HIStalk Interviews Jeff Lee, Principal, DCM Ventures

Jeff Lee is a principal with DCM Ventures of Menlo Park, CA.

Tell me about yourself and the company.

DCM is a global venture firm. We manage about $2.5 billion investing in IT-related opportunities in the US with offices in Beijing as well as Tokyo. I’m a trained engineer, a product guy. I spent some time as an investor and then as an entrepreneur and then an investor. I’ve seen both the operating side as well as the investing side and the product-building side of technology companies.

Your world is mostly young, West Coast, and high tech. Is it hard to avoid having that mindset unduly influence your view of companies?

It’s funny you say that. I did my undergrad out here at Stanford and I spent five years at Cisco right in the middle of the boom and bust. I’ve seen both sides of that in the Valley. I intentionally left the Valley for eight years and spent the last eight before moving back up here in LA to see a different perspective on the rest of the country, how companies are started. I’ve intentionally gotten that experience to have a different perspective.

Where are the geographical pockets of innovation and which will be most important?

Around the country, Silicon Valley has always been the capital for technology. With globalization and the represented aspects of that domestically, you see a lot of interesting things coming out of LA, you see a number of interesting things coming out of New York. Boston historically has been a bit of a hub. If you think globally, you’re seeing a lot of stuff coming out of Asia as well, as far as big companies getting built and technology and stuff that’s frankly going cross-border.

Healthcare innovation often comes from the presence of a big vendor in a location like Madison, Wisconsin or Malvern, Pennsylvania. Do those areas spawn their own innovative ecosystems?

I suspect they do. One of the challenges, especially with innovation in the healthcare IT sector, is you really need a balance of healthcare expertise, but you also need the entrepreneurial blood. I think there may be some pieces of those coming out in places like Madison, Wisconsin.

It’s difficult to find the folks that are truly going to create game-changing companies. Not to say that there won’t be, but where you look geographically, some of the places that are hubs of innovation that are growing where there’s an increasing expertise in the healthcare space are where we tend to see some of the big opportunities emerging.

Do you sometimes look at a little company’s pitch and tell them that while they’ve built an interesting and potentially profitable small business, you just don’t see that it can scale to the point that would get you interested?

Definitely. There’s a bunch of statistics around venture capital and companies that hit. There are very few companies where venture makes a lot of sense, or when you look at the broad ecosystem of funding, small business is probably five percent or less.

We see a lot of those things. We are one solution of many for funding early-stage small companies. We tend to be the high-risk, high-return piece of it where there’s a good chance it might go to zero, but there’s a possibility that it could be a large, substantial public company. Those are the opportunities that we go after.

How important is the personality or the outlook of the founder when trying to identify those potential winners?

In my view, it’s the single most important factor. If I were to paint a broader picture around it, you take a great founder and management team in a big market. Those are really the two ingredients you look for and a great opportunity for us.

How do you project the timeline of how far the founder can carry you and then at what point you’re going to bring in a different managerial skill?

They depend on a case-by-case basis. Our ideal situation is a founder who’s the CEO of the company who can go all the way. I think that the passion that a founder has for a company and the desire to see it successful, which frankly sometimes is irrational of sorts, is really what it takes to get some of these companies all the way.

I’ll say that we infrequently will go into a investment thinking or knowing that the founder will only go so far. Usually it causes a lot of turmoil, and more often than not, will in essence sink the company at some point.

That being said, I think understanding that, and if that’s what the founder wants and acknowledges that, then we certainly can help in identifying the right talents or helping them think through the timing or the personnel that they should be looking for. We are active investors, but we will typically take a number two to the founder where’s it’s really their company, it’s not ours. That’s philosophically how we look at it.

How much extra value or extra credibility does a company have when the founders done it before?

It makes a huge difference if somebody’s been able to do it before. It’s the best indicator of future success. Again, every situation is case by case, but especially I would say in the sectors like healthcare where there’s a lot of innate domain knowledge that needs to be hedged, how to operate in it, your having that background is really important.

It’s always big news when a company is sold. What’s it like behind the scenes trying to get a company to that point? How do you find potential buyers? Are the sellers always happy to get a bunch of cash and turn over the keys to someone else?

The best exit opportunities are usually not being sought out and usually are on the backs of the success and high growth of a company. Before we get to that point, what we are focused on is always building a large, scalable, fast-growing business. If inbound interest comes in, we’ll seriously consider it. We typically are swinging for home runs, so more often than not if a company is doing well, we’re going to double down and help support that company to keep on going.

Sometimes to your point an attractive offer comes in. Depending on timing, you might then take it through a process and go talk to other folks and see what exits might be available. Obviously, if it’s an IPO, that’s a slightly different animal.

That’s typically how the best exits happen. Usually the ones where you really need to build a process around it are the ones that aren’t doing nearly as well.

If I’m running a really successful company and I’ve got funding and the growth is there, do I get a lot of calls out of the blue? Who’s calling me and what are they saying?

The calls don’t go to me typically. The calls would go to the CEO and the founder. I think a lot of the times they come from business partners. They might be the development partners, they could be customers. They come from the ecosystem.

I had this experience myself. I had started a company in the small business group buying space. As we are building and we were talking to a number of our distribution partners, one of them asked, "Would you consider a possible acquisition as opposed to just a partnership?" That was the beginning of a conversation that led to our eventual acquisition.

That’s typically how it happens. Usually, it’s not unsolicited. Usually, it’s a ongoing conversation or at least the relationship over six to 12 or even more months before a company is really going to look at writing a hopefully large check to acquire another company.

As an investor, how much influence do you expect to have?

Our typical type investment, which is I think a generally true for most in the venture industry, is we’ll write a large enough check and take probably 20 to 30 percent of a company, typically to warrant a board seat. We will typically not go in and operate the company, but we will help guide the strategy of the company, help guide the fundraising strategy of the company. We will make business development introductions to meaningful partners that could change the trajectory of the company. We’ll spend time recruiting for and qualifying if it’s a CEO or senior executives on the team, folks that really will come in and make a material change on the opportunity of the company.

What’s it like doing what you do?

It’s awesome. I love it. My day is spent predominantly meeting a lot of very interesting people. On the early-stage side, it’s meeting entrepreneurs, hearing about what they’re passionate about, where they think the big opportunity is. It could be in concert with a financing that they’re trying to put together or maybe getting to know people before that.

Part of it is getting to know folks in the ecosystem such as yourself or in the healthcare space. It might be other operating execs, people at large companies who understand what they’re looking at strategically or how we might be able to orchestrate some partnership between some of our portfolio companies and their company.

Then obviously getting to know other investors as well. Once we fund a company, when we look at a next major round of financing, we typically look to get an outsider to add additional value to the company or some of those that in reverse are doing smaller checks than us. They might see the opportunities to us.

Those are the broad pieces of the deal piece of it. Then part of it is working with our companies and our entrepreneurs. Some of that happens in the board room, where there’s usually it’s monthly. Usually there’s an update about the business and a discussion around the critical issues in the business both good and bad. Then we talk about, "What do we need to do to get to the next step? How do we work through the problems that a company is having?"

Frankly, a lot of the work happens outside of the board meeting itself. Coffee with the founder, sharing some of those similar issues or concerns, introducing people that maybe they need a VP of sales and if you can think of somebody who would be great, making that introduction or again business development partnerships where they’re looking for a channel to get to other customers.  We can make those kinds of introductions.

That’s typically how we work with companies. I think a board meeting is really a formalized way of driving that discussion, but those discussions happen offline and hopefully often.

Are there any technology areas that you like really well or that your firm would tend to stay away from?

Broadly, just looking at technology, the world has shifted from the way it was 10 or 20 years ago. This partially and directly answers your question, which is I think a lot of models had moved away from what I’ll call true technology and they’ve gone more to business model innovation.

With globalization, with the advent of outsourcing, it’s a lot easier to find talent to actually develop technology or software than it has been in the past. A big piece of it is, where’s is there empty space that you could leverage technology to create a sustainable business?

That being said, I do think there are a few interesting instances around what I’ll call real technology or hard technology. One that is not in the healthcare space but is a very interesting company that a friend of mine invested in is a company called Planet Labs. It’s literally NASA rocket scientists that have figured out how to build satellites for $20,000 and deploy them for under $50,000 or $60,000. Because of the cost basis and their ability to do this, they’re able to put up all these micro satellites in the space and basically give you almost a real-time picture of what’s happening, literally, on the planet. You can see deforestation, you can see weather patterns, and you have access to something you never had before.

We’re investors in a company called Athos, which developed a shirt with fabric that can measure your muscle twitch response. The product hasn’t been released yet — it’s in beta. What it’s able to do is determine how hard your muscles are firing and determine how to optimize your workouts, determine how to make sure that you don’t get injured. There’s a lot of other applications like that.

We’ve done a number of core technology investments as well. Lithium ion batteries, so your smartphone can last longer.

One company that might be a little bit more relevant is Augmedix. It leverages Google Glass. Attached in the back of the Google Glass is a scribe that might be in India or Bangladesh or some other place. They basically offload for a doctor the hour or two hours that they spend writing up notes every day. Because it’s a live video feed, because they get to know the doctors and what they’re looking for and how to input data, in essence you can take an hour and a half of doctor time that’s wasted into five or 10 minutes. That’s a way of leveraging technology and new business model where there’s a little bit more of a fundamental technology than the business model innovation.

Do you have any final thoughts?

There’s a big opportunity in the healthcare IT space. It’s obviously a large part of GDP and with the introduction of technology through EMR into the business and the pervasiveness of mobile, we spend a decent amount of time looking at where those convergence opportunities are. Augmedix, like I mentioned. We’re in a company called Stride Health, which is centered around providing better insurance solutions to contract workers.

We continue to look at a few things. There’s probably one or two projects that are in the works. We think there’s a big opportunity in the space.

Morning Headlines 2/11/15

Cerner Reports Fourth Quarter and Full Year 2014 Results

Cerner announces Q4 results: revenue up 16 percent to $1.16 billion, adjusted EPS $0.47 vs. $0.39.

Premier, Inc. Reports Fiscal 2015 Second-Quarter Results

Premier, Inc. announces Q2 results: revenue is up 19 percent to to $294 million, EPS $0.36 vs. $0.31.

Is Your Doctor’s Office the Most Dangerous Place for Data?

ABC News cover the rise of hackers migrating toward the healthcare space, an industry that finds itself 10-years behind financial services in terms of protecting consumer information.  

WakeMed posts $3M Q1 income, goes live with electronic records

WakeMed goes live with its $100 million Epic install.

News 2/11/15

Top News

Premier, Inc. announces Q2 results: revenue up 19 percent, adjusted EPS $0.36 vs. $0.31, beating analyst expectations for both. President and CEO Susan DeVore says the company will make more technology acquisitions following its recent buys of TheraDoc, MEMdata, SYMMEDRx, and Aperek, noting an interest in supply chain analytics, alternate site, ambulatory data, and population health.

