Monday Morning Update 7/30/07

From Claude LaMont: “Re: Acermed. They sure appear to have closed up shop. A physician on our medical staff was teed up for hardware install this week. Tech never showed up. Doc called sales guy at home, only to be told that company told him on 7/20 that company had folded and he was terminated. Doc is out a bunch of cash for hardware he cannot use. Nice of the vendor to call, isn’t it?” So much for the idea that CCHIT-certified products are less risky for buyers. Neither, apparently, are those applications that are highly rated by self-proclaimed futurist Mark Anderson of AC Group, who’s taking shots broadside over at EMRUpdate for his company’s previous lofty rankings of Acermed. He posted one rebuttal: “We never had Acermed rated number 1”, but hasn’t posted again in the several days since a reader pointed out of this link or this one. One made this comment: “Mark, when you make your EMR evaluations transparent, no one will question the results. When an EMR that you highly rated goes belly up a few months after your positive rating, and you say you take into account financial viability of the company, people will wonder how good your ratings are.” Some were nastier, either accusing him of various improprieties or demanding to see his raw data (I got a few of those e-mails after we ran some comments he was nice enough to provide a few weeks back). In his defense, Anderson calls himself a futurist, not a clairvoyant, and Acermed’s problems may involve neither functionality nor financial viability. It sounds like a spat among the owners. Bad for their customers, bad for other PM/EMR vendors without a long corporate pedigree, and bad for CCHIT.

From Sore-Ian: “Re: Soarian sales. Siemens is a company known for fine German engineering. I wonder how much of the Soarian fiasco has to do with the old dysfunctional SMS culture and politics in Malvern dominating the German kultur? A conversation I had there a few months ago suggested the new people who had not been SMS’ers were looking for ways to deal with the latter’s American-big-bad-IT ways.”

From The PACS Designer: “Re: virtualization. TPD did a piece on virtualization earlier this year, but felt it was worth repeating. You will be hearing a lot about the use of virtualization to improve organizational efficiency over the next few years and some of the successes that institutions have achieved by going virtual. Yes, you will be hearing from department managers about how they need to keep their local storage solution, but with the newer software tools and faster networks, the attraction of redundant storage should make the conversion to the virtual world of storage even more palatable now. Setting up a virtual server through partitioning and making the storage archive a virtual application can save considerable amounts of money through such a venture. Also, the local storage solution can still be kept as a redundant archive to appease the manager when there is considerable resistance to change.”

From Paul Burmaster: “Re: CIOs. At the recent AHA Leadership Summit, you could pick out the CIOs by their dress. Wisdom suggests you should dress one or two levels up. Some yahoo was there in shorts, and yes, he was a CIO. I love to relax and be casual, but there’s a time to dress for success.” 

Atos Healthcare is released from its $500 million UK HNS diagnostic imaging contract after missing deadlines.

Visicu announces Q2 numbers: revenue up 21%, EPS $0.06 vs. $0.04.

McKesson announces for Q1: revenue up 5%, EPS $0.77 vs. $0.60. Technology revenue was up 49% and profits up 178%, great news for shareholders (maybe less so for customers whose payments made it possible).

Former IDX CFO Jack Kane is appointed to athenahealth’s board.

Cardinal Health pays a $35 million penalty to settle SEC charges of inflating revenue and earnings.

One recommendation of a Presidential commission reviewing the care of veterans is an online electronic medical record. Cleveland Clinic CIO Martin Harris is a member.

What the hell is the American Hospital Association doing running a for-profit subsidiary that shills vendor products to its members? “AHA Solutions, Inc. is a subsidiary of the American Hospital Association that collaborates with companies to create strategic financial, technology, regulatory, employee benefit, and insurance products and services for healthcare professionals.” I hadn’t heard about it until I noticed their ringing endorsement of Cisco, apparently rubber stamped by “a group of influential IT leaders from AHA member hospitals”. Is the implication that less-influential hospital IT professionals (i.e., unwashed rubes) can’t be trusted to make wise IT decisions? Or, that vendors who don’t pay financial tribute to AHA aren’t reliable? Let’s hope no one running a hospital IT shop is so clueless as to need AHA’s sponsor-fueled guidance. Looks like the AHA folks running the enterprise are marketing people with no stated healthcare background. Joint Commission does it, HIMSS does it, AHA does it … but that still doesn’t make it right. Non-profit hospitals should insist that those claiming to represent them be non-profit as well.

The former CEO of imaging vendor A.L.I. is having a ball with the $35 million he pocketed after McKesson bought the company in 2002.

Lawson’s Q4 numbers: revenue up 69%, EPS $0.04 vs. -$0.03, but the company cautioned on 2008 prospects.

Intel’s Craig Barrett issues more homespun sound bites about healthcare IT: “‘I have a ranch with 45 horses, and they all have electronic medical records, and they all get e-mail updates when their shots are needed,’ he told the summit.The difference is that veterinarians work in a competitive market that gives an advantage to those who adopt technology,while the health-care industry has much less incentive to change, Barrett explained in an interview afterward.” And this one: “It’s time for health care to turn from a mainframe-computer industry to a personal-computer industry.” Want to guess which one he sells chips for? Hey, do your part: buy AMD desktops and servers instead of Intel and invest the difference in charity care. That will send a message to Mr. Barrett and the horse he rode in on (even if he’s right, he’s awfully smug about it).

Talk to me.

Allscripts has been selected to provide its EMR to Urology Associates of North Texas, the country’s largest private urology group. The 50-doctor group had previously been using Penchart/Amicore and will integrate the Allscripts product with their old IDX Groupcast (Centricity Business) practice management product. Penchart/Amicore, by the way, is the product that Misys bought to develop as an ASP solution – and later dropped entirely. Though they don’t mention Misys by name, the UANT medical director was quoted as saying, “We’ve experienced what happens when vendors don’t keep up with changes in a dynamic industry.” Ouch.

Allscripts also made news last week when announcing a new initiative with Sprint to use smartphones to generate prescriptions in the exam room. Sprint will be donating up to 1,000 devices to prescribers who register for the National ePrescribing Patient Safety Iniative and activate NEPSI’s Web-based eRx NOW software.

Pioneer Medical Group of Cerritos, CA signs up with MED3000 for a five-year ASP hosted agreement for Allscripts Touchworks EMR. Pioneer Medical has over 50 providers in Los Angeles. (Either Allscripts is getting their PR machine in gear or they are in the midst of a good run.)

TriZetto names Robert G. Barbieri as the incoming CFO. Barbieri comes most recently from Lawson Software, where he served as CFO and Performance Officer. (Does his appointment mess up Mr. HIStalk’s – and Yahoo’s – theory that Misys is considering a TriZetto acquisition?)

Inga’s listening.

News 7/26/07

From Ambulatory_Vendor: “Re: Sage. Fallout from the layoffs? We’ve been receiving calls from Sage customers who have been unable to get support for weeks.” Unverified. I’ll ask Inga to follow up.

From Judith Beasley: “Re: Soarian. 2005, zero sales. 2006, zero sales. 2007, no sales yet. Soarian development costs are now over $150 million per year. Siemens can and will continue bleeding for a long time. The Susquehanna CIO is now a Siemens employee. Guess that will keep vitriolic e-mails from showing up in HIStalk.” Unverified. If anyone has facts, please elaborate.

From Mia Hottie: “Just a clarification on the Cerner product I mentioned yesterday. It’s not the Visicu-like remote monitoring product, but rather the ICU EMR that would compete with Picis or Sunrise Critical Care, for instance. Cerner announced iNet at least five years ago and, as usual, it was a toe in the water and was never been completed or well done.” Thanks.

From ExCPRUser: “Re: CPR. The combination of an archaic architecture (remember UltiMumps?) and lack of any real integration among CPOE, nursing, and rad/lab will eventually sink them.”

From RonA: “Re: QuadraMed and Vista Equity Partners. Dumb and dumber. Dumb: QuadraMed admits they can’t deliver a clinical product, throws in the towel, and buys an orphaned clinical system. HDS, Per-Se, and Misys couldn’t sell it, so what makes QD think they can? Dumber: Vista Equity Partners buys the junkyard of legacy standalone systems for $382M. Do you really think Vista Equity will invest more in these products? Both of these are feeble attempts to add value to challenged businesses and then sell it to someone even dumber.” 

From Jeff: “Re: KLAS. I think KLAS bends over backwards to provide an impartial opinion, but the key is that KLAS is only one indicator anyone should use to evaluate a vendor. There are many ways to substantiate or repute what a KLAS report might contain, so rather then ‘crying wolf’ because a vendor is not getting a great ranking, include in your opinion other factors, like making some reference calls, talking with the vendor about their vision vis-a-vis yours, and going to trade shows to see how others view the vendor. KLAS may not be perfect, but it is a great starting point for anyone.”

From Rufus: “Re: Anne Arundel. Rumor has it that Anne Arundel Medical Center (Annapolis, MD) might be ripping out Meditech and replacing it with Cerner. Their relatively new CIO is an ex-Cerner employee. Seems like a giant expense and burden. Questions: 1) true?  2) why?” Unverified.

From The Shelton Shadow: “Re: Lawson. TSS has been investigating a new possible takeover candidate who is partially in the healthcare space. That  company is Lawson Software. Don’t know yet who the suitor is, but one sign that something is up is that they have disabled their ‘Partner Network’ on their website. Only time will tell if it is one of the big players in healthcare or a private equity group.”

From Russel Ziskey: “Re: Google and the advisory team. Add Intuit to the list of organizations that maybe doesn’t get it. They announced a product over a year ago and nothing is released. Their division GM, head of bus dev/ strategy, and head of product dev are all gone. Also, the issue is not one of needing an RN to help think through what to get. The truth of the matter is that there are too many vendors from too many different angles trying to solve a need that doesn’t exist (let’s leverage our EMR, our claims data, whatever to deliver a PHR to consumers so they will manage their health and we will get $$). The reality is that consumers say they want a PHR (you have to – it’s like saying you should go to church). But, do you go every Sunday? Adoption is low, no one will pay, and standards certainly do not help – each player tries to protect their own interests.”

Cerner’s Q2 numbers: revenue up 17%, EPS $0.37 vs. $0.29, meeting expectations. The stock was down over 4% today as financial types realized that Cerner’s $26 million in NHS revenue brought along a 0% profit margin and decided the company’s expenses were too high.

OK, it’s usually pretty quiet on HIStalk in the evening. Right now, there are 51 readers on, some who’ve been there for more than 30 minutes (according to my stats service). Visitors from the past week would extrapolate to 61,889 per month, with 112,000 page views. Obviously, this will be a record month. Who knew there were 2,000 people each day who care enough about healthcare IT to hang around some anonymous guy’s blog? Join me in giving yourself a round of applause. And if you want to connect with each other, give HIStalk Discussion a spin.

University General Hospital Systems (TX) signs an exclusive agreement with Calence for network services. The press release uses the word “luxury” and “five-star” a little more than I’d like for a hospital chain, even if they are for-profit.

This ZDNet editorial is critical of the single announcement that Misys is considering an open source EMR release. “Its medical records product was already being pressured by OpenEMR, a GPL product … The current Misys Web site is terribly opaque. If Misys wants to compete effectively in open source that will have to change fast. Open source is more than free code, it’s a transparent way of doing business.”

University of Florida and IBM announce standards-based middleware to connect home monitoring devices to physician offices. “It would then be possible to buy a device off the shelf and by dialing a 1-800 phone number establish a connection between the device and one’s doctor. ‘The device itself becomes a service,’ he said.”

Cardinal Health says it has developed a better outcomes model for pay-for-performance programs. The big improvement came from adding lab data to the mix, which predicted mortality better than any other indicator, up to 67 times more important than administrative data.

FCG and InterSystems will jointly offer integration and business services to hospitals in India.

News, rumors, privaty equity investment opportunities: e-mail me.

Mr. HIStalk suggested I try to track down a CPR client to find out their perspective on the sale of the Misys CPR product to QuadraMed. I was lucky enough to catch Dave Paulson, Manager of Clinical System Support for St. Francis Health System in Tulsa, OK. He admitted he had plenty of thoughts on the whole situation and took the time to share them with our readers. Thanks, Dave!

What are your thoughts on the sale of CPR to QuadraMed?

I was very involved with the Misys leadership when they initially purchased Patient1 from Per-Se four years ago. I met with those guys and asked questions. With the Per-Se management, they had ideas but not resources to move the product forward. We were thrilled to hear what Misys management had to say. The CPR product is our lifeblood. It does everything. It’s huge for us and we need it to be continually developed and moved forward.

Misys said they realized they would do three things with regard to CPR and its development. They said, “We aren’t going to be invited to the dance unless we move from a proprietary platform to Cache’. We aren’t going to be asked to respond to RFPs because we are not Web-based. And, we have all these Sunquest lab clients now asking for the total package – they want integration with that product set.” So, those were the enhancements to be pushed by Misys.

Where Per-Se was not interested in supporting a user group for feedback, Misys was. I was very, very involved. Misys came in, devoted a lot of resources, but, about six months or a year ago, they had leadership changes and they ran out of steam when it came to focus on the CPR product. It wasn’t like some vendors that talk about things and don’t deliver. Misys just stopped talking about anything. Releases were pared down and delayed. And now, Misys has decided to be physician-focused.

We found ourselves back to where we were in the Per-Se days, but we need the vendor to move forth and advance the product. If it had been McKesson or GE or someone with products in the space to have bought CPR, it wouldn’t sit well with us. But it seems like, with QuadraMed, here is a vendor that has focus and wants to move things forward. My understanding is that the vendor staff that works on CPR is hearing good things thus far. They plan to keep people and they do have a good staff. I have not heard directly from anyone from QuadraMed yet.

I have talked to several other key CPR users in the last couple of days. We were frustrated that the CPR focus seemed to have been lost. Now people are cautiously optimistic that this is a good thing. This vendor gives us more reason to feel at ease than others.

Has the product been stable for you?

I think the product itself is stable. The one thing we really saw Misys bring to the table was improved quality of code. It just really became an issue of, “When will the next release with functionality that we want become available?” I assume that the same folks that have been working with us for the last eight years will continue and we won’t start getting support from a group that doesn’t know the product. That remains to be seen

When did you get your last update?

I think the last major release we took was about a year ago and they haven’t had one available since then. The next major release had been scheduled for release in August 2007, but that has been pushed back indefinitely. The next major release was planned for late 2006, then pushed to August 2007, then we were told they were pulling two major components and didn’t have a delivery date. The release is smaller and we don’t know when it will be available. You can appreciate frustration of the user community with something like that.

