News 8/17/07

From John Winger: “Re: Ingenix. Ingenix acquired LighthouseMD. Not sure when it will hit the wire, but I hear it’s public within Ingenix.” Thanks for that info. Does it seem like just about every semi-cool, little-known physician EMR vendor is getting bought or buying someone else? I admit I’m mostly a hospital guy, but I’ve never heard of most of these companies.

From Reggie Hammond: “Re: Misys. I hear that Misys is looking to do some sort of partnership with e-MDs. Misys wants to resell e-MD’s new ASP software. I think it makes sense because Misys has been wanting a lower-end ASP integrated PM/EMR option and the Amicore effort failed. Look for Kelley Schudy (former head of Physician System sales) to oversee the transition and then leave. Also, speaking of leaving Misys, three HR VPs have announced their resignation, though it is unclear if any/all will leave now or over the next few months.” Reselling a much hotter company’s software? How far the mighty have fallen.

From Billy Bear: “Re: Misys. After having been pared down to the bone to make the books look good for the Vista Equity buyout, Tucson support staff have been told the deal is contingent on their reducing the (large) volume of outstanding support calls. That may be true, but it’s more likely current management trying to shift the blame.” I doubt the deal hinges on it, although incentives may be in place. There’s nothing that keeps already antsy customers happier than demanding that terrified support reps prematurely close their support tickets.

From Cheryl: “Re: Google Health. Here are screen shots.” Link. Not much to look at. I bet it’s got a good personality.

I read an interesting editorial about Citrix’s purchase of virtualization software company XenSource for $500 million. Aimed at private equity guys, it argues that the VC model is less successful than incubating a company to begin with and (surprisingly and arguably) less risky. That’s an interesting thought since most companies jump in big only in later rounds. They also mention that Citrix probably wishes it had latched on before competitor VMWare did its own blockbuster IPO this week ($1.1. billion raised – priced at $29, now nearly double that).

I noticed that Lucida Healthcare IT has a new web page design. I know it’s geeky to watch for that kind of stuff, but it fascinates me. I think their current consultant openings page is new – lots of Meditech, Epic, clinicals, imaging, etc. They also offer a Personal Career Advisor and a Star Service Concierge Specialist to help consultants keep everything running smoothly, locating engagements, and structuring compensation. The site lists the engagement options that Bruce Cerullo talked about when I interviewed him.

And speaking of cool new sites, eScription has one, too. Will companies have to update yearly to keep up with new design styles, kind of like buying a new car every year? It’s looking that way, but the Web 2.0 stuff was the first big change in awhile.

SureScripts joins NACDS, NCPA, AAFP, MGMA, BCBS, and Intel to form The Center for Improving Medication Management. It will perform research on using electronic linking technologies (like that of SureScripts, let’s say) to improve prescribing, dispensing, and using medications as well as measuring outcomes. They’re talking about bringing in RAND for a study. If they can keep it non-proprietary, they could do some good work. E-prescribing and electronically managed refills will bring patient compliance issues (of which there are many) out of the closet.

Gerard Dab, CEO of VisualMED, is interviewed by the Wall Street Reporter. I liked their product when I saw it many years ago and I still think they’re kind of a cool company. I interviewed Gerard last year.

Barnet and Chase Farm Hospitals become the first London NHS facilities to go live on Cerner Millennium.

New executives at anesthesia software vendor DocuSys: Robert Watson, formerly of Concuity and Cerner, is named CEO. Joseph Heins is the new EVP/COO after previous stints at Eclipsys, Cerner, and Infoway. If you’re an up-and-comer suit, it’s obviously good to have worked at either Cerner or GE Healthcare since those folks are popping up everywhere. Does that mean we’ll end up with a boatload of companies just like those two?

Another former Eclipsyser, Noel Strong, is Mediware’s new CTO.

Google bundles Sun’s StarOffice in its Google Pack, meaning its price just went down from $70 to $0. I’ve used it (a little) and it’s a nice option when you otherwise have to pay for Office (like for your kid’s computer).

Transaction processor MedAvant announces Q2 numbers: revenue down slightly, EPS -$0.31 vs. -$0.14. That’s if I did the math right, since EPS wasn’t reported (I can see why).

The VA and DOD are issuing millions in healthcare IT contracts. The recipients aren’t surprising: Northrop Grumman and Booze Allen (oops, that’s Booz). Somehow noble-sounding government initiatives always end up meaning millions for SAIC, Accenture, BearingPoint, or all the other high-price, insider IT mercenaries out there. Not surprisingly, once their people are on the ground, the government never seems to find a way to dismiss them and do the work with its own employees.

Rodney Schutt, formerly of GE Healthcare, is named COO of Luminetx.

Siemens and Intel will co-develop an electronic blood banking system for Malaysia’s 334 hospitals.

Verus, the healthcare billing company that made itself a household name by allowing all kinds of data breaches involving its hospital clients, has shut down. Investors pulled their money and MedSeek has taken over some of its business. A spokersperson said it was really just one IT error that caused all the problems. The fifth hospital, Sky Lakes Medical Center (OR), announced a Verus-caused vulnerability today. You just know there’s some nerdy network engineer who screwed up and brought the whole company down in the process.

LA County supervisors vote unanimously to shut down Martin Luther King Jr.-Harbor Hospital (a.k.a. King-Drew, a.k.a medical cesspool). One supervisor said it best: “I don’t know how you’d be able to tell how stupid some of these people are. I mean when I read this, I can’t see how a nurse couldn’t mix medicine. I can’t see how she says, ‘I don’t know where to find this instrument.’ That is incomprehensible.” On the other hand, someone had to have hired that person and supervise them, so I’d blame the bosses. The closure plan is here (warning: PDF). Here’s the CMS report (warning: PDF).

Another flavor of medical tourism: US seniors are heading across the border to live in nursing homes in Mexico. And why not, for $1,300 a month? “Douglas gets a studio apartment, three meals a day, laundry and cleaning service, and 24-hour care from an attentive staff, many of whom speak English. She wakes up every morning next to a glimmering mountain lake, and the average annual high temperature is a toasty 79 degrees.” I’m ready to head there now. If they have broadband, I can write HIStalk from there while sipping Dos Equis and eating carnitas and flan. The ladies are pretty there, too, although Mrs. HIStalk wouldn’t find that a plus.

Windber Medical Center (PA) cuts its ties with Conemaugh Health System and goes independent. CEO and blogger Nick Jacobs goes public with a plea to get the word out about Windber, although they’ll need local exposure instead of national to survive. A reader suggested I interview him. I’m game. I’ll evaluate and brag on its IT function if it’s any good.

IBA Health finally surrenders to CompuGroup on its attempted takeover of iSoft.

