News 12/7/07

From Art Vandelay: “Re: Emergin. Nice move by Philips. Why build when you can buy the best? This puts a crimp in the competition’s next incremental strategy for their products. The strategy was to continue to increase safety by sending alarm notifications outside their systems – integration. This move will allow Philips to focus on creating a next-generation architecture for their products and leapfrogging their competition. Hey, what do you know, a big fish acquiring a value-added bolt-on. I am very surprised Emergin lasted this long as an independent without receiving an offer they couldn’t refuse. GE, Siemens, Johnson Controls, Draeger, Cisco, Ascom, or SpectraLink could also have been interested suitors. Now let’s see who tries to one-up the move by acquiring Capsule Technologie or vendors also playing some role in the integration market, such as Global Care Quest, Nuvon, Sensitron, LiveData, iMetrikus, Cain Medical, Delphi Medical, or Pervasa. Best wishes to Michael and the team. Now, only if Philips-Epic relationship would have worked-out (AnswerMan – there is one more for the Epic quota).”

From Dr. Lisa Cutty: “Re: Agfa. Agfa Pulls ORBIS From Dutch Market. According to the Dutch ehealth portal ICTzorg, Agfa decided to resign from the Dutch market. After a fit-gap analysis, Agfa learned that the international version of ORBIS HIS is not ready for the Dutch market. Where are the European next generation HIS products? Lorenzo delayed, Soarian delayed, ORBIS delayed … will the U.S. help Europe once again?” Link. She also mentions that General Atlantic sold only about a million of its 4.7 million Eclipsys shares, reported earlier this week as a potentially larger number.

From Lacey Underall: “Re: vendor support. When you’d call the vendor in the 80s, you’d get transferred to a techie who would resolve the problem on the phone. Now, vendors require that you learn how to use their software for problem tracking. Attach enough supporting evidence to take the case to the US Supreme Court, and they will come back and ask you for more. Last week, we installed code that didn’t work as we had hoped. I opened multiple cases and was invited to a conference call, during which the vendor’s person asked for case numbers. I told them I used their case reporting tool, so look them up. The response from a manager: ‘I don’t know that techie stuff. Please just send a list of the case numbers.'” I’m with you. First, customers of some vendors end up being their outsourced QA department since they don’t bother to test otherwise. Then, you have to log on to their clunky web tool, slogging through cryptic fields that a customer should never have to see. Then, they insist on working from that system, which you invariably download to Excel since they speak no other language when you talk to them, or they dump it into an RTF and e-mail it. Lastly, you not only better be able to repeatedly duplicate the problem and provide ironclad evidence if you don’t want your ticket closed immediately as ‘working as designed’ or ‘unable to duplicate’, you then have to explain it to the clueless help and test the usually dysfunctional and sloppy fix that results. The obvious goal: to put the burden of their mistake and its rectification (no pun intended) on the customer. You prove it, you help them fix it, you test it, you pay big maintenance fees for the privilege. I should name my vendor right here, which I’m betting is the same as yours since our experiences are identical.

Kaiser CIO Phil Fasano is interviewed on video by ZDNet. I asked Justen Deal for his impression just to get the counterpoint. Here are a few of his excerpted thoughts. “The interviewer says Fasano ‘parachuted in to fix some big problems.’ Interesting. KP has never really acknowledged that there were problems when he came. This interview doesn’t talk about any of them. It’s a lot of fun talk about Web 2.0, RFID, mobile computing, and social networking, all the glamorous buzzwords. The interviewer was excited about remote and mobile computing, but the extent of KP’s remote access infrastructure is its Cisco VPN Concentrator and the RSA SecurID tokens it rations out to worthy IT employees, managers, and a few doctors. As for mobile computing, KP is notoriously un-mobile. Tablets and PDAs just aren’t used in clinical settings at any of KP’s medical centers. Finally, I estimated last December on my blog that KP was spending $2.6 billion per year on IT, which KP disputed to anybody who would listen. But Fasano says in the interview it’s $3 billion a year. So, $330 per year, per member. The VA is at about $296 per individual, but has more than four times the number of medical centers and double the number of clinics. And, the UK’s NHS spends less than a third of what KP is spending per citizen (including NPfIT).” And speaking of Justen, a reader (someone from Kaiser) liked his scathing, well-research comments about Kaiser’s CEO.

OK, I need your help. Several folks who should know have told me that they’re sure that specific HIT software vendors are selling the patient data of their customers. Logistically, those vendors would need contractual permission and (for non-hosted systems) remote data access. If you have any (anonymous) proof of that practice, I’d sure like to hear about it. Contract terms would be good, first-hand knowledge even better. I’ve never heard of that happening, but I figure it’s a good time to either prove it or put it to rest.

GE, McKesson, and Microsoft are rumored to be interested in buying Canadian HIT applications and services vendor Emergis, but telecom company Telus may get it outright.

Former QuadraMed VP Michael Lanza is named EVP and general counsel of Selective Insurance Group.

Some idiot blogger is involved in a new online HIT job service.

Ronald Crall is named CIO of Quincy Medical Center (MA).

A group of healthcare companies will develop and use security practices developed with Health Information Trust Alliance.

Red Hat and HP will collaborate to facilitate healthcare data sharing in India. Interesting …

AHRQ releases 17 patient safety toolkits created from its research projects.

Cedars-Sinai, stung from being front-page tabloid fodder, abandons any pretense of offering a non-punitive culture. Everyone involved in the heparin overdosing of Dennis Quaid’s twins has been suspended and a reported 1,400 nurses will be required to attend special training. One story said that nurses have been warning the suits for years that staffing cutbacks and poor labeling were causing increasing numbers of medication errors.

Singapore’s HIE will be extended to community hospitals in the next few months, allowing public facility records to be viewed in community hospitals.

Survey: 60% of US adults think EMR benefits outweigh privacy concerns; 40% don’t. 75% want to be able to e-mail their doctor, but only if it’s free (apparently 25% don’t want that option even at no cost, proving that only idiots are sitting at home during the day, people willing to take a break from Jerry Springer to do telephone surveys).

The CareSpark RHIO chooses Wellogic’s physician portal.

Sunquest announces plans to expand its CoPathPlus anatomic pathology software.

Erie County Medical Center (NY) says the PeriOptimum wireless surgical patient tracking system is saving it big bucks, boosting OR utilization from 55% to 92%. Hospital CEO quote: “Think of it as a kind of air-traffic control system … You have 10 runways, 10 planes landing or taking off, 10 queued up waiting to take off, X-number in the air waiting to land. The rare commodity is the runway. The closer together you can get them landing and taking off, the more business you can do.”

Steve Case’s Revolution Health buys HealthTalk, a social network for those with chronic conditions (should it be called a social disease network?) and invests in fitness goal website vendor SparkPeople. Overnight futures prices were up for companies whose unimaginative names were created by simply jamming two words together (the company’s other businesses are CarePages, RediClinic, and Extend Health … how did they miss that last one?) And lest you think the companies are just a hobby for Steve to spend his AOL money, the young parent company gets serious and lays off a quarter of its staff, explaining “What you will see is a flatter organization, with a greater emphasis on revenue generation.” Aw, that’s so 1.0.

E-mail me.

Inga’s Update

“Differences in management philosophy” have led to Gregory Burfitt’s resignation as CEO of Centura Health after just over two years.

I have given up on Congress to pass any meaningful legislation about healthcare IT. (Now that I think about it, I am not sure about Congress’ ability to pass much meaningful legislation on anything, but I digress.) Despite my pessimism, I liked the new proposal that would require all doctors seeing Medicare patients to e-prescribe by 2011. It would also “bonus” doctors who use e-prescribing starting next year, although the bonus will likely be wiped out by lower Medicare reimbursements. Regardless, I say let’s get some legislation on the books and start forcing the HIT issue. E-Rx is probably one of the easiest tools to use in any EMR. If you have doctors resistant to technology, e-Rx is a great way to dip their toes in the pond. And obviously if you are able to convince a doctor that one aspect of an EMR is easy, then maybe the doc will move to other functions. E-Rx is also one aspect of automation that has great returns in terms of patient safety. It’s harder to argue that it’s not worth the money/effort. And if you get more doctors using e-Rx and the products are deficient, then there will be more voices crying for enhancements.

Meanwhile, check out Martin Jensen’s comments about the topics (especially if you want a totally different perspective!).

MedcomSoft adds James Haveman to its board. His background includes a stint as Senior Advisor for Health to the Ministry of Health in Iraq.

Statcom names Jim Rosenblum as executive vice president, products and chief technology officer. Rosenblum comes from Emmi Solutions and Allscripts before that.

athenahealth agrees to provide its practice management services to Indiana State Medical Association members. The organization has over 840 member doctors. Interesting that the press release doesn’t mention EMR. If athena is able to get a physician’s billing business, then its more likely to get the EMR as well. And, without having to discount.

E-mail Inga.

Contracts Need Penalties: Sullying the Honeymoon Bed with a Vendor Prenup

Inside Healthcare Computing has graciously agreed to make previous Mr. HIStalk editorials available from its newsletter as a weekly “Best Of” series for HIStalk. This editorial originally appeared in the newsletter in February 2007. Inside Healthcare Computing subscribers receive a new editorial every week in their Electronic Update.

As a hospital IT person, I would never sign a vendor’s software contract without protecting my organization with a variety of specific and severe contractual penalties. From recent Inside Healthcare Computing articles, many or most hospitals sign penalty-free contracts. I’m shocked. I like vendors, but money makes people (and companies) behave badly.

Vendors (software or otherwise) can tell you anything they want about their product’s performance and reliability. That can have one of three possible outcomes:

• If the company is both knowledgeable and honest, you will be pleasantly unsurprised when their product works as advertised, but at least you won’t be caught unaware by a major meltdown. That’s the best outcome.
• If the company is honest but doesn’t have broad enough experience with their product in a setting like yours, you’ll probably be miserable together, hoping they’re as responsive as they are honest. That’s bad. Sometimes you hit architecture or design flaws that can’t be fixed.
• If the company is lying or has wildly oversold their wares, nothing else matters because you’ve been suckered into a long-term, expensive, and contentious relationship with a company that has already demonstrated its willingness to take your money under false pretenses. That’s the worst.

For all three outcomes, your first line of defense is due diligence. Don’t whip out your checkbook until you’ve taken extensive site visits (of your choosing, not the vendor’s), performed acceptance testing, and documented every promise and important capability in a binding contract. Buying from a demo is just plain stupid.

The biggest mistake hospitals make is finding problems with previous implementations, but then buying the product anyway. The most common rationalization: “We’re smarter than those rubes who couldn’t make it work, plus we really like the product and the salesperson.” That combination of naiveté and misplaced bravado has lined many a sales rep’s pocket. It often benefits an executive recruiter, too, since the CIO who ignores a product’s well-known, spotty history often has plenty of free time to reflect after he or she has been shown the door.

Vendors may not be thrilled to see the list of penalties you want, but they’re not your best buddies. They’ve got their best possible price and terms. So do you. You both have the same job: to meet somewhere in that middle ground after fighting over what’s left between those numbers.

You can be chums when selecting a product and again after buying it, but not while the deal’s on the table. If the vendor doesn’t hate you during that time, you’re not pushing them hard enough.

Contracts without penalties are binding only to the customer. If the software fails to provide value, crashes constantly, or can’t be used like you were told, you still pay unless you were smart enough to write in penalties. Your want their skin in the game with yours.

The most important eventualities to cover with penalties:

• If the software doesn’t do what you were promised in a way that makes it unusable.
• If you have problems that will cause you the most harm: downtime, poor response time, or cancelled development plans.
• If the software or vendor has weak areas that sound like trouble. If the vendor’s teeth clench up when you lay out penalty terms for failing to deliver a richly functional ED package or a CPOE-to-pharmacy interface, maybe they don’t really plan to.

Penalties and payments go hand-in-hand. Your contract should require lots of the former and none of the latter if performance slips. Without penalties, you have no leverage. Vendors know you won’t yank a CPOE system if they have a major bug that could cause patient harm. A hard-hitting, predefined penalty is your best hope for getting their undivided attention to fix it. The cash won’t be much consolation, but it’s a hammer to hit the vendor over the head with.

I know we all like to throw harmless little love words around like “partner” and “shared vision.” Vendors pretend to be wounded when you sully the honeymoon bed with legal assurances. Take a lesson from Paul McCartney – maybe the vendor is a wonderful partner who loves you for something other than your money, but make them sign an air-tight prenuptial agreement just in case. Secretly, they’ll admire you for it.

This editorial is copyright-protected by Algonquin Professional Publishing, LLC., publishers of Inside Healthcare Computing. Please do not copy, forward, or reproduce this material without prior permission.  To obtain permission or for more information about Inside Healthcare Computing’s reprint policy, please contact the Customer Service Department at 877-690-1871 or go to http://insidehealth.com/ihcwebsite/reprints.html.

Mr. HIStalk’s editorials appear each Thursday morning in the subscribers-only version of Inside Healthcare Computing’s E-News Update.  To subscribe, please go to:  https://insidehealth.com/ihcwebsite/subscribe.html or call 877-690-1871.

News 12/5/07

From Jill Purity: “Re: Epic. Lots of prestigious organizations have bought Epic, run wildly over budget, and don’t get all sites live. Have they got a full inpatient site live or not? It seems that with Epic, the hospitals get blamed and not the vendor, where for everybody else, the reverse is true. Why does Epic always emerge squeaky clean?” I’m just riffing here since I don’t know for sure, but Epic’s contracts put most of the burden on the client (wisely, if you ask me). If things go sour, Epic can say they did all they promised. Epic is the only vendor doing so well that they can put that in a contract and get the customer to sign. Their competitors are so desperate that they’ll guarantee all kinds of outcomes outside their control, like physician use of CPOE, cost savings, and improvement in turnaround time. Also, why would a customer who’s already spent the money broadcast their dissatisfaction to the world? They’re big and well-known enough such that a little extra push won’t help them get anything out of Epic anyway, arrogant enough to not want to look stupid, and rich enough to just swallow the cost no matter what. Also, keep in mind that Epic is head and shoulders above all its competitors in KLAS, where its users could blast them anonymously if they chose, so let’s not discount that maybe Epic has a better product and methodology even though its customers, big names aside, are at least as clueless as hospitals with less cachet (or Cache’, for you merry punsters).

From Seth Davis: “Re: Eclipsys. The primary investment firm behind Eclipsys, General Atlantic, dumped a lot of their stock this week, maybe all of it. They still have a board seat, at least for now. Probably not a near-term Eclipsys crisis, just a feeling that now was a good time to get out.”

From Dan Panama: “Re: Misys. Vern said at the business update yesterday that an overwhelming number employees in the employee survey said they are not having fun any more. Vern’s response: ‘You have to earn the right to have fun.’ He also said that the banking division had a tough first half because of housing woes.”

Dennis Quaid and his wife file suit against Baxter Healthcare, manufactures of the heparin vials with which their newborn twins were overdosed at Cedars-Sinai in a drug mixup. Oddly, they aren’t suing the hospital for making the mistake, maybe because the babies are fine. Even though Baxter sent providers a warning letter that the hospital supposedly ignored, the Quaids say that wasn’t enough and they should have recalled the vials. Says they aren’t looking for money, but that’s standard ambulance-chaser boilerplate. Baxter’s response: “Company spokeswoman Deborah Spak says the issue is not product-related, but instead concerns improper use of a product. She says no amount of differentiation in packaging will replace the value of hospital staff carefully reviewing and reading a drug name and dose before dispensing and administering it.” I’m with Baxter on this one. If anyone should have learned from the Indianapolis deaths, it was Cedars. And there’s no need for the Quaids to “save other children from this fate” since the packaging was changed earlier this year. Cedars made the call to keep using the old stuff and their employees gave the wrong product.

Lots of HIT jobs (75 or so) have been posted at HealthcareITJobs.com in its first few days, everything from ambulatory system analysts to sales execs to CIOs. The five most recent are listed to your right and the first Hot Jobs e-mail has gone out (sign up here).

Ambulatory systems from Epic and e-Medsys earn CCHIT 2007 certification.

Sage Software joins the e-Prescribing Controlled Substances Coalition, which is trying to get federal laws changed that prohibit e-prescribing of controlled drugs. The ban is kind of silly given the immense problem with forged handwritten prescriptions and the retrievability of those prescriptions for DEA audits. The government wants providers to eat the cost of automating, but won’t make the same requirement of its own departments, apparently.

Fred Trotter has started a blog about healthcare IT in Houston. He’d appreciate getting any local stories and a chance to meet folks there in a monthly meeting he’s planning to set up. I’m sure there are lots of HIT’ers there, at least judging from the massive healthcare canyon that is Fannin Street, so say hi to Fred.

Lucida Healthcare IT brings on Cheryl Alpert as director of marketing. She’s been marketing VP for several companies, including Yahoo and DataBroadcasting. Also joining the company is Mike Lucey, director of business development, who has held positions at Forrester Research, Meditech, and McKesson.

Privacy advocate Deborah Peel advises residents of Lufkin, Texas to avoid the local hospital, which just implemented McKesson’s clinical systems, until they research how the hospital and/or McKesson will handle their data. “People from Lufkin should really think twice before going into the hospital until they know whether their health data will be disclosed without consent and until they know whether the technology vendor contract allows data mining and sale of their sensitive health records.” She claims by name that GE, Siemens, and Cerner reserve that right in their contracts. “This is a way that vendors and hospitals use to help pay for expensive technology infrastructure — they turn around and sell sensitive patient records. The records are sold to employers and insurers, that then use the data to discriminate against people in jobs and insurance coverage.” Assuming those vendors aren’t selling records, I’d protest vigorously for being characterized publicly as such. Sometimes her comments are kind of over the top, reminding me that she’s a psychiatrist.

In what must be the highest software version level in history, Siemens announces INVISION 27.

Omnicell announces SinglePointe, which isn’t defined until the fourth paragraph of the press release. If the conjoined word name wasn’t enough, the oh-so-Brit E at the end raises the annoyance bar, like those cutesy, woodsy-sounding names for cookie-cutter subdivisions in which all flora and fauna are ironically destroyed to erect boring beige boxes, like “Heron Pointe” or “Rivermonte.”

Guess who’s going paperless with their medical records retrieval and management? Some Chicago ambulance chasers.

The Raleigh office of Sunquest Information Systems leases new office space, presumably to vacate the Misys building. Seems odd to have a Raleigh office when the company is in Tucson and odder still to have the CEO working from there.

A Massachusetts entrepreneur is offering a $10 million prize for anyone who can come up with software that can map the genetic codes of 100 people in 10 days for $10,000 or less per genome. “There’s a lot of talk about personalized medicine … But to get there, we’re going to have to be able to do rapid and cost-effective genome sequencing. And for that, we’re going to need a new technology. People are going to remember who did this.”

HHS secretary Mike Leavitt says doctors should have to adopt EMRs to avoid a 10% reimbursement drop scheduled for January 1.

E-mail me.

Inga’s Update

From Randy: “Re: cell phone death. It has now been discovered that this report was inaccurate and a fellow worker ran over the man that died. The cell phone had nothing to do with the death.” Link. Guess we all feel safer taking calls. Another reader pointed out my poor choice of words when noting that “fortunately” the phone was only sold in Korea. I actually wouldn’t want the Koreans or anyone else to risk death by cell phone.

Automated pharmacy system provider ForHealth raises $9 million in new capital funding. The company announces its new IntelliFlow IV Room Workflow Manager solution for managing and tracking I.V. dosing.

A new must-have tool for every road warrior: a service you can launch on your mobile phone browser to help you find the nearest bathroom by city and street address. Brilliant.

eClinicalWorks makes a sale to Redwood Community Health Coalition, California’s largest network of non-profit community health centers.

Desert Regional Medical Center in Palm Springs will purchase the Cerner RxStation for medication automation.

Wyndgate Technologies, a division of Global Med Technologies, licenses its SateTractTX transfusion management system to Sheridan Memorial Hospital in Wyoming.

