth lays off nearly 150 employees in consolidating its R&D function, with 102 employees dismissed in San Francisco and 40 in Atlanta as the company focuses R&D in Watertown, MA; Austin, TX; and India.


Germany-based medical software vendor CompuGroup Medical formally notifies Agfa of its interest in acquiring the medical imaging company. CGM’s market cap is $2.1 billion, while Belgium-based Agfa’s is around $625 million.


  • Drew Memorial Hospital (AR) went live with Paychex time and attendance in September 2016.
  • Memorial Hospital at Craig (CO) went live with Kronos time and attendance in October 2016.
  • Hardin Medical Center (TN) will go live with Kronos HR, time and attendance, and payroll on January 1, 2017.

These provider-reported updates are provided by Definitive Healthcare, which offers powerful intelligence on hospitals, physicians, and healthcare providers.

Announcements and Implementations


Audacious Inquiry releases CAliPHR (CQM Aligned Population Health Reporting), an open source CQM calculation tool to support provider participation in federal and state incentive programs and value-based payment systems, available on Github.


A new Peer60 report looks at healthcare IT trends in the UK, identifying as the top concern the shortage of doctors and nurses, with 76 percent of respondents saying Brexit is hurting their staffing. Net promoter scores are terrible for both EPR and PAS, but limited replacement activity (as well as equally poor scores across vendors) suggests a reluctant acceptance of the status quo.

Government and Politics


The Ohio State Medical Association complains that the state’s medical board overreacted in sending a sternly worded letter to the state’s doctors, one-third of whom were not using the Ohio doctor-shopping database as the board requires. The top 25 doctors who weren’t looking up patients before prescribing opioids averaged 30 such prescriptions per month, while one doctor prescribed narcotics for 705 patients in one month without using the database at all. The letter had the intended effect of spurring sign-ups, also resulting in subpoenas for seven non-participating dentists for unspecified issues.

Privacy and Security

From DataBreaches.net:

  • A man treated for life-threatening injuries in a hospital’s ED says he will sue the hospital after one of its employees took photos of him that were later sent to him by someone claiming to be a friend of a nurse there.
  • The information of 1.3 million Australian citizens is exposed when a security researcher finds that the Red Cross’s donor record SQL database is accessible to Internet searches.
  • A report finds that messages sent to unsecure alpha pagers (like those still used widely by hospitals) can be easily intercepted, noting particularly that the US is the only country where detailed alert messages are automatically sent by nuclear power plant monitoring systems. The report recommends encryption, data authentication, and limiting how email-to-pager messages are managed.



Apple finally announces a refreshed MacBook Pro line four years after its last update, creating little excitement given that the big innovation (details of which had already leaked out) was an on-screen Touch Bar along with the usual “thinner, lighter” one-upmanship. The entry-level price would buy a handful of Windows laptops or a dozen Chromebooks. Apple might want to invest some of its giant cash reserves in trying to clone Steve Jobs, who would surely not have taken the stage to do his “one more thing” bit with Apple’s unexciting, grindingly incremental improvements. You know it’s bad when the biggest takeaway from the iPhone announcements was the elimination of the headphone jack and the biggest from the MacBook announcements was that the headphone jack remains.



Money-losing Nevada Regional Medical Center (MO) provides an interesting glimpse into the odd ways Medicare pays providers. The hospital buys one medical clinic and plans to purchase another because they are designated as rural health clinics, meaning Medicare pays 2.5 times the amount the hospital would make from an inpatient or regular clinic patient. The hospital’s three rural health clinics are its highest-margin business lines courtesy of Medicare’s financial incentives to keep people out of the ED.


Everybody knows John Halamka as a pre-eminent health IT spokesperson with endless energy and enthusiasm, but I enjoy even more his writings as a gentleman farmer and animal sanctuary operator, evidence of which I submit from his latest Unity Farm Journal:

Before I left, I cut a road from the barnyard to the new aviary area and around the back of the alpaca paddock to the edge of the new sanctuary property we’re acquiring next door. In my absence the gravel for that road arrived, so we now have a new area to drive over with farm equipment. I’ve called it Sanctuary Road … This weekend I’ll be busy doing animal care — trimming alpaca toenails, running with the dogs, giving the pigs the belly rubs they’ve been missing. I’ll be crushing and fermenting 500 pounds of apples. I’ll be racking the cider I fermented before I left. The work on the farm is invigorating and I will not miss sitting in economy seats while the person in front of you leans back all the way.