Philips buys RIS vendor XIMIS, whose site doesn’t say who runs the company. I hate that crap. Is it embarrassing or something? I’m going to start critiquing HIT-related web sites. Would that be entertaining or would you glaze over?

CMS is offering Web-based education for doctors interested in implementing EMRs for their practices.

Internet trade association USIIA opines on healthcare IT. Recommendations: more broadband, physician incentives for EMR adoption, and anti-Net neutrality. I was going to see who its members are, but in a delicious irony, its site was down. Maybe some of us healthcare geeks should return the favor and criticize how they run their industry.

News, rumors, HIStalk government contracts: e-mail me.

Inga’s Update

Ethidium is a company I hadn’t heard of until earlier this year when Take Care Health Systems (a Walgreen’s subsidiary) implemented their clinical software in 16 of their clinics, all of which are located in retail pharmacies. Ethidium has a line of products that include an ASP-based EMR, a personal health record (PHR) option with patient portal, and medical decision making tools. Now Ethidium announces it has acquired exclusive ownership of VLink health information exchange from Vaceris, which will enable Ethidium to offer connectivity needed by RHIOs, IPAs, etc. VLink is currently implemented by the 1700+ doctor Genesis Physician Group IPA in Dallas (oh by the way in HealthVision’s backyard.) No word as to whether Genesis is looking to offer their doctors an option for the Ethidium EMR solutions, but you have to believe they would love to. About three years ago Genesis had secured preferred pricing A4 health Systems/ Allscripts, GE Medical Systems (Centricity) and NextGen but the rumors are that not too many physicians took advantage of the offerings. I think Ethidium will be an interesting company to watch over the next few months.

WiFiMed Holdings Co. of Atlanta has completed its acquisition of JMJ Technologies Inc. JMJ is the developer of the EMR product EncounterPro.

Blue Shield of California announces it will award $31 million in pay-for-performance bonuses to medical groups and IPAs that showed performance improvements.

Talk to Inga.

HIStalk Interviews Ken Creager, Sr. Dir. Strategic Markets, Meru Networks

A long-time reader whose background is clinical suggested I talk to the folks at Meru Networks. I figured it takes a lot to get a clinician excited about IT nuts-and-bolts stuff, so I was happy that Ken Creager, senior director of strategic markets for Meru, agreed to chat. I hear gripes regularly about wireless networks, even with the relatively modest demands placed on them. I was interested to learn more about what’s changed in the time since many hospitals put up their first 802.11b network. Thanks to Ken for the conversation.

Tell me about Meru Networks.

Meru has been in business since 2002. We produce a family of access points and controllers for mission-critical and life-critical environments. The company is headquartered in Sunnyvale, California, with operations in all of North America, Europe, Asia, and R&D in Bangalore, India. We’re not public so we don’t provide financial numbers, but we’re about 280 people, growing at a very rapid pace due to a lot of industry demand. We’re having a great time trying to respond to the needs and requirements of the field.

The lion’s share of our business is in the healthcare and education markets. In healthcare, we solve unique problems as a result of doing a lot of observation in the marketplace, getting assistance from people, and from our participation in HIMSS. We don’t always go in and talk to the technical people.

We look at the nurse as the integrator. If the technology is going to work, it has to be easy to use and functional to a nurse. If a nurse is using a PDA at the bedside, that person doesn’t really care if it’s the applicaton, the unit, or the wireless network if it fails. We work closely with our clients and our partners to make sure we’re very functional for the clinical staff in hospitals.

What’s the penetration of wireless networks in hospitals and how are they being used?

The actual penetration is close to 80%, but let’s clarify. Many of those deployments are first- or second-generation, with fat access points that are difficult to configure and lots of cost. They also tended to have been installed for a single application or department, like something radiology or oncology wanted to put in. It wasn’t pervasive until recently. Most hospitals report that they have some use of wireless, but it’s not pervasive.

What we see happening is an absolute explosion of applications. Go to HIMSS or trade shows and you’ll see applications and devices using wireless as a transport. There was a time when wireless was nice to have, like in the conference room. Today, it’s an integral part of the architecture and an enabler for taking care delivery to the bedside.

We spent a lot of time looking in hospitals and saw this snowball of applications coming at clinicians, but found that networks aren’t pervasive or are limited in their capacity and are failing. Those first implementations may have worked well for an application or two, but with 15 or 20, they are failing. Adoption of devices is not being as well-received as it could have been with a more robust network.

That has given us a window of opportunity to come in and show how our technology is differentiated in the marketplace. We have better coverage and performance and can prioritize traffic to assure application delivery. Let’s say we have a Wi-Fi based phone and we want to make sure that calls get through ahead of someone in the back room who’s Web surfing. We can inspect that traffic, prioritize it, and makes sure it gets through. We have quality of service built into both the upstream and downstream.

A great application of pervasive wireless that we have witnessed first-hand are nurse-type devices like Wi-Fi based phones or Vocera-type badges. You see clinicians walking the hall with those devices. We noticed they stopped walking. They told us it was because they had a good signal and stopped so they wouldn’t lose it. We’re in the mobility business and we asked whether that makes sense. We’ve seen areas where good coverage was marked on the floor with tape. That’s the pervasive element. Is if through the entire facility? Not yet today. We’re getting there.

Common problems in hospitals include dead zones, slowness, and overloaded access points. How does your technology address those problems?

Wireless runs on a series of channels, usually 1, 6, and 11. Access points have different channels and you roam between them, much like when you’re on the cell phone in your car. That inherently causes problems in your end device because it has to continually look to figure out which one of these guys it wants to talk to. At some point, it’s talking to two of them and has to decide how to hand off.

RF planning is required to determine how access points in a general area interfere with each other. Also, as devices move, they have to decide which way to go. If I’m trying to talk to two different access points to determine which is stronger, that’s taking time on the network. Our advantage is that we can put all our access points on a single channel. The end user device sees it as one big network.

There’s no handoff. We make that decision for the end device in our controller. If you’re walking between 15 access points, that entire campus may be on one channel and you’ll never know it’s happening. The advantage is a four to five times performance increase because you’re not asking questions where to go next. Also, it’s seamless between access points. The opportunity to drop a call or device is almost completely negated.

If you think about what’s happening with clinicians walking down the hallway and looking at vital signs on the laptop and they hit a dead zone, they’ve lost information. We take that away because our coverage is more pervasive. We have quality of service upstream and downstream and we guarantee delivery of those packets for critical devices like a patient monitor or voice call. We can assure the delivery of that piece of information.

This all plays into clinical adoption. We’ve seen the reports come out. In the 100 Most Wired, technology today is having a positive impact on health, safety, security, and mortality rates. Much of that’s due to the deployment of technology solving errors at the bedside, medical conflicts, wrong medications, those kinds of things.

