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April 30, 2019 News 15 Comments

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Meditech posts Q1 results: revenue down 5.7%, EPS $0.97 vs. $0.08. The big bump in earnings was due to a $46 million year-over-year swing in unrealized marketable securities gains.

Product revenue dropped 21%, operating income was down 33%, and net cash earned from operations was down 44%.

Reader Comments


From Dramatic Entrance: “Re: provider online reviews. This survey says patients find them critical when choosing.” This gives me an opportunity to illustrate how the headline of a survey’s results is often misleading or its methodology so shaky that the results mean little. For this particular one:

  • The survey’s 839 respondents were self-selected, recruited by using a survey tool’s survey bank and thus likely not validated in any way.
  • The survey question asked whether a positive online reputation is important, where a better question would have been, “How important was online reputation when you chose your most recent provider?” Never ask people what they think or believe when you could just as easily ask them what they actually do.
  • Half of respondents said they have submitted negative provider feedback but were never contacted, but the question didn’t ask how they submitted their criticism (Yelp? The practice website’s contact form? Complained to the front desk person on the way out?)
  • The survey lumped all providers together, everything from hospitals to dentists to doctors. That means the somewhat skimpy respondent count was then segmented further.
  • The company that performed the survey sells reputation management services. They did not engage an independent survey organization that would have followed defensible methodology.
  • Perhaps worst of all, lazy sites that are desperate for “news items” reworded the results into a pointless story with unrestrained headlines and no disclaimer about the obvious validity concerns.

From Ornery Cuss: “Re: health IT startups. Why do you let other sites offer more coverage?” My audience is mostly at the health system C-level, and as the lack of market success of most startups validates, those self-proclaimed disruptors don’t typically fare well trying to pass off half-baked outsider ideas to conservative health systems that are looking for solutions to real problems that offer quick return on investment. Sites that love writing about startups are usually run by people with minimal actual health IT experience who find their naiveté less of a hindrance when they write speculatively about companies nobody’s heard of. I’ll give those companies airtime once they’ve done something impressive enough to take up reader time, which right there excludes 90% of them. Otherwise, it’s like a major league baseball fan studiously following tee-ball games.

HIStalk Announcements and Requests

Listening: new from Interpol, Manhattan-based indie pop-rockers who have been at it since 1997 and who still sound great (think Joy Division). I was excited about hearing them for the first time, at least until I used the HIStalk search function to realize that I first recommended them in January 2009. At least I still do.


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

Acquisitions, Funding, Business, and Stock


Philips announces poor Q1 revenue and earnings that strong growth in China could not offset. Its connected care group posted a 1% revenue drop, while its Personal Health businesses grew sales 5%. The company’s strongest segment was electric toothbrushes. The company said in the earnings call that “we are developing a much more end-to-end care orchestration environment that hospital and care providers are excited about,” but it is taking time to roll that out.


Computer Sciences Corp accuses India-based Tata Consultancy Services of stealing its source code to develop a competing life insurance administration application. Epic won a $420 million trade secrets award from Tata in 2016, claiming that company employees exploited their role as Kaiser consultants to download proprietary Epic materials to help them develop competing software.


The Kansas City business paper digs up some interesting Cerner SEC filings related to the involvement of activist investor and tiny shareholder Starboard Value, with which Cerner signed a legally binding cooperation agreement for reasons I can’t fathom other than Starboard’s swagger scared rookie Cerner CEO and board chair Brent Shafer into avoiding the kind of public battle that took out Athenahealth’s Jonathan Bush:

  • Starboard Value made its run at Cerner two days after Shafer announced his new “operating model.”
  • Two of Cerner’s four new board members were nominated by Starboard – former AliphCom President Melinda Mount (AliphCom was the original name of now-liquidated Jawbone) and former Cloudmark CEO George Reidel.
  • Cerner agreed in writing to implement profit-boosting cost cuts and operating changes and to announce those plans via a press release.
  • Cerner agreed to reimburse Starboard up to $275,000 for the legal fees the investor spent to force its way onto Cerner’s board.


The Wall Street Journal reports that Health Catalyst expects to raise up to $200 million in its IPO.


  • Metro Health – University of Michigan Health chooses Glytec’s FDA-cleared EGlycemic Management System to standardize best practices in glycemic management.
  • HealtHIE Nevada and the Nevada Hospital Association will implement Collective Medical to provide point-of-care insights to reduce avoidable admissions by supporting care collaboration and event notification across EDs, hospitals, post-acute care, behavioral health, and ambulatory settings.
  • Catholic Charities of Baltimore will implement the SmartCare EHR from Streamline Healthcare Solutions.