How fully are you using the system in nursing and ancillaries?

About as fully as it can be done. 100% of nursing staff is using it. The whole closed loop medication management process is fully online. Our Heart Hospital component is doing full CPOE and all the major ancillaries are using the medical records module. Sometimes I hear people say they need to look into getting single sign-on. I say, “What you need is one vendor.” It has worked well for us.

What is the CPOE utilization?

It is fully utilized in our Heart Hospital. We have three hospitals in Tulsa with 1,000 beds and the Heart Hospital has been our pilot.

Are orders being sent electronically from CPOE to pharmacy?

Yes. CPR does that fully. We have closed loop medication management.

Any problems with downtime or response time? Is the system solid?

Very solid. Really, no issues with down time and response time.

Have you ever considered switching to another system?

Yes, we have looked at that. We have had administrative changes and new management has asked if this is the horse we want to be on long term. You have to consider the cost to replace all that functionality. I cannot even fathom it. To try to replace full nursing documentation, all three major ancillaries … I don’t even know how you would do it. I can’t even imagine.

What are the best and worst things about CPR?

The best thing is the integrated nature and ability to view patient data from anywhere. The thing we have really needed from the vendor and which has been delayed multiple times is an enhancement to the clinical documentation toolset. We need it to provide more efficiency for nursing and physicians. We need something more EMR-like.

Secondarily, the pharmacy module needs to be updated and was to be included in the next release. The pharmacy module was one of the first modules to be ported to the Web. Our pharmacy folks are just still waiting for the changes. When I talk to people at QuadraMed, I will say those two areas need to continue to see focus.

Would you recommend CPR to others as it exists today?

Yes. Come and look at it if anyone needs to see what I just described. Cerner is going to talk about it, but we are going to show it to you.

News 7/25/07

From Meat Beat Manifesto: “Re: Misys. Misys will be announcing a sales leader to take over the Misys Connect product. He is a former Cerner guy who has been with Misys less than a year. If they want to sell more EMR, they need to give Connect away or sell it as a subscription with a low monthly cost. Similar players (Healthvision and their competitors) already have a foothold, the community market is soft, and RHIOs are broke. All these things will make it hard to sell Connect like in the good old days (for $250K and up). By the way, conference calls are being held today to brief sales teams on the recent changes. Everyone had a fit when things started popping up in HIStalk.”

From Nick Cave: “Re: Sunquest. Who gets the name? Lab had it first so, it should go to Vista. The name is worth something since it used to be a great company to work for and to be a client of.”

From Oldtime Sunquest: “Re: Sunquest. Now the lab, rad, and pharm business can move forward and not back. Now the profits from lab can be reinvested in lab. The new owners know software and there is still a place for growth in the diagnostic software market. The software is still good, even though Misys tried to run it into the ground. It feels good to call them Sunquest once again. Sid must have a smile on his face today. I know the users and employees do. I agree that GE should look out.”

From Terence Hogan: “Re: Misys. Keith Hagen actually came from Sunquest first, then moved to Misys Transaction Services to be groomed for bigger and better things (like being CEO of QuadraMed, ha!) Lab and rad are good products, but weren’t selling well due to outdated technology. CPR was indeed hard to install and, although CPOE was very strong, the integration that was supposed to happen never really did.”

From Misys User: “Re: CPR. QuadraMed needs to get rid of the CPR Client Services management. The few users who attended the recent conference agreed that the last twelve months have been the worst in the history of the CPR product. We aren’t going to give QuadraMed as much time as Misys to make it work.”

From MrMisyster: “Re: Sunquest. There is very little question that the original Sunquest group in Tucson have reason for celebration today. Misys did nothing for them but take the profits and throw them away on a failing acute care business comprised of every lackluster product Tom Skelton could buy. The real question is who will lead this group since all executives are in Raleigh (Atkin?)  Also, what about infrastructure: marketing, HR, and a few others that all got compressed into the milieu that was Misys? What a six-year mess, but at least there’s some hope for the future of the Tucson group.”

From Enumerator_of_Beans: “Re: Misys. Looks like what’s left of Misys Healthcare is running about a 13% operating margin. Not the loss-maker some think, but hardly a punchy, software-type margin, either. For the $400 million, I would expect them to acquire an ASP-based physician product and save some cash for share buybacks to keep shareholders happy for the short term since the dispositions will negatively impact earnings unless they do something sensible with the proceeds.”

From Mia Hottie: “Re: Cerner. The iNet monitoring system that competes with Visicu is rumored to be at risk of being de-installed in a handful of hospitals.”

From Lane Kimchee: “Re: Google. Google announced a bunch of healthcare advisors, mostly big-name talking heads and luminaries, and not a single RN, much less anyone who’s ever actually taken care of a patient. Is there another industry where the #1 user group would be ignored? Google may just be another clueless big company trying to get into healthcare like those that failed before them: Amicore (IBM, Pfizer, and Microsoft), Dossia, and Cisco.”

I missed this: the interface engine part of Quovadx is bought by – who else? – a private equity firm. Cloverleaf will live on under the Quovadx company name, but the company will be moved to Dallas under new owners Battery Ventures, who also put their CEO at the helm.

If you had problems reading HIStalk on Monday or Tuesday, I’ll apologize yet again. I knew the server was going to get pounded when I noticed that over 100 readers were on during the early hours of both days (I can only see the first 100, so I only know it was some number bigger than that). It didn’t drop below for long on either day (mostly due to a crapload of stock analysts reading up, judging from incoming addresses). HIStalk was the only source of full coverage of both the Misys and Picis events (sleep-in reporters don’t like working Sunday afternoons and the wee hours of Tuesday morning like I did, even though I have another day job and they don’t).

Anyway, as Inga pointed out when I bemoaned possible site slowdowns, the user volume and feedback seem to indicate that HIStalk has become the primary source of industry news, both breaking and routine. For that, we say thanks. We really do work hard to get information, thoughtful opinion, and industry reaction in front of you. It’s easy for me to lose sight of that fact since all I see is a keyboard in an empty room for several hours a day, never talking to anyone about HIStalk or acknowledging that I’m behind it. I really appreciate the support of readers and sponsors. It wasn’t nearly as much fun with I had neither. As several folks have noticed, we’ll get our 1 millionth visit to HIStalk soon. Nobody wants HIMSS Hummers these days, so maybe I can get one cheap and give it away.

If you read HIStalk on the HIStalk2 site (with the pipe-smoking doc), you can click Archives at the top of the page to find your way around.

Cerner is speculated as a possible bidder for a big Australian hospital IT project.

HLTH Corp. (the stupid name WebMD chose voluntarily) and Emdeon Practice Services are suing nine insurance companies to force them to pay the estimated $58 million legal bills of their nine indicted former officers and directors. I bet it didn’t even cost that much to keep OJ golfing.

New CIO: Tom Pagano, Carondelet Health (MO), moving over from Truman Medical Centers. Boy, the paper really botched the name of the HIMSS chapter of which he was president.

HITSP seeks public opinion on its next recommendations to AHIC: emergency responder EHR specs, security and privacy, quality use case, and consumer information access case.

Discuss today’s news here: Misys, Picis, or even non-rhyming newsmakers.

Impress me with your knowledge or speculation: e-mail me or use the Rumor Report to your right to spill secrets or educated opinion. We like both.

Last week, Mr. HIStalk mentioned that Acermed was perhaps closing its doors. I was able to connect with Acermed’s Anoush Tabriz in Client Relations. While Tabriz wanted to make it clear that AcerMed is continuing to provide clients with support with their “skeletal staff,” the rest of our (short) conversation had several “no comments”. So officially no comment as to what is going on with the company, why the reduced staff, whether or not they are still selling new products, if the situation is temporary, etc.

Millennium Research Group announces results of a study that nearly 18% of physicians had an EMR in 2006 and the number is expected to rise to over 30% by 2011. System costs and the disruption of implementing a new process are the two biggest barriers today. To increase acceptance vendors are introducing more streamlined versions of their products. While these adoption numbers seem lower than some I have seen, I am inclined to believe they are fairly accurate.

Compare that to the recent AAFP survey that indicated that half of doctors that responded to a survey said they had either fully implemented an EMR (37%) or were in the process of implementing (13%). That suggests that either family practice docs are more advanced than other specialties, or, that the study was not as scientific as it could be (since it was based on respondents versus a random sample.)

Anyway, all interesting data points, but in 2005 some “experts” predicted that by now 24% of the docs would be using EMR. And about a year ago, the predictions suggested that by the end of 2007 25% of the 1-2 doctor groups would have EMR and as many as 78% in the larger practices. There are obviously varying interpretations of what it means to utilize an EMR and that likely lends to a wide range in the percentages. Bottom line – regardless of whose survey you look at, the market is still pretty unsaturated. Once there are more easy to use products and possibly hospital or government subsidies, the market will see some rapid growth.

eClinicalWorks was chosen by the DC Primary Care Assocociation (DCPCA) to provide EMR/PM solutions for their six community health centers. Four additional centers may be added in the future. No mention of the size fo the deal.

Not sure I have anything to add to all the comments regarding Misys. I actually have had fun reading what readers have had to say. Guess my only thought is that at one time Misys (at least the old Medic piece) was considered the Mercedes product in the industry. The good thing about an old Mercedes is that, even with age, they tend to still work. The problem with an old Mercedes is that there are a lot of other options that do the job as well or better and happen to be sexier and cheaper. I am sure that there are still a number of great employees left and I hope Misys will take care of them.

A MED3000 client forwarded us a letter that was apparently sent to all their clients. Chairman and CEO Pat Hampson announced the finalization of the InteGreat acquisition and the “vision” for how it was to become a “critical component” of MED3000’s and their clients’ success. There is acknowledgement that they are large users of multiple vendors’ software (Misys, GE, Sage, Allscripts, etc.) but Hampson point outs that they have “only limited influence over the direction of their software development.”  MED3000 plans to continue to expand development of IC-Chart and IC-MyHealthRecord. A cynic (like Mr. HIStalk) might suggest that clients watch out for a push to move everyone over to the InteGreat products.  However, if you take the four-page letter at face value, Hampson is trying to enforce the idea that they will continue serve the needs of their 9,500 physicians, including those on other systems, while at the same time channeling additional efforts to promote the InteGreat products. As Hampson rightly says, “the proof is in the pudding”.

Chat up Inga.

Picis to Acquire LYNX Medical Systems, Will Announce Goldman Sachs Equity Investment of $155 Million

High-acuity hospital information systems vendor Picis of Wakefield, MA will announce later today its intended acquisition of LYNX Medical Systems of Bellevue, WA, which markets revenue cycle management software and services for hospital emergency departments.

While terms were not disclosed, Picis President and CEO Todd Cozzens told HIStalk that Goldman, Sachs, & Co., advisor to Picis, will provide the company with a financial package worth $155 million. A portion of that investment will fund the Picis purchase of LYNX from its private equity firm owner, Francisco Partners.

Cozzens says the deal will combine the clinical expertise of Picis with the financial managment offerings of LYNX, both targeting the hospital emergency department. “LYNX Medical Systems focuses on revenue cycle management in the ED. It’s a huge revenue opportunity for hospitals. CMS [Centers for Medicare & Medicaid Services] rules in the ED are much different. There are so many areas in the food chain from patient encounter to patient disposition where charges can get lost or mis-coded. It’s a $25 to $35 per case improvement with this product, which will be even more when integrated with our clinical product.”

Picis offers perioperative and intensive care information systems in addition to its CareSuite ED PulseCheck emergency department information system, which it acquired from ibex Healthdata Systems, Inc. in August 2004. “It does for ED what we did for OR in putting anesthesia and clinical and administration together,” Cozzens told HIStalk. “We have a highly differentiated solution for these areas. It’s a big trend. It’s not good enough to just have clinical documentation and flowsheet information. You have to tie it to factors that are hard dollar, with a proven return that will stand up to scrutiny.”

The LYNX software suite includes ED and clinic modules for patient tracking, documentation, visit level assignment, and CPT and ICD-9 coding. Its health information management application provides browser-based electronic records management, remote access, and coding workflow.

“LYNX is software as a service,” Cozzens told HIStalk. “It’s a great per-click business model. The content and algorithms have been through CMS audits. If you over-code, it’s fraud, and if you under-code, it’s lost revenue. LYNX has been tried and tested with CMS. This is not software you can build in a day. It’s a great little company, a great little business, compatible with our clinical focus in ED. Picis will offer the first end-to-end solution for ED from clinicals to financials. LYNX sells to CFOs and has some great customers like Partners, Vanderbilt, Montefiore, Triad, and Yale-New Haven.”

According to Cozzens, LYNX is profitable, with revenue of over $30 million that has increased by 800% in the past four years. Its 200 employees serve 350 healthcare organizations representing over 15 million encounters. Additional LYNX offices are located in Waterloo, IA and Tampa, FL. No management or location changes are planned.

HIStalk asked Cozzens about integrating the product and company culture into Picis, which is located on the opposite coast. “We’ve been good at merging,” he told us. “It’s not like GE, where they don’t like domain experts and they bring in the plastic and lighting people. We love the domain experts and invest in them and, hopefully, they will multiply. We know this will be one of our easiest integrations. It’s easy to run companies in other locations if you have good management systems in place. Since I talked to you last, we’ve really beefed up our senior management team, people who know the enterprise software business. Big ERP went through what healthcare is going through 10 or 15 years ago. We’ve found that they’re invaluable in driving better practices and stronger management systems.”

The combined organization will service 1,350 hospitals in 19 countries, with reported annual revenues in the $125 million range.

Cozzens disclosed that Picis placed its initial public offering on hold three weeks ago so it could complete the LYNX acquisition, which had been in discussion since early spring. “It could not have happened with the IPO,” Cozzens told us. “We wanted to raise money to do this. The timing wouldn’t allow us to go out and then do the deal. There was too much space in between and it was time-sensitive. The company was going to be sold.”

Goldman’s investment eclipses the estimated $84 million the Picis IPO would have brought, Cozzens told HIStalk. “Private equity valuations aren’t too far off of public valuations. Our shareholders didn’t leave much on the table here.”