Annals of Internal Medicine publishes the results of a survey on physician professionalism. One particularly troubling finding: although 96% of respondents agreed that physicians should report impaired or incompetent colleagues to relevant authorities, 45% of respondents who encountered such colleagues had not done so.

The Christ Hospital in Cincinnati signs a multi-year contract with Care Tech Solutions for IT infrastructure outsourcing, help desk, and web services.

E-mail Inga.

Philips To Acquire Emergin

Royal Philips Electronics NV announced this morning that it will acquire medical alarm and event notification software vendor Emergin of Boca Raton, FL for an undisclosed sum. The transaction is expected to close by the end of the year.

See also: HIStalk’s June interview with Emergin President and CEO Michael McNeal.

CIO Unplugged – 12/1/07

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

My Journey to CIO
By Ed Marx

As a 16 year old sanitation engineer (they called us janitors back in the 80’s) working the evening shift at the 21st Medical Group Clinic at Peterson Air Force Base, I never envisioned myself having a healthcare career. I was more concerned about adjusting the volume on my new Sony Walkman than how dirty the floor looked. That is, until I met Tech Sergeant Samuelson. Samuelson worked in the ED where I signed in and out for each shift. He loved his job and it showed in his smile. He had a passion I did not. Unknowingly, Samuelson seeded my vision to serve in a profession where I could impact the lives of people—as he did mine.

The summer prior to college, I enlisted in the Army Reserves and became a Combat Medic. Although I had limited opportunity to serve others in an actual crisis, I relished the time I spent training soldiers for the worst. It was more than a job. As my university studies progressed, I left the medical corps to be commissioned as a Combat Engineer Officer. I enjoyed the challenge, but I missed giving shots and driving an ambulance. In a job that appeared to be a diverging footpath in graduate school, I gained an appreciation for technology and its ability to enhance processes and enable transformation. Consider it another experience that laid another slab in the foundation of my future. The question was how my passion for healthcare would meld with my emerging interest in technology.

As providence guided, I landed a position at a community hospital as an Anesthesia Aide. I had applied for dozens of senior positions, but because of my lack of relative experience, I couldn’t land any interviews. As an Anesthesia Aide, I honed my clinical experience and learned more about patient care processes. This season was key to my future. I developed relationships with clinicians and administrators and was eventually offered a position in administration. Unlike the traditional CIO, I rose up through the business ranks while attaining both clinical and technology experience. In leveraging these three divergent disciplines, I discovered my niche but, moreover, I allowed my vision and passion to move me forward into my calling.

My career soared and afforded me many cherished memories of institutions and people about whom I will write. I have served as a leader in academia, single hospitals and IDN’s, for-profit, and not for profit, the last 5 years as a CIO. But what stokes my fire each day is knowing in my heart of hearts that what you and I do as professionals in healthcare information technology has a significant impact on those whom we serve, primarily our collective patients. Stay tuned to “CIO Unplugged.”

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.”

Monday Morning Update 12/3/07

Someone who should know tells me that the “Juan Garcia” rumor is true on two fronts: he served as a CIA drug interdiction guy in South America and he was approached about one or more GE leadership positions, although he’s got it pretty good at Eclip … I mean, the company at which “Juan Garcia” works.

Graham Barnes is named CEO of BidShift. Zero healthcare experience, according to the press release.

Courts may impose sanctions on Northern Westchester Hospital (NY) for destroying OR schedules. The hospital replaced its chief of anesthesiology, who of course brought in his own anesthesia group. The former group, which had served the hospital for over 25 years, accused the hospital of conspiring with the new chief to destroy their practice and is suing the hospital. They say the OR schedules would prove that the new group was given first shot at business.

A Flash video of the press conference announcing athenahealth’s purchases of a 53-acre campus in Maine features Jonathan Bush’s comments to the locals. Fast forward to 21:40 to bypass the politicians and get right to JB, who leads off with some well-delivered standup material. “Carol Woodcock’s here from Senator Collins office … thank you very much for coming and for all the help that Senator Collins has brought us. Thank you for the notes and the pictures and the grants and the cigars and Blair, waiting at the dock while I tried to find it to bring the kids because I didn’t have anyone to take care of the kids, but I wanted to get a look at the facility and, you know, I never really paid for what they did to the seats in your Suburban, Mark, and I apologize for that. I’ll make it up to you at some point … when people ask me, why Maine, and I don’t have all the witnesses, I usually … well, when people ask me anything, I use that as an opportunity to talk about myself more broadly, so why don’t I do that? We started athenahealth …” Luckily, all the politicians were sitting directly behind him, providing more convenient lip access to his posterior. Well, he is darned charismatic and politicians love job growth.

Speaking of videos, this one from a DC newscast says that the faculty practice at George Washington University is saving lots of paper after its move to Allscripts (calculated at 182,000 trees a year).

Listening: The Dictators, polished, good-natured, and influential New York proto-punk from the early 1970s. Reader tip.

Omnicell will buy mobile cart vendor Rioux Vision for $26 million in cash.

New poll to your right: should CIOs consider open source enterprise apps?

CTO John Bosco is promoted to CIO at The North Shore-LIJ Health System.

HealthcareITJobs.com drew quite a few position listings and advertiser interest at Friday’s kickoff. Check the jobs, sign up for weekly job alerts, and (if you’re an employer) post your jobs for free until January.

Vince Ciotti passes along news that Art Randall, former McAuto sales exec, has died of cancer. “Anyone who worked at McDonnell-Douglas couldn’t fail but remember Art’s great sense of humor, fiercely competitive spirit in the HIS sales world, and indomitable leadership style. In that primarily engineering-oriented aerospace firm, sales was not given as high priority as it deserved, and Art fought the good fight during his decades there, giving the ex-IBM sales crowd at rival SMS a run for their (your) money. What I remember most about Art was his incredible diverse talents: he could repair clocks, restore old cars, write articles on ANY subject in minutes, and give speeches that left audiences entertained and educated. A larger-than life, Protean charmer, Art will be sorely missed. Condolences to his many friends and family.” A scholarship fund in his memory can be reached at: USSVI, Attn: Art Randall, PO Box 3870, Silverdale, WA 98383.

Michael Malone is named president and COO of RemedyMD. Gary Kennedy remains chairman and CEO.

Health First (FL) will present at IHI next week, saying VISICU’s eICU system has saved 82 lives.

Dennis Tribble, CTO of ForHealth Technologies, is named chairman-elect of ASHP’s informatics and technology section.

Christ Hospital (OH), permitted by court order to pull out of Health Alliance, says Health Alliance threatened to cut off its information systems when the hospital started moving admissions offsite. The hospital has filed an injunction.

E-mail me.

Art Vandelay on Revenue Cycle Applications

Reader question: can you elaborate on your comments about revenue cycle product reinvigoration?

Vendors will soon re-architect aged revenue cycle platforms, such as INVISION, MedSeries4, STAR, HealthQuest, and Eclipsys SDK. These apps are older than most college graduates. Should we kick them out of the house or at least put them on notice that they need to improve? We will also need to prepare their “adopted mothers” (the staunch supporters of the app who are leery of change) for that possibility.

They do the basics pretty well. However, adding user interactive functions and meeting regulatory changes will be hard because of their aged architectures. Did any of these vendors add advanced work queues, compliance management, or contract management natively in their apps after all those years of being asked? No. They did it through Stockamp, HSS, Trego, or bolt-ons (Pathways Compliance Advisor, Contract Management). ICD-10, combined inpatient/outpatient payments, and medical error reporting are coming. They can either (a) build it in, or (b) bolt on to somebody else’s product. Old technologies encourage (b).

Many vendors have made minimal investment in revenue cycle products in the past five to 10 years. They’re collecting licensing fees and riding the hype wave to deliver new clinical systems. How many of them built those new clinical systems on their revenue cycle platform? Not a single one.

I expect that investments will shift between major clinical systems and revenue cycle systems.

News 11/30/07

From Bill Bandolero: “Re: Second Life. Patients are using it, clinicians are exploring it, and educational institutions are setting up shop.” Bill sent a link to a site he maintains that has a lot of links to Second Life healthcare sites, but he asked to stay anonymous, so just Google “second life healthcare” and you’ll find stuff.

From PNeddy: “Re: Second Life. Maybe Mr. HIStalk should open a shop in this neighborhood.” Link. Government agencies, including NASA, NIH, NLM, and CDC, are using Second Life for meetings and eventually for widespread communication. “Not far from Meteora is Health Info Island, a medical library and virtual hospital initially funded with a $40,000 National Library of Medicine (NLM) grant to a group called Library Alliance in Illinois to provide consumer health information services in virtual worlds. There are three buildings on the island, said NLM technical information specialist Laura Bartlett, a consumer health library, a medical library and a health and wellness center. Over time, the project will provide training programs, outreach to virtual medical communities, consumer health resources and one-on-one support to Second Life residents.” I’m always up for cool stuff, but I’m light on available time. If anyone can explain what I could do there and what it would take to hook me up, let me know.

From Dan: “Re: Rumor Report. Why does the rumor report redirect to the old HIStalk instead of HIStalk 2? Just curious.” You’ve reminded me that I need to fix that sometime. I’d already created the button and the Web form and just didn’t have time to change it over for the new site. It works great, so I placed it low on my to-do list. You would be amazed at how nice it is to have a secure Rumor Report form that requires Captcha verification to keep the spambots out, plus allows attachments. Before, I was getting dozens to hundreds of spam messages a day. Now, it’s zero. Your rumors and news tips reach me unmolested.

From Maria Cortez: “Re: HIPAA. I’ve heard a lot of dumb things justified by HIPAA, but yesterday I heard one of the best. Our local medicaid HMO has started a ‘high risk diabetic outreach’ program, where they send patients forms to bring to their MDs to fill out. The forms have no pre-printed information and all look the same, so if you see three patients the same day from the same plan, you have no idea which form belongs to which patient (I handwrote their names and MRNs to remind myself). When I inquired as to why they don’t just pre-print patient information on the form (since it’s obviously printed on the envelope they send it in), their response was that if someone else in the household opened the envelope (addressed to the patient), and read the pre-printed form, it would be a privacy violation. I then asked them why anyone’s name is ever printed on a health insurance form/bill/EOB, but they didn’t have a good answer.” Wasn’t this the kind of overzealous interpretation that scared us about HIPAA in the first place? We like the “minimally compliant” approach.

From Charlene O’Donahue: “Re: PHRs. Here’s a new Wharton article.” Link. It’s a good overview for non-HIT people, but I’m surprised that it missed health record banks completely. I’d also question one conclusion that says PHRs could be a bridge between EMRs. I just don’t see that happening.

From The PACS Designer: “Re: ZOHO. TPD has been experimenting with an office software application that is Web-based. It’s called ZOHO and mimics Office. It also provides downloads for Windows, Internet Explorer, and Firefox to link to your system files for transferring online work. It would be good for mobile users when they want to do quick transfers to their home or work based records or files. You can also share records online with others using this application.” I’ve heard great things about Zoho DB and Reports (online forms and databases) and it also has a project management application. The more I play around with stuff like this, the more it feels like the old days when networks were catching on, but many people were still stuck on unattached PCs. I’m using Google Apps so I can access HIStalk documents at work (you didn’t hear me say that) and Inga and I are coordinating some of the HIStech Report stuff on Google’s shared calendar. Plus, I do all e-mail on Gmail and Yahoo Mail. Without all those apps, the PC seems kind of isolated, sitting there running boring stuff off its local drive.

I’m excited to announce HealthcareITJobs.com, something I’ve been working on in partnership with healthcare media publisher Gente Corporation. People have been telling me for years that I should start a first-class HIT career resource center and I’m confident this will be it. Here’s how it came about: first, I was planning to just buy some cheap Internet script and throw something up. Second, as I reconsidered whether that would really meet my standards, I thought about signing on with one of the online job services, but realized it would be cluttered with non-healthcare IT jobs and all kinds of junk that I couldn’t control. Then, I linked up with Gente and it just clicked. This isn’t Monster or Careerbuilder – our career center is dedicated to healthcare IT pros and employeers seeking exceptional candidates. No blind ads, no clutter, no lightweight software. We’re running a world-class job board application and have a team of real people operating it (one of whom you know – me!) The jobs are right there to see on the main page without any “register first” BS. I had my checklist of the ideal job board and we’ve hit every item.

Here are some things you can do with HealthcareITJobs.com. First, click on over and sign up for weekly job alerts. Click around, check out the first group of posted jobs, and register as a job seeker or employer. If you’re an employer, here’s a deal for you: we’re offering free job postings through January, so give us a try. We’re also offering banner advertising with a 10% discount for our loyal HIStalk sponsors. Remember what I said about real people? Here’s one: Gwen Darling. She’s the expert who will be happy to help you with your job postings or advertising needs. I’ve put a link to the site to your right and, as soon as I get a few minutes, I’ll be listing some of the hot jobs right here in HIStalk. I know some of you are unhappy with your situation or have been downsized, so we’re going to do our best to give you some fresh job options for 2008.

And, as I need to say often, thank you sincerely for supporting HIStalk and related projects. It’s not about fame or money (I’m anonymous and a working stiff, after all). I do this because I need something creative to do after a long day at work and I have few other interests or talents. It’s immensely gratifying that you read, interact, and educate through this vehicle. Thank you.

Crescendoplayer sent over some speculation that’s juicy, although certainly not verified. He tells me that a certain software vendor executive, who I’ll refer to as Juan Garcia, is a former military strike leader who ran anti-drug missions in South America with the CIA. Says that exec is being courted by GE Healthcare to be CEO, although he already passed on a CTO offer from them last year. Other companies supposedly interested in his leadership: Microsoft, McKesson, and IBA. I’m cutting back on the details since I don’t have first-hand knowledge, but it’s a fun story if nothing more.

Will Weider sent over to a link to a story about athenahealth’s Jonathan Bush and his participation on a PBS program that took non-athletes and trained them to run the Boston Marathon. JB’s Marathon Diary is a fun read, although a little sad because he was going through a divorce at the time. “Well, my friend Pierre, who knew about the project, said I should. I was in a very suggestible place. [laughs] If someone told me to join the Moonies, I think I’d probably be a member right now. I was in, you know, a difficult place personally. And there was something reassuring about joining a group to do something healthy for me. Forced health, forced purging of all kinds. I think that was the main motivation. Pierre also told me I needed to meet girls and that there would be all these girls in the marathon. [laughs]” Will is unhappy that Jonathan finished in 3:52. “I trained much longer for my marathon and ran much slower. I now officially despise him. I am pretty sure that I will never buy anything from athenahealth. Perhaps I will add a question to my RFIs about the marathon times of their executives that I can use as a filtering criteria.” I e-mailed Will back: “I like the idea of showing preference to vendors whose executives are less athletic. I’m also on record as preferring those that are less attractive, less wealthy, and less intelligent. I have enough insecurities without realizing that some vendor sales VP is better than me in every important category!” To which Will replied, “Exactly. It is not a new concept. Everyone understands ‘client golf.’ We are just extending it a little.”

A bad smell forces the evacuation of one of McKesson’s Georgia offices. Any witty punchlines are up to you.

Industry regular Steve Roberts signs on with HealthPort as COO. He’s done stints at SDS, GE Healthcare, Allscripts, and McKesson.

An analyst thinks Emageon’s share price drop could attract merger or buyout offers.

Sunquest announces a sale to TriCore Reference Laboratories.

Embarrassing: surgeons at Rhode Island Hospital operate on the wrong side of a woman’s brain when a surgeon “misremembered” the CAT scan, the third such occurrence at the hospital so far this year. The state fined the hospital $50,000.

Somerset Pediatric Group (NJ) picks Sage Intergy.

South Florida has an epidemic of upper-middle class families, including their kids, who are hooked on prescription drugs willingly doled out by shady doctors operating from roadside pain management clinics. One such doctor had his medical license revoked and is working in a gas station while we waits to be tried for prescription drug trafficking, which could put him away for up to 75 years. “We wanted our market share … we didn’t wanna lose a patient.”

Greg Larkin MD, formerly of Eli Lilly, is named CMO of the Indiana Health Information Exchange.

Strange hospital lawsuit: a Chinese hospital insists on getting the husband’s signature on a surgical consent form before doing a C-section on his wife. He refuses at the last minute and the woman dies. Her mother is suing the husband and the hospital. The hospital says they coudn’t do anything without approval, although a legal expert says hospitals have the right to save a patient but are sometimes sued for doing so without the paperwork.

E-mail me.

Inga’s Update

From Dr. John J. Ryan, Founder, President and CEO, The Int’l. Assoc. of Dental and Medical Disciplines: “Inga, I am writing to tell you that we have no sponsors at the current time. Our organization is trying to remain financially independent for as long as we can. Though things may change at some point, we are giving the growing bundle of perks to attract educators and health care practitioners to share our mission of combining dental and medical under one umbrella to better treat every patient as a whole person. It is important for us to combine all disciplines to communicate on behalf of the best possible care and the IT giveaways can facilitate that. The Web Site, Hosting, and Email service is for every member, the IBM Thinkpads, however, are a limited number, for now. With members joining our group we can better build our donated services health care base and better help us can to find dental or medical donated care for such a person in need.” Dr. Ryan also mentioned they are looking for administrative volunteers to help find care for the uninsured.

Athenahealth is purchasing a 130,000 square foot office facility on 53 acres in Belfast, ME. The center will serve as a second operational service site

Sage reports its total revenues were up 24% over the previous year, though the healthcare group saw  just 1% growth.

Overheard: Big Brother is watching over sales reps at a certain vendor. Supposedly sales folks at this company are upset over a new policy that requires them to keep up to schedules in Outlook. Seems like management could find better ways to help salespeople sell then by micro-managing their calendars. Not to mention that if someone is producing, what difference does it make if they take an afternoon off to golf? And if they aren’t selling, why keep them around?

Delaware Health Net selects Allscripts HealthMatics Office for its 20-doctor, six-location network of community health centers.

Norman Physician Hospital Organization purchases eClinicalWorks for its 31 affiliated practices and 100 physicians.

Carestream Health and IBM announce plans to integrate Carestream’s radiology solutions and IBM’s Lotus Sametime software to facilitate rapid communication, including instant messaging and VoIP operations.

Visage Imaging will integrate Nuance’s Commissure RadWhere into its PACS and image interpretation software.

The Brooklyn Hospital Center, Brooklyn, NY will implement Eclipsys’ Sunrise Clinical Manager at its 463-bed facility.

A Korean quarry worker dies after his cell phone battery explodes. Fortunately, the phone is only sold in Korea.

E-mail Inga.

News 11/28/07

From Bignurse: “Re: chart errors. The article about the doctors finding incorrect information in their own medical charts reminded me of a ‘new paradigm’ for charting that I saw a few years ago in which the doctor-chart-patient are in a triangle, with doctor and patient sitting side-by-side and looking at the chart (an EMR) together. It makes perfect sense and would prevent incidents of ‘wrong patient, wrong chart’ as described in the article, but when I used to describe the ‘new paradigm for charting’ during EMR training sessions, people looked at me like I had three heads. It is anathema for medical folks to imagine letting patients see—much less contribute to – their own medical records.” Maybe we need an evaluative tool to determine just how capable and interested people are in participating in their own care. Otherwise, we just treat them equally like dull fools, at least unless the family intervenes. And I truly believe the days of “don’t worry your pretty little head about your records – that’s my job” are over. No one’s too scared to speak up any more. I say if you want to stroll around to the doctor’s side of the PC or hold out your hand for the chart when he or she’s done writing in it to take your own look, then that’s your right as a paying patient, no different than you’d expect than when dealing with a mechanic or plumber (although since doctors work on patients, not cars, they can’t put out those phony “insurance doesn’t allow customers in the garage” signs to keep pests from bothering the help).

From Hamilton Swan: “Re: Perot. Has Perot has adopted the IHE model for HIT standards, do they lean more toward the HL7 model, or are they agnostic?” I’ll ask for a lifeline on that one, if anyone knows.