Another key thing we find in hospitals is that they’re amass in assets – wheelchairs, infusion devices, phones. The biggest question is “where are they?” COWS and crash carts move to emergency situations, congregate around nursing stations, and then get pushed into the hallway. We can do some locationing with our management software that lets you determine where those devices are.

Because we’re able to do a single-channel architecture of the standard 12 channels, that gives you 11 available. You can stack channels like a stack of pancakes. You can segment your traffic. As an example, you could put voice traffic on Channel 1, data on Channel 6, and telemetry on Channel 11. That increases your capacity on the network and segments them. They can still talk to each other.

Because we don’t have channel conflicts, when you need more coverage or bandwidth, you don’t need more RF planning. You plug in a new access point, it figures out what’s around it, and it becomes part of the community. That’s a low cost of ownership.

Hospitals spend as much upfront with our competitors doing surveys and channel planning as they do on the actual product. We can almost eliminate that. You don’t need as many of our access points to get the same or better coverage as our competitors. The cost of an access point may be equivalent, but you don’t need as many.

When you look at a clinical environment and recognize that a critical care nurse will take 1,000 data points in a shift and there’s five or six of them trying to do something and they congregate, do they have the bandwidth to get their job done? As they move out on the floors, do they have the quality of connection to get their job done?

Also different is that we have an ability to create fairness in the networks. That offers us the ability to do backwards compatibility. You have the b-rated radios that operate at 11 megabits per second. The g-rated ones are at 54 megabits per second. If a guy comes in to your g-network area with a b device, everybody goes down the lowest common denominator. Everybody gets slowed down because of that guy.

We can give all users their full capacity at the same time. We can offer 802.11n megabits, but still allow g and b clients to work on the same network together. In many industries, but especially true in healthcare, devices stay in service for many years. They’re not going to rip out technology to replace the radio cards. That gives us an extensible architecture and investment protection for existing clients.

Describe 802.11n and what impact it will have on healthcare.

It’s the next generation of speed. It will give you six fold the bandwidth of 802.11g. There’s a lot of technical stuff around that, but from an end user perspective, you’re bringing true desktop wired speed to the wireless world.

Most connections to the desktop are 100 megabits. You’re going to have wireless signals that are three times as fast. If you’re building a new facility, do you need to put those wires in place? You can go to the all-wireless enterprise and have speeds faster than that of the wired world.

In healthcare, most of the devices we see are operating very well at b- and g-rated speeds. Ascom has a great g-rated phone purpose built for healthcare with messaging and made for clinicians. On your hip, the display is upside down so you can read it without using your hands. The next generation of phones will have n-rated radios, so you can have more of them out there.

The biggest impact will be in imaging and video. Today’s early generation networks don’t have the capability to take full-motion video or large images. In a shared PACS environment, you might need to look at large images in real time. 802.11 n will allow you to do that.

How important is wireless voice over IP to hospitals?

We’re seeing it as becoming a much bigger element. They view the network as being able to carry everything. We’re seeing dual-mode phones – cellular outside, Wi-Fi based inside. Doctors look like they have Batman utility belts with 15 pagers and devices. You will continue to see an explosive rate of devices coming down and then a convergence period. Blackberry is coming out with a dual-mode device.

Voice is becoming a much bigger element of these networks in healthcare. In many cases, it’s the driver for upgrades. Then, you get into, “What’s the quality of the call? Is it comparable to toll grade? If a bunch of users make calls, is the network degraded?” We have technology that protects the quality of those calls.

What patient care quality issues can result from ineffective wireless architecture?

Time. Let me go back to the nursing station to see what’s happening. If an application is readily available on a tablet PC, laptop, phone, or multi-use device, you’ll save time. The opportunity for errors is reduced. Where you find a low adoption rate of handheld devices and point of care by clinicians, you find higher error rates. Those have an impact on care delivery and quality of care.

If I’m a hospital CIO, why shouldn’t I just buy Cisco like I’ve always been doing?

Cisco has a great product. I used to work for them myself. But this technology is truly differentiated. When you look at a Cisco product, you have no single product in the top five. You’re not really getting best-of-breed in any segment.

We use Cisco products in our demos. We can make their wireless phones work better than they can because our wireless network is so robust. Our technology is extensible and backward-compatible. There are no forklift upgrades. Once you’re set up, you just stick an access point in the ceiling.

CIOs have multiple vendors and multiple levels of code. With us, you have one level of code that runs all controllers and access points. The controller code is broadcast out the access points. You set a corporate policy for HIPAA or JCAHO or whatever is required. Let’s say you allow a certain number of guests, but you have to keep them away from the business office and lab. You set those central policies and the access points come online, assume those rules, and apply them universally across the network however you’ve set it up. Once you’ve set it up, you don’t have to do it again.

We can also suppress rogue access points. Somebody runs down to Best Buy and buys a D-Link box and plugs it into the wall. Suddenly you have a new wireless hotspot with no security policies applied to it. Somebody in the parking lot has access to your network. We have rogue detection.  We determine it’s there and don’t let that person come in. We go one step further. Once we recognize that the access point is there and it starts to broadcast, we jam the signal. That keeps devices from taking time away polling the access point. I see that guy broadcasting, I’m going to jam the signal so the end devices never see it and can’t take up bandwidth.

How do you justify the cost of your technology to a hospital that already has a wireless network?

Does your existing wireless network have the capacity to deal with what’s coming? Most tell us no. People with a network in place for 18 to 24 months are having to replace it because of the applications coming. They have to put in an extensible one for the next speed or the technology required.

The advantage we have is that most have already come to the decision that something has to change. We come in and say, “We can solve a lot of these problems with coverage and speed and ROI and save you money as compared to the other vendors, and provide you a better of quality of service.” Our value proposition is strong. Clients are feeling the pain by finding low adoption rate by clinicians on new devices. The end user doesn’t know what’s behind it, it just doesn’t work. We try to build the most robust infrastructure at the lowest cost to make sure those applications work.

Cisco convinced HIMSS to create The Community for Connected Health, which seems to be a thinly disguised Cisco trade group that paid HIMSS for exclusive access to its members. Does that make it even harder to complete against the Goliath?

What’s interesting about that … they did that with HIMSS and had tried to do the same thing with the AMA, who pushed back and made Cisco take down some of their marketing. A week later, Cisco announced their endorsement by AHA. Everyone I’ve talked to on the client side and vendor side says this is an abuse of .org facilities and people. The industry is policing that themselves.