DeVore adds that HHS’s fee-for-value push will increase the need for the company’s technology related to quality and clinical analytics, labor analytics, infection surveillance, and population health. Above is the one-year share price chart of PINC (blue, up 0.6 percent) vs. the Nasdaq (red, up 14 percent). The company’s market capitalization is $1.32 billion, with DeVore holding shares worth $7.3 million.

Reader Comments

From Smartfood99: “Re: Ohio Valley in Wheeling, WV. Chose to upgrade to Meditech 6.1, beating out other finalist Ohio State University’s farm out of Epic.” Unverified.

From Webejammin: “Re: patent trolls. They’re using ONC’s list of certified EHRs to file suits using old patents that never should have been issued. This will dampen innovation and increase the cost of EMRs.” It’s not hard to get a list of EHR vendors from ONC’s list or elsewhere. Nor is it hard to find an old, intentionally vague patent and use the threat of an expensive legal defense to coerce EHR vendors into paying settlements or licensing arrangements whose cost is intentionally placed at the extortionate sweet spot between “annoying” and “profit-threatening.” Thank your lawyer-heavy Congress for its resistance to embracing the “loser pays” frivolous lawsuit policy that would increase unemployment among our vastly superior US force of ambulance chasers.

From Dingman: “Re: companies in financial trouble. You probably see some of that firsthand when they either are slow to pay their sponsorship or don’t renew because of financial issues.” I could indeed, although I usually lose sponsors instead because (a) they get acquired, or (b) a new marketing person who doesn’t even know what HIStalk is decides to wield their low-level decision-making power in deciding not to renew, which sometimes gets them in trouble down the road with their executives who wanted to support HIStalk in the first place. Sometimes I do hear directly from companies that their budget has been cut or executive upheaval is so extensive that they can’t even figure out who has purchasing authority, which might involve more transparency than customers get.

HIStalk Announcements and Requests

Welcome to new HIStalk Platinum Sponsor Galen Healthcare Solutions. The Grosse Pointe Farms, MI-based professional and technical services consulting firm also offers products for Allscripts TouchWorks  — remote patient monitoring, integrated health calculators, downtime chart review, note form reporting, and reporting. Technical services include EHR conversions, integration, technical consulting, and contract programming, with experience in Epic, eClinicalWorks, Allscripts, Meditech, Orion, Medfusion, and others. Galen helped Citizens Memorial Hospital (home of one of my favorite CIOs, Denni McColm) convert an acquired Allscripts-using practice to its Meditech system, bringing over 1.5 million documents and 3.5 million test results. Galen’s full (and huge) client list is available freely online along with client testimonials. Thanks to Galen for supporting HIStalk.

Sign up now to attend HIStalkapalooza on April 13. The “I want to come” form is still open, but that won’t be true for much longer. Every year I get annoyed at people who email after signups close to insist that they weren’t aware that it had taken place and demand special treatment, which generates little sympathy from me because that tells me they don’t really read HIStalk. On the other hand, I’m amused by some of the creative uses of the comments field on the form from the responses so far:

• On a Cerner life raft in an ocean of Epic. Would love to come and party with the smartest, coolest people on this blue planet.
• Is there a more senior VC in HCIT? What do I gotta do?
• I figured since even you were filling out the "I want to go" form, so should I! 😉
• I went two years ago and loved it!!! I didn’t get an invite last year 🙁 I hope I am still a cool kid!
• [enter pithy/witty comment that guarantees entry here]
• Often watched the big party bus roll out without me while I searched the conference town for tourist food. I had the HIMSS blues, man.
• Can we get the band from last year? They were brilliant!

I took over running the event myself this year with the support of multiple sponsors so that I could invite more people, and so far it’s looking good for covering the cost of a big guest list. House of Blues is an amazing venue and I will indeed be bringing back last year’s musical entertainment, Party on the Moon, America’s #1 private party band. I’m hoping the winner of the “Healthcare IT Lifetime Achievement Award” will accept the award on stage. I’m also contemplating whether the individual named as “Industry Figure in Whose Face You’d Most Like to Throw a Pie” would be willing to receive delivery of said pie in public, possibly delivered by the second-place vote-getter (I might be able to mount a charitable fundraising campaign rivaling the Ice Bucket Challenge to shame both parties into participating).

One more HIMSS-related event item: we’ve emailed HIStalk sponsors about our networking reception on Sunday, April 12. Email Lorre if you’re a sponsor and you want to come because sometimes we don’t have good company contacts.

I could use some help from folks willing to critique the recorded rehearsals of our webinars, suggesting to the presenter what they might change for the live event. Provider CIOs, CMIOs, or other hospital IT types are ideal given the topics often covered. I’ll send a $50 Amazon gift card in return for the 45 minutes or so it takes to watch the video and fill out the eval sheet. Email me if you’re interested.

Webinars

February 13 (Friday) 2:00 ET. Inside Anthem: Dissecting the Breach. Sponsored by HIStalk. Presenter: John Gomez, CEO, Sensato. The latest intelligence about the Anthem breach will be reviewed to provide a deep understanding of the methods used, what healthcare organizations can learn from it, and how to determine if a given organization has come under similar attacks. Attendees will be able to ask questions and put forth their own thoughts. 

Acquisitions, Funding, Business, and Stock

Hitachi Data Systems will acquire Orlando-based business analytics tools vendor Pentaho, which has some healthcare-related customers and partners, for $500 to $600 million.

Aventura raises $14 million in an oversubscribed Series C funding round and will use the proceeds to expand its awareness computing services and product development.

Image-sharing cloud vendor LifeImage raises $2.6 million in funding, increasing its total to $68 million.

Shares of Merge Healthcare jumped substantially in the past week in hitting a 52-week high Monday, doubling in price since October. Above is the one-year share price chart for MRGE (blue, up 101 percent) vs. the Nasdaq (red, up 14 percent).

Cerner announces Q4 results: revenue up 16 percent, adjusted EPS $0.47 vs. $0.39, meeting earnings expectations and beating on revenue.

Sales

Frontier Behavioral Health (WA) chooses the CoCentrix Coordinated Care Platform as its EHR and care management tool.

Quintiles signs a five-year contract with the National Football League to track player injuries using the league’s EHR data.

People

AMC Health names Jonathan Leviss, MD (WiserCare) as SVP/medical director.

HIMSS names Michelle Troseth, MSN, RN, chief professional practice officer of Elsevier Clinical Solutions, as  the recipient of its Nursing Informatics Leadership Award.

Joe Miccio (ESD) joins Impact Advisors as VP.

Brigham and Women’s Hospital promotes David Bates, MD to SVP/chief innovation officer.

Adam Wright, PhD, who leads a biomedical informatics team at Harvard Medical School, is promoted to associate professor of medicine.

Kaiser Permanente names interim CIO Dick Daniels to the permanent position. He was previously SVP of enterprise shared services.

Personalized medicine analytics vendor Kyron names Jacob Reider, MD (ONC) as chief strategy officer.

Cumberland Consulting Group names board member Brian Cahill (LifeImage) as CEO. His predecessor, founder Jim Lewis, moves into the board chair role.

Surgical Information Systems names John Spiller (Origin Healthcare Solutions) as CFO.

Announcements and Implementations

WakeMed (NC) goes live with Epic.

Imprivata launches Confirm ID, which supports DEA-mandated policies for electronic prescribing of controlled substances.

The US Patent and Trademark Office awards DR Systems seven imaging-related technology patents.

Divurgent and Sensato will jointly offer healthcare cybersecurity and privacy services and will host Hacking Healthcare 2015 in March.

Cone Health (NC) issues easy-to-read patient bills using Patientco’s PatientWallet.

PatientSafe Solutions expands its clinical communications tool and renames it PatientTouch Clinical Communications.

Government and Politics

A GAO report seems satisfied that CMS is ready for the ICD-10 implementation date of October 1, 2015, although it seems to have looked more at CMS’s responsiveness to suggestions than its actual technical readiness.

The New York Times calls out little-noticed White House budget language that urges Congress to eliminate the financial incentive for hospitals to buy physician practices so they can charge more for delivering the same services to patients.

Privacy and Security

The largest insurer of the Lloyd’s of London insurance marketplace says that breaches — such as the one just experienced by Anthem — involve financial risks that are too large for insurance companies to cover, suggesting that only governments have the resources to manage those liabilities. Insurance companies worry that multiple cybersecurity insurance customers could be hit by the same exploit simultaneously.

ABC News asks, “Is Your Doctor’s Office the Most Dangerous Place for Data?” citing the FBI’s warning that healthcare organizations are being targeted and quoting a security expert who says healthcare is 10 years behind the financial services sector in protecting consumer information such as Social Security numbers.

A Swedish biohacking group offers to replace the security key fobs used by a high-tech building’s employees with a palm-embedded RFID chip that allows them to wave their hand to unlock doors, activate the photocopier, and pay their cafeteria bill. The group says the chips could be used to make payments and replace fitness trackers.

Reporters are trying to create a story around whether Anthem was irresponsible in not encrypting its customer records. I’m not an expert, but my minimal exposure to encryption involves three types: (a) encrypting a secure online session connection such as with SSL; (b) encrypting a storage device so that nobody can dig into its contents without logging on with the appropriate credentials; and (c) encrypting individual database elements so that they can’t be queried without logging on with the appropriate credentials. The only relevant form in Anthem’s case would seem to be (c) and that wouldn’t have helped since the attackers stole a database administrator’s credentials via a phishing attack. Encrypting data at rest is great for physical protection (a stolen disk drive or a physically breached data center) but otherwise the system doesn’t know that the correct login was used by an unauthorized person, short of using biometrics or privileges tied to IP address. I think the story is misleading, but I’ll defer to any experts who care to respond.

Anthem’s hackers knew that database credentials would give them access to everything, so perhaps the immediate health system to-dos would be (a) review users who possesses DBA credentials; (b) monitor the use of those credentials for irregularities, such as large queries that are run off hours or that involve outside that individual’s normal job scope; (c) monitor for large data transfers outside the firewall; (d) enlist DBAs to help watch for problems since they were the ones who detected the Anthem breach; and (e) put efforts into anti-phishing technology and user education rather than worrying about encrypting databases on the off chance that someone will physically steal a server. I really don’t understand in this day and age why we haven’t moved to biometric security instead of the easily pilfered “what you know” password – our data center doors are more technically secure than the systems they house.

Several Atlanta-area businesses fall victim to ransomware, where malware encrypts the files on a user’s PC and demand anonymous payment to restore access. A Secret Service representative says that physician offices are targets since their often-unsecured wireless networks can be hacked from their parking lots, although I would have assumed the method of infection would be via other methods.

Technology

Google will incorporate Mayo Clinic-curated information into its medically related search results, providing symptoms and treatments via its Knowledge Graph and Now personal assistant (which I’ve never heard of).

Medical device manufacturer DexCom will release an app that will display readings from its implanted continuous glucose monitor on the Apple Watch when the latter goes on sale in April. Dexcom already offers such monitoring on its own hardware with Bluetooth-powered iPhone data sharing.

Merge Healthcare announces that users of its iConnect Network will be able to transmit and receive imaging orders and results to Emdeon Clinical Exchange users.