From Gerry Fleck: “Re: reading list. I have found The Innovator”s Solution a powerfully useful way of thinking about what it is that we healthcare informaticians are really trying to enable and why the incumbents can find it daunting.” OK, I was hooked by the opening sentence of the first Amazon review: “The first two chapters of this book are so well thought out and beautifully written that reading them literally made my muscles ache and toes curl.” I’ve placed my order. Thanks for the recommendation – book report to follow.

From Theodore Millbank III: “Re: hospital guards. Kaiser does not allow any armed guards for the ED or anywhere else for that matter. I really dislike this policy.” I’d be nervous, especially after dark. If you work for a trauma center or inner city hospital, you need a front door security guard and an real, uniformed cop in the ED, in my opinion. There’s nothing like a couple of stabbed gangbangers dripping blood in the ED who regain enough moxie to continue their knife-fight from their gurneys, sandwiching a 110-pound female nurse between them in the process. Current example: police dropped off a drunk man in a New York hospital ED, where he broke out of restraints at 4 in the morning and beat two nurses with them, threw a computer at another nurse, and wailed on security guards with computer cords. Sounds like an effective, if inappropriate, use of technology.

From Art Vandelay: “Re: remote monitoring. Monitoring technologies allow disease management with human interventions (i.e., people watching your data and running reports with automated alerts). These people will likely sit in other countries (The World is Flat) and use mobile broadband capabilities to work with our phones, watches, and other on-the-person devices. This could offer interesting alternatives for chronic condition management and surgical recovery, although the FDA 510K challenges could be interesting.” Art mentions Bill Crounse’s blog entry on mobile devices.

From Harlan Pepper: “Re: CIO Summit. The one being discussed is not affiliated with CIO magazine. They made their logo look just like the magazine’s.” I’ll be darned. Compare CIO Magazine’s logo to the Summit‘s. That’s quite a coincidence. Harlan sent over a list of delegates who’ll be there, some of whom I know read HIStalk, so perhaps a critique will ensue.

Another sad news item involving a hospital IT leader. UPMC CIO Mark Hopkins died of cancer on November 13, the family announced yesterday. He was 47. Hopkins was named as one of ComputerWorld’s Premier 100 IT Leaders last year. He is survived by his wife Kimberly and two children. A memorial service will be held Saturday at noon at First Unitarian Church and a reception will follow at UPMC Shadyside’s Herberman Conference Center. In lieu of flowers, donations may be made to the Mark T. Hopkins Fund at the Baltimore Community Foundation.

Eric Rubino joins InfoLogix as COO. He was formerly COO of SAP Americas and Neoware.

Listening: Paramore, big-guitar chick rock. You have to like a song called “For a Pessimist, I’m Pretty Optimistic.”

Gaines Baty, president of recruiting firm and HIStalk supporter R. Gaines Baty Associates Inc., provides career guidance for employees of acquired companies in The Wall Street Journal.

Tom Visotsky, formerly of Concuity and 3M HIS, joins Medicare compliance and reimbursement solutions vendor CodeMap as EVP of business development.

A reader sent over John Glaser’s article in Harvard Business Review, a fictional case study in which an IDN’s CEO is asked to choose between a billion-dollar monolithic enterprise system and experimentation with service-oriented architecture. Without apparent irony, Kaiser CEO George Halvorson opines that the phony organization shouldn’t bet the farm on systems without a sound business case and that “extremely high levels of system availability are an absolute necessity.”

Reminder: Platinum Sponsor Picis is looking for topnotch talent, which I know is commonplace among HIStalk readers. Worth a look, I’d say.

Streamline Health’s Q3 numbers: revenue up 10%, EPS $0.00 vs. -$0.04.

A Tacoma Community College nursing professor uses the online world of Second Life to create ED simulation training. I tried Second Life once and was bored after a few minutes of fumbling around, but apparently it’s quite the hit, especially for nerds whose First Life isn’t what they’d hoped. If you’re a fan of it for medical or business reasons, feel free to send in a precis.

Health Data Services offers its FreeDOM PM/EMR at no charge to one- and two-doctor practices in Florida, the tenth state it serves. They make money from elective add-ons like claims processing, patient statements, support, and coding. Sounds like a good idea, although I know nothing about the product.

Cardinal Health recalls another model of its Alaris smart IV pump line, this time the biggie: the Medley, with 200,000 devices in the field.

Inga and I have been insanely busy lately with interviews, HIStech Report, and new and upgrading sponsors. If we’ve been inattentive to anyone who’s taken the time to e-mail, allow us to apologize and pledge to do better once we dig ourselves out from under the work we keep creating for ourselves. Here’s the lightning tour of reminders for the noobs: the Search function to your right covers the 4 1/2 years and millions of words of HIStalk, you can sign up for instant e-mail updates and the Brev+IT newsletter (current issue here) over there, and ping us if you’d like information about HIStech Report or sponsoring. The Rumor Report to your right is where you can tip us off to interesting news and rumors (you can even submit attachments and it’s anonymous, of course). Speaking of HIStech Report, I interviewed the guys from PringPierce Executive Search there, so check that out. In a day or two, I’ll also tell you about a new job service that I’m involved in that I think is pretty darned cool.

I wasn’t exaggerating on the “millions of words” above. So far this year, HIStalk is running well over 300,000 words, about six novels’ worth. That doesn’t count my editorializing, Brev+IT, HIStech Report, and so on. I knew I should have taken typing in high school.

Canadian physician EMR vendor Nightingale Informatix loses $1.4 million in Q2 on doubled revenue.

UPMC signs a seven-year, $70 million deal with Xerox for print and document management.

Atlanta’s Grady Hospital could close in the next few weeks, leaving the city’s poor with few options and Atlanta without a Level 1 trauma center. It’s running a $55 million deficit and needs $300 milllion in capital improvement. Its board wants local government to guarantee $200 million in new loans, although it’s a safe bet the money would never be paid back. In a sure sign of rational responsibility over the issue of privatization, community activists and showboating politicians scuffled with hospital security guards and were hauled off screaming in handcuffs, although in their defense the board did sound kind of high-handed in its decision-making.

A CDW Healthcare survey concludes that nurses understand the benefits of IT, but hate paper duplication, poorly designed systems, lack of input in selection and implementation decisions, and inadequate computer training. My experience validates every conclusion. Good work from a vendor you might not expect to care about such issues. You can download the report here.

E-mail me. It’s alway slow in December, so I can use good rumors, secrets, or thoughts.

Inga’s Update

Drs. DeBakey and Cooley have ended their 40 year feud. I never realized that the rift was over a stolen (artificial) heart. I guess at ages 99 and 87, they figured it was time to bury the scalpel. Heartwarming.

SCI announces that its Order Facilitator product won (warning: PDF) second place for “Best Technology Innovation for Continuum of Care” by Consumer Health World.

Fired Microsoft CIO Stuart L. Scott resurfaces as COO of Taylor, Bean & Whitaker Mortgage Corp. The company is based in Florida, but Scott is going to stay in Washington with his family (seven kids!)

Medsphere continues to add to their executive team. Former Athenahealth Chief Revenue Officer Rick Jung comes on board as Chief Marketing Officer. While he has an impressive resume, it looks like he has spent most of his time as a numbers guy. But, their new CMIO has spent most of his career with IT start-ups, so why not put a finance guy in the marketing role?

There is a new private investment firm focused on the healthcare. Cressey & Co. doesn’t have much of a web site up yet, but they do have former Senator Bill Frist as a partner.

I’ve read about the organization that is offering free IBM Thinkpads to attract doctors to their new association. The International Association of Dental and Medical Disciplines is offering this perk in addition to a free customized Web site, free Web site hosting, free email, and a free marketing package. The annual dues are $1899 and the perks about $5000. I looked all over the site for the catch (or at least an idea of who is providing the funding) but didn’t find any clues. Anyone know?

Hewlett Packard is giving the Lucile Packard Children’s Hospital $580K in HP equipment plus an additional $500K in cash for research.

E-mail Inga.

HIStalk Interviews Eric Rosow, Chairman and CEO of Premise

Photo: Hartford Courant

I was certain I knew Eric Rosow of Premise when he introduced himself as a new HIStalk sponsor, but I couldn’t place him. Finally, I remembered: I had seen his presentation at the 2002 HIMSS conference in Atlanta called “Real-time Executive Dashboards and Virtual Instrumentation: Solutions for Healthcare Systems”. It was one of a handful that I thought were interesting enough to cull out for further review, the idea that a feed of information and instrument sources could, like a car’s dashboard, provide an array of information needed to keep the vehicle operating efficiently and going in the right direction.

Patient throughput and its underlying components (patient assignment, bed managment, housekeeping, and patient transportation) have an enormous impact on hospitals that I’ve seen first-hand: ED waits, patient satisfaction, staff satisfaction, and even clinical outcomes (another great HIMSS presentation from years ago was from CareScience, which dealt with bed assignment and the clinical variation that occurs when nursing units get patients whose needs are vastly different from the average patient on that unit).

Hospitals need the kind of measurement and transparency that products like Premise’s can provide. Many (most?) of them have the expensive symptoms of poorly managed patient throughput. No wonder Premise has enjoyed growth of over 2,000% in five years.

Tell me about yourself and about Premise.

First, I have to say that I feel like I’m talking to an underground celebrity. I really love your blog. It’s just so refreshing and humorous and insightful and thought-provoking. It looks like at the rate you’re growing, it could blossom into a great vehicle for communication.

I’m a geek by definition, in some respects. I’m an engineer by training. I went to Trinity College here in Hartford, Connecticut. I majored in mechanical engineering and then got my Masters in biomedical engineering.

My Masters program had an internship, so not only did I get my degree in biomedical engineering, I also spent two full years at St. Francis Hospital and Medical Center in Hartford. That’s really where I fell in love with applied technology in healthcare. After graduating, I got to row with the US team for a couple of years, which was a great experience to see other parts of the world. I then went back to Trinity and taught for a year. It’s very true that you have to learn something to teach it.

After that, I joined Hartford Hospital as clinical engineer, where I was immersed in front lines of healthcare delivery and the role that technology can play in addressing those challenges. I did a 13-year stint at Hartford Hospital and was the director of biomedical engineering for the last seven. I served on the capital committee and was involved with the technology assessment of major projects, including enterprise-wide monitoring and re-engineering engagements.

It was the reengineering initiatives in late 1990s that led to the opportunity to develop what we now call our bed management platform. Hartford Hospital was faced with a number of challenges. A top initiative there was to find, build, or buy enabling technologies to help streamline capacity management/bed management. They had looked at different solutions on the market, but felt there was need for better communication and better integration of clinical information. That provided the opportunity to co-develop the Bed Management Dashboard.

I love the sport of rowing and helped started a rowing team in our town. Through that experience, I learned to value the passion, the teamwork, and the commitment that can come with a high-performing team. I think that experience fostered the entrepreneurial DNA that must have been in me. Or, the lack of a fear gene – I’m not really sure which [laughs] that resulted in us creating this crazy thing called Premise.

Premise is an interesting ride. It wasn’t just, “Let’s go off and create this thing called Premise.” It started out as two guys in the basement, myself and a long-time friend and colleague named Joe Adam. We met as high school lab partners. We were the yin and yang of complementary skill sets. In the early days, we were more of a consulting firm. Over time, we evolved to apply our applications to product-focused and decision support and business intelligence, ultimately to workflow applications. That was the next generation of Premise, in the late 90s, where we evolved from consulting and data acquisition and data presentation and focused on how we could apply those tools and visualization dashboard metaphors to really impact healthcare. For me as a biomedical engineer, it was such as great intersection of connecting devices and communications with workflow and safety and efficiency initiatives.

Hospitals used management engineers a lot a few years back to find and fix process problems. Did that work and are they using them enough today?

One of the ways I got engaged in developing the bed management dashboard was that I was one of first non-GE employees to go through GE’s Six Sixma quality training. Whether it’s management engineer or TQM or CQI or Six Sigma, I think the goal of trying to make informed decisions based on data and trends is what will always be required in healthcare, particularly given the challenges of aging nurses and baby boomers, the perfect storm that’s happening with capacity demand.

Hospitals respect the science of management engineering in day-to-day operations, but saying and doing it are two different things. In our focus area of capacity management, there’s a huge opportunity where information technology can play a huge role in improving that. Specifically, in things that IT is really good at – providing transparency across the organization, analyzing variation, looking at historical trends like where are peak discharges and admissions by time of day, day of week, time of year – and most importantly, streamlining communication among stakeholders.

MRSA is an example of where, when we developed our application, it was really important from the get-go to provide that type of clinical information so that caregivers could take the precautions they needed to and not put patients at risk, particularly if they’re in a semi-private room.

How big a problem is patient throughput in hospitals?

It’s amazing to me how ubiqitious it is, not only in large hospitals, but small hospitals, and not only here in the US, but internationally. We’ve been fortunate to work with a lot of great thought-leading hospitals, places like Cleveland Clinic, Mass General, MD Anderson, and even recently at a kickoff for our first international application at Singapore General Hospital. Places like that who have lived through the SARS epidemic have an even greater appreciation for the challenges when it comes to emergency management. The day-to-day issues include ED wait times, the metrics around diversion, people who leave without treatment, satisfaction indicators, not only people coming from what we call portals of entry, like ED and ancillary areas, but are transfers from other hospitals.

The challenge I’ve seen is that ED backups or diversions and OR and PACU backups are symptoms of a much broader patient flow challenge. Studies have been done that show that ED wait time isn’t necessarily tied to volume or ED staffing, but the visibility of upstream bed capacity. That’s the challenge in hospitals from 100 to 1600 bed hospitals throughout the world. The opportunity to create virtual capacity by better utilization of existing beds is important, especially when we’re seeing bricks and mortar and cranes helping to build out capacity, but at a cost of half a million to a million dollars per bed, plus several years to do that. That’s the real benefit.

It’s looking at the right metrics. The bed turns in a year or in a given time period is a key operating metric that all hospitals need to monitor in real time to better manage their operation.

What are the symptoms that your hospital has a throughput problem and do executives recognize them?

Certainly diversion, excessive wait times in ED, people who leave without treatment, operating room cancellations or delays or backups in PACU. Corresponding derivative effects of that are upset physicians, caregivers, and surgeons who have to cancel or delay their cases due to lack of ICU or stepdown beds for patients to go to after the surgery. Also the challenge of what we call the shell game, where patients are placed on off-service units. An orthopedic patient who’s had their hip done that morning may go to a medical floor. That creates a whole host of challenges. Those units are not trained to manage an orthopedic patient and they are often placed in a temporary holding state. Medications and meals may play catch-up as the patient moves from one holding area to another. You create work for the organization because you’ve got a bed that was occupied that has to be cleaned and prepared for another patient to come in.

There’s great efficiency if you can get them to that right level of care the first time. We’ve seen hospitals that have done more than 40 intra-unit transfers per day. You’re just not getting the throughput you need because of poor visibility across the enterprise. In our experience, capacity management in many hospitals is reactive and decisions made round a diversion, cancellations, and delays are made without good, real-time information that can support these decisions. That’s the biggest value that Premise is focusing on – increasing that visibility and decision support.

Can throughput problems be fixed without an actively managed patient transportation program?

Clearly it’s a continuum. I’ll go on record as saying that you can’t fix throughput with any technology solution. It’s a holistic approach looking at as-is, the to-be state, gap analysis to configure a solution to manage that continuum. The way we look at it is that you’ve got a circle – a portal of entry, bed assignment, bed management. Then, you need the transportation on site to move the patient and/or assets and other equipment to their room and level of care. Communicating all the activities throughout the length of stay to discharge, when a housekeeping event occurs and the room and bed are cleaned. We were originally focused on clinically driven bed management and evolved to environmental service functionality. Our newest module, Transportation Dashboard, provides that visibility across the transportation team as well.

Are hospitals getting better at discharge planning?

I think they’ve had to. As more information becomes available, it becomes easier to plan. The challenge we’ve seen is this notion of hiding beds. People can only make decisions only based on timeliness and accuracy of the data they have. Patients may leave the hospital at 10 in the morning, but that event may not be broadly visible across the organization. If you’re looking only at one ADT system, it could appear that that patient is still up there occupying that bed. That’s the type of mis-information that can create a cascading effect of backups. That continues to be a challenge in terms of visibility in discharge planning and overall patient flow.

Hospitals often think that bed turnover is a housekeeping issue. Is it?

No, I absolutely don’t think so. I often think one of the most rewarding aspects of our solution and the clients we’ve worked with is vindicating and supporting what a great job the housekeeping departments actually do. Because housekeeping departments may not have all the tools and data to support the job they do, they can be the easiest to blame. By providing metrics such as response time to a cleaning request and bed turnaround time, and doing that both on a shift and employee basis, Premise can really empower an organization to see where the bottlenecks can be in their patient flow process. In general, they’re not with housekeeping.

Can census levels be predicted?

I think hospitals can predict some of them. Certainly if you’ve got scheduled procedures, you can see what’s coming up. You can look at histograms and historical trends and control charts of what patterns have been historically for different regions of the country. There is a growing capability with some of the business analytic tools to look at what patterns have been and to use that going forward.

Having been at Hartford Hospital on 9/11, a tragic day for this whole world, the ability to look at patients that were in the hospital that day … there were only three open beds that morning and calls were coming down from state and federal authorities. There were two questions: how many beds do you have available right now by type and how many can you have available in one, two, and three hours from now? Without technology to augment your hypothesis, it would be almost impossible for many hospitals to answer that question. Hartford was able to free up over 140 beds that day to make room for anticipated casualties from New York City, which tragically never came.

What’s the ROI on your products?

There are different pain points for different organizations. Many we’ve worked with have looked purely at their ability to increase admissions without increasing their bed compliment or increasing their staff. Going back to virtual capacity and making better use of the beds they have. Other ROI elements can tie in to reduction in diversion, reduction in OR delays and cancellations. We’ve developed quantitative and qualitative ROI metrics that may or may not apply to a particular hospital’s geography or challenges.

We’re seeing more and more organizations view patient flow as a strategy, not just a problem. It’s critical, it’s real time, it’s strategic. The ability to increase efficiency and therefore profitability is why inpatients are such a high profile. It also plays an important role in patient and staff satisfaction. Chief nursing officers and other leaders use tools that help manage beds and and patient flow as a recruiting tool that makes it a more desirable place to work. All the years I’ve worked with nurses and physicians, they want to do the best job possible and take care of patients like they’ve been trained to. When you have such a potentially out of control system with patients not appropriate for their population, that can create anxiety and risk. Getting the patient in the right bed the first time is critical.

What vendors are competitors to Premise and how would you compare your offerings to theirs?

Certainly the market continues to mature. The vendors we typically see are Tele-Tracking, who I have a lot of respect for; Navicare; Statcom as a pure play vendor as well; and certainly Awarix is a really impressive company and obviously McKesson thought so as well. Those are the pure play vendors we see most often. The large healthcare IT vendors have some functionally. We see ourselves as complimentary to them. We can work in concert with the big HIT or ADT vendors out there. It’s good for the market that we’re all raising the bar, all bringing features and functions to bear as strategy that allows hospitals to better utilize their beds.

In terms of differences, our architecture is open, flexible, based on industry standards. We’re a Microsoft technology platform. We’re unique in the clinical functionality we use to match the patient’s clinical attributes to their level of care. If a patient presents with chest pain and tuberculosis and MRSA, we might need to find a bed with a patient monitor and negative pressure capability in that room. We used to joke that if you have a Yankee fan and Red Sox fan, you may not want to put them in the same semi-private room during the playoffs.

There’s all kind of attributes that may not be readily apparent. Some hospitals have to track gang affiliations. You don’t want to put rival gang members in semi-private room. This ability to complement ADT demographic data with specific attributes, like monitoring infectious disease, is really important to optimize the patient flow experience.

We want to have a highly intuitive look and feel and an easy-to-use user experience. We have patent pending technology called our Intelligent Workflow Engine to optimize and load level how tasks are assigned, particularly in the area of bed turnover, environmental service/housekeeping, and transportation tasks.