I’ve instructed my team to not even respond to those questions because it’s how Cisco markets today, defensively and protecting their ground. Frankly, I’ve talked to folks like yourself who view that as very offensive, “Cisco has infiltrated HIMSS and I can’t believe HIMSS any more.” I think the industry will self-police that. People who have drunk the Cisco Kool-Aid will buy it no matter what. For those wanting a best-in-class solution, I don’t think them doing that with HIMSS or AHA will influence them in making a purchasing decision.

Wi-Fi companies seem to have had mixed IPO success. Meru was considering IPO this year. What’s the most likely outcome?

We are going through a rapid growth spurt. We just tripled the size of our sales team. There have been some successful IPOs, some not so good, some consolidation. The opportunity for us to move forward and grow this company is excellent. There’s a lot of opportunity out there. We have a disruptive technology. I’m sure the company and its founders and its venture funding would like to see us go out. I’m not privy on whether it’s this year or next or whenever, but when it’s time and the market dynamics are correct, I’m sure we will go out.

Any final thoughts?

Our wireless technology is unique. We’re fully standards-based and we help drive a lot of those standards. We’re innovative in our technology. You’ll find that many if not all of our customers are raving fans of what we do. We have very large hospitals like University of Miami, Wake Forest, and St. Johns. We continue to add and grow in this market almost on a daily basis.

We’re something of a positive disruption. We’re getting a lot of positive write-ups and are getting attacked by people you’ve mentioned [laughs]. When we’ve reached the point we’re being attacked by Cisco, that means we’re a thorn in their side and are disrupting their business. That’s good thing.

The challenge is getting the word out. We’re a small company compared to Cisco. We only do wireless. Customers are benefiting financially. I’m happy with where we’re doing. We’re focusing not only on the IT buyer, but how the products are used by the clinical staff. As we well know, doctors walk in with a great application they found or something they use that they want you to support. We’ll see more and more of that. Having a network that is extensible and easy to add capacity to will have an amazing capacity on the IT staff of hospitals and the budget.

News 8/15/07

From John Winger: “Re: Ingenix and Healthia. I don’t see the fit. Healthia’s focus is professional services, primarily Epic implementations although they do other work at United. Not too surprising to me that their CFO would be here – I’ve seen their COO on site and just assumed it was related to consulting business development.”

From Jessica Bradford: “Re: Initiate. Anybody making any bets about why Initiate is going public? Could it be that Oracle is shopping for a strong partner for their healthcare EMPI business? God knows Oracle has bought enough companies recently that acquiring one more wouldn’t be beyond their business strategy. Or could IBM be the suitor? Inquiring minds would sure like to know ….” Maybe the CIA, the company’s investor, wants to bank some cash before the next election.

From The PACS Designer: “Re: RFID. TPD has been following the trend of incorporating radio frequency identification tags (RFID) in healthcare processes. It appears to make sense since there is so much equipment in hospitals and sometimes it can’t be found when needed. The RFID industry is expecting increased business the rest of this year and next year, according to a recent Frost and Sullivan Report, as the solution is finding its way into an increased number of institutions other than the traditional distribution channels. Since healthcare needs to improve efficiencies due to tight budgets, RFID makes sense, where knowing the location of valuable equipment can guarantee having the right equipment at the right time and place in such places as the OR and ED department. By having things handled more efficiently, institutions can cut down on new purchases and help the budgeting process.”

From Peter Smythe: “Re: HIMSS. Since you mentioned the amount McKesson’s paid for lobbyists this year, it might be interesting to see what HIMSS is paying for lobbying and advocacy, instead of using member dues and fees to help its membership. It seems that HIMSS has become what it professes to be against. The organization caters to vendors and spends money on the lobbyists instead of catering to and educating its membership. The number of almost daily HIMSS emails to members is bordering on spam, with the vast majority selling something. It might be that it has grown too large to fulfill its primary mission or it might be the leadership is more interested in personal recognition. HIMSS could take your lead and offer an RSS feed and brief weekly email that offers value.” They don’t put their 990 forms online that I can find. I’ll see if we can’t scare up a copy.

The Portland, OR city-wide RHIO (Health Data Exchange Group) is comatose and not expected to survive. Nobody wants to pay the $3.4 million needed this year or the $150K annual cost that each hospital would have to chip in. CIO Dick Gibson of Legacy Health was honest in saying that, in addition to the costs, hospitals would lose up to $10 million in those avoided duplicate tests that they still get paid for. Those involved can’t even reach consensus on why it’s tanking, which isn’t a good sign.

Good news from Sumter Hospital. The insurance company has agreed to replacement of the destroyed building. There’s work yet to be done, but that’s encouraging. Fundraising is underway to cover the $10 million shortfall.

Updates from Medicity from their newsletter: the Delaware Health Information Network (a Medicity client) received its state funding, despite earlier reports suggesting otherwise. Medicity’s Clinical Clearinghouse is mentioned, an ASP solution that routes information from hospital clinical systems to physician EMRs. There’s also a new version of ProAccess, 4.0.

Thanks to the readers who tipped me off early on the Perot acquisition of JJWild. HIStalk ran it first, of course, both as a rumor and as fact (that second part because a reader somehow found the announcement buried on a public Perot site even before the press release hit the wire). $89 million? Sweet. That’s quite a testament both to JJWild and to Meditech. Where else could you build a business worth that with one vendor package as your focus? Perot picks it up for 1x revenue, although that’s probably a good for a consulting outfit. FCG’s market cap is $247 million, which is just less than 1x revenue, but they’re a publicly traded company.

The KLAS Mid-Year Report ranks eScription’s EditScript software #1 in Transcription and Back-End Speech Recognition with a score of 90.74. That’s four years in a row.

Last reminder for now: the Brev+IT weekly newsletter comes only to those who sign up to your right. Also: I have some interviews coming up, but would like to do more with those on the provider side (informatics, IT leadership, hospital visionaries, etc.) If you’re interested and interesting, let me know.

McKesson’s Relay Health announces its NotifyRX product. It sends critical drug company announcements to pharmacies, such as recalls and packaging changes.

Google Health has been previewed to a few clinicians, some of whom spilled the beans. What it contains: a health profile, suggested treatments, drug interaction lookup, exercise regimens, pages for sharing information, prescription and appointment reminders, and provider directories. It had better be more exciting than it sounds since just about every starry eyed kid with web skills has come up with these ideas already. It may be more like a consumer magazine than an IT application and those always put me to sleep.

Irish wireless applications vendor Valentia Technologies will open an office in Dubai’s Healthcare City in November.

Merge Healthcare will restate revenue and faces delisting yet again after delaying financial reports after a review of accounting rules for maintenance revenue.

A senior diplomat in Korea’s Chinese embassy dies after receiving a Rocephin IV injection that a Chinese clinic gave him for a stomach ache (for some reason).

