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Monday Morning Update 8/7/17

August 5, 2017 News 5 Comments

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Allscripts will write down $145 million of its $200 million investment in NantHealth, whose shares have dropped 77 percent since the investment. Allscripts said in its earnings announcement, “This impairment is based on management’s assessment of the likelihood of near-term recovery of the investment’s value.” Shares in NH, which closed at $18.59 on their first day of trading in June 2016, are now at $4.20, valuing the company at $510 million.

Allscripts says it will exchange its NantHealth ownership stake for “certain technology assets and client relationships” of NantHealth as well as a commitment that NantHealth will buy Allscripts software and services.


Other items from the Allscripts earnings call:

  • Allscripts CEO and long-time Cerner executive Paul Black opened the call by offering his condolences to Neal Patterson’s family and colleagues.
  • Black says executives have been talking for some time about the need to boost the company’s inpatient EHR market share, with the McKesson EIS acquisition adding hundreds of new inpatient clients who present cross-selling opportunities for systems for EHR, post-acute care, population health management, and precision medicine.
  • The company signed the largest Sunrise agreement since 2011 with a six-hospital system.
  • President Richard Poulton said in response to an analyst’s question about why the company would take on the risk of buying McKesson EIS, “This is an industry that is going to continue to transition. You can go around the horn for both inpatient and outpatient competitors and you’d find several of them are either for sale actively, have been recently for sale, or will be for sale most likely in the not too distant future … as the market matures, consolidation is a natural occurrence and it’s inevitable.”
  • Poulton says what’s left of the retired Horizon business will wind down within two quarters of the acquisition’s closing.
  • Allscripts hopes to improve the McKesson customer defection rate that started when it announced plans to exit healthcare IT.
  • The company says it will recommend Paragon for under-200 bed hospitals with simple product and service lines and Sunrise for larger, more complex health systems. Poulton admits that the company found it hard to sell Sunrise into small hospitals because of the effort required to implement it and the difficulty for a small hospital to get full value from it, adding that competitors have reached the same conclusion.
  • Asked which McKesson solutions might appeal to Sunrise customers, Black listed lab, blood bank, surgery, anesthesia, the OneContent document management system, and supply chain.

Reader Comments


From Tater Consultancy: “Re: Epic. The contract from a just-signed Epic site says Care Everywhere is licensed via a transaction fee for each CCD exchanged with a non-Epic EHR. Epic made a big deal at HIMSS15 about waiving the $2.35 per record fee due to industry pressure. Looks like not much has changed, although a specific fee isn’t mentioned in the contract.“ Judy Faulkner said at HIMSS15 that data exchange via Care Everywhere would be free “at least until 2020.” Fees prior to that were $0.20 for each message sent to an HIE and $2.35 per year for a given patient for whom messages were received from foreign EMRs regardless of the message count. About that time, Athenahealth said it would pay customer fees for participating in CommonWell indefinitely and Cerner promised to do the same through at least 2017. I’m happy to run any fee updates from Epic, Athenahealth, or Cerner customers. I summarize with my common conclusion: Q: Why do vendors charge xxx? A: Because they can, and because customers keep signing those contracts. UPDATE: an Epic spokesperson says the company has not broken the 2020 promise — CCD exchanges are free, also adding, “In our new contracts, CCD exchanges with non-Epic EHRs are free indefinitely, and this is a standard we are applying to both new and existing customers, regardless of what their contract says.”


From Confused Consultant: “Re: Summa Health. Cutting 300 jobs to cover a $60 million operating loss. Implemented Epic from Catholic Health Partners last year while claiming they want to remain independent as the city’s largest employer, turning over what is likely their largest non-personnel expense line to a larger IDN who might be a likely purchaser. I’m not saying it’s the case here, but some mega systems wield Epic as an instrument to influence referral patterns or M&A activity, and industry narrative that has been largely unnoticed by trade media.” Summa made a PR and professional mess of its ED staffing change early this year and large physician groups started sending patients elsewhere due to quality concerns, both of which gave it a community black eye even before this latest financial bombshell. It’s also located in Akron, an industrial city whose population is declining and skewing older. Still, I agree that a larger, Epic-provisioning organization might get first dibs at acquiring a given hospital that uses its services. That could be for several reasons: a successful, non-competitive working relationship; the smaller hospital’s willingness to outsource a key service and its underlying motivation to do so; more transparent referral patterns; and if the organizations indeed express acquisition interest, access to better due diligence data and a potentially smoother transition afterward. My conclusion is that large health systems are acquiring smaller ones that stumble operationally or financially and technology makes it more attractive. Good or bad, we seem to be heading toward big regional and national health systems owning most hospitals, a situation that is almost universal in every industry outside of healthcare.


