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July 18, 2019 News 15 Comments

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John Muir Health outsources its IT, RCM, analytics, purchasing, and claims processing operations to Optum and will  transfer 540 employees to the company.

I’m wondering – have other health systems turned over this much of their non-clinical work to Optum? This deal represents nearly 10% of the health system’s total headcount.

John Muir’s just-filed financial report shows a $59 million profit on $1.5 billion in revenue, a CEO who was paid $3 million, and several million-dollar executives. The CIO made $825K.

Reader Comments


From Jade Warrior: “Re: Surescripts. Shouldn’t they have to change their name since we are no longer sure about these scripts? Don’t they do testing?” Surescripts warns users in a Patient Safety Alert that medication histories may contain incorrect patient instructions if they include a slash symbol, which it removes in erroneously converting instructions such as “take 1 and 1/2 tablets” to “take 1 and 12 tablets,” which it estimates has happened in 0.3% of Medication History dispensing records. I don’t fully understand the problem description, but it sounds as though the error is limited to storing the incorrect patient instructions in its medication history – the prescriptions it sends are fine.

HIStalk Announcements and Requests


Welcome to new HIStalk Gold Sponsor MWTherapy. The Wellesley, MA-based company’s web-based physical therapy software platform serves outpatient practices everywhere. PTs and staff can work anytime, anywhere, and from any device, including both Windows and Mac. The software, which was built from scratch for the rehab market without cobbling together acquired products, can be set up for any practice, budget, or need. Modules include EMR, billing, scheduling, appointment reminders, home exercise program, outcomes, reporting, secure messaging, and patient email. The “Amazing Value” EMR package starts at $1.65 per day per therapist, while the affordable Build-A-System offers a customized solution with exactly what a practice needs with no long-term contracts and with the backing of a company that has been around for 15 years. Thanks to MWTherapy for supporting HIStalk.


July 25 (Thursday) 2:00 ET. “Meeting patient needs across the continuum of care.” Sponsor: Philips Population Health Management. Presenters: Cindy Gaines, chief nursing officer, Philips Population Health Management; Cynthia Burghard, research director of value-based healthcare IT transformation strategies, IDC. Traditional care management approaches are not sufficient to deliver value-based healthcare. Supplementing EHRs with advanced PHM technology and a scalable care management approach gives health systems proactive and longitudinal insights that optimize scarce resources in meeting the needs of multiple types of patients. This webinar will address the key characteristics of a digital platform for value-based care management, cover the planning and deployment of a scalable care management strategy, and review patient experience scenarios for CHF and diabetes.

July 31 (Wednesday) 1:00 ET. “Modern Imaging Technology for the Enterprise: Mercy’s Approach That Improved Imaging Cost, Speed, Capacity, and Care Quality.” Sponsor: Mercy Technology Services. Presenter: Jim Best, executive health IT consultant, Mercy Technology Services. Enterprise imaging has become as critical as EHRs for transforming patient care, but many health systems are struggling with the limitations and costs of dated, disconnected PACS even as imaging volumes grow and radiologists report increasing levels of burnout. Radiologists at Mercy were frustrated by its nine disparate PACS, which required them to toggle between workstations, deal with slowdowns and poor reliability, and work around the inability to see the complete set of a patient’s prior images, even as demands for quick turnaround increased. In this webinar, MTS — the technical backbone of Mercy — will describe the lessons they learned in moving to a new best-of-breed PACS platform that increased radiology efficiency by 30%, with the next phase being to take advantage of new capabilities by eliminating third-party reading services and distributing workload across radiology departments to improve efficiency, capacity, and timely patient care.

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

Acquisitions, Funding, Business, and Stock


Interoperability solutions vendor Ellkay acquires the assets of Tampa-based Legal Easy, which includes the X-Link interfacing software that connects EHRs, practice management systems, and other healthcare technologies.

Payments processing technology vendor Edifecs will open an Atlanta office that will house up to 200 new employees.



Patrick Neese (Jefferson Regional Medical Center) joins Lake Regional Health System (MO) as CIO.