A big shareholder in Quality Systems, Inc. complains to the SEC over board governance. I didn’t realize that the company’s market cap is $1 billion, pretty much all it from the NextGen product, I assume. Founder Sheldon Razin’s shares are worth $98 million.

Workers at a hospital in Scotland are taking heat over their YouTube video “MRSA”, which features staff dressed like the Village People and singing altered lyrics to “YMCA”. The hospital is the third highest source of healthcare-related infections in Scotland, so we were not amused over there. I couldn’t find the video.

News, your great ideas: e-mail me.

Inga’s Update

I have enjoyed reading the first couple of Brev+ITs. Even though I read every word of HIStalk, I must admit that some topics don’t interest me as much and/or I don’t understand it all (!) Thus even as HIStalk Queen (as Mr. H likes to call me), I find that the quick and dirty summary is very helpful.That being said, I found that I had a bit of difference in opinion from Mr. H last week when he applauded the recommendations for EMRs to include anti-fraud tools. Not that I disagree with the need to reduce fraud. However, shouldn’t HHS worry as much (or more) about such things as insurance underpayment as they are seeming to worry about fraud? Which is more prevalent – fraud or insurance underpayment? Am I being cynical to think that the big insurance company lobbies are behind the efforts to reduce fraud … yet another way to not pay out as much? If HHS is going to serve as Big Brother to watch for fraud from the providers, shouldn’t they also ensure EMRs assist providers to receiving all the reimbursement to which they are entitled?

Northrop Grunmman Corporation is awarded a $10.3 million contract with the Department of Defense to deploy, enhance, and maintain the Clinical and Health Data Repository initiative to help the Defense Department and VA share patient information.

Misys PLC founder and former Chairman Kevin Lomax is now Executive Chair of Enigmatec, a UK-based company that provides policy-driven automation solutions for resource management.

Private equity firm Galen Partners has raised $250 million for investing in healthcare information technology and outsourcing, medical devices, and specialty pharmaceutical companies. Hope they are HIStalk subscribers since our readers always let us know about the hottest companies and trends.

SugarCRM, a provider of commercial open source customer relationship management (CRM) software, announces finalists for their Best of SugarCRM awards. While this has next to nothing to do with HIT (a couple of finalists did include athenahealth and Purkinje), I liked the creative names of a couple of the other finalists: Geeks on the Way and Eject-Stop-Divide.

Speaking of athenahealth, I have been reading the various comments on the HIStalk Forum that Dr. Kato started. The discussion started when Dr. Kato asked for other readers’ impressions of athena’s PM and EMR solutions. There has been some great commentary, some of it more globally about PM/EMR’s rather than just athena. I am not all of with it all, but many good thoughts that anyone considering a PM/EMR vendor should consider. Some things that came to mind for me:

• Is it more important to pick a quality PM first or have an EMR that works for your doctors and practice? Personally, I believe that you must have an EMR that your doctors embrace or they won’t use it. Unfortunately, that means that the administrative and office staff could potentially end up with a billing system that is lacking some functionality (though truly most PMs all offer the basics).
• I definitely agree that it is best to make sure have your PM solidly in place before starting on EMR, though with a brand new startup practice, you often have to get both going simultaneously.
• I am glad to see that Dr. Kato is considering the financial stability of the vendors. Implementing an EMR and PM is too costly and disruptive to make a mistake.

Talk to Inga.

Perot Acquires JJWild for $89 Million

 Perot Systems has announced its acquisition of Meditech consultants JJWild of Canton, MA for $89 million in cash. According to Perot’s announcement, “The 190 JJWild associates will enhance and firmly position Perot Systems’ MEDITECH Solution Center as a market leader.”

Monday Morning Update 8/13/07

From Michael Vronsky: “Re: Holy Spirit Hospital. How about a follow up with Holy Spirit Hospital? I think you’d be pleasantly surprised what their CIO (Edith Hunter) and others have to say nine months later.” This was a replacement of Soarian with Eclipsys. I’ll ask Inga to look them up and report back.

I got e-mails from a couple of journalists who were nice enough to let me know that they use HIStalk as a source of story ideas and opinions. That came after a reader accused the HIT publications of stealing ideas from HIStalk. My server records show other incoming domains from HIT magazines, but at least these had the class to tell me. Should I call the others out publicly?

Burt Finkelstein, formerly of Cardinal Health and Johns Hopkins, joins VisualMED as Senior Pharmacist.

NextGen gets a mention in the Pawtucket (RI) newspaper when Blackstone Valley Community Health Center goes live, claiming to be the first place in the state with all electronic records. Most of the state government seemed to be on hand to see a demo (must be an election year).

EMR/PHR vendor Ethidium Health Systems announces its acquisition of the VLink health information exchange product from Vaceris.

McKesson spent $560K on federal lobbyists in the first half of this year.

The White Stone Group announces an upgrade to its TRACE communication tracking system for eligibility and benefits that allows capturing images of entire web pages, documents, and e-mails. TRACE can now fax those images directly to payors or physician offices to handle payment disputes. Payor changed their website since the service was rendered? You’ve got a picture as proof.

I’ll put out this week’s Brev+IT shortly. If you’re quick on your trigger finger on Saturday afternoon, it’s not too late to sign up to your right and get your copy. Otherwise, I’ll just tease you about how great it was next week. Hmm, what were the five most important HIT news events this week?

Marty Belscher joins Emerson Hospital of Concord, MA as VP/CIO. He comes from FCG. Seeing his Ed.D. credential made me remember that he worked on an engagement for me once. Seemed like a good guy.

WorldVistA EHR is CCHIT-certified, but still not ready for release. The issue: drafting a user agreement that allows them to modify the software as open source while avoiding nullification of its CCHIT certification. They’re also working out royalties for use of CPT and Zip codes. Somebody must be using it since CCHIT doesn’t certify products that aren’t GA and running.

Parkland Hospital (TX) is using background-checking software to catch patients who lie about their address or income to get free care to which they aren’t entitled. The system flagged 12,000 cases of potential fraud, they’re going after several hundred, and more than a dozen people have pleaded guilty and paid up. Oddly enough, most of those first prosecuted are small business owners from Middle Eastern countries, several of them related, who falsely claimed to live in Dallas County to get county charity care. One guy who owns nine Subway franchises and drives a Mercedes told the hospital he made $8 an hour as a sandwich maker. He paid his $47,000 bill in cash when caught. The criminals mostly seem indignant or indifferent since healthcare services, as we all know, are steadfastly viewed as free by those who can’t or won’t pay.