From Art O. Deal: “Re: VA. The taxpayer watchdog in The Hill makes the same point you’ve made about Shulkin (Trump) giving away leverage by no-bidding the VA.” The president of Taxpayers Protection Alliance says no-bid contracts have become the rule rather than the exception at many federal agencies, observing that the Department of Defense spent more than $100 billion in 2016 — more than half of its spending — via non-competitive contract awards. It questions the assertion of Secretary of Veterans Affairs David Shulkin that the VA “can do this cheaper for the taxpayers by essentially moving forward quickly without a lengthy process” when he has no idea how long the project will take or what it might cost. President Trump and White House advisor Jared Kushner both bragged on pushing the VA to choose Cerner without exploring the only viable alternative (Epic) or sticking with VistA, with Shulkin obediently framing the choice as obvious since the DoD is already implementing Cerner. The Trump clan brags about being skilled deal-makers – at least when it’s their money and not that of taxpayers —  but telling a vendor they’ve been chosen without first hashing out a contract is about as amateurish as you can get. I think everybody, especially Congress, was just sick of DoD and VA making excuses why they can’t exchange information, with active service military members starting over with a nearly blank page after transitioning to veteran status. 

From Compromized Consumers: “Re: Optum 360. Will obtain patient records of UnitedHealthcare members and dependents, not just claims and EOB, but also labs and prescriptions. They will then build a personal health record similar to Microsoft HealthVault. To avoid regulator and consumer rights backlash, they will partner with someone like Apple or Experian, with the final solution marketed as a consumer convenience under the partner’s name. This update will be shared with VIPs attending the Optum event in DC this week.” Unverified.

HIStalk Announcements and Requests


Poll respondents give their largest local non-profit health systems mixed marks on serving patients selflessly, with 44 percent grading them A or B, 29 percent a gentleman’s C, and 27 percent going with D or F.

New poll to your right or here: who will benefit most from the proposed acquisition of McKesson EIS by Allscripts?

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HIStalk readers funded the DonorsChoose teacher grant request of Ms. M in Missouri, who asked for science books and weather kits. She reports, “You have awakened a love for science in my classroom! Our new materials have allowed us to get knee-deep into our content. Having the chance to put together a pulley system gave students the opportunity to really see how they work, and to decide for themselves that they do lighten the amount of work it takes to lift an object. The power of seeing this first-hand really helped the concept to stick! In the same way, the model we put together to show how the moon rotates around the earth gave rise to a number of interesting discussions. Students were able to seek answers to their own questions and share these with their classmates. This went so far beyond what a normal paper-and-pencil lesson could have done.”

This Week in Health IT History

One year ago:

  • Theranos CEO Elizabeth Holmes announces in her AACC Q&A session that the troubled company will pivot into manufacturing the MiniLab sample processing machine.
  • Drone delivery vendor Zipline says it will deliver medical supplies to areas of Maryland, Nevada, and Washington within a year.
  • Senator Elizabeth Warren’s NEJM opinion piece recommends that underlying data from submitted journal articles, as well as from both successful and failed clinical trials, be shared openly.
  • Hackers breach Newkirk Products, which issues BCBS insurance cards in several states.
  • A New York Times article questions whether “did we control your pain” hospital satisfaction survey question encourages doctors to over-prescribe opiates since satisfaction scores impact their bonuses.

Five years ago:

  • Massachusetts announces that it will create a statewide HIE, paid for by the federal government.
  • McKesson announces Cardiology Inventory and Surgical Point-of-Use Integration Module.
  • The VA begins implementing the first sites of its $543 million RTLS contract, with HP as the prime contractor.
  • Allscripts CEO Glen Tullman says in an earnings call after the company fell short on earnings that Sunrise Financial Manager will be released in Q4, it expects to win more hospital business as competitors step away, and that demand for the company’s open, less-expensive hospital systems will grow.

Ten years ago:

  • The CEO of Lawson Software says software-as-a-service won’t live up to its hype.
  • Perot Systems acquires JJWild for $89 million in cash.
  • IMedica reports that its customer base grew 76 percent in the first six months of the year.