OptimizeRx hires Stephen Silvestro (Wolters Kluwer) to the newly created position of chief commercial officer.


OurHealth names Brian Norris, RN, MBA as interim VP of IT.


Impact Advisors promotes Erin Svarvari to VP of operations.

Announcements and Implementations


A new KLAS report looks at hospital EHR market share and makes these points:

  • Epic gained a net 121 hospitals in 2018, losing just one existing customer.
  • Cerner’s net hospital gain was 100, mostly because of its VA deal that represented 167 hospitals, but it lost 65 Millennium accounts, nearly all of which moved to Epic.
  • Nearly all large hospitals and multi-hospital systems that are choosing EHRs (which is not all that many these days) are choosing Epic, while Cerner is selling mostly to smaller hospitals.
  • Meditech had a net loss of 18 hospitals, while Allscripts lost 28 while gaining only three.
  • Market share in hospitals of 500+ beds is mostly Epic, with 58% vs. Cerner’s 27%.
  • Meditech Expanse is selling well and customers are upgrading, but its users are mostly small hospitals, quite a few of which are being acquired by large systems that then convert Meditech to their corporate standard of Epic or Cerner.
  • Allscripts is losing Sunrise and Paragon customers to other vendors as few choose to replace their Allscripts-acquired legacy products with Sunrise.
  • Athenahealth has stopped hospital sales at least temporarily, while EClinicalWorks sold no new hospital contracts in 2018 and the hospital product has not yet reached beta testing.

Imprivata launches IAM Cloud Platform, a cloud-based identity and access management platform that is powered by Microsoft Azure Active Directory. The initial release includes Healthcare Seamless SSO single sign-on.

Meditech launches a professional services division, expanding its implementation offerings to include spearheading quality initiatives, physician consulting, performing  interoperability assessments, and lending expertise to analytics and population health projects.

Verisk will analyze EHR data collected by Human API for life insurer risk scoring and benchmarking.



Paychecks at 34,000-employee Hackensack Meridian Health are incorrect for the second consecutive pay period due to what it says are problems related to its Oracle PeopleSoft payroll implementation. One employee’s paycheck was for 19 cents, while others have reported that errors caused them problems in qualifying for a mortgage and avoiding bank overdraft charges.


Bob Wachter makes an interesting observation – a doctor told him that he enjoys the companionship and collegiality of working with a scribe just as much as he enjoys their help with documenting patient care. I had never really considered that a typical practice or clinic doctor interacts only superficially with employees and even that might be awkward because of the perceived rank and authority issue. This reflects on what Dr. Jayne just wrote about in hospitals ending the old-school “medical staff dinners” where everybody got together with their peers for decent food, socializing, and hospital updates, building trust all around (as we say in IT, a lot of people like our employees but hate our department). I’ll also add my own observation – frontline doctors are an easy target for drug company reps who are trained to push emotional buttons (fake friendship, fake mutual interests, fake romantic interest) to generate more prescriptions. In fact, I’ll add observation #2 – doctors (especially procedure specialists like surgeons) often behave bizarrely and childishly when attending hospital-convened meetings because they live their work lives in a fluorescent caves where they are expected to issue curt orders while never really learning professional niceties, while hospitalists and other non-procedure docs who have to get along with patients and families are not much different from the rest of us in skillfully riding the conference room chairs. I bet I could sit here and cobble together a burnout remediation strategy around these factors.


Business Insider tries DNTL, a New York City “walk-in dental bar” that offers online appointments, IPad form completion, a massage exam chair, and a TV in the treatment room. Its services are covered by dental insurance. Maybe the important takeaway here is that consumers value convenience and atmosphere topmost when they consider a service – such as teeth cleanings or even dental procedures — to be a commodity where outcomes are assumed to be similar everywhere (whether that’s actually the case is irrelevant). Contrast that with the average clinic or doctor’s office, where patients wait in uncomfortable waiting rooms to be seen later than scheduled, nobody really cares if they are comfortable or anxious, treatment is mostly episodic and impersonal, and it’s like cattle being prodded through an abattoir on the frustrating round-trip journey from and back to the sidewalk (hopefully in no worse shape).