Announcements and Implementations

A Black Book poll finds that 4% of health system boards include members with health IT experience, with 91% of boards relying on consultants to develop IT strategy. Eighty percent of health system CFOs say their board members do not remain impartial in their review of system selection and spending approval and are instead influenced by other board members, corporate management, or vendor salespeople. I can’t speak for all, but the health systems I’ve worked for didn’t rely on board members to make IT decisions or set IT strategy – their job as community leaders was to set big-picture strategies and to make sure that the management team — which made its recommendations only after lengthy research and deliberation — hadn’t missed something. I’ve seen bad IT decisions caused by big-ego board members who paid half attention to a 15-minute review of a plan formulated by experts over many months, but who then used their self-perceived insight and wisdom to push an entirely different course of action.

In China, 50 hospitals will use AI technology from Ping An Good Doctor to create Internet hospitals that offer diagnosis, prescription sharing, and health management. The hospitals will share their information in real time.

Privacy and Security

The number of patients whose information was compromised in the breach of American Medical Collection Agency grows to 22 million as Clinical Pathology Laboratories and Penobscot Community Health Care join Quest Diagnostics, LabCorp, and BioReference Laboratories in notifying their affected patients. Quest has complained that AMCA — which filed Chapter 11 bankruptcy after the initial breach reports – didn’t file required HHS breach notification and hasn’t paid $500,000 of Quest receivables it collected from patients. Indiana’s attorney general has filed a motion to convert AMCA’s bankruptcy to Chapter 7, citing the company’s lack of post-event transparency and its food-dragging on getting the reorganization going.


Former Apple CEO John Sculley predicts that the future of healthcare will be in remote patient monitoring and telehealth for chronic condition maintenance, especially as hospital beds are eliminated and high-utilization chronic patients stress the system financially. He predicts that Apple will turn its Health product into a subscription service that will connect Watch users to doctors; says that Google could create a similar health subscription service using medical sensors for its Pixel phone, Assistant voice power, Duplex conversational AI for phone conversations, and its Nest smart home technology; and concludes that Amazon could scale Alexa Health faster than either company. On the other hand, he’s the guy who fired Steve Jobs.

Two physician-venture capitalists who head up Google’s life sciences investment arm warn that technologists “spend on the order of three months before they realize how screwed up [US healthcare] is … you make more money by keeping a patient sicker,” at which point half of them walk away to target more reasonable industries. The investment group has set up crash course rotations and a mini-residency in which technology entrepreneurs can learn what the healthcare system is really like. 


Kaiser Permanente Southern California researchers find that 58% of patients whose kidney function lab test results are abnormal don’t receive appropriate follow-up. The study authors recommend improving EHR inbox management,flagging abnormal estimated glomerular filtration rates (EGFR), increasing the lab results management role of nurses, and enhancing the use of patient portals. PCPs reported some interesting factors that cause care gaps:

  • Overly large patient panels.
  • EHR inbox message overload.
  • Lack of lab result triage help.
  • Role ambiguity when lab orders are cc’d.
  • Lack of an abnormal result EHR flag for EFGR, which isn’t automatically  is calculated from patient demographics and serum creatinine levels.
  • Lack of follow-up lab draws due to high patient co-pays, limited lab hours, and conflicts with work-life activities.

A Philips-sponsored report finds that while the US is near the top in EHR usage, it is below-average in applying telehealth and artificial intelligence. 


I checked compensation for Children’s Hospital Los Angeles after its announcement of a $25 million anonymous gift to expand its neurology and interventional radiology services and wasn’t surprised that the CEO makes $1.9 million, but I’m a little bit puzzled at how a Registered Nurse Lead was paid $748K vs. the CIO’s $606K.

Sponsor Updates

  • USPTO awards Medicomp Systems a patent for the intelligent filtering of health-related information in its Quippe solution.
  • EClinicalWorks will exhibit at the 2019 FACHC Annual Conference July 21-24 in Fort Lauderdale, FL.
  • InterSystems will exhibit at Sunquest July 22-25 in Scottsdale, AZ.
  • Imprivata publishes a white paper titled “An Evaluation of the Clinical and Financial Value of Work Station Single Sign-on in 19 Hospitals,” which describes how Christus Health is saving 49,000 clinician hours per year with the company’s OneSign single sign-on and virtual desktop access platform.

Blog Posts



Mr. H, Lorre, Jenn, Dr. Jayne.
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Currently there are "15 comments" on this Article:

  1. I hope the outsource deals works out for John Muir and goes better than most outsourcing. Typically the client never REALLY gets improved operations. Keeping in mind the outsource company is for profit and has to do the same and more with less people and it typically ends up being less than desired results. You sure can’t keep people on the payroll making 500K plus.