I do think it’s not just about technology. You don’t just double click the install button and it’s done. We measure the as-is state and the to-be state based on desired outcomes, and then gap analysis. We bring subject matter experts, a number of clinicians who are nurses with backgrounds in clinical patient flow, project managers, and technical specialists to make sure that when we go live with client, we tune that application to align with their desired workflow. For that reason, our solution may not be right for everybody, but for those it is, it will fit like a glove when we’re done.

Deloitte recognized Premise for outstanding growth of nearly 2300% over five years, one notch behind Google. How did you create that growth and how do you manage it?

We’ve certainly been excited to have grown the way we have. We joke internally that we were right behind Google in terms of statistics, so we love that “lies, damned lies, and statistics.” [laughs] We have great people who have a lot of experience in building companies and also focusing on what’s important. Our goal isn’t to grow, it’s to have 100% referencability. People here are exceptionally passionate. We say we have a company, but we have a mission to make a meaningful difference in healthcare. Hiring the right leaders, the right skill sets and, most importantly, the right culture and chemistry is key to any high performing organization.

In some cases, we’ve been better served by hiring people from outside of our industry. We recently created a chief technology officer position and, after an extensive search, hired a person from the digital media space, somebody familiar with innovation, user experience, and time to market, unencumbered by the traditional healthcare IT world. That has been an advantage for us to innovate. We also made a decision, for the first time, to take on a round of investor money. Through that process, we’ve got a very strong board of directors and thought leaders who have been wonderful advisors and strategists and also mentors to me and other members of our team. One gentleman in particular, Joe Zaccagnino, was the former CEO of Yale New Haven Health. He brings a tremendous insight into the challenges going forward in hospital management and administration.

You said when you hired Craig Gavina as CTO that innovative consumer technologies have healthcare potential. What are some of them?

Certainly as we look at different forms by which information can be displayed. Form has to fit function. We don’t want to be too ahead of curve, but we want to be responsive to what’s out there. One thing we say here at Premise is NEHITO – nothing every happens in the office. We want to make sure we understand what is the most effective way to deliver information, through touch screen interfaces to PDAs to iPhones, as well as traditional vehicles.

The other thing that’s exciting to me as a biomedical engineer is the convergence of other medical devices and applications with patient flow. We have relationship with Stryker,where their next generation smart bed, or iBed as they’re calling it, can communicate bed parameters. For example, are the side rails up, are the brakes on, is the bed at a low height. That information can be critical to another hospital challenge, falls and fall risk and the ability to integrate that type of information into an application like our patient flow system. The same applies to scheduling and resource management. We have a history of form fitting function.

We do what’s right for the customer, and by having a lot of what I call Chuck Yeager accounts – hospitals that push the envelope of this company in a good way to make sure we’re thinking ahead but also grounding our thinking in what will work and what won’t. I know from my experience at Hartford Hospital that things that don’t work the first time often don’t get a second chance. Applications that are innovative and functional and, at the end of the day, will get used.

I love to read books and ideas from thought leaders. One of my favorite authors is Guy Kawasaki, who describes himself as Apple Computer’s evangineer, someone who wants to change the world and has the technical ability to do it. That’s what I see that at Premise. We’re excited to have this technical ability to influence how patients move through organization. We’ve had housekeepers come up to use with tears in their eyes and hugging us, thanking us for being able to show what a great job they do in helping that organization improve their patient flow.

Where does the company go next?

We see a tremendous challenge of continuing to focus and build on the base we have. The opportunity we have to extend into the ability to tie into other devices, staff scheduling, analytics – the market will see a lot more functionality on reporting and analytics. We will continue to be opportunistic as we see challenges and synergies that are presented. We don’t want to boil the ocean – we want to focus on what we do really well. We see the benefits and value of RFID technology.

At Singapore General, we’ll see the integration of advanced RFID technology into our patient flow platform. Technology that can not only show the location of a patient, of staff, or an asset, but also be able to measure physiological signals of those patients, like core body temperature. In Singapore, that can be a useful tool to for precursors or outbreaks of infection or disease states like SARS or avian flu.

Who do you admire in the industry?

I think people like Michael McNeal, who I know you interviewed a while ago. What he’s doing with Emergin is really exciting, how he’s looking holistically across multiple vendors and providing that glue, middleware that can tie information and devices together to enable companies like Premise to add value quicker. Outside the industry, I really admire Steve Jobs and the elegance of what Apple has done and continues to do. I’m one of the heretics here at Premise that carries the iPhone and MacBook running Windows applications. I hold that as the standard to try for in terms of elegance, ease of use, and functionality.

Also, Bill and Melinda Gates and the incredible work their foundation is doing for global health with access to vaccines and drugs and research to develop health solutions that are affordable and practical. I’ve been an Apple evangelist since college, but I’ve always admired Bill’s ability to scale his vision and organization through the vehicle of Microsoft and especially the standards and rigor of the Gates Foundation. It has always been my goal to create social value through my profession and now through Premise. I’ve been in the healthcare profession my entire career because I can think of no better industry to devote one’s time and energy to. Their leadership by example has been a tremendous catalyst for others to contribute, like Warren Buffett, to such an important initiative — global health and the challenging inequities in the world.

Any other thoughts?

The patient flow is a strategy and looking at logistics and analytics is a platform to look at the core processes of delivery. That’s what we’re really focused on doing.

Our success to date has been a combination of our company’s humility. We don’t think we know it all, but we have have great advisors and customers to guide us through a dynamic market. I think it’s due to our passion, a desire to innovate, and our commitment to realizing that vision that has made this place, while at times challenging given the growth we’ve experienced, rewarding. Everybody who works here wakes up every morning excited about what we’re contributing to healthcare. It’s not for everyone, I wouldn’t want anything else. I’m really proud of this team. I don’t want to sound like an infomercial, but I really mean that. It’s a great experience we’re building on and I really appreciate the opportunity to talk with you and I appreciate all the great work you’re doing with your website.

A doctor I worked once with made a great analogy. Why do people buy drills? What they’re really buying is holes. I love that analogy. What is it you really do? What we really do is provide workflow automation, but what we really provide are analytics and real-time information. That’s what people need. We are never going to be a replacement, nor do we want to be, for the big HIT vendors. What we want to be is a decision support tool and real-time dashboard that can work in concert with ancillary systems to make the best, accurate, timely decisions so that the patient gets to the right place at the right time. That ties into patient safety and a whole host of other benefits.

Monday Morning Update 11/26/07

From Jay G: “Re. CIO’s Healthcare CIO Summit. I got to attend the recent Scottsdale event. The resort location was quite impressive, but we didn’t have much time to enjoy the surroundings. The organizers had things scheduled from morning to evening, with roundtable presentations during lunch and vendor presentations during supper. Vendors reportedly paid over $30K to sponsor (which works out to ~$2,000 per 45-minute one-on-one session with a CIO). At that rate, the organizers were pretty aggressive about making sure that the guests got to their sessions. Vendors ranged from hardware (UPS) to implementation consultants. I heard positive comments from guests (‘learned about a variety of solutions’) as well as negative comments (‘waste of time’). Overall, it was an interesting example of how much vendors will pay for face time with a CIO.”

From CIO Guy: “Re: HBR. ave you seen the Case Study authored by Glaser in this month’s Harvard Business Review? It is a little quirky, but I think he did a good job overall. How did they choose the respondents?” I couldn’t find the article by searching on their site, but I like quirky.

From Former Misys Manager: “Re: Misys. Sunquest Announces New Investment and Market Focus for its Radiology Information System.” Link. Smart move. I expressed surprise that Misys sunsetted Flexirad and the PIM PACS broker in the first place. I expressed surprise once again when Sunquest re-emerged as a LIS-only vendor, having dumped rad, pharm, and clinical decision support apps along the way that were good, marginal, and immature but promising, respectively. The last radiology upgrade was in December 2006, so they can pick up the cycle pretty easily if they still have the right people. Their PE investors could consider acquisition targets that have complementary clinical offerings, like TheraDoc or E&C.

From The PACS Designer: “Re: what to read. TPD peruses the Ebling Library, Health Sciences Learning Center to find interesting reading material. Ebling is in Epicland at the University of Wisconsin-Madison, so it’s in the right location for healthcare research devotees although you need a UW-Madison ID to access the library remotely. There are over 1,900 biomedical and health sciences journals in the online library. If you find something good that HIStalk readers may benefit from, please post a comment so we all learn something new.” Link.

From Rich Kremsdorf: “Re: what to read. Here is a link to the reading list I maintain on my website. It was developed for MDs who find themselves in HIT leadership roles, but is more generally applicable.” Link.

From Duuude: “Re: informatics programs. I recommend UAB, which has done a good job of training eventual directors and CIOs in healthcare IT. It misses its founder, Merida Johns, but still does a good job.”

From The Shadow Chancellor: “Re: UK identity loss. This quote sums it up: ‘Let us be clear about the scale of this catastrophic mistake – the names, the addresses and the dates of birth of every child in the country are sitting on two computer discs that are apparently lost in the post, and the bank account details and National Insurance numbers of 10 million parents, guardians and carers have gone missing.” From this newspaper editorial: “Yet when asked if this fiasco effectively ends plans for identity cards, government ministers say no, still holding to a misplaced belief that ID cards will help make Britain safer. This is a contempt-ridden response. All politicians should be judged on their record. On anything to do with data and IT, this government has a woeful record, illustrated by the millions wasted on an NHS computer system that after years of consultancy fees still does less than a doctor with a notepad and a Biro. And the lessons learned here? There have been none. The plans for ID cards, with all the complexity of biometric data they are supposed to contain, are said to be still on course.” Biro is apparently Britspeak for a pen.

Tim Belec, VP of IT at Wheaton Franciscan Healthcare, was shot in the parking lot of the organization’s Glendale headquarters as he left work on Tuesday. A 17-year-old suspect approached Belec and robbed him of several items, then shot him twice in the chest with a .38 pistol. The 50-year-old Belec, a former police officer, gave authorities a description of the suspect and weapon, leading to his arrest. Belec was moved out of the ICU at Froedtert Hospital later in the week and no updates of his condition have been posted since, but he is expected to recover. Wheaton had recently increased security after vehicle break-ins and now plans to fence the property and hire additional security guards.

Bill Yasnoff sent over a link (warning: PDF) to a new report on health record banking called “Improving Health Care: Why a Dose of IT May Be Just What the Doctor Ordered”, by The Information Technology and Innovation Foundation. I’m beginning to like the concept since it seems to address the major issues that are holding back information exchange (privacy concerns, technology challenges, business models).

I guessed wrong on the system used to inappropriately access celebrity medical records in New Zealand. Wrong Concerto – theirs was Orion Health‘s Concerto portal. Makes sense since both are from New Zealand.

I haven’t heard a word about the recent Virtual HIMSS.

Everybody’s read the headlines by now: the newborn twins of actor Dennis Quaid are given heparin 10,000 units instead of 10 units at Cedars-Sinai. They got a quick PTT and protamine doses and will probably be OK. I’m betting it was the same problem that happened in Indianapolis before, where pharmacy technicians loaded the wrong vial into the Pyxis dispensing cabinet and nurses didn’t pay attention to the label on the otherwise nearly identical vials. Barcoding, people.

McKesson VP and former Per-Se chief accounting officer Richard Flynt joins Immucor as CFO.

Healthcare organizations in Maine get a $3 million FCC grant to bring in broadband connectivity.

Baxa signs on as the exclusive reseller of software from MedKeeper that tracks the preparation and delivery of drug doses packaged in the hospital pharmacy. Everybody involved in MedKeeper used to work for Micromedex.

A Berlin hospital is involved in testing a brain-computer interface that could help people who are  paralyzed. It uses EEG signals to control a robotic arm, in essence making it a thought-controlled device.

UMass Med Center uses RFID to track stents and other devices via smart cabinets that inventory their contents and update them as items are removed.

A Michigan woman faces fraud charges for continuing to use employer-paid medical insurance for eight years after she was fired, running up $230,000 in expenses. She got on the county-paid BCBS plan, was fired after 10 days on the job, but kept getting new cards because the county screwed up.

The guy who started Hotmail and sold it to Microsoft for $400 million uses the money to launch a free, online semi-clone of Microsoft Office. That’s one irony; the other is that Microsoft itself set the legal precedent that may keep them from suing him over look and feel issues, from a 1994 ruling that Apple lost to Microsoft claiming that Mac graphics were copied for Windows. Trivia that I didn’t know until now: they guy came up with the name Hotmail as the sounding out of HTML. Great quote: “We are just a few years away from the end of the shrink-wrapped software business. By 2010, people will not be buying software.” I signed up for an invitation, so I’ll let you know.

The New York Times magazine has a fascinating look at how drug companies get private doctors to pimp their wares to colleagues. $500 for a one-hour lunch chat, luxurious “training” (i.e., brainwashing) that includes Broadway tickets and cash, and buddying-up with the local drug reps who grade their selling performance. Startling: 25% of US doctors get paychecks from drug companies for pushing their goods. “Naïve as I was, I found myself astonished at the level of detail that drug companies were able to acquire about doctors’ prescribing habits. I asked my reps about it; they told me that they received printouts tracking local doctors’ prescriptions every week. The process is called ‘prescription data-mining,’ in which specialized pharmacy-information companies (like IMS Health and Verispan) buy prescription data from local pharmacies, repackage it, then sell it to pharmaceutical companies. This information is then passed on to the drug reps, who use it to tailor their drug-detailing strategies.”

Doctors, when they are patients anyway, think doctors do a sloppy job with paper medical records. One doctor quoted had a cheek lump that went away, but his chart said he’d had a stroke.

Sumter Regional is doing great in the “Win an MRI” contest with 136,000 votes, well ahead of second place Lockport Memorial’s 73,000. But, voting runs through December 31, so they would appreciate some clicks, I’m sure. While you’re there, check out Othello Community Hospital’s (WA) “MR Chick Magnet”, which is pretty funny in the prevalent “we’re hayseeds” genre.

What HIT people are reading:

Redefining Healthcare
The New CIO Leader: Setting the Agenda and Delivering the Results
Crossing the Chasm
The Innovator’s Dilemma
How Doctors Think

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Art Vandelay on the Near-Term Vendor Frontier

We can see the intermediate strategy emerging for a number of vendors. Two strategies ago, vendors were working on a set of bolt-on applications targeted at work-queue and workflow enabling the old-and-tired applications in our environments. Some vendors elected to partner for bolt-ons, others elected to build them, and still others had a foot in both worlds. Representative strategies were to add billing and collection queues and registration and authorization queues for payer-rule intensive areas ( i.e., high-end diagnostics, surgeries). The next strategy was to provide visual workflow aids (i.e., bed boards) and visual integration of information (i.e., patient context enabling any best-of-breed applications in the environment, portals) as well as pursue the enhancement or re-architecture of general-use clinical systems ( i.e., systems supporting order entry, general documentation, not specific departments).

We are on the verge of another strategy shift, one back towards a focus on the functions enabling departments and the emergence of the next stage of integration with real-time location systems (RTLS). The major single-source clinical system vendors ( i.e., Cerner, Eclipsys, Epic) have poor capabilities that enable the workflows and effectiveness of “specific-use departments” or care delivery areas (i.e., cardiology, emergency department, lab, oncology, pharmacy, radiology, procedural medicine). As the deployments in the “general-use care delivery areas” ( i.e., ICUs, medical-surgical floors, ambulatory primary care) progress, the focus will turn back to the “specific-use departments” who “took one for the team” and are now swimming in the inefficiency of a single-source system. The single-source vendors can choose to address the issue and keep their customers happy and engaged, or they can continue to short-change these areas.

Vendors who short-changed these areas, or who can execute two major strategies concurrently, will likely focus on the acquisition of or partnering with vendors on RTLS. Health care, as an industry, is usually behind other major industries. Real-time feedback and visualization has been a focus of other industries for over 5 years now. We are just getting to this. The next stage of RTLS integration will involve the visualization of and enablement of tasks and workflows on a macro-basis, not just focused in a “specific-use department.” This next stage of integration will involve visualization of orders, pending activities ( i.e., documentation, medication administration, transport), patient health status and staff workload. Beyond this, I can see the systems evolving to show or predict the picture hours in advance to help sequence future tasks and determine if additional staff are needed.

On the far horizon is the reinvigoration of revenue cycle systems, it is inevitable as the disenchantment with the broad yet not deep clinical systems will grow and the economic situation in the country becomes more challenged.  As always, the million-dollar question is, “Can vendors evolve or will there be more strange appendages and vestigial structures bolted-on to an inflexible architecture?”

News 11/21/07

From Dr. Lisa Cutty: “Re: Agfa. We had a big rumor going around at MEDICA. GE buying Agfa Healthcare and they wanna announce at RSNA. Confirmation, anyone?”

From Fish n’ Chips: “Re: Sutter. Does the $500+mil Epic install at Sutter include the cost of maintaining the old systems for the next 10 years or so? Seems that Judy doesn’t want her database polluted with legacy data. The solution? Keep the old boxes running for next xx number of years.”

From Nasty Parts: “Re: SureScripts. I understand that one of the primary factors standing in the way of EMR vendors getting current CCHIT certification is that they are mandated to use Surescripts. I know this is an issue for several vendors that already have other solutions for this area. My question is why a vendor-neutral organization is in essence giving a monopoly to another company. Why the mandate?”

From Thaddeus Balbricker: “Re: reading list. I recently re-read ‘Healthcare in the New Millennium’ by Ian Morrison. Do readers have a recommended reading list or would they share what they’re reading?” Good question. Have recommendations of the healthcare, business, or IT variety? Use the Rumor Report to your right to send them my way and I’ll compile. I’m always on the lookout for something to read.

From Millie McPilli: “Re: CIO’s Healthcare CIO Summit. Anybody have vendor or attendee feedback?” Link. I’m interested myself, if you’ve participated, please give me your opinion.

From Wompa1: “Re: DUI story. It would be interesting if the hospital’s information could be used as evidence. Hospitals working in concert with law enforcement? It sounds like they already believe they are part of the government.” And the odd thing: maybe they are, depending on organizational structure. Remember that Nassau University Medical Center CIO who got in trouble for taking hockey tickets from Cerner who claimed she didn’t know she was a public official? That may well have been true given the complex organizational structure issues involving publicly funded hospitals.

From A Competitive Kaiser Doc: “Re: Sutter. Competitively speaking, I see this as a win for Kaiser. How so?If Kaiser spends several billion without reasonable return and Sutter avoids that trap, Kaiser would lose, relatively speaking.” Sounds like a rousing RIO testimonial: “Spent billions with minimal benefit, but still less than our competitors.” I don’t actually know about the “minimal benefit” part, but HIT history leans that way.

From The PACS Designer: “Re: PACS/RIS. Lately TPD has been asked about which is more important, PACS or RIS, to department flow. While RIS has been around more frequently in hospitals and is more stable, it is still important to have a good RIS in place when contemplating a new PACS install. What has changed recently is PACS is being interfaced to existing RISs at a much more frequent number of institutions, so there are more questions about which is the best solution for the most efficient interface. If a RIS is in place and a PACS is to be added, it is important that the RIS/PACS interface be fully tested before going live with the new system. To avoid the requirement for an interface, I advise buyers it would be good to also consider buying a PACS with RIS from the same supplier so a proven solution that has already been installed and  resulted in happy customers will limit the need to use an existing RIS. I tell potential buyers that both systems are important, but the integration between the two systems is even more important.”

Scot Silverstein sent a note about AMIA vs. HIMSS. I like his comparison that postulates that, as a trade show, HIMSS is based on an identifiable management information systems culture. “It is process and control oriented, which in many circumstances it needs to be, and has some of the characteristics of a religion (e.g., dogma, central tenets that must not be challenged, a belief that its approaches are the best approaches and even the only approaches to any information problem at hand). It is very different from the culture of medicine and medical informatics. The latter cultures take the scientific method seriously, are probing, inventive, and results-oriented. In MIS, it seems there’s a belief that you can get to the moon in a balloon if there’s enough workflow analyses, process, and people put to work on the problem. In the medical culture, there’s just no time for committee meetings and K-T analyses in cardiac arrest situations.” That’s interesting, and probably correct (although maybe a bit MIS-heavy than today’s shops) from my observations: IT folks decry physicians and the culture that teaches them to behave in certain ways, but IT has its own set of beliefs that probably drive doctors equally nuts. The standoff: IT overrides the docs and the docs refuse to play. Someone could write an interesting article on how to recognize and mitigate those behaviors in a way that would increase the chances of clinical IT project success.

