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November 1, 2018 News 4 Comments

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ProPublica investigates the VA’s no-bid, $10 billion Cerner project, with these findings:

  • Trump advisor and son-in-law Jared Kushner pushed the no-bid selection of Cerner, naively assuming that interoperability would be automatic if VA and DoD used the same company’s product. “The premise of all of this is incorrect,” a former project official now concludes, adding, “We thought it made perfect sense until we looked under the hood.”
  • The VA team, which justified choosing Cerner without a bidding process by claiming it would create “seamless care,” has stopped using that term and now just says VA doctors will be able to see DoD records, which they can already do with their old systems.
  • The White House rejected qualified candidates for CIO and other oversight roles and instead proposed former Trump campaign officials who have no health IT experience.
  • One of those rejected candidates was former Sutter Health CIO Jon Manis, who questioned the role of Bruce Moskowitz, MD — the physician member of the Mar-a-Lago group of Trump supporters that was reported to be meddling in VA affairs – and feared that the project’s politics and instability would make the job impossible.
  • Since-fired VA Secretary David Shulkin, MD sent Cerner reps packing when they showed PowerPoints instead of something real, explaining that he planned to hold Cerner to a higher standard than just installing its standard software. He expected to create a single lifetime health record with computerized decision support.
  • A group of hospital executives warned the VA that Cerner’s off-the-shelf product and VA-DoD data synchronization would not by itself achieve the VA’s goal of seamless care.
  • The VA’s project to mine EHR data for key clinical insights was abandoned with the selection of Cerner, which turned out to not have those capabilities.
  • Cerner was found to be missing key VA capabilities such as Agent Orange exposure, spinal cord injury, and PTSD.
  • Intermountain Healthcare CMIO Stan Huff told the VA, “If you install Cerner as an off-the-shelf product, your clinicians are going to be extremely unhappy and everybody is going to ask why did you spend billions of dollars for a crappy system.”
  • The DoD has proposed sending only 1-3 years of service member and dependent records to the VA’s new system.
  • Since-resigned VA CHIO Genevieve Morris could not get VA clinicians to participate and found herself in a political power struggle with new CIO Camilo Sandoval (no health IT experience), John Windom (whose expertise is procurement), and Rich Stone, MD (the VA’s top health official).
  • The VA spent at least $874,000 on a kickoff event held at Cerner’s headquarters, where Morris and Windom argued over stage time and walk-on songs and tried to gloss over the project’s convoluted org chart.
  • Cerner’s internal progress report rates the project’s alert level as “yellow trending towards red.”
  • The DoD is so concerned about VA’s project oversight that they have proposed taking the project over, although the Pentagon’s lawyers said that probably isn’t legal.

Cerner has reportedly emailed veterans groups to warn them of “negative media coverage, including a piece from ProPublica.”

Reader Comments

From Fortune Teller: “Re: Medicare’s Patients Over Paperwork initiative. Do you have a prediction on what to expect?” I’ll let readers and Dr. Jayne chime in on the proposed changes to E&M codes, office visit documentation, and other paperwork that were first floated by CMS a year ago. It’s hard to separate meaningful HHS/CMS announcements from the political rhetoric spouted by its campaigner-appointees, so I’ve quit trying.

HIStalk Announcements and Requests

I added a “Add/Read Comments” button at the bottom of this post. It will make it easier to add a comment after reading. Let me know what you think.

Mrs. HIStalk shamed me into accompanying to seeing yet another movie (a rarity for me), in which case I give “First Man” a B- for being dull, presumably accurate, and nausea-inducing for using the “shaky cam” such that living room scenes are far harder to watch than when Gemini and Apollo spacecraft are careening wildly through space (“The Right Stuff” is about a hundred times better in every way). Before that, I laughed out loud at the preview of awful-looking sing-along, Queen-approved puff piece “Bohemian Rhapsody” as the audience all reflexively ducked to avoid being gored by the massive fake teeth of Freddy Mercury (Rami Malek).


November 7 (Wednesday) 3:00 ET. “Opioid Crisis: What One Health Plan is Doing About It.” Presenter: Samuel DiCapua, DO, chief medical director, New Hampshire Health Families; and chief medical officer, Casenet. Sponsor: Casenet. This webinar will describe how managed care organization NH Health Families is using innovative programs to manage patients who are struggling with addiction and to help prevent opioid abuse.

