Monday Morning Update 11/2/09

From HISJunkie: “Re: InfoLogix. Looks like they are on their last breath. Never did think this outfit would make it. They always seemed kind of shifty to me — did the Wall Street dance, pumped it up, took it public, made a killing on stock sales … then puff!” The company, which sells an odd lot of healthcare systems ranging from RFID to ERP, defaults on loan covenants requiring it to keep $1.5 million of cash. They were supposed to either raise $12 million or sell themselves by July 31, but missed the deadline. Share price has dropped steadily over the last couple of years, from over $5 to the current $0.18 and a market cap of less than $5 million.

From CK: “Re: Lindsey Jarrell, CIO of BayCare. He was awarded the CHIME-AHA Transformational Leadership Award on Thursday at CHIME’s Fall Conference.”

Jonathan Bush in the athenahealth earnings call, acknowledging that the company is at capacity in its EMR implementations: “.. our Clinicals implementation process still has some vestiges of the early EMR thought that went into building it. EMR is a shitty way to get a practice online. It’s just garbage, and we still have that stock inside of some of our thinking. It’s almost gone … we are getting much more of our thinking oriented towards, ‘This is a clinical information network.’” He answered a question about enterprise deals with a little jab at the big HIT vendors: “We don’t have massive professional golfers on the ground ready to be buddies with these people the way some of our giant competitors do. The athena jet doesn’t fly people into the experience center to have a day of visualizing the software of the future.”

Interpreters at UNC Hospitals (NC) replace their pagers and cell phones with the iPod Touch at half the cost, also rolling out a customized version of their ServiceHub dispatching software to work over WiFi.

British parliament member Richard Bacon gets his answer on how many people actually use NHS’s Lorenzo system in the five early adopter trusts: 174 total, with a peak concurrent user count of 19, according to NPfIT. Bacon’s cost estimate of up to a million pounds per user may not be far off.

Data analysis vendor Initiate Systems (I challenge you to concisely describe what they sell after a quick glance at their Web site, but they’ll always be an EMPI vendor to me) acquires interoperability vendor Accenx. You may recall that Initiate was initially an investment and also a vendor of the CIA (identity intelligence stuff, which was big during the previous administration) and also pulled its $75 million IPO last year.

Weird News Andy, straying from his core competency of weird news, recommends this healthcare series by noted thinker Dr. Thomas Sowell. I like it that Sowell is not only brilliant, but actually writes so you can understand it (unlike the 99% of academics who lapse into obfuscatory journo-babble). “In reality, an injured, deformed, or brain-damaged baby and an eloquent lawyer can lead to jury awards in the millions of dollars, even when it is by no means clear that the doctor who delivered that baby was in any way at fault … It costs a jury nothing to ‘send a message’ warning doctors to be more careful, and the particular doctor in the case at hand probably has insurance from a company that can pay a few million dollars easily out of its billions of dollars in assets.”

The HIT Standards Committee wants to hear about your EHR experiences, good or bad. You can also vote on the submissions of others. “Today, the Health IT Standards Committee within the Department of Health and Human Services will begin an unprecedented effort to get the public’s view on how our work might ‘pull forward’ the benefits of healthcare information technology (IT). Specifically, we’re interested in uncovering new strategies to accelerate the adoption of health IT standards.” Your comments are welcome by November 19, the date on which they will be presented to the committee. 

Results of my CPHIMS poll are above. Apparently, the credential doesn’t hurt but also doesn’t usually help, which is what I would have said. New poll to your right: should clinical software be treated as a medical device under FDA guidelines?

Border unrest escalates between Missouri and Kansas, bitter combatants fighting for the right to pay Cerner hundreds of millions of dollars in incentives to lure its office complex and the pro soccer team that Neal and Cliff own chunks of to their apparently economically desperate states. Right as Cerner was choosing its new BFF state, Missouri hires the commerce secretary of Kansas who was instrumental in putting the Kansas package together. Kansas officials, sustaining mortal wounds in the civic pride area, said that’s was like a baseball player switching teams during the World Series, with one adding, “We thought (Kerr’s) Number 1 goal was to bring jobs to Kansas, but find out now he was working to take his own job to Missouri.”

Doctor complaints about patient safety and an increasing backlog of delinquent charts lead Jefferson Regional Medical Center (PA) to go back to paper for some reports. They’re using Siemens, as evidenced by this cheery article about how swell it was going in 2007. You wouldn’t think chart completion would be such a big deal.

TPD has updated his list of iPhone applications.

A quiz question for you non-newbies, spawned from some random Googling: in what year did these companies first make the Healthcare Informatics Top 100: Per-Se, Applied Healthcare Informatics, Object Products, and Triple G? (hint: it was the same year that these companies were acquired and therefore fell off the list: Phamis, Amisys, Medicode, Medicus, HPR, Bukstel & Halfpenny, SDK, Rothenberg, and HCI).

The Teamsters put out an angry press release against McKesson, which sided with the minority of shareholders in continuing to allow “golden coffin” provisions to be offered without shareholder approval. Those provisions pay a lump sump to heirs when a senior executive dies, $25 to $39 million when John Hammergren meets his maker (in addition to the $80 million his family would get from his retirement plan). “Mr. Hammergren took home $29 million in total realized pay last year alone and has ample opportunities to provide for his estate. We believe shareholders should have a say in whether they’re saddled with payments made without receiving any services in return, and clearly our fellow McKesson shareholders agree.” For the first time ever, I agree with the Teamsters. Hammergren is always in the top ten lists of executives salaries, benefits, and security costs. You would think he founded the company instead of just coming on board eight years ago. Maybe Senator Grassley should look there if he wonders why healthcare is so expensive. But, if MCK shareholders would rather he get the money than them, so be it.

A hospital in Ireland reduces appointment no-shows by 44% by sending patients text message reminders.

Speaking of text messaging, StaffKnex, a nurse scheduling vendor whose product sends text messages about open shifts and schedule changes, raises $1.3 million in funding. The product originally sent only text messages, but it now converts them into voice messages for recipients who don’t like texting. Interesting: recipients can respond to the message (“I’ll work that shift”), the scheduler is alerted to the overtime cost involved, and the request is routed to the supervisor for approval.

A group of California hospitals that includes Stanford, San Francisco General, and two Kaiser facilities says it reduced medication administration errors by 88% by following best practices from the California Nursing Outcomes Coalition. I was hoping to find a list of those practices but struck out.

Patrick Soon-Shiong, the billionaire drug company founder with a keen interest in healthcare technology, offers to back $100 million in loans to reopen MLK-Harbor in LA. He’s on the board of Dossia. I tried to line up an interview awhile back, but he passed.

Charlie McCall’s attorney says he’ll call former HBOC president and CFO Al Bergonzi to the stand. He says Bergonzi, convicted years ago, will back Charlie’s story that all the phony accounting happened without Charlie’s knowledge.

Merge Healthcare’s Q3 numbers: revenue up 16%, EPS -$0.02 vs. $0.01. 

Confidential records of House ethics investigators are made public when a junior staff member working on documents from home accidentally makes them available to his peer-to-peer file sharing application.

Quality Systems’ Q2 numbers: revenue up 22%, EPS $0.41 vs. $0.37, meeting expectations on earnings and exceeding on revenue. ARRA is accelerating PM/EMR sales, the company says. Market cap for the company, including its QSI and NextGen divisions, is at $1.74 billion, of which founder and chairman Sheldon Razin holds over $300 million worth.

Odd lawsuit: drug company Amgen is sued by 14 states for offering doctors kickbacks for using the anemia drug Aranesp. The suit claims that Amgen intentionally added extra overfill to the drug vial as a “free sample” that could be billed to insurers.

E-mail me.

News 10/30/09

From HITGhost: “Re: Aspyra. It voluntarily delists itself from NYSE Amex.” The market cap of the LIS/PACS vendor is down to $1.4 million, so obviously it’s not worth the administrative cost to stay publicly traded.

From UKnowMe: “Re: Accenture. I hear that Accenture is eliminating its healthcare practice over the next 2-3 months and will be releasing 300-400 people. Can anyone confirm?” I haven’t heard that, but Accenture just launched the Center for Health. I never know what a company or university means when it announces a “center” that doesn’t seem to involve new people, new facilities, or anything more than a new marketing campaign and maybe a new suit or two, but it happens all the time. Here’s another one: IBM is opening a Health Analytics Solution Center in Dallas, which one of its people says is related to Dell’s Perot acquisition.

From Weird News Andy: “Re: brain surgery. Being in Britain, the patients did not have to pay through the nose for this procedure.” Surgeons are removing skull base tumors through the nose, with one patient leaving the hospital just to days later. Just in case this doesn’t impress, the newspaper article gives a graphic description of the alternative: “Previously, neurosurgeons would have had to split the facial skeleton or peel back the scalp and remove the skull on the forehead to complete the same operation.”

Athenahealth reports Q3 numbers: revenue up 37% to $49 million, EPS $0.14 vs. $0.14, missing expectations of $0.16.

In Britain, a member of Parliament wants to know the cost of iSoft Lorenzo at early adopter sites, saying the number could run anywhere from hundreds of thousands to even millions of pounds per concurrent user. Richard Bacon says Lorenzo isn’t providing value and Cerner Millennium “has caused absolute havoc.” On the other hand, the arguments seems largely political.

HIMSS continues its acquisition of other member groups, this time taking over the Medical Banking Project (HIMSS always calls it “unification with” the group it takes over). Its membership is a bit company-heavy with 163 individuals and 42 corporate members. The only employee mentioned is its founder, from whose home in Franklin, TN it is apparently run. I could find only one reference that called it a non-profit, with its own materials describing it as “a self-funded policy research firm.”

CHIME awards Ivo Nelson, chairman of Encore Health Resources, its Lifetime Achievement Award. I couldn’t find a link for the press release that someone sent me.

A radiation oncologist says Varian’s linear accelerator sales should increase in an economic recovery, but its clunky ARIA oncology EMR is a dog that might hold it back. In his words, “ARIA is far too complex and does none of the simple everyday tasks well. Obviously written by an engineer with little clinical input from the end users, ARIA is a major physician dissatisfier, as they find daily tasks much more time consuming.” Just what you want your doctor to be struggling with as they’re treating you for cancer. If you agree with his opinion, that is.

In all the Charlie McCall talk, I shamefully neglected to observe the October 18 11-year anniversary of the announcement that McKesson was buying HBOC. I editorialized about his first trial back in 2006, with this shout-out to the neglected McKesson shareholders who got burned the worst: “Among those involved were certainly some crooks and some fools, but let’s not forget those who suffered most, those McKesson lifers who had stashed away years’ worth of shares of their unexciting company’s stock instead of risking it on flaky enterprises like Microsoft and Dell. When lonely old conservative widower Dad McKesson brought home a sexy young step-mom named HBOC, she stole the kids’ piggybank.”

Cerner announces Q3 numbers: revenue down 3%, EPS $0.57 vs. $0.54, falling short of revenue estimates. System sales were down 14% and global revenue was down 23%. CERN also guided down on Q4 revenue. Neal actually chimed in at the end of the conference call.

A little recognition for HIStalk’s Founding Sponsors: Medicity and Nuance. Medicity has started a rather cool HIE Blog, I notice, that unlike the usually crappy corporate “blogs” that have “posts” written by chipper marketing types that don’t even claim to be written by executives, Medicity’s is the real deal. Included are posts from one of the smartest people I know in the biz, Robert Connely. Both companies (eScription, in the case of Nuance) were among the sponsors of HIStalk back when I was writing it with a chisel on stone, so I ought to thank them a little more often.

Allscripts used to own the domain escripts.com but let it lapse, so it went up for auction this week. There were no takers at the expected range of $10-25K. On the other hand, medicalpractice.com went for $9,000, conciergedoctor.com fetched $1,250, and h1n1fluvaccines.com was bought for $1,000.

I e-mailed the Canadian medical device licensing people about classifying EMRs as regulated devices. I appreciate this response:

In general, but not necessarily inclusive, patient management software is any software that is intended to be used to diagnose, treat, mitigate or prevent a disease, disorder or abnormal physical state, or its symptoms, in a human being. Please be advised that the classification of patient management software as a medical device and the requirement for licensing is not a new approach taken by Health Canada. Manufacturers have always been responsible to undertake their own due diligence to determine regulatory requirements. Health Canada has considered software of this nature a medical device for several years. Health Canada did not create the notice regarding patient management software with specific ‘information systems’ in mind. It has always been Health Canada’s role to review medical devices to assess their safety, effectiveness and quality before being authorized for sale in Canada.

According to the US FDA’s interpretation, a medical device is “intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals.” It almost sounds like software vendors in Canada recognized their own products as medical devices and had them evaluated as such, but US vendors have staunchly argued that their products aren’t covered. Software that displays or manipulates lab results, provides diagnostic suggestions, or manages drug therapy seems to fall into the broad category as laid out by FDA.

Ten software developers in Rwanda who work on the OpenMRS EMR graduate from an 11-month course called e-Health Software Development and Implementation, part of the country’s effort to transform itself into an IT hub.

The Center for Connected Health and Mass General buy a Tandberg telepresence videoconferencing system for telemedicine. I thought they dealt more with home medical sensors and monitoring, but maybe the mission has changed.

A med student and his programming partner (isn’t that who always creates medical apps?) develop iMurmur, an iPhone-based learning tool for heart murmur. It has sold 15,000 copies to users in 35 countries, pushing its price from 99 cents to $2.99 and leading to its acquisition by a digital stethoscope company.

The King of Jordan hosts hosts a public demo of its VistA system, implemented by Perot and the non-profit Electronic Health Solutions. Jordan is creating a VistA educational program to make itself self-sustainable.

Jobs: Director of Business Development, Clinical Application Educators, Cerner Remote PathNet Support.

Half of the doctors responding to a British survey say they are too busy typing into the computer to look patients in the eye. One doctor said, “The demands of the patient’s agenda, the Government’s agenda and the requirement that everything I hear, say and do must be meticulously recorded make for an extremely crowded consultation.”

John at Chilmark Research finds interesting facts about the Dossia PHR. After they parted ways with Omnimedix and hooked up with the Indivo platform from Children’s Boston, they found that Indivo wouldn’t scale, so they had to rewrite it. John outlines other problems they’re having. One I’ll add is that PHRs aren’t exactly lighting up the skies and Google and Microsoft are formidable competitors for what little interest there is.

Odd lawsuit: welfare recipients in Michigan file a class action lawsuit against the state for not paying for adult dental benefits. The state is broke, of course.

Also going broke: California, which paid $2.1 billion in overtime to state employees last year. One state hospital nurse made $733K in overtime in a five-year period, while two other nurses at the same hospital made $132K each per year, twice their annual salary.

E-mail me.

HERtalk by Inga

The US Postal Service finds CalOptima’s missing CDs that contained unencrypted personal data on 68,000 members. The package landed in a secure postal facility in Atlanta and the disks appear to be intact.

GE Healthcare’s Medical Quality Improvement Consortium (MQIC) is submitting anonymous clinical data to the CDC to provide H1N1 tracking information. MQIC is a repository of de-identified clinical data captured from GE’s Centricity EMR users. Every 24 hours, MQIC is forwarding updated data that’s been collected from 14 million record patient records. Great use of EMR data, though I wonder if the patients (and/or providers) are aware their de-identified clinical data is being used for this purpose. Or if they need to know.

Would you be more willing to travel to Thailand for surgery if you knew the hospital was using Microsoft HealthVault to document your treatment? Me neither. Hospital officials at the Bumrungrad International Hospital in Bangkok seem to think it will add to their appeal. I believe the $5,000 knee replacement that would cost $50,000 at home is still the bigger draw.

St. Paul Eye Clinic (MN) selects SRS EMR for its 15-provider group.

API Healthcare announces that seven new hospitals have signed on for its human capital management solutions.

El Camino Hospital (CA) deploys Web performance monitoring solutions from Gomez, Inc. The performance and availability monitoring applications will concentrate on El Camino’s recently launched public Web site and its physician application site.

Ingenious Med reports that nine new organizations have added its inpatient practice management system over the last three months.

I love my iPhone, so I was not surprised to learn that 99% of all iPhone users are happy with their smart phones. In fact, we are two times more likely than BlackBerry users to say we are very satisfied. I’m not sure I can think of any other consumer product with a 99% satisfaction rating.

Speaking of iPhones, Harvard Medical School launches an application to update consumers with the latest H1N1 flu virus news, including tips for shaking hands or other body parts to avoid the spread of virus. (Do people seriously do this?)

One last iPhone comment: here’s a nice list of healthcare applications, complete with product summaries and pricing.

GE expands its healthymagination campaign, launching a new e-health business unit that is focused on connectivity among providers, hospitals, and patients. While the announcement suggests that GE is jumping into a brand new world, the core products sound familiar: LifeSensor PHR, Centricity HIE, a clinical portal, and master patient index technology. I guess GE wasn’t too concerned over the use of “eHealth”, even though the folks in Ontario sort of sleazed up the name.

Allina Hospitals collaborates with CVS’s MinuteClinics to align clinical care operations and medical oversight. Allina and MinuteClinic will also develop interfaces between their two EMR systems.

Regional Medical Center Anniston (AL) selects ProVation MD software for cardiology procedure documentation and coding.

A Florida man opens his mailbox and finds an envelope containing medical records of over 70 people. The full chain of events is unclear, though a postal employee or two seem partly at fault. Just a reminder that while we might one day have fully secure EMRs, we’ll never rid the world of stupid (lazy?) people.

Send Inga a scary note

HIStalk Interviews Parker Hinshaw

Parker Hinshaw is CEO and co-founder of maxIT Healthcare.

 

What made you move from the provider side to running companies?

I’m a service-oriented kind of a thinker. It always felt like one of my strengths was surrounding myself with really talented people because I need people around me that could make me look good, I suppose. It was successful for me working in hospitals.

It seemed like there was just a real need for that out in the marketplace. The software vendors always struggle with how they keep their costs down. They end up hiring a lot of young people who take awhile to really be productive. Also, generally speaking, they don’t have a real hospital experience, so they’re learning on the job. And they’re overpriced.