Someone who should know sent positive comments about CEO James Burgess of Mediware, saying he is great to work for and will take any role needed and will meet with anyone. Says he’s honest with clients and didn’t come into Mediware with the attitude that he was the expert and anyone who didn’t agree could hit the street. Glad to know that. I don’t know him and haven’t been critical other than to observe that he’s been involved with layoffs at more than one company (which in healthcare IT just means you’ve worked at more than one since, unfortunately, most of the big ones like to dump staff to prop up earnings).

The Revere Group is a new HIStalk Platinum Sponsor, for which I’m most grateful. The company has grown amazingly since its 1992 founding into a major global consulting force. In its healthcare vertical, The Revere Group provides services to providers, payors, life science companies, and associations. They have lots of case studies and white papers on their site. You may have seen the August announcement of the company’s acquisition of consulting firm Tryarc, LLC. The Revere Group has a skilled Microsoft Solutions Practice (Gold Certified) covering all the cool stuff: SharePoint, BizTalk, SQL Server, Visual Studio, System Center, and more. I notice they also have a full-service Microsoft BI group that handles SQL Server, Transact-SQL, and other BI/OLAP expertise, too, and I don’t know of many hospitals who don’t have a lot riding on their BI programs (and more coming with all the quality and outcomes data analysis needed). Anyway, it’s great to have The Revere Group on board with HIStalk and its readers, for which I thank them.

I received some excellent feedback on informatics programs. Greg suggests first checking this list of programs that have received federal funding through NLM. Among the schools on it that he recommends as first tier: Stanford, Yale, Indiana, Harvard, Columbia, OHSU, Pitt, Vanderbilt, and Utah (the first column contains the programs most likely greared toward provider computing, I would think). The second resource is AMIA’s list of programs, which contains those additional schools that arguably would comprise the second tier of programs, which Greg says could be programs that lost a strong leader or that may have cobbled together a degree by mixing a few IT courses with a splash of healthcare. The good news: degrees from either list will probably be just fine for working in healthcare IT. If your goal is to be an academic or researcher, then schools on the first list would be safer. Sara is in Northwestern’s MMI distance learning program, along with consultants, physicians, nurses, and hospital executives. She says the program is challenging and requires coordinating group work, but the professors are supportive. Michael also recommends the NLM-sponsored programs since they focus more on academic topics, such as vocabularies and natural language processing, but not necessarily general or project management. He says the four programs I originally mentioned are relatively new, so the NLM programs will provide networking and instant recognition which worked great for him. For training of a more professional nature instead of academic, he recommends consider the 10×10 program from AMIA first. He also mentions that many CMIOs don’t have formal training.

Former Carilion CIO and KLASser Greg Walton has taken El Camino Hospital’s CIO position, I’m told.

The 31 IT employees of Wyoming Valley Health Care System (PA) move into a new building they’ll share with the School of Nurse Anesthesia. No jokes about both groups putting people to sleep, please.

A hospital in Denmark uses Hyland OnBase to share electronic medical records. I like its EMR system name: Cosmic EHR.

Listening: Saxon, old pop-tinged metal. Driving music.

UK’s NPfIT has lost almost all its physician support: down to 23% of GPs (compared to 56% three years ago). Fewer than half now think it should be an NHS priority, down from 80% five years ago.

An interesting profile of 94-year-old Morrie Collen, a father of electronic medical records (he built a system in 1969) and a founding member of the Permanente Medical Group.

New Zealand healthcare workers are disciplined for using an electronic medical records system to look up the records of celebrities. The system wasn’t fully named, but it appears to be Canadian vendor CHCA’s Concerto. Doesn’t matter which system, of course, but I was curious.

MetroHealth (OH) signs with AT&T for an Aruba wireless network and security solution.

23andMe, the company owned by the wife of Google co-founder Sergey Brin, launches its $999 personal genetic profiling service.

Odd: Chinese doctors warn viewers of the pirated version of the latest Ang Lee movie not to try the sexual positions shown, which censors cut from the theatrical release, unless they have gymnastics or yoga experience.

I’ll probably skip writing Thursday since nothing much will be happening and few would read anyway, but I’ll make sure to have a Monday Morning Update to get you reconnected next week. If you’re going to RSNA, bundle up and travel safely. Thanks for reading. It’s never a chore to interact with so many smart people. Happy Thanksgiving.

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Inga’s Update

The Ohio State Medical Association will begin a process in January that allows EMR vendors to certify their sales contracts with a Standards of Excellence designation. For example, the contracts must allow for refunds if implementations “fail,” must allow for installment payment based on achieved milestones, and must allow software license transfers. The Coker Group helped with the project that is designed to make contracts more physician-friendly. It will be fun to see what vendors balk because the requirements don’t align with their objectives.

The Minnesota Medical Association is also in the news for publishing a report on the state’s P4P programs. Their conclusion: “Although research on the efficacy of these P4P programs to improve the quality of care is increasing, there is little evidence about their value that is statistically significant or overwhelming.” The Association also had some recommended steps for improving P4P programs, including common measurement sets and financial incentive for EMRs.

Kings County Hospital in Brooklyn will use MediKiosk self-service kiosks in the ER for check-in and triage. I personally think this technology is cool, but I wonder how well the masses are embracing it?

The FCC announces (warning: PDF) the 69 winners that will share $417 million in grants to promote broadband telecommunications. Recipients come from 42 states and 3 US territories.

It’s a great time of year to reflect on the many gifts in my life and give thanks for the good stuff. Most of my “stuff” sounds pretty simple but I’m happy for simplicity:

I am thankful that I’m healthy, have great friends and family, and never have to worry about having enough money for food or shelter.

I am thankful to live in a country where I can feel safe and have had the freedom to choose where and how I live, where I’ve had great educational opportunities, and where I’ve had the chance to choose my career (more than once!)

I am thankful for the opportunity to work with Mr. H. I am really not trying to suck up … I have been having an amazingly fun time the last few months and I have had the chance to grow and learn. How lucky is that?

E-mail Inga.

Monday Morning Update 11/19/07

From Holly: “Re: HIPAA. On the heels of Piedmont Hospital, Cedars-Sinai in Los Angeles is number two to be undergoing a HIPAA Audit by the government.” Unconfirmed, but that’s interesting. I didn’t hear what came out of the Piedmont visit. Gartner could do an interesting hype cycle on HIPAA. Phase I was everybody panicking and hiring consultants and attending endless HIPAA preparation seminars, along with promoting some obscure HIM or compliance person to a higher paying HIPAA Czar position. Then, it kicked in with NPPs, employee training, and transaction set software upgrades. Next, it dropped out of the picture entirely when it became clear that the administration wasn’t keen on actively hunting down violators. Most recently, the formerly timid providers and agencies are piping up to say that it really has impeded information flow and needs to be revisited. Somewhere in all that is the Insurance Portability part that got the whole mess going.

From Amber Waves: “Re: AMIA. I vastly prefer it to HIMSS. It is much more practical, in my mind, with way less focus on vendors and way more on what is really working – whether vendor-driven or homegrown. They have lots of opportunities for interaction with people who are really working hard on the tough informatics issues. Some of the solutions are not yet in the vendor products, but they will be soon and it is great to see in advance what types of real implementation issues are going to be coming along.” I also noticed that AMIA will take its 10×10 informatics education program global, now shooting for training 20,000 informaticists by 2020.

From Jack Horner: “Re: AMIA. Another great panel was ‘Integrating Informatics Into the Enterprise’, with John Glaser, Bill Stead, Marc Overhage, and Charlie Safran. The first two basically proved why Vanderbilt and Partners have the biggest informatics departments. Partners is also impressive in that it has avoided vendors for its EMR system and also that its IT department actually funds small, internal research grants. Bill Stead gave one of the best descriptions of the field informatics I’ve seen. Also notable: the empty Misys booth in the exhibition hall. Maybe you could get the NLM to give out ‘I Am Mr Histalk’ buttons at the 2008 conference?” OK, you’ve just about convinced me. I probably won’t attend the meetings (although you never know) but maybe I’ll join. It does sound more practical than I remember and I just might be an informaticist, depending on who’s defining. Its CEO salary: $256K.

From Keyser Size: “Re: layoffs. In Atlanta, the air is cool and brisk, leaves are turning red and gold, the holiday spirit is all around. It is also fall at McKesson, where around 250 employees were given their pink slips this week.” Unconfirmed.

From Nasty Parts: “Re: Allscripts. The culture of Allscripts is very micromanagement. I understand that Glenn Tullman himself regularly dials members of the sales force to quiz them on competitors, elevator speech etc. He also has his product manager making similar calls. All of this on top of the daily pipeline reports that the sales guys have to deliver.” That’s probably annoying to a sales guy used to being a lone wolf, but I give him credit for getting involved in the details. If he wasn’t, someone would claim that he was distant and disconnected.

From Justen Deal: “Re: Universal Rules for Big EMR Rollouts™. Went ahead and trademarked it for you.” Justen comments on the big Epic projects at Kaiser and Sutter, calculating that HealthConnect will end up costing $9 billion over ten years, just a bit higher than its original $1.8 billion estimate. Hey, maybe I could work that Universal Rules thing like Letterman’s Top 10. Actually, that list just kind of spewed out because I was tired, so two minutes later, I was trying to figure out how it got on the screen. I must have been channeling some dead HIT cynic.

A reader asks about medical informatics programs, specifically those of Northwestern, UIC, SUNY Downstate, and UMNDNJ. Good question. Which programs are good nationally, maybe both those intended for full-time study and programs better for working adults? Are they worth the cost and effort required? I’m curious myself. Let me know.

Allscripts must have allowed its web domain to lapse, at least temporarily, or maybe somebody hijacked their DNS. I went there yesterday and got one of those fake search engine sites littered with Adsense ads. Same result when I Googled and clicked on the several links listed. It’s working now.

Amcom Software will merge with telecommunications provider XTEND Communications.

MedAvant’s Q3 numbers: revenue down 25%, EPS -$0.38 vs. -$0.12.

Microsoft gets an Azyxxi sale to St. Joseph Health System (CA).

Odd hospital lawsuit: a man arrested for drunk driving after a car crash refuses to submit to a blood alcohol level. After his release, his wife took him to a local hospital to get the test “to satisfy his own curiosity.” He failed, so the hospital notified the police because they thought they were supposed to. He changed his plea to guilty, spent a couple of days in jail, and lost his license for a year. He’s now suing the hospital for emotional distress and economic damage, claiming it violated HIPAA by disclosing information when it didn’t have to (he claims he wasn’t being treated at the time). What are the odds that he even paid for the test?

Visionary Medical System announces it has met the interoperability requirements of the Novo Grid by Novo Innovations, allowing its EMR product to view hospital information along with the practice’s health records.

CPSI announces the migration of its hospital system (the applications and database tiers) to Red Hat Linux, offering customers royalty-free licensing, portability, and broad industry support. The GUI will remain ClientWare on Windows.

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Inga’s Update

I have to admit I am sad that everyone thinks Mr. H is right with his universal EMR rollout rules. Does this mean everyone who talks about their success stories aren’t telling the whole truth?

From Tracy: “Is the President and COO’s name really Rob Kill? Man, his parents must have been in a bad mood during the baby naming process. I’m glad I’m not in charge of PR or brand management at that company!” Yep, it really is. I heard his brothers are Chase and Hunter.

Northern Louisiana is establishing a new e-health initiative with the help of IBM, Carefx, Initiate Systems, and the Louisiana Rural Hospital Coalition, Inc. Louisiana taxpayers are providing the initial funding.

Former Accuro Healthcare Solutions and QuadraMed execs announce the formation of a new company, Panacea Health Solutions. They’ll focus on helping hospitals improve their financial performance.

Unless Mr. H, who doesn’t like to give his projects too many shameless plugs, I am happy to shamelessly ask people to contact me for the HIStech Report scoop. We are already working on reports for four or five companies. If you want to be included in the pre-HIMSS editions, let us know soon.

E-mail Inga.

News 11/16/07

From HIT Insider: “Re: Sutter. Haven’t seen this article on Sutter Health wasting millions on its Epic installation yet.” Link. Sutter’s original estimate to install Epic in six hospitals: $150 million. Current estimate: $500 million and going up. Nearly $100 million for one hospital? Says they learned from Kaiser’s mistakes.

Mr. HIStalk’s universal rules for big EMR rollouts:

1. Your hospital will pledge to make major processes changes, vowing to “do it right” unlike all those rube hospitals that preceded you, but the executive-driven urgency to recoup the massive costs means the noble goals will change to just bringing the damn thing up fast, hopefully without killing patients in the process.

2. The project and/or system must be anointed with an incredibly dopey and user-embarrassing name, preferably chosen from user submissions and with the offer of crappy vendor paraphernalia or lame IT junk as a prize, and also preferably made up of a far-fetched phrase whose contrived acronym spells out a medically related word or female name. Instead of inspiring the expected collegial chumminess among users, it will serve as a bitter reminder of the innocent, naive days between RFP and go-live before it got ugly.

3. Doctors won’t use it like you think, if at all, because hospitals are one of few organizations left that doctors can say ‘no’ to.

4. You’ll spend a fortune on mobile devices and carts that will sit parked in a corral due to the short life of their $100 battery and a dysfunctional but not yet fully depreciated wireless network, the keystone arches to the entire project.

5. All the executives who promised undying support to firmly hold the tiller through the inevitable choppy waters and who overrode all the clinician preferences in a frenzy of inflated self esteem will vanish without a trace at the first sign of trouble, like when scarce nurses or pharmacists threaten to leave or when the extent of the vendor’s exaggeration first sees the harsh light of day in some analyst’s cubicle.

6. It will take three times as long and twice the cost of your worst-case estimate.

7. You’ll pay a vendor millions for a software package consisting of standardized business rules, then argue bitterly that all of them need to be rewritten because your hospital is extra-special and has figured out the secrets that have eluded the vendor’s 100 similar customers. The end result, if the vendor capitulates, will be a system that looks exactly like the one you kicked out to buy theirs.

8. You’ll loudly demand that the vendor ship regular software upgrades to fix all the bug issues you submit, but then you’ll refused to apply them because you’re scared of screwing something up with the skeleton maintenance staff you can afford, given that millions were spent on systems with nothing left for additional IT support staff or training.

9. All those metrics you planned to collect to show how quickly the EMR would pay for itself instead show the situation unchanged or getting worse, so factors beyond your control will be blamed (like a ridiculously long implementation time that changed all the assumptions and external conditions) and ROI will not be brought up again in polite company.

10. No matter how unimpressive the final result toward patient care or cost, the EMR will be lauded far and wide as wonderful since the vitality of the HIT industry (vendors, CIOs, consultants, magazines, HIMSS, bloggers) requires an unwavering belief that IT spending alone will directly influence quality, even when nothing else changes.

From Dastwood Biouf: “Re: AMIA. AMIA’s annual meeting wrapped up this week in Chicago. It had over 2,000 attendees. AMIA still has a reputation for being full of pointy-headed navel-gazers more concerned with abstract topics than solving real-life issues in health care. If that was ever true, it’s certainly not now. The academic rigor is definitely there, but the focus is on everything from dealing with vendors to doing clinical decision support in distributed health information networks. Other highlights were a demonstration of context-sensitive “infobuttons” linking from EHRs to knowledge resources like UpToDate using the new HL7 Infobutton standard and a discussion of privacy policies around RHIOs. Oh, and also an announcement and panel discussion about AMIA’s latest initiative: establishing Applied Clinical Informatics as a formal medical specialty. Good stuff all around. AMIA is a great organization that deserves to have a higher profile than it does.” I’ve started to join a few times, but I always balk at the $250 a year. That darned HIMSS has set the bar high by selling out to Diamond Members, thus keeping dues for the little people low in the process. AMIA’s still worth it, I think, so I may pony up.

From Tom C. “Re: Eclipsys. Cardinal Health may buy Eclipsys. Cardinal likes the way McKesson is leveraging the old HBOC division.” Bet they liked it even better back in 1999, when their arch-competitor took it in the shorts as the HBOC house of cards finally collapsed, wiping out $9 billion of market equity in one exciting day and forcing the writedown of hundreds of millions of dollars worth of fictional accounting.

From PoBoy: “Re: Healthvision sales price. Quovadx determined fair market value is $7.42M. After payment of @ $4.87M of Healthvision’s indebtedness (primarily to VHA and a bank) and @ $1.23M of transaction expenses in connection with the merger, the remaining net equity value of Healthvision is @ $1.32M. Healthvision’s Series E Preferred Stockholder was entitled to receive the entire net equity. None of the other stockholders were entitled to receive any proceeds.” I assume General Atlantic was the stockholder, but I was too lazy to look it up. And to think that, according to Scott Decker, it had a value of between $1 and $2 billion back in the dot-com days. Like he said in my interview, too bad they didn’t go public quickly then.

Pictures of Kiowa County Hospital in Greensburg, KS from May 4, 2007, from a presentation by administrator Mary Sweet. 68 employees lost their homes. That bottom picture is of HIM, yet 95% of the paper records were saved because a cement wall fell on them and protected them. Her tips: have a plan to bring in storage pods if needed, make sure the building code footprint is current, use employee picture IDs with an extra copy kept at home, develop plans to save vital items, have contracts in place for temporary buildings and bathroom facilities, make sure patient beds fit in the elevator, and don’t keep your backup tape across town – the tornado’s 200+ mph winds destroyed 95% of the town and the tapes, too. Pictures of the town are here. Ten people were killed. Sad.

Was I the only one who didn’t notice that consulting outfit Kurt Salmon Associates sold out to a UK consulting company last month for $125 million?

I got wrapped up watching Eric Fishman’s videos showing Dragon NaturallySpeaking working with several EMR products in several specialties. Though the speech recognition part is cool and it’s clear that it works really well (you actually see the narrator’s voice dictating and running the app), I liked being able to see someone actually going through eClinicalWorks, e-MDs, etc. so I could see what their screens looked like. Putting those out there was pure genius – seeing speech recognition driving the screens is fun.

I’m hearing that Dairyland laid off around 30 people this past Monday, with developers, architects, and PMs the hardest hit. This could be like a sports trivia question: what CEO laid off dozens of people at two different companies in the same year? (answer: James Burgess, 2007: Mediware and Dairyland).

The Healthcare IT Transition Group guys amuse me yet again (no, they’re not a sponsor – I just think they’re funny). Marty covers the CCS conference from Beverly Hills. In a wickedly funny summary, he postulates that Canadians live longer because all meat keeps better in the freezer, describes Eclipsys CEO Andy Eckert as “… like the guy in high school who was both valedictorian and captain of the football team. The kind of guy who you just couldn’t help liking, even as he drove off with your girlfriend in his red Camaro.”, and Jonathan Bush as Alex P. Keaton with ADHD and a software company (“he chewed up the scenery like William Shatner on steroids.”)

McKesson Provider Technologies is criticized by the health department for moving quickly out of its Queensbury, NY building after an employee claimed to have Legionnaire’s Disease. The health department says no one has reported the disease as the law requires, the landlord has been told nothing, and the health department said McKesson had been “less than forthcoming.”

Former Duke University associate CIO Iain Sanderson is named CMIO at Health Sciences South Carolina.

EHRVA releases a free quick start guide for the Continuity of Care Document standard.

Misys tries to drum up some enthusiasm for the iMedica EMR it licensed. What it says: some resellers said they’d sell it and some MGMA attendees saw it demonstrated. Not well written: the headline is a dead giveaway for the commercial that follows and it lapses into the first person in the eighth paragraph as though some unseen press release god suddenly began speaking to you directly from your monitor. Bet they didn’t feature as many compliments about the same system when iMedica was selling it against the old Misys warhorses (like this one, in which a practice paid over $150,000 to get five doctors on Misys).