Other

The local newspaper covers the migration to Epic by two Lehigh Valley, PA competitors, Lehigh Valley Health Network and St. Luke’s University Health Network. Epic replaces GE Healthcare at LVHN and McKesson and Allscripts at St. Luke’s.

Health system consolidation continues: Emory Healthcare and WellStar Health System are discussing merging into a single Atlanta-area system, while in New York, North Shore-LIJ is talking to Maimonides Medical Center about a “partnership” that sounds more like the former acquiring the latter.

Why do reporters feel qualified to interpret scientific information and render related opinion without consulting experts? The Toronto Star runs a self-proclaimed investigative article on the dangers of HPV vaccine Gardasil, dramatizing the 60 potential cases of side effects out of 800,000 doses administered. Expert physicians called out the poor reporting, to which one of the paper’s otherwise uninvolved left-leaning, American-hating columnists (best known for calling Sarah Palin a “toned-down porn actress” and insisting that male conservatives make bad decisions because of impotence) responded with a bizarre rebuttal that invokes government secrecy, Twitter, the US Tea Party, and her own self-study of statistics. The physician author of a book the columnist cited immediately blasted out a series of tweets calling out the paper’s “appalling, ignorant, irresponsible journalism” in running a “scare story.” The exchanges were summarized and brilliantly titled as “When ‘Teaching Yourself Statistics’ is No Match for Being a Doctor.”

Sponsor Updates

• Craneware enhances its Supplies Assistant solution to make it easier for hospitals to add new devices and supplies to their chargemaster.
• Dental software vendor Curve Dental incorporates DrFirst’s e-prescribing technology into its product, which will allow users to comply with New York’s I-STOP mandatory e-prescribing regulation that takes effect March 27, 2015.
• Meditech will add more products from Truven Health Analytics’ Micromedex Patient Connect Suite to its EHR platforms.
• Clockwise.MD announces that nearly 1 million patients have been seen through its Web-based appointment reservation tool.
• Clinical Architecture offers the third installment of its blog series on “The Road to Precision Medicine.”
• Certify Data Systems validates the interoperability of its HealthLogix solution at the IHE North American Connectathon.
• Anthelio renews its contract with Saint Mary’s Health System (CT).
• Besler Consulting latest blog post covers “Optimizing Communications to Reduce Readmissions.”

Contacts

Mr. H, Lorre, Jennifer, Dr. Jayne, Dr. Gregg, Lt. Dan.

More news: HIStalk Practice, HIStalk Connect.

Get HIStalk updates.
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Morning Headlines 2/10/15

CMS’s Efforts to Prepare for the New Version of the Disease and Procedure Codes

A GAO report finds that CMS is adequately prepared to migrate to ICD-10 coding in October 2015.

WellStar, Emory explore merger in Atlanta area

Emory University Healthcare  is in discussions with WellStar Health System to merge, forming an 11-hospital integrated delivery network in the Atlanta area.

Medical Device Data Systems, Medical Image Storage Devices, and Medical Image Communications Devices

The FDA issued two final guidance documents on the regulatory stance it will take over mHealth apps and software systems that send and receive, but do not alter, medical data.

Curbside Consult with Dr. Jayne 2/9/15

One of the most fun things about being part of the HIStalk team is the ability to interact with readers. I asked last week if the “Fireside Chat” at the ONC annual meeting (with former Senate Majority Leaders Tom Daschle and Bill Frist) actually had a fire. A reader quickly replied with his summary: “Well attended, interesting, some controversy, but an informative and enjoyable event.” But alas, no fire.

Another reader sent this sweet little bit of shoe love. It arrived in the middle of a crazy, crazy week and I enjoyed the smile it put on my face. I probably would have enjoyed the smile a little better if I hadn’t been caught multitasking in a meeting, when my grin made it clear I wasn’t paying attention to the ridiculous discussion around patient satisfaction scores that was going on at the time. I bet if we gave patients one of these treats at checkout, we’d get better scores. I’m not being flippant, but it’s at least as good as some of the plans I heard thrown out by the 24-year-old MBAs who seem to be running the place.

From the practicing physician side, many of us are at a point in our careers where the daily grind of dealing with insurance, regulators, and government entities seems to outweigh the satisfaction we get from actually caring for patients. I was inspired to hear from a young IT consultant who answered my question about, “If you could be anything you wanted, what would you be?”

I asked myself this very question last fall and decided without a doubt that I wanted to be a doctor. I have a liberal arts degree, almost zero science background, and have never taken the MCAT but am in the process of applying to post-baccalaureate pre-medical programs. Seeing firsthand how people approach healthcare convinced me that this was something I needed to do. Thanks for contributing to a great site and being part of the industry driving me towards my dream.

I sent back some words of encouragement and hope he will stay in touch. I don’t think many would argue with the idea that being part of the healing professions is a calling. Given all the pressures associated with healthcare today, I think it may be even more so than it has been in the past. My medical school class had a large number of people without science degrees and I know many medical schools are looking for non-traditional students, so I wish him the best of luck.

Another reader who has worked his way up through the industry over a lengthy career offered some options for what he would do if he had the choice to do something different:

• Start over. Go back to school and learn something new. Concentrate on helping people help themselves in this messed up world of healthcare.
• Change. Do something you love and you won’t work a day in your life. So maybe cooking or entertaining. Thoughts of starting a coffee shop or something very new and very social come to mind.
• Hang in there. Continue to fight the good fight and go down with the ship when the time comes – a comfortable option because I make good money and my schedule is mine (for the most part).
• Give up. Find some way to make a bunch of money so I don’t have to think about a career. Suing a doctor over something has interest!

I hope he was kidding about the last item, but some of the others do resonate. Right now I’m leaning towards his third bullet – hanging in there. At times my work is crazy, but there’s something to be said about the devil you know vs. the alternative. Option #2 definitely resonates. We used to tease one of our residency colleagues about her hobby of raising goats until the organic movement really took off. Now her income in the niche dairy business allows her to volunteer at a free clinic, which has been greatly satisfying.

In the same vein, one reader would become a professional volunteer. “I do my share of volunteering and giving back, but I always think I could do so much more.” Watching my parents volunteer during their retirement has been great and I’m glad they remain healthy enough to do so. My favorite answer to the “what would you do” question is from a long-time reader. I had to change a few of his answers to protect his anonymity, but I hope you have as much fun reading them as I did:

I would continue to battle the politics and personalities of a non-profit health system. I would work tirelessly for days on end for the same amount of money I could make delivering for FedEx or tending bar. I would get dressed up so that I can sit in a poorly-lit work area in a chair that has celebrated its own retirement working on a computer that can only be classified as “retro” to anyone else familiar with technology.

I would learn the names of the faceless consultants who roam the halls with shined shoes, sharp ties, and opinions on everything. I would let individuals that have no stake in the community or organization play Russian Roulette with our financial and social futures. I would wake up and be the butt of every motivational poster. I would be the buzzword people are looking for. I would wake up and do mock Joint Commission audits every day because it is fun and everyone loves the villain. I would “operationalize” bad ideas more. Since that is the new word, I would need to be great at it, because the consultants said so.

Although he paints a bleak future, it’s a good reminder to some of us about why we went into this in the first place. If I wanted to make more money than the night team at Taco Bell did, I would have quit during residency. (Yes, I did the math, and it wasn’t pretty). If I wanted glamour and a windowed corner office, I would have gone to business school or law school. If I wanted shiny shoes and sharp ties, I could have gone into pharma. 

I chose healthcare, not for the saggy scrubs and rubberized clogs, but because I wanted to make things better. In the immortal words of Dr. Mark Greene, “Helping them is more important than how we feel.” Whether it’s a sick patient or an ailing hospital, I’m here to stay.

Email Dr. Jayne.

Readers Write: Fact and Fiction About Anthem’s Breach

Fact and Fiction About Anthem’s Breach
By John Gomez

Anthem has quickly created a surge of inquires across the wire, leaving many CIOs wondering how they can keep ahead of the cyber-security challenges that continue to evolve. I suspect no one is surprised to learn about the existence and extent of the attack on Anthem. More than likely, many in our industry continue to wait for the “big one.” That in and of itself is a rather scary state of affairs. Most of us are not surprised and we don’t collectively believe this is as bad as it will get.

The Anthem breach is an ongoing criminal investigation led by the FBI with the assistance of FireEye and Mandiant, so nobody knows all of the details. As was the case with the Sony Pictures breach, sources will make statements without the evidence that only the FBI possesses. Here’s what we know today.

Anthem reported the breach publicly within eight days of discovery. Approximately 80 million customer and employee records may have been stolen, but the common thinking is that the actual number may be higher and that there is a high probability that other critical data was also compromised by the attackers.

The customer and employee data stolen was complete — name, home address, email address, date of birth, medical history, employer information, family relationships, and much more. That valuable information allows attacks to continue against the individuals whose information was compromised.

The concern with Anthem is that this is a move by a foreign state to amass profiles on individuals and use that information in future operations. That’s one theory, but equally likely is that the breach was profit driven since complete records are worth well over $100 on black markets.

Attribution — figuring out who did it — is one of the most difficult things to do in the world of cyber-forensics. Companies specialize in attribution, but their success rate is low, often less than 50 percent. The amount of computing power, resources, and advanced algorithms required to perform attribution at a higher level of success is mind boggling. While a theory exists as to who carried out the Anthem attack, it could be proved wrong as the evidence unfolds.

Current intelligence points to one of two groups with ties to China — Deep Panda and Axiom. Both groups have previously carried out verified attacks that had sophisticated intelligence-gathering objectives.

Deep Panda has developed a five-year strategic attack plan that includes objectives specifically focused on healthcare targets. Axiom has a specific and focused attack plan that includes government agencies, electronics and integrated circuit manufacturers, Internet-based services companies, software vendors, journalism and media organizations, NGOs, healthcare providers, biomedical device manufacturers, pharmaceutical companies, and academic institutions.

It appears that Anthem may have been compromised by parallel attacks. The first focused on employees with phishing attacks that allowed the attackers to deploy malware via their corporate email accounts. The second attack appears to have been via DNS compromises used to deposit malware.

Credible cyber-security operators rarely call an attack “sophisticated” or “advanced” unless they are trying to make headlines. Anthem’s attackers had a plan, were extremely patient, and were focused on their victim. Their attack was sophisticated and advanced, but due to tactics and practices, not because they used a new generation of attack technology. Anthem was mostly likely beaten by off-the-shelf technology and practices, the same techniques that attackers would use in penetrating any healthcare organization.

The preliminary investigation suggests that Anthem’s attackers used malware known as Poison Ivy or HiKit or some combination or derivative of those tools. Both malware applications are attributed to Chinese developers. Steps can be taken to determine whether an organization has been compromised by those tools, and if found, a cyber incident response team should be contacted immediately.

Anthem was tested for exploits by attackers over months or even years. Its employees fell for a phishing attack that compromised their machines. In parallel, perimeter systems were also compromised. Malware allowed the attackers to monitor network traffic, take over webcams, and capture confidential date over a long period. Some believe that Anthem was an attack pivot from which its clients or vendors could be compromised.