Picis will eventually continue with its IPO plans, Cozzens told us, but with the critical mass and momentum that the acquisition will provide. “We never viewed the public offering as a seminal event, just a financing event,” he said. “It was a no-brainer when we could arrange financing through strong terms, be a good deal for our shareholders and Goldman, and not be public at the same time. Critical mass will put the IPO at a different level at a higher market cap, with more analysts folowing and many different revenue streams.”

Goldman’s private equity financing makes it a major investor in Picis. According to Cozzens, the deal is Goldman’s first direct investment in healthcare IT and the largest healthcare deal in Massachusetts this year. “At $155 million, it’s nearly twice what we wanted in an IPO,” Cozzens said. “Goldman is an investor, very close to being the major shareholder.”

Goldman managing director Chris McFadden was quoted in a Picis press release. “The opportunity to invest in Picis is consistent with our long-standing desire to invest in companies with strong growth and earnings potential in healthcare. This investment underscores our belief that Picis has the strategy to meet this opportunity.”

The acquisition is expected to close later this summer.

Mr. HIStalk’s Cheap Seat, Hastily Thought Out Conclusions

• I like the deal. The only unknown is how much Picis paid. Goldman wouldn’t have put in its own money if it didn’t look good. It gives Picis a nearly unbeatable ED offering, something that no mainstream vendor can match.
• This must have been a complex set of three-way agreements to hammer out, especially with two of the parties being private equity firms.
• Picis is smartly sticking with areas in which the big boys are weak instead of trying to fight an expensive, ill-advised CPOE-and-orders ground war. Plus, revenue-related systems are back in vogue again after lots of money was wasted on unused CPOE applications.
• How did I miss LYNX? I’ve heard the name and mentioned them a few times, but really knew nothing about them.
• When Picis put its IPO on hold three weeks ago, I wrote: “Related to Picis (but written before the IPO news came out) is my editorial in this week’s Inside Healthcare Computing electronic update: ‘Private vs. Public Vendors: I’ll Take the Former,’ in which I argue that the now-trendy private equity investment is replacing IPOs as the primary way for companies to grow. I have to admit that I felt traitorous when I wrote it because Picis is my sponsor and my argument is that current customers historically have fared worse after a vendor goes public (my vendors, anyway) but now I can feel OK about it. I still have confidence in Picis and I bet there’s a positive reason they changed their IPO mind.” Score: Mr. HIStalk 1, lots of other pundits, 0. Lucky guess, I admit.
• Goldman Sachs, $155 million. Damn! No wonder Picis passed on the IPO for now. Why hamstring yourself with all the publicly traded drawbacks and expense when you can get liquidity and financing needs without opening your kimono to the world? Plus, that’s an impressive name to hang alongside your own.
• Assuming Picis sticks with Goldman for its eventual IPO, Goldman can’t weave itself too deeply into the Picis operations. While I’m sure they’ll be involved in strategic decisions, they can’t load up the Picis board and management ranks with insiders and then float the IPO.
• While Goldman will reap management fees and a cut of the profits, that at least that aligns their interests with those of Picis, i.e. they make money together or not at all.
• Francisco Partners flips LYNX after holding it for just 18 months. They just bought Dairyland Healthcare Solutions a few weeks ago, you may recall. The trend of private equity investments in the HIT industry is full steam ahead. It won’t end here, but the real question is how long those companies will sit patiently while waiting for a big payday. Will they buy and hold or slash and burn? It would be fun to know how much they made on LYNX (and how much of Goldman’s interest in Picis ownership hinged on that piece of the puzzle).
• Todd Cozzens is among the best businessmen in the industry, especially given his role as co-founder of a relatively small, privately held company. He just got a $155 million vote of confidence from the Cadillac of investment bankers and hasn’t even IPO’ed yet. Who would have guessed he’d be that much of a star after starting up a fairly unexciting niche vendor in 1994 and sticking around all these years?
• It was cool of Todd to contact me personally in advance of the announcement. I bet his marketing people thought he’d lost his mind in trusting an anonymous blogger with an embargoed story (meaning I was on the honor system not to run it before 12:01 a.m. on July 24). He also offered a potential follow-up to our interview awhile back, which I think you’d enjoy.

Misys Sells Off Sunquest, CPR, Exiting the Hospital Systems Business

Lots of Misys news to report as announcements are made in London:

• The so-called Diagnostic Information Business, i.e. Sunquest, is being sold to Vista Equity Partners for $382 million. That includes pharmacy, lab, and radiology systems.
• The Misys CPR hospital clinical system is being sold to QuadraMed for $33 million.
• Rumors are that Misys will introduce an open source, EMR-related product (along with other open source products in its banking divisions).
• Vista will try to market Misys EMR as part of the deal.
• Both new owners have agreed to support the Misys Connect strategy.
• UK rules require Misys shareholders to approve the transaction.

Thoughts

• From QuadraMed’s announcement of the CPR purchase, it appears that Quadramed’s motivation was known weaknesses in its own Affinity clinical offferings, particularly for larger hospitals: integration and CPOE.
• Misys bought CPR from Per-Se (as Patient1) for $30 million in mid-2003 and spent a lot of money ($20 million?) tinkering with its technology underpinnings. So, QuadraMed gets an even better fire-sale price than Misys got originally, although with a few more layers of accumulated tarnish. It’s now nearly 20 years old with few installations.
• Misys CPR was once a great product, but it has languished for many years under two unfocused owners.
• Current KLAS rankings: CPR # 6, but notably one notch ahead of Cerner Millennium and two above GE Centricity Enterprise (Affinity had much higher numbers, but too few installs.) Lab: a strong #2 (good job, Sunquest.) Pharmacy: mid-pack, but too few customers to score officially. Radiology: #3 of a four-horse race, but once again the last-placer was Cerner. In other words, if you believe KLAS, QuadraMed gets an instantly competitive clinical product line for $33 million.
• QuadraMed CEO Keith Hagen is familiar with both products: before becoming CEO, he was with QuadraMed and left for Misys (although he was involved in their transaction services, not software).
• One rumor is that the old Sunquest name will be revived. I like that idea.
• Misys took on 200 Per-Se employees when it bought CPR. I can’t imagine very many are left. Ramping up staff isn’t something QuadraMed has done a lot of, so that will be a challenge (as will trying to move the office from Tucson if that’s part of the plan – QuadraMed struggled with that in moving everyone to Reston a few years back.)
• Vista is the same private equity company that bought Surgical Information Systems in February 2006.

Reader Comments

“Affinity was not designed for larger, multi-facility organizations and lacked technical infrastructure to support needed enhancements. Their interfaced, acquired pharmacy product was never going to work. CPR has an excellent integrated pharmacy system and an OK lab solution. Much deeper nursing and CPOE capability. However, CPR is hard to install and most of the knowledgable staff are long gone. It needs to be configured for out-of-the-box installation.”

“I need some help, as a business-ignorant techie. Misys just sold of PLX (Pharm, Lab, Xray) to an investment firm. CPR is probably going to QuadraMed based on another rumor. What I don’t get is this: Verne keeps telling us that Hospital Systems is making money and keeping areas like Physician Systems (that he said is bleeding) afloat. Why sell off the very unit that is keeping the other units afloat? I just don’t get it.” Misys Myopia is an interesting phenomenon caused by bringing over a bunch of Medic people who never bought into the inpatient thing and just assumed their gravy train had endless track in front of it. The old, unprofitable product line wasn’t Sunquest or CPR, it was the ambulatory business, but they couldn’t see that. The cash cow has been sold for a low price to try to plug a few of many lifeboat holes. While this strategy isn’t a bad idea, they need to show far more brilliance and vision in trying to save the only remaining business than they did deciding to sell this one off.

Mr. HIStalk’s Cheap Seat, Hastily Thought Out Conclusions

• CPR was always a better product than the market acknowledged. The problem was the incompetent vendors selling, installing, and supporting it (Health Data Sciences, then Medaphis/Per-Se, then Misys). Several years ago, when I last looked side by side (casually) at all the available products (except Epic), I ranked it #1. Very nice user interface, great for physicians and nurses.
• Affinity Clinicals are pretty good and, despite technology criticisms (MUMPS and Cache’, not much different than the original CPR technology). Epic is obviously a poster child to prove it’s sellable despite the nuts and bolts. Still, QuadraMed’s purchase of Australia’s Detente Systems never really worked out – nobody does real integration via that route and McKesson is much better at convincing a gullible market to the contrary than QuadraMed ever was.
• QuadraMed paid $4 million for Detente in 2004. It paid $14 million to get Tempus Software the same year, a much better investment.
• Affinity Clinicals are best suited for small- to mid-sized hospitals, while CPR’s few customers seemed to indicate a big-hospital preference. Keith Hagen’s video statement about the announcement clearly says they’ll offer both products. That’s been tough for those who’ve tried it before – trying to merge cultures, technology, and sales is a lot harder than just hanging a new name on it.
• I don’t know how many good clinical product people are left at QuadraMed since Affinity Clinicals were doing pretty much nothing. Ditto CPR. Who’ll be involved? It had better be folks with clinical backgrounds who can come up to speed quickly.
• Misys management seemed almost openly contemptuous of the Diagnostic Information Business, but the sales announcement painted a far rosier picture, with margins of nearly 30%. Need proof they didn’t get it? How about this from the press release: “The Diagnostic Systems business has been run largely as a stand-alone operation, and therefore will experience minimal impact in day-to-day operations.” In other words, Misys was adding no value whatsoever and, most probably, actually hampering that division from succeeding due to its own corporate- and division-level bungling. And even then, it was bringing home big profit margins.
• Misys is selling the former Sunquest for slightly less than it paid: $404 million in 2001. Not much value-added there.
• Misys Connect never amounted to much and will be irrelevantly straddled across three companies. The only remaining assets of Misys Healthcare, i.e. the physician systems, will have to make it on their own with fierce competition. Divesting the other businesses will let them focus on trying to salvage that struggling product line.
• Misys finally acknowledges that, grand proclamations about its vision aside, it lacked the execution and vision to play in the hospital market. It’s first and foremost a banking software company that happens to own a troubled physician practice software division hanging on for the ride. It has finally gotten ride of one of its two unaligned albatrosses.
• QuadraMed has had its share of rough rides, too: wildly faulty acquisitions, survival without vision under Larry English, the slow and painful demise of Affinity, and what looked like a wise retrenchment into the company’s only strength: the HIM product and service market. Will the market accept their re-emergence into acute care clinical systems?
• The industry needs another strong clinical systems player, with the odds going down by the minute that a GE-retooled Carecast will be it.
• Tucson employees of Misys, as Gerald Ford said, your long national nightmare is over. Your were already an abused step-child, so it can’t get much worse. The announcements proved what everyone suspected: Misys Healthcare didn’t respect its only successful product lines and the people producing them.

Post Your Thoughts on HIStalk Discussion

Since I have to work for a living on Monday, I won’t necessarily be able to post HIStalk updates as any news breaks and to get your comments online quickly. Post here! You can bet that Misys, QuadraMed, Vista, investment analysts, and everybody else in the industry wants to know what you think.

Monday Morning Update 7/23/07

From Hamrick: “Re: Misys. Misys will announce the sale of Misys CPR to QuadraMed on Monday, July 23.” QuadraMed already has a clinical product that nobody’s buying, so I’m not sure why they’d want another one. However, since Misys was making big changes Friday (supposedly), maybe the timing was intentional if this is true.

From Wompa1: “Re: CHI. Christopher MacManus, Sr. VP of IS at Catholic Health Initiatives, has moved on.”

From Duuude: “Re: Mayo and Cerner. I’m wondering if Mayo feels left out of with Intermountain being the development partner. They used to hold IDX by the gonads when they were truly a development partner. In my experience with Mayo, even though they can be a big pain in the derriere, they did know their stuff. Even with all of that holding and pain caused by Mayo, they are worth keeping, even just for the perks of having them as a named client. When will GE take notice and stop the bleeding? If I was GE, I would be trotting out Hogan, the executive GE Healthcare board, and whatever is left of Seattle management to keep Mayo.”

From The PACS Designer: “Re: iPhone clones. TPD wants HIStalk readers to know that the iPhone is not the only choice when it comes to ‘combo phones’. The iPhone is getting all the attention, but there are other all-in-one phones to consider. There’s the RIMM Curve, the Motorola Q9, and the Helio Queen. They aren’t truly clones, but they offer more traditional functionality. I’m sure we’ll be hearing about more companies jumping on the bandwagon.”

From TwoDogMom: “Re: Mediware. What does anyone out there know about the Mediware vs IHC lawsuit?” They’re suing each other, it appears. Intermountain bought Mediware’s blood blank system in 2004 with a three-year support agreement ending June 30, 2007, with rights reverting back to Mediware on expiration. Mediware told Intermountain it wouldn’t renew the agreement, so Intermountain is arguing it should be able to keep using the system. Intermountain had already sued Mediware in April for breach of contract. An unhappy, high-profile customer is just the icing Mediware’s cake needs.

Rumor: physician practice vendor AcerMED has abruptly ceased operations.

Jon Philips of Healthcare Growth Partners asked me to clarify that the number of deals I quoted the other day was of the principals, not the company itself. They’re doing great, of course, but he didn’t want anyone to think they were trying to mislead.

iSoft couldn’t even get a date a few weeks ago, now it has two marriage proposals: Germany’s CompuGroup trumps IBA’s bid with a $329 million cash offer of its own, a 19% premium to IBA’s offer that iSoft’s management is urging shareholders to accept. Part of their offer: CompuGroup will sell off the NPfIT business to CSC and both companies will own the Lorenzo product line.

Mediware shuts down its OR business line and fires 20 employees under the new COO. They announce their focus on so-called closed loop systems. Well, good luck with that. That’s bad news for GE: Mediware’s exit frees up the dead-last KLAS surgery spot for Centricity Perioperative. Doh!

I didn’t hear first-hand about the scheduled Misys bloodletting on Friday. Did it happen? Maybe you’ll be offered another position, like this one: Misys needs a PR specialist. Desperately, some might say. Guess the layoffs freed up some salary dollars.

CPSI announces Q2 results: revenue down 3.5%, EPS $0.31 vs. $0.38, falling short of expectations.

Emergin sent over their latest newsletter. It includes an Emory neuroscience CCU case study on alarm integration.

My editorial this week in Inside Healthcare Computing: “‘Best’, ‘Most Wired’, and Other Hospital Surveys: Good for Selling Stuff and Not Much Else.” I won’t spoil the suspense by revealing my opinion.