Medsphere hires Edmund Billings, MD as CMO, who appears to have bailed out of medicine early in his career to start IT companies (like Oceania). I don’t know that I’d have made him CMO, but maybe a marketing or development guy. He’ll be a good asset to them nonetheless, I suspect.

Cardinal Health announces a 340B software package.

Ambulance chasers file a class action suit against FCG for taking $365 million in cash for the company. It’s not enough, they say, despite the 30% premium to market price at the announcement. It was not mentioned whether they kept a straight face.

HIStech Report has caught the eye of a few companies and PR firms. I’m not making a pitch, but simply mentioning that companies who are interested in the pre-HIMSS period of January and February contact Inga stat because we’re going to book it up fast, I think. We’ll have a “Mr. HIStalk Goes to HIMSS” writeup that accompanies it.

MediNotes says its small-practice EMR system interfaces with 76 practice management systems. My interview with CEO Don Schoen is here.

EnovateIT announces an agreement that gives Language Access Network the right to provide its two-way video system to EnovateIT’s 1,100 hospital customers.

Pioneers Memorial Hospital (CA) chooses Optio’s document-based EHR.

IBM will acquire Cognos for $4.9 billion in cash. Pretty much all of the BI companies have been swooped up except privately held SAS. They’re probably next (Oracle?)

It’s a holiday coming up, and one of few that somebody doesn’t protest about. I’ve got planning to do (HISsies, the HIMSS get-together we’re hoping to put on, and the announcement of a new service in the next handful of days). I’ll still be writing here, of course, since that’s what I do. If you’re heading out of town, be safe and enjoy the time with your family and loved ones.

E-mail me.

Inga’s Update

Larry: Regarding your comments on Allscripts third quarter projections and the question: Do you think the ambulatory market is slowing? I think that it has to do with Stark relaxation. My guess is that 1) physicians/groups are not buying as much because they are waiting to see if the hospitals will foot the bill and 2) hospitals/health systems take longer to make decisions and are still planning their strategies and budgets.

I think those are pretty good guesses. Hospitals establish strategies years in advance and many were not anticipating needing to have a strategy for offering EMR to community physicians. Those strategies and budgets are not created overnight.

A UMass Memorial Center doctor is arrested for soliciting sex, but claims he was just gathering information on STDs. No word if his wife bought that story.

La atención oradores españoles: Averigüe UnBuenDoctor.com, un nuevo sitio web del español Idioma que permite a usuarios a buscar para la información de asistencia sanitaria y recursos.

Chuck Noland and his buddy Wilson might have liked this. Telemedicine comes to Tristan da Cunha, a remote island 1,665 miles off Cape Town, South Africa. It is only accessible by boat and it takes a week to get there. But, thanks to IBM, UPMC, and Beacon Equity Partners, the island’s only physician can get advanced medical assistance when caring for the 270 residents. I am adding this one to my list of places Mr. H can send me for interviews (once he gets his $2 billion for going public.)

Speaking of UPMC, the Vatican blesses its merger with Mercy Hospital.

McKesson will provide PACS for 22 Shriners Hospitals for Children. I love the Shriners. Not only do they wear cool hats and get to ride funny bikes in parades, they provide free specialty pediatric care. Love it.

Virtual Radiologic Corporation, a provider of remote diagnostic image interpretation services raises $68 million for its IPO. Rob Kill, former Misys Physician Systems president, is Virtual’s president and COO. Bet he is happy how things turned out for him.

E-mail Inga.

HIStalk Interviews Tanya Townsend, Director of IT at Saint Clare’s Hospital

Every CIO’s dream is to start fresh with a new hospital in a new market with all-new employees, choosing technologies from scratch and building the necessary infrastructure right into the structure. Tanya Townsend had that opportunity. The level of automation in most small hospitals is modest, but Saint Clare’s Hospital in the Village of Weston, Wisconsin, is a 107-bed digital hospital, thanks to some cooperation with Marshfield Clinic and parent organization Ministry Health Care.

The all-digital characterization generates a lot of industry interest, so thanks to Tanya for sharing the story with HIStalk’s readers.

Tell me about yourself and your job.

I am IT director for Saint Clare’s Hospital in Weston, Wisconsin. I’ve been here three years now, so I was involved with project about a year before it opened. We are the first and only all-digital hospital in state of Wisconsin, a very remarkable and unique experience and I’ve been part of that since the beginning.

If I walked the halls of Saint Clare’s, what would I see that’s different form the average hospital?

First and foremost, it would be lack of paper chart and a lot of paper-pushing of the paper chart. So, for example, on our nursing units, based on our design for an all-digital hospital and knowing we didn’t have to worry about having a central communications station where that paper chart is generally stored. We started to rethink how we were going to provide care and do business with this new model in mind.

We actually decentralized nursing unit and put all of our nursing staff closer to patient. Now we have alcoves outside all of the patient rooms where documentation can occur, otherwise our document is completely mobile and wireless. Documentation can occur at the bedside as well.

We also implemented voice over IP wireless phones so all our communication can happen either via the computer or phones, tied into our nurse call system. Everything is very mobile and everything is real-time action. It’s a different model for communication and lot more of a decentralized approach, closer to the patient and then hopefully more family-friendly as well.

How do you define an all-digital hospital?

That’s a great question because I’m finding out, as we start sharing stories with other so-called digital organizations, we all have a little different definition of what exactly all-digital means. Going into our guiding principles, we certainly had a lot of different ideas of what we wanted the all-digital approach to be. One was that we didn’t want a paper chart and to worry about storing or maintaining a paper chart in a long-term format. That was the first piece – understanding how you’re going to get rid of any paper coming into your facility in the first place.

It’s also about optimizing information flows across the continuum and building in decision support and patient safety into all of the different systems as much as possible. That means implementing systems such as CPOE and clinical documentation with decision support at the bedside. Not neccessarily just about scanning paper on the back end.

One of the biggest problems CIOs have is change management. What opportunities did you have starting from scratch?

That was actually a unique opportunity. We were a brand new facility – we weren’t even a replacement facility, in a new market and a new area. Everybody coming into the facility was brand new. We all came in with open eyes, the sky was the limit, with a sense of camaraderie and collaboration from the very beginning, both business as well as IT, starting with the senior leadership level. The senior leaders built this vision, and upon hiring everybody into the hospital, everybody was part of that same vision. Very open minded, a lot less of “we’ve always done it that way.” We set expectations right at the beginning, even with the recruitment process.

Other pieces are building the culture of what we wanted to accomplish, so this idea of decision support, best practices, patient safety – it was at the core of every one of our processes that we built. It was also part of the initial process before the hospital opened – building our culture and process flows. We formed multidisciplinary teams for year before hospital opened, forming process flows. It could be as simple as registering a patient or as complex as medication reconciliation. We have 8,400 pages of process maps, all available digitally and used for both training purposes and process improvement purposes..

It really is an evolution. They’re not just one-time static documents. Any time we want to improve a process, we go back to the process maps and they get continuously updated.

How did you create the process maps?

We have a project manager. We use a project management methodology and we had a project manager to help facilitate those sessions. We had simulations and walkthroughs, and since then have a process improvement manager who will update the process flows and facilitate the sessions sessions. Our quality department is absolutely integral as well. They usually identify the areas we want to look at for process improvement activities. They’re available on our Intranet and we built them with Visio.

What systems do you use and why did you choose them?

Where we had the opportunity to really start fresh, we also knew from a cost savings opportunity as well as efficiency, and what we needed on this campus was a lot of collaboration, with both Ministry Healthcare and Marshfield Clinic present on this campus. Rather than reinventing the wheel, we took a look at what was available to us within both organizations that we thought we could fit in here. We looked at the tools that then did a gap analysis of where the holes were that we needed to identify solutions for.

We came up with two core systems. One of the was GE LastWord, now called Centricity Enterprise, and we’re in the process of converting to that. The other is the Marshfield Clinic application, which is now called Cattails MD. They officially got their CCHIT certification. 90% of all our documentation for our medical record is found in those two core tools.

The OR and ED are two very niche areas that typically require their own set of documentation. In the OR, we are partnered with Picis. They do our OR and anesthesia documentation for pre-op and intra-op. In the ED, we recently went live with MedHost for ED documentation. We also have the GE perinatal product, formerly known as QS, in family birth center. The other gaps was progress notes. How were we going to handle hospital progress notes? We had hunch that we were probably not going to get physicians to type their progress notes. It was one thing to ask them to do CPOE, but we weren’t sure we were going to get them to type progress notes.

Also, the different types of paper forms that are typically found in a medical record  chart that we don’t have solutions for – anatomical drawings, for example. There’s some forms that get approved through the medical records committee every month. And, documents coming in from outside facilities. We knew that patients would be coming here and transferring their care who might have some paper coming with them. We needed to find a way to acquire that into the record. We partnered into Marshfield Clinic. Since they do their own development, we could partner with them and decide on solutions for that.

With Marshfield Clinic, they developed a system called Digital Ink over Forms. That’s a tool that allows you to use a tablet style PC, pull up a form, and complete it with a stylus on the tablet. It digitizes your handwriting or whatever you did on the tablet. That’s our solution for progress notes as well as those different types of forms like the anatomical drawings. We have a scanning solution also developed by Marshfield Clinic for scanning those paper documents that will make their way into the facility.

How does the Marshfield Clinic’s homegrown EMR application work?

It’s actually been in development for the last 20 years or so. It was a system developed by physicians, for physicians. Marshfield Clinic is physician-run group. A lot of it was just a unique opportunity for us to say, “These are the gaps are on the hospital side, can we partner together to help with that collaboration across the continuum”, which is where you often have handoff issues, between ambulatory and hospital and back. That’s where a lot of handoff errors can occur. How can we partner together so that our systems are integrated across the platforms? So they’ve done a lot of very remarkable things, a very powerful tool.

We use it differently in the hospital than they do on the ambulatory side, but we share a problem list, medication list, and allergies. That was a key requirement for patient safety, that we have a medication list that would cross the continuum between ambulatory and hospital and back. The developed a very powerful medication reconciliation processes called Medication Manager. That’s also for patient prescription-writing as well.

Like I mentioned, the scanning solution is embedded right within their system. We have all our radiology and PACS images integrated with their system that allows dictation. And, one of the most unique functions is the Digital Ink over Forms that allows you, with your tablet and stylus, complete forms digitally or electronically. I’m probably missing a bunch of things it does. One of the reasons that Cattails is certified is that because it certainly meets all the standard criteria that commercial vendors already have as well.

What kind of user devices are in place?

Our core tool is the Fujitsu tablet, primarily because of that Digital Ink over Form documentation opportunity where we can use it with the stylus pen and complete the forms digitally. It’s mobile and wireless, of course. That’s our core clinical device. Each provider gets a tablet, whether a nurse or physician. The physician typically gets their own assigned to them and can take that from the clinic to the hospital and can roam freely throughout the campus using their personal tablet. On the nursing units, we have a pool of devices that they check out for the day and that’s their clinical tool they use throughout their shift.

How’s the battery life?

We have docking stations outside all those patient alcoves that I mentioned, so there’s lots of opportunity to sit and charge up. We also have the COWs that they can charge up on. If you’re operating wirelessly, continuously, it’s probably about four hours.

What kind of IT infrastructure was created for the hospital?

We’re completely Cisco, using the voice over IP technology as well of all of our wireless mobility. We’re using the tablets on wireleess, phones on wireless, wireless IV pump … lots of devices sitting on our wireless infrastructure. One of the concerns that I often get asked is about downtime and how to avoid any systems from going down, it both wireless as well as wired. We have multiple categories of redundancy, both on the wireless side as well as wired. Redundancy with different paths going to our data center so that if one of those ties is severed, the other would be up, entirely seamlessly. That’s another goal of the all-digital strategy, to make sure you have 99.9% uptime.

Is your data center on campus?

Actually, no. We have several data centers to house all of these different systems. They’re in Marshfield, Wisconsin, which is about 45 minutes away from Weston. We have a local data center as well, but our core main servers for both the Marshfield Clinic application and GE are in Marshfield.

So you’re running their systems and don’t have to run a separate instance?

Correct, which goes back to that we looked at the tool already available to us that made sense to us to adopt.

What about your wireless infrastructure?

We run 802.11g. We are running into the issues of the A-B-G compatibility with different devices that were available at the time. For example, our wireless phones operate only at the B level, so we have a little bit of issues with the access points being drained with too many devices on the access point, all at the same frequency at the same time. We’re upgrading our wireless infrastructure to separate out that traffic, which is again where it came in handy to have several areas of redundancy for an access point.

Do the B-devices slow everyone down to B-speed when they connect?

It drops the whole thing and we’re living that. Because the phones are almost always connecting to an access point, they limit the number of connections to each access point to try to streamline some of that traffic. The hospital opened and we learned that lesson.

What lessons learned would you have for IT departments moving into a new facility?

A lot of it was on the wireless side, to do the appropriate site assessments. That’s the trickiest thing, to put as much traffic on the network as you think you’re going to have to try to get those correct assessments. That was the tricky piece, especially trying to do that before the furniture was placed. Once you occupy the building, there’s all sort of findings with the wireless piece. So that’s a lesson learned – once everything is occupied, you probably want to do a few more assessments.

We had all kinds of interesting things happen. TVs, for example. We almost didn’t have TVs on our opening day because it was the same time as Hurricane Katrina and they were stuck out in the ocean somewhere. You never know what you’ll have to plan for.

In terms of disaster recovery, as much as you plan for avoiding an outage in the first place, you still have to be prepared because the inevitable will happen and did. Three months after opening, we had one of those unexpected WAN outages and we were essentially an island over here. The good news is that we had a good backup downtime electronic medical record system that we could access in that event, but not everybody was as familiar yet. It was one of those things that you have a procedure for, but you don’t necessarily walk through as often as you need to. That was another lesson learned.

How does the downtime EMR work?

We have a lot of our information stored in there. Even our niche systems like Picis in the OR and perinatal QS in the family birthing center and MedHost in the ED, all of those systems feed a summary document or quite a lot of patient information to the Marshfield Clinic Cattails system. That’s essentially our core repository. That information is then replicated, both in their data center as well as another offsite data center located in Madison, Wisconsin. That’s replicated near real time. So, we have the ability to access that through the Web in the event of an outage. Even if Cattails is down, we can still get to it.

Or, if the WAN is down, we have a satellite on the roof directly connected to this location in Madison so that we can pull up all of our patient information over the Web. It is just view-only at that point, so our downtime procedure is that you’re viewing information, but any new information that’s being captured, you go to a downtime process of paper. Imagine that. We do have paper. [laughs] That’s part of the downtime procedure process – identifying what are those core paper forms that you need to keep on standby.

IT in 107-bed hospitals is usually unsophisticated because of financial constraints. Can comparably sized hospitals accomplish what Saint Clare’s did?

That actually was part of the analysis. We did say, “Let’s try to leverage what we have available to us”, but we did a feasibility study and other vendors were looked at. For some of these systems, the vendor wasn’t too interested in us and we couldn’t touch the ballpark figures. That’s where it really made sense to leverage what was available to us. From a cost savings perspective, that was phenomenal.

What’s your IT staffing?

I have 21 FTEs on my payroll, but there’s a lot of sharing and collaboration with the parent organization. Saint Clare’s is the hospital proper, but it shares this campus with three other entities: MMG Weston, which is the family practice group also owned and operated by Ministry Healthcare, and I’m the IT director of that as well. Then we have the Marshfield Clinic Weston Center, which is over here, and then Ministry and Marshfield Clinic formed the joint venture on the campus called the Diagnostic and Treatment Center. That provides ancillary services for the entire campus – lab, radiology, cath lab, rehab, etc.

I’m over just MMG Weston and Saint Clare’s Hospital. At Marshfield Clinic, there isn’t a local director. They’re supported by the Clinic. Diagnostic and Treatment Center does have a local project coordinator, but we provide services to them. While I have 21 FTEs, resources are shared throughout those parent organizations because we are sharing systems, so I get services from them as well.

Can you prove the value of the technology in terms of cost or patient outcomes?

That was a little bit tricky for us. We didn’t personally have the before and after picture. In terms of looking at our guiding principles, which was to avoid a medical record filing room and storing charts, there was quite a bit of cost savings upfront. Same with PACS. We don’t have a radiology film room, everything is digital as well. A lot of avoidanace in the first place, but then we start to look at our outcomes and successes, that’s where we can try to do some benchmarking in comparison to our peers. We’ve been doing a lot of that. For the true use of CPOE, we’ve pretty much met compliance with all the mandates for best practice and quality outcomes.

For turnaround times on order sets, we’ve done some benchmarking. For delivering antibiotics stat, we’ve been able to turn that around in about five minutes. In a paper world at some of our peer facilities, it’s probably one and half to three hours.

The CPOE side was most controversial area. Lot of organizations are skeptical and taking a wait-and-see attitude. All of our order communications is as fast as the stat antibiotics. We’ve seen cost containment. We’ve been able to drive the doctors to use the formulary. They are 99.6% compliant.

The biggest result of all goes back to our guiding principles – optimizing the flow of information across the continuum. Having somewhat of an integrated system record, even if it is a best-of-breed vendor approach. Making sure none of our patients would be harmed due to lack of access to available information. By collaborating with Marshfield and sharing tools, have been able to avoid that.

Those are the types of things that we’re capitalizing on now and that process will continue. That certainly was a part of why Ministry and Marshfield looked at this campus as a unique opportunity and put quite a bit of effort into it, because it was an opportunity to look at how can we do this from the ground up and apply some of those lessons learned, good and bad, to rest of the organization as we continue to develop an electronic health record strategy.

My advice to others is to develop your strategy and stick to it. Get buy-in and understanding from senior leadership. The vision must be accepted at the senior leadership level. CPOE is not easy to implement. Make sure everybody is committed to vision, but adaptable. It’s a continuous evolution.

Where do you see yourself in ten years?

Hmm. Geez, I just don’t know. [laughs] Continued growth and development. Probably still in healthcare IT – this is definitely my passion. So, I can’t say for sure where exactly, but I’ll be doing something similar.

Your formal medical informatics training sets you apart from most IT leaders.

It’s absolutely been a plus. It’s been a weird development, I guess. I actually started out in health information management, more on the medical records documentation side. As I was finishing up and about to start in that career is really when the whole electronic medical record future started to pick up. I though I’d keep on going, continue to not only work, but also develop my career on the IT side because that’s where I could see myself was development of the electronic medical record and continued process improvement of our healthcare industry through the power of technology.

It wasn’t necessarily what I planned on in the very beginning, but absolutely where I want to be now. It has been extremely beneficial for me not only to have the technical training, but also have that healthcare background so I can communicate effectively and collaborate with my peers on the clinical side of the business, but also can effectively manage the IT technical component.

What do you do when you’re not working?

Who’s got time for that? [laughs] That’s an interesting question, probably another lesson learned. While it’s very fun to tell this story now, it’s been quite a journey to open an all-digital hospital, even if was from the ground up. It’s an incredible amount of effort and work. While it’s been extremely beneficial and a wonderful opportunity, it also was extremely busy. We found the eighth day of the week many times. It’s been such a great team-building experience. This will probably be one of those things that I’ll always look back as such a great experience and great friends for the rest of my life. Not a whole lot of time for everything else in life. But now that hospital is open and we’ve gotten into a little bit more of an operational mode, we’re going to get out and do some more fun things.

News 11/14/07

From TGIG (Thank God I’m Gone): “Re: Misys Connect. Just one of many great decisions. How about taking a pass on NextGen; how about putting a Windows overlay on Medic PM but keeping the underlying COBOL code; how about stopping the bidding for MedicaLogic (now Centricity) at $25M; how about firing the guy from GE running Physicians Systems who was exceeding his numbers; how about putting  his “Peter Principle” buddy in charge of BD? Misys is where it is due to lack of leadership and a failure to make courageous decisions. The new leadership can do no worse.” Jon Phillips thinks they’re doing better, but with some unknowns in front of them.