    • Tell that to Jack Welch! Hospitals and their CIO’s and IT Teams are not the experts on IT, Digital transformation! Might as well stay out of this game and leave it to the expert IT SI’s or others.

      BTW- Cerner just confirmed AWS relationship + strategy.

  2. John Muir outsources its IT and analytical functions while Providence bought an entire consulting company to go deeper into that area. Just goes to prove that nobody knows anything! People are just throwing stuff on the wall to see what will stick.

    • While you can make a legitimate argument that no one knows anything in healthcare, these to situations are quite different. John Muir, is looking for operational efficiencies (again in theory) so outsourcing IT and business process can make sense for them.

      Providence, on the other hand, is looking to increase revenue so they bought those consulting firms to accomplish a couple of goals. For starters, they are doing custom Epic development so once they make certain changes in the system, they will then market those changes and sell them to other customers through this new acquisition (similar to what UHS did with Crossings Health Solutions via Cerner mPages). Providence also has an innovation team that is thinking up new healthcare technologies and then will most likely uses these new firms to sell/push those to other systems. This is something we are seeing more and more with the larger IDN’s like Providence, Ascension, UHS, etc…They are building their own business lines and are selling those solutions to the masses..

        • I can only give my opinion and I say that because people love to shred opinions without ever giving a solid opposing argument/ideal…I think that both can work but, and I know its cliché, but it really depends on the Health System, Vendor and the situation…

          With John Muir being in California, the cost of labor is quite expensive as compared to say the Midwest, so “outsourcing” some of the business office and IT makes sense. Yes, I know that it mentions about 500+ people badge fliping, but being someone that has worked on deals like this previously, many of those people don’t make it long term. They are re-evaluated and many are given early departure packages, keeping the cream of the crop and then backfilling virtually with people that living in lower cost of living areas. Usually look at a 30% or more reduction in staff. These resources that are kept also get leveraged across other clients as well, so that needs to be kept in mind too. Sharing resources isn’t the worst thing, its just that you need to be tight with cost, SLA’s (service levels) and customer satisfaction. Plus, by outsourcing, the burden is now on the vendor to produce, they are now the throat to choke. I have seen this model be successful but I have also seen in flop and the hospital takes things back over. Again, its a case by case basis.

          Now one model that could work, is something I built out a few years ago with a health system in California that couldn’t afford to rebuild their IS department because they were competing with Bay Area tech companies .Instead I built them a virtual model with resources primarily in the Midwest (all were US based) and they saw a significant drop in the operational expense and it opened them to a greater pool of resources. However, the difference is that it was only “outsourced” for 12 months and then the Health System took back ownership of the resources, all of them virtual. See, they didn’t know if a virtual employee model would work so I built one for them and basically let them “rent it” for a year and then after that year they took it back over. To my knowledge, they are still using that system today. If Health Systems really want to lower some of the operational costs, they need to look at virtual models for positions that don’t need to be physically there all the time. However, since many have never worked in that model, they don’t know how to set it up correctly. This is why I like what I have built which is, let me build it for you, try it for a year and after that year, I can keep doing it for you or you can take it back over yourself.

          As for Providence, I am still in a wait and see approach. I see why Health Systems would do it and it makes sense to partner or buy a company that knows how to run a commercial type business because that is not the type of business that Hospital Execs know how to run effectively (no disrespect to health system execs but its a totally different way of doing business). No one has really exploded on this front so I don’t know how much revenue is out there for them to realize…I think it can work, but I don’t know if the pay off is as great as they may hope it is.

          Long winded answer, so my apologies…

      • “For starters, they are doing custom Epic development so once they make certain changes in the system, they will then market those changes and sell them to other customers through this new acquisition”

        Not possible. Epic Clients are contractually required to NOT attempt to sell any Epic related solutions to anyone if the solution is based on a direct knowledge of Epic’s apps and code and data structures and could not be marketed to non-Epic sites. Epic clients can submit their solution for review/evaluation by Epic and if Epic decides to they MAY post the solution in their community sharing section of their web site (UserWeb). When you submit your solution to Epic for consideration you are also granting them the right to use that IP in future Epic development and potentially use your ideas/design/etc. (with no compensation to you at all) in future releases of Epic. This provision holds even if they opt to NOT post the solution to the community sharing site.