Speaking of the Most Wired BS, even H&HN had to punt when it came to the obvious: “The analysis shows an association between IT adoption and key quality measures, but association is not causality.” That wasn’t on the cover, of course. Those paying for the survey: the magazine, Accenture, AHA, CHIME, and McKesson. All but AHA have a vested interested in encouraging the “buy more stuff” bandwagon. Just another meaningless award given to customers by their vendors.

eScription announces the release of a new version of its speech recognition software, AutoScript. They casually mention in the second paragraph that it’s twice as fast at processing dictation as the prior version. I’m thinking there was little debate about whether that justified a new version number.

El Camino Hospital creates a CMIO position and recruites Eric Pifer from the University of Pennsylvania Health System.

Charles Wagner leaves IBM/Healthlink to become SVP of professional services for Eclipsys.

Discuss today’s news here. Lots of you have registered for HIStalk Discussion, so why not use it? I rented the hall and brought the band, but I can’t make you dance.

E-mail me. But only if you want to.

News 7/20/07

From Joey Cheesesteak: “Re: CHOP. Regarding your 7/13 item: their outage was due to loss of power in the Primary Data Center. Operations did not shift to the remote data center because the SAN was not configured to cooperate. This outage was not an Epic problem (not to say that the Epic implementation is going smoothly). Also, three of the four CIO direct reports have left recently. One moved to a different department within the hospital and the other two have found other employment. The CIO will hit a five-year anniversary in January 2008. What’s the average tenure of a CIO after an Epic implementation?”

From Dr. Mark Bellows: “Re: Cerner. Look for Cerner and Mayo to make a huge ‘Kaiser-like’ announcement soon. Also, Clarian is looking for an out in their Cerner contract (it’s not looking good AT ALL over there …) I have always enjoyed reading your blog and have laughed at times when rumors are stated about Cerner well before they have made them public. You and your readers have been on the nose 90% of the time with most things.” Unverified, but, from what seems to be a good source.

From Lance Le Gault: “Re: Cerner. The funny talk around here is that Cerner would take any temp, put ’em in a suit, and say, ‘We are sending you a VP.’ Cerner losing 20 of those VPs means very little.”

From Nancy Greenly: “Re: Cerner. It’s obvious that Neal is putting the company up for sale with all the cost-cutting and moving everything to centrally-based KC for an easier transition. Sales are slow, but the stock price keeps going up. The Indian outsourcing is in place and a European presence makes them a ‘global’ company. I’d bet a non-current player picks them up within three years.”

From Sean Murphy: “Re: non-competes. That was nice of Mike Etue to ride out his non-compete from the other folks in Malvern on someone else’s dime and then jump ship a few months after it expired. Wow, that Epic document is brutal. Too bad the federal government says that you can’t prevent someone from earning a living. It would never stand up a real court. Do we have any legal readers that could lend an opinion of the language?” I asked a non-compete attorney I ran across to chime in, but he hasn’t replied so far. The bottom line is that non-competes are almost always unenforceable, but unless you take the company to court to obtain a summary judgment (kind of like a class action suit), each employee has to spend their own money fighting retainer lawyers in court. That’s assuming you can even get a job offer, that is. You’d be proven right, but not before you went broke. The threat alone is enough to tilt the landscape to the company’s side.

If you’ve had problems accessing HIStalk recently, my apologies. It’s hard to believe, but even after my big upgrade in May, the site’s server red-lined on memory this week and killed the Apache service several times (that causes “Page Not Found” errors). Inga tells me some of the notification e-mails may not have gone out either, although they looked OK on the server. I thought the May upgrade was overkill that would guarantee enough horsepower for years. Well, two months later, a punishing number of HIStalk hits maxed it out again, so I’ve doubled the memory and had extra bandwidth allocated. I’m not complaining – it’s a great problem to have.

The LA Times writes up Prem Reddy MD, a cardiologist turned for-profit hospital entrepreneur who claims to be worth $300 million. He tools around in a $1.4 million helicopter and has a 15,000 square foot mansion with gold-plated toilets formerly owned by Roy Rogers. How he does it: he buys struggling community hospitals, cancels their insurance contracts, dumps services that don’t have a big profit, (allegedly) turns away patients without insurance, and (allegedly) lets quality slip. He does that Bob Dole thing in referring to himself in the worshipful third person: “There isn’t anybody like Prem Reddy that can face so many challenges in the medical field.” I mentioned him two years ago, when his brother, a CEO of one of his hospitals, fired the CNO and HR director after they claimed he (Prem) was drinking while working in the ED and using a triage system based on insurance coverage.

Reminder: use the sign-up to your right to get e-mail updates when I write something new. I notice that list is up to 527 subscribers in a very short time, plus the 1,843 on the “old” e-mail list.

Jason Baker has joined Healthcare Growth Partners as Managing Director. He comes from Cerner, where he was head of corporate development (high-level strategic stuff like investments and acquisitions, not programming-type development.) I didn’t realize that Healthcare Growth Partners has been involved with over 100 deals worth over $1.5 billion in just two years. Nice.

Some Misys folks have been asking about severance (wonder why?) Typical for the company is supposedly one week per year of service. They also don’t go after non-competes too hard, rumor has it, which is to their credit when folks leave under something other than their own volition.

Off-hours teleradiology provider NightHawk Radiology buys Midwest Physician Services, a radiology business process company, and another off-hours teleradiology company. Total price: $62.5 million cash. They’re creating NightHawk Business Services, which will offer services for revenue cycle, HR, transcription, and other back-office stuff for radiology practices.

Someone who should know tells me that Cerner is indeed slimming down implementation teams as Bedrock gets built out, running implementations from the KC Accelerated Solutions Center. Apparently it really does work and they won’t need virtual implementation staff any more. Another tidbit: supposedly Paul Black left because he didn’t like how the customer-facing employees are being treated (accessibility to client, work-life balance, etc.). Unverified, of course.

Comanche County Memorial Hospital (OK) signs a $13 million deal with McKesson for Horizon Clinicals.

The Most Wired list is out. I don’t care, so I won’t mention it or the winners. It’s meaningless, was created by vendors solely to encourage the “buy more IT” bandwagon effect, and keeps going only because the “winners” pretend it shows how excellent they are. I’ve worked for winners and all those I spoke to laughed about it behind closed doors, but it’s better to win than not, they always figured (harmless CIO resume expansion and hospital chest-puffing).

Bizarre lawsuit: a nurse changing clothes in a Kentucky hospital’s anesthesia office finds a hidden camera in the ceiling tiles. She says the hospital then tried to throw her and her surgeon husband off the property for trashing the camera, also threatening to revoke their privileges. Another nurse was fired. The hospital says the camera was there to monitor controlled substances that are kept in the office and that the women should have used unmonitored areas set aside for changing. The nurses are suing for voyeurism.

News, rumors, changing room video: e-mail me.

News 7/18/07

From Inside Outsider: “Re: heart images on iPhone. TPD will be happy to see this.” Web-based image management company Heart Imaging Technologies is offering iPhone access to their browser-based imaging application. Sample images here. Looks cool.

From Malvern: “Re: Misys. Mike Etue is the new Senior VP of Sales for Misys. Mike Etue resigned five days before the Eclipsys ‘announcement'”. Deady convinced Mike to hold off for a week, then claimed he fired Mike.”

From Hatchet Guy: “Re: Cerner and Paul Black. Now Mike Valentine has nobody to blame. Pay close to the number of employees in KC. Compare the number they announce on the earnings call to the annual report. It is shrinking fast. Instead of severance, negative press, and stock reaction, they told a large group of implementation folks they have to move to or stay in KC, knowing that will cause turnover. That’s the plan – that Bedrock will install Cerner’s app without implementation resources needed. In the last 45 days, more than 20 VPs have left the company. One more thing to watch in the coming days in KC: the FDA.” Unverified, as I always add, so if you can verify or contradict, e-mail me.

From Wayne Frake: “Re: Lawson. Is Lawson looking for something new to buy and/or merge with? I saw an email from Debes to Messing. Messing’s response was no interest.”

Epic Escapee sent me a copy of the non-compete agreement he or she signed a few years back. It is quite broad, probably not enforcable legally. Some terms: (a) you will “neither accept nor conduct any other business or professional activities while employed by Epic”; (b) for two years after leaving, you can’t contact any Epic customer in a sales capacity; (c) you can’t have anything to do with companies it has defined as competitors: Allscripts, Cerner, Eclipsys, GE Medical, Healthvision, IDX, McKesson, Misys, NextGen, Per Se, SMS, or WebMD for two years after you leave; (d) you can’t join a business or start your own during that two years if it competes with Epic; (e) for two years, you won’t try to convince any Epic employee to quit; (e) for three years after employment or six months after leaving, whichever comes first, you won’t work for any Epic customer or prospect, except in a role not involving software. It’s pretty smothering, but on the other hand, you don’t have to sign it. You won’t get the job, but maybe that’s best if you’re thinking about your post-Epic career.

From Roscoe Dexter: “Re: Epic. I’m waiting out my non-compete. I’ve heard a rumor that Epic once called customers who were courting a recently fired implementer to tell them not to hire them. I’ve studied non-competes and I know they’re essentially unenforceable, but I’ve heard of Epic blacklisting people from Epic certification who circumvented the clauses. I’ll call these rumors since I didn’t hear them directly from the people involved.”

By the way, if you’ve ever wanted to send me something anonymously like Epic Escapee did, remember that the new Rumor Report form (link to your right) allows attachments. I keep forgetting to mention that.

For you Misys folks, especially those in sales, reliable sources tell me that major changes will happen late this week. The new guard is taking over and much of the old one will be dismissed, including many dozen who will be offered severance to leave quietly. Nearly that many will be marched out, I’m told. I have names of a few high-ranking employees who will be affected (good and bad), but I don’t see any point in plastering them here since it’s unavoidable at this point. Condolences to those about to be negatively affected and tepid congratulations to those who’ll be sliding into the still-warm chairs, at least temporarily.

McKesson will buy Birmingham-based patient throughput software vendor Awarix Inc. St. Vincent’s of Birmingham was their development partner, as I recall, and much of the management team came from Emageon.

Speaking of McKesson, they’ve got offices in good places, according to Money‘s new Best Places to Live list. #2: Louisville, CO. #3: Lake Mary, FL.

Since this isn’t an ad-packed magazine, I don’t have to waste your time writing unimportant stuff just to separate those ads. You are now current on the industry. Congratulations and see you next time. If you are so moved, e-mail me. How’s your summer going?

Monday Morning Update 7/16/07

From Tommy Pischedda: “Re: Epic’s non-compete. Didn’t Carl Dvorak give an interview awhile back in Inside Healthcare Computing saying that those didn’t exist? They’re actually pretty nasty about it. Even if an employee is moving because of a spousal employment change, the clause is still enforced. There are some customers who don’t have that in their contracts. Epic has still gone after ex-employees trying to get jobs there.” He told the newsletter the agreement is basic, of limited timeframe, and involves only a few direct competitors (more specifics are in their October 16, 2006 issue).

From Mick Shrimpton: “Re: Epic. I heard that there is a lawyer in Madison that specifically works with ex-Epic employees and HR issues.” I’d enjoy speaking to that person if anyone has contact info. I also heard from a former Epic employee who broke the chains in going to work for a customer and offers help to those who need it, so I’ll forward your contact info to him if you like.

From John “Stumpy” Pepys: “Re: Illinois nurse staffing bill. I haven’t heard any word about Illinois Senate Bill 0867, Nurse Staffing by Patient Acuity. Any thoughts in the industry about this?” I’m not a fan of the article itself since it clearly favors the nurse’s union that supported the bill and refers to nurses as “her” (like male nurses don’t already have enough ‘splainin to do). Its sponsors were Democrats, of course. It requires hospitals to use a patient acuity tool, an idea that’s come and gone at least ten times since the early 1980s. I’m not a fan of prescriptive lawmaking where the government gets involved with how businesses operate, but the sad thing is that hospitals were so lax on staffing that it came to this.

From Grapevine: “Re: Initiate Systems. Mark Battaglia, SVP of worldwide business development, is no longer with the company. Initiate is pursuing IPO and one has to wonder why a top executive would exit the company at this time.” Looks like he was nuked off their Web page sometime after May 14.

From The PACS Designer: “Re: best hospitals. TPD closely follows the annual release of America’s Best Hospitals by US News and World Report, which happened today.” The honor roll: Hopkins, Mayo, UCLA, Cleveland Clinic, MGH, NY Presbyterian, Duke, UCSF, Barnes-Jewish, and Brigham and Women’s, University of Washington, HUP, UPMC, University of Michigan, Stanford, Yale-New Havel, Cedars-Sinai, and University of Chicago. Hey, how come the Vandy informatics rock stars didn’t propel VUMC onto the A-list? Kidding. Just popped into my head because we were talking about it earlier.

From Ronnie Pudding: “Re: Andy Corbin. My theory as to why he left Sage was that he’s being indicted. After all, the Forbes article was an embarrassment to the Justice Department. Anyway, he wasn’t much of a leader and surrounded himself with people who don’t know the industry and who don’t listen to their subordinates who do. He also pushed the selling of Emdeon to Sage, so maybe Sage is feeling ripped off at this point.”

From Angela: “Re: Verisign. I read yesterday where the CFO of Verisign resigned. This and the recent departure of their CEO and the failed investment in Healthvision would lead one to believe that they have changed their minds regarding the health care space.” The CFO bailed after yet another options-dating scandal that will cost the company $160 million and force it to re-state earnings. The CEO high-tailed it in May. You have to expect them to retrench back to core business, which healthcare isn’t. How that will affect Healthvision is anyone’s guess.

From Viv Savage: “Re: Misys. Mike Etue is the new Senior VP of Sales for Misys.” Well, if so, then I’ll pat myself on the back for near-psychic ability for taking that wild guess strictly on the basis of timing. If it’s true, that would pretty much dismiss the implied claim by Eclipsys that they fired him, unless he was darned fast at lining up a new gig.