Another company no one’s heard of is offering free physician EMRs that will supposedly be supported by ad revenue. Actually, I’m probably the only one who’s never heard of them since the product is CCHIT certified. It’s apparently run by individuals too shy to list their names on the web page (why are companies so secretive about who’s in charge?) Here’s a free 60-second strategic consulting session from Mr. HIStalk: ad supported EMRs can work, but not by running crappy Google AdSense text ads like Practice Fusion is trying to do. You need to have a strong marketing arm that can develop ad packages specific to practitioners, like some of those Australian EMR companies have done. To really work, you’d have to throw ethics to the wind and jam the ads right into the care process: popping up medication commercials based on patient diagnosis, suggesting a competitor’s alternative when e-prescribing, or integrating permission-based marketing for patients. Companies would pay for that because it would work and many doctors are crass enough to go for it.

Consulting firm RTI tells ONCHIT that EMRs need more safeguards against fradulent billing.

Lawson Software’s CEO says software-as-a-service won’t live up to its hype.

Oracle says it’s too hard to figure out a pricing model for software running on virtual servers, so it will just keep collecting your money as usual, thanks.

Wisconsin Health Information Exchange has expanded its Executive Director role to full time and is seeking candidates. And, if you like the heat (geographical, not job-related), Qatar Hospital is looking for an executive director of health information systems.

Rumors and ideas? E-mail me.

News 8/10/07

From Joseph L. DiNardo: “Re: other sites. I notice that [name removed] has a story on private equity in healthcare IT. Other magazine stories and sites seem to just write about what you do, except later. They’re ripping you off.” Well, I could turn into Howard Stern and claim I invented the genre, but I won’t. Certainly I’ve noticed some remarkably coincident news and opinion pieces over the four years I’ve been writing HIStalk. I’ll attribute that to subsconscious influence, kind of like when one singer hears a song and writes another one very much like it. If I influence them, good for me.

From Doc Hilarity: “Re: you must be flying under the radar.” Link. Somebody wrote a program to chart out the healthcare “blogosphere” and HIStalk doesn’t look like a big deal on it. Reason: it counts links to and from. I don’t link to other sites and don’t expect anyone to link back to me. Here’s the stat that counts: HIStalk has more readers, page views, and sponsors than any site I know. If those slip, I’ll know I’ve left the Blogosphere and entered Suckitude USA.

From Shortwave Coates: “Re: Healthia Consulting. Healthia Consulting Sells to UHG? That was the word from some Ingenix employees (a division of United Health Group).The consulting company’s CFO, rarely seen at client sites, was visiting Ingenix this afternoon.” Since I’ve got Healthia contacts because they sponsor HIStalk, I sent it their way for a response. “As you may know, UHG and many of their companies / business segments, including UnitedHealthcare and Ingenix, are clients of ours, and our entire leadership team takes a strong interest in having close relationships with each of our customers to ensure the quality of our services meet and hopefully exceed expectations. Additionally, UnitedHealthcare manages our employee benefits, so our leadership team communicates with and/or meets with UHG staff regularly. Due to the strong reputation we’ve built in the industry, we do periodically get approached by companies across the industry about strategic partnerships the depth of interest in those relationships varies across the partnership spectrum. In the event we determine that a strategic partnership at any level with any organization is in our colleagues’ and clients’ best interests, we’ll let you know and work with you to publish complete and accurate information, so that the readers of HIStalk are informed.”

From Bill Hafner: “Re: Cerner. I saw the stock rocket upwards Wednesday. Looks like there was an Investor Day at the HQ on Tuesday. These financial guys came away thinking Cerner was doing pretty well. What do you think?” Bill attached a fancy report on the visit from stock guys Thomas Weisel Partners. Some quotes: “Tuesday, August 07, 2007, we met with Cerner management at its Kansas City headquarters. The highlight of our trip, by far, was the tour of CERN’s newest data center located on its corporate campus … Our trip to the Experience Theater was impressive. The company has always proclaimed that once it gets a potential customer to the Experience Theater, the probability of a customer win is high.” Sounds like the Tom boys were so wowed that they just about bought Millennium themselves instead of just CERN, like many CIOs so distracted by the carefully scripted Vision Center sizzle they forget to check the steak along with their checkbook. You’d think investment guys would be more cynically realistic, or at least not report back with such obviously fanboyism. What I think: less than that, certainly. Cerner is managed well and entrenched, but Epic is stealing a lot of their high-margin, big IDN business. They say they’ll make money in the UK, but I doubt it – no one has so far. They don’t play much in outpatient, still struggle with non-clinicals, and have taken only baby steps into non-provider markets to try to find another growth area to prop up the share price. Meditech has the entire low end of the market staked out already, so there’s nothing there for them. I expect clinical sales to dry up because those hospitals who can afford the ridiculous price tags have already shot their wad. If Cerner wants growth, they’ll have to buy it through acquisition. Just my opinion, of course. That fancy data center that the investors drooled over won’t sell much product, especially since most clients run their stuff locally anyway. It’s not that Cerner won’t make money; it’s just that the growth built into a lofty share price will be hard to sustain now that the numbers are a lot bigger.

From Cao Van: “Re: Piedmont. Any update on the OIG Audit?” I haven’t heard a thing.

It’s my pleasure to introduce you to Stratus Technologies, a brand new HIStalk Gold Sponsor. What they do: five-nines system availability, redundancy, and system monitoring and alerting. System availability is critical once you’ve installed all those EMR and real-time clinical systems, so these are the folks who can help. They’ve been around for 27 years and have a big presence in other continuous availability industries (six of the world’s 10 biggest banks and 14 of the 20 biggest telecom providers, for example). Stratus, of Maynard, MA, was the first to offer a 100% availability guarantee for Windows Server in 2002. All you need to remember: continuous availability=Stratus. Thanks to Stratus for supporting HIStalk and respecting its readers by doing so. I appreciate it.

And speaking of Stratus, they’ve got a case study from Orthopedic Center of St. Louis: “Bonner finds Stratus’ ActiveService architecture particularly helpful because it amounts to having ‘another staff member on call 24×7 to monitor the server .. ftServer system is constantly in touch with Stratus’ service center, which monitors its performance. If the server has a problem, it alerts the service center, which either corrects the problem remotely or sends a ‘hot swappable’ component to fix it … the ftServer, which comprises redundant components running in lockstep, continued to run the practice and clinical management systems with no interruption at any time, including during the replacement. When Bonner finished, the server automatically resynchronized and returned itself to full redundant operation.”

Remember those Bulgarian nurses and doctor who were arrested by the Libyan government in 1999 and charged with intentionally infecting 400 children with HIV? They were stuck in jail until last month, constantly threatened with execution unless Bulgaria sent Libya a few billion dollars, but finally were released last month. The Libyan government now sheepishly admits that their confessions were extracted by torture. “Yes, they were tortured by electricity and they were threatened that their family members would be targeted. But a lot of what the Palestinian doctor has claimed are merely lies.” 