In China, police haul a thoracic surgeon away in handcuffs after he refuses to see a patient whose husband had jumped the line, then tells officers he can’t leave to make a statement because he has patients waiting. In a slight medical irony, the surgeon — perhaps aided by knowing where to punch when a scuffle ensued – broke the husband’s rib.


Weird News Andy codes this story as W61.92 and expresses relief that the birds that were involved weren’t sick because that would have been “ill eagle.” A woman who is taking photos of a sky full of eagles is hit by a pair of them who were engaged in the mating ritual called “cartwheeling,” whereupon they drop from the sky, and in this particular case, into her lap. The happy couple flew away unharmed, but the accidental falconer required bandages and a tetanus shot.

Sponsor Updates

  • AdvancedMD will exhibit at ACOG May 3-6 in Nashville.
  • Mumms Software will integrate DrFirst’s e-prescribing and medication management software with its hospice EHR.
  • CoverMyMeds will exhibit at the NCPDP Annual Conference May 6-8 in Scottsdale, AZ.
  • CTG will exhibit at the KACHE event May 2-3 in Garden City, KS.
  • Diameter Health will present at the Annual DoD/VA & Government HIT Summit May 8-9 in Alexandria, VA.
  • DrFirst structures a new $17 million commercial financing facility with SunTrust.
  • Wolters Kluwer accelerates healthcare data mapping with artificial intelligence to bridge data silos.

Blog Posts



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Currently there are "15 comments" on this Article:

  1. Large health systems continue to bail from Cerner, and they continue to sell a beautifully-packaged bundle of vision & vaporware. The federal government timed its contract about as perfectly-poorly as possible: right as Cerner hunkers down into cost-cutting “post-EHR” mode and its customer ratings plummet. Millennium is losing customers like a legacy system and VA appears to be the last of the big suckers.

    Only a few questions remaining: How much will taxpayers get milked for before they pull the plug … $16 billion … $32 billion? Will they revert to VistA or go Epic? (Or Meditech which has taken Cerner’s spot as #2 EHR? Or athena which is #3 and well-connected in DC?) Will they ever get even one site live on CommonWell?

    • Seriously, what did Cerner do to you? When did they shit in your Cheerios? Its clear you have the worlds’ largest axe to grind against them. I get holding vendors accountable but the ONLY vendor you ever talk about is Cerner…MEDITECH has taken Cerner’s spot as #2? Stop reading KLAS only (Not to mention Cerner couldn’t care less about KLAS, nor should any of us for that matter). MEDITECH from all financial numbers is Down, and quite dramatically at that, not to mention they had a net customer loss for 2018. AthenaHealth? Did you even read above, they have literally paused from selling to hospitals.

      As for CommonWell, can you provide any facts that connecting to CommonWell was even in scope? I cannot find anything and I am more than happy to be wrong, but I don’t believe the CommonWell connection was in scope for MHS Genesis. So, if its not in scope, then why even bring it up. It doesn’t prove any point you are trying to make.

      • Associate CIO, I have no dog in the hunt – but can you acknowledge that Cerner has promised RCM FOR YEARS and has not delivered? I don’t want to see a monopoly (ie Epic), in the large IDN/AMC space, but can you make a evidenced-based, market-savvy argument that Epic has/will not dominate?… I did an in-depth CIO survey a few years ago (dozens of Cerner CIO’s and Epic CIO’s) …. without fail, Cerner was characterized as “over promise – under-deliver” and Epic was characterized as the opposite (not to say there was not Epic criticism)… btw, I do agree with the assertion that Meditech will not beat Cerner in the community hospital space. I think Mr. H can connect us if you’d like a chance to enlighten each other (in a good way 🙂 – David

        • I think the readers of Histalk are aware of the shortcomings and strengths of Epic and Cerner. I think the more interesting questions are:

          Is there a space for a third medium to large inpatient enterprise vendor? I think the answer is no.
          If there is space for a third vendor, who is it? Allscripts has the higher revenue, Meditech has the higher client numbers. I think one of these two will be the last EHR standing before the duopoly.

          I actually am more optimistic about Meditech beating Cerner than you. I think the Neal Patterson Cerner would have swallowed the entire lower part of the market and then there would be a Cerner-Epic duopoly. This private equity firm seems to be trying to move Cerners focus from gaining marketshare to milking their customer base. I doubt the corporate suit they have in charge now has the original vision or an alternative vision that he can articulate to the board/shareholders. That could drive the Cerner offering to a price nearer to Epics. With the cash strapped community hospitals or penny pinching for-profits, that could make the cheaper, good enough Meditech Expanse more tolerable.