I’d like to introduce you to The White Stone Group, Inc. of Knoxville, TN, an HIStalk Platinum Sponsor. They’ve been around since 1991, with over 400 hospital customers and three major products: TRACE (revenue cycle communication tracking, like precertification, to improve denials management); OptiVox (handoff reporting for shift changes and transfers, of obvious Joint Commission importance); and VoiCentral (automation of incoming telephone calls with information templates for pre-registration, scheduling, etc.) They offer lots of case studies and articles on their site. It’s pretty cool that they’ve found some unusual yet much-needed healthcare IT areas of focus. I always Google companies before I take them on as sponsors and I ran across this interesting article about White Stone’s struggle with providing employee health insurance. Back in 2004, the wife of one of the company’s 70 employees gave birth to quintuplets, racking up a $2 million hospital bill that increased the company’s premiums by $90,000 per year. “For a company with $8 million in revenue, that extra $90,000 was going to hurt. ‘Willem said he was sorry,’ says [CEO Guille] Cruze, who tried to reassure his employee. ‘I told him that it was okay, that we would live and die as a team.'” Welcome and thanks to The White Stone Group for supporting HIStalk.

A regular reader chimes in with some Mac comments that make me want to give it a run. “As a non-zealot who’s used both a Mac and a PC since 1992 (as well as a UNIX machine), I recommend an iMac. OS X is elegant, works very well, learning curve not high if you do Windows, and an iMac is an elegant piece of hardware, besides, that is quite a change from the usual ugly metal box. Kind of like a Camaro Z28/SS being the opposite of your neighbor’s minivan. And now that Macs use Intel inside, you can have your cake and eat it too.” They look cool, but I was most intrigued by the Mac mini. I don’t know anything at all about Apple (I lost interest 100 or so years ago with the Lisa flop) and their commercials seem to aim to a different demographic than mine, but maybe I’m missing out.

Cerner COO Paul Black will retire on August 31, the company announced Friday. Sorry for the redundancy for you regular readers: I said this would happen on February 28 (courtesy of Private Ryan), May 7 (PezMan), and again on June 27 (Hatchet Guy). Given their production cycles, the trade journals will have this scoop by Labor Day or so (if they run it at all, since it isn’t advertiser-friendly), so that means you read it here six months early. The COO position, which Paul assumed in February 2005, won’t be filled. Isn’t 48 a bit young for retirement?

Eclipsys announces KLAS results indicating that it has the highest nurse satisfaction rating of fully rated vendors and the highest positive commentary percentage. That last stat is beginning to annoy me: how valid is a comparison of percentages of positive commentary when all comments are voluntary, unattributed, and of wildly dissimilar relevance and importance? And, in the interest of fairness, I note that the “fully rated vendors” part was tacked on by Eclipsys because Epic annihilated them in the nurse satisfaction score, but with too few respondents to meet KLAS’s validity standard. They were also fifth in the eight-horse race for adoption scores. Still, I’d place it above most of what’s out there, with the very bright spot being Knowledge-Based Charting. Had they rolled out a pharmacy package earlier to gear up for medication dispensing and bedside barcoding, they’d be sitting pretty right now.

Sentillion announces nine new Q2 customers. I like their tagline (assuming it’s true): “The company that created healthcare single sign-on.”

The president of a corporation that ran nine San Francisco-area nursing homes gets 30 months in jail for failing to pay $10 million in payroll taxes. He also owned Skilled Logic Systems, a software company (without a web site, so I’m guessing tax dodge.) His genius attorney tried to keep him out of jail by citing Scooter Libby’s get out of jail free card. It didn’t work. “Easterday ran his business on the government’s tax dollars, buying a six-bedroom home now valued at $2 million, sending his children to private colleges, funding his mother’s monthly pension and buying a sailboat and jet skis, Assistant U.S Attorney Jay Weill wrote in a sentencing memorandum. ‘He used the withheld payroll taxes like an ATM machine for working capital for his business activities,’ Weill wrote.” I made up some amusing lyrics, sung to the tune of Yesterday, but that kind of humor is beneath me.

Modern Healthcare had a pretty good editorial going called Scrap the National IT Plan, at least until toward the end when it advocated smart cards for data sharing. Other than that one ill-conceived paragraph, I liked it.

University of Rochester claims that labor savings from reduced chart pulls gave them a 16-month payback on TouchWorks.

Bye. E-mail me.

Sage Software Healthcare CEO Andrew Corbin Resigns

Andrew Corbin, president and CEO of Sage Software Healthcare, has resigned, the company announced this morning. Sage North America CEO Ron Verni will assume his responsibilities until a successor is hired.

News 7/13/07

From TalkOfTheTown: “Re: Allscripts. Executive changes in the small business unit of Allscripts (A4). VP of sales is leaving there is some indication that the president of the business unit is leaving as well.” Unconfirmed.

From Bill Blazejowski: “Re: Eclipsys. Much as Eclipsys would like you to believe they let Mike Etue go, he in fact resigned and will be joining another vendor next week. After all, Jay Deady has to pretend to do something to justify his $2.3M 2006 paycheck (see proxy). Demonstrate action by reorganizing over and over again, which Andy seems to like – progress through attrition and bringing in sycophants to make you feel good.” I wondered if Etue might end up at Misys, since the rumored source of their new sales VP was either Kodak or Eclipsys. Coincidental timing, maybe, but jobs don’t open up every day at his level. I hear from reliable sources that Misys named the new VP Tuesday, but I don’t have a name yet.

From Scot Silverstein: “Re: ‘I only wish those similar types might go back to being physicians full time and stay out of informatics, where they DON’T belong.’ I agree with that. Informaticists need to be intermediaries between different healthcare factions, not primadonnas. Your audience might like a presentation I gave to ARMA last year on this issue.” Most of the informatics people I know, docs included, are pretty down to earth. From reader comments, Vandy’s aren’t, apparently, despite the tiny domain they’re lording over. I guess it’s like Star Trek conventioneers feeling smug when one of their ilk doesn’t know which actor was missing a middle finger.

From Edward Koogle: “Re: Epic employees. What do you know about ways around hiring Epic employees? Does the whole industry really pander to Judy so much that they let her get away with harboring and controlling all the Epic talent in the marketplace? We aren’t an Epic partner and we want to hire a current Epic employee, but is there any hope of getting a client to contract them from us? All the clients seem to be willing to stay in the corner that Judy puts them in without a word of dissent. It’s un-American to stand by passively while the spirit of free competition is quashed!” I’ll allow those who are more knowledgable of that particular situation to respond.

From In the Know: “Re: Bronx Lebanon. Eclipsys and Medsphere are being dragged along to keep Cerner honest on price. The CIO drank the Kansas City Koolaid. It’s Cerner’s deal to lose … and GE’s, too.”

From Dewey Oxberger: “Re: sponsors. You’re getting a lot of sponsors. Are you and Inga doing some kind of marketing blitz?” No. All we do is reply to e-mails when someone asks for information about sponsoring. Nothing’s changed since I started HIStalk in 2003, other than I’ve got a ton of readers and that gets the attention of sponsors (as does the presence of the lovely Inga as my Queen). I’m still the same irascible, annoying, cynical blowhard that I’ve always been, although I’m hoping to mellow into a lovable curmudgeon at some point. I sure do appreciate the support, however. I’ve worked harder on HIStalk than anything else in my undistinguished career, so it’s nice to get some recognition (which is hard to come by when you’re sitting alone in a room writing anonymously).

From Francis Soyer: “Re: Sentillion. Someone told me that Sentillion laid off 30% of the company a few weeks ago, although they tried to take care of those affected. The person said that competition from Carefx, Improvada, and the big vendors is cutting into sales.” Unconfirmed, but I’m sure someone will update me.

From Bob Saccamano: “Re: CHOP. I just heard from a frustrated physician at Children’s Hospital of Philadelphia that Epic has been down in the clinics for two and a half days (since Monday) and they’re back to paper. No idea if it’s Epic or IT issues, would love to know if any HISTalk readers have more info. Keep up the great work, it’s much appreciated. Also, love HISTalk2 and the weekly email summary concept and can’t wait to sign-up.” Thanks, Bob, Anyone got the scoop on CHOP? I heard the same thing from another source. And thanks for the HIStalk2 kudos – having a new design and platform is like wearing a shiny new pair of tennis shoes. The weekly e-mail update is imminent – my graphics guy is working on a logo and fine-tuning my crude HTML e-mail format as we speak. HIStalk is great for those of us knee-deep in the industry every day who know all the companies and people. The weekly update will be more accessible to executives, non-IT provider-siders, and those who just want a no-nonsense quick read with background information and opinion (printing it off will be a one-click option – I know you travelers love that).

Some thoughts on Allscripts stock, which Forbes called one of the most dangerous. Price-to-book ratio and return on invested capital were mentioned, which aren’t that meaningful for acquisition-minded tech companies. Old news, in other words, and presumably built into the stock price. Software companies don’t have many assets on the balance sheet (or so you hope, since they probably wouldn’t really drive revenue all that much anyway). Cash flow is more important than paper writeoffs, although Allscripts needs to improve cash flow since the share price is pretty much NPV – a price reflecting future cash flows. The bottom line: these measures don’t move share prices up or down. For growing companies, it’s all about shareholder expectations and growth. Supply and demand of shares, in other words, to use my favorite economic principle. Pull the back issues of Forbes and see how often they’ve hit the nail on the head before following their advice mindlessly.

A reader tried to explain the Apple thing to me. Summary: (a) Windows is a cheap imitation of Apple’s good ideas; (b) OS X is far more secure than Windows; (c) reboots and OS reinstalls are nearly unheard of on Macs and reboots are nearly instantaneous compared to Windows; and (d) DLL Hell is a Windows-only disaster. He mentioned that journalists given Apples to try rarely went back to Windows afterward. Since I’m not a Windows slave anyway, I’d try a Mac if Apple gave me a freebie (especially since the reader mentioned that Macs now run Windows apps at full speed and can also dual-boot). My bias against Apple is because of whiners form my previous IDN: the half-dozen or so marketing hippies and pain-in-the-ass docs who hit you over the head with their Apple evangelizing every time their stuff didn’t work on our network. Those self-proclaimed rebels mindlessly followed every oppressive hospital rule except the “PCs only” one, using that pitifully insignificant rebellion as a proclamation of their individual freedom over corporate control. Sounds good until you can’t get on the network and no one in IT knows squat about Apple.

Please welcome to our happy little band MedMatica Consulting Associates, of Chester Springs, PA. They just signed on as a Platinum Sponsor of HIStalk and offer IT strategic planning, application evaluation and selection, operational improvement assistance, HIPAA, contract negotiation, implementation of most major systems (Siemens, Epic, Cerner, Eclipsys, Lawson, etc.), and technology consulting (database, e-commerce, COBOL, and SAS). Pay attention to their value proposition – highly skilled consultants deployed regionally with a very competitive fee structure and flexibility for the client to structure whatever services meet their needs. Check out their client testimonials, with real names of hospitals and people, several of whom I know. MedMatica has been named as the 12th fastest growing company in the Philly area, so they must be doing something right. Click over, take a look, and tell Bruce Generotti or the folks there that you appreciate their support of HIStalk and its readers. They could have thrown away ad dollars running glossy pages in free magazines that no one reads, but instead they chose to support an independent blog and its “think for yourself” readers, which Inga and I truly appreciate.

I didn’t hear anything further on the rumor that Meditech is buying the rest of LSS. A couple of readers asked. Sorry, I don’t know (yet).

The former Surgeon General says that the Bush administration compromised public health by stifling him on politically charged issues like contraception, global health, and secondhand smoke. He was also told to mention President Bush three times per page of his speeches, ignore Special Olympics because the Kennedys are involved in it, and make partisan fundraising appearances.

A House bill would create independent health record trusts, giving patients ownership of their electronic records and allowing them to assign trusted parties to manage them.

Billie Waldo is named chief nursing officer of McKesson.

A little problem in HMS’s billing system: each patient’s bill was the cumulative total of all bills that printed before it. The highest for a Northern Cochise Community Hospital (AZ) patient: $49 million. The hospital said HMS told them they were busy that day and didn’t notice. Funny quotes from hospital staff, among them, “If enough people pay them, we’ll keep the nursing home open longer!” Hey, it happens, might as well laugh and move on.

Sanford Health (SD) chooses EnovateIT for mobile and arm-mounted devices for their EMR rollout.

MedAssets keeps buying: they acquire revenue cycle software vendor MD-X Solutions.

Blue Shield of California announces $11.3 million in nonprofit grants, including rural IT and telemedicine.

Two Sioux Falls (SD) health systems will use Meditech.

Big news: the Dossia PHR project, whose corporate members include Wal-Mart and Intel, is falling apart. Dossia has filed a restraining order against Omnimedix Institute, a 13-employee nonprofit headed up by J.D. Kleinke. He says Dossia did it to prevent an Omnimedix suit of its own. Omnimedix wanted paid, but Dossia says it hadn’t met deliverables. Omnimedix was supposedly getting $15 million to build the PHR system, which is behind schedule. Dossia is considering other vendors. Fine reporting by InformationWeek. I’m sure our intrepid HIT rags will catch up eventually.

Memorial Hospital of Rhode Island will partner with ICW America to create a PHR based on that company’s existing LifeSensor PHR.

GE won’t buy Abbott’s diagnostic testing business for $8 billion after all.

Baylor complains that one of its hospitals was declared worse than average in heart attack deaths, saying they missed the cut by just one patient. CMS said it was one of the worst in the country. As usual, the hospital howls that its widely recognized excellence drives dying patients to seek them out, skewing their numbers. CMS wasn’t impressed: “There are other hospitals who said the same thing.” Among them: fellow cross-town bottom feeder Huguley Health System. Baylor trotted out a list of its own wonderfulness, including the fact that its $240 million EMR system will reduce post-surgical deaths, ignoring the fact that hospitals that beat the pants off it have no such system.

According to this newspaper, HIPAA stands for “Health Insurance Probability and Accounting Act”. That’s 60% right for you “glass half full” types.

If you have anything important or scandalous to say, e-mail me. I’d do it for you.

News 7/11/07

From Cernerguy: “Re: RemedyMD. RemedyMD acquires EZHealthcare Inc.” Good catch. I interviewed RemedyMD CEO Gary Kennedy just a few weeks ago and he didn’t drop any acquisition hints, although as I re-read what he had to say, I really like his “make some bets” philosophy on building a company. Back to our regularly scheduled programming: EZHealthcare Inc., a Salt Lake neighbor of RemedyMD, does revenue cycle and practice management automation for over 1900 medical practices.

Art Vandelay left a question for Cindy Dullea about her interview: “Are you saying AHLTA (CHCS II) is behind the commercial products? If so, why?” Cindy was gracious enough to volunteer an answer when she noticed the question: “ALTA is a good core HIS product and works well in the military health system. There are many commercial clinical products that I have personally worked with that have a high degree of sophistication. The most important element is how well a product feeds the EMR so we can track care across the continuum. This will be key to case managing our service men and women.”