In Canada, Island Health’s Nanaimo Regional General Hospital offers its doctors extra pay for “the extra burden the new electronic health record has placed on many physicians during the roll-out phase of IHealth.” The hospital’s doctors previously reverted back to paper charts, citing patient safety and workload concerns with its newly implemented Cerner system.

Doctors in United Arab Emirates complain that their hospital employer is docking their pay for clocking in minutes late, even when they work past their quitting time. The HR people tell them it’s an automated system and there’s nothing they can do. The doctors also note that right before orientation day, the hospital decided not to hire residents and interns even though the government pays their salaries.


The folks at Epic, many of whom aren’t many years removed from trick-or-treating under the watchful eyes of their parents, have trotted out their Halloween-themed web decorations.

Sponsor Updates

  • Experian Health will present “Denial: It’s Not Just a River in Egypt!” at AAHAM WA November 10 in Spokane.
  • PatientMatters will present at the Missouri Hospital Association Annual Convention November 2-4 in Osage Beach.
  • AdvancedMD will introduce an all-in-one cloud site (scheduling, billing, EHR) at MGMA, also adding fully integrated telehealth capabilities and an expanded AdvancedPatient.
  • The SSI Group will exhibit at GC3 HIMSS November 3-4 at the Beau Rivage Resort & Casino in Biloxi, MS.
  • SK&A publishes a new report on “Provider Move Rates.”
  • The American College of Pathology names Aprima a certified ACP PRO Venous Registry EHR vendor.
  • Valence Health will exhibit at the National Association of Medicaid Directors November 6-8 in Arlington, VA.
  • Voalte will host its second annual user conference November 9-11 in Sarasota, FL.
  • Built in Chicago names ZirMed to its list of 2016 Top 100 Digital Companies.

Blog Posts


Mr. H, Lorre, Jennifer, Dr. Jayne, Lt. Dan.
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Currently there are "3 comments" on this Article:

  1. Re: A Gates-Jobs discussion in heaven! Bill Gates: “So, how’s heaven, Steve?” Steve Jobs: “Great ! It just doesn’t have any wall or fence.” Bill Gates: “So…?” Steve Jobs: “So, we don’t need any Windows and Gates. I’m sorry, Bill, I didn’t mean to offend you.” Bill Gates: “It’s ok Steve, but I heard a rumor.” Steve Jobs: “Oh, what rumor?” Bill Gates: “That nobody is allowed to touch Apple there, and there are no Jobs in heaven.” Steve Jobs : “Oh no, definitely there are, but only no-pay Jobs. Therefore definitely no Bill in heaven as everything will be provided free!

  2. Myth: Epic doesn’t have a marketing team.
    Fact: Epic doesn’t do advertisements.

    It’s not software engineers designing that HIMSS booth. They’ve always said that they have a very small sales and marketing team when compared to other vendors, going back to old Modern HealthIT interviews.

  3. Re your FHIR comments – well done and thorough. One more – possibly an expansion of your #2. Vendors also have no interest in creating a truly functional interoperational capability for a few reasons. The two main ones: It means that the client can more easily convert to a competitive system if all data were batch transferable, instead of making the client go thru the painful months-long parallel operations while the data settles – thus protecting their client base from poaching.

    And for the bigger gorillas who offer “all-encompassing” solutions, it makes it harder for competing vendors who offer departmental or connectivity solutions to smoothly integrate their solutions when the client deems those versions better than the solution offered by the main vendor.

    The main failure of the RHIO/NHIN attempt 15 years ago was that there was no way to require common data structures so that data could map directly. This didn’t mean that vendors would be at risk because they could have differentiated themselves by the functionality, screen design, work flows and customer support. But they didn’t see it that way and the gov’t wouldn’t or couldn’t mandate it. I am a fully free-market guy who believes in less regulation, but even the railroads are required to all run on the same gauge track.

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Reader Comments

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