        • David S: 100% agree that we cannot have a monopoly as competition not only breeds innovation but also cost control (the more vendors out there, the more financially competitive they have to be)

          I also am on board with you as it pertains to Cerner’s terrible attempts at RCM. I mean really, how hard is it to build a reliable financial system…That is what many of us though when Cerner bought SIemens, Soarian financials would be the go forward strategy. But instead, for the first 3 years post merger, Cerner actually still sold Millennium and Soarian Financials and customers were confused and pissed at the same time: why the option? With Cerner’s cash on hand and number of employees, why the hell can they not figure this out. They are so worried about always being first to market…Screw first to market, just make your product the best product. God Rest his soul, but this falls on Neal….This should have been corrected years ago but like that dog in the movie Up: Neal would pick a direction and then see a Squirrel and completely lose focus.

      • Associate CIO, Meditech and Epic do not have a 10 billion dollar contract with the United States federal government for which the US taxpayer is on the hook.

        I think it would be fair to question Vaporwares motives if this was a local hospital chain making a selection on a private contract and it didnt go to Vaporwares favorite vendor. However, this contract and its implementation are categorically different. Money is being taken from the taxpayers pocket to fund the implementation of a vendors product – a product that will affect the health of many citizens. That vendors product was selected without a competitive bidding process behind closed doors. When representatives of the public and administration weighed in on the intent of the deal in the past, it was clear interoperability was a large concern. The implementation of the software does not appear to be meeting that interoperability requirement. We cant even tell if other vendors would have been able to come up with a better solution because they couldnt even bid on the contract! Now the dirty deal is done and the only thing US citizens can do is hold Cerner and the VAs feet to the fire.

        A member of the public is yelling that his or her government needs to be held accountable for its corruption. Dont shush him.

        • SelfInflictedWound – That is fair, to compare the Federal Government to our traditional hospitals procurement of an EMR, isn’t a fair apples to apples. However, what you said isn’t entirely accurate (unless you were ONLY referring to the VA) but we have to look at the DOD and VA as a whole.

          The DOD selection was an open bidding process. Leidos was actually the winner of the DOD with Cerner being the technology vendor that Leidos chose to partner with. This went through a lengthy selection process and from all accounts, was as transparent as can be.

          As for the VA, correct, that was a No Bid decision, per say, but lets be honest, had Epic won the DOD, the exact same thing would have happened, they would have No Bid won the VA. It only makes sense to have both of them on the same platform. We all know that whoever won the DOD would with the VA.

          My issue with the original post is this BS about CommonWell. CommonWell, from all accounts, was never in scope for the DOD. So, why is a user constantly bitching about the same thing, when its not even in the contract. Its like someone complaining they didn’t win the lottery but didn’t buy a ticket.

      • A’CIO … CommonWell not in scope? You’re joking?

        “MHS GENESIS has made sharing health information a top programmatic and system priority, emphasizing interoperability as a critical mission requirement.”

        As for other vendors, I agree, athena and Meditech wouldn’t be suitable as they stand today – but clearly neither is Cerner. Does it really matter though? Whichever vendor you attach to the feed trough basically becomes the de facto in-house IT/development shop for the federal government. The in-house VistA talent that was swept out was expensive, but at least they made an EHR that worked when you turned it on.

        • Did you even bother to actually read that link you sent? All it states is that Cerner is the co-founder of CommonWell. NO WHERE does it state that CommonWell is part of the MHS Genesis project, NO WHERE. They are literally just telling you Cerner’s resume on the page, nothing more; nothing about what is in the ACTUAL CONTRACT!

          CommonWell sparsely used? How about some facts to back that up? Fact: CommonWell has 11,853 entities/organizations using it today including Ascension, IU Health, HealthSouth, Adventist: Some of the largest IDN’s in the country.

          We get it, you hate Cerner and CommonWell but the FACTS don’t back up your claims.

          • You’re just being disingenuous at this point. A “top programmatic and system priority”. (Nah, not in scope.)

            To say that Cerner, Leidos, et al didn’t promise interoperability for the DoD is false to anybody but the most pedantic hairsplitter. Anyone who hadn’t physically seen the contract on the day it was signed would be completely safe to assume that CommonWell was not only in scope but also included (remember?… free for the first 5 years!). I obviously don’t have a copy of the contract, so can’t provide it here. But wouldn’t you agree if it’s NOT in the contract, that’s just as bad – if not worse?