From TheRunner: “Re: GE. GE will lose yet another Lastword client to Cerner or Eclipsys. Bronx Lebanon (Bronx, NY) will make a decision shortly.”

From Anon: “Re: Vandy. Interesting someone comments about Vandy. I’ve never  had much love for their arrogant ways from the informatic blokes. I think he just moved on, or retired from Vandy, but that [name expunged by Mr. HIStalk, fearing litigation] was a masterful SOB, with his nose so damn high I about involuntary puked every time I had to talk with him. I only wish those similar types might go back to being physicians full time and stay out of informatics, where they DON’T belong. On a non-pandering note, when will we realized healthcare has pandered to the physician, when it should have been to the patient? Now we’ll spend a lifetime fixing that.” Now this is my kind of e-mail: leading off with a scathing personal attack, then jumping right in with a profound comment on the physician-centric healthcare model. (Obviously, someone sees how we work here.) If the model is physician-centric in a negative way, some would say we’re undoing it gradually. It sure seems that way to me, given that I started in a day where you just about had to kiss the ring of every quack doctor in the house, many of them with absolutely horrid medical training obtained from a handful of specific countries that treated them as an exportable fungible good. I tangled with quite a few of them, trying to at least slow down their rate of incompetence. I lost every time (I worked for a for-profit hospital, so even bad medicine paid well as long as you practiced a lot of it.) I sat on the hospital’s Death Committee for awhile and that was quite a whitewash.

From Ex-Sunquester: “Re: Misys landlord lawsuit. Did you know that the owner of Any Travel Inc. is Sid Golblatt’s daughter? BTW, the buildings were in pretty bad shape when we moved in in 1994.” Several readers tipped me off. Any Travel is the company that owns the old Sunquest buildings in Tucson and is now suing Misys for $1 million for leaving them in bad shape. According to Arizona public records, Any Travel Inc.’s president is Jodi B. Gottlieb, one of Sunquest founder Sidney Goldblatt’s three children. Other corporate officers are the usual interlocking directors from Pittsburgh that Sid used for all his companies (he sold Sunquest to Misys in 2001 for $400 million in cash, a 63% premium to the share price.) So, in essence, she’s suing her father’s former company since they were the tenant for much of the time, although claiming the damage was done when Misys moved out.

From I Heart Misys: “Re: Misys landlord suit. First, it is likely no coindence that the suit is filed two days before MHSUG. Nothing like giving the Misys clients one more thing to worry about! Second, when Misys was Sunquest, they used Any Travel as its travel agency and landlord. Any Travel was of course owned by Jodi Goldblatt, Dr. Godlblatt’s daughter. In essence, it was a shell company. The buildings were leased to Sunquest by a Goldblatt. When Misys came along, they took over the lease. Who in their right minds signs a lease that really gives the landlord (Any Travel) no obligations whatsoever? Cracks me up for sure!”

From Rumour: “Re: Misys. It is true that Misys is getting reorganized. They are getting lean and more efficient. Payerpath is getting functionally realigned with the Physician Systems. The hospital division will be getting realigned in the second phase.”

From Maggie DuBois: “Re: Misys. We signed up for Payerpath and were surprised to find the training being outsourced. But, to be frank, the experience with the trainer was just great. She was from India. She was extremely polite, very Knowledgeable and highly professional.”

From The Great Leslie Gallant III: “Re: Eclipsys sales re-org. Here’s the e-mail from Jay Deady.” I won’t run it all, but here are a few high points (no guarantee that it’s authentic, but it appears so, and thanks for sending it over): Steve Schroeder and John Sage are promoted to Senior Regional VP with expanded Mid-America new business and New England client business. SVP Kristin Lenahan gets South existing business, Dustin Whisenhunt goes back to new business in the South, Bill Shuman adds midwest sales. Jay Colfer and Mike Smeraski split the country as sales SVPs. Mike Etue and Tom Dunn get the axe. Steve Carper goes full-time to international business and Greg Lusch gets Canada. And speaking of Eclipsys, they’re on World Business Review, some kind of infomercial hosted by 15-minutes-over Norman Schwarzkopf.

From The PACS Designer: “Re: convergence. With the release of the iPhone, the trend toward convergence only gets more news stories about improved connectivity. One thing healthcare can use is more connectivity options to enhance the chances for improved patient care. With many new software platforms being debuted, you would think that healthcare applications would also benefit from the increase in convergence solutions. Only time will tell if the increased convergence will benefit healthcare institutions.” Is anyone really following the iPhone as anything other than a wildly overhyped and overpriced consumer toy fad? I admit that I don’t get the whole Apple thing, so I need someone who does to explain it, especially when it comes to business computing. I’m a beige box kind of guy.

From Hezekia Sturdy: “Re: Sage. Interesting article about Andy Corbin, CEO of Sage Health.” The article rips the former executives of BISYS, which paid $25 million to make SEC charges of a $179 million income overstatement go away (plus another $66.5 million to settle a shareholder class action suit.) The CFO running the books at the time the financial fiction was being written: Sage Health’s Corbin. What the article finds amusing is that the former CEO of BISYS is now a part-time accounting professor and an anti-fraud consultant. Both men got to keep the money and neither were charged criminally, although SEC says it may not be finished with them yet.

From Henry Goodbody: “Re: HIMSS junket. According to this letter, a bunch of specially selected HIMSS members should take their spouses on a trip to India since HIMSS is an international organization. I can’t imagine who has time for this, let alone the $6,500 per person to travel. I shudder to think someone might try to get their employer to pay for it (or their time off).” According to the invitation letter’s co-signers Victoria Bradley and John Wade, HIMSS is inviting “only select members” and a spouse or guest, leaving March 30, 2008. I can’t get too worked up about it since everybody’s paying their own way. If I had the money and time off, I’m not sure I’d pick a trip to India with a bunch of HIMSS people. Do you really need to see the outsourcers eye to eye to understand them? How about we have a Webinar, with each attendee sitting in from his or her local Indian buffet restaurant? Since I like Indian food very much and $7.95 is more in my price range, I’d be up for it.

Discuss today’s news here.

Speaking of those go-go, pre-dot-bomb days: how about this quote from then-Misys chairman Kevin Lomax on the Sunquest acquisition in 2001: “The acquisition of Sunquest consolidates Misys’ position as a leading provider of healthcare information systems, extending Misys’ presence into the acute-care market making it well placed to exploit the expected growth in clinical systems.” Well, one part was right: there was growth in clinical systems. The rest wasn’t: Misys watched the action from the cheap seats. The Sunquest acquisition was announced the same day that Misys PLC shut down two dot-bomb businesses of its own: theformula.com and Screentrade. Hmm: suppose they knew they were losing their dot-com shirts and figured healthcare was the safer way to grow? The timing makes me wonder.

Sorry if you got double e-mail updates this morning. The hosting company had a little problem (with Exim, for you server software geeks). That reminds me: if you’re getting one update from Blog City and another from Mr. HIStalk, you can click the unsubscribe link to that first one (the Blog City one.) The one from Mr. HIStalk is the one I’m considering to be primary, so I wouldn’t un-sub that one. On the other hand, feel free to click both and read everything twice if you’re so inclined. And if that didn’t scare you off, sign up to your right to get an alert when I write something new. I might say something about you, after all, so you’d want to know first.

I’m very pleased to introduce to you HIStalk’s newest Platinum Sponsor, Pring|Pierce Executive Search of Hampstead, NH. Managing Partners Troy Frank and Mike Delisle wanted to support HIStalk and reach out to its readership, for which I greatly appreciate. These guys have over 300 successful HIT executive searches under their belts. They place sales and marketing VPs, product management executives, national sales team development, and other executive positions for early-stage, high-growth, and mature companies in our industry. They’ve developed a very cool ad over to your left. I’ve sat here and watched it run through several times just because it’s dramatic. I like to think of Troy and Mike up there in that lighthouse turned recruiting office, working tirelessly to reach out nationally to the industry’s best and brightest talent like a shining beacon … well, clearly the dramatic ad got me carried away. Anyway, thanks, guys, glad to have you on board.

It’s really hard to figure out what Forbes thinks of the stock of Allscripts in their July’s Most Dangerous Small-Caps story. Help me read between the lines: “A complete mess, in our opinion. MDRX holds the distinction of the stock on our most dangerous stocks list with the most negative price-to-economic-book value ratio at a mind boggling -151.6%. This bottom-quartile ranking in ROIC and negative free cash flow yield only make this stock more of a dog.” Well, if they were all that smart, they wouldn’t be giving away swell stock tips in magazines. Do your own homework.

Inga was tittering at this story: President Bush performs an aortic aneurysm repair (simulated) at Cleveland Clinic. Since all the witty comments I thought of were sure to offend one group or another, I’ll let you fill in the blanks: “The best thing about having President Bush perform your brain surgery is …” Feel free to e-mail me your best line and I’ll run a few of them here (but keep it respectful, please: politics aside, he is the President).

Guess outgoing NPfIT head Richard Granger won’t be asked to join the happy customers manning Cerner’s HIMSS booth: “Sometimes we put stuff in that I’m just ashamed of. Some of the stuff that Cerner has put in recently is appalling.” Maybe he needs a reprogramming trip to the Vision Center. Like him or not, he sticks up for the taxpayers when it comes to vendors, which to me offsets any perceived negatives. Good article in CIO. I bet he’d be a fun HIStalk interview, at least before he puts on some new employer’s muzzle.

Congrats to long-time HIStalk sponsor eScription, whose software earned the highest ratings in the back-end speech recognition category of KLAS’s 2007 Speech Recognition Report, winning in 39 of 40 categories, a 97% “would buy again” score, and 85% positive commentary (29 percentage points higher than its closest competitor.) And this, in KLAS’s comments about eScription’s win-loss record: “There was insufficient loss data to report percentages for eScription because most of the respondents who considered eScription selected them.”

You have to hand it to those no-nonsense Chinese: when their equivalent to the head of FDA was caught taking drug company bribes, he got slightly more than a few months in a miminum security golf resort. He was executed.

Eyes right: see the text ad? Yours can join it quite cost-effectively. I’m just mentioning that because it looked cooler with more ads running.

The VA buys Picis CareSuite for anesthesia for five big-name West Coast hospitals, where it will pair up with Picis’s ICU software already installed.

AHIP (America’s Health Insurance Plans) launches a professional certification program, apparently aiming it at employees of offshore business process outsourcing firms. Maybe the HIMSS cadre can drop by. In fact, maybe AHIP should send some of its own people: its former IT manager (an Indian national) pleads guilty to stealing $1 million from the organization by ordering computer products from a sham company he set up. Say, if it’s the BISYS model, he could teach an accounting class in their certification program.

Milton Hospital (MA) goes live on Meditech’s bedside barcoding verification.

Connie D’Argenio, formerly with Siemens, joins Visicu as sales VP.

iSoft’s shareholders vote nearly unanimously to have IBA Healthcare take the company over. All that remains is regulatory approval later this month.

SureScripts is fully supportive of Medicare’s decision to disallow computer-generated faxing as an e-prescribing substitute. The company, as you might surmise, sells e-prescribing stuff.

News, rumors, amusing anecdotes: e-mail me or use the anonymous Rumor Report to your right. Thank you sincerely for reading.

Health benefits provider WellPoint has entered into an agreement to acquire American Imaging Management (AIM), a radiology benefit management and technology company with health plan clients representing over 20 million consumers. WellPoint is paying $300 million in cash for AIM and hope to reduce imaging claims expenditure by 15-30%.

An interesting study published by the Archives of Internal Medicine looked at whether or not EHR use and quality of care performance. The study looked at data from 2003 to 2004 and determined that “as implemented, EHRs were not associated with better quality ambulatory care.” I guess that is a little disappointing. I wonder if results will get better when someone examines more current EHRs that presumably have more quality care tools? It might also be interesting to see if coding and reimbursement varied much between EHR and non-EHR users.

MedQuist update: last week they filed a 10K report for the year ending December 2005. This is their first SEC filing since a whistleblower accused them of improper billing practices and the SEC required mandatory accounting reviews. Meanwhile, Philips is considering selling their 70% stake in the company.

I have to admit I have done a bit of drooling over the new iPhone. Somehow I think my life would be more complete with one, but I can’t quite justify the expense yet. However, I have figured out a great solution for anyone wanting an iPhone but who has Sprint (rather than AT&T) and is worried about early termination fees. Sprint has discontinued service for about 1000 clients who have called customer service excessively (an average of 25 times a month.) Those folks are not being penalized with early termination fees. So, start making those excessive calls today!

A special thank you to the anonymous consultant who enjoyed reading the comments from Mark Anderson (and says he loves our site). He also suggested readers might be interested in learn more about what EMR products are being de-installed and why. Anyone care to comment?

A computer error is blamed for a $962,120 bill for a four-day hospital stay in Glendale, CA. Hope the patient wasn’t suffering heart problems when she first opened it.

Whisper to Inga.

HIStalk Interviews Cindy Dullea, SVP of SCI Solutions and Rear Admiral (Select) of the United States Navy

I only knew Cindy Dullea as my sponsor contact at SCI Solutions. We swapped the occasional e-mail about advertising reports or graphics, that sort of thing.

Memorial Day of this year, I made my usual “fly your flag in honor of service men and women” pitch in HIStalk. Cindy e-mailed her thanks for that comment, confiding that she holds an additional role that she doesn’t talk much about. Cindy is Rear Admiral (Select) of the United States Navy.

Of course I had to interview someone that interesting and accomplished. Thanks to Cindy for agreeing to be interviewed (and for her service to our country, of course).

Let’s start with your civilian career. What do you do for SCI?

I am the senior vice president of marketing. I’d been with John Holton in the original 25 folks that started Scheduling.com in 1999 as VP of marketing. It was a great opportunity for me to create a brand and launch something from the ground up. I have an MBA with an emphasis in healthcare marketing and information systems. I had the opportunity to create the brand now known as SCI Solutions.

I left in 2002 and came back two years ago when John bought the Efileshare product. John and I had lunch together and it was a really great time to bring me back to re-brand the organization and figure out how to put the Scheduling.com product and Efileshare product names in perspective. We looked at that for seven months and re-launched about year ago.

I do all things marketing as well as being a nurse by background. I do a lot of client relations things, visiting clients and understanding how they use our systems, using my healthcare consulting background to see how they can improve their use of our product line.