Previous webinars are on our YouTube channel. Contact Lorre for information.

Acquisitions, Funding, Business, and Stock


Orion Health finalizes its sale of Rhapsody to technology investment firm Hg, enabling Rhapsody to launch as an independent company in Boston under the leadership of former McKesson executive Erkan Akyuz. The company, which offers health data integration software, plans to increase staff by 40 percent over the next 18 months.


Bloomberg reports that Elliott Management and Veritas Capital have teamed up to bid on Athenahealth. Veritas acquired GE’s ambulatory care, revenue-cycle, and workforce management software business for $1 billion in April.


Allscripts reports Q3 results: revenue up 16 percent, EPS $-0.20 vs. –$0.16, missing Wall Street expectations for both. Shares were down 9 percent in early after-hours trading Thursday following the announcement.


NextGen Healthcare, in its first quarterly report since changing its name from Quality Systems, Inc. on September 10, reports Q2 results: revenue down 2 percent, adjusted EPS $0.24 vs. $0.22, beating earnings expectations but falling short on revenue. Shares dropped 24 percent on the news, valuing the company at $968 million. From the earnings call:

  • Customer attrition rate in the trailing 12 months was higher than expected at 13.9 percent, as “Epic clients continue to sweep through their physician practices and as Cerner continues to convert the Siemens ambulatory base post-acquisition.”
  • The company will “sort of be proactive. We’re actually getting in and optimizing those clients long before they ever even think about whether or not there is a different opportunity available for them within their local ecosystem.”
  • The company has eliminated the COO role that was vacated with Scott Bostick’s resignation in September 2018, with sales and services now reporting directly to the executive team.
  • The company will add new financial services and contract management offerings.
  • Long implementation cycles with all-in customers reduced the conversion of bookings to revenue.
  • President and CEO Rusty Frantz said in response to an analyst’s question about one-time accruals that it was “my least favorite one-time accrual … lowering the management incentive plan because our expectations on revenue are not what they were at the beginning of the year.”
  • NextGen isn’t seeing any sales benefit of Athenahealth’s tribulations, saying that ambulatory physicians look purely at products rather than investor-side activity.
  • The company is making a push to upgrade the 50 percent of its clients that are on older product versions and will eventually implement end-of-life support.


Meditech reports Q3 results: revenue down 2 percent, EPS $0.52 vs. $0.47. Product venue slipped 7 percent due to implementation delays.



McKesson CEO John Hammergren will retire on March 31, 2019. to be replaced by President/COO Brian Tyler.


PeraHealth hires industry long-timer Greg White (PerfectServe) as CEO.


  • Hawaii Health Information Exchange will implement NextGate’s cloud-based provider registry and enterprise master patient index.
  • Asquam Community Health Collaborative (NH) signs a managed services agreement with Huntzinger Management Group for LRGHealthcare and Speare Memorial Hospital. Asquam’s IT staff will become Huntzinger employees.
  • Citizens Medical Center (TX) selects automated pre-bill coding analysis software from Streamline Health Solutions.
  • Lake Regional Health System (MO) will implement Cerner Millennium in collaboration with University of Missouri Health Care.
  • Inova Health System (VA) will expand the rollout of Spok Care Connect clinical alerting beyond its initial implementation at Inova Fairfax Hospital.

Announcements and Implementations

Adventist Health System (FL) implements Glytec’s EGlycemic Management System at 33 facilities in seven states.

Government and Politics


Cerner Government Services President Travis Dalton provides an update on the company’s DoD and VA software implementation efforts, highlighting workflow and care improvements made at the initial DoD implementation sites and the company’s receptiveness to progress reports from those facilities, which, as he acknowledges, have been seen by some as setbacks. He adds that the company is ready to kick off implementations at military medical facilities in California and Idaho.


HHS re-launches the Healthcare Cybersecurity and Communications Integration Center as the Health Sector Cybersecurity Coordination Center. HC3 will operate under the authority of the Department of Homeland Security. The initial HCCIC suffered from organizational delays and leadership setbacks tied to allegations of ethics violations that led to an OIG investigation.