        Any consulting firm (and all consultants) that wants it’s staff to be able to access the UserWeb must sign an agreement declaring ALL work product produced during a client engagement is a work for hire and therefore solely owned by the customer (Epic client site). The Epic client may then opt to submit the work product to Epic for potential sharing via the community sharing site.

        Also, if a consulting firm creates some sort of Epic related solution for a specific client that could potentially be of value to other Epic clients you may not, in any fashion take that to market. You can engage with another Epic site, but you would be required to recreate the solution from scratch for the new client and they (the client) will own all rights to that expression of the solution.

        App Orchard (if you look carefully) is limited to solutions that interact with Epic via fairly narrowly defined methods and processes. App Orchard does NOT allow for modifications to Epic code, extensions to Epic code or any other sort of developed solution that doesn’t interact with Epic via their defined methods and pathways.

        If Epic was not restricting the market in this fashion (and I totally understand their desire to protect their own IP) then it’s likely that many millions of dollars could be saved across Epic client sites – in the current state every site must recreate the wheel in some common areas that are required for a successful implementation (and where the required solution is not part of Epic’s offerings).

        If I were a potential client of Providence’s Epic consulting arm I think my first question would be “how do I know you aren’t going to take my best practices/methods/processes back to apply them at Providence without compensating me for the IP and whereby you potentially significantly reduce your cost of getting to a similar solution?”. Think about it – all Epic clients face similar challenges in many areas of an implementation – imagine the benefit of being able to tap into a staff that has seen best practices in any number of other Epic sites and thereby enrich Providence sites when they benefit from the hard earned expertise and lessons of other Epic client sites.

        Frankly, I would not be surprised to learn that Epic steps in and puts some pretty strong guardrails around the Providence consulting group in an effort to limit their ability to engage in this sort of behavior. Something like – if you want your staff to have access to the UserWeb then you and all of your staff must execute an agreement with Epic specifically declaring that you will not share information with Providence except under a formal contracting agreement that you apply to all of your clients.

        • Re: Code Jockey –

          Seriously, thank you for the deep dive into the Epic way of client dev. I honestly had no idea it was that strict. Most of my experience is on the Cerner side, where they are no where near that strict. They do have their T&C’s but several of the consulting firms have taken their custom Cerner build specs from one site to another and Cerner doesn’t really intervene (mPages and CCL Reports comes most to mind as several sites have created custom work and have sold/sent that to other sites).

          Again, thank you and good to know –

        • “Think about it – all Epic clients face similar challenges in many areas of an implementation – imagine the benefit of being able to tap into a staff that has seen best practices in any number of other Epic sites and thereby enrich Providence sites when they benefit from the hard earned expertise and lessons of other Epic client sites.”

          Do you really think that Epic doesn’t share best practices with organizations during implementation? The Foundation System is more or less a best practice soup. Every organization believes they are different and special so there is no reason to believe that Providence would have any more success convincing implementing customers to change their workflows and adopt best practices. Despite staff turnover, no customer organization has more experience implementing Epic’s software than Epic itself. There is also no reason to believe that working with Providence means you will get a consultant with experience. Turnover isn’t just a vendor thing.

          • 13 years, 8+ Epic client sites, 20+ go lives, 7 Epic Certs – I think I have a pretty good handle on Epic’s role in an implementation. Most of the staff members sent out to support pre-implementation build are well trained in their (very) silo-ed application. 100% of the staff that are sent out for pre-implementation build support have (by definition) NO experience supporting that same build (that they are so ‘expert’ on) two or three or five years down the road. The Foundation system is a starting point that Epic herds their clients to as a base line system – because that is what they have trained their implementation and TS staff members on. I was around in the days BEFORE the foundation system and trust me – not having a base line system was painful and required significantly more pre-implementation build.

            My point is that mature Epic sites (2+ years post go-live) will have by necessity turned to optimization work, and typically those projects are highly integrated across Epic applications. Those are the best practices I’m referring to and the ones that are so costly for Epic clients to sort out.

            In all of the time and locations I’ve done pre-implementation build I’ve never encountered an Epic resource that fully understood the impact of the build decisions that they were leading their clients to implement. NO Epic resources know/realize/are trained on the downstream impacts of their area of build or the upstream build areas that will impact their area of responsibility.

            Those lessons are learned and that knowledge developed ONLY after go live, as the site implementation matures and are LONG after Epic has left the site.