I suspect that we will learn that Anthem also had weak passwords (fewer than 15 characters), didn’t use dual-factor authentication, relied on third parties for DNS, and very possibly had its supply chain compromised.

Company executives can miss a few quarterly financial goals, run late on a few initiatives, and even run over budget a couple of times. But if they have a major breach, their career is over. Target’s CEO resigned after its breach and just last week the top film executive at Sony Pictures stepped down. I suspect we will see something similar at Anthem.

There is a saying in special operations: don’t be that guy. Don’t be the person who takes the easy road or embraces mediocrity. Get  mad and assertive about cyber-security. Rethink vulnerabilities, test systems, learn what you don’t know, share information with the community, and become vocal.  We have a choice — we can either wait to be attacked or we can decide that enough is enough.

John Gomez is CEO of Sensato of Asbury Park, NJ. Intelligence Analyst Laura Walker contributed to this article.

John will host a free, HIStalk-sponsored Q&A webinar on the Anthem breach on Friday, February 13 at 2:00 p.m. Eastern. 

HIStalk Interviews David Ting, CTO, Imprivata

David Ting is founder and CTO of Imprivata of Lexington, MA.

Tell me about yourself and the company.

I’m the CTO and founder of Imprivata. We focus on healthcare IT security and streamlining clinical access to computer systems.

What are the technology trends in positively identifying users and patients?

Government regulations are increasingly tightening up from both a privacy perspective to meet HIPAA requirements as well as the new requirement, which is how you tie a prescriber’s identity to an electronic prescription, or in fact, any other transaction. This started years ago with Ohio’s positive ID program, where every electronic prescription has to be confirmed by a provider who is authenticated using some form of two-factor authentication. 

More recently, the DEA has allowed controlled substances to be electronically prescribed, again provided there is a means for the e-prescribing systems to confirm that prescribers are using two-factor authentication. The DEA’s requirements are much more rigorous. They consulted with NIST — National Institute of Standards and Technology — to provide the recommended procedures for not only the second-factor authentication, but also identity proofing. NIST is very prescriptive in terms of the methods that are allowed. It has to be a combination of well-known authentication modalities that we all know – something you know, something you have, or it could be a token or something biometric.

We have done a fair amount of work over the past few years making sure that two-factor authentication is integrated into the clinician’s work flow. Our Confirm ID product packages a lot of the compliance requirements of the two-factor authentication capabilities into one product that a number of EMR vendors are using. Today, it’s something that you know like a strong password, a fingerprint that has to meet specific NIST requirements in terms of both of accuracy of the match as well as the imaging capabilities of the scanner, and something that you have, which could be a token, something that generates a passcode, or a cryptographic smart card.

The trend clearly today is on wireless authentication and the ability to leverage the mobile phone, and in the future, secure wearable devices that can all vouch for your identity and serve as one of the “what you have” tokens or components of the authentication process. That is a trend that we are very actively working on and see a lot of promise in — simplifying that task for the clinicians so they don’t have to remember something and don’t have to take a one-time passcode out and transcribe that eight-character code into a form.

Those are the technologies that we believe will become dominant as policies get tighter and government regulations become more prescriptive.

Is the age of passwords just about over?

Passwords have been around as long as computers have been around because it was the simplest form of authentication. In today’s world, we have too many passwords and passwords are too easily compromised. Anything from shoulder-surfing to keyboard-sniffing technology can easily lift them. Increasingly, the new phishing attacks that are being launched in a wholesale manner are much more sophisticated. It’s very, very hard for the average employee to distinguish between a legitimate request from the IT staff and a malware attack.

The only way you’re going to defend against that is to use “something you have” or “something you are.” Something that can’t be electronically stolen — it has to be physically stolen. Apple has done a great job with the Touch ID on the phone. Unfortunately, it doesn’t meet the DEA requirements of “something you have,” but it is a step in the right direction. 

I believe the phone, together with Bluetooth technology, will become a very powerful mechanism for eliminating the need for password. That together with some form of simple but DEA-approved biometric medication could become very useful. Increasingly, facial recognition is being used, as is palm vein scanning, for a lot of patient identification.

The technology will improve. With the advent of the 3D cameras that Intel and other vendors are building, you can start to see how that technology can potentially play into much more active facial recognition. Passwords will hopefully become something you use only in case of emergency as opposed to something that you need all the time.

Another seemingly obsolete technology is pagers. Will hospitals get rid of them completely any time soon?

Pagers have been around since 1950. It was initially used in some critical industries to alert people to use the phone as a means of communication. Pagers have morphed over the last 60 years from an alerting mechanism to now providing very simple textual output with the opportunity to respond from some pagers bi-directionally.

Those capabilities are rapidly being surpassed or provided by the smart phone and even simple flip phones. Technology, certainly in healthcare, is moving towards the increasing use of secure electronic messaging using smart phones. As Wi-Fi coverage and Wi-Fi reliability is improved within the hospital and certainly outside the hospital with 4G technology, the ability for smartphones to serve as a reliable communications mechanism will eventually displace many of the uses for pagers. It’s more cost effective and there’s much more informational content that you can share.

Our Cortext product is a secure messaging product that allows a clinician to send textual data or photos. In the future, we can see sending all kinds of complex PHI in a secure fashion and also to have that receipt mechanism that indicates when the receiver actually saw it, whether they received it, whether they saw it, whether they can respond to it. That will eventually become the predominant communication mechanism.

Your have a lot of experience with document management and other systems. Are we missing opportunities by worrying too much about text field entry instead of other forms of media?

Text fields are only relevant because that’s the way computers originally were built. We had keyboards. We added a pointing device with the mouse.

A physician with a smart phone is carrying a microphone, an accelerometer, and a camera with them. That will allow more media-rich content to be integrated into the EMR record. We have lots of clinicians who want to take photos of their patients’ wounds or their gait and then incorporate that into the EMR as opposed to textually describing it. 

More complex sensors  will become available. A lot of personal fitness devices and vitals devices will become easily accessible through the smart phone. That will become the means by which a lot of the data that we enter today manually, like your vitals, will be electronically captured and passed into the EMR systems.

Morning Headlines 2/9/15

Anthem hack: Personal data stolen sells for 10X price of stolen credit card numbers

Security analysts report that the Anthem hackers should be able to sell the stolen health records for as much as $1,000 each, making them ten times more valuable than stolen credit card data.

Defense Health shoring up IT ahead of EHR move

The Defense Health Agency reports that it will spend 2015 updating its IT infrastructure in preparation for its upcoming EHR implementation.

VITL Launches Marketing Push With Super Bowl Ad

The Vermont Health Information Exchange spent $13,000 to run a 30-second regional commercial during the Super Bowl in an effort to increase patient consent rates and boost physician utilization.

Monday Morning Update 2/9/15

Top News

 

Experts say hackers can sell the patient information exposed in Anthem’s 80 million member breach for up to $1,000 per record (or a staggering potential payout of $80 billion for the thieves) since it forms a “complete identity theft kit” that includes insurance and Social Security numbers (stored unencrypted, in Anthem’s case). A stolen credit card number is worth only $1 and insurance credentials alone fetch just $20. Anthem admits that hackers used the credentials of at least five of its IT employees for up to a month before the attack, which the company detected only when a database administrator noticed someone running queries under his user ID. Investigators are looking into evidence suggesting that China-sponsored hackers launched the attack to obtain information to be used in espionage-related phishing, which seems to be the standard, non-verifiable post-breach excuse.

Meanwhile, scammers pile on by sending bulk spam using Anthem’s logo (above) and cold-calling people claiming to offer credit monitoring trying to get recipients to divulge their own confidential information.

The healthcare- and privacy-related background of Anthem CIO Thomas Miller: zero. He came from Coca Cola just eight months ago, hired because of his background with digital marketing and loyalty programs. 

HIStalk Announcements and Requests

Nearly 80 percent of poll respondents think the federal government should issue a national patient identifier, about the same percentage that answered positively in my 2013 poll asking the same question. They added some thoughts: (a) an opt-in version would be more acceptable; (b) the VA could use the identifier to provide information needed to process Social Security disability claims; (c) the ID should be used only for healthcare, employers can’t ask for it, and the individual owns the information associated with the number; (d) use Social Security number as the patient identifier; (e) since nobody wants their Social Security number used for fear of hacking, instead create an ID consisting of date of birth, first three letters of the last name, and the last four digits of the SSN; and (f) a private company’s solution is available now and they’re looking for partners.

New poll to your right or here: will Athenahealth be able to create a competitive, large-hospital information system by rewriting BIDMC’s internally developed WebOMR? Vote and then click the poll’s “Comments” link to elucidate further.

Welcome to new HIStalk Platinum Sponsor CoCentrix. The Sarasota, FL-based company’s Coordinated Care Platform, built on the Microsoft Dynamics CRM solution, optimizes the behavioral health continuum for the benefit of state and local government agencies, providers, and consumers. Components include a certified HHS EHR for state agencies and community providers (intake, assessments, treatment plans, orders, documentation, billing, dashboards, and data mining), enterprise-level case management, a managed care solution, and the rather cool Caretiles integrated mobile app marketplace for consumers. The 32-year-old company has 500 customers in 42 states. Thanks to CoCentrix for supporting HIStalk.

Here’s a patient-centered overview video of CoCentrix that I found on their site.

Sign up now if you want to come to HIStalkapalooza on April 13. I’ll have to shut the page down once I get too many requests to accommodate. I can’t necessarily invite everyone who wants to come, but I can say for sure that you won’t be invited if you don’t sign up (which is true for me as well, so I’ll register today).

Last Week’s Most Interesting News

• Roper Industries acquires two health IT companies, including the leading laboratory middleware vendor as a complement to its Sunquest business, for $450 million following its recent acquisition of Strata Decision Technology.
• Insurance company Anthem announces that a cyberattack exposed the information of 80 million of its customers, but says no medical or credit card information was stolen.
• Athenahealth acquires rights to Beth Israel Deaconess Medical Center’s self-developed WebOMR hospital information system, announcing plans to rewrite it to sell to large hospitals.
• ONC requests $92 million for its FY2016, budget, with $5 million of the 50 percent increase set aside to create a Health IT Safety Center.
• Cerner completes its $1.3 billion acquisition of Siemens Health Services.
• ONC publishes the draft version of its 10-year interoperability roadmap that includes a goal of allowing most patients and providers to exchange and use a common set of electronic clinical information by the end of 2017.