Cerner gets a mention for its surgical tracking system that keeps families informed of the patient’s status. They get a card with a confidential number and can look at the patient’s status on a plasma screen in the surgical waiting room (like “PRE-A” or “OR” or “PACU”).

The St. Louis paper runs an article on Purkinje’s physician office dispensing system. I’m vehemently against that concept from a patient safety standpoint, especially when pitched as a revenue booster for doctors, but Purkinje supposedly has built safety checks into its electronic systems. Like Allscripts, Purkinje got into the business by acquiring a company already in it, back when they were Wellinx. I know next to nothing about them, but they sound like of interesting.

A reader e-mailed me to ask, “What are the top three HIT-centric publications that are well read and well respected?” I honestly couldn’t think of any. I don’t read any of them and my feeling is that most industry people don’t either. What little real news they carry is two months old by the time the issue goes out, plus the non-expert reporters just re-word the press releases anyway in most cases, keeping it friendly to advertisers. Of course, I’m biased.

QuadraMed announces not so great Q2 numbers: revenue up 7%, EPS $0.02 vs. $0.06. The stock headed south, trading near its 52-week low and now down 24% in a month. Some folks on the conference call claimed that Keith Hagen was wishy-washy on the financials of the Misys CPR product that QuadraMed bought, leading to speculation that the deal could be in danger once the bean-counters shine a harsh light on those books. Doubtful, but they still have to figure out how to make money from it.

Pravene Nath is named CMIO for NYU Medical Center. Mentioned by Toni Rienzi when Inga interviewed her. And when looking for that link, I ran across this oldie but goodie phony news issue of HIStalk, which had me cackling even though I wrote it.

HIMSS joins some trade associations in trying to get the President to override the ITC’s ban on imported 3G cell phones containing Qualcomm chips, claiming a threat to public safety. Broadcom probably doesn’t agree: it was their patent that Qualcomm infringed upon, according to a previous unanimous ITC ruling. Doesn’t sound like something HIMSS needs to be involved with. Guess their CPOE and RHIO work has been successfully completed and cell phones are the new imperative.

Merge Healthcare shoots off whatever toes it had left, announcing a delay in filing their Q2 report on the day it was due. Stock board speculation was coalesced around three themes: (a) top management is bailing out; (b) the company will be bought; or (c) everybody in charge is a moron.

Cardinal Health announces Q4 numbers after the bell: revenue up 5%, EPS $2.33 vs. $0.76, although most of that came from the sale of one of its business units to private equity star Blackstone Group.

Interesting: this Mac-based practice management system uses MySQL for its database.

Odd: a surgeon in federal prison for 51 months for healthcare fraud is suing Apple, claiming he invented the iPhone’s keyboard.

Former Sutter CEO Van Johnson joins the board of Visicu. Different Van Johnson: it’s not the slightly dense blonde guy (Lt. Steve Maryk) from The Caine Mutiny, I now know (although he’s still alive and will be 91 in two weeks, so here’s an HIStalk shout-out, you big lug).

Allscripts announces Q2: revenue up 17%, EPS $0.10 vs $0.05. The stock dropped; analysts expected $0.14.

Emageon’s Q2: revenue down 14.8%, EPS -$0.01 vs. -$0.04.

Odd lawsuit: a Nigerian man who took his sick neighbor to the hospital in Saudi Arabia has been arrested there for immoral behavior by Islamic religious police. Men aren’t allowed to associate with unrelated women, even when saving them.

News, rumors, blogosphere positioning developments: e-mail me.

News 8/8/07

From Victor Melling: “Re: Perot. Perot already has an offshore company dedicated to healthcare. Their plan to aggressively grow the healthcare organization has to include international initiatives. In the international market, you can’t just take something American and expect the rest of the world to follow. You do it with country-specific nationals, and in some countries, it will make the best business sense to acquire. Don’t forget the payer and government side of their healthcare biz. Services are a key.” Victor was talking about Perot’s $10 million acquisition in 2003 of Vision Healthsource. Back then, it was a 500-employee BPO company doing healthcare claims and billing. Thanks for that report.

From Stan Fields: “Re: Are you sick of Misys yet? Last week, four more senior folks left. Not sure if they chose to leave or were asked. All were long-timers and two were on the Wall of Fame. Either they’re cleaning out the old guard or the old guard has had enough.” I’m always uncomfortable naming names, so how about first names only: Tammy, Scott, Stephanie, and Karen. I think I am getting sick of Misys rumors, finally, although their diaspora should have wide influence on the industry.

From The PACS Designer: “Re: CafeScribe looks interesting, as it fosters the shared learning experience that permits updating of text material and experiences similar to how a wiki operates. Through this shared experience, healthcare IT users can expand their knowledge base and interact with others who share the same desire to learn.” Link.

I hope you enjoyed the interview with Vince Ciotti. I should have warned those of you who don’t know Vince that he speaks his mind. Sometimes he’s pulling your leg, sometimes not, but he’s always entertaining. He cracks me up.

Speaking of interviews, if you know someone interesting I should talk to, let me know. I learn a lot every time I do one.

I’d like to recognize a loyal HIStalk sponsor both old and new: InterSystems. Old, because InterSystems has been a Gold sponsor of HIStalk for some time. New, because they just upgraded to Platinum, for which Inga and I thank them very much. As in the case with Vince, I’ve been their customer, although they don’t know that because I’m anonymous. I’ve used Cache’ and it’s a smoking-hot database, running faultlessly under heavy, enterprise use at a big IDN I’ve worked in, and with minimal care and feeding on our part (say the words “Cache DBA” at my old shop and they’ll look at you blankly – it doesn’t need one). You know that already, of course, because it runs what seems like 80% of big healthcare apps already (Meditech, Epic, both lines of QuadraMed, etc.) Equally hot stuff are the company’s Ensemble integration platform and HealthShare for EHR data sharing. Anyway, many thanks to InterSystems for the vote of confidence. Say, I bet CEO Terry Ragon would be a great interview. He’s one of several Boston-area giants of the industry.

And speaking of CEOs, thanks to those who are recommending HIStalk sponsorship to their CEO peers in other companies. I’ve gotten several e-mails out of the blue from CEOs who start out by saying, “So-and-so tells me he loves your site and that I should really consider sponsoring …” I’m blessed. Thank you. That’s really cool.

I’ve received two unverified rumor reports claiming that a well-known Meditech consulting firm is about to be sold. One says the buyer is Perot Systems. I’m not naming names because I’ve received incorrect rumors about this company before. Still, the sources appear to be unrelated and Perot says they’re buying somebody. We’ll see.