From Sonomaca: “Re: Jon Phillips. I’m interested in the payer tech side of HCIT. Would like to know Jon’s views of present and future here. Companies in the space are Medecision, Click4Care (private), Kryptiq, Trizetto, and bigger companies such as DST and McKesson. Also, will UnitedHealth spin off Ingenix at some point. What’s that business worth? Also, what about the CDHC platforms such as CareGain (Fiserv), ConnectYourCare (Express Scripts), HealthEquity, ASI (DST). Also, banks such as BofA are getting into this, in part because of huge opportunities in financing consumer HC debt.”

From Money Money: “Re: Healthvision. Anyone know or can guess how much it sold for?” I have no idea, but I’ll guess with everyone else. Reported revenue was in the $20 million range but trending down from all appearances, so I’d say it was worth maybe $25-30 million tops given the employee losses and cash flow struggles. I’m sure there was some debt involved.

From The PACS Designer: “Re: Google Android. Google is muscling its way into the mobile phone marketplace by releasing Android, its free and open sourced software stack for the mobile marketplace. Healthcare institutions will most likely show some interest once there is a stable platform for mobile viewing and some new options developed that will benefit daily work routines. Developers will be going after Android’s Software Development Kit (SDK) since Sergey Brin, Google’s president, is offering $10 million for the best new design applications using Android as the platform for new mobile features. Google hopes to challenge Microsoft’s Windows Mobile 5 (WM5) by enticing independent developers to work to improve the  application’s functionality with new features. Since 3D is the newest software that has penetrated the healthcare workspace, it would be nice to have 3D images viewable on your mobile phone. The YouTube video shows a 3D application running on their new platform.”

From Inside Outsider: “Re: Andreessen’s Stanford gift. This is not like the old Bill Gates (prior to Melissa coming into the picture), where he’d donate 100,000 copies of MS Word to poor schools, then write off the donation at full cost. This is a real monetary gift and he should be commended. Think of how much less giving there would be if someone decided who we had to donate to. We should not look a gift horse in the mouth, even if it is giving to a better-off hospital.”

Speaking of alternative practice models, Bruce Friedman has an interesting piece (and I’m not just saying that because he quotes me) on a company that provides medical services by telephone. You get a telephone consultation and prescriptions for $35. Sounds like small potatoes until you notice the headline on their site – they just signed up their millionth customer. Imagine the cost savings if prescriptions didn’t require prescriptions (is it reasonable to require a prescription for drugs that might hurt you but not for alcohol, fast cars, dangerous power tools, and handguns?)

Listening: new from The Hives.

QuadraMed’s Q3: revenue flat, EPS -$0.01 vs. $0.08, some of the loss from the expense of buying Misys CPR.

Several new profiles are in flight for HIStech Report. The interview with Novo’s Robert Connely is fun, of course. Great HIMSS product previews are coming.

Initiate Systems announces plans for a $75 million IPO, with heavy hitter Goldman Sachs bringing them out. The company also announces Initiate Master Data Service version 8.0.

My newsletter editorial for tomorrow: “Two Economic Theories That Explain Why Epic’s Competitors Had Better Improve Fast.”

Sage Software Healthcare announces John Lopiano as division president. He’s new to healthcare, it appears, with previous stints at Spinet Associates, Xerox, and IBM. A West Pointer, which we like here.

Post-acute care services provider CareCentric announces that CEO John Festa and CFO Lyle Newkirk are gone. Says it’s part of a plan “to refocus the company on operations, software development, and infrastructure.” Wonder what were they focused on before?

Symantec announces some kind of healthcare provider package with software and stuff.

The Kansas City paper covers Mediware’s retooling, including a new CEO, restructuring, product retirement, and layoffs.

Industry longtimer Kerry de Vallette joins HealthPort as SVP of Solution Sales.

Thomson announces PDRhealth, an online version of the Physicians’ Desk Reference with some health tools added on (can yet another PHR be far behind?)

Government Health IT, probably my favorite online HIT publication, runs a well-written profile on Brent James of IHC.

Odd: a Florida cardiologist’s office is raided by the DEA, he’s named in several civil lawsuits, and his office manager is shot dead by a coworker who later kills herself. Now, his physician partner gets a court order and takes all the equipment from their angiography practice. The partner had started an EMR company at one time (I’m guessing it was AutoMedicWorks).

The Healthcare IT Transition Group, fresh off their report urging RHIOs to find local funding instead of relying on federal grants, announces a new resource directory to make that easier. It’s $395 per region, which seems like a pretty good deal. Those guys must be busy all the time.

Allina is urging staff to take PTO and will probably have layoffs by Christmas. Its 2004 tax form shows a $198 million profit, an $835 million warchest, and a CEO compensation of $1.4 million. For all that (plus the $249 million Epic project) I would have expected something more creative. But, hospitals have zero willpower when it comes to position control (at least of the preventive persuasion).

An Oregon community college and Asante Health System join forces to offer informatics training, with plans to expand it to a certificate and then associate’s degree program. It’s not exactly what I’d call informatics since it has no clinical component mentioned and the maximum pay at Asante will be $19 an hour, so it’s more like field support and training for applications. Sounds like a good program, though.

Steve Starkey of Healthcare Management Systems is promoted to COO.

State funded UT Southwestern takes heat after the local newspaper obtains a list of 6,400 wealthy, influential, and connected people who would be given concierge-like VIP treatment if admitted. Other hospitals contacted rationalized their own VIP lists, saying that UTS went too far by including people with whom it had no relationship, according to an overheard conversation between the pot and the kettle. I like the frankness of a county commissioner who found out that he was on the list when the paper called: “I get there at 7 a.m. and there’s not much of a wait. Ain’t nobody hardly at work. I’m glad I’m on somebody’s VIP list, because I’m damn sure I don’t have any money.” The hospital’s president does: he gets a $1.1 million salary, according to tax records.

Oracle will offer freely downloadable server virtualization software starting on November 14, knocking down VMware’s share price.

E-mail me.

Inga’s Update

Turbulence at Medquist continues. Three independent directors announce their resignation amid concerns over the potential sale of the company. Costa Brava Partnership III, a five percent stakeholder, wants to inspect the books. And, the company lost $8.9 million in the third quarter.

Meditech Chairman Neil Pappalardo donates $2.5 million to Korea Advanced Institute of Science and Technology. The university plans to build a medical center with the funds. No word as to whether they plan to use Meditech products at the new facility, but perhaps Michael Dell can advise him on this strategy.

The Georgia Department of Community Health announces winners of $853K in grants to promote EHR and electronic prescribing initiatives. One of the four facilities was Sumter Regional, which received $250K.

Sentillion announces a new Channel Partner Program and already has at least three initial members. The company also reveals that it signed six new customers in the third quarter and now has 335,000 live users.

Oschner Health System in New Orleans goes live with master patient indexing for 2.7 million records across 10 hospitals and 32 health centers. IBM and Initiate Systems helped create the EMPI.

An ambulatory vendor employee commented that his company missed their third quarter projections, though not as badly as Allscripts. His question: “Do you think the ambulatory market is slowing?” I personally don’t have the answer to that question, but I am curious what readers think. Despite missing projections, Allscripts earnings were up 26% from the same period in 2006 and QSI’s were up 16%. I doubt Misys and Sage will announce similar growth, however.

The FCC announces a proposal to fund a $400 million Rural Health Care Pilot Project to deploy broadband telehealth networks. The project would target rural and underserved communities and is designed to facilitate telemedicine programs.

Perhaps the FCC read this report before making their announcement. The Center for Information Technology Leadership conducted a study that found a national implementation of telehealth technologies could save $4.28 billion in annually, including $912 million in patient travel costs. AT&T helped pay for the study.

SCI Solutions will provide its Order Facilitator solution to HCA’s TriStar Health System, which includes 18 facilities.

E-mail Inga.

Art Vandelay on IT Project Work

I wanted to comment on a great topic and pending analysis to be completed by Will Weider.

Will would like to determine how much effectiveness he is receiving from his IT staff time spent on project work. Competing demands lead to sub-optimized use of his staff’s time. No project assembly line exists to ensure that work is contiguously and effectively sequenced for his staff.

What factors drive the lack of effectiveness of work in health care IT organizations? From my experience, it is a combination of the following:

1. Effective IT governance. Who, how, and how quickly can decisions be made that are binding in order to prioritize projects?
2. Tactical prioritization of resources. Day-to-day prioritization of resources doing the project and operational tasks.
3. Effectively estimating, measuring and communicating resource capacity within or outside of IT. Who is truly available to do what?
4. Vendor providing qualified resources. Experienced and trained people who are capable of mapping the capabilities of a product to the client’s goals while addressing the unique characteristics of a client’s environment.
5. Evolving project scope and requirements. May impact project approval and re-approval, which leads to idle time for resources while decisions are made.
6. The lack of early determination of product fit ( i.e., usability,technical, response time) with the resources, processes and technology capabilities of the organization. Results in potential idle time as issues regarding product fit are resolved.

To speak in statistical terms, these are the factors (in my opinion) driving a good R-squared if we were to model this relationship. Your organizations may have other factors that may be “statistically significant” driving ineffectiveness. The other factors likely involve your organization’s competitive environment, financial situation, leadership styles, cultural norms, and a lack of standardization in resource roles, technology capabilities and processes.

HIStalk Interviews Jon Phillips, Managing Director of Healthcare Growth Partners

I like to do a high-level business update about the healthcare IT industry once or twice a year. My go-to guy is always Jon Phillips of Healthcare Growth Partners, LLC. Jon is careful with what he can and can’t say (unlike me, he won’t just gleefully blurt out sensitive information to the whole world) and if you check his track record from previous interviews here, he’s done very well in his analysis and prognostications. I always enjoy chatting with Jon and appreciate his taking time to share his thoughts with HIStalk.

Characterize the M&A market so far this year.

This year, we’re looking at well ahead of recent years in number of transactions even than the markets of recent years, which have been pretty active. What we’re seeing is activity in the sub-200 million dollar range. You haven’t seen much in huge deals going on, but seeing a lot in the middle market and sub-middle market. That bodes well for continued strong M&A activity in the space over months and years to come.

The big difference this year, and there are probably three that I would consider somewhat bellwether transactions or maybe four, is where you have financial sponsors making significant plays into the healthcare IT space. One of those, obviously, is Francisco Partners acquiring Dairyland. Two is Battery Ventures acquiring Quovadx. Three is Vista acquiring Sunquest, Four is potentially Insight and the Bessemer guys acquiring Netsmart, and five could be Primus acquiring HMS.

You’ve had a lot of financial sponsor activity in the healthcare IT space this year. That means a couple of things going forward. I think that these companies under new ownership are going to see some shifts in strategy. Not all of them, but some of them are certainly going to see shifts in strategy.

Take Sunquest, for example. Now that the CPR piece has been decoupled and Sunquest has been pulled out of Misys, all of a sudden you have a business that looks very different than it did six months ago. The growth opportunities are different. You have an organization that most likely will look to acquire new assets to augment their existing position and to grow in new ways.

For each of these financial sponsor deals, you’re going to see aspects of that. They may seem like small changes at first, but over time, you’ll see more and more. Quovadx bought Healthvision. My bet is that they’ll look to buy other things as they go forward. I think you’ll see acquisition activity and interest from these new kids on the block.

The pressure that will put on the other strategic players in the market, the traditional acquirers of choice like McKesson and Cerner and GE, they’ll start seeing more competition in situations where they’re looking to buy things. If you’re a small company, it’s great for you, because instead of having one or two people to talk to, now you have a lot of people to talk to. A small company can be more bullish about exit opportunities than you’ve been able to for quite a long time.

What’s hot and not in healthcare IT?

If we went back three months before the dislocation of the credit markets, I would have said that the hot opportunities are companies that are meaningful size with strong EBIDTA performance and a conservative investment platform for investment sponsors. Dairyland, Sunquest, HMS – organizations like that four months ago were on fire. You’ve seen a little bit of a slowdown because sponsors can’t put as much debt on them as they’ve been able to earlier in the year. There still will be a market for them because when a company gets to the 30 to 50 million dollar size with strong EBIDTA performance, but you’ll see some compression in the value that people can put forward on them.

In terms of what I see as hot, if you look at where the venture investment is going into, I’d drop it in three categories and there’s not a lot of change. There’s still a lot of interest in revenue cycle. Part of the challenge is defining what revenue cycle is. There’s a lot of interest in solutions that address revenue cycle challenges. More financings will be announced of companies in technology business and services businesses that are focused on fixing bits and pieces of the revenue cycle. The large majority of them fix bits and pieces. You don’t have anybody who’s going soup to nuts. Still, those point solutions can still deliver a lot of value to customers and that’s what’s driving investment VCs.

The other areas with a little more froth in the market come back to some things that are geared toward consumer-facing solutions, things that help manage information or care in consumer-directed or higher deductible type health plan environments. There’s some strong interest there.

Others get back to clinical content and clinician collaboration tools. Figuring out different ways for clinicians to work together and to exchange thoughts and ideas and being able to capture and then present back out the resident knowledge. That’s another area that’s pretty hot.

One that I’ve heard more about, and it will be interesting in how it plays out, is the whole remote care, telemedicine, home monitoring, and different ways of to deliver care into non-institutional environments. I’d stay that’s still a little bit earlier on in terms of the froth, but you’re starting to see people get more excited about that.

What do you think about Health 2.0?

I always tend to be a little bit skeptical of buzzwords. Some of the solutions that are out there, like the clinical content solutions that I was talking about, there are some really cool things that people are working on, When you think about the applicability of these technologies, or not even technologies but business models and care models, to the existing healthcare environment – you start getting pretty excited about that. Just different ways to give people a platform to work together and access knowledge that they wouldn’t otherwise be able to access.

We’re all in this to try to improve healthcare overall. You gotta think that by bringing more of that knowledge to bear, you’re going to be able to improve healthcare overall. I still think there’s a lot of noise around it and I’m not sure how all the business models will play out, but it’s definitely exciting.

We are seeing a lot activity on the interoperability and portal side. I’ve been a big fan for a long time. I’ve never run a hospital IT department, but solutions that let me manage my application migration myself on my schedule, not being forced to make changes because of interoperability requirements, those types of solutions strike me as being able to bring a lot of value. I characterize those as different aspects of Health 2.0 solutions that are clearly provider-facing, not consumer-facing, but you recognize that there’s a lot of data and information that’s already out there and tools that help you access that. They’re going to drive improved outcomes. It’s not necessarily a direct causation relationship, but the more information you have … think about clinicians. They are very smart people. Give them more information and tools to work with and they’ll use that and you’ll see that in healthier patients and better outcomes.

Private equity has gone crazy since we talked last in January. Explain how it works and how it has affected the industry.

Different private equity funds are going to have different approaches to how they like to build businesses. Some like to buy things cheap and fix them. Some buy pretty good companies and make them a little bit better. Some buy really good companies and help them be really good on a larger scale. So, you have these different approaches to the private equity marketplace.

Funds have acquired businesses in the healthcare IT space. Their focus is to generate a return in a reasonable timeframe. They may be willing to have a longer-term hold, longer than two or three years. Francisco Partners turned around their Lynx investment very quickly on a relative basis, but the investment was performing so well that it was the right time to do it and they got an incredible outcome from Picis on that exit.

These guys have made investments and the way they will make money is by really two ways. One is organic growth, the other is inorganic growth. They can augment those returns because they put debt on the company to start off and get leverage on their investment. But, the reality is that these guys need to figure out how to grow these businesses to get the kinds of returns they want to get. Companies that may have been a little more passive historically will probably get more aggressive in management and personality.

The direction for these companies is to be more aggressive toward growth. You also will see ongoing acquisition activity, especially in companies that are under $50 million in revenue, as these businesses look to add on pieces and capability so that they can take their organic growth rate, say 10 or 12%, and augment that with acquisitions and move that up to 20 or 25%. That really helps them get the returns they want to get.

At the end of the day, to get the returns they need, have to have some kind of exit. It can be an IPO, like athena. They can sell to strategic, like Francisco Partners selling Lynx to Picis for a strategic exit. Or, they can sell to another private equity firm. They have different approaches and sizes, so a smaller fund can always grow a business up and then sell it to a bigger fund. What you’ll see is a good amount of activity as these businesses position themselves for growth. Then will see those folks making the call to find a bigger home and see them making those decisions as well.

What’s the track record of private equity owners with respect to making R&D investments, keeping customers happy, and not flipping the company at the first opportunity?

I think some of the private equity folks will actually be better owners than the historical ownership, not to knock the historical ownership. The private equity owners are going to be very focused on how to grow the business. You can go buy stuff, but you also have to be able to sell more to new and existing customers. These guys are smart enough to realize that you can’t sell stuff to customers who don’t aren’t happy with what you’re giving them.

I’ve had conversations with a number of folks involved in both investors and management of these companies, and what you’re hearing about is a renewed level of focus on customers. Customers can actually be better off. When you think about it, when a strategic acquirer buys a business that’s in the same line of business of something they already have, one of those customer sets will have a migration path. They won’t want to support both customers on different platforms indefinitely. A strategic acquirer will have to manage a customer transition.

The financial acquirer wants that customer to be happy and to buy more things from me so that I can both grow in terms of selling new stuff, and on the maintenance side, I don’t have people who say they don’t want to fool with me any more and I’ll find another vendor because your product is behind and you’re not giving me decent service and a reason to stick. My argument would actually that these private equity owners can result in good things for customers.

The folks that will have the toughest time are organizations that have gotten used to operating in a certain way. You have folks coming from outside of healthcare IT, and some ways that’s good and in some ways that’s bad. Healthcare IT as a market has a lot of very unique characteristics. If you don’t understand those characteristics, you can really fall flat on your face.

There are some evolutions have occurred in other IT markets that haven’t hit healthcare yet. Some will never hit healthcare, some of them will hit healthcare and some of these folks bringing some outside perspective can bring value by saying, “This is how it played out in Market X.”  If you think about your business in different ways as a vendor, you might find ways to make customers happier and grow your business.

So I think that for customers overall in the near- and mid-term, it’s a good thing. The downside is the next round of exits, because you know they’re going to sell at some point. You hope they become strong enough when they do get sold, they’re not getting sold into a situation where somebody’s just buying them for the footprint and moving you off that system and onto something else.

Give me a grade for each of these publicly traded companies in terms of market share, image, management, and return on shareholder equity:

McKesson

In terms of market share, they’re absolutely getting an A because of their footprint. In terms of customer retention, I’m not sure what grade I’d assign, but what I’m hearing more of is that they’re having some customer losses. Historically, McKesson has been unbelievable in being able to hang on to customers. Traditional wisdom is that they didn’t try to find that many new customers. They weren’t trying to fight the ground war in getting new business hospital by hospital. I hear they’re starting to do more of that with some of their new capabilities that they have on board.

The Awarix deal that the did this summer … that they’re getting pretty aggressive in using that as an entry point. Awarix is a workflow tool for patient management hospital-wide, so it pulls information from disparate systems and presents it on flat screens that you have around the house. At a glance, you can understand things about census, room availability, where the bottlenecks are. It’s a patient throughput tool, very cool. McKesson is using that to push into new hospitals. They haven’t done a lot of that, so I’d give them an A in terms of what I’ve heard on that front. I’d probably give them a B in terms of customer retention because they’re losing more than they have in the past.

Eclipsys

At this point, I’d give them a B overall. They would agree that it’s taken them a little longer than they expected to right the ship. But, I also think that they still occupy a pretty interesting position in the market. They have strong capabilities. Organizationally, they’ve made the changes they needed to make to push things forward. I’d almost give them an incomplete. The judgment is still out.

Cerner

I still rate Cerner as being an A overall. Everybody you talk to, you ask them who frightens them in the marketplace, and everybody’s going to say Cerner. People can throw stones at different parts of their products and capabilities, but the reality is that Cerner, for better or worse, has defined the hospital information system landscape in a way that’s favorable to them.

Cerner’s question going forward comes back to where do you find growth going forward? When you’ve built up to be as big as they are, where do you go? I would expect that they wrestle with that internally. I’d give Cerner an A. Everybody knows about them, even outside of healthcare IT. They’re still the company to beat.