Weekly Anonymous Reader Question


Responses to last week’s question:

  • Chased love, laughter, and friendship, not money and fame. Crossed the finish line a WINNER.
  • You can never have enough rope!
  • Appears he didn’t hear us yell “Duck!”
  • That reminds me of a story…
  • When I die at the age of 103: “Life – like me – was short, but sweet.”
  • The “Clean up Woman.”
  • She put the fun in dysfunctional.
  • Have a drink on me. (with a bottle opener mounted on the tombstone).
  • When I am dead and gone and my time on earth has passed, I hope they bury me upside down, so my critics can kiss my a$$.
  • I told you I was sick!
  • It’s too hard not to have a good time.
  • And now, for something completely different…
  • Oh what a tangled web we weave when first we practice to deceive.
  • Faithful to us here, we loved him to the last.
  • He left life better than he found it.
  • He found love, joy. and peace in family.
  • S/He was born at a young age, and lived until the end.
  • Adventure.
  • Cheer up, there’s no hope.
  • The measure of what a human being could be.
  • He had nothing, but gave it his all.
  • I told you so.
  • Made a positive difference in numerous lives by being alive and was a great friend.
  • She made a difference.
  • Smart from the start, caring and overbearing, made a difference with little deference.
  • The most difficult thing she ever did was live when all she wanted was to die.
  • Veni, vidi, vici.
  • That was fun!
  • Mostly sorry for before 25. I spent the next 50 working to even the balance.
  • Left this world wondering what difference she made. Hopefully will find out now.
  • He tried every day to be the man his dog thought he was.
  • Been there, done that.
  • A joyful scoundrel gone, not forgotten.
  • This was harder than I thought!
  • Life is too important to be taken seriously. Smile.
  • No situation is so bad that it can’t get worse.
  • I tried really hard.


This week’s question: of the places you’ve experienced, where would you choose to live if job or money wasn’t a factor?

Last Week’s Most Interesting News

  • Allscripts announces that it will acquire McKesson’s Enterprise Information Solutions business for $185 million in cash.
  • The VA announces expansion of its telemedicine program, including allowing its employed providers to conduct sessions across state lines.
  • A Politico report claims that then-VP Joe Biden scolded Epic CEO Judy Faulkner in a January 2017 meeting for her questioning him as to why he would want his complete medical records, which Epic says is an “inaccurate and misleading” description of his meeting with EHR vendors.
  • Drug maker Merck warns that its manufacturing process is still being disrupted by its June 27 malware attack and warns of potential drug shortages and unknown financial impact.
  • Athenahealth announces that it will target $100 million in cost savings and strips Jonathan Bush’s president and board chair titles in recruiting replacements.
  • Quality Systems says it has received a Civil Investigative Demands letter from the Department of Justice and says it has heard of other vendors receiving the same letter, which involves a false claims investigation such as the one that cost EClinicalWorks a $155 million settlement.
  • The White House’s opioid crisis committee recommends that state doctor-shopping databases be connected and that the government relax the HIPAA requirement that prevents addiction treatment professionals from sharing patient information with other providers without consent.
  • A $10 million donation will fund the launch of a UCSF institute that will perform analytics-based drug discovery using a newly created dataset covering all five UC system medical centers.


None scheduled soon. Previous webinars are on our YouTube channel. Contact Lorre for information on webinar services.


  • Wadley Regional Medical Center At Hope (AR) will go live with Cerner in December 2017.
  • Sartori Memorial Hospital (IA) will switch from McKesson to Cerner in October 2017. Its clinic will remain on an Epic ambulatory EHR.
  • Hereford Regional Medical Center (TX) will switch from Healthland (a CPSI company) to Cerner next month.
  • Select Specialty Hospital – Danville and Gainesville (PA) plans to switch to Epic.
  • Regency Hospital Of Central Georgia will go live with Epic in 2019.

These provider-reported updates are supplied by Definitive Healthcare, which offers a free trial of its powerful intelligence on hospitals, physicians, and healthcare providers.

Announcements and Implementations


The Madison business paper profiles the recent launch of Datica’s Digital Health Success Framework that helps startups get their products to market.

Privacy and Security


It’s tough to stay on the pedestal once placed there. The security researcher who single-handedly stopped the May 2017 WannCry ransomware attack is arrested at the Las Vegas airport while boarding a plane back home to the UK after attending the DefCon hacking conference, charged with creating and then selling malware that targeted banks in 2014-2015.

Siemens warns users of several of its molecular imaging systems that those systems could be easily hacked remotely because of bugs in their Windows web server and HP Client Automation Service software. The company is working on a patch, but recommends in the meantime that the Windows 7-powered machines be disconnected from the network or run on isolated network segments. 