So when I looked at it, it seemed like there was just a real opportunity to do two things. One was to create opportunities for people who ran up against the ceiling at a hospital, as a really good technical person or functional application person. You can get bored at some point in time if you’re really somebody who needs to be learning new things all the time. In a hospital, you’re going to run out of new things to do.

It’s just interesting that you can hire folks that are underpaid at a hospital, pay them better, and still have a really positive, wholesome, healthy culture that you get at a hospital. Most people that work in healthcare are all about taking care of the patient in the end. That’s what drives us all, and the opportunity to do that even on a larger scale.

It’s those two things, I guess, and just a desire to create a company culture that’s very, very positive, because I’ve worked in many that weren’t. [laughs] It just seemed like if you were spending that much time working for someone, it ought to be a good thing. If you were going to spend that much time going to work, you should feeling good about going to work.

So I left the provider side and went to the software companies. That was bizarre. They were just so political, so aggressive in their treatment of people, so callous. It just didn’t work for me at all. I had to find something in between the two, I guess, in the end. This seemed to be a good thing.

Where were you working?

I spent time working for Compucare in the early 80s when they were going from an outsourcing firm — which is what I thought I was doing — (laughs) to becoming a software company. That was during the Baxter years. Baxter had acquired five good companies and messed them all up, in my opinion. [laughs]

Are you gearing up for new business because of ARRA?

Yes. To me, it’s just the next wave. I’ve been around a long time now. When you do something for 35 years, you start to see the patterns. If it hadn’t been this, it would have been something else, is my view of it.

This one seems like a really good one, though. I think this one is very exciting, because those of us who’ve been around a while always figured something had to change in a major scale, because we’ve been doing everything the same way, in reality, from the beginning of IT in healthcare.

I think it’s time. I don’t know how it’s going to shake out. I don’t think anybody does. But something had to change, and I don’t think they’re doing this because there’s not a problem. I’m very excited about it.

We’re also starting to get involved in the payer space primarily for those reasons, because something’s got to change. It seemed like a good opportunity in several different areas. It’s not just the hospitals and the ambulatory centers. It seems like a great opportunity to me.

So what type of things are you looking to do in the payer space?

It’s really very similar. It’s got an IT bent to it. It’s really all about the systems, change. You really look at what ours are about; it’s all about facilitating change. So most of the time IT is in the depths of all of that.

We fundamentally track the customer base of the software vendors because of what we were talking about before. The software vendors, because of the way they are reimbursed with delivery points ultimately, there is a parting of ways in the goals and objectives of the customer versus the goals and objectives of the software firm. That’s where firms like ours come in and fill that void, because they need to go on to closing their next deal and make sure the people keep their pipeline full.

Then they turn it over to the service organization of the software company. Then you’ve got all those dynamics that we were talking about before, the politics of the organization, those things, the churn that goes on with people trying to cover more than they could possibly handle. Those are the profit requirements of a for-profit company.

How does a consulting firm add value other than simply marking up the hourly rate of its consultants?

I think the way that we add value is that the IT side of the work that we do is almost secondary. What we really have is clinicians and financial folks first who happen to be really good with IT. I think the way that we really make a difference is — and hopefully, what we’re doing is hiring the cream of the crop, right? I mean, if we hire those people that hit the ceiling in a hospital because they’re better and they need more work, that kind of thing, then hopefully we’re better than the folks that are traditionally happy and satisfied staying at a hospital level.

So it’s really all about knowledge transfer. I talk to my folks all the time. “Your job, really, is to work yourself out of the job in every engagement that we do.” It’s all about knowledge transfer, right? If you do that really well, then that hospital that you’re working for is going to give you another job to work yourself out of.

So perpetual knowledge transfer is really what this is all about. Elevating the skill sets of the people in the hospital that use those products and understanding it.

People get satisfied doing the same job over and over and over again. Some people do. When they have to change and do something different, it takes a special person, I think, to help them understand that they can still get to that comfort zone that they’re used to. But it’s got to change. You have to move forward. Those people that like the process of change need to help those that don’t. I think that’s where we fit.

You’ve got eyes and ears all over the hospital IT business. What are the most interesting and innovative things being done out there right now?

I think there’s an awful lot of exciting things happening in cardiology, radiology. Lot of the clinical departments that we’re seeing a real need for that really aren’t the traditional spots that firms like ours work in. It’s usually about nursing or lab or pharmacy, all the traditional things that we spend most of our time on.

But right now, we’ve decided that what our role could be as a transitional thing and also to make work interesting for people, is to do departmental management consulting. I wouldn’t call it strategic in any way, but really it’s a lot about helping departments in a hospital do assessments, figure out how to better utilize the equipment that they have, improve on the work flows, all those kinds of things.

To me, it’s those kinds of areas where the technology is really improving, and we’re trying to figure out how to adapt to that and then tie it in to the traditional information system. It’s all related to the EMR; that’s where it’s all heading. Those areas that we may not even have thought about historically. “What’s going on in the OR?” “What’s going on in the ER?” and all those things.

Who do you admire in this industry?

Fundamentally, I’m an entrepreneurial guy, so I would say people that find an angle that’s different and new that really adds value, and they do it not because they want to make a bunch of money, but because they want to provide a service. The money will come as a result.

I admire people who have a real passion to do something that benefits us all, and in the end, they made it. Most entrepreneurial guys are still thinking about the dollars, but it should be secondary to providing a service that makes it valuable so you can make a dollar.

I’ll tell you one person that I really have learned to admire, and I find her to be really different — it’s Judy Faulkner. She has taken a stance that is kind of counter-culture to what the typical software vendors are about relative to customer service. She has happy customers. It’s very hard to find software companies in this industry that have happy customers.

I have admired Jim Reep, who founded First Consulting. I thought he created a really positive culture, and really fit that description that I mentioned earlier. When he went away, I think bad things happened in that company. [laughs] I guess I admire leaders fundamentally, people who see something, pursue it.

I also admire people who do it without somebody else’s money. The people who go to private equity firms and borrow — I’m a bootstrap thinker, I suppose. Those people who do it for the right reasons. That’s what happens if you’ve got a bunch of investors involved and you borrowed their money. Now, all the sudden, you’re more worried about keeping them happy than you are about your customer and taking care of your employees. So people who take that approach, I admire.

It’s always been exciting to me. I’ve always felt good about being in healthcare. I’ve felt very blessed to be somebody that was lucky enough to fall into the IT side of the industry that’s always doing the right things for the right reasons. Not always competently. [laughs] But it’s always an interesting place to be.

News 10/28/09

From Midnight Oil: “Re: Australia. The South Australian Department of Health has posted a notice on its Web site for a Vendor Conference on November 13. The RFP, to be issued in mid-December, is for a full EPAS (enterprise Patient Administration System aka HIS) and an EHR, plus Billing, Mental Health, Oncology and ED as optional components.”

From The PACS Designer: “Re: Windows 7. TPD was thinking of buying Windows 7 to load on a laptop, but now will wait based on what PC World had to say about it. It appears that the install procedure has several flaws in it, thus frustrating buyers of this new operating system. A major flaw is not recognizing the product number after entering it as instructed by the program!” I think many of the problems came from that student discount version that I have a coupon for, which had some kind of snafu with Digital River’s download package. In the mean time, I installed a Snow Leopard upgrade the other day without doing anything more than starting it and checking back a few minutes later to make sure it finished. And unlike the XP-to-Win7 “upgrade,” it did not require a fresh install. Advantage: Apple.

From HISFan32: “Re: Waterbury Hospital. Despite having spent mucho dinero on a consultant over the last five months to evaluate Meditech, WH has decided to retain Cerner on a RHO basis. Why they wasted money on this foolish endeavor is beyond reason. They had only had a successful install of Cerner only a few years ago.”  

 

SRSsoft of Montvale, NJ has become a Platinum Sponsor of HIStalk, which Inga and I appreciate very much. The company offers a hybrid EMR (“specifically designed for high-performance, high-volume, high-revenue practices”) that focuses on workflow, not physician data entry, and thus enjoys a 100% adoption rate. Their site contains 106 testimonials that include the practitioner’s name and location (don’t you hate anonymous product testimonials that you can’t check?) CEO Evan Steele’s blog, EMR Straight Talk, is here. I’m impressed with the executive team’s credentials (lots of Ivy Leaguers, a former naval aviator who served in Vietnam, and even a sales EVP who has a Harvard MBA). Thanks to those folks for supporting HIStalk. I was going to take their six-question Stimulus IQ Test, but I was afraid I’d do poorly and would have to disclose that fact.

The Coalition for Patient Privacy urges HHS (warning: PDF) to repeal its HITECH interim rule covering breach notification, complaining that organizations involved in a breach don’t have to notify anyone if, in their judgment, those people whose information was compromised won’t be harmed by the exposure.

Professor Jon Patrick of the University of Sydney says the government should cultivate development of local open source expertise instead of importing proprietary software that wasn’t designed for Australia’s health system. I asked if he’d heard more about why the University pulled his article critical of an ED system implementation offline last week, but he still doesn’t know.

McKesson announces Q2 numbers after the bell: revenue up 2%, EPS $1.13 vs. $1.19, which beat expectations. Shares are up a little in after hours trading.

Speaking of McKesson, former HBOC chairman Charlie McCall is on trial again in San Francisco. The US attorney claims Charlie and general counsel Jay Lapine cooked the books to inflate revenue right before McKesson insanely bought HBO & Company for $14.5 billion in 1998 (nearly 40 times even the phony earnings), only to see its own shareholder value drop 48% just months later when the house of cards collapsed. McKesson shares still haven’t recovered from the mini-Enron, priced today lower than in their pre-HBOC heyday in 1998 (not to mention the nearly $1 billion McKesson paid in 2005 to settle shareholder lawsuits). Charlie’s mouthpiece told the jury today that his man was wronged by his trusted lieutenants, who conspired without his knowledge to write side letters and recognize phony revenue. That mouthpiece, of course, has an impeccable track record of defending those accused of white collar crime, including former labor secretary Ray Donovan, former agriculture Mike Espy, former Cheney chief of staff Scooter Libby, junk bond king Michael Milken, and the corporations behind the Exxon Valdez environmental disaster. He got Charlie and Jay an acquittal on one charge and a mistrial on the others in 2006, so here they are again in a retrial. Not to be pessimistic, but I feel sorry for a barely-six-figures assistant attorney who has to butt heads with Charlie’s uber-expensive dream team.

Cerner and Eclipsys are the final two vendors being considered to implement clinical systems for Sidra Medical and Research Center in Qatar. It must feel odd not to see Epic sitting across the table.

Speaking of Cerner, Hospital de Denia is the first in Spain to move to a single-vendor EMR, using Millennium.

Vocera ships its first smart phone, developed by Motorola and running Windows Mobile. It supports dual-band wireless networking and supports a fixed number and role-based permissions. It does not look like a Star Trek communicator, however, unlike the original Vocera badge device.

The Wall Street Journal lists the HIT vendors that were sent Senator Chuck Grassley’s letter asking for contract and product defect information: 3M, Allscripts, Cerner, Cognizant, CSC, Eclipsys, Epic, McKesson, Perot, and Philips. I’m not sure why some of those companies were included since they don’t sell inpatient EMRs (and what about Meditech, QuadraMed, Siemens, IntraNexus, Healthland, etc.?) Maybe he actually got complaints about these specific 10, which seems unlikely. This will be fascinating to watch in any case – what will the fiercely independent and reclusive Judy Faulkner do? And will the CEOs make nice long enough to ask each other whether they plan to comply and to what extent?

Thanks to Health Data Management writer Joe Goedert, who credited HIStalk in his story about the CalOptima data breach. Lots and lots of press get their ideas and sometimes their actual stories from here, but it’s uncommon for them to give credit. He and I have swapped e-mails a couple of times and I consider him first rate.

A reader forwarded a technical alert from McKesson that warns Horizon Clinical Infrastructure clients that hard-coded passwords were posted on the Internet. I found the document refreshingly free of mumbo jumbo as it listed some user actions that hopefully aren’t new to anyone technical since they are basic auditing stuff: check your firewall, disable TELNET, enable SSH, and change system-level and Oracle passwords. I’m no security expert, but the exposure seems minimal — any bad guy would need to penetrate the firewall and get into the application or database server to do any harm (the passwords don’t work from the application, I assume). Most interesting to me was the reminder that McKesson’s documentation is “Produced in Ireland,” as it says at the bottom of the notice. That always strikes me as both odd and fascinating. I may need to inspect the facility first-hand at someone else’s expense to augment Senator Grassley’s inquiry.

A cardiac hospital in Malaysia goes live with the myCare2x open source hospital information system. You can run the demo system live here, although it didn’t work for me in Firefox but did in Chrome.

Some nice news on QuadraMed CPR, which got four new sales. Everybody always forgets about them as a clinical systems player, but in the last system selection I was involved with (admittedly years ago), our nurses and I liked their product better than those of the competition (although it was Per-Se Patient1 at the time and we weren’t sold on the company). Shares are close to a 52-week high.

Kaiser Permanente will start a pilot in January in which it will exchange patient information electronically with systems from the VA and DoD (that comment is way down the page in the next-to-last paragraph of the story, but I don’t think I’ve heard it until now).

iPhone clinical alert vendor Voalte is profiled in its hometown paper in Sarasota, FL, along with its customer Sarasota Memorial Hospital. The reporter noticed the pink pants the Voalte people wore at HIMSS. 

Dossia announces that its PHR can now manage information for both employees and their dependents.

The Wii Fit is the first computer game to be endorsed by British government, specifically the NHS. Nintendo will use the NHS’s Change4Life logo in its advertising. I can say first hand that it’s amazing, especially now that other really good fitness software has come out that uses the Wii console and the balance board (Wii Fit Plus, Gold’s Gym Cardio Workout, Active Life Outdoor Challenge, My Fitness Coach, etc.)

Odd lawsuit: Nevada’s controlled substance prescription database flags a woman buying large quantities of hydrocodone and Soma, so the Board of Pharmacy sends letters to 14 Las Vegas pharmacies warning them that she could be a drug abuser. A year later, the impaired woman runs over a motorist changing a tire on a highway shoulder, killing him and seriously injuring another man who was helping him. The survivor and family of the deceased man are suing Walmart, Walgreens, CVS, Rite Aid, and other pharmacies, claiming they shouldn’t have filled her prescriptions after receiving the state’s warning. Drugstores say they’ll get sued by both sides: for refusing to fill questionable prescriptions or for filling them for someone who later causes harm.

E-mail me.

HERtalk by Inga

Peeking doesn’t pay, as evidenced by the federal sentences handed down to three Arkansas healthcare workers. A physician and two hospital workers are ordered to pay fines and are sentenced to probation after improperly accessing the medical records of a slain TV reporter. The doctor received the harshest judgment, which included one year of probation, a $5,000 fine, and 50 hours of community service educating professionals on HIPAA.

Carroll Hospital Center (MD) implements multiple applications from Lawson Software, including enterprise financial management and asset management suites, Lawson Business Intelligence, and HR management suite.

Picis says that over the last two quarters, six large IDNs have contracted for the Picis LYNX E/Point revenue management solution. Picis also announces it has extended its relationship with The Sullivan Group, a provider of risk management and performance solutions for EDs. Under the multi-year agreement, the companies will integrate the Sullivan Group’s risk management content with Picis ED PulseCheck.

I normally wouldn’t mention a news piece like the article above, posted on Foxnews.com. However, the headline caught my attention and I think some of Mr. H’s grammar and spelling snarkiness must be rubbing off on me.

Blood Bank of Alaska selects Mediware’s LifeTrak Technology for blood donor management.

Virtua, a multi-hospital healthcare system in New Jersey, selects NextGen EHR for its Medical Group network. In addition to implementing NextGen across its 23 locations, Virtua will offer NextGen EHR to its community-based physicians.

Congratulations to all the employers named to Modern Healthcare’s 100 Best Places to Work in Healthcare. Sadly, HIStalk came in at #101 and thus failed to be mentioned. But, Mr. H says it was an honor to be nominated.

When it opens its doors next year, The Roy and Patricia Disney Family Cancer Center (CA) will use the latest oncology products from Elekta. This includes EMR, workflow management systems, and treatment planning.

The Brooklyn Hospital Center (NY) contracts for several Eclipsys Sunrise applications.

Privately held Sunquest Information Systems reports that its fiscal year 2009 (ending May 31) was the most successful one in its 30-year history. Its FY2010 first quarter was also strong, with sales up 30% from the previous year.

Rhode Island becomes the first state to use e-prescribing records to track the spread of swine flu statewide. A brilliant example of using HIT to improve patient care (although the tracking is based on prescriptions of Tamiflu and other antivirals). Maybe things are different in Rhode Island, but in many parts of the country, physicians are reluctant to prescribe antivirals, so maybe the data isn’t all that helpful (although the directional trend may be valid). Still, I like that someone is at least trying to use that data for more than tracking prescribing trends.

New Mexico Governor Bill Richardson names the NM Health Information Collaborative the state’s official HIE. The organization will partner with MedPlus to create the HIE infrastructure to connect with physicians.

Rex Healthcare (NC) introduces Rex Express Care urgent care clinic wait meter for smart phones. This handy application (with a long name) provides instant wait time information for each of Rex’s three urgent care clinics. Great idea , but more importantly, it has helped me come up with an even better application. You know how the airlines will send you a text or e-mail telling you the status of your flight? How about an application that sends a similar note saying whether or not your doctor is running on time? Just think how handy it would be to know your doctor is 30 minutes behind so you have extra time to keep working or to stop off for a Starbucks. I’m sure it could be automated to some sort of appointment scheduling system. Feel free to steal my idea as long as you call it the Inga Meter.

The New York eHealth Collaborative appoints David L. Whitlinger its new executive director. The organization also announces it has received a $35 million grant from the State of New York to support the NYeC’s efforts to advance HIT implementations.

Regular HIStalk reader Jon Wikstrom sent over a note saying he has posted an album to Pandora. “You were the first person who ever made me aware of Pandora, though there seems to be wide recognition of it now whenever I mention it to someone.” I guess I mentioned Pandora a year or more ago, when I first set up IngaRadio (which is still out there, by the way.) Jon’s got some sweet vocals (in a James Taylor-ish way) with some jazzy influence. It may not be edgy enough for those favoring Mr. H’s picks, but I’d give it a thumbs up.