Acquisitions, Funding, Business, and Stock

From Friday’s Athenahealth earnings call:

• Chairman and CEO Jonathan Bush says the company “fell short of the finish line” in 2014 due to “over dependence on one channel partner, over focus on ambulatory medicine, and limited experience with turnaround situations.” He says those were “admission tickets to new levels of adulthood” that will allow the company to get back to 30 percent growth.
• Bush admitted that the company’s enterprise prospects have balked at solutions that don’t address inpatient.
• He says that the acquired RazorInsights product, built for hospitals under 50 beds and priced at around $250,000 to $500,000 per hospital, is “the multi-tenant platform we need to manage most hospitals in the country,” while BIDMC’s WebOMR can handle the more complicated hospitals. Those will be merged together to form Athena Inpatient Clinicals.
• Bush says the company failed in missing its Net Promoter goal of 52.5 in hitting only 42 for Q4.
• The company hired 1,300 employees in 2014, raising its total to 3,700, and will add another 1,000 in 2015.
• Athenahealth’s CFO says RazorInsights produces “a very small amount of revenue at a loss” and that WebOMR is not immediately commercializable, so she recommended that analysts view the acquisitions as ways to eventually enter the inpatient market rather than as revenue-contributing products.
• The company “tried to stop the bleeding on the nervous prospects” who were passing on Athenahealth to choose Epic.

ATHN shares closed Friday down 0.8 percent. Above is the one-year chart of ATHN (blue, down 17 percent) vs. the Nasdaq (red, up 15 percent).

From the McKesson earnings call, which had few mentions of its Technology Solutions business:

• Technology Solutions revenue was down 7 percent due to lower revenue from Horizon Clinicals and the exited UK workforce business, in line with projections.
• John Hammergren says McKesson is “in middle of the game” in trying to move Horizon customers to Paragon.
• He adds, “There’s a bunch of interesting places that we’re placing bets, including CommonWell Health, that we think will pay off” as the company sells data-related products.
• Asked about the future Technology Solutions product line, Hammergren said, “I would say though that as you think out two or three years, the EMR space and the transition away from Horizon will be more complete or complete, and we’ll see more results, we think, in terms of this pay-for-performance priority. I mentioned that HHS and others believe that the market has to move more towards a value-based reimbursement methodology. That’s going to require additional investment.”

Crain’s Chicago Business profiles 73-year-old, near-billionaire investor Dick Kiphart, who says of his investment 10 years ago in healthcare communications company Emmi Solutions, which he sold two years ago to Primus Capital, “It stumbled for a long time. I kept my money in, and it looks like it will be a two- or three-bagger.”

People

Jennifer Haas (Microsoft) joins Aventura as VP of marketing.

John Hallock (CareCloud) joins Imprivata as VP of corporate communications.

Tony Scott (VMware) is named chief information officer of the United States, replacing Steve VanRoekel.

Announcements and Implementations

Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, MD donate $75 million to San Francisco General Hospital (CA), where Chan did her pediatrics residency. The city will name the expanded facility Priscilla and Mark Zuckerberg San Francisco General Hospital and Trauma Center, which is pretty much the opposite of creatively and succinctly naming a social media website “Facebook.”

Government and Politics

The Defense Health Agency says its top 2015-2016 priorities will prepare it for its EHR implementation: continuing to work with the VA on interoperability, consolidating infrastructure, and standardizing configurations.  The agency’s director explains that, “This is an $11 billion procurement. When you think about that, this infrastructure piece is huge. So we have to think about what we’re going to do to make sure we get the best performance out of that EHR."

Technology

A CNN report says the Apple Watch will fail (at least in compared to typically blockbuster Apple offerings) because: (a) for $350, all it does is allow users to perform existing iPhone functions from their wrists; (b) rumors are that the battery life will be awful at just 10 hours; (c) it’s rectangularly chunky compared to sleeker products already on the market; (d) it doesn’t do anything particularly compelling; and (e) it’s likely to be improved in a year, forcing users to buy it all over again.

Other

Grant-funded Vermont Information Technology Leaders pitches its new HIE to consumers by running regional Super Bowl ads on local TV stations at a cost of around $13,000 of its $195,000 marketing campaign.

University of California’s 10 campuses will require students to be vaccinated for measles starting in 2017, with students expected to enter their vaccination records into UC’s electronic system. Religious and medical exemptions will be honored, UC says.

Forbes notes the “emerging bull market” for “digital healthcare journalism,” with examples being Politico’s three-reporter subscription-only eHealth launch in 2014 and its plans to expand to an overall healthcare team of 16, the recent sale of Med City Media, and establishment of a five-reporter health and science department at BuzzFeed.

Patients of Reid Hospital (IN) complain when the hospital tries collect debts from as far back as 2011. The hospital has apologized, saying that some patients didn’t receive the usual three monthly bills before their accounts were turned over to collection agencies by a former contract company.

The gutted healthcare system of cash-strapped Greece requires hospitalized inpatients to hire their own nurses for even basic inpatient care, but lack of money and insurance leads many of them to retain poorly trained and illegal phony nurses – often immigrants — provided by temp agencies that cruise the hospital halls handing out business cards. Hospitals say they are too understaffed to expel visitors who offer to rent TVs, bedding, and chairs to patients, adding that even the state doesn’t have the legal authority to issue fines to violators.

Weird News Andy never eliminates stories about fecal transplants, titling this one “Does this bacteria make me look fat?” Researchers suggest not using gut bacteria from overweight fecal donors to treat infections since a case study found that the recipient gained 34 pounds in the 16 months following the procedure.

Sponsor Updates

• Medicity offers a recap of the HL7 conference that showcased FHIR as the “next big thing” in healthcare.
• Sandlot Solutions writes about “Interoperability: Making the ONC’s Vision a Reality.”
• Courtney Patterson asks, “Could Your Reporting Team Structure be Helping or Hurting Your Organization?” in the latest Sagacious Consultants blog.
• RazorInsights will exhibit at the Rural Healthcare Leadership Conference February 8-11 in Phoenix.
• Qpid Health’s Amy Krane summarizes the company’s recent webinar on how Partners Healthcare eliminated prior authorization.
• Siavosh Bahrami rants about the importance of simplicity in a new pMD Charge Capture blog.
• PatientKeeper offers a post on “The Interoperability Non-Controversy.”
• Park Place International offers advice on “Getting Ready for the Meditech Patient and Consumer Health Portal.”
• Patientco posts an article titled “The Importance of Payment Plans in Your Revenue Cycle Strategy.”
• NVoq Director of Healthcare Industry Solutions Chad Hiner, RN explains why “EMR adoption will require more than financial carrots.”
• In the latest Phynd blog, Thomas White asks, “How many employees does it take to enroll a new provider in a hospital’s EMR?”
• Ryan Reed offers “5 Tips to Prepare for Cloud Migration” in the latest NTT Data blog.
• Netsmart will exhibit at the Open Minds Best Management Practices Institute meeting February 12-13 in Clearwater Beach, FL.
• MBA Health Group Consultant Nicholas Bocchino writes about the possible changes to Meaningful Use this year in its latest blog.
• PeriGen launches its Five-Minute Challenge for labor and delivery managers.
• Medfusion will introduce its Help Center in an event on February 12.
• Nandini Rangaswamy asks “What works? EHR-based PHM or PHM-based EHRs?” in the latest ZeOmega blog.
• WeiserMazars releases its Group Annual Report.
• T-System shines a spotlight on staff member Javariah Khan in its latest Informer blog.
• General Manager of Clinical Solutions Eric Brill writes about Voalte’s work with UCSF Medical Center Mission Bay in a new blog.
• Stella Technology Founder and SVP of Business Development Salim Kizaraly discusses HIEs past and present in a Relentless Health Value podcast.

Contacts

Mr. H, Lorre, Jennifer, Dr. Jayne, Dr. Gregg, Lt. Dan.

More news: HIStalk Practice, HIStalk Connect.

Get HIStalk updates.
Contact us online.

HIStalk Interviews Todd Cozzens, Partner, Sequoia Capital

Todd Cozzens is a partner with Sequoia Capital of Menlo Park, CA.

Tell me about yourself and the company.

My career after college was trying to win the gold medal in Olympics in sailing. I did that for about six or seven years almost full time. Somehow I got my way into selling medical devices for a company named Marquette Medical Systems. We were in the early dabblings of what we called patient data management, taking all the data from the devices and creating flowsheets for clinicians in high-acuity areas.

I worked my way through Marquette and eventually took the company public with the founder. As we approached the end of the 1990s, we were approached by GE to buy the company. It was a long negotiation with Jack Welch directly and Jeff Immelt, who was running healthcare at the time. We eventually did the deal. 

Out of that, I understood that the next wave was not just the medical devices themselves, but  what clinicians — especially those in the high-acuity areas — were going to do with all the data. Akin to where we are today, with all these doctors in general having EMRs and not understanding what to do with the data. That led to Picis, which was a technology that I had seen in my travels. Eventually I struck a deal with the technical founders of Picis and we got the first seed capital. 

It was a great run with the company. We built it to the largest provider of electronic medical records for high-acuity care. We didn’t call it that at that time – it was emergency room, operating room, and ICU. Built that up to about a $175 million run rate, very profitable, with an acquisition and a couple of other things that we did to go after not just the clinical side, but the financial side of taking care of these very high-acuity, expensive patients. 

We were about to take it public in 2010. That jibed with the Affordable Care Act being finalized and a lot of players in healthcare — like insurers and providers — wondering what their future was going to be under the change. UnitedHealth Group decided they didn’t want to be a managed care company for the rest of their existence and they had all kinds of underlying assets, so they decided to broaden their scope a bit. That’s when they started looking at provider-type technologies.

Their thesis about Picis was that the brick and mortar of existing hospitals was going to eventually just become big towers of ICU, operating room, and emergency care facilities as everything moved out of the hospital into other types of settings that are more accessible and more affordable. That proved to be true — it’s happening as we speak today. The day I joined United, I gave the reins of Picis to other managers and helped with the Optum brand and started their Accountable Care Solutions division, which we built up to a pretty big part of Optum within a short time.

A number of events happened leading up to my involvement with Sequoia. When I was raising money, I never saw Sequoia. From what I learned later, they  took a hiatus from healthcare after biotech and other investments in the late 1980s. But they had gotten back into healthcare on the premise — this was before the Affordable Care Act – that no matter what happens to healthcare reform, 20 percent of GDP for healthcare is unsustainable and there will be enduring, disruptive companies that are going to help change the picture over the next 10 years. We had a number of companies that we knew or were involved with in common. I was asked to join full time in April 2012.

What role do investors play in the day-to-day operations and the strategy of a company?

It depends whether it’s an early-stage company or a late-stage growth company. For an early-stage company, the old adage used to be that the company had to be a bicycle ride from our office, which is adjacent to Stanford University. That’s because these young companies need support and they need help. They need mentoring and they need contacts. That was the best way we were able to help them. Plus Don Valentine, the founder of Sequoia, said, “You know, when I fly to Denver, I’m flying over 15 companies in Silicon Valley that I’m probably overlooking.” So in the early stage, there’s a lot more involvement.

In growth stage, it’s whatever you can contribute. To be a first-rate investor today, you’ve got to provide a lot of capabilities for your companies. Marketing support, hiring, what kind of systems should you have in place, etc. We’ve built up a pretty good support part of Sequoia that is dedicated to helping our founders grow their companies.

Is it tough as a passionate founder to have investors giving advice or issuing requirements?

I always found investors that had more than money, something about them that could be value-add to me. I had to be humble and willing to learn enough to take their advice and seek their advice on a regular basis.