What’s new with the company?

We have lots of new product functionalities coming out with Order Facilitator and our scheduling products. We had a record quarter last quarter in sales. Things keep getting better and better. We have wonderful ratings in KLAS. I couldn’t be more pleased, as I know John is, with progress of the company, from ratings to sales. We’re on a roll and have great momentum.

How does working for a relatively small HIT vendor compare with the big ones you’ve worked for?

It’s an opportunity to work, first and foremost, with some really bright people who have been around the company for awhile. In big companies, you get siloed and may not know what the division or department beside you is doing day to day. In a small company, you rely on each other. We’re all in it to make the company better. We’re high energy, multi-tasking types of individuals who are happy to step outside of our bounds to help the overall company and the individual departments meet our goals.

I like to multi-task and to be a part of multidisciplinary teams and high-energy team efforts. We can accomplish this by being very virtual. Of our 65 employees, over half are virtual, working from home offices. All our sales and marketing as well as implementation employees are home-based.

As a vendor marketing executive, how do independent blogs like HIStalk fit into the big picture?

We at SCI think it’s great because it gives us an unadulterated view of what going on in the industry. Most, if not all, of our executives read HIStalk. It gives us an idea of what the target market is thinking.

In the beginning when I came back, my group was focused on how to take the SCI Solutions brand and make it better to reintroduce it. We accomplished that in terms of creating marketing collateral and so forth to support the deployment of the new brand.

We switched over and said, “What are we doing for sales lately? How are we going to help our salespeople prospect better?“ It’s hard to fill your funnel and tool chest with qualified prospects to talk to. We said, “Where will we focus our marketing activities to help our sales organization?”

We became a prospect marketing organization. We looked at ways to do that and where to focus our advertising dollars. HIStalk was #1 on our list. That’s where the majority of the healthcare arena will get their information, not from reading trade journals. There’s no bang for the buck there.

We do Webinars, go to trade shows where buyers will be, and focus on getting clients out there speaking. We do a number of activities, but we advertise only in two places: HIStalk and on the NAHAM [National Association of Healthcare Access Management] website. That’s it.

You’re a board-certified informatics nurse. Is that a career path you’d recommend?

Absolutely. It has really caught on the past five years, especially among those nurses who have been at the bedside for 10+ years and can take their knowledge of how care is conducted to the information systems piece. It’s a great career path that’s catching on. CARING [a nurse informatics organization] is an organization that has grown tremendously.

Tell me about your military responsibilities.

I’ve been Navy nurse for over 27 years. I spent 3 ½ years on active duty as a full-time Navy nurse. I got off active duty, spent four years in the inactive Reserves, and have been a weekend warrior for the past 20 years.

I was just selected to be the next Navy Rear Admiral for the Reserve Nurse Corps. I’ll put on my star October 1. It was just confirmed by the Senate. It’s a done deal now [laughs]. I guess they found nothing bad in my background.

I’ll be over 4,000 Navy nurses, both active duty and reserve combined. I’ll be the #2 admiral over them. A two-star, full-time admiral is the #1. I will be there depending on the needs of the Navy. It could be up to 180 days a year on active duty. That’s one part of my Admiral job.

I’ve also just been named the Deputy Regional Commander for Navy Medicine National Capital Area. Navy Medicine is divided into four regions, each with a commander over Navy hospitals in their region. The National Capital area covers the National Navy Medical Center in Bethesda, Great Lakes Naval Hospital, and several others.

What are your responsibilities?

That’s unknown for me at this point. I believe it will have some level of governance over all components of Navy Medicine in the Capital region.

It will probably involve the integration of Walter Reed with Bethesda, which has lots of moving parts to think about. It’s no different than when two health systems merge. Beyond who has which toy and who does what, the cultures are different. It’s all military, but each component truly has their own culture, and with that comes small details. A Navy Corpsman is not the same as an Army Medic. Training is similar, but their patient care duties vary. How do you handle that on a patient care ward? You start going through the building blocks to bring the cultures together.

The Navy Surgeon General is the top doc, the top Navy person for Navy Medicine. The Surgeon General is a three-star Vice Admiral, the only three-star in Navy Medicine. I had the opportunity from 2000-2003 to command a unit at Navy Medicine headquarters that reported to the Navy Surgeon General. My unit worked with the strategy and goals of Navy Medicine. Everybody reports to the Surgeon General. I was probably closer because a lot of what we did was under the direction of the Surgeon General and his top team.

Is your military job affected by politics and bureaucracy?

Oh, yes [laughs]. Any time you get in a big organization, especially one that tries to stay apolitical, there’s always politics involved. Nothing happens with Navy Medicine unless it’s at the direction of someone pretty high up in politics. For example, we can’t just decide that we’re going to deploy a hospital ship when a tsunami hits. The Navy Surgeon General can’t just send out his big white ship. It has to come from Congress.

Do the armed forces do a good job taking care of soldiers?

Absolutely. There is nothing even comparable to the military’s ability to treat combat casualties. We’re seeing casualties in this war unlike anything we’ve seen in wars past. Service men and women who would have died in Vietnam and maybe Desert Storm I are living. We get to them quickly, stabilize them, and move them to Landstuhl, Germany. That’s great.

I think our challenge in the military arena – and probably Walter Reed has felt that more than other services – is post-critical time of care. One of the things we’ll get really good at doing is case management. What happens when you release that service man or woman from your facility back to their communities or bases? Each service does that continuity of care differently. Some hiccups have to occur. We’re learning from it. I’m convinced everybody knows that long-term case management has to be done very well.

You helped design the Navy Reserve’s personnel deployment system. How does it work?

It used to be that all reserve medical personnel came under the authority of big Navy Reserve, which owns every Navy Reservist. They were great at administratively taking care of us, but when it came to mobilizing us, they fell short because they didn’t understand the idiosyncrasies of physician and nurse specialties. You might be a med-surg nurse, OR nurse, or ICU nurse. You have to know what kind of nurse.

In 2000, the decision was made that the big Navy Reserve would pass over the day-to-day authority and operational control of Navy Reserve Medicine to the Navy Surgeon General, who would own his or her own assets, including reservists as well as activity duty. They had a better picture of what I call part-time staff, those several thousand reservists. We built MEDRUPMIS, which gave us the ability to drill down into fine detail about each reservist – corpsmen, nurses, doctors, dentists, and medical service corps. We could see not only what they were and their designator , but also see down to the granular detail, like the doctor is a board-certified orthopedic surgeon and is credentialed to practice.

We did a search query capability. You can pull up all med-surg nurses in a list of states and tell a military treatment facility like Bethesda how many med-surg nurses are in their area that they might be able to mobilize or have come in for their annual two weeks of training.

We were scheduled to do a Beta test scenario in which the hospital ship USNS Comfort was deploying for an emergency and we had to backfill Bethesda. I was there on September 11, 2001 as the senior officer, watching the screen as it matched requirements. The planes hit the towers and the Pentagon. What was supposed to be the Beta test became reality. We used the system, not knowing if would work to backfill 250 staff into Bethesda for staff deployed on Comfort to New York. Since then, it’s been used to mobilize for tsunamis and into military theaters around the world.

Having seen clinical information systems in both the military and private sector, how would you compare the two?

The commercial clinical systems are much better than what started out as CHCS I, created by SAIC and now AHLTA or CHCS II. I would say that some of our in-theater product lines are very good. Where the military is still lagging behind is in looking at those civilian systems and trying to understand, building on something that’s reached its life cycle, to see if there’s something out there. Systems aren’t building that EMR that we need to get to in the military. The case management aspect and knowing where service men and women are going will play into that.

What military leadership practices do you use in your job with SCI?

I absolutely give credit where credit is due. I wouldn’t be where I am today without the military. First and foremost, it’s understood early on the military that, as you move up into additional ranks, you are expected to take on increasing levels of responsibility. That taught me not to fear taking on bigger and better and more complex issues.

The military allowed me to lead not only small groups as a junior nurse over maybe 20 people, but up to 700 people over six states. It challenged me to think outside the box, to redefine my leadership skills, to try to not be afraid of trying different things and giving myself permission to fail.

I’ve taken those fundamental thought processes to SCI. John Holton lets me do that, strategizing what I want to do. In some ways, it’s very much like senior officers I’ve worked for in the military, using him as a sounding board. I enjoy that collaboration.

There’s much more organizational structure on the military side. Everything is extremely chain-of-command oriented. You wouldn’t pass over your immediate supervisor to get to someone else. When I come back from military duty, I have to think about which environment I’m in. I can be more relaxed and open about what I can say. I’ll use acronyms and John will tell me to stop [laughs].

You’ve known a lot of people in the industry. Which ones were most memorable?

I certainly would say, on the military side, I had opportunity to work for Vice Admiral Mike Cowan, who I understand is now CMO for BearingPoint. I learned a lot from his style. I’ve worked with John Holton twice, so there’s a testimonial there. Steven Russell from QuadraMed gave me my first break in the industry back in 1992 and hired me almost sight unseen, setting my path at Compucare for the first five years.

There have been lots of great people along the way who have allowed me to do different things. On the Navy side, Chip Rice, president of the Uniformed Services University. And, his chief of staff, Steve Henske, who was my commanding officer 12 or 13 years ago. I was selected as his #2 person, his Executive Officer, which began my leadership movement in Navy Medicine.

Any other thoughts?

I’d like to give a plug for any healthcare professional who has considered looking at a career with the military. For those who are patriotic, who want do something for our country, and who have the skill set, I’ll give a plug for the Navy Reserve.

For me, one of the most enjoyable things that I cherish over the last 20 years as an active reservist is the quality of the people I meet. Wherever I go, I’m in awe of the types of people who are out there and who set aside their lives for two days a month and two weeks a year to do something for the military. Some of them are health system CEOs or senior consultants or nurse anesthetists in business.

It’s incredible the kinds of folks I’ve had the chance to meet and get to know. If you’re looking for a new challenge, I would highly encourage you to consider service to your country. It’s a great opportunity and there’s a lot of self-satisfaction that can come with it.

I’m very blessed in that I’ve had the opportunity to have this alter-part of my life and able to maintain it, thanks to lots of folks who have supported me along with way on the HIS side. I’m blessed to be able to maintain both sides. I’m honored that SCI Solutions and its employees have been supportive. More importantly, when I speak with them, I feel there’s a lot of respect and a celebratory feel that it’s cool that I’m one of them. It’s like family at SCI.

Monday Morning Update 7/9/07

Rumor: Misys continues to reorganize. They’ll soon name a new SVP to take over all of sales, an outsider who’s coming from the same big company that provided other Misys execs.

Speaking of Misys, they’re being sued by their former landlord Any Travel Inc., owner of the vacated El Dorado Office Buildings in Tucson that Sunquest/Misys occupied from 1994 through 2006 for annual rent of $788,655. The landlord claims that Misys let the place go to pot knowing they were moving out, including ruining the fancy “water feature” system by shutting it down instead of repairing it, peforming shoddy roof repairs that caused leaks and interior damage, and allowing sidewalks and parking areas to deteriorate. Repair estimate: $1 million. The landlord claims they had a potential buyer for $8 million who bailed when they saw the condition of the property. Also claimed: Misys didn’t pay real estate taxes as the lease requires, sticking the landlord with the bill. That’s only one side of the story, of course.

Healthia Consulting is named one of the “101 Best and Brightest Companies to Work For”, which recognizes employers that treat employees well (communication, compensation, diversity, employee development, work-life balance, and community initiatives.) Worth a look if your employer doesn’t exactly shine in those areas.

BrainLAB’s software may not have been at fault in Belgium, where several patients received radiation overdoses. The company provided hardware only, not software, for University Hospital Ghent, despite earlier reports. The company thinks the system may have been implemented incorrectly by the hospital.

A just-published article in The American Journal of Managed Care says outpatient visits and telephone calls are reduced when patients can contact their doctor by e-mail instead. Kaiser Permanente did the study. That’s the conclusion you’d expect, but it’s good to have it documented. Unfortunately, those on the other end of the communication (doctors) don’t want to swap e-mails with patients for a variety of reasons (reimbursement, liability, and time pressure), but perhaps that will eventually change.

Rumor: MEDITECH will acquire the rest of its practice management system partner LSS.

Rumor: Eclipsys has restructured its sales function yet again.

New UK prime minister Gordon Brown may be distancing himself from NPfIT, as several ministers who supported it have moved on.

Intel’s Digital Health Group is working on projects related to eldercare, such as wearable monitoring systems and sensor-enabled “magic carpet” that analyze walking patterns to prevent falls.

Clearly the heat and summer distractions have kept relevant news to a minimum. Good stuff: e-mail me.

News 7/5/07

From The PACS Designer: “Re: iPhone. TPD wants HIStalk readers to be among the first to see the developers’ site on how the iPhone works and how it can be a good tool for accessing healthcare information and image files. Link.”

Also from The PACS Designer: “Re: AdoptWeb 2.0. TPD was reading the eHealth weblog and came across a posting on AdoptWeb 2.0 and thought it would be good reading for HIStalkers this Holiday Week. TPD wishes all Americans a Happy and Safe 4th!” The link didn’t work for me, but it may be down temporarily. And, I’ll add my holiday greetings as well, flag flying and John Philip Sousa-ing on my end.

From Ingo Montoya: “Re: Vanderbilt. I was watching ESPN2 when who should appear on my TV screen but Jim Jirjis, CMIO of Vanderbilt University Medical Center, in a propaganda commercial for the cable TV industry. Dr. J talked about how (paraphrasing) ‘we tried to bring doctors and patients together online for years, but there was one thing stopping us [makes mouth noises imitating the sound of a dial-up modem connecting].’  He goes on to explain that broadband Internet connectivity provided by cable TV companies was the missing link in Vanderbilt’s ability to do e-health (one direct quote that I caught: ‘Competition from cable revolutionized medicine.’)  I’m glad that e-literacy issues, the digital divide, privacy, security, determining responsible provider for each patient, handling provider cross-coverage, and oh yeah, interoperability across multiple platforms were non-issues for Vanderbilt. Apparently the biggest challenge they faced was having to look at the top of some cable guy’s butt crack while he installed their cable modem. On the other hand, it IS nice that health IT now has a high enough profile to make us attractive whores for feel-good testimonials for the likes of the National Cable & Telecommunications Association, who (in small print) paid for the ad. NCTA, me love you long time – call me!” Vandy’s done some good informatics work (the stuff they turfed off on McKesson being a notable exception) but they’re not shy about horn-tooting. I’ve known a few folks from there and they speak of “Vandy” in reverential, Ivy League-wannabe tones, causing an anticipatory autonomic reflex (gagging) just from the sight of them gearing up for pontification. Actually, that’s probably overly harsh, as I’ve met a couple of them in leadership roles who were pretty cool. I usually root for them in football in any case.