E-mail Inga.

Readers Write 10/27/09

Submit your article of up to 500 words in length, subject to editing for clarity and brevity (please note: I run only original articles that have not appeared on any Web site or in any publication and I can’t use anything that looks like a commercial pitch). I’ll use a phony name for you unless you tell me otherwise. Thanks for sharing!

CPOE Is The Surest Route to Meaningful Use
By Linda Gleespen, RN, BSN

Few hospitals have complete EHRs, so demonstrating Meaningful Use to get government financial incentives looks like a pretty steep hill to climb. But if your institution’s strategy first begins with implementation of computerized physician order entry (CPOE) you will be on the road to success.

The 2011 Meaningful Use criteria for hospitals require the use of CPOE for at least 10 percent of orders, and many of the other requirements can be achieved with CPOE alone. For example, CPOE enables hospitals to collect data for many of the requisite quality measures because they’re related to test or medication orders. Examples include the use of high-risk medications in the elderly, the percentage of eligible surgical patients who received VTE prophylaxis, and the percentage of patients at high risk for cardiac events on aspirin prophylaxis.

Meaningful Use will also require medication reconciliation, which is much easier to do at discharge or during transfers if you have CPOE. And, each hospital will have to show it has implemented a clinical decision rule related to a high-priority hospital condition. My hospital system, Summa Health System in Akron, has created dozens of such decision support rules since we started using the Eclipsys Sunrise Clinical Manager application in 2006. For instance, for stroke care, we programmed a “hard stop” to prevent physicians from prescribing the clot-buster medication tPA if more than three hours have passed from initial onset of stroke symptoms. However, research has now defined clinical scenarios in which this three-hour window can be exceeded.

The beauty of clinical decision support rules is that the application can be altered to adhere to the most current standards of care.

I’m not minimizing the difficulty of successful CPOE adoption. At the two hospitals in my health system that have implemented CPOE, a couple of years of planning were required to prepare for CPOE, and early on, getting physician buy-in was a challenge. However, I’m proud to say that our latest statistics indicate that doctors are entering over 80 percent of their orders directly into the system. Only 8.8 percent of our orders are telephoned in, 7.3 percent are verbal, 2.3 percent are written, and under 1 percent are faxed.

Equally important, electronic order sets are used for 94 percent of hospital orders. These order sets incorporate evidence-based protocols that improve quality and safety, which is the paramount goal of Meaningful Use.

To add decision support features to the order sets, Eclipsys SCM enables us to create customized “medical logic modules” that automate key portions of orders. For example, when doctors enter orders for a patient with pneumonia, they are prompted to enter information about the type of pneumonia and other significant clinical information. The system then auto-selects the correct antibiotics. It functions like an electronic decision tree.

To measure how our order sets are affecting patient care, we compared how closely physicians were following the American Stroke Association and Joint Commission guidelines for stroke care with and without the use of order sets. We found that compliance with best practices was 40 percent higher with the order sets than without them. More important, the use of order sets in CPOE improved outcomes. When the order sets were used, 9.4 percent more patients went home directly from the hospital, and 21 percent fewer patients were readmitted.

By these demonstrations of Meaningful Use, the exceptional quality care and patient outcomes is truly what is meaningful.

Linda Gleespen, RN, BSN, is lead quality and clinical analyst for the Summa Health System of Akron, OH.

EMRs and Interoperability: HIT’s Oxymoron?
By Lynn Vogel, PhD, FHIMSS, FCHIME

ox·y·mo·ron; \äk-sē-‘mor-än\, noun, a combination of contradictory or incongruous words (as cruel kindness); broadly : something (as a concept) that is made up of contradictory or incongruous elements[1]

How odd, you say, to propose as an oxymoron two terms that politicians, IT luminaries, healthcare experts, vendor product brochures, and academic journals typically assume simply and reasonably can and must go together. But do they really go together, or are we just trying to make them fit when maybe they don’t?

Consider the fact that every EMR product on the market today started with a single purpose: to automate the workflow of clinicians within a specific organizational setting, and in the process, seek to make it more efficient and more effective. Among other features, EMRs focus on making data from previous encounters or activities easier to access, assuring that orders for tests and x-rays have the right information, or that the next shift knows what went on previously. In general, in spite of visible successes and failures for all manner of products, EMR products do a pretty good job of automating a complex workflow — of automating intra-organizational clinical processes.

But interoperability, in the sense in which the term is used in today’s discussions about Health Information Exchanges (HIEs), is not about intra-organizational workflow, but about inter-organizational work flow. Recognizing that patients often receive care in a variety of organizational settings — hospitals, multiple physician offices, rehabilitation facilities, pharmacies, etc. — the challenge is to extend the internal workflow beyond the boundaries of individual organizations so that data is available across a continuum of care. Interoperability, then, is not so much about what happens within an organization, but about what happens across organizations.

A major assertion here is that the architectural requirements for automating intra-organizational clinical workflows are very different from the architectural requirements for facilitating inter-organizational interoperability. An intra-organizational architecture focuses on facilitating real-time communications among providers, optimizing the process of collecting data at the point of care, and ensuring that clinical tasks are carried out in an appropriate sequence.

An inter-organizational architecture needs to be designed to minimize the duplicate collection of data in different care settings, to facilitate quick searches of relevant data from a variety of organizational sources, and to rank data in terms of relevance to a particular clinical question.

If these assumptions are true, then one has to wonder whether we can ever achieve true inter-organizational operability using an architecture that has focused for more than a decade on optimizing intra-organizational processes.

An appropriate analogy might be taking a bunch of cars, which were designed to accommodate small numbers of people, and somehow string them together to make a bus in order to accommodate a large number of people with the same goal of moving them from one point to another. Yes, you could make a bus out of cars — no doubt with a lot of effort — but why would you? Requirements for tires, suspension, seats, luggage storage, and even bathrooms are very different for buses than for cars and require a different architecture if you want to build a bus that works. But isn’t that what we are trying to do with current proposals for using EMR architectures to build HIEs?

Maybe it’s time to rethink this approach. Interestingly we don’t have to look very far to find a set of experiences that would make more sense for an interoperability architecture than trying to extend our current EMRs. It’s  the Internet. With millions of different data repositories around the world, an architecture that seems to work most of the time, and increasingly sophisticated search engines for locating data, it would seem that we should be looking more closely at the services-oriented architecture of this ubiquitous example of interoperability rather than trying to string EMRs together and replicate their architectures in an attempt to achieve objectives which were never in their initial designs.

So that’s why EMRs and Interoperability may be HIT’s oxymoron: the architectures may simply be too contradictory and too incongruous to fit together no matter how hard we try. If so, this would add a significant constraint to HIEs that are already being challenged by the sustainability of their business model. Bus manufacturers learned long ago that simply making cars bigger using the same underlying components wouldn’t result in a workable bus. Perhaps there is a lesson here for how we should be thinking about interoperability.

[1] Adapted from http://www.merriam-webster.com/dictionary/oxymoron, accessed on 9/19/2009.

Lynn Vogel, PhD, FHIMSS, FCHIME is vice president and chief information officer and associate professor of bioinformatics and computational biology at The University of Texas M.D. Anderson Cancer Center in Houston, TX.

Monday Morning Update 10/26/09

From Croc Dundee: “Re: academic censorship! The Australian Ministry of Health has forced the withdrawal of Dr. Patrick’s essay on EHR problems in the ED in NSW. See his page now – the download is disabled. Was Cerner involved?” Beats me, but Scot Silverstein archived a copy. It’s anecdotal, opinionated, and more of an editorial than a research study, but interesting. The fact that someone doesn’t want me reading it sent me looking for a copy. Jon Patrick tells me the university took it offline late Friday afternoon and he’s meeting with them Monday to find out why. Rumor has it that complaints were made.

From Fil_Peed: “Re: Eclipsys User Conference. Mr. Pead’s ‘joke’ went over like a lead balloon. Here was the opportunity for him to make a mark on the client base, many of whom he was meeting for the first time, and instead he makes an off-color analogy to what one should do in bad economic times and customers started walking out.” I’ll withhold judgment until someone tells me what he said.

From HITGhost: “Re: lost data. CalOptima reports that its claims imaging vendor, ImageNet, accidentally sent out unencrypted DVDs that contained claims from 68,000 of its members. The DVDs were sent to CalOptima via certified mail, but never reached CalOptima. CalOptima actually posted this information and identified ImageNet on its home page.”

From Avon Calling: “Re: a paperless and telephone-less, state-of-the-art hospital. Babies turn blue, but are always OK. Did Han write the classic CPOE-caused mortality paper from this hospital? And with all of those computers, there are gaps in the record?” UPMC’s Children’s Hospital of Pittsburgh is criticized by the state health department for not responding to a report in which a baby’s mother claimed her baby turned blue but nurses didn’t respond to the emergency alarms. The mother says the nurse’s emergency alert phone wasn’t working, but the hospital disputes that. According to the investigation report, the alarm phones that were claimed not to work were from Emergin (Philips). Children’s was indeed the subject of a 2005 journal article that showed that the use of Cerner Millennium for CPOE was the second-best predictor of patient death, behind shock but ahead of coma (I criticized that conclusion right after and I’ll stand by that – the hospital made some spectacularly bad implementation decisions).

From Ex-Cerner Guy: “Re: Methodist-Gary. They have lost $220 million over the past five years. The consultant was suggesting Meditech, a system they might be able to afford and still be able to pay the consultant.” It’s hard to believe that one hospital would, over just a few years, sign with Epic, drop it for Meditech, and then contemplate going back to Epic.

Speaking of Cerner, St. Bartholomew’s Hospital in London faces fines of $650,000 per month for lengthy patient backlogs that it blames on the “dreadful” Cerner Millennium. I doubt it’s that simple, but blaming the computer is always convenient.

Listening: Muse. I mentioned them before, but I cannot get enough of this band, maybe the best music I’ve heard in a few years. The live album, Haarp, shows they aren’t just studio overdubbers. My highest recommendation.

Welcome and thanks to Dentrix Enterprise, now a Platinum Sponsor of HIStalk. The company is featuring its Dentrix Enterprise Electronic Dental Record, the industry-leading paperless, centralized record system for community health centers. You can read a product review by the National Network for Oral Health Access here (warning: PDF – it’s on page 29). Dentrix Enterprise is a wholly owned subsidiary of Henry Schein, Inc. a Fortune 500 company with annual sales of over $6 billion. Thanks much to Dentrix Enterprise for supporting HIStalk.

GE says the rumor about its Centricity Cardiology layoff is not true and that the system continues to be sold, installed, and developed. Instead, my contact says, “We’re just migrating the business from local to global over the next few years and have shifted some resources for future project development to avoid redundancies.” Sounds like the product is fine but the people working on it aren’t.

A fun practice EMR comment from Gartner’s Wesh Rishel: there are hundreds of systems, not including those developed by “nephews of doctors.” On ARRA: “If they put up $44,000, they don’t want the doctor to buy (Microsoft) Office and open a spreadsheet.” He also predicts that those hundreds of EMRs will shake out to 10. The same article (which is excellent and objective, by the way, since it was written by a local paper’s reporter) quotes Cleveland Clinic CEO Toby Cosgrove on EMRs: “Whether it will drive down quality, I don’t know. It doesn’t increase efficiency or lower costs.” Cosgrove says he told the President that the biggest savings will come from e-prescribing.

A Mass High Tech article covers Lawrence General Hospital’s IT systems, including its Picis ED PulseCheck system that an ED doctor says reduced wait times by more than 30 minutes and reduced ED walkouts from 6% to 1%. It also notes that transcription costs were reduced by $600K per year and revenue was increased by $5 million for IV charges alone through accurate documentation. The hospital will replace most apps (not the EDIS, though) with McKesson Paragon.

The e-mail update subscriber list just passed 4,800 people, some of whom are your archest of enemies and competitors who will read (and possibly act on) time-sensitive news before you if you haven’t entered your e-mail address in the Subscribe to Updates box to your upper right.

CPSI announces Q3 numbers: revenue up 8.7%, EPS $0.37 vs. $0.38.

Two universities get ARRA grants for EMR projects related to genomics. University of Virginia will collect $1.9 million to create a genome-enabled EMR that will be part of Epicare. Vanderbilt is given $415K for its Vanderbilt Genome-Electronic Records project, which will look for a link between blood values and arrhythmia and also develop natural language processing tools to mine EMR data.

Bloomberg profiles rookie private equity manager David Brailer, whose Health Evolution Partners has invested $120 million of California pension money from Calpers so far. He says he will invest $150 to $200 million each year starting next year. A pension consultant comments, “No matter how you look at it, $1 billion is a lot to allocate to someone with no track record.” Some of the biggest investments so far involve radiology. One investment that sounds interesting is in Triveris Inc., which offers an add-on insurance plan just for diabetics that emphasizes preventive care using software to identify diabetes risk. It’s part of Health Network America.

TriZetto issues a press release to notify an impatient world anxious for yet another PHR that “additional features and functions” of its own version will be ready by year end. The opening sentence of the breathy press release is possibly the most awkwardly structured and confusing sentence I’ve read lately.

Not Yet sent a copy of an October 16 letter sent by Senator Chuck Grassley to Cerner and nine other big HIT vendors (I posted the full letter here). The Senator said, as the ranking member of the Senate Committee on Finance, that he is collecting information about healthcare software defects. He cites “learned intermediaries”, “hold harmless”, and “gag orders” clauses that let software vendors shift responsibility to users and prohibit them from disclosing defects. The Senator asks whether the vendor’s contracts include those provisions, asks for copies of all user correspondence involving software complaints or concerns, requests documentation of any lawsuit settlements, asks whether the vendor has offered financial incentives to facilities or providers to get them to choose its products, and wants to know how the vendor tracks reported defects.

My most recent poll asked about your plans for Windows 7. The voting was pretty evenly divided, but reading between the lines is interesting. Around 37% of reader employers plan to use Windows 7 compared to 61% of those readers themselves. New poll to your right, suggested by a reader: what would your reaction be to seeing the CPHIMS credential on the resume of a job candidate?

Perot (soon to be Dell) announces that it has been contracted to develop a plan for a city-wide RHIO in Changsha, China.

NIH awards the University of Florida a $12.2 million stimulus grant to develop a Facebook-like social network that will allow scientists to find research opportunities.

The creator of the MySQL database says Oracle should sell it to a third party to soothe antitrust concerns about its Sun Microsystems acquisition. Suggested buyers were Red Hat or Novell.

E-mail me.

News 10/23/09

From Bill Costanza: “Re: HIMSS keynote speakers. I’ve ranted to HIMSS about the lame speakers who have no bearing on either IT or healthcare. They would rather have vapid celebrities to entertain the troops. I can just see Bob Hope and his golf club on stage.” I quickly came up with 10 I’d like to see: (a) Bill or Melinda Gates (to talk about global health and atone for Ballmer); (b) Larry Ellison (an entertaining wacko); (c) Richard Grainger (to describe the folly of massive civil works healthcare IT projects); (d) Barack Obama (he hasn’t done much, but he’s maybe the funnest and nicest President so far); (e) Suzanne Somers (cute and fun for a 63-year-old and full of all kinds of bizarre medical theories); (f) Senator Chuck Grassley (hates government and healthcare waste and suggested that AIG executives who got huge bonuses from taxpayer bailouts should quit); (g) Judy Faulkner or Neil Pappalardo (pioneering industry recluses); (h) any health bigwig from Chinese government; (i) Ben Carson (Hopkins neurosurgeon); and (j) Hans Rosling (Swedish global health expert and inventor of free healthcare statistical display software). I could also be convinced to back Artie Lange, Bill Murray, or Kate Winslet as the token celebrity.

From Doug N. Nuts: “Re: patient safety. Thought you might be interested in Bob Wachter’s commentary on the media and safety. This is an excellent site for safety in general and has great monthly CME.” The editorial postulates that hospitals in the Northeast and those known to house celebrity patients get disproportionate coverage for making medical errors, and even though hospitals shy away from the publicity, they generally emerge better after the public scrutiny (Hopkins, Dana-Farber, and Duke are given as examples). I agree completely. It’s a shame that greedy conglomerates bought local newspapers, loaded them with debt, and mismanaged them into near irrelevance — we need real reporters as public watchdogs. Since the trade rags do little original reporting of real news, especially if it makes any healthcare stakeholder look bad, almost all the big patient safety stories come from the local newspapers or peer-reviewed journals.

From Lady Pharmacist: “Re: hi. Could you put in a kind word? This week is National Pharmacy Week. There are a number of pharmacists and pharmacy technicians (both in hospitals and the vendor side of the world) involved with informatics and are trying to make software / products / systems safer as it relates to the use of medications and ultimately patient safety.” We love pharmacists and techs at HIStalk, so here’s that shout-out, especially for those who serve patients in an IT or patient safety capacity. I always give lab people credit for being excellent developers, adopters, and users of IT, but the unquestionably most complex set of functions and workflows to automate in healthcare involve the ordering, dispensing, and administering of hospital medications. As the photo above proves, lady pharmacists like yourself have been providing pharmaceutical care for at least 50 years.

From Lee Samosa: “Re: GE. GE has pulled the plug on development of the Centricity Cardiology DMS program. All of the developers and most of the support staff in the Sioux Falls office were laid off this week, leaving behind a small team of sustaining engineering and a single Level 4 support person to support the installed base.” My GE Healthcare contact is checking on this. That’s the cardiology data management systems group.

From Certifiable: “Re: Epic. Gary (IN) Methodist de-installed Epic, at the recommendation of consultants who deemed Meditech more appropriate. I have heard they are considering an Epic return.” Any hospital considering those systems as interchangeable alternatives, much less swapping them back and forth, is clearly in need of some soul-searching.

From EndoIndiana: “Re: Mr. Richard Johnson, CIO of Clarian Health. He died in the last few days of metastatic renal cancer.” Richard Frederick Johnson, 50, died Tuesday. Online condolences can be left here.