Privacy and Security


A reader sent this Reddit-posted breach item claiming that employee and dependent information from Cerner’s health plan was posted to a company wiki and had been visible internally for nearly a year. I reached out to Cerner and received this response:

Some data about associate benefits was posted on a password-restricted intranet site. The personally identifiable information was not exposed or accessed by anyone from outside the company. The data was viewed by a small group of associates, all of whom have had extensive HIPAA training. Due to the limited nature of the exposure, we determined that this did not constitute a data breach and we are not formally reporting this matter.


IBM’s Red Hat acquisition will enable it to move Watson Health services to a hybrid cloud model, which the company says will give customers easier access to data for analytics and AI projects. Initial converted data sets will include claims and patient data from IBM’s Truven Health Analytics, Explorys, and Phytel acquisitions.

A Kaiser Health News report says that precision medicine for cancer treatment sounds good, but insurers cover the cost poorly if at all because the treatments are off label and evidence is lacking that they extend lifespan. The article profiled a breast cancer patient who can’t afford the $17,000 per month cost of AstraZeneca’s drug, and after the story ran, the drug company immediately offered to comp it (thus proving that in our unbelievably screwed-up healthcare non-system, the biggest shortage we have isn’t of doctors or other clinicians, but rather reporters).


A nurse in Germany who is serving a life sentence for killing two hospitalized patients confesses to killing at least 100 more in two hospitals, explaining that he enjoyed trying to resuscitate the patients he chose randomly to inject with arrhythmia-inducing drugs. Authorities and the families of his alleged victims question why he wasn’t caught sooner, even in one case in which he was caught in the act of injecting a patient but was allowed to work for another two days, during which time he killed another one. Hospital records showed that death and resuscitation rates doubled when he was working, a nice piece of analytical work in every way except timeliness.

Sponsor Updates

  • Mobile Heartbeat attains 100,000 monthly active users of its MH-CURE unified clinical communications platform.
  • EClinicalWorks will exhibit at AAP 2018 November 3-5 in Orlando.
  • Allina Health CIO Jonathan Shoemaker and Health Catalyst win CHIME’s 2018 Collaboration Award.
  • Nuance shares results following Piedmont Healthcare’s implementation of the company’s clinical documentation products.
  • Formativ Health publishes a new white paper detailing ways providers can grow and maintain their patient panels.
  • Kids Rock Cancer Center shares how FormFast has benefitted its care team.
  • Glytec publishes a new e-book, “Hypoglycemia in the hospital. Why is it costing you millions and what can you do?”
  • CHIME names Nuance Communications VP Kali Durgampudi its 2018 Foundation Industry Leader.
  • Bumrungrad International Hospital in Thailand implements the InterSystems TrakCare EHR.
  • ChartLogic parent company MedSphere supports federal efforts to alleviate the opioid epidemic.

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Currently there are "4 comments" on this Article:

  1. “Cerner was found to be missing key VA capabilities such as Agent Orange exposure, spinal cord injury, and PTSD.”

    What could this possibly mean? You can’t document the care of a patient with these conditions in Cerner? Couldn’t you do that in any EHR?


    “The VA’s project to mine EHR data… was abandoned with the selection of Cerner, which turned out to not have those capabilities.

    One can certainly “mine” EHR data from Cerner (or any EHR). This one sounds at best unfair and at worst absurd.

    No doubt the project has problems, but statements like this sound like something got lost in translation.

    • I like that idea as a name for either a band or a song. In fact, it could be the VA’s next walk-on song for their next taxpayer-funded shindig. Although it should really be “toward” without the “s” according to most dictionaries and AP Stylebook, at least when used in the US and Canada (ProPublica was just quoting the Cerner report, apparently, so that’s where the superfluous “s” slipped in).

  2. Reading that ProPublica piece is /facepalm the whole way through, no clinical governance at all and being run by people with no experience. When experienced people bail during recruitment, and you answer experts’ concerns with the contract with “no change required” in every instance (that Huff document), that’s a sign your project is off to a bad start.

    I hope they can turn this around for the sake of our veterans, but who’s going to want to jump onto this grenade at this point?

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