GE Healthcare

I’m going to stick with GE at a B-. I think they’re getting their arms around the assets they have, but every time they get their arms around the assets they have, they go out and buy something else, like Dynamic. When you look at where they fit, I’ve certainly heard good things about product development, but broadly I don’t feel like they’ve taken advantage of the footprint as well as they could have.

They have this incredibly strong brand, they’ve bought a lot of companies, but I would argue that, of the companies they bought, I don’t know how many you’d say were better off for having been bought by them. You can’t go through the list and say, wow, they bought that company and they really turned it into a massive business. You saw that on occasion, but they haven’t done a great job at taking advantage of the pieces they’ve put together.

Perot

I know less about them, but I would say that I’ve been surprised at some of the things they’ve done. I’d probably put them, honestly, closer to a B- or C. They’ve bought some things, but then lost one of the big contracts recently. I understand why people are in the outsourcing business because there’s huge opportunity there, but I haven’t heard that many, if any real success stories, in outsourcing. It’s an interesting thought, but then in practice, it just doesn’t seem to work that wall. It comes down to how different than other industries healthcare is, with a more complex mix of stakeholders. Aside of a few case studies, I don’t that they have a lot of folks saying, “Wow, I’m ecstatic about my outsourcing vendor.”

Quality Systems

They continue to stick to their knitting and I think they’re doing really well. I’d give them an A for focus. Anecdotally, I would give them somewhere between a B and C for delivery. I don’t know that that’s their fault, but they have so much opportunity out there that it’s tough to deliver.

The biggest risk Quality Systems and Allscripts and eClincalWorks and folks like that, that the more successful you are on the sales side, the more risk you’re taking on because you’re signing people up and it will take time to implement them. The longer that delays, you start digging a hole for yourself. It’s hard to argue that they’re doing the wrong thing based on the business they’re doing. From customer perspective, I get a little nervous about how long I’ll have to wait to get my system.

Sage Healthcare

I follow them a little bit. I think they’re probably a C to a D. Not through all the fault of their own. They stepped into a tough situation. They’re an example of an organization that stepped into healthcare most likely thinking it had some real similarities to other small and medium business, and they’re finding that the physician business is a challenging market.

Medical Manager had a great footprint, but those customers didn’t get a lot of care and feeding. When customers aren’t expressly unhappy but at least not happy and there’s a technological inflection point like the EMR hitting your sector, you’re in trouble. Your customers are going to go and you’ll lose more than you keep. That’s what they’re running into.

Misys

I think their new focus is good. I’d give them a B with little bit of an upward trend. They have this great asset in terms of the physician installed base. They just need to make sure they don’t run into the same issue that Sage is running into. If they can keep their customers happy enough so they don’t see them walking away. As customers go through technology replacement cycle, I want to make sure I’m on the winning end of a disproportionate share of my customers as they make those choices. They’ve got a fair amount of risk in front of them, but the focusing will help them out.

Mediware

I thought it was good to seem them start to focus more. The real question is, can they really figure out how to get some growth back? They have some interesting assets, but have to put them on a C on growth side until the most recent quarter. It’s good to see that most recent deal they did was focusing back on blood bank. It’s a good thing to reinforce what you’re good at and they’re good at that. They have an upward trend in front of them, but the jury is out.

Allscripts

Boy, up until the most recent quarter, I probably would have tagged them with an A based on what I was hearing in the marketplace. They were going a great job in getting big wins and were a really tough competitor. That doesn’t change with one quarter’s results, but you get a little concerned when a company operating in this great sector of healthcare stumbles. You wonder, is it due to growing pains, and if so, then look at them getting whacked 20% on stock price, then buying that’s a great buying opportunity. Otherwise, if it’s something fundamental, you get a little nervous. I’d probably give them a B, but I’d keep an eye on them because it could be opportunity to get in at the right price, but you have to see if the quarter was an aberration and not a trend.

Siemens

I’d give them a C. You get the sense that they’re buzzing around a lot, but you don’t get the sense that much is happening. They’ll have to continue to wrestle with whether this is a market they’re committed to long term. The answer has consistently been yes, but you keep asking the question because you’re not seeing them just rip it in the marketplace.

What do you think about big acquirers like InfoLogix, Nuance, and MedAssets?

I don’t know much about InfoLogix.

Nuance is really focused on strategically to be willing to be aggressive to build out a strong position. As a banker, you love to see that, but being a strategist as well, you wonder how all the pieces fit together at the end of the day.

MedAssets is especially interesting to me because they’re really a non-traditional player. Given the fact that they’re going public and they’re going to have lots of money and lots of margin and footprint, they could be a really big competitor for folks. I think it’s just a question of what they want to do. Do they want to focus on revenue cycle, or get into broader information systems in hospitals?

Given that they can touch so many hospitals, if I’m sitting in the competitive intelligence department of McKesson or Cerner or one of those places, I’d keep a very close eye on MedAssets. I’d want to know what those guys are doing. They’ve been pretty creative and can they certainly could continue to be creative.

In terms of other players, you’re going to see more and more offshore organizations looking to buy entry into the US market. Indian companies and other Asian organizations looking to take advantage of the labor force that they have and looking at the US market and trying to find targets that have a labor component that they could offshore.

When you think about situations with labor requirements, where you have systems that you can deploy that have labor associated with them. Revenue cycle is a good example of this. You can put the technology in place, but if you don’t have people to run after the claims or other aspects of it, you’re leaving money on the table. I think what you will see is a continued push by offshore organizations to find US targets where they can get some of that offshore arbitrage.

Are Microsoft and Google serious about healthcare or posers?

They’re serious about it, but I also think that they consistently underestimate the complexity of the market. A lot of people do. Microsoft has certainly done some interesting things with the businesses they’ve bought in the space, but they have to figure out where they’re going to fit and who they want to be. Are they going to be an enabler or in the application space? You look at them and they’ve got brand and reach, so they should be able to do things in healthcare.

I tend not to get too excited about some of the big healthcare initiatives these guys put out there. On the PHR side, I spend a lot of time around PHR businesses. It would be great if everybody had a personal health record and they all do it with Microsoft HealthVault, but you think through the challenges of how you get information in there. You don’t want to type it in, but because of privacy issues, you don’t want to have someone do it for you because who knows where the information will end up. You have challenges on the personal side of healthcare that won’t be resolved for awhile. For Microsoft and Google, I think they absolutely have huge opportunities and they recognize there’s a lot of money to be made in the space, but they will have to go through a bunch of iterations to get there.

There were rumors going around that Google was going to buy WebMD. Let’s say they did. What does that really do? How many people do you know who are using WebMD for more than a basic reference tool? The consumer market is tough. You haven’t had people have a lot of success there for a reason. As fragmented and challenging as the provider market is, it’s far simpler than consumer side.

If someone wanted to invest in early-stage companies but doesn’t have the $1 million it takes to be an accredited investor, what are their options?

It tends to be pretty tough. To get into a private equity fund, you must be accredited, and even then it can be pretty tough to get into private equity funds. The other part, in terms of direct investing, you still have the issue of being accredited.

I spend a lot of time thinking about that. One of the great opportunities in this space is that there’s such grassroots knowledge out there that it would be great to capture that and to let people invest and to be able to get return for the fact that they know what’s going on. Mechanically, it’s tough.

One of the challenges is that, in the early stage of healthcare IT investing, it’s a pretty small universe of funds that will do that. You and I know some of the characteristics that will make these small companies successful, but from an investor perspective, you have a whole raft of risks. If you’re not living and breathing healthcare technology, you’re not comfortable with a lot of those risks. You don’t see a lot of funds that have made plays in early stage healthcare technology because a lot of them made bad investments and lost money. It’s hard to find funds that are interested in doing that, much less putting your own money to work.

If I can figure that out, I’ll let you know, because I think there’s a great opportunity there in working with early stage companies. It’s not formulaic, but there’s a lot of common problems companies have. We see it in our client base. The challenges aren’t that different between companies. So there’s some benefit you can add just having that knowledge, saying let’s figure out how to apply it and help those companies grow and the best way to do that is as an investor.

How about the practice management market? Any projected winners?

I still think on the practice management side that you’ll continue to see a divergence, guys who will be software-focused and those will be services-focused. So not just services in terms of the subscription model for software, but bringing a broader set of services to the physician practice.

Take athena vs. Quality Systems. Athena uses a lot of technology and maybe they’re a technology company, but they’re really providing services, whereas Quality Systems is a technology company. In terms of who will win, I come back to that scale is incredibly important in the physician market. There are a lot of companies that have 200 or 500 docs, but you have over 200,000 practices. It can be a high cost of sales to go after those practices and try to convert them. Scale will be a big differentiator. Product will continue to differentiate, but a bigger company with a weaker product will still probably have a leg up over a smaller company with the best product out there.

Do you still like Teletracking, DR Systems, and the handheld vendors?

I do. When I come across a company that is bringing a fresh perspective and making money while they’re doing it, I love to see early stage companies that don’t have a lot of revenue that have cool technology because some of those guys are going to make it. The difference between making and not making it is picking the right strategy.

When I look around, I’m still a fan of the privately held businesses that keep plugging along and doing their thing, focusing on being the absolute best at what they do and not necessarily saying they have to do everything for everybody. Lots of companies that fall into that category. Those are businesses that you like to be around. You go through the KLAS rankings and see how many companies are out there and how many of decent size with really happy customers. That’s pretty cool. If you look at the top-ranked vendors, you get pretty excited when you see them serving customers well and growing their business and making money.

Instead of saying I like specific kinds of companies, I like companies that have strong technology and really happy customers who are really using the product. There are a lot of technologies out there where they get a couple of customers who aren’t really using the product. All the stuff we’re trying to change broadly – if people won’t use the technology, it’s still worthless.

What is athenahealth’s IPO telling the market?

To people who are either owners or employees of healthcare businesses, the capital markets are pretty interested in stories that help them. Jim Cramer said he’s a fan of any company that addresses the cost problem of healthcare. That’s a pretty blanket statement and a lot of people believe that. The stock came out at 18 and is over 40 today. Athena is trading with the expectation that it’s an option on improving efficiency in healthcare.

It’s nearly impossible to justify that price based on the fundamental performance of the business today. But, if you look forward, athena is a leader in a market that has a massive amount of opportunity, and as such, people are saying they’d rather in invest in Quality Systems in 2001 than in 2007. If you can communicate your business model and deliver numbers, there’s money to be had to fund it.

What’s the best M&A deal of the year so far from the buyer’s perspective?

I would probably say that the best one for the buyer is the McKesson Awarix deal. Awarix certainly wasn’t a $100 million business when they bought it, revenue-wise. McKesson was willing to make a strategic change in terms of what they were looking to do. They’re effectively rapidly going to market with that. It could be the most transformative and impactful of the deals.

What other industry segments are going downhill and likely to take some companies with them?

I think you’ll see a shakeout on the physician software side. I don’t think the segment is going downhill, but will see a shakeout there with all those CCHIT-certified vendors. You haven’t seen much consolidation there in a long time.

You’ll see that in the RIS-PACS marketplace. The aggregate enterprise value of Merge, AMICAS, and Emageon is less than $200 million. Each of them were valued at multiples of that not that long ago. Some of it’s the impact of the DRA, others because of company-specific things. A lot of people are still buying in that sector, but those guys have had a rough road. AMICAS is turning the corner, Emageon had a rough quarter. Merge is caught in challenges. The sector has been challenging, but it can’t be that challenging since GE bought Dynamic.

What changes would you predict for the upcoming year?

I think you will see sharper competition for new customers and for holding on to existing customers. It’s always been competitive and a highly fragmented market with a lot of small and large companies that run around. You can have a hospital systems vendor that can really make a go of it with three or four hospitals that they sign up from the start and bootstrap from there.

I think you’ll see a paradigm battle between best of breed and enterprise continue and probably heat up. Since so many hospitals have made large scale systems decisions and picked their big player, you will see a lot of fighting to capture the IT dollars around that big investment. The private equity investment … some companies that might have been a little more laid back will have pressure ramped up to deliver growth and profit. From a customer perspective, you might find that this next couple of years is a good time to be a customer, not that you didn’t have people fighting for your business before, but they’ll fight even harder.

I think you will see more of a focus on getting value from IT investments already in place. You hear a lot about healthcare technology investments, “We bought the system, but it’s not delivering even the soft ROI that we justified the investment with.”

This is part of why you’re seeing consolidation on the consulting side. People are realizing that consulting organizations are they’re bringing value in getting systems in place and some specialty firms actually help out with the adoption. That will be a bigger and bigger thing. If I’ve spent seen or eight figures on IT investment and it’s not being used, I have to figure out how to get people to use it. I can’t just throw it away and start over.

Given the issue with bond insurance companies, I think you will see capital constraints because of capital markets and operating pressure because of reimbursement trends from third-party payers and self-pay. You must be more efficient with the resources that you have.

The Huffington Post is a blog that raised $10 million in VC money. Is this a sign that exuberance is irrational enough for me to take HIStalk public?

I think if you took HIStalk public, you could expect a valuation that would be at a significant premium to the athena valuation. I would argue that you could go ahead and start interviewing bankers for this. I would say you’re worth somewhere around two billion dollars. [laughs] I’ll get a call from Jon Bush after this, asking, “Hey, are you saying I’m overvalued?”

People focus on return. In terms of what you’re building, you’re not just grabbing eyeballs and clicks. If people are looking at the information and the content that you’re bringing together … and this is in all seriousness … and you’re capturing decision-makers as they’re looking it and shaping their decisions, there’s a lot of value in that. Seriously.

You’re jumping off the $2 billion thing, but there’s a lot of value in the fact that you’ve got an audience who are really influential in the healthcare space. The challenge that you have … you’ve done a great job of monetizing it, because you’ve done a great job balancing it between making money without compromising the integrity of the commentary. The challenge in putting venture money in … I’m not saying that you’d ever compromise the integrity … is that the pressure goes up to find more revenue and be able to continue to grow that revenue line.

I think you’re doing the right thing the way you’re doing it, but I tell you what, if somebody comes along and offers you $10 million for it, you probably should think pretty hard about it. [laughs]

Monday Morning Update 11/12/07

From Red: “Re: KUMED. Cerner should be getting the last laugh with EPIC and KUMED. KUMED is going live with EPIC on Sunday night. However, they have apparently killed their budget for support staff. Their project manager (must be a Cerner lover) is putting the EPIC kids up at a 40-something buck a night motel. Judy and Carl heard and said that customers can make their employees stay anywhere they want. They should just suggest putting a whole brood in one room like a college slumber party- that would save even more.” Send me a picture!

From B: “Re: Epic. Epic doesn’t deal. If Cedars is convinced Epic is the way to go, this really won’t hurt them at all. This all goes back to Epic’s corporate philosophy concept, i.e. stay private, don’t do deals, and be frugal (a big reason for the presentation on the math behind building the new facility at UGM).The story goes that one of the first customers we signed bartered for a pretty good deal. A short while later, another organization didn’t barter with us at all and took the worse price. Judy didn’t think this was fair and changed the policy to only offer deals to regional (WI), research/children’s hospitals, and hospitals that serve the indigent.” I will add this to Mr. HIStalk’s hard-knocks MBA curriculum for the benefit of Cerner, Eclipsys, McKesson, and others: if your competitor can charge whatever they want and still beat you, your product needs work.

From Pogue: “Re: HIMSS. How about a daily report on booth giveaways? Who has the nicest toy to take back home to the kids, who has the single worst item you’d NEVER put on display on your desk, who has the giveaway most seen being played with as folks saunter the aisles, etc. Now THAT would be some real exhibit floor value!!” I like it. Maybe I’ll collect everything they put out and run photos for comparison (and then leave it all in the room for the maid to toss). I could get a Trinket Update up Monday so folks would know where to cruise the rest of the week.

From The PACS Designer: “Re: OpenMRS. There’s a new movement internationally to get medical records developed for third world countries and its called Open Medical Record System, or OpenMRS. The World Health Organization (WHO), the Centers for Disease Control (CDC), and others are involved, so there is some serious development work going on. They are looking for volunteers to speed the development effort.” Link 1, Link 2.

Roger Maduro sent over a very nice electronic newsletter he writes called VistA and Open Healthcare News. Topics like Medsphere and the VA’s Cerner decision are important, so you might want to sign up for a free subscription. Just send an e-mail to subscribe@lxis.com.

Speaking of open source, the new VP of open source at Misys responds to a Scott Shreeve posting about Misys Connect. See if you can interpret Scott’s closely guarded position based on words I pulled from his piece: perverse, land grab, confusion, silly, desperation. In his reply, the Misys guy says that Connect is live at only two sites (and this was to be Tom Skelton’s bet-the-bank company strategy?) and, basically, that it was open sourced because there were few customers with Misys products on both ends to care. I bet the community is really lining up to work free on that.

Scott also comments on the VA’s replacement of VistA lab with Cerner. That inspired me to put a new poll to your right: should the VA keep VistA, rewrite it, or replace it with commercial systems?

Photo: Associated Press

Veterans Day is Sunday, November 11.

A reader I’ll leave anonymous asked for an opinion. The customer had complained that a vendor’s app requires a 1280×1024 display resolution, limiting the ability to use it efficiently on tablets (they don’t provide vertical scroll bars, either) and therefore it requires dedicated workstations. The vendor replied that while that was true, the customer could use unsupported third party screen changer apps that are known to work. The customer’s question: is that an acceptable answer? Opinions welcome, but here’s mine: yes. The vendor suggested a third-party solution that supposedly works, so I’d try that. It would be nice to add the scroll bars, though (sounds simple). I always ask this question: would most customers be willing to give up other enhancements and fixes to get that change instead? If not, then it isn’t in the vendor’s best interest to develop it, other than in a competition-free world. I wish it weren’t true, but vendors are in the business of selling new systems and keeping current customers from defecting. If a change doesn’t contribute toward either, it shouldn’t be done.

Netscape co-founder and serial entrepreneur Mark Andreessen donates $27.5 million for a new ED at Stanford. Ever notice that celebrities and rich folks always put their money into hospitals that don’t need it, i.e. the kind of swanky places in which they themselves might inhabit an off-limits VIP suite? Doesn’t anyone care about tiny, struggling backwater hospitals taking care of average Americans? Certainly their largesse would go much further there. From its latest publicly available tax forms, Stanford Hospital made a $132 million profit in 2005, paid its CIO $465K, paid Perot $38 million to run IT, gave an ad agency $2 million for advertising, and paid the CEO $1.2 million. My heartstrings are untugged.

Sales: North Mississippi Health, Eclipsys Sunrise. Carolinas Medical Center-NorthEast, Allscripts Healthmatics ED.

University of North Carolina Health Care gets coverage on local TV for its use of an unnamed system that allows referring physicians to receive electronic updates when their patients are admitted and followed by hospitalists.

A University of Toledo pharmacology professor starts a company that puts pharmacists in medical practices to follow up with diabetics. He’s working with a vendor to develop a custom EMR application.

RXHub proudly announces (its words) that it has paid money to Newt Gingricht’s for-profit company. Why is that something to be proud of?

Latest non-news headline: CCHIT’s chairman is happy with CCHIT’s work.

Odd hospital lawsuit: a Kentucky hospital is sued for failing to render proper care to a woman bitten by a rattlesnake during an illegal snake-handling church service.

People in Buffalo are thrilled that their Congressmen have brought the US taxpayer bacon home. “The House has approved a spending bill for labor and health programs and military construction that includes a treasure trove of earmarks for Western New York — including projects that prompted Republican Reps. Thomas M. Reynolds and Randy Kuhl to buck the White House and support it. Nearly $4 million would go to local hospitals and agencies in the bill, which faces an uncertain future because President Bush is threatening to veto it.” Well, at least those politicians are freely spending dollars that will be worth next to nothing soon enough, also their doing. Expect a mammoth Canadian influx to Florida this winter since the once-mighty US dollar now buys only 94 cents Canadian. We’ll be like Southerners wheelbarrowing Confederate money across the border to Montreal to afford poutine.

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