I messed up the Moment With featuring Jon Phillips last night (I was tired). I posted it to HIStalk Practice by mistake and sent out the e-mail blast without noticing. Inga caught it right away, so I then posted to HIStalk like I originally intended and sent out the corrected link (no spam intended). So, Jon is up on both sites, which I told Inga is like when the president’s speech is on every TV channel.

Dr. Gregg Alexander thanks the folks who stopped by the Pediatric Office of the Future exhibit (under the white roof during setup above) or his get-together after. He was sick as a dog, so I think he was in a daze, but he was a trouper throughout.

Omnicell’s Q3 numbers: revenue down 16.1%, EPS $0.03 vs. $0.09. The CEO says he’s happy with that and shares are up a little, so expectations must have been low.

I was talking to a colleague about today’s Windows 7 launch. Both of us longed for the good old days when desktop software was so important that people slept outside computer stores (remember those?) to be early in line when the store opened at midnight. Actually, I should correct that: there are still massive lines when products launch, but only at the Apple Store.

The nice folks at MedVentive e-mailed to let me know that they’re hosting a Webinar next Thursday, October 29 at 1:00 Eastern entitled “Measuring the Business Value of Business and Clinical Intelligence (BCI)”. The company offers intervention, registry, dashboard, and P4P solutions for providers, along with quality, scorecard, registry, HEDIS, and Medicare Advantage programs for health plans.

AHIMA will publish a new book next month called H.I.T. or Miss: Lessons Learned from Health Information Technology Implementations.

Allen Tien, MD, MHS of mdlogix checked in to say that Johns Hopkins is using the Subject and Protocol Registry of the company’s Clinical Research Management System for all of its new studies. It’s being used for 790 studies, 15,000 subjects, and more than 1,000 users in all departments.

Florence Community Hospital (AZ) brings in a new management team, among them CIO Stephen Franken, formerly CIO of San Juan Regional Medical Center (NM).

Jobs: Clinical Application Educators, IT Manager, Laboratory Systems Application Analyst.

Document management and revenue cycle management vendor HealthPort announces the terms of its upcoming IPO, with a market value of $338 million at the midpoint of the proposed range. The Alpharetta, GA company has annual revenue of $285 million.

International Medical Solutions announces availability of smart forms and Web-based mobile applications to manage informed consent processes digitally.

Fletcher Allen Health Care chooses Netezza and Business Objects for its Cerner-fed data warehouse.

Ranjan Das, the 42-year-old CEO of SAP India, dies of a heart attack. He worked for InterSystems and Oracle previously.

In London, Kingston Hospital NHS Trust goes live with Soliton’s radiologist and pathologist workflow system, powered by Nuance Healthcare and integrated with iSoft RIS, Sectra PACS, and Clinisys LIS.

Cal Berkeley researchers dream up CellScope for the developing world, a microscope attached to a cell phone that allows sending highly magnified sample images to medical experts anywhere.

A writer decries companies that jumped all over Second Life, only to leave it littered with virtual ghost towns after they abandoned them to chase equally trendy but newer technologies like Twitter. Called out: Cisco’s Virtual Palomar West, intended to promote “The Hospital of the Future” and Cisco’s medical-grade network, but now “totally deserted and mostly broken.” I’m not sure I believe that even though I always thought Second Life was an over-hyped bust.

The Quantum Group gets a delisting notice from Amex and voluntarily decides to trade its shares on the OTC BB. Amex didn’t like the fact that it “sustained losses that were so substantial …that it appeared questionable, in the opinion of Amex, whether the Company would be able to continue operations …” The company offers “a 21st Century EMR Solution” (not surprising since that’s the century we’ve been in for quite a few years now), an MSO, and provider services. Shares are trading at 55 cents, for a market cap of just over $6 million.

A hospital rabbi is fired for violating HIPAA privacy laws after writing an essay about comforting the family of a security guard killed at the U.S. Holocaust Memorial Museum. She says she didn’t say anything that wasn’t public knowledge. She thinks the hospital fired her for complaining that it pays male rabbis more, so she’s thinking about suing.

Researchers in Japan develop software that predicts with 80% accuracy the chance that a 911 caller will die. It may have application in routing ambulances to the most critically ill callers. I say license it to Hollywood to make another sequel to The Ring.

United Health posts Q3 earnings that beat Wall Street expectations, with one of its fastest growing segments being its Ingenix healthcare IT business.

CareTech Solutions is named one of the best places to work in the Detroit area.

Odd lawsuit: a psychiatric hospital patient sues the facility for $7,500, claiming it should have prevented a female employee from having sex with his roommate. She already admitted it and quit.

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HERtalk by Inga

GE launches a $250 million equity fund to invest in small healthcare technology. The GE Healthymagination Fund will focus on HIT, life sciences, and diagnostic companies developing unique and innovation business models and services. The fund is part of GE’s $6 billion Healthymagination initiative. GE’s total revenues in 2008 were $187 billion, by the way, making the $250 million equity fund look smaller than a rounding error.

System integrator Emtec expands its healthcare offering with the signing of partnership agreements with FairWarning and BridgeHead Software.

Federal authorities admit that the lack of electronic interfaces between labs and provider EHRs continues to be a challenge to the industry. Technological and financial challenges force many labs and providers to rely heavily on paper and fax options. The HIT Policy Committee heard testimony on the topic this week as it prepares its meaningful use recommendations for HHS and the ONC.

Former PracticeOne and Picis CFO Scott Lentz takes over CFO responsibilities at Aprima Medical Software. Interestingly, Lentz started at PracticeOne just this last January.

The American Academy of Professional Coders introduces an online ICD-10-CM code conversion tool that converts ICD-9-CM codes to ICD-10-CM codes (and vice versa). The tool is free and looks pretty easy to use, even for someone who knows nothing about coding (like me). Note that the site doesn’t provide any sort of data conversion of your existing files, but advises you which ICD-10 codes will take the place of the current ICD-9 scheme.

You got to know this was a painful discovery. A Canadian medical office realizes it permanently lost two years worth of electronic patient records, presumably during an EMR conversion.

Across the pond, Basildonand Thurrock University Hospitals NHS Foundation Trust awards a contract to Sentillion to deploy expreSSO single sign-on.

Integrated Medical Services (AZ) selects Allscripts’ EHR, PM, and RCM solutions for the members of its physician services organization.

The White Stone Group installs the latest version of its TRACE software at San Antonio Community Hospital (CA.) The implementation is the first for this newest release, which tracks communication across the healthcare revenue cycle. I interviewed the company founder Guile Cruz a couple of years ago and was impressed with the number of prominent clients and its highly functional product.

Presbyterian Intercommunity Hospital plays host to physicians and technicians from Singapore who were checking out the hospital’s EMR (Eclipsys, I believe). The Singapore group wanted to see an EMR in action before implementing their own at their 1,600-bed Singapore General Hospital.

Hoag Memorial Hospital Presbyterian (CA) implements Amelior EDTracker solution by Patient Care Technology Systems. The hospital will use the system to track patients in its 66,000-census ED.

Here’s a prediction that’s sure to appeal to many readers: up to 50,000 new HIT positions will be created over the next several years as a result of the federal stimulus package. A recent Robert Half survey of healthcare CIOs found that 76% were looking to hire network administrators in Q4 and 72% were positioned to add desktop support. If you need a lower-tech job, be assured that demand for medical records clerks is also on the rise, making Robert Half’s list of 10 Promising Jobs for 2010.

VeriChip continues to try to re-establish itself in the market, announcing a strategic partnership with the Diabetes Research Institute(DRI). VeriChip and DRI are developing a glucose-sensing RFID microchip. VeriChip also hopes to incorporate findings into its Health Link PRH.

I think this may be the best name ever for a business: Snoring Isn’t Sexy, LLC, which offers an online directory service to facilitate communication between patients and providers. The company just announced that it can handle the secure transmission and storage of all electronic communication. Curious logo, don’t you think? Is the suggestion that you get to sleep with beautiful women if you don’t snore, or that perhaps some beautiful women actually snore? (unlikely)

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An HIT Moment with … Jonathan Phillips

An HIT Moment with ... is a quick interview with someone we find interesting. Jon Phillips is managing director of Healthcare Growth Partners, LLC of Chicago, IL.

What economic and market conditions have most affected vendors in the past year and how does the next 12 months look?

Fundamentally, vendors are indirect victims of the challenges facing their customers. Hospitals have seen access to capital disappear, operating results worsen (due to reductions in elective volumes and increases in Medicaid and self-pay/uninsured visits) and dramatic declines in investment income (which helps to fund operations).

Physicians are seeing operating pressures as well, not to mention the indirect impact of declines in value of real estate and other investments and the effect that has on their ability and willingness to spend. Insurers and suppliers remain profitable, but have become quite cautious as the healthcare reform debate works its way through Washington.

As a result of this pressure on customers, vendors are feeling significant stress related to their financial performance. The capital markets see it differently — HCIT valuations are at or near all-time highs as public investors assume that ARRA-related stimulus spending will drive billions in revenue to vendors in the space. At some point, the capital markets expectations will have to meet the reality of customer spending, or customer spending will have to dramatically accelerate to meet capital markets expectations.

The good news is that we are hearing customer purchasing trends are starting to look up, particularly on the physician side of things. However, given the fact that ARRA actually froze much of the market this year as purchasers have been waiting for clarity, our sense is that there is still a long way to go for vendors to feel that they can achieve strong sales growth.

Spending will likely improve across the board in 2010 with solutions demonstrating clear ROI leading the way. Physician sales of EMRs and related capabilities will continue to be strong as practices position for stimulus benefits. Hospital solutions, payer solutions, and supplier solutions are likely to see cautious growth next year as the implications of any healthcare reform package are weighed with regard to how the new environment will impact IT requirements.

We still see strong interest in “pay as you go” models, providing opportunities for providers to acquire systems capabilities while managing upfront capital outlays. While those types of models seem to be spurring sales, many vendors struggle when making the shift to that type of a model since, absent some type of third-party financing, the “pay as you go” model can wreak havoc on the balance sheet of a company used to selling perpetual licenses.

What will drive the M&A market this year?

The M&A market for the balance of this year and into next will be driven by two main trends. First, you will see an increase in the number of distressed transactions. We look at distressed transactions as ones in which the seller is effectively forced to consummate a transaction, generally due to liquidity (i.e. the company is running out of cash).

We expected the distressed market to pick up sooner than it has, but a number of factors have impacted that part of the M&A market. First, with the potential stimulus spending hanging out there, investors have been willing to continue to fund companies operating at a loss in hopes that revenues will pick up and profitability will be achieved in the near term. Unfortunately for many of those companies, revenue growth will recover, but too slowly for them to reach profitability in a reasonable period.

Second, many companies aggressively cut costs late last year and early this year to extend their financial runway. There is not a lot more “fat” for them to be able to take out of their businesses. The result of these two factors is that a number of companies will likely be at or near the end of their financial runway over the next six months. The closer a business gets to that point, the less leverage it will have in its sale negotiations. As a result, we expect distressed deal volume to pick up.

The second main trend relates to investor expectations versus reality. Because of all of the hype surrounding the stimulus spending on HCIT, healthcare IT stocks have rallied, in many cases to their all-time highs. However, if you look at the results being delivered to date (we’ll see if Q3 continues the trend), revenues have been soft, and earnings improvements have been driven by expense reductions. From our perspective, there is a gap between what the markets expect healthcare IT companies to deliver in revenue growth and what they can deliver organically in the short and mid term.

All of the stimulus talk has actually extended sales cycles, and even as the purchasing environment improves, it will take time for bookings to translate into revenue. Therefore, you will see public and larger private HCIT companies looking to acquisitions to augment their internal growth rates.

What companies need to be bought and which companies need to buy someone?

As we mention above, larger companies facing the reality of their sales efforts will need to buy revenue to augment their organic growth. These targets will most likely fall into two categories — share buys and technology buys. Share buys are situations where the acquirer cares little about the target’s capabilities. They are primarily interested in their customers and the opportunity to either up-sell or cross-sell those customers new solutions. Technology buys are intended to broaden an acquirer’s capabilities, using the acquirer’s distribution reach to push a strong product out to a broader customer base.

In terms of companies needing to be bought, if a business has less than six months’ cash on hand, they should be aggressively pursuing an exit, whatever products and solutions they offer. Often we see businesses waiting, hoping that they will be able to raise money or that the market will quickly improve. When those hopes fail, the outcome is generally far worse for employees, shareholders, and customers than it would have been if the business had elected to pursue an orderly exit process rather than an accelerated distressed sale.

If you were launching or buying a start-up, what niche would you go after?

We’d go after a “lowest common denominator” physician-focused EMR that qualifies for meaningful use and that is seamlessly integrated into a physician’s workflow. This type of a solution would likely be a hybrid offering, providing for electronic documentation and order entry but doing it in a way (perhaps with scanning or e-forms) that works with existing clinician workflow. The solution would be priced very aggressively on a subscription basis and would be offered as a Web-based service. We think that a simple offering like this would have the chance to revolutionize the market by being rapidly adopted by small physician groups.

What kinds of vendors will benefit most from stimulus money, both in the short and long term?

Depending on how meaningful use is defined, vendors most likely to benefit are those that help providers qualify for incentives at the lowest cost.  We also see incumbent HIT vendors in hospitals benefitting as they can help shape hospital spending to hit compliance levels.

The other group that is definitely seeing growth is the consulting side of the business- it seems that many organizations are looking to consultants to help them plan their approach to become meaningful users. Those consultants are likely to continue to benefit as organizations implement the solutions that they recommend. However, most vendors probably won’t benefit quite as much as the markets think — “up to $19B” and “incentives” doesn’t mean that the proceeds go directly to HCIT, it just means that providers are rewarded for utilizing HCIT. There’s a big difference.

It is also important to remember that the government gives and the government can take away. We are highly skeptical of business plans built on the basis of attracting stimulus money. It is important to remember that fundamentally the stimulus incentives are being paid to encourage providers to do something that nearly everyone agrees is in the best interest of the healthcare system. As unlikely and unfair as it might seem, it would not be out of the realm of possibility to imagine a scenario where incentive payments are drastically reduced to help cover some other government shortfall.

News 10/21/09

From Winston Zeddemore: “Re: SNOWMED. Almost as bad as ‘HIPPA’ eruptions are ‘SNOWMED’ eruptions, where the terminologically naive misspell the name of SNOMED-CT. Here is a link to the latest, courtesy of Government Health IT.” Revisionist history does not work well with Google caches (see previous and current images above). While they were doctoring it up, they should have corrected physician’s to physicians’ unless they are being extra-pessimistic in assuming that only one doctor will be using an EMR by 2015 (not likely since they’re owned by HIMSS now). The same reporter misspelled it the same way in Government Computer News, so it’s time to fire up that spell check dictionary. Googling turns up several other examples by people who should know (or is that KNO?) better.

From Will Weider: “Re: de-identification. Wired finally picked up a story you highlighted months ago.” They sure chose odd sources in trying to flesh out a New York Times article about patient privacy: CCHIT’s marketing director, investment guy George Hill, and a 2007 quote from PAMF’s Paul Tang from Modern Healthcare (which they spelled wrong). They did, however, spell HIPAA correctly and put up a nice graphic from Patient Privacy Rights (although it was too small to read).

From ITRN: “Re: Epic. Did KLAS report they had a de-install in 2008?” I don’t have access to KLAS (I have no KLAS, in other words) so I’ll ask readers to chime in.

From DDD: “Re: Windows 7. I upgraded a month ago and have found it to be more and more intuitive every day. There’s no ‘killer app’ per se, but management of multiple apps, windows, files, etc. are amazingly different. Learn how to use it, and I’ll bet you become a fan.” They said that about Office 2007. At work, I de-installed Access 2007 and went back to 2003, every minute in front of Word is torture, and the only reason I don’t dislike Excel and PowerPoint is that I don’t use them much. Like they say, change is welcome only when the status quo is untenable, which it wasn’t. Maybe I should install Win7 on a spare PC (I love that PCs are so cheap that everyone has spares) and report.

From Secret Squirrel: “Re: McKesson. Horizon Clinical Infrastructure (HCI) appears to use hard-coded database passwords. A security organization has run the entire password list online.” I thought everyone knew that, but maybe not (I reconsidered adding fuel to the technical fire, so I’m not including the link). The poster was amused that e-mailing security@mckesson.com bounced back as undeliverable. I would imagine that many vendors have services that log on as “users” that may or may not use encrypted passwords, some of which give full read/write/update database privileges. I would also imagine that vendors ship default passwords (some intended as their own “back door” in case clients screw up) that unlock every system they’ve ever sold. The clients I’ve known never seem to worry much about that.

From Just Curious: “Re: EMR. I’m sure you got this question by the thousands already, but I’m curious as to what vendor your PCP uses for his/her EMR? Thanks and keep up the great work!” It’s McKesson, he told me last time, although he didn’t seem too certain.

From Enrico Brizzi: “Re: CPHIMS. I was wondering what the industry’s current view of the CPHIMS designation is, specifically in Canada since CPHIMS-CA is fairly recent.” I have my own opinions, but I will leave others to express theirs for a change.

From Sore Arm: “Re: flu vaccine. The Atlantic is running a major article questioning the received wisdom about flu vaccines and antivirals, for both seasonal flu and H1-N1.” The article speculates that the benefit of flu vaccine has been wildly overestimated due to the inherent variability in a self-selecting patient cohort (i.e., it’s healthier people who get the shot even though unhealthy ones are the target audience, so naturally they live longer). Also, that a lot of “who the hell knows” deaths get incorrectly coded as influenza. The conclusion from a noted investigator: getting the flu shot doesn’t reduce mortality rates at all. The high-powered naysayers say, studies aside, they still believe in it and don’t like all the frowny talk. The article also questions why the US government has stockpiled millions of doses of Tamiflu and Relenza despite lack of evidence that they are effective.