For example, my first chairman was a guy named Bernard Giroud. He was president at the beginning of Intel Europe. He took Intel from a million to well over a billion in revenue. He knew everybody in the tech industry. He had seen every movie before. When I needed advice about expanding the sales force, product development, what type of people to hire, how to organize HR, finance, areas that I was less familiar with, he had great advice because he ran strategy directly for Noyce, who was the CEO of Intel and was very close to Andy Grove and the rest of the management there. He learned a lot, so taking some pages of out of his playbook was absolutely incredibly helpful to me. 

As we grew the company, we attracted board members and sought board members that were going to be value-added, whether they worked for an investor or they didn’t. An interesting example is that when Bernard left Schroder Ventures, which became Permira, they put in a kid in his place that had no value add whatsoever. In fact, I thought his judgment was really off on some things. Once you have somebody like that on your board, it’s hard to work them off. It took us a while to do that. 

Having a helpful, resourceful board is critical for a young founder. There’s just no way, as a young entrepreneur, that you have all the skills that it takes to build a company. Being a good listener is not a skill that goes readily with being a great CEO leader. You’ve got to learn how to do both.

How do you know when it’s time to have a conversation with the founder about taking a different role than CEO?

We see that fairly often, especially with the early-stage companies. In Silicon Valley, business models, entrepreneurship, and start-ups are at a level three generations ahead of any other place I’ve ever seen, just because of the amount of companies that are being built there now and the amount of talent that’s migrating there. Often you’ll see founders who are the technical guys who are great at building a product or they understand the consumer market or whatever, but they know and embrace bringing in a professional CEO to run the company. In healthcare, that is not often the case, because it’s often a physician founder who thinks they can do everything.

It comes naturally where you just realize that – I use this phrase even though it’s pejorative – “this person’s not going to get any taller.” In other words, they’ve reached the maximum of their skill set limit and it’s time to bring in somebody. I’ve been involved in situations where it’s been a rough ride to convince them. But I would say in almost all cases, eventually once you get through the pain and the hurdles of putting a new CEO in place, it works out.

Sometimes the problem is that you have to bring in someone who can do it all. If you bring in somebody from outside of healthcare, that’s always tough. In some cases, because of time pressures, you bring in the wrong guy. That can be even worse. You see situations like Apple. They had to bring back Steve Jobs and it turned out to be great. In the intervening times, Steve had learned a lot.

It depends on the personality, what they’re open to reach beyond their own skill set. It takes a lot of work and a lot of involvement to make one of those transitions happen. It’s not something you can do with quarterly board meetings. You have to step up your involvement in the company a lot more in those situations.

In our DNA at Sequoia is the inherent trust in the founders we partner with and we have a track record of supporting them throughout the entire growth of the company. The majority of our founders make the transition from start-up to a much bigger company. In almost all cases where the company is struggling with scaling, the founders realize the company has outgrown their skills and they proactively reach out to us to find an execution-oriented leader as the company scales. In some cases, we need to convince the founder to bring on more talent mostly to augment them, and in pretty rare cases, to replace them.

What do you actually do as a board member?

My first inclination is to say to myself, is what I’m out about to say at this board meeting truly helpful and necessary for the CEO and management to run a better business, or are my own "CEO / operator / control freak" instincts taking over and forcing me to spew something out? It took me a while to adapt to that, but now I think have a very strong bond and trust with the CEOs and founders I work with.

I ask the same of fellow board members. Is their advice worthy, or do they just like to hear themselves talk? God knows management doesn’t need 45 different points of view from the board  — they probably have enough internally. My colleagues at Sequoia are the best I’ve ever seen at being helpful, precise in their advice and not wasting words and time​. I’ve learned a lot from them.

Having run board meetings, I pride myself as using the board for a very positive tool to help grow the company. It’s how you manage your board, how you handle the board meeting, and how you prepare people for the board meeting. As CEO, I worked on a package of materials that the board could look at to  understand the pulse of the company before coming into the board meeting. Like presenting an ICU spreadsheet that the intensivist was used to looking at and could immediately assess the condition of the patient and what needed to be done — visually and the right information and not too much information. That took some time and I took a lot of advice from others on how to do that. What’s the package that you’re presenting? What are the main issues? 

Trying to sell the board, trying to be anything but completely transparent is the wrong way to go, because eventually someone’s going to find out. Surprises are going to develop. Boards get twisted with companies when you miss expectations. You raise money at a very high valuation and you don’t perform to that valuation. 

My advice to entrepreneurs is to prepare your boards really well for the board meetings. Some board members don’t like to even open up a PowerPoint until they either get on the plane to the board meeting or during the board meeting. Call those people prior to the board meeting – those might be people that just like to do things verbally. Walk them through it.

In the board meeting, try to get through the perfunctory issues as quickly as possible. The meat of the matter is the strategic issues that need to be discussed. Half of it’s getting the board to understand what your company is all about. Doing things like sending my board members to a local emergency room, Mount Sinai in New York or Mayo Clinic, to see how the product operates and what the user issues are. To really understand how the product is used is extremely helpful. 

You can’t give your board too much information. At those board meetings, what are the top three tough issues that we have to tackle? What are the other issues for future growth? For example, you might have a company that is doing really well. Bookings are extremely important for a young company — it’s probably the most important metric to be watching, because it’s obviously the temperature on future performance. Bookings are trending really well, expense management’s been fantastic, and you’re already 10 percent EBITDA  cash positive. You know, great. Should you be spending that 10 percent on expanding your sales force or developing that new product? Because things are going to tap out at the end of the quarter or at the end of the year. On the other hand, advising a company to run that close to the vest on cash is always a tough game to play.

Understand the business and the momentum of the product. If I’ve got a product out there that’s just absolutely lights out, has been turned into a “got to have” product, and I see that’s going to be there for the foreseeable future, I’ll do everything I can to encourage the operating team to focus on growth. Growth is scary for a young team. Getting all those bookings is a great thing, but executing on them and having satisfied customers on the other end so that cycle keeps continuing is not an easy task. 

Most companies I see that have great bookings growth, a great product, and early success with customers seem to be the management teams that can handle the “what happens when the orders have to get installed” and are usually good at bringing on the right people, experts that have done it before on the operation side to execute, in most cases. But they need a lot of help and understanding then. 

The other thing is how they look at talent. Are they the type of manager that wants just a lot of “yes” people around them, or do they want people that are going to push back, going to do the right thing? That’s another thing you’ve got to really be careful with with these boards.

What company characteristics are have the most impact on success?

Early on, figuring out whether this is a product or a company. By understanding the market size, the market potential that you have or is this a stepping stone to a larger market, is very, very critical. I see that in a lot of incubators. It’s great that there’s a lot of people that are taking that kind of risk with their careers and stepping out there in the cold, dark world to try to build these companies. But I wonder in many of the cases what have they done to really walk in the shoes of the people that are going to be using those products.

To me, the products that are born out of a natural need by customers or someone that’s experienced this in their family … I know a lot of great companies were built because, unfortunately, a family member had a bad experience and their life’s mission was, how are we going to fix that? But it’s really critical to understand what the market potential is. It might be just a great product that I might sell to another company, or is this going to be a company in itself with a big market potential? Those are the critical decisions that you’ve got to look at, both as the founder of those companies and the investors.

Do you have any final thoughts?

The idea of accelerating the move to value-based care will have a tremendous impact on healthcare. It’s going to require much more of an effort of employers putting pressure on the insurance companies and the government or CMS leading the way. We all know that when CMS sneezes, the rest of the world has a cold. Fee-for-service is still the crack cocaine of healthcare that people can’t get off. It’s going to take more than just a lot of evolution of different models, you know, shared savings plans, pilot programs by CMS. It’s going to take a real shift in the entire reimbursement system and it’s not going to come easy. But I think there’s the will there to make it happen.

Morning Headlines 2/6/15

Roper Industries Announces Two Medical Software Acquisitions

Roper Industries, parent company of Sunquest, acquires two more health IT companies for a total of $450 million. Data Innovations, a middleware software vendor that supports hospital laboratories, and SoftWriters, a software vendor working in the long-term care space.

Exclusive: Apple’s health tech takes early lead among top hospitals

In a small survey, Reuters finds that 14 of 23 hospitals are moving forward with plans to interface with Apple’s HealthKit API, beating Google and Samsung in terms of hospital penetration.

athenahealth, Inc. Reports Fourth Quarter and Full Year 2014 Results

Athenahealth reports 2014 year end results: revenue is up 26 percent, at $752 million, adjusted EPS $1.31 vs. $1.16.

McKesson Reports Fiscal 2015 Third-Quarter Results

McKesson reports Q3 results: revenue up 37 percent to $47 billion, adjusted EPS $2.89 vs. $1.48. Revenue from its health IT business dropped seven percent to $755 million.

EPtalk by Dr. Jayne 2/5/15

Although our local groundhog said that spring was just around the corner, I’m not sure I believe it. The grey skies seem to match the mood of many of our hospital’s administrators, as they come up with long lists of IT-related projects to keep us busy even though we already have plenty to do.

Regardless of the CMS plans to shorten this year’s reporting period to 90 days, we now have a month’s worth of data and are heading out to our practices to remediate staff and reinforce workflows. It’s a good time to deliver training since business tends to be down in many practices during the first part of the year. With patients having not yet met their ever-increasing deductibles, they tend to be reluctant to come in unless absolutely needed.

I’ve been in touch with some friends in vendor circles, hearing about their plans for HIMSS and specifically what they are planning to help draw people into their booths. I’m not a fan of so-called booth babes (unless they are wearing amazing shoes and can also talk about the product they are representing) and “must be present to win” giveaways don’t do the trick either. One vendor promises a close encounter of the sensory kind, including both aromas and edibles. Knowing the team involved, I can’t way to see what they cook up.

As I sat having dinner with someone wearing a watch that would have made Dick Tracy do a double take, I remembered that an intrepid reader had sent me an article about jewelry that camouflages  tech rather than showing it off. I’ve been keeping my eye on Ringly but hadn’t realized they raised more than $5 million last month. Although I’ve enjoyed my GPS watch and think it’s motivated me to be more active, I do wish Garmin offered something that didn’t scream “Runner!” and looked a little more businesslike.

One of the email digests I receive had a link to a fluff piece about the November round of ICD-10 testing. The American Academy of Professional Coders polled 2,000 participants, concluding that the results were positive with 90 percent reporting no payment shifts in test claims. I wasn’t able to get my hands on the full results, but some of the numbers cited looked a bit strange without current ICD-9 results for comparison. If anyone participated in testing, we’d love to hear about your experience. Additional testing is planned for April.

Speaking of ICD-10, we are planning to start training (again) at our hospital and outpatient offices within the next month. We had begun orienting providers prior to the delay and I have to admit there no longer seems to be any urgency about it. Some probably think it will be delayed again and others are just tired of the ongoing parade of regulatory changes. Our online sign-up sheets are remarkably empty, so we’ll have to start doing outreach to try to draw people in. Some specialties will face larger challenges than others and I’d rather not have a flurry of “emergency” training in September.