From Jolly NC: “Re: Misys. Former Misys Healthcare Physician president Rob Kill is now president and COO of Virtual Radiologic, a MN-based company that provides virtual radiology interpretations.”

From Russel Ziskey: “Re: Healthvision. It seems that Healthvision is laying off some of its people. Do you know why? Good or bad for the company?” Covered here last week, but I’ll repeat. Healthvision hitched its wagon to RHIOs, which are nearly universally fizzling out (HIMSS hoopla to the contrary.) It’s bad that Healthvision had to lay people off, but carrying too many FTEs when revenue isn’t up to snuff is worse. When I interviewed CEO Scott Decker in February (after correctly predicting VeriSign’s investment in the company per a reader’s report) he was perhaps overly optimistic about RHIOs, but sold on the connectivity concept: “I wouldn’t say Healthvision is wed to RHIOs, but to disparate groups sharing information. RHIOs brought it back up to the attention of boards and providers. We see all kinds of hybrids – health systems, IPAs, payors. There are a lot of RHIO-like models that aren’t the Washington, DC model, and that’s good for us and good for healthcare. Our pipeline of opportunity is ten times what it was 24 months ago.” The $64,000 question: can Healthvision get that other business now that its most highly targeted prospects aren’t buying and with far larger players elbowing them aside? Scott’s a good guy, but I wouldn’t want his job.

I like to check out the sites of sponsors and wandered over to that of R. Gaines Baty Associates. An idea for candidates: “Create an RGBA Career Connection for consideration for opportunities (immediate and future) that fit your desires and criteria. Be advised of outstanding career opportunities without actively ‘looking.'” They’re also offering a free electronic newsletter. Just thought I’d give them a shout-out.

Several folks are e-mailing me that Picis has withdrawn its IPO request (right before the trading holiday.) Since I posted that very item on the Discussion Forum at 8:00 Tuesday morning, I’m concerned that I haven’t mentioned the “Latest Topics from HIStalk Discussion” headlines to your right enough times (only if you go to www.histalk.com or www.histalk2.com and not the Blog City page since I haven’t made it work there so far.) Inga and I will sometimes post new stuff there early in the day, so it’s worth checking those headlines occasionally (or setting up to read in your RSS reader.) And if you post in the Forum, your headline will show up there too.

Related to Picis (but written before the IPO news came out) is my editorial in this week’s Inside Healthcare Computing electronic update: “Private vs. Public Vendors: I’ll Take the Former,” in which I argue that the now-trendy private equity investment is replacing IPOs as the primary way for companies to grow. I have to admit that I felt traitorous when I wrote it because Picis is my sponsor and my argument is that current customers historically have fared worse after a vendor goes public (my vendors, anyway) but now I can feel OK about it. I still have confidence in Picis and I bet there’s a positive reason they changed their IPO mind.

And speaking of sponsors, at least four new ones are coming online very shortly. I’ve hooked up with a graphics person who’s pretty darned good at creating Flash ads, so I’m now offering that at no extra charge for Platinum sponsors who need some graphics help.

Nice gesture: someone pretty high up in Cerner invited me to their big barbeque contest that will be held on July 20. I probably won’t go (the anonymous thing is always a problem) but I appreciate the thought, barbeque being my favorite food and my past experience with Cerner bash-throwing being entirely positive. Thank you.

HIStalk nearly always scoops the other so-called news sources because loyal readers keep me informed, to the point that I don’t even go back and check any more to see when I first reported something. However, I was Googling for something on Dairyland and ran across these entries, giving you several months’ advance notice despite company denials. Bet they were mad.

• December 1, 2006: “From Anonymous: Dairyland is being shopped around to potential buyers, so I hear.”
• February 5, 2007: “From Venny: Re: Dairyland. I have heard from more than one source that the Dairyland principals are looking for potential suitors. I haven’t heard any reasons, though.”
• February 12, 2007: “From HITman: “Re: Dairyland. I met with some Dairyland folks today and they denied any talks or that the company is even on the market. DHS is an ESOP company and some folks stand to make a lot of money if the rumors are true, but it is all denied as of now.”
• February 14, 2007: “A reader who should know confirms that Dairyland is (or at least was) shopping itself for sale, their previous denials to the contrary.”
• June 29, 2007: Dairyland announces that it has been acquired by Francisco Partners.

Tragedy in Belgium: at least 17 patients received incorrect radiation doses because of malfunctioning software in Brainlab‘s Novalis oncology radiation aiming system. Nine have died, but not necessarily because of the problem. Also confirmed: Cleveland Clinic and Valley Medical Center (WA) use the same model (stopped since, I’m sure.)

Former Fairview CIO-turned-COO Gary Strong joins competitor Allina as chief administrative officer. Met him once, nice guy, a rare case of a CIO’s excelling in a bigger chair.

I struggled with this press release‘s headline: “Thru Executive Thought Leader to Serve on DFW HIMSS Board.” Was it missing some punctuation or maybe some words? And exactly what is a Thru Executive – a spelling-challenged C-leveler who’s been fired? Nope – the company’s name is the ever-so-precious Thru. Which I did – up. I really hate gibberish company names, especially those created around a misspelled word (although I save much of my wrath for those indecisive merged entities that give up and simply jam their previous separate names together to create an ugly conjoined twin, i.e. McKessonHBOC or PricewaterhouseCoopers). Another reason to hate lawyers – fear of lawsuits drove us to making up names.

Police are investigating the deaths of two University of Chicago Medical Center patients after excessive insulin levels were found post-mortem. If I had to bet, I’d put my money on an incorrectly compounded IV. Happens quite a bit, especially with insulin. The value of all traditional clinical information systems in preventing that error: zero.

Coming shortly: a weekly HIStalk e-mail update for executives, with the top five healthcare IT stories of the week with background and opinion. Inga and I did a trial issue and we think it’s cool – about a five-minute, portable read that can make even non-IT experts fluent in industry developments. We’ll have the sign-up form online soon. Here’s a sample entry I wrote yesterday (one of five) as I developed the format. Your suggestions welcome. We figure it will be free since we like giving stuff away (it makes us feel important).

Facts
James Burgess, president and CEO of Mediware Information Systems of Lenexa, KS announced he will step down by September 24. The company sells systems for blood bank, operating room, and medication management. Also announced: VP John Damgaard of the blood bank division, is promoted to a newly created SVP/COO position, effective immediately.

Opinion
The company’s institutional investors are losing patience with this industry laggard. Damgaard’s division was its only bright spot, so he gets his turn in the hot seat. Plus: decent earnings and a PE of just 25. Minus: a market cap of only $58 million, cost and transparency of being publicly traded, and a product line made up of mediocre specialty products when the market shows a vast preference for integrated offerings from Cerner, Epic, and Eclipsys. The stock is down 40% from December 2005 in a healthy healthcare IT market.

Musings
Revolving door executive turnover continues.
Forced customer upgrades have created revenue at the expense of goodwill.
Going private might be an option.
Prospects are bleak.

The Irish government is still shoveling millions on the PPARS healthcare payroll and personnel system that was mothballed two years ago. The system, estimated to have cost at least 30 times its original budgeted amount, was provided by SAP and Deloitte and Touche. Great things happen when you mix government, ERP, and consultants.

Huge non-profit consulting company RTI International will host a free July 26 Webinar describing its creation of a perinatal EMR for a Zambian teaching hospital, funded by the Gates Foundation and now available under a free and open source license. Nice.

The Feds put up a new NHIN website covering CCHIT, HITSP, NIST, and ONC. According to the metadata, Booz Allen Hamilton did the design. Wonder what that cost? Just for fun, I ran it through an accessibility checker (that’s why government web consultants get big bucks). It failed.

Banking security guy Troy Moritz joins Allscripts as chief security officer.

Greenway Medical announces their EMR product is now integrated with DrFirst’s Rcopia e-prescription technology. Last week, Greenway also made news for being one of the first two products to receive 2007 CCHIT certification (NextGen was the other).

Toothpaste alert: McKesson Corp said it was recalling its China-made EverFresh brand after it was identified as containing trace amounts of the chemical known as diethylene glycol, a compound used in anti-freeze.

More hospitals are allowing cell phone use, according to a recent CHIME survey. 23% of the respondents said the benefits of improved patient care and satisfaction outweighed any negligible effect of interference with medical equipment.

CMS is considering no longer allowing providers to e-prescribe to pharmacies. If the new ruling is passed, providers will require all e-prescriptions to be in the Script standard as part of the 2008 physician fee schedule. So how would this affect providers (and their vendors) who are don’t offer this format? Well, the providers go back to paper scripts. (All together now … isn’t faxing a little outdated anyway? Who – besides those in healthcare – fax much of anything these days?)

A couple of weeks ago there were a few postings after I mentioned the recent AC Group Functionality Ratings that are published twice a group by Mark Anderson. There were a couple comments that suggested Mark and consultants in general tended to favor certain products over others, to which I said that of course consultants have a bias – that is what an end user pays for. Blindsided Vendor also that his company “runs for the hills” when they learn the AC Group is involved.

Well, I was able to catch up with Mark Anderson and asked him if he cared to provide us with a comment – to which he graciously agreed.

“The best way to respond is to ask our clients if they thought we were fair and impartial. We do no marketing and 80% of our business comes from references from our clients. If they were not happy, they would not refer us. As far as favoring vendors, they are right. We favor vendors that prove that their company and products are strong. We will tell our clients the plusses and minuses of each vendor and our Top 10 matches everyone else’s Top 10.

A number of vendors do run away because we challenge them to perform. When they cannot perform, it’s easier to run and to blame the consultant. My Top 10 vendors are listed in my published report that comes out twice per year. The Top 10 has changed slightly in the past seven years, with five new vendors added and five removed. We have found that vendors “do not always tell the truth.” However, if you ask the right questions, you can get to the truth. The problem is, most people do not know the right questions to ask.

If the vendor runs away, it’s because they cannot meet the functionality requirements. My point – let them run. My clients would not be happy with them anyway.”

Talk to me.

Mediware CEO Resigns

James Burgess, president and CEO of Mediware Information Systems, has resigned. He will leave his position on September 24. The company also announced that John Damgaard, VP of the company’s blood management software division, has been appointed to the newly created position of chief operating officer and senior vice president, effective immediately.

Burgess joined the company in 2005, Damgaard in 2003.

Monday Morning Update 7/2/07

From Anonymouse: “Re: Cerner. Unsubstantiated rumor from a third party vendor: Cardinal to acquire Cerner. Have you heard any of these whispers?” I haven’t. Anyone?

Thanks very much to old HIStalk friend eScription, an early-on sponsor. The company is now the exclusive sponsor of HIStalk Discussion as well, while continuing as a Gold Sponsor. I was cruising around their newly redesigned site and I notice they’re hiring: software engineers, account managers, Java developer, and other technical positions. I can’t imagine that working for super-cool Paul Egerman is anything but great (not to mention they provide over 400 pounds of free fruit each month for employees to munch on!) Continuing my cruising, I see that my sponsor contact Lauren Richman has a Penn undergrad and Columbia MBA, which is impressive even among the educational credentials of her peers: Princeton, Brown, Dartmouth, Harvard, Carnegie Mellon, and MIT. Smart company, nice people, kicking butt and taking names in their market. That’s how it ought to work.

Speaking of Penn, UPHS awards CSC a five-year, $67 million contract for IT infrastructure services.

And speaking of old friends of HIStalk, my first-ever sponsor Medicity sent over their electronic newsletter this week. The company has taken over two new floors in the Medicity building, employment will increase 50% this year, they demonstrated at MUSE last month, and several new sales were finalized in the past few weeks. All due to their sponsorship, at least when I’m telling the story.

Wisconsin State Journal is running a fancy series on medical errors, including an online game where you try to staff a nursing unit given ever-changing conditions. From a reader who wishes to remain anonymous: “Interestingly, they don’t mention EMRs at all, or CPOE. They talk about pharmacy robotics and barcoded med administration, but that’s pretty much it. They included some ‘patient safety’ tips, such as writing down your allergies, writing down what meds you’re on and what you take them for, and taking these lists with you to clinics, hospitals, etc. Isn’t that sort of the point of an EMR, so you don’t have to remember? Clearly technology doesn’t solve everything, but I would have thought it worth mentioning in their ‘technology improvements’ article.” It is somewhat surprising, although they seem to focus on the sharp end of the stick, right down to the patients themselves.

Cerner gets 510(k) clearance for its new transfusion and specimen collection system that will be marketed under the Cerner Bridge Medical name. The party must be on: Cerner gets North Kansas City approval for a big blowout, including a barbeque contest, at their headquarters on July 20. I’m positive I’ll be invited so I can report to you live.

Former HealthSouth CEO Richard Scrushy and former Alabama Governor Don Siegelman became former free men after being sentenced to seven years in prison for bribery and corruption yesterday. The judge wasn’t impressed by the chorus line of character witnesses the defense paraded in, with Scrushy even dragging his nine children in to meet the judge (triggering a Groucho Marx thought: “Hey, I like my cigar, too, but I take it out now and then.”) Anyway, the judge sent him straight to jail.

CPSI is named to the FSB100, a fast-growing small company list compiled by Fortune Small Business.

This 29-year-old newly graduated Canadian doctor (Melissa) has gotten a doctor job, written a diet book, and helped design a Web-based EMR system that may be ad-supported later.

Akron Children’s Hospital sues its former foundation director, claiming she downloaded donor information to start her own business.

Imaging vendor Emageon has cut 10% of its workforce so far this year.

Bizarre, only-in-California lawsuits: an LA fire department captain gets $3.75 million, much of it for pain and suffering, because his supervisors retaliated against him for not giving women firefighters easier training. In another case, the city offered a firefighter who was fed dog food by colleagues $2.7 million.

News is slow. If this were a HIT magazine, I’d keep writing crappy stuff just to fill up space. Since I value your time instead of my need to pad out the ads, we’re done here. Have a good July 4th (and fly your flag, please).

News, rumors, my own private Idaho: e-mail me.

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