From Bernie Tupperman: “Re: Archimedes. Kaiser licenses it to corporations to screen employees, but you can use it free since it was licensed to the American Diabetes Association. You put in your numbers and it takes about 10 minutes to crunch your data to show your 30-year risk of diabetes, stroke, heart attack, and complications. You can then play with the numbers – what if you lose 20 pounds or start taking aspirin? This is a great patient motivational tool and I am busy telling EVERYONE.” That is just cool (access it here). I didn’t realize that it was Kaiser’s but it is definitely an eye-opener. Brilliant.

The VA engages the Industry Advisory Council to identify the issues involved with keeping and modernizing VistA. This sounds ominous: “… opportunities and impact of modernizing and deploying VistA upon private industry …” Surely they aren’t considering dumping VistA just to protect for-profit vendors.

Weird News Andy sniffs out this story about a high-tech scalpel that detects the presence of malignant cells from cauterization smoke, helping surgeons remove all parts of a tumor.

Gila Regional Medical Center (NM) chooses the Cboss patient payment portal.

Cleveland vendor Lakeshore Health System announces Urgicode, which notifies the pharmacy via a cellular network when a code cart is used, then allows restocking by bar code. They probably should have held off on the press release until they improved their Web site a bit, like maybe adding the company’s address, phone number, or that same press release.

Healthcare Growth Partners releases its Q3 2009 Healthcare IT Transaction Summary (warning: PDF). Not to give away the conclusion, but merger and acquisition activity is on the upswing.

TPD forwarded a link to the Kaiser Family Foundation’s tool for comparing health care reform proposals.

I enjoy reading comments left for articles, but I need to disclose that I have the obligation to edit or remove those with advertising, personal attacks, or questionable claims. That almost never happens, but just so you know.

GE Healthcare announces that something has finally come to market from their Intermountain relationship: a new real-time decision support product. Details were skimpy and buzzwords were ample, but it might be interesting given Intermountain’s original HELP system and the work of Brent James. It will be “unveiled” at HIMSS.

Speaking of HIMSS, I keep forgetting to mention the keynote lineup for the March conference: Sprint Nextel CEO Dan Hesse (I’ve never heard of him and Sprint’s shares have dropped from $25 to $3 in four years, so I’ll pass); celebrity doctor Sanjay Gupta (you can see him free everywhere); Harry Markopolos (him I’d see – he’s the former Army officer and securities executive who tipped off the SEC boneheads about Bernie Madoff); and pilot Sully Sullenberger (who has started a safety consulting firm and might be interesting). Given the propensity of HIMSS to grab whomever is popular at the moment, I expected Balloon Boy (like Dana Carvey and that guy who sawed his own arm off in previous conferences). I should run a poll on who they should get since I haven’t been happy with the choices for several years.

Vangent, Inc. says ONCHIT has chosen its HIEOS HIE system as a component of NHIN CONNECT Gateway Version 2.2, which includes XDS.b and XCA profiles (its open source Wiki is here).

Sequel Systems announces GA of its SequelMed Patient Portal for practices, priced at $75 per provider per month according to its site.

San Francisco IPA Brown & Toland Physicians says one reason for its spat with UCSF is that the hospital didn’t want to participate in its EMR program. From Googling, it appears that the practice uses GE for practice management and Allscripts for the EMR. UCSF, you may recall, just halted its own GE Centricity Enterprise project. According to a rumor posted here last year, the IPA was threatening to cut off referrals to doctors who wanted to stop using its EMR and billing services.

More e-health fraud accusations in Canada, this time in British Columbia. Allegations have been made that health ministry officials paid falsified invoices and improperly chose vendors for an $108 million project.

And more: Canada Health Infoway is under government scrutiny for heavy use of consultants, missed deadlines, and having spent $1.6 billion so far with another $500 million on the way. The newspaper article points out that Infoway fell far short of its goal of covering 50% of Canadians with an EMR by March 2010, currently stuck at 17%. The federal auditor’s report will be out next month.

Geisinger Health System (PA) partners with Navigant Consulting to offer consulting services, including those related to EMRs and process improvement. I’m not sure how I feel about that or any other hospital business that has nothing to do with caring for their own patients, but it’s all the rage.

The managing partner of consulting firm Courtyard Group, stung hard by the reports of auditors investigating eHealth Ontario, says his firm was deeply entrenched in the project, but only because the agency’s people were clueless and without goals. He claims the company billed only $7 million of an authorized $10.6 million. His quote about the predecessor agency Smart Systems, which spent $800 million to build a non-Internet based network that went mostly unused: “I remember a conversation with the previous CEO of Smart Systems and he was very proud of the fact Ontario was the only jurisdiction in the world building a private health network. My reaction was, maybe the fact we are the only ones doing it might be an indication this is a bad idea.”

Epocrates announces that its drug reference will run on BlackBerrys.

Virtual Radiologic upgrades its vRad Enterprise Connect product work with new mobile device and speech recognition support.

Cedars-Sinai and GE Healthcare get their first lawsuit (of many, no doubt, and this one seeks class action status) over the CT radiation overdoses caused by unnoticed equipment settings.

Odd: the IT guy at an animal hospital changes the computer system to record a Valium tablet dispense when artificial tears were ordered, allowing him to pocket 18 of the tablets worth $3. The animal hospital let him slide after he quit over it, but then filed a report after the admitted addict tried to claim unemployment.

MIT’s Technology Review interviews ONCHIT head David Blumenthal. I like his terse answers: the writer asked why insurance companies don’t push EMRs, and he said, “The insurance companies have been able to pass along the costs of waste in our health-care system to their clients.” When asked about why progressive hospitals like Blumenthal’s own Mass General don’t share data, he said, “There has never been a business case for health-information exchange. As a matter of fact, there has been a negative case: if you give away your information, you may lose it. You may lose the patient.”

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HERtalk by Inga

California-based St. Joseph Health System cancels its Perot IT outsourcing contract and establishes a new system-wide service center in Lubbock, TX, expecting to add 60 jobs and $3.1 million in salaries the first year.

Healthcare deals represented nearly 30% of all US mergers so far this year, based on dollar value. Typically, healthcare represents only 10%.

Swedish company Anoto Group announces that the EDs at Western Maryland Health System have transitioned to MEDITECH’s EMR and are using Anoto’s digital pen and paper technology. In case you missed it, I mentioned a similar product called Shareable Ink that I saw at last week’s MGMA meeting. As long as the data capture will fully integrates with the EHR and the price point is reasonable, I think the digital pen technology has a lot of potential.

I’m thinking about trading out my Snuggie for one of these. Arizant Healthcare introduces a fully covered hospital gown that features a built-in warming system that blows warm air through tiny holes in the garment. The “Bair Paws Flex” gown sounds like the perfect Christmas gift for that hard-to-buy-for relative.

Cerner teams up with CDW to promote Cerner’s PowerWorks, the first time Cerner has offered its ambulatory suite through a national partner. Clearly Cerner wants to make sure it receives its share of the ambulatory EHR money that vendors expect to flood the market.

Picis announces that 25 hospitals have selected its Anesthesia Manager software this year. Among the new contracts are two with the VA for Picis Anesthesia Manager, PACU Manager, and Critical Care Manager.

University Children’s Eye Center (NJ) selects SRS’s hybrid EMR product. The Eye Center’s physicians are on faculty at RWJU and St. Peter’s University Hospital.

Axolotl Corp. realigns its management team, naming a new president, COO, and two VPs.

Wolters Kluwer Health announces new sales, including SwedishAmerican Health System’s (IL) and Signature Healthcare Brockton Hospital’s (MA) purchase of ProVation Order Sets to automate authoring and maintenance of evidence-based order sets. Sadler Clinic (TX) is also adding ProVation MD for procedure documentation and coding.

Oregon Health & Science University says it has received $51.5 million in ARRA funding, which has helped create 116 full- and part-time jobs. That’s about $444,000 a job, though the university does expect to add more. So far, the grants have funded over 100 research projects which require additional lab employees.

Eclipsys names six winners in its 2009 Circle of Excellence Awards. Winners had to demonstrate innovation and achievements in  process improvement, adoption, or collaboration, or actively participate in the Eclipsys ClientConnect program. Recipients were given $2,000 to be donated to a charity of their choice.

Rutland Regional Medical Center (VT) agrees to serve as a national host site for visiting community hospitals. Rutland will demonstrate to visiting clinicians and administrators how they utilize various GE solutions.

The MEDSEEK folks informed us of their ranking in Deloitte’s Technology Fast 500 program, based on the company’s 346% fiscal year revenue growth over the past five years. There was no healthcare-specific grouping. but I identified several in the “software” group. Congrats to GetWellNetwork, CAREfx, Red Hat, CodeRyte, athenahealth, and other HIT companies making the list.

BryanLGH Medical Center (NE) contracts for Salar’s electronic forms tool.

NorthBay Healthcare (CA) retains PHNS to assess its readiness for obtaining ARRA funding, an example of stimulating the economy without the government spending a dime.

Physicians are using Kryptiq’s escriptMessenger software to send 310% more electronic prescriptions than last year. Its 10,000 users send about 1 million electronic prescriptions per month. I think it is safe to say that e-prescribing is finally catching on, in the same way everyone has long been predicting EMR will.  Hard to believe it has been 5-1/2 years since George W. Bush made mention of computerized health records in his 2004 State of the Union address.

Social media update: I now have 25 friends on Facebook (and frankly pretty amused by the amount of time some of our readers spend doing goofy quizzes). Also, 216 connections in LinkedIn (which is about 100 less than Mr. H, but who is counting?) Also, 574 followers on Twitter (200 less than Mr. H, not that I noticed.) Forever the undercard.

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Healthcare IT from the Investor’s Chair 10/19/09

Initial Public Offerings, Part 2

The IPO market for HCIT continues to show some signs of life, or at least hoped-for life, as Accretive Health filed its IPO Prospectus (known as Form S1) with the SEC for a $200 million capital raise in late September, with part of the use of proceeds to pay back its private equity investors. Those who notice, track, or even care about such things observed that the company filed with four of Wall Street’s largest firms (known as Bulge Bracket banks) as lead managers — Goldman Sachs, Credit Suisse, JP Morgan, and Morgan Stanley.

These four Goliaths will take about 90% of the offering fees (known as economics), leaving the crumbs for one or two smaller firms that actually focus on HCIT to take or divide. An interesting choice to motivate those smaller banks and their analysts who will actually be paying long-term attention, but, clearly their prerogative. By the way, if this paragraph is meaningless to you, you probably missed my last post and might want to read it before proceeding (here).

Loyal readers will recall that when last we tuned in, our intrepid management team of HISTalkCo had just decided to go public and, after completing the ordeal of selecting underwriters (and, almost as bad, the economics negotiation) was getting ready to start the next phase of the process. After the dust settles on economics and cover order discussions, it’s time to begin the process in earnest. This starts with an “org meeting,” short for organizational.

The org meeting ritual sets the stage for the fun to follow. They generally start first thing in the morning in a location at or near the company issuing the stock (known as “the issuer”, or “the client”). Org books are handed out by the lead underwriters’ junior bankers and the meeting is called to order by the senior banker from the lead firm. The first 30-40 minutes are what I always refer to as “Mousketeer Roll Call”, aka introductions. This is where everyone in the room introduces themselves. Why so long? It’s a big crowd. For an org meeting, you’ll almost always see a few members of the management team (3-10, in my experience), three or four bankers from each firm (except for the lead, who brings a small army of bankers and capital market folks), two sets of lawyers (one set for the company, one set for the underwriters), and often some accountants. Before Elliot Spitzer changed the rules, you’d always have the equity analyst and usually their associate at the shindig as well, but those days are gone. It’s a big group, and usually a costly one.

Then the managing director of the lead firm re-takes control, reiterates their pleasure in being there, and then starts going through the rest of the agenda for the day and the subsequent weeks of the process. It always seems to be “a great story” that he or she “expects to have minimal issues with the SEC” and there’s always an “aggressive, but achievable” timeline. All agree to that, and it’s on to D&D — no multi-sided dice though, it’s time for diligence and drafting. The CEO, usually aided by the CFO and a few others, begins telling the story of the company in, of course, as glowing terms as possible, all with the goal of creating a prospectus that, in addition to having the required disclosure of risks and history, is as much of a marketing document as possible. This prospectus and the roadshow presentation delivered are the tools management and their bankers have to market the stock to potential investors.

Oftentimes these meetings start with a draft that’s been developed between company, lead underwriters and lawyers, making the process easier, but it’s primarily committee-driven, with all the fun and efficiency that suggests. From this point, there are multiple steps required to create the prospectus that will ultimately be submitted to the SEC for review.

First, the underwriters have a fiduciary responsibility to exercise “due diligence” to ensure that what’s being claimed is, in fact, the case. That means over the next few weeks, representatives of each bank will share conference calls with their clients’ clients, suppliers, and others who can verify that the system or product does what the prospectus and marketing materials claim. At the org meeting or subsequent drafting session, each member of the executive team will stand before the underwriting group (and lawyers) and discuss how they manage their department and discharge their other responsibilities. Sales pipelines and how they’re tracked will be discussed; product plans reviewed, and financial controls and forecasts are analyzed and “diligenced”.

It’s an important part of the process, and, in my experience, taken quite seriously. In addition, risk factors have to be discussed (and blessed by lawyers from both sides), though they are quite often cribbed from competitors’ SEC filings. Cover art is shown and discussed over and over again and the first few pages (known as the summary, or “the box” for the box it appears in) are virtually, and not inappropriately, obsessed over (“should the logo be that big?”).

Drafting a prospectus can generally take months and it can be painful. After the first diligence session, the herd of attendees is thinned dramatically, however. Senior bankers who aren’t at the lead firm rarely if ever show up after the first meeting. In many instances, I’ve been the most senior non-book-running banker in attendance, in part because my “pitch” to get my firm on the cover was that I’ll bring the research perspective to the process. Hopefully I always managed to.

While the diligence aspects of the meetings are often interesting (at least to me), it’s the drafting sessions that really drag and drag and drag. These are where the document actually gets written and rewritten and each mid-level banker (generally associates, but occasionally VPs, who should know better) tries to put a few fingerprints on the prospectus and show that their firm really and truly cares. There’s nothing quite like being in a room of 15 or more people, some of whom are paid by the hour (remember the lawyers present) arguing over whether something is a ‘strategy’ or a ‘tactic’, which SIC code to use, or how to punctuate a sentence to really get your blood running!

Possibly my favorite drafting session moment was underwriting a company that made blood glucose meters. The prospectus had a table that showed various parameters of each meter the company made, one of which was atmospheric tolerance (how many feet above sea level it could function). An associate from a co-managing firm asked (in her only speaking role of the day, I might add) if that meant they couldn’t be used on airplanes. The CEO took a breath, and patiently explained that no, it didn’t, because airplanes tend to be pressurized. I’m guessing said associate earned over $250,000 that year. The number of drafting sessions vary depending on the complexity of the story, whether any are done via conference call (where senior bankers are often on for the beginning and ends and have junior folk listen and throw in occasional comments for the vast middle) and how much the story needs prettying up for the investors.

Are these as bad as they sound? Yes, except for a few aspects, top of which can be the food! I had one Minnesota-based IPO client that had its meetings at its New York law firm, and, with apologies to Mr. HIStalk’s meeting comments, the spread they brought in was better than some weddings I’d been to. I remember commenting to my junior colleague that only in New York could you see sushi, corned beef sandwiches, and buffalo wraps (plus much, much more) at the same buffet. All that was missing was a bar.

How else could you pass the time? Like other corporate types, there was the ubiquitous BlackBerry usage. Recall that the BlackBerry was first popularized by bankers and you’ll have an idea of just how much your thumbs could hurt after a marathon drafting session. Clients, bosses, even friends and loved ones could be contacted during these meetings. Once in a while a banker would get caught, but for the most part, it was more or less ignored — though the CEO of Visicu imposed a strict no-BlackBerry rule in his sessions — at least for the ones he attended. Aiming for subtlety, I sometimes worked on other things, but on paper. My best use of time during an endless tangent was writing a poem for my wife, so it wasn’t a total waste.

Many, many circulated drafts later, hopefully close to the scheduled date, it’s time to “go to the printer”. Now, I’ve never been to the printer, as I became a banker at a senior level and my old firm never lead-managed a deal in HCIT, so much of this relies on colleagues’ stories. The printer, not surprisingly, prints the prospectus and oversees its transmittal to the SEC. Back before computerization, this relied on typesetting and other complex processes, but in the days of WYSIWYG (you young folks look up that term), it seems needlessly complex.

While at the printer, auditors sign off on the financial statements, the lawyers do their final bit of obsessive wordsmithing and editing — helped by junior bankers (analysts and associates) who’ve been instructed to find times to chime in to ensure the smaller firms are perceived by the management as “adding value”, final battles are fought over cover order (believe it or not) and the i’s are dotted and the t’s are crossed before the lead manager “pushes the button” and it’s off to the SEC. Printer sessions can last well into the wee hours and there’s a fair amount of idle time while these things happen, so I’m led to believe the place is stocked with an array of goodies (from snacks to beers) and toys (from pool tables to massage therapists) to occupy the oft-abused junior folk, where they’re finally treated the way many of them believe they should be. Sadly, the advent of WiFi and laptops makes the printer less fun than it used to be as they’re expected to keep working through the night on other projects. But, all good things come to an end and now the S1 is on file with the SEC.

I apologize if this is starting to sound like Schoolhouse Rock (I’m an S1, I am just an S1 and I’m telling you that drafting’s not fun…), but Bismarck must have forgotten this task when he said Laws are like sausages: it’s better not to see them being made.

Once the SEC has the first draft of the prospectus (and it’s simultaneously posted to www.edgar.sec.gov), a few things occur. First, HISTalkCo’s clients and competitors can all rush to read how profitable the business is (if at all), how it describes its business and, for the nosy friends, how much senior officers earn (“wow, I knew Inga had nice shoes, but always wondered how she could afford them”), and how much stock they have and what it will be worth at the time of the offering (“hmm, guess she’ll start shopping at Ferragamo”). Competitors can have a field day sharing the bad parts (like boilerplate risk factors or accounting details) with potential clients: “It says here if an asteroid hits their facility, they may experience service-related issues. Are you sure you want them as your vendor?”