Pharma bro Martin Shkreli is convicted on three counts of securities fraud charges, for which he faces up to 20 years in prison. Prosecutors say Shkreli ran a Ponzi-like scheme in which he convinced people to invest in his hedge funds by falsely claiming he knew what he was doing, then lost a lot of their money and diverted some of the funds to start up a drug company while falsely claiming positive returns and giving the runaround to investors who wanted to cash out. All of that is unrelated to his turmoil-filled time at Turing Pharmaceuticals, which bought an old, cheap drug that is still sometimes useful in treating AIDS and raised its price by 5,000 percent. As I observed above: Q: Why do vendors charge xxx? A: Because they can. Behavior that some might find despicable isn’t necessary illegal.

Ireland’s Health Services Executive says the recently publicized national imaging system bug that caused the “less than” symbol to be omitted from reports was discovered in January 2016 by the system’s vendor, Change Healthcare, who didn’t let customers know about the problem until it was fixed in August 2016. Change Healthcare became the vendor in its recent merger with most of McKesson’s health IT business. The company’s Canadian subsidiary, McKesson Medical Imaging, reportedly sent out a field safety notice this week to all customers, many of which are in the US.

Here’s the next-to-last installment of Vince’s series on Cerner from a few years back.

Sponsor Updates


  • The Summit Healthcare team sorted through 10,000 pounds of food while volunteering at The Greater Boston Food Bank.
  • The SSI Group will exhibit at the HFMA Region 8 conference August 7 in Kansas City, MO.
  • ZappRx is nominated for Xconomy’s inaugural Life Science Awards
  • A Datica podcast features an interview with Naomi Fried, PhD on digital health companies supporting drug company innovation. 

Blog Posts


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Currently there are "5 comments" on this Article:

  1. Why does Tater get to post Fake News with no verification? Lies posted become lies reference which build perception. Epic’s competitors have figured out that HISTalk is a place where their lies get implicit support from you, Mr H., and the rest of the industry assumes if you let it post, it is truth.

    HISTalk is becoming a fake news outlet.

    • Like a lot of folks who scream “fake news” (even just once per message and not twice) are not carefully reading what they’re complaining about.

      Tater Consultancy made one statement: that he/she saw a newly signed Epic contract that still contained language indicating that CCD exchange requires paying (unstated) fees. Not only that, he/she provided a screen shot of the contract. No fake news there. Maybe it’s not earth-shattering, but it’s a good reminder to revisit those vendors who promised to make CCD exchange free for some extended period of time.

      He/she then asked the logical question — if new Epic contracts still contain such wording, then is CCD exchange still free and will it remain so? He/she didn’t claim that Epic is charging again, only that the contract he/she saw hasn’t changed no matter what promises the company may make to the contrary.

      I also did not say that Epic was charging, only that they did pre-2015 but had promised not to through at least 2020. I invited readers to indicate whether any of the three vendors named are charging now. Epic quickly provided a response that they aren’t. Nothing has changed with the 2020 promise.

      Epic also asked me about the contract wording I received since that has long been removed from their standard boilerplate. The fact that it wasn’t removed in this specific case suggests that it might be an Epic Community Connect agreement in which the issuing hospital is still using old language. Epic would like to get that fixed and I’m trying to determine (with Tater Consultancy) whether that’s the case here. In other words, Epic agrees that someone goofed in placing that into a new contract. I like that better than the unpublished “trust us” clause that contradicts the legally binding document.

      Epic does 2 million CCD exchanges each day, 25 percent of those with non-Epic sites. They don’t paid for those and say they have no plans to charge in the future (presumably going even further than 2020). That’s good to hear. Waiting to hear from Athena and Cerner.

      Tater Consultancy is neither anonymous nor an Epic competitor, by the way. They are a provider IT executive.

      Now that we’ve all agreed that Epic isn’t charging for CCD exchange — even though nobody said they were — I’ll turn the fake news lens around and ask for proof that “Epic’s competitors have figured out that HIStalk is a place where their lies get implicit support from you.”

      This particular Verona-based reader is pretty sensitive about anything that falls short of Epic cheerleading, even declaring that Banner’s replacement of Epic with Cerner as mentioned in the Definitive Healthcare update is “fake news” because Cerner is Banner’s standard system. I agree that it’s not necessarily timely since I mentioned this long ago, but it’s still correct.

  2. “President Trump and White advisor Jared Kushner…”

    I enjoyed this Freudian slip tremendously. Thanks for a Monday morning laugh!

  3. “…a standard we are applying to both new and existing customers, regardless of what their contract says.””

    What does that mean? They can change their mind at any time, and you’d be obligated under contract to pay. What’s in the contract is the rate. If you don’t want to charge that, then don’t put it in the contract.

    It looks like they’re leaving themselves open for some selective enforcement of that clause.

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