            For what it’s worth, no, it wouldn’t surprise ME at all that CommonWell isn’t in the contract, because Cerner’s most reliable habit is to sell one thing and deliver another (or neither).

    • Regardless of your clear bias against Cerner, you could at least post some factual information. This is just pure sensationalist propaganda though. Pretty amusing.

      • CIO – I agree 100% with Vaporware and that Cerner has made a deal with the devil with the DOD contract. That is just an opinion based on my experiences. However what isn’t an opinion is that Cerner is a publicly traded company that has to answer to forces that Meditech and Epic do not. It is not an opinion that Cerner has caved to the pressure of profit seeking investors and it will fundamentally impact the way the manage and pay their talent as well as their development and support expenditures. Do you honestly think that having to balance a huge contract with a notoriously difficult customer in the most open and public way, while at the same time trying to please shareholders demanding more profit now, is conducive to being a responsible steward for your private and community hospital partners?

      • CIO, I have acknowledged several times on this site that I have a grudge / axe to grind / inedible cheerios. Obviously my questions aren’t facts, but which of these other facts do you disagree with?
        – Cerner is in cost-cutting mode. In its own words.
        – Cerner’s flagship product is losing customers like a legacy system. Is this open for debate?
        – Cerner’s user-reported scores are trending down. (If KLAS doesn’t count, find me a source that shows them increasing?)
        – CommonWell is six years old and sparsely (at best) adopted.
        – The ONLY real oversight of the GENESIS project that has been done (by Behler’s office), concluded “not suitable,” “not interoperable,” and “not usable.”
        – Cerner’s response to this oversight has been, repeatedly, “going as planned.”

        I think taxpayers are generally resigned to overpaying for anything the government does, but they should be able to expect that they ACTUALLY GET WHAT THEY OVERPAY FOR.

  2. The “conventional wisdom” about consolidation doing MEDITECH in eventually isn’t pulled out of thin air but it does fundamentally ignore the underlying realities of technology, organizations, people and the inertia that clearly exists in the HIT world as far as migrating to new systems and vendors. In the late 80’s early 90’s the rock solid narrative was we would be completely off paper in 20 years. Well here we a decade beyond that and paper usage is down about 15-20%.

    Churn rate is of course a concern for all vendors not named Epic, however their entry in to selling directly in to hospitals they used to flat out say no to is indicative they know that the acquisition advantage they have is running out of targets. The cat is out of the bag that selling off to the large chain doesn’t cut costs for the community and it doesn’t improve services. The hospitals that have managed their money and capital commitments have been able to resist having to sell of to rid themselves of debt. Many communities take great pride in having their own independent hospital.

    In short the assumption that every community hospital will end up being owned by Epic or Cerner running systems isn’t set in stone.

    • Not every community hospital will be on Cerner or Epic just because of the sheer number of facilities but you have to see the ‘forest through the trees’ and look at the much broader demographic and economic trends affecting community hospitals.

      There is never going to be another large stimulus of Health IT funding similar to ARRA in our lifetimes. I would put money on that especially given the results to date.

      Kind of similar to the passage of Hill-Burton in 1946. It built basically about a 1/3 of the current hospital facilities in the U.S. and much of the current hospital infrastructure in rural & community settings.

      Life in rural America is in a serious long-term decline and has been for decades. Deindustrialization has just piled on especially in smaller towns in the Midwest, Northeast, and the South to a lesser degree especially since 2000. The only area that has avoided this trend is smaller (and relatively newer towns) in the SW and West which never had much, if any, of a manufacturing base to begin with. They have been able to pivot more easily to the current economic model especially if they attract tourists year-round and/or have a higher education institution which has remained competitive.

      If smaller towns are declining economically and demographically, there is going to be less of a need for community hospitals especially those with aging physical plants which are costly to remain and run. The trend is going to be ASC/outpatient wherever possible and more micro-hospitals/hospital-at-home.

      There will still be a need for facilities to treat emergency patients but that is going to be a much more complex issue from a political and economic standpoint.

      Coming back full-circle, there is still going to be a market for community hospital IT software but it will be one that is in long-term decline and largely a maintenance market that lives of the 16-20% annual software and maintenance feeds vendors charge (more if they host it).

      What is likely going to emerge is software to support new models of care and much smaller facilities. It just won’t have the $$$ that an enterprise community hospital system has to it.

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