Meanwhile, the issuer is assigned an SEC examiner who carefully reads the whole document and has approximately 30 days to send the company and its lawyers and underwriters a “comment letter.” These letters vary in length, but are usually at least a dozen pages and require the company to substantiate virtually every claim made, or at least tone them down. While at times these comments can get a bit silly, by and large, I think they do protect the investing public, which is, after all, the agency’s primary goal, we’re told. While the SEC doesn’t rule or opine on the veracity of prospectus statements, they do, in general, ensure that risks are disclosed and the worst hyperbole is eliminated. The company (and its underwriters and lawyers) amend and resubmit the draft and the process iterates until all the comments are “cleared” and the document ruled acceptable — kind of like a software QA process.

HISTalkCo now has an acceptable prospectus, it’s time for the Roadshow!

While the review process has been taking place, the lead (and occasionally the co-) managers have been working with the client on the presentation that the CEO and CFO (say, Mr. HIStalk and Inga) will give to institutional investors on the roadshow. With the help of the underwriters (and occasionally consultants or colleagues), Mr. HIStalk and Inga have rehearsed their presentation over and over again and also been prepared for any potential question that might be thrown at them. New suits (and perhaps shoes for Inga) are bought, hair is cut, and it’s time (cue the music).

Most firms have set itineraries that they like to use for roadshows and have it down to pretty much a science to ensure that the parts of the country that matter (to them) get covered as efficiently as possible. At the very least, this tour will include New York, Connecticut, Boston, Denver, San Francisco, San Diego, and Kansas City. Minneapolis, Chicago, Los Angeles, and even Europe, depending on the type of company and how much demand is forecast, are often added to the itinerary. The two fun-filled weeks go like this:

First, the management team delivers the 30 minute or so presentation to each of the underwriters’ sales forces (the people who call on the mutual funds, pension funds, and hedge funds that will buy the stock and pay all the underwriters’ commissions), then they hit the road along a pre-planned itinerary where they’ll repeat the presentation 50-100 times. Then it’s almost one of those scavenger hunts where management (accompanied by bankers of varying ranks) go from fund to fund in city to city in limos and often private planes (as schedules are tight).

The itinerary is constantly evolving as the sales people (perhaps mindful of the higher commissions inherent in an IPO) call their institutional clients and suggest they take a meeting with HISTalk Co (“as it seems to be a great play on the growth of HCIT in America”). Large funds get private meetings, smaller or less-active funds are relegated to group lunches or breakfasts where they hear the same story. When I was an underpaid associate research analyst, I’d sometimes go to these lunches, partly because hearing lots of stories was a good way to get trained (and hone my BS detector) and partly because the food was often better than I could afford for dinner, let alone lunch.

The quality of the meetings varies greatly and range from buy-side analysts who have no intention of recommending their firm buy, but are doing a favor to the sales person who took them to a game last month (it’s good to be at a big fund), to portfolio managers who’ve not even looked at the S1, but liked the sales pitch, to analysts who will grill the management team on even minute items and likely read the document more carefully than some of the bankers or even the company did. So, the meetings vary, as do the accommodations (but generally we’re talking Four Seasons level) and the amount of annoyance generated for both sides.

Management’s goal here is to convince the investor that HISTalkCo is a stock worth owning for the long haul. Simultaneously, the firms’ research analyst is fielding calls from potential investors, answering questions, sharing his or her estimates (which, incidentally, are never provided in writing), and trying to help sell the deal as well. They’ll have done separate diligence from their bankers to build their own models and (in theory) form their own opinions (thank you, Mr. Spitzer).

After the management meetings, the investors decide whether they want to own the stock and, if so, how much and at what price. As I mentioned last month, while the underwriters suggest a target price, it’s the investors who actually determine it, and it works as follows. Readers will recall from the last post that the underwriters (now, primarily the lead), have established the likely price of the stock as it relates to comparable companies and applying a 15% “IPO discount” to offset the risk inherent in buying a stock with no trading history. This range of values is what’s put on the cover of the prospectus a week or so before the road show so that investors will have an idea of what the company is worth, at least in theoretical terms.

Economics teaches us that prices are set by the intersection of supply and demand. The supply of stock is generally limited, so price depends on demand. Each fund that wants the stock will decide how much (up to a ten percent order) they want, and at times will say, we want none at $x/share, 5% at $y/share, but would take 10% if it’s priced at $z/share. Others and smaller funds will just say no, or how much they’d like to buy. Meanwhile, the lead underwriter’s capital markets department is keeping track of all this in a “book”, hence the term “book-runner”. The goal (and, in fact, some of their art) is to build a book that is over-subscribed (more demand than supply), so the stock will be priced within the hoped for range and, ideally, jump up after it opens on the market as funds buy more to build the amount of stock they want to hold (a position).

In some cases, demand within the range exceeds supply to an extent that the underwriters will “raise the range” and target a higher price, and/or the company will sell more stock. In less happy situations, issues price “below the range” and the price is lowered. Because companies want long-term shareholders, not funds that will sell the stock immediately to gain the 15% (or higher, in the case of a hot issue), the book runner primarily focuses on those funds that indicate they like the story or have a history of being loyal shareholders. I say primarily because, if an IPO is dramatically oversubscribed, the stock will rise immediately, and some funds will sell into that demand (a practice known as spinning) and make a very quick and easy profit. This can be a way for underwriters to reward loyal clients (saying, in effect, “sorry the last IPO you bought didn’t work, we’ll make it up to you with this one” or, “thanks for all that other commission business you’ve given us lately”.) Back in the dotcom days, banks did the same thing for CEOs of hoped-for clients as a way of currying favor (see “Friends of Frank” for details, or ask me in a follow-up post to discuss that phenomenon).

Once the calendar says the road show’s over (and hopefully it’s even close to the same date as we predicted at the org meeting), it’s time for “bring down diligence” and the pricing call. Bring down is simply checking in that nothing material has changed. In my experience, it rarely has. Then the lead banker and capital markets guys have a chat with Mr. HIStalk and his board or other advisors. The state of capital markets over the past few days is rehashed, the team congratulated on what a great road show they put on, the orders summarized, and the lead underwriter recommends a price of $x/share.

Assuming that’s acceptable to the company, the orders are then filled based on an amalgam of size, price, importance of fund to the investment bank, promises made by the funds to buy more the next day (known as the aftermarket), favors owed, and the best judgment of the capital markets group. The orders are thus filled in the morning, the Registration Statement is declared “Effective” by the SEC and HISTalkCo is now a public company (maybe Mr. HIStalk even gets to ring the opening Nasdaq bell). Depending on the state of the broader market that day or week, how strong the book is, and how good the allocations were, the stock than starts to move. Part of the art is to allocate and price it so that there are more buyers than sellers and the stock goes up and everyone is happy. That said, if it goes up too high, the company (and bankers) just left money on the table as they could have sold the stock at a higher price, but a big first day pop gives some bragging rights, so issuers don’t tend to complain too much when that happens.

From this point, all that management has to do is manage their business as before, but pay attention to investors, analysts, and the SEC, while ensuring they always hit the quarterly targets that investors are expecting. Miss a quarter, you can see your net worth plummet. Hit them consistently and it can skyrocket. It’s all just part of the fun that being a public company entails (well, that and Sarbanes-Oxley). I’m stunned, simply stunned that Ms. Faulkner continues to pass it up.

This was a long post, and I appreciate your patience in reading it. Please keep the questions coming, I’ll devote more of the next post to answering them.

Ben Rooks is the founder of ST Advisors, a strategic consultancy offering long-term and project-relationships to companies and financial sponsors. He earned an MBA in healthcare management from The Wharton School of the University of Pennsylvania, has done healthcare IT equity research, and has worked as an investment banker in over 25 successfully closed healthcare and medical technology transactions valued from $40 to $365 million.

Monday Morning Update 10/19/09

From eHealthDC: “Re: the Senate’s plan for making EHR incentives permanent. I had staff follow up on the story. According to a source, there was some misquoting – while there are a few areas of interest in Senate Finance, it does nothing aggressive on HIT. The key areas it touches on are the following: (a) the Secretary will conduct a study on methods to encourage meaningful use by entities offering insurance plans through a state-based exchange; (b) organizations participating in the CO-OP program will be permitted to enter collective purchasing arrangements for HIT-related materials; (c) the bill requires CMS to develop a plan to integrate the PQRI program with the standards for meaningful use; (d) no less than triennially, the Secretary will identify quality measure gaps and may appropriate grants to entities with expertise in developing such measures. These measures specifically include, among others, meaningful use of HIT. To this end, HHS will appropriate $75 million for fiscal years 2010 – 2014; (e) free clinics will be eligible for meaningful use Medicare and Medicaid HIT incentives; (f) the Secretary will incorporate reporting requirements and incentive payments and penalties related to electronic prescribing and EHRs into accountable care organization requirements; (f) the bill creates a bonus payment structure for care coordination and management activities conducted by Medicare Advantage plans. HIT programs are included as eligible activities. Nothing earth-shattering.” Thanks.

From MEDITECH Customer: “Re: Kronos. I guess it isn’t really a rumor since I heard it first from my Kronos sales guy, then verified it in about half a dozen places. Kronos bought Stromberg from Paychex Inc. Stromberg had been beating out Kronos in some of the small hospitals in my area lately.” Paychex sells its time and attendance business to Kronos for an undisclosed sum. Kronos gains 1,400 customers that it describes as primarily mid-market (250 to 1,500 employees). Stromberg was an independent vendor in Lake Mary, FL that Paychex acquired in 2004 after first buying its Time in a Box product for small businesses the year before. It continued to operate under the Stromberg name as a Paychex subsidiary, offering free version upgrades, fixed price implementation, and a 99.7% customer retention rate.

From HITgeek: “Re: Siemens reorg. You can assume that Siemens reorg rumors around this time of year — right at the start of its fiscal year — are based on reality. Siemens’ most dependable product release timing is new org charts every year.”

From Simon Kirke: “Re: Meditech 6.0. I hear Meditech is forcing customers to buy a scanning and archive product with Meditech 6.0, even if they have a current document imaging solution. Can you verify this?” The floor is open.

From VA HIMSS: “Re: HIMSS. Friday night at the VA HIMSS Fall Conference, John Hoyt, VP HIMSS Analytics, said that HIMSS sees itself as matchmakers between providers and vendors. Huh? I thought HIMSS was a professional organization!” I’ve said all along that HIMSS is a highly profitable bar with a business model in which ladies (providers) drink free provided they don’t mind being groped by men (vendors) who pay dearly for the privilege. As evidence, I usually link to the HIMSS Exhibitor Priority Point Opportunities list (warning: XLS) that enumerates what vendors have to buy to earn the right to spend massive dollars on their annual conference exhibit (the cover charge?) 

I’m fascinated by the unintentional insight provided by responses to the poll I did on whether your primary care doctor uses an EMR. The PCPs of 63% of respondents use an EMR, which is astoundingly high and, frankly, hard to believe as representative. However, only 23% feel so strongly about EMR use that they would choose only EMR-using doctors, so those of us in the HIT industry aren’t eating our own dog food.

My doctor uses an EMR and I’m finally buying the concept after longstanding skepticism. I can confirm my appointment online and pay my co-pay online with a credit card (which lets me skip the check-in at the office), I can see my labs online from anywhere with his notes about what they mean, he can pull up my records from anywhere I’ve been seen within the health system, he uses e-prescribing, and he has done a great job in integrating the EMR as part of his patient teaching right in the exam room. Nobody has asked me even once for repetitive information. And most importantly, he says he finds it useful and clinically beneficial. Like most of the respondents, I’d stick with him even without the EMR, but it makes my encounters more convenient, adds clinical value, and gives me the peace of mind that if I show up at another health system facility I won’t be just an empty clipboard to them. I get it, I like it, and I’m looking forward to having more electronic and online services. I figure it’s no different than when I get my $13 haircut from the local cheap chain place since they look up my records by telephone number, their version of an EHR (electronic haircut record).

New poll to your right: are you and/or your employer planning to upgrade to Windows 7? It ships Thursday. I’m riding the fence myself. Microsoft panicked that it would lose impressionable students for good when Apple priced its Snow Leopard upgrade low, so I’ve got a $29.99 upgrade coupon for Windows 7 Home Premium since I have an EDU e-mail address for reasons too complicated to explain. Even then, I’m finding it hard to get excited about displacing XP since the Vista wounds are still fresh and I’d have to install from scratch this time since there’s no XP upgrade. Everything I do is on the Web, so I don’t know that a prettier and allegedly better Windows would change my life since Firefox would still look the same.

I see some folks have added their Webinars and conferences to my events calendar. Just a suggestion: put them up well in advance so those interested folks can lock in. You won’t get many new registrants for an onsite conference if the posting is made the week before.

A reader forwarded an e-mail from Kaiser CEO George Halvorson touting the Archimedes healthcare modeling system. Interesting: it’s an artificial intelligence system that uses computer models of the human body to analyze treatment approaches, rather like a virtual clinical trial. Kaiser did a stroke and heart attack prevention study with it to determine optimal combinations of drugs in a large population. It predicted that a combination of aspirin, lisinopril, and lipid-lowering agents would reduce risk by 71%, darned close to how it turned out in Kaiser’s real-world result of 60%. It has rolled out the protocol to 250,000 patients. Kaiser is the ideal environment for that kind of project since it fully manages its HMO patients and is incented to improve their health.

This isn’t news to us industry types, but an investigative report says EMR stimulus could cost twice the $19.5 billion figure that everybody remembers. Now we all know the real numbers – the incentives are pegged at $46 billion but will supposedly be offset by non-specific savings, giving a net cost of $19.5 billion as a best case. The report quotes a taxpayer group that compares HITECH to irresponsible overeating with a plan of going to the gym later to work off the calories. There’s not much point in debating whether the numbers are right or wrong, however. Once you’ve hitched your wagon to idealistic taxpayer bailouts as a national program despite crushing national debt, you shouldn’t expect the SWAG numbers to be anything more than irrationally exuberant.

UMass Memorial chooses Accenx Exchange for interoperability.

Iowa Health System and Allscripts launch ePrescribe Iowa, in which physicians will be offered a free Web-based e-prescribing tool.

Eclipsys Sunrise Pharmacy customers are on the rise, although exact numbers aren’t given in the press release. It says 80% of them do CPOE on Sunrise (a more interesting stat would be the number of its CPOE customers using their pharmacy system, of course, since Sunrise Pharmacy probably isn’t bought as a standalone system very often). It has some big-name users like El Camino, RWJ, SUNY Downstate, University of Kentucky, and HUP.

University of Iowa Health Care creates a half-time CMIO position and hires otolaryngologist Douglas Van Daele, MD for it. He’ll oversee its new $61 million implementation of — you guessed it — Epic. Their state representative gripes that UI gave the doc a $46K salary boost to $291K, saying, “I can’t think of any justification for adding any position while these cuts are being made that can’t draw down more (grant) dollars or doesn’t save lives. I can’t believe they’ve gone this long and they are adding it into a half-time position — and that couldn’t wait?" Apparently there’s friction over the university’s recent layoffs and some other recently added executive positions.

If you’re a fan of Dr. Gregg Alexander on HIStalk Practice and are attending the American Academy of Pediatrics conference this week, Gregg invites you to stop by the Pediatric Office of the Future exhibit and then join him at the Official Unofficial HIStalk Practice Happy Hour Reception at the President’s Sports Bar in the Renaissance Washington from 5:00 to 7:00 p.m. on Monday, 10/19. It’s a block and a half from the conference center.

Indiana cancels its 10-year, $1.34 billion welfare services contract with IBM and ACS, saying “the system wasn’t working, and it wasn’t getting better, despite best efforts.” The failed effort to privatize the systems was the largest contract in state history. It was supposed to save the state $500 million. ACS call center workers said they were told to lie to welfare recipients whose benefits were delayed, always telling them they’d get them within 48 hours just to get them off the phone. House Speaker Pat Bauer wants IBM to “go away and pay us something.”

Speaking of Indiana, its HIEs band together under a new governance organization called Indiana Health Information Technology to apply for stimulus money.

GE announces ugly Q2 numbers: revenue down 17%, EPS $0.26 vs. $0.54. GE Healthcare’s earnings were down 20%.

Just who you want advocating for EMRs: South Carolina Governor Mark Sanford, who is best known for disappearing for a week to cavort with his Argentine mistress and then lying about it with a lack of skill that is surprising for a politician.

Vanderbilt University Medical Center gets $6.4 million in stimulus money to look for a link between drug performance and genetic factors, matching 67,000 DNA samples in its database to de-identified patient medical records.

E-mail me.

HIStalk Interviews Sanjeev Arora

Sanjeev Arora, MD is professor of medicine, director of Project ECHO, and executive vice-chair of the Department of Internal Medicine at the University of New Mexico Health Sciences Center, Albuquerque, NM.

Please give me an overview of Project ECHO.

Project ECHO stands for Extension for Community Healthcare Outcomes. Our mission is to develop the capacity to safely and effectively treat chronic, common and complex diseases in rural and underserved areas and to monitor outcomes. It’s funded by the Agency for Healthcare Research and Quality, the New Mexico legislature, and the Robert Wood Johnson Foundation.

We started this project about five and half years ago to treat hepatitis C, which is a global health problem affecting 170 million people worldwide, of which 3-4 million are in the US. In New Mexico, we had 28,000 patients who had hepatitis C. In 2004, less than 5% had been treated because there weren’t enough specialists in rural areas to treat them. There were 2,300 prisoners who were diagnosed with hepatitis C and none had been treated. We had the highest rate of chronic liver disease/cirrhosis deaths in the nation, so it’s twice the national average. 

The disease was treatable and it can be cured. Hepatitis C has six main kinds of virus. If people had Genotype 1, we could cure them about 45% of the time. If they had other kinds of genotypes, we could cure them about 80% of the time. The problem was that if patients were given this kind of treatment, which consisted of weekly injections and daily pills, they got severe side effects.100% of patients became anemic. Their white cell count went down. About a quarter of them got depressed. 

Primary care doctors didn’t feel comfortable treating this disease. There weren’t any specialists in the rural areas and in prison. That was the problem that we were trying to solve. 