            Also, my point about limiting complementary solutions in the Epic marketplace (except via the very narrow App Orchard), Epic is essentially forcing their clients to independently make the same mistakes, learn the same lessons, develop the same supporting solutions and processes (i.e. change control, build auditing, promotion management and so on) – there is no effective way for the Epic user community to share ideas/solutions/processes related to best practices.

            In this environment, I’ll repeat again – if I were a Providence Epic consulting client I’d sure like to know that they aren’t going to poach my best practices and go market them around the community without some form of equitable compensation (and verification that the sharing of same doesn’t place the Epic user sites in legal jeopardy related to the restrictive portions of the contracts we all are required to execute in order to participate in that market).

            As the mad rush to new implementations winds down I would expect that retaining VERY talented Epic analysts will become a challenge and a priority for Epic client sites.

            Also, it should be interesting to see if Epic is able to maintain it’s grip on the sharing of information and solutions across the Epic user community.

            Just to be as clear as possible – if you are a Providence Epic consulting customer I would think you’d want some assurance that those same consultants serving you are not going to collect your best practices and take them back to the benefit of Providence’s sites – without any compensation to you.

        • I don’t think you actually understand what APIs are, or how they work. You say this:

          “Not possible. Epic Clients are contractually required to NOT attempt to sell any Epic related solutions to anyone if the solution is based on a direct knowledge of Epic’s apps and code and data structures and could not be marketed to non-Epic sites.”

          Then you also say this:

          “App Orchard (if you look carefully) is limited to solutions that interact with Epic via fairly narrowly defined methods and processes. App Orchard does NOT allow for modifications to Epic code, extensions to Epic code or any other sort of developed solution that doesn’t interact with Epic via their defined methods and pathways.”

          Which aren’t really compatible. It’s pretty lazy to describe Epic’s API library and app store as “their defined methods and pathways”. That’s literally what APIs are.

          • So, Liz….. It strikes me that turning to “it’s pretty lazy” and similar comments are a clear indication that (a) you are an Epic KID or (b) you really have no experience whatsoever in the Epic space.

            There is no such thing as an “Epic API” whereby third party developers can craft solutions that developers can go market to Epic clients and generate some form of income along the way.

            In the Epic space you have two options – share your solution with Epic as a submission for the community sharing site (whereby you explicitly grant Epic rights to ALL of your IP embedded in that solution, even if it is never added to the community site) or craft some sort of app for submission to the App Orchard whereby your application/solution is sending transactions into Epic via some very narrowly defined messages (think HL7 here).

            There are absolutely, hands down, 100% zero options for what (uninformed and snobby) folks may traditionally consider an API for an application whereby complementary, third party apps can in some fashion manage or change the behavior of the ‘parent’ application in the Epic space.

            With Epic and App Orchard apps you have the options of submitting messages to Epic (and receiving results) from some corner of an Epic application – but you sure as heck are not going to adjust the behavior of Epic from some external app.

            Epic very carefully, and for a long time now, manages it’s clients and all parties that interact with their clients in such a way that there is no “real” market for third party solutions related to their applications. It’s worked up to now because most Epic clients were hell-bent for “meaningful use” dollars – it will be interesting to see if they can somehow maintain that iron grip on hundreds of mature sites. Someone, somewhere is going to attempt to break out from the Epic restrictions (maybe Providence Epic consulting will lead the way) – when that happens – is Epic going to actually take legal actions against their own customers?

          • The primary API standard for AppOrchard apps is FHIR and not HL7. FHIR is pretty broad and let’s apps both read and write information from/to the patient record. AppOrchard also provides a standard way to embed your own app’s UI into the EHR workflows in a way that is seamless to users.

          • Yeah, I guess when you narrowly define APIs as “only things Epic doesn’t do” then yeah, by that extremely narrow definition you have created for the discussion, you are correct. Also, for the record, every app store has the same IP provisions. Apple can make your iOS app. Google can make your Android app. If you can show any actual abuse of this, please go right ahead.

  3. @Code Jockey

    That seems contradicted by companies like Imprivata or Fairwarning who have a business built on accessing and manipulating Epic not via HL7 v2. Epic will also let you (the presumed external software vendor,) make a product that runs SQL against views that they have built on one of their analytical databases (idk which one.) I agree that they are hesitant to allow write access to their databases via API, but there are multiple vendors who provide imports into the legal patient medical record in Epic. They do allow write access to their database via HL7 – I work for a vendor that does this.

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