ONC held its annual meeting this week in Washington DC. I’d be interested to hear impressions from attendees. In particular, was there actually a fire for the Fireside Chat with Former Senate Majority Leaders Tom Daschle and Bill Frist? Email me.

Email Dr. Jayne.

Readers Write: Paving the Way for Patient Voice at Health Industry Events

Paving the Way for Patient Voice at Health Industry Events
By Simone Myrie
@MyrieTash

There is a revolution happening in healthcare. Once willing to accept their role as passive recipients of healthcare, patients are increasingly being recognized and acknowledged as consumers of healthcare.

What do I mean by this? Individuals are taking on the responsibility of shopping for their own healthcare and purchasing technology to help them better manage their health. Additionally, policy changes are propelling the shift towards consumer-centric care delivery. More emphasis is being placed on reimbursement for patient satisfaction, value-based care delivery, and increased information sharing and communication with consumers.

If health industry leaders want to rethink their approaches in response to this shift, they need to make sure they have truly engaged patients — now consumers – well represented at their major conferences and being included as active participants in the conversation about healthcare. Arguably, HIMSS is the biggest annual health conference in America. I applaud the Walking Gallery for partnering with HIStalk to sponsor a patient scholarship competition to allow for more patient attendance at HIMSS15.

Patients and their caregivers have long shouldered the responsibility of managing their health outside the four walls of the care setting. They have a wealth of information and are stewards of that information, a role that is mutually beneficial to providers. Technology is also changing the way they track, manage, and share their health information.

We know that today, 21 percent of Americans are using technology to track their symptoms. We also know that 58 percent of consumers are more likely to stay with their providers if they offer online access to their clinical health information.

Giving individuals access to their data will be critical in the more competitive, value-based healthcare system of the future. This is why the Blue Button Initiative continues to remind health industry leaders that patient expectations are changing. They want to collaborate more and are activated and engaged in ways we’ve never previously seen.

More people than ever before – regardless of pre-existing conditions or employment status – are gaining access to affordable healthcare, largely because of the Affordable Care Act. The latest numbers report 9.5 million Americans have purchased health insurance through the health insurance exchanges. More importantly, much like any other purchase that they would make, consumers are demanding choice in healthcare.

To meet that expectation, HHS has reported that over 90 percent of consumers will be able to choose from three or more issuers on the exchanges, up from 74 percent in 2014. Consumers can also choose from an average of 40 health plans for 2015 coverage, up from 30 in 2014 based on data at the county level.

With the expanded pool of Americans gaining access to healthcare services, health plans now have to rethink their marketing strategies so that they appear attractive to a new group of stakeholders beyond employers. They now have to sell themselves to individuals, a historic change in the system.

While healthcare leaders convene to talk the latest in care delivery — or better yet, patient engagement — it makes sense to have more consumers present contributing to the dialogue about them. Unfortunately, these conferences often prove to be cost prohibitive for the average individual. HIStalk and the Walking Gallery are leading by example with the latest patient scholarship competition. I suspect they will see a large group of applicants.

Given the crucial role of the individual in the new healthcare system, I hope that more patient scholarships will become the norm at every health industry conference. In the discussion of how to take healthcare into the future, we can’t afford to miss the individual consumer’s voice.

News 2/6/15

Top News

Anthem announces that the information of 80 million of its health insurance customers has been stolen in a “very sophisticated cyberattack.” Luckily for the company, the breach didn’t include either medical information or credit card numbers, or so it says so far. The FBI is investigating. It stands to reason that every breached organization will always claim that the attack was “sophisticated” – nobody would admit that they were hacked by primitive methods that exploited their poorly implemented security.

Reader Comments

From Laura Petri: “Re: Roper acquiring Data Innovations. This is interesting because Sunquest has traditionally disliked DI and wrote their own interfaces instead. DI was viewed as a competitor. Wonder how much they paid?” The announcement didn’t break out the $450 million Roper paid for two companies. The company did announce that its three recent health IT acquisitions cost $590 million and will contribute $100 million in annual revenue, which would be a similar multiple as the $1.4 billion it paid in 2012 to buy Sunquest, which had annual revenue of only around $200 million. Apparently Roper doesn’t mind paying six times revenue. Battery Ventures bought Data Innovations in 2010 for an undisclosed price from founders looking to retire, so it surely pocketed some nice gains.

HIStalk Announcements and Requests

This week on HIStalk Practice: Dr. Gregg sheds light on finding HIE successes. ICD-10 expert David Freedman, DPM offers best practices for making the switch by October 1. Rite Aid RediClinics debut – could Whole Foods clinics be far behind? ONC announces new funding for HIT workforce training. Hawaii moves forward with island interoperability. At-risk practices fall into the "digital divide" thanks to IT costs. Researchers offer physicians think-twice tips on Googling patients. Thanks for reading.

This week on HIStalk Connect: Under Armour acquires calorie-counter app MyFitnessPal for $475 million and fitness coaching app Endomondo for $85 million. The acquisitions will bring 100 million active users into Under Armour’s growing digital health ecosystem. ONC publishes a draft version of its ten-year, API-based interoperability roadmap. HIStalk Connect’s newest series Ramp Up kicks off with interviews from early-stage digital health investor Robert Greenglass of Waterline Ventures, and early-stage digital health startup CEO Jacob Sattelmair of Wellframe.

Listening: Australia-based indie rocker Courtney Barnett, who just announced a US tour.

Acquisitions, Funding, Business, and Stock

Roper Industries, which owns Sunquest and which acquired Strata Decision Technology two weeks ago, buys two more health IT companies for a combined $450 million. South Burlington, VT-based Data Innovations is the largest laboratory middleware company and has 4,500 customers using its 1,000 laboratory instrument interfaces, giving Sunquest an interesting position among LIS vendors who rely on the company’s products. SoftWriters, based in Allison Park, PA, sells specialty pharmacy software.

Rite Aid announces that it has opened RediClinics inside 24 of its drugstores in the Baltimore, Washington DC, and Philadelphia markets and will expand next in Seattle and Texas. Rite Aid acquired RediClinic in April 2014 when it had 30 grocery store locations in Houston, Austin, and San Antonio.

Under Armour acquires two fitness tracking apps with a combined 100 million users — MyFitnessPal and Endomondo — for $560 million. The company acquired MapMyFitness for $150 million in 2013 and will “continue to redefine and elevate the Connected Fitness experience for millions of people around the world.”

Cognizant releases Q4 results: revenue up 16 percent, adjusted EPS $0.67 vs. $0.59, beating expectations on both and sending shares to an all-time high. Increased healthcare demand and the company’s $2.8 billion cash acquisition of TriZetto in September 2014 drove the results. Healthcare makes up 25 percent of the company’s business and was its fastest-growing segment in 2014.

McKesson announces Q3 results: revenue up 37 percent, adjusted EPS $2.89 vs. $1.48, beating expectations. Technology Solutions revenue was down 7 percent due to product retirements.

Athenahealth announces Q4 results: revenue up 24 percent, adjusted EPS $0.58 vs. $0.57, beating estimates on both. Epocrates revenue dropped 32 percent quarter over quarter.

Sales

Five-hospital Adventist HealthCare signs an eight-year IT outsourcing agreement with CareTech Solutions and General Dynamics Information Technology.

People

Dave Cassel (Epic) joins Healtheway in an unspecified position overseeing its Carequality initiative.

Industry long-timer Mike Etue, EVP of global sales at MModal, died Monday of pancreatic cancer. He was 62.

Announcements and Implementations

Rauland-Borg announces that a new interface for its Rauland Responder provides the first instance of integration between a nurse call system and hospital’s EHR, allowing nurses to chart from patient rooms and to receive notification when important EHR information changes.

The Advisory Board Company will convene the sold out “Future of Health Care Summit” on February 18, 2015 in Washington, DC, with speakers that include National Coordinator Karen DeSalvo and executives from CMS and drug store chains.

Vocera releases a free secure texting solution for its healthcare customers and their affiliated providers.

Government and Politics

 

FDA Commissioner Margaret Hamburg, MD will resign in March, with her mostly likely replacement being newly hired internist and cardiologist Robert Califf, MD (Duke Medicine).

The VA rolls out online tracking of prescriptions ordered from its mail order pharmacy, implementing an idea offered by VA employee Kenneth Siehr.

In England, Health Secretary Jeremy Hunt announces that the Department of Health will create an online consumer diagnosis tool within two years that he hopes will reduce ED volumes.

Privacy and Security

Students of all-female Bryn Mawr College plan to demonstrate after the college uses its student health records to send emails inviting 100 high-BMI students to enroll in a weight loss program.

MIT Review warns that 2015 will see a  big increase in “ransomware,” software that spreads to PCs via malicious emails or websites, locks all files with unbreakable encryption, and requires users to pay a ransom using untraceable Bitcoin to regain access to their information. The recommended solution: use antivirus software and make backups so that documents can be restored.

Technology

A Reuters survey of 23 top hospitals finds that 14 are piloting connectivity to HealthKit, giving Apple the jump over similar offerings from competitors Google and Samsung. BIDMC CIO John Halamka, MD says the health system has collected wearables-generated data from 250,000 patients, adding that, “Can I interface to every possible device that every patient uses? No. But Apple can.”

The New Yorker profiles Crisis Text Line, a 24×7 crisis intervention hotline for teens that uses SMS text messaging exclusively and handles 15,000 messages per day with as many as 50 home-based counselors on duty. The service is data driven, using the information collected from 5 million texts to create counseling algorithms and to determine when crises are most likely to occur, information the founder plans to provide at no charge to school districts and police departments. Nancy Lublin (who uses the title “Chief Old Person”) also runs DoSomething.org, which helps people launch volunteer campaigns, and while still in college used a $5,000 inheritance from her great-grandfather to start Dress for Success, which provides job interview suits for underprivileged women. I guarantee that her 2012 TED talk above on texting-based crisis intervention is worth every second of your five minutes. The hurt she feels when describing teen abuse is palpable.

Other

Healthcare Growth Partners releases its “2014 Market Review,” which is always brilliant. Eighty-nine percent of health IT-related business survey respondents said their companies are looking for 2015 acquisitions, with the most popular categories being population health and analytics and care coordination and telemedicine. Only 29 percent said they believe health IT is in a bubble. It also reflects back to 2007, when most startups incorrectly predicted that they would be acquired by an EHR vendor, to the reality that transactions often involve non-traditional acquirers looking to take an existing relationship deeper or to disrupt the market. The survey methodology is self-selecting and therefore somewhat biased toward respondents interested in acquisitions, but it’s still interesting.

Carolinas HealthCare paid all of its 10 top executives more than $1 million in 2014 — including $5.3 million for its CEO — in a year the health system said it had to reduce expenses due to Medicare cuts.

Baltimore Episcopal Bishop Heather Cook is indicted on 13 charges related to the death of Johns Hopkins Medicine software engineer Thomas Palermo, who was run over while bicycling on December 27. Cook is charged with drunk driving, texting while driving, and leaving the scene of an accident.