Rural areas of New Mexico are a very underserved area for healthcare services. Thirty-two of 33 New Mexico counties are listed as Medically Underserved Areas. Fourteen are designated as a Health Professional Shortage Areas. We said we could use this new model to develop the capacity to safely and effectively treat hepatitis C in all areas in New Mexico and to monitor outcomes. We felt, if we could do that, then we would have a model to treat complex diseases in rural locations and developing countries.

We developed a partnership between the University, the prisons, health department, Indian Health Service, and community clinicians who were willing to treat hepatitis C in rural areas. ECHO’s model is based on four key ideas.

One is the use of technology to leverage scarce healthcare resources which may exist only at a university or in a tertiary care center.

We use a disease management model, where we focus on improving outcomes by reducing variation and processes of care. We create a best practice protocol for treating hepatitis C and then we share it widely with our partners. We all manage off the same label. This is to improve quality.

The third key idea is case-based learning. That’s when a rural provider goes to medical school or residency. They learn from real patients and mentors. When they go to the rural area and a new disease like hepatitis C gets discovered in 1989, they’re expected to read books and then treat this disease. They don’t feel comfortable because it’s a very complicated disease. So we said, “Why should we not bring case-based learning back into the lives of the rural provider by co-managing patients with them? We have a centralized database to monitor outcomes.”

We train physicians, nurses and pharmacists in hepatitis C. Then we conduct these telemedicine clinics, which we call Knowledge Networks. Many rural clinicians sign on simultaneously onto an interactive video network with specialists from the university. One by one, they present patients with hepatitis C to experts at the university. The specialists at the university help them manage these patients, tell them what to do, what tests to order, what treatments to take, and help them manage side effects of treatment.

They come every week, once a week, for a couple of hours and present their patients. This creates a learning system which we describe as a Learning Loop, where these clinicians learn from each other as much as they learn from university specialists. They also learn from short didactic presentations.

We give the rural providers no-cost CME credits. We give nurses credits for participation because they are learning from experts at the university. We like to improve their professional satisfaction and we give them access to multiple specialists at the same time.

Everybody gets the chance to present their patients. We use all different kinds of technology, including videoconferencing bridges, videoconferencing recording devices, and electronic records to enhance communication. We described this first for hepatitis C, but it’s applicable to any disease that is common, management is complex, new treatments are coming, high societal impact, if there’s a serious outcome of a untreated disease, and if there’s effective treatment.

We have a few concepts that make Project ECHO work. One is we are trying to provide the same level of care at a community health center as we give at a university. We can do this by means of technology, best practice protocols, and case-based learning.

From the Pareto Principle, the 80/20 rule, if you create Knowledge Networks for just a few diseases, you can have a huge impact on healthcare. You don’t need to have Knowledge Networks for 500 diseases to have a huge impact. A few diseases account for most of the morbidity and mortality.

We use the concept of a Force Multiplier. Because of the specialist shortage in rural areas, we can use existing community clinicians like nurse practitioners and physician assistants and enable then to provide the same level of care as specialist, therefore multiplying the capacity for specialty care in rural areas.

One challenge that comes up is that there is not only a shortage of specialists in rural areas, there’s also a shortage of primary care doctors. This is the next generation of Force Multiplier, which essentially shows you that we are training now community health workers and medical assistants and nurses also in these chronic diseases so they can be part of the chronic disease management team to help the primary care clinicians.

Existing methodology for training and development of widely distributed learners has major limitations. They tend to be expensive and out of sight, out of mind. You call them in for a conference into your city, spend thousand of dollars, they go back, and they forget what you have taught them.

In our model, we help them apply this knowledge and, using technology, we can do this training at a much lower cost. Also, we don’t have the problem of knowledge obsolescence because it’s a weekly interaction where we are slowly making them experts.

We also have a prison peer education program where we train prisoners in New Mexico to teach other prisoners about hepatitis C.

We have 15 separate areas in which we have Project ECHOs going on: hepatitis C, cardiac risk reduction, asthma, rheumatology, chronic pain, substance abuse, high-risk pregnancy. Some are supported by the Robert Wood Johnson foundation. We have many others. Overall, we have more than 140 programs around the state.

With hepatitis C, we have done 375 HCV Telehealth Clinics. More than 3,500 patients have entered the HCV disease management program. We have provided thousand of hours of CME credit at no cost to clinicians.

We’ve taken community clinicians and assessed their skills and abilities on different domains of hepatitis C care. On the question of, “What is your ability to treat Hepatitis C patients and manage side effects?”, on a scale of one to seven, they were two out of seven when they started and it went up to 5.2 in 12 months alone. So, very major improvements occur as they engage with us in this learning process.

Asking if they could serve as a local consultant for hepatitis C in their clinic and area, it went from 2.4 to 5.6. Overall competence went from 2.8 to 5.5. When asked if this kind of activity is of moderate or major benefit to them, it ranged from 94% to 98%.

Subsequently, we did a hepatitis C trial in which we compared the care in the university to the care in the rural areas and prisons by primary care clinicians. Rural primary care clinicians deliver hepatitis C care that is as safe an effective as a university clinic. We can also improve access to care for minorities. Almost 69% of our patients in the ECHO groups are minorities, versus much fewer in the university.

The potential benefits of the model are improved quality and safety, improved access for rural and underserved patients, workforce training and force multiplier, improving professional satisfaction and retention, cost effective care by avoiding excessive testing and travel, preventing cost of untreated disease, for example, liver transplant, and integration of public health.

In 2007, applications were sought for disruptive innovations in healthcare, new models that would change healthcare nationally and globally. This was sponsored by ASHOKA Foundation and Robert Wood Johnson Foundation in a disruptive innovations contest. Project ECHO was selected a winner among 307 applications from 27 countries. We were one of three winners selected.

Using technology, best practice protocols, and co-managing patients with case-based learning is an effective way to safely and effectively treat chronic, common and complex diseases in rural and underserved areas and to minor outcomes.

This is the first program I’ve heard of where the goal wasn’t just to turn over patients to experts sitting on the other end of a monitor, but rather to educate and make local practitioners self-sufficient. Has anybody else done that?

We don’t know of anybody that has done it the way we do it. Basically, that is why it was selected, probably, as the most disruptive innovation in healthcare.

Commonly, technology has been used specifically in healthcare by telemedicine, where there’s a specialist at the university and there’s somebody in the rural area connected by camera. That doesn’t lead to the force multiplication that we’re talking about. We’re interested in long-term capacity expansion of care.

In the passage of time, these healthcare providers become less and less dependent on us as they become good at it. We are not aware of this model anywhere.

Healthcare reform always talks about who’s going to pay and who will be covered, but nobody has addressed the issue of having enough practitioners of the right types in the right places. Are you getting interest from the government or insurance companies about how they might use this model?

We have not focused so far on publicizing at all. This is the first initiative. We got a very large grant from Robert Wood Johnson Foundation and they hired a PR firm, which I think reached you. So I think that this is just the beginning, really.

Very few people know about this program in the way you have just learned about it. We have treated tens of thousands of patients through this methodology, but our focus has been on service, not so much on policy work or convincing healthcare providers. But we hope that some of the work you and your colleagues will do will help us get there.

We think that this is a very valuable tool for healthcare reform because we can train, not only primary care physicians, but community health workers to become experts in very common diseases like obesity and hypertension and diabetes.

Because of the shortage of primary care clinicians, how do you take care of all the chronic disease that is going on everywhere? We thought, if we trained the teams of the primary care clinicians in these very common problems, we’ll do a better job.

When a community health worker is used as a sole diabetes educator — that is, no doctor, no nurse, no certified diabetes educator — HbA1c can drop by 15%. Comparing the care provided by a community health worker and a nurse practitioner in the community versus a university-based primary care clinician, the community-based care does twice as good.

We asked ourselves, “Why is this community health worker intervention effective?’ These people live in the community. They understand the culture. They walk two moons in the patient’s moccasins. They appreciate the economic limitations of the patient and they often know family and can engage other the social resources. But most importantly, they spend more time with the patient.

If you are trying to change a diabetic or and obese patient’s behavior and doctor spends four 15-minute sessions with them over the course of a year, it’s hard to do that, whereas somebody like community health worker can spend seven one-hour sessions for one-tenth of the cost and actually make a bigger impact.

We have developed two tracks. The first one has already launched, the second one is in preparation. The first one we call the CHW Specialist Training Track, where we take these community healthcare workers and train them in diabetes, obesity, hypertension, cholesterol, smoking cessation, and exercise physiology. Then, over time, they start interacting with us on these Knowledge Networks until they really become experts in a very narrow area. This specialty CHW program uses low-cost technology to take specialty training to CHWs, promotoras, CHRs, and medical assistants where they live. It has a very narrow focus but deep knowledge, standardized curriculum.

We give them ongoing support via Knowledge Networks. They become part of the disease management team. Basically, the point that I was trying to make to you with reference to your question is, in healthcare reform, we have to train a much larger health workforce so that doctors work in teams, rather than individuals trying to solve the big problem.

I’m interested in your statistic on how well the community-based caregivers were able to do what they do. Do you think that would be true outside your population of the underserved or on a Indian reservation? Is it translatable to the rest of the United States?

There are some places in the United States where you have a highly trained work force, for example, Manhattan or Boston. There are hundreds of certified diabetes educators. So the moment somebody comes to you, you can refer them to a nutritionist, diabetes educator, or podiatrist. You don’t need a community health worker — you’ve got super experts doing all this work.

But when you go to a prison, a rural area, an Indian Health Service facility, there aren’t any certified diabetes educators. They don’t exist. The nurses there are not experts and there’s a shortage of primary care clinicians who are trying to see 25 patients a day and do it all themselves. In that setting, or in inner city areas whether it be south of Chicago or Bronx … I think where there’s a shortage of these healthcare resources, these models are particularly effective. We’re not trying tot change healthcare where there’s doctors on every street corner and every other health professional fully supplied. Our mission is to provide world class healthcare in cost effective ways in areas where there isn’t enough healthcare workforce.

It seems that there’s not much ego involved. You’re not saying that your organization or your doctors have to get all the credit. You’re just saying, “We’re going to help you and help the patients.” It must be hard to convince people that you don’t have a vested interest.

I think the fundamental issue with Project ECHO, as you have alluded to, is that we have to be willing to break the monopoly of knowledge that exists. The knowledge gets monopolized otherwise. Breaking that monopoly and sharing it freely for public benefit, without necessarily charging anybody for it, doing it at low cost on public dollars, would be much more cost effective.

What if President Obama came to you and said, “This works. This is where we want to go. We want to take this national.” How would you go about doing that and what would it cost?

I think the first thing that would happen is one would have to create some kind of a federal granting mechanism to academic medical centers around the country, in which we would essentially ask them to consider a different mission.

Right now, academic medical centers do three or four things. They basically provide very high quality tertiary care, but they also train doctors and nurses. These federal grants that would be provided to these academic medical centers would ask them to essentially refocus their mission to training a much larger workforce in America to manage chronic disease in a highly cost-effective way.

That is, finding out what is the lowest cost person who can be trained to provide education, behavioral change, and foot exams to diabetics in rural areas without having to have them travel. Right now, people in New Mexico have to travel sometimes five hours to come to an academic medical center.

Most of the academic medical centers are being financed right now by the clinical revenue generated by all these patients travelling. If you redirect clinicians, these highly educated specialists, from providing direct care one on one to instead enabling the workforce around the state in their rural areas to provide world class care by setting up these Knowledge Networks, you can actually get a much more cost effective healthcare system and get much better outcomes at much lower cost.

It means re-thinking how we do healthcare, so it would mean reconfiguration. In order for the federal government to be able to support such an effort, they would need to support this transition in the mission of academic medical centers. I think if federal granting mechanisms were available, large numbers of institutions like ours would jump at the opportunity because they want to do this kind of work if they are made financially whole.

News 10/16/09

From Nash Rasty: “Re: HIT Regional Extension Centers. Is there a list of sites that are on the preliminary approval list? Is it your understanding that for-profit vendors can provide technical expertise? I’m foggy on how companies can get involved.” I haven’t seen a list. I believe the original announcement indicated that the non-profit organization that is awarded an Extension Center contract (up to 70 of them will be created using stimulus money) can farm some of the work out to a for-profit company. In fact, Perot has already thrown in with AMGA and MGMA to offer services to them. I assume but don’t know for sure that each Extension Center is free to choose its own partners. That’s an interesting point: there’s going to be a ton of spending by these organizations, so if my assumptions are correct, consulting and other firms should be watching developments there carefully.

From Midwest CIO: “Re: Siemens. Siemens IT is reorganizing. Hospitals here say experienced associates are no longer with the company.” Unverified.

From The PACS Designer: “Re: Microsoft Tag. Using your iPhone to navigate the web will be easier if you use Microsoft Tag. The application is designed to read a color-coded 2D pattern called a High Capacity Color Barcode (HCCB) that is similar to the black and white checkerboard ones your find on packages which are called Portable Data File 417 (DF417). The PDF417 is a stacked linear bar code symbol used in a variety of applications, primarily transport, identification cards, and inventory management.”

I’m looking for a really good writer, preferably with a clinical background, who is on top of the mobile computing market, especially smart phones and caregiver apps that run on them. Let me know if you know of someone.

Patent troll Acacia Research Corporation extracts cash from Sage in return for dropping its nuisance suit against Sage over PACS, which Acacia claims to have invented. Despite having “research” in its name, even the company itself admits that its business is pretty much suing companies who quickly realize that it’s cheaper to buy ridiculous licenses than mount a legal defense. “The subsidiaries of Acacia Research buy patents as well as represent patent owners on contingency basis to generate revenue from licensing and enforcement.”

More hospital IT employees get the axe courtesy of a Cerner outsourcing deal, this time at Naples Community Hospital (FL). Thirty of the IT department’s 75 employees are turfed off to Cerner, nine stay on as NCH employees, and 36 are screwed.

Former ONCHIT head Rob Kolodner joins Open Health Tools, a North Carolina-based non-profit trade association of open source developers working on interoperable health records, as CIO.

A couple of readers e-mailed to say that former Baylor CIO and Cleveland Clinic IT executive Bob Pickton has been named CIO of SEHA, the health authority of Abu Dhabi. I know Cleveland Clinic has a management contract for one of its hospitals (Johns Hopkins has a couple, too), so maybe there’s a connection. Bob starts work Sunday. The high there today: 96 degrees.

A New York Times article says that time pressures, mandatory multitasking, and real-time attention demands (including EMRs) are burning out doctors who no longer have any contemplative time.

Surescripts will adopt the NCPDP SCRIPT 10.6 standard to connect EMRs to pharmacies for prescription information. 

Coastal Communities Hospital is the first site to go live on CalRHIO’s statewide HIE.

Now I won’t be able to enjoy my pork barbeque, thanks to a YouTube-prowling reader: pigs whose foodd is automatically dispensed in controlled portions by their RFID collars are smart enough to look for discarded collars on the ground and carry them in their mouths back to the feeding station, earning a second meal for the effort. I’ll refrain from making witty comparisons to healthcare scanning.

In the UK, the CEO of the Colchester Hospital trust blames poor service numbers on “data issues”, implying that the CIO was fired as a result. According to the article, “a new chief information officer had been appointed to address this.”

Stock publications have a terrible track record of being able to predict the future, so take this for what it’s worth: someone lists the five companies Dell should take over, all of them in healthcare IT. They are Allscripts, Quality Systems (NextGen), CSC, Cognizant, and Citrix Systems. Citrix isn’t technically a healthcare IT vendor, but it’s probably their biggest vertical since the industry is dominated by 1970s time capsule applications that won’t run efficiently and securely without it (my war horse Citrix joke: Citrix is like a Denny’s restaurant – chosen often, but only out of desperation). Actually I use Citrix a fair amount at work and it’s pretty cool – poorly architected fat client apps run a heck of a lot better over wireless or VPN when you’re only painting screens and not slinging massive data packets back and forth.

Michael Dell hints that the services business he’d like to get into is practice EMR hosting. I’d say that boosts the credibility of the Allscripts part of the rumor above. I bet he would love to get his hands on eClinicalWorks if the founders would sell.

Speaking of Quality Systems, it gets the #3 spot on the Top 10 Small Companies list by Forbes.

Senator Mike Enzi (WY) wins the HIMSS Federal Leadership Award. He’s HIT-friendly, of course.

Caritas Christi Health Care will use the Azyxxi part of Amalga and HealthVault, both from Microsoft.

Virginia Governer Timothy M. Kaine creates the Health Information Technology Advisory Commission, charged with spending a lot of federal taxpayer ARRA money. I don’t think I know anyone on the long list of commission members.

Five hospitals and health systems go live on MEDSEEK’s consumer portal: Advocate Healthcare (IL), Connecticut Children’s, EMN Regional (OH), Forrest General (MS), and St. Joseph (WI).

Cardinal Health signs a deal to distribute Orchard Software’s LIS and anatomic pathology systems.

Recombinant Data Corp. and Sun Microsystems sign a $4 million deal to create a translational research and quality improvement data warehouse for Health Sciences South Carolina, made up of the state’s big hospitals.

I don’t know why this popped into my head, but you aren’t a newbie if you know which popular software once had competitors named Quattro, Symphony, and Lucid.

Informatics Corporation of America wins the Best New Technology award at the HealthIT Insight Conference.

Centegra Health (IL) chooses GE Centricity Enterprise.

Everybody wants to get their snout into the ARRA trough. Medical equipment and monitoring manufacturer Welch Allyn launches an EHR preparation and selection consulting program.

Health plan software vendor HealthTrio spins off an independent company, Monument Systems LLC. The same guy owns both companies, so I’m not sure this is really big news, especially since the only thing I know about HealthTrio is that HIT industry pioneer Ralph Korpman used to work there.

The LA Times covers the Cedars-Sinai radiation overdoses, citing “the blind trust of medical machinery” as a key cause since the incorrect dose came up on the screen every time and nobody noticed for 18 months. I’m sure Cedars is doubly thrilled that the Times reminded its readers that the hospital also nearly killed the Quaid twins with massive heparin overdoses.