Sponsor Updates

• Caradigm Care Management is named winner of “Most Innovative Product of the Year” by Best in Biz Awards International.
• A PerfectServe guest blog post by physician collaboration expert Kenneth Cohn, MD addresses “The What and Why of Physician Engagement.”
• Extension Healthcare reports a 273 percent bookings increase quarter over quarter and 54 new hospitals serviced in 2014.
• Nordic releases a white paper titled “Return-Driven Optimization.”
• Aspen Advisors announces that it was ranked among the top three overall IT services firms in KLAS’s annual report.
• PatientSafe Solutions CNIO Cheryl Parker, PhD, RN publishes “Update Clinical Communication Strategy, Not Just the BYOD Policy” in PSQH. 
• Kenneth Rashbaum of Logicworks publishes a blog post on “2015 HIPAA Audits & Implications for Healthcare Cloud Computing.”
• InterSystems will exhibit at the iHT2 Health IT Summit February 10-11 in Miami.
• Healthfinch has fun with EHR and brain surgeon analogies in its latest blog, “Time to Call in a Specialist.” 
• Steven Botana writes about “The Art of Paying it Forward: Credit Balances” in the latest Hayes Management Consulting blog.
• Senior VP Molly Mettler advocates for giving family caregivers a break in the latest Healthwise blog.
• Maria Greger offers advice on “How to Avoid 5 Common Hiring Mistakes Startups Make” in the latest Greythorn blog.
• Harris Corp. will also exhibit at the iHT2 Health IT Summit February 10-11 in Miami.
• HealthTronics will participate in “The Evolving Role of MRI in Prostate Cancer Management: Detection, Staging, Surveillance, Follow Up, and Reporting” course February 7 in Santa Monica.
• HDS posts a new blog on “Champions, Change & Culture: 3 Things the Medical Device Industry Needs Now.”
• The HCI Group posts a new blog entitled, “6 Key Reasons Why Hospital IT Outreach Projects Fail.”
• Andy Smith, president and co-founder of Impact Advisors, offers a new blog on the company’s recent “Best in KLAS” award.
• HCS will exhibit at the NASL 2015 Winter Legislative & Regulatory Conference February 9-11 in Washington, D.C.
• Brian Manning offers tips on how to thrive in a paperless office in the latest DocuSign blog.

Contacts

Mr. H, Lorre, Jennifer, Dr. Jayne, Dr. Gregg, Lt. Dan.

More news: HIStalk Practice, HIStalk Connect.

Get HIStalk updates.
Contact us online.

Morning Headlines 2/5/15

Health Insurer Anthem Hit by Hackers

Anthem, the country’s second-largest health insurer, is reporting that hackers broke into a database containing personal information for 80 million customers. Investigators are still assessing the damage, but early reports suggest that “tens of millions” of records were stolen.

AMA, MATTER Partner to Create Transformative Health Care Innovation and Technology-enabled “Physician Office of the Future”

AMA is partnering with a Chicago incubator to create a health IT lab focused on growing startups that will drive efficiencies and improve care delivery for physician offices.

Under Armour Just Bought 100 Million Users Worth of Fitness Data

Under Armour acquires calorie counter app MyFitnessPal for $475 million and fitness app Endomondo for $85 million, growing its digital health ecosystem to 100 million active users.

Readers Write: Top Technologies in Private Practice for 2015 and Beyond

Top Technologies in Private Practice for 2015 and Beyond
By Arman Samani

As we enter into 2015, healthcare is entering an era where it must compete for the patient’s time and attention. Mobile and cloud computing are now pervasive enablers of other technologies that physicians can and should be leveraging. Mobile and cloud are attributes of other technologies rather than a technology or trend themselves.

As payment reform is progressing and we are switching from fee-for-service to fee for value models, it is critical that private practices take steps in 2015 to prepare for this new reimbursement model. This preparation will steer practices toward doing the right things for their patients as well their businesses. Practice management, EHR, patient relationship management, actionable analytics, and interoperability are broad categories that a private practice should evaluate carefully to be prepared for long-term growth.

Health watcher technologies are enablers of proactive patient engagement. According to the recent IDTechEx report on the wearables market for healthcare, the market is projected to grow from $14 billion in 2014 to more than $70 billion in 2024. This booming market is an opportunity for physicians to shift into the role of “health watcher” for their patients. The industry can no longer function in reactive ways to patients initiating visits. Both Apple and Samsung have introduced health tracking frameworks and data repositories in their mobile devices, and as a result, consumers will soon be wearing devices such as Apple Watch and Samsung wearables.

Not only can someone track how many steps or even floors they have walked, but health statistics like heart rate and blood pressure can be measured. Private practices should think about integrating this patient base data into their EHR in order to provide proactive and preventative actions to their patient population. Not only is this the right thing to do for the patients, it increases the practice revenue, enhances reputation, and decreases healthcare costs. While appointment reminder technology is now mainstream, health reminder communications such as email, text, and phone calls will be become mainstream in 2015 and beyond.

With the rise of mobile computing, convenience will be an important factor. A 2014 study from Manhattan Research found two in five physicians agreed that using digital technology to communicate with patients will improve patient outcomes. Starting January 2015, CMS will start paying for chronic care management, wellness visits, and psychotherapy services. The telemedicine cash business has been growing for a few years and now that CMS has expanded reimbursement for telemedicine, private practices need to start putting business processes and technologies together to take advantage of this growing market and offering a convenient way for their patients to save time and get readily accessible preventative care.

With industry regulations such as ICD-10 imminent, practice management software has to be ready to support the increased complexity in coding. However, the effects of an expanded code base aren’t all about technology. Patient visits and the associated workflows, from the moment a patient arrives through to receiving a claim payment, need to change in fundamental ways. The questions that are asked and data that is collected right at the point of care are also affected. Practices need to stop thinking of coding as data entry and make it a proactive process that happens in real time. Practices that don’t plan for this shift may see a rise in claim denials — the aftermath that creates may overwhelm staff and burden the business. Practices should do ICD-10 risk assessment now.

With cloud technologies, big data is no longer only for large health systems. From patient health monitoring to quality measures, accounts receivable and payer reimbursement, and more should be provided in easy and actionable analytics. In addition to actionable analytics for the different aspects of business, it is important to benchmark a practice against other practices or the industry as whole. Otherwise, a practice might never know how well it is doing and what new goals should be set. Benchmarking tells the practice manager where their business stands compared to other practices. It helps answer questions such as how much the practice is getting paid relative to other practices and if it needs to start collecting more for certain services. Analytics can measure these factors relative to the practice’s goals and in comparison to other practices. Benchmarking is complex and time consuming, but cloud providers of EHR and practice management technologies are especially well positioned to provide these benchmarking services.

Practices are overwhelmed with data and technology providers need to move beyond providing dashboards and monitoring trends. Big data must now be a driving force for actionable alerts that trigger automated staff or even patient actions. Physicians might be asking what treatment plan or medications other doctors are prescribing for the same diagnosis. Analytics data can help with matching up patients who share the same condition so they can compare notes and even create support groups.

All practices play a role in the healthcare ecosystem. Most practices receive patient referrals from or give patient referrals to other practices or care settings. It is important to have seamless transition of care among entities to save time and money and provide patients with excellent and convenient service. Interoperability will enable sending and receiving summary of care documents and other necessary information about the patient care continuum. Interoperable systems will be able to store patient information such as discrete data points within the EHR automatically. This will allow practices to not have to ask the same questions from patient multiple times and will expedite care, increase care quality, and decrease costs by avoiding unnecessary procedures and tests.

The pace of innovation in healthcare has immense potential to advance the quality of care in 2015 and beyond. Smart practices need to prepare and adopt for upcoming healthcare reforms and provide proactive preventative care for their patients. This is not only good business but also the right thing to do for the patients and communities.

Arman Samani is CTO of ADP AdvancedMD of South Jordan, UT. 

Readers Write: EHR Ease of Use is Not Easy

EHR Ease of Use is Not Easy
By Lee Farabaugh

Usability shows no signs of losing its luster as a buzzword in health IT. Coverage of a usability collaborative involving the efforts of the Electronic Health Record Association, the American Medical Association (AMA), and the American College of Physicians to improve user-centered design of EHRs in the context of the Meaningful Use program has certainly escalated. I

It’s no secret that EHR usability is, generally-speaking, pretty abysmal. There are standouts in the realm of interface design excellence – think of the award-winning PracticeFusion and athenahealth. But the overwhelming response to EHRs from the physician community is a groundswell of complaints over poor design, longer patient encounters, time-consuming documentation, and slow information retrieval response time.

The AMA recently published an article entitled “Improving Care: Priorities to Improve Electronic Health Record Usability” that identifies eight EHR usability principles, including supporting team-based care, promoting care coordination, and reducing cognitive workload through a user-centered design (UCD) approach. But even the AMA admits that while “some vendors have implemented user-centered design … their results have been inconsistent and many other vendors have not [even] implemented UCD.”

Apparently it’s not as simple as just applying the UCD process of user research, iterative design, and usability testing to the field of EHR design. Mary Kate Foley, VP of user experience at athenahealth, perhaps says it best: “Our industry has been talking about EHRs for years now, and if it were simple to make EHRs easy to use, we’d be done by now.”

EHR interface design is still subject to the design choices of individual interaction, visual, and user experience designers. While we’ve become used to the new flat UI convention on our iPhones, the vast majority of EHRs still look like snapshots from the past. In short, we don’t typically look to EHRs to be on the cutting edge, whether in terms of visual design conventions or adherence to UI design best practices.

The AMA calls for “the development of a common style guide – designed through collaboration between physicians and vendors – so physicians who practice in different care settings can move from one EHR to another.” But it’s not just physicians who stand to benefit. This type of common design framework frees organizations to make changes to their toolset because they don’t have to fear a steep learning curve for providers on a new interface.

How can we as designers support these efforts?

• Remember that EHR design affects not only physicians, but patients, too. Patient tools, while separate from the EHR itself, both push information to and pull information from the EHR, making patients de facto EHR users by default.
• Acknowledge existing efforts to reach a common design language in EHR interface design. Juhan Sonin, Jeff Belden, and Catherine Plaisant, among others, have created a nice start towards an EHR style guide for the industry at InspiredEHR.org. Their work includes medication lists, allergy lists, and drug alerts.
• Continue to push forward with additional design patterns. One area where common design vocabulary is needed is the patient banner. EHRs should employ common conventions for elements such as patient name, gender, date of birth, allergies, etc. that typically appear in this space, and balance information communication with respect for screen real estate.
• Educate our colleagues in industry about the importance of understanding and designing for the way real humans think and work. In my course on user-centered design for healthcare at UAB’s Masters Program in Health Informatics, my students (nurses, business analysts, and EHR vendors) are learning about how humans process information, think irrationally, and act according to behavior patterns that point the way towards more intuitive design.

EHR usability isn’t easy. It involves a complex interplay of care teams, workflows, the legacy of paper charts, and the promise of a design language we can all speak. But the need is real, and as the focus on “checking the box” for MU fades away, we’ll get down to the real business of not just using EHRs in a meaningful way, but in a delightful way.

Lee Farabaugh is chief experience officer at PointClear Solutions of Atlanta, GA.