Interesting: 80% of Taiwan’s citizens are happy with the country’s national health insurance, they have lower infant mortality than we do, and the country spends 6% of GDP on healthcare compared to 15.3% here. Technology is credited, including a nearly universal smart card containing medical data that uploads to central systems (not separate insurance company databases) to provide a real-time view of healthcare. As a result, administrative costs there are 1.5% of the total vs. over 30% here.

Hoboken University Medical Center will implement Medsphere’s OpenVista.

New England Baptist Hospital bans social networking sites, fearing that employees could be posting confidential patient information.

Bizarre: the Minnesota Board of Nursing revokes the LPN license of a man who allegedly encouraged people in suicide chat rooms to hang themselves while he watched via webcam. At least two people did, the board said; the person who alerted police claims there were actually at least eight victims.

ACS gets a $4.5 million, three-year contact to develop the Kentucky HIE. All of us are paying for it: CMS covered the initial amount and the state wants ARRA money to take it statewide.

The Senate’s healthcare reform bill would create Internet-based health insurance exchanges with standard enrollment and make EHR incentives from the stimulus bill and make them permanent. That second item is interesting.

Pitt County Memorial Hospital (NC) says a missing Flash drive contains information on 1,700 former patients. And in Florida, a laptop stolen from the car of an employee of Halifax Health contains billing information for 33,000 patients.

The Health IT Standards Committee will assemble a panel later this month to share best information management practices, bringing in experts from other industries.

Hospital systems vendor Healthcare Management Systems will start selling an ambulatory EMR this month.

This sounds like a good job for you MD or PhD types: University of Missouri-Kansas City’s school of medicine is recruiting to fill a new position to lead a newly created department — Chair, Department of Informatic Medicine and Personalized Health.

E-mail me.

CIO Unplugged – 10/15/09

The views and opinions expressed in this blog are mine personally, and are not necessarily representative of Texas Health Resources or its subsidiaries.

Embrace the Cloud
By Ed Marx

Friends of mine recently returned from a trip abroad. The advanced wireless infrastructures found in these third world countries both astounded and pleased them. By unintentionally leapfrogging the technological revolution, these cities had bypassed the incremental advancements of the last 30 years and gone straight from laggard to leader. Societies that have not had a telephony infrastructure, for example, are suddenly delivering the highest per capita cellular subscribers.

Leapfrog advancement. Can we do it in healthcare IT? I believe we need to.

Does the fact that we trail our non-healthcare peers by 5-10 years embarrass you as much as it does me? Do you realize that we think of EHR as advanced when in fact it’s an application that’s been around since the 90’s! We have various excuses for our delay of advancement, and some are valid. But they don’t change the reality. We are behind.

We do nevertheless have an opportunity.

Cloud—it’s clearly the future of both software and hardware. And consistent with the past, it draws both resistance and hesitance, which perplexes me. We act as guardians, but have no basis for such. We pontificate more than we lead while the people we serve need us to advance.

I’m tired of employing self-depreciating humor to cover the glaring technology gap whenever I speak to non-healthcare audiences. I’m ready to leapfrog and bridge the gap using technology as a key lever. So let’s embrace the cloud.

Lead!

Ed Marx is senior vice president and CIO at Texas Health Resources in Dallas-Fort Worth, TX. Ed encourages your interaction through this blog. (Use the “add a comment” function at the bottom of each post.) You can also connect with him directly through his profile pages on social networking sites LinkedIn and Facebook, and you can follow him via Twitter – User Name “marxists.”

HITlaw 10/14/09

When is “perpetual” not perpetual?

Recent encounters in my practice have required me to carefully explain the intricacies of perpetual software licenses, so I decided to share some thoughts with the HIStalk readership. Perhaps due in part to the economy and in part to the anticipated availability of EHR funding, healthcare executives are asking some very specific and important questions in the HIT acquisition process, such as; “What exactly do I get for my money? How long until I must reinvest? How do I avoid or predict additional fees?”

Unless you are using a Software as a Service (SaaS) model, then you probably have acquired use of your software applications under one of many varieties of software licenses that ultimately grant to the license holder a perpetual right to use the software, subject to certain limitations. These limitations vary widely and would make a good topic for another writing. The purpose of this HITlaw article focuses on the single word PERPETUAL.

Perpetual license grants are never 100% perpetual. There is always a proviso. In most cases, this is fine and good and protects the vendor.

Here is a simple boiled down example: “Provided that the customer licensee abides by the terms of the license agreement, use of the software in perpetuity is permitted.”

Perpetual use is conditioned on abiding by the terms of the entire agreement, so read carefully and understand the license agreement offered by your vendor. Find the conditions under which the vendor can suspend or terminate the “perpetual” license.

And before I start another firestorm (like the non-disclosure clause HITlaw submission in August), let me be clear that there are some very valid and proper conditions for a vendor to suspend or terminate the right to use its software.

My point is to understand the terms of the license grant itself. First, the terms by which the license is granted (typically payment in full of all license fees) and then the events or conditions that could suspend or revoke that license. Make sure you identify the triggers and weigh the consequences as you make your vendor selection. Hard work up front can alleviate heartburn later.

Finally, keep in mind that the perpetual license is granted subject to certain limits, such as number of users, number of acute care sites, or net patient revenues. In that vein, perpetual also means “assuming status quo”. An increase in users, sites, or revenues above the stated maximum, while not a trigger for termination, could trigger payment of additional license fees, which is acceptable as long as the condition is clearly stated and understood up front.

Think of a standard cell phone bill. The customer pays a certain amount per month for up to X minutes of use. If the limit is exceeded, there is an additional fee. This is a simple example, which obviously leads to whole different discussion about being able to accurately predict the additional fees that could potentially arise should the stated limit(s) be exceeded (never leave this term open).

My advice and my mantra are consistent. Recognize and fully understand the terms of use for the license for which you are paying.

William O’Toole is the founder of O’Toole Law Group of Duxbury, MA.

News 10/14/09

From Lizzie Borden: “Re: University of Rochester. I hear they just signed with Epic systems for their EMR solution. What are they installing and are they hiring? Interestingly, I also know that Buffalo Medical Group has acted proactively and offered their Epic analysts a $$ incentive to stay with them instead of fleeing to U of R.” URMC’s Web site says Epic says contract negotiations “were finalized in September 2009.” It also says that they’ve had to scale the $49 million project back, but still hope to nab $8 million of taxpayer ARRA money. It’s the full-blown inpatient system, apparently, expected to go live in the fall of 2011. Details here.

From Topper Harley: “Re: trial. Not too nice of the doctor!” An HIT company executive goes on trial this week, facing multiple felony charges for an alleged road rage incident. I initially did a detailed write-up complete with links and accident scene photos, but I reconsidered for several reasons: (a) he’s been charged, but not found guilty, which means he’s innocent; (b) he is an HIStalk reader and I’ve swapped e-mails with him in the past, so it would be needlessly painful for him to read the story here and know that his peers are doing the same; (c) I could easily wreck his career unintentionally just by giving the unproven details a spotlight. If and when he’s found guilty of something major, I’ll provide details. Until then, I’ll express non-specific sympathy for all involved and my hope that justice prevails.

From Luke O’Scyte: “Re: Ontario. It is called a learning opportunity, or perhaps a teachable moment, how not to spend one billion dollars. The Ontario government, through arrogance and folly, decided that they new best how to pick the market winners, run their own networks, decide on which technologies to approve and which to ignore. So how did that work out for them? See the auditor’s report (warning: PDF).” It’s full of juicy details, like that eHealth Ontario’s CEO paid a recruiter $1 million upfront to fill 15 management positions; one successful contractor’s bid was five times more than a comparable one and more than quadruple the budgeted amount; and $800 million of the $1 billion spent to date was for a private network that “remains significantly underutilized because as yet there is insufficient health-related information on it.” in other words, they jumped all over their equivalent of NHIN without first getting provider EMRs up and running to populate it. 

UCSF finally confirms what I reported in August as a rumor (supported by a reader-forwarded copy of an internal department e-mail): UCSF has halted (temporarily, at least) its $50 million GE Centricity project. You’d never know there was trouble in paradise if you Google UCSF+Centricity: the rags and press releases were making it sound like a match made in heaven. Thanks to SF Business Times Chris Rauber for giving HIStalk and rumor reporter UCSFWatch credit.

Here’s the next gossipy tidbit provided to me by one of those UCSF rumor reporters: as soon as UCSF’s lawyers get them out of their GE contract, they’re going with Epic. Unverified.

Cisco takes its Vision Van (or whatever you call a demo trailer) to Auburn Memorial Hospital (NY), showing off technologies such as videoconferencing and mobile caregiver communication.

Eclipsys announces scheduled events for its EUN conference in Dallas next week. ARRA’s on the list, not too shockingly, along with the customer knowledge sharing tool Eclipsys Outcomes Toolkits and physician sessions on its PeakPractice ambulatory EHR.

Welcome back to HIStalk Gold Sponsor MedMatica Consulting Associates of Chester Springs, PA, a software and technology implementation firm (Epic, Eclipsys, Siemens, Meditech, Cerner, etc.) The company provides HISAssist support plans (live, telephone-based, or Web-based) for those vendor products as well. I’m blessed with amazing sponsor retention, so having MedMatica come back soothes my overwhelming feelings of inadequacy at least temporarily.

McKesson announces that all of its physician EMRs can now use Bright Note Technology. I didn’t really understand from the press release what it does, exactly, but it’s some kind of multiple input/single search capability for patient data. I found this demo on YouTube, showing a doctor using speech recognition to dictate a single SOAP note that parses out the information into specific chart data elements.

Inga’s update from MGMA today is on HIStalk Practice.

GetWellNetwork announces GetWell Town, an interactive patient care system designed for pediatric patients, and its first customer, Walt Disney Pavilion at Florida Hospital for Children. It includes care content, child life programming, entertainment options, parental controls, pediatric education, and pediatric pathways.

A summer intern (Harvard-graduated lawyer, Stanford PhD candidate) at IBM Research comes up with an encryption breakthrough that may have great potential for protecting health information, especially with cloud computing. Homomorphic encryption, formerly viewed as impossible by cryptographers because it takes a lot of computing horsepower, allows running calculations on encrypted data without actually decrypting it. IBM hired him, of course.

Listening: My Dying Bride, an old favorite doom metal band that I’d forgotten about.

Weird News Andy characterizes this story as both weird and sad. An 31-year-old English veteran of the war in Iraq dies after receiving cancerous lungs transplanted from a donor who had been a heavy smoker. The tumor wasn’t discovered until months after the transplant, during which time its growth accelerated, fueled by the routine post-transplant immunosuppressive drugs the patient was taking. The delay in noticing the tumor was blamed on poor communication among the radiologists and doctors involved. The cancerous lung made him ineligible for a second transplant since, under hospital rules, he had become a cancer patient.

NIH gives Kaiser $54 million of ARRA/taxpayer money to conduct biomedical and personalized health research using HealthConnect.

RelayHealth announces that 50 health systems and hospitals have contracted to join its RelayHealth Network, which connects 20,000 doctors, 90% of retail pharmacies, and 52 reference labs, all of which automatically update 7.6 million shareable personal health records for HIE connectivity and care coordination. We may need to talk to a participating site since that sounds pretty interesting.

Allscripts announces that it’s the first EMR vendor to integrate its systems with Intuit’s Quicken Health Bill Pay, which gives patients an easily understood statement and the ability to pay online. Doctors get paid 18 days faster on average. Everybody seems to like the Quicken app, which I first wrote about in early 2006 and talked up as potentially a big deal, although it seemed to take a long time to see the light of day.

Also announced: Allscripts will offer its practice customers point-of-care patient payments via mPay Gateway, which calculates patient responsibility and obtains payment authorization before the patient leaves the office. Inga interviewed mPay Gateway CEO Brian Beutner just last week on HIStalk Practice. We asked him the obvious question – are patients really willing to pay before leaving the office? He says 90% of them will. “They like the fact that there are no more unpleasant surprises and the simplicity of taking care of the payment up front, rather than having to wade through numerous statements from the doctor and comparing them to the multiple EOBs and other confusing insurance documents.”

Check out TPD’s list of iPhone applications for healthcare. If you know of others, leave a comment on that article and he will expand his list. Thanks to TPD for putting the list together and for his ongoing contributions to HIStalk.

Dave Roberts, the VP of government relations for HIMSS and former mayor of Solana Beach, CA is running for Congress.

A reader e-mailed to ask if I’d heard of QlikView, with which she was impressed in using it on a consulting project. I hadn’t, so I Googled. It’s a very cool BI tool (check the online demos) and supposedly the fastest growing BI company in the world (which probably means Oracle, IBM, or Microsoft will be buying them next week, unfortunately). I noticed that Bassett Healthcare was listed as one of its healthcare customers, so I Googled yet again to find that apparently Surgical information Systems uses it for its SIS Analytics offering (PDF case study here).

Two Johns Hopkins pediatricians and informatics faculty members launch Applied Clinical Informatics, an official online publication of the International Medical Informatics Association and AMDIS that hopes to “bridge the gap between visionary design and successful and pragmatic deployment.”

The VA awards a claims processing contract worth up to $60 million to VistA integrator Document Storage Systems.

Cedars-Sinai admits that it overdosed 206 CT scan patients with eight times the intended dose of radiation because of  “a misunderstanding about an embedded default setting applied by the machine.”

Dell, fresh off its Perot buy, will be looking for more healthcare acquisitions, says Michael Dell.

UVA Medical Center confirms that it will implement Epic, which I speculated in February (I’m not psychic – if a hospital has more than 400 beds, I always guess Epic and I’m usually right). UVA was the hospital that got a lot of press (some of it snarky) recently when it said it would hire scribes instead of repurposing busy doctors, so now we know which EMR they’ll be typing into.

University of Central Florida gets preliminary HHS approval to start a health technology regional extension center and apply for $8 million in stimulus money.

An Oklahoma hospice owner fears that reimbursement cuts and government-encouraged EMRs will drive him out of business. “One of the things they talk about is electronic medical records, which has great applications for medical doctors’ offices, but for hospices, that doesn’t help us at all.”

Philips posts surprisingly good Q3 numbers, with an expected loss of $66 million actually turning into a $258 million profit. Healthcare margins dropped to 9.6% and sales were down 4%, however.

You would think PHR vendor MyMedicalRecords is a huge enterprise given endless press releases and PR efforts. Not so: the quarterly revenue of its money-losing parent company was $221K.

Virginia Tech gets a $28 million NIH grant for infectious disease research at its Virginia Bioinformatics Institute.

E-mail me.

Readers Write 10/12/09

Submit your article of up to 500 words in length, subject to editing for clarity and brevity (please note: I run only original articles that have not appeared on any Web site or in any publication and I can’t use anything that looks like a commercial pitch). I’ll use a phony name for you unless you tell me otherwise. Thanks for sharing!

Health 2.0
By DrLyle

I attended the second day of Health 2.0. Although geared towards consumers and the Internet, I thought it was worthwhile for any HIT junkie. Here are a few points of interest.

It was a good review of what the big guys are doing (Google, MS, WebMD).

• Basically all three want to be the "holders" of your health data (e.g. your demographics, med list, lab values …).
• While both Google and MS want to also allow anyone else to create PHRs or apps that can use that data, WebMD wants to be the only one who can use the data they hold. 
• Business models — unsure on Google and MS, but I assume it is something about either company marketing or eyeballs. WebMD obviously does advertising, but they also can sell their system as a private label for employers to give their employees (and they said employees can access their data on the regular WebMD site if they leave the company). 
• Overall, I think Google and MS will be more successful since they seem to have more openness, but they are not mutually exclusive. You can have information in both, and then have a third party creating a PHR or apps that sucks in data from both of them. My hunch is that WebMD will eventually interoperate with them and focus more on the end user applications than on being data storage experts.

Seeing new/interesting startups in the Internet space.

• Most are consumer focused, mostly enthusiastic souls trying to build a site that provides new information, niche communities, or consolidated approaches to healthcare. 
• Some business plans rely on employer financing (e.g. wellness sites), while others seem to be just interested in getting eyeballs for now, with plans for ads or an upsell (e.g. extra functionality) later. 
• Particularly interesting ones included AccessDNA (helps a consumer pick out which company to use for gene banking and analysis). TrialReach (a nice improvement on the typical search for research trials). iGuard (give them your medication list, and they will email you if any FDA or similar warnings come out). RelateNow (focused exclusively on the niche of parents and providers taking care of autistic children). ScanAvert (you tell them your meds and dietary issues, and then use your phone to take a picture of a UPC code and it will tell you about interactions, etc. …) 

Keas.

The NYT article paints an amazing picture where a patient would bring in data (some manual, some automatically from pharmacies, payors…) and the Keas system would create personalized "Care Plans" that tell the patient how to get healthier. Furthermore, they see a world where any provider or company could create Care Plans within their system and then sell them to patients like iPhone apps (e.g. one of my patient might want to buy the Cleveland Clinic Diabetes Plan, while another might want to buy my group’s Diabetes Plan, and yet another will buy my own DrLyle’s Diabetes Plan).   

So I was excited to see Adam Bosworth launch Keas at the Health 2.0 conference. Unfortunately, I was underwhelmed (as were many others whom I spoke with about it). Basically, it looked like a fancier version of the same old stuff that eHealth wannabees have been pushing for years (providing personalized advice based on your data). Specifically, their Care plans seemed very basic — "eat better by doing ABC, and exercise more by doing this XYZ…  and we’ll send you three reminders a day!"  

In other words, they seem to be naïvely falling into the trap of thinking that patients are just looking for advice and knowledge. What they really need is motivation. They know they need to lose weight, so it is unlikely that a Web site telling them they need to lose weight will make it easier for them.  Additionally, the screen is quite cluttered. He seems to be using his MS roots rather than his Google ones.

However, I would not underestimate Adam and his company. The general concept is sound and they must know they have to figure out "patient motivation" eventually, so one to watch.  

 

Lyle Berkowitz, MD is a practicing internal medicine physician, a healthcare IT consultant (www.DrLyle.com), and founder of the Szollosi Healthcare Innovation Program (www.TheSHIPHome.org). He blogs regularly at The Change Doctor (http://drlyle.blogspot.com/).