Errata: I inadvertently cleaved off a zero from the UPMC server virtualization numbers last week. Their engineers estimated a server cost of $65,000, not $6,500. I said they estimated a cost 98.7% less than the software vendor’s server specs, but the actual number was 87% less (still not exactly chicken feed). I also got a follow-up from Marc Holland in response to some reader comments. He mentioned that UPMC’s high growth (25% in Wintel server count per year) plus software rollouts and end-of-life replacements mean they’re saving big bucks quickly. They’re also feeding an enterprise-wide SAN instead of direct-attached storage to cut costs even more (both cost per gigabyte and cost per usable GB due to easier provisioning from a central storage pool). Thanks, Marc.

Quality Systems (the NextGen ambulatory EMR people) reports Q1 numbers: revenue up 17%, EPS $0.29 vs. $0.28. Wall Street wanted $0.33, though, and the stock is down around 10% since the announcement.

DR Systems announces 10 new small-hospital RIS/PACS contracts worth $5.6 million.

Alberto Kywi is promoted from CIO at Cottage Hospital to SVP/CIO of Cottage Health System.

Cleveland Clinic names Sulaiman H. Sulaiman as CIO of its Abu Dhabi project.

The two organizers of the German HIT trade show ITeG are parting ways and arguing over its name. Issues: location, whether to add HIMSS-like educational sessions, and control.

Dell, Fujitsu, and Lenovo will offer hardware discounts to organizations that receive grants from the Center for Community Health Leadership of Misys.

Joseph Zaccagnino, former Yale-New Haven Hospital CEO, is named to the board of Premise Corporation. They sell throughput and patient flow applications: bed management, bed cleaning, transport, and executive dashboards.

I see quite a few folks signing up on my e-mail lists to your right. The first one is to get e-mail updates when I write something new here. The second is for the new Brev+IT (pronounced “brevity”) weekly newsletter, which you’ll get only if you sign up. Help me spread the word on that one by forwarding your copy to anyone else who might be interested, please. It’s aimed at C-levelers who might not enjoy the insider stuff here that the rest of us love. It looks deceptively simple, but the value is having culled out only the most important news of the week and added some perspective and opinion around it, all in a quick-read package that’s self-contained in an e-mail.

Laparoscopic gastric bypass patients at Sinai Hospital of Baltimore whose doctors used robots for bedside rounding had a mean length of stay of 1.26 vs. 2.33 days for traditional rounding.

A hospital in Belgium is using .NET-Java EE integration tools for its portal, developed on WebSphere and running on Linux with an Oracle database. They’re developing with Visual Studio and compiling to Java (!)

Cool: three foundations donate money to pay for a document-based EMR for behavioral provider for foster children in Kansas.

A Wall Street Journal story describes a neurovascular surgeon who bought an iPhone on launch day to access his practice’s EMR. I also like an unrelated tag-on at the bottom that ridicules common IT terms. “But the word implies that the ‘users’ are utterly dependent on the provider …Today, all the term does is emphasize technology at the expense of the task someone is trying to perform. To an IT person, you aren’t writing a message, you’re using email … We also hate the term ‘solution.’ IT people often say that they have a customer-relationship solution or a supply-chain solution. The word ‘solution’ not only doesn’t tell you what it does, but also doesn’t tell you what it is. A supply-chain solution might be software, but it might be a storage rack in a pickup truck, or it might be a cardboard box.” Amen, brother.

Craig Barrett’s horses aren’t the only ones with an EMR. “Horses treated by Hagyard will soon have electronic medical records that allow their veterinarians to see their history from anywhere in the country. Images taken by the practice’s 11 digital X-ray machines allow veterinarians in the field or working for bidders at horse sales to see a horse’s file from computer work stations set up on site. They can do endoscopies and bone scans, and soon will have MRI capability to help diagnose problems. There’s a hyperbaric oxygen chamber for treating horses with a variety of conditions and a treadmill on which to test respiratory function and lameness. A neonatal ICU cares for newborn foals. The babies get ‘their own little Tempur-Pedic mattresses,’ which tour guide O’Flynn says helps eliminate bed sores.” Say, I could be the first veterinary CIO. Sport horses apparently get better care than a lot of humans, but then again, they’re worth a lot more in real dollars, sadly enough. The short, whip-wielding guy on their back probably has no insurance. At least he won’t be put down if his leg breaks.

Amcom announces its Answering Service module for call center customers.

Bizarre: a Minnesota man decided he needed to have his testicles removed. When hospitals refused, he found some amateurs willing to tackle the job in his home. He awoke, bleeding, in a makeshift OR complete with medical supplies, specimen jars, and a camera. The impromptu surgeons had high-tailed it when police were called and the man wouldn’t name them. Larry, Moe, and Curly?

News, rumors, good HIT sales stories: e-mail me. Thank you for reading.

HIStalk Interviews Vince Ciotti, Principal, H.I. S. Professionals LLC

Photo: Healthcare Informatics

My IDN employer brought in Vince Ciotti and H.I. S. Professionals for consulting work years ago (at my urging) and he did a good job. He’s definitely a free-spirited rogue in a button-down world. Maybe the best testimonial to his skill and outlook is that he did all the IT consulting for The Hunter Group, which may have been occasionally reviled for telling hospital executives hard facts they didn’t really want to hear, but who told them nonetheless.

Vince definitely knows his IT history because he lived it and made it. He’s one of those pioneers who hooked on for a ride as the industry got started in the late 1960s, but here he is still working in it nearly 40 years later. Thanks to Vince for the chat.

You and your fellow H.I.S. Professionals founders left good jobs to strike out on your own. What did it take to make your business successful?

We were all fired. You get into consulting because you lose your job. I was fired outright. Bob Pagnotta got sick and tired of taking companies public and dealing with vendors. Karl Sydor had been with SMS and was sick of apologizing to customers. So, two of us weren’t really happily and gainfully employed and Karl had been out on his own. I can’t see many sane people leaving a good job and striking out on their own.

What’s it like working for yourself instead of someone else?

It’s a blast. I spent 15 years before the mast in various positions with vendors. The first 10 years with SMS were wonderful. It’s like Judy Faulkner when your company is hot and everyone loves you. When you get big and it’s a 1,000 person organization and customers get unhappy, it goes downhill.

I went to McAuto and a little in vendor in Brooklyn. I admire a guy who can spend 20 or 30 years with a vendor. I got sick of it after 15.

If you had to take a job with a vendor, who would you want to work for?

At this stage in life, nobody. I’m 62 years old and I’ve got four more years to bag this stuff. It’s fabulous. I’m standing here in my underwear because it’s hot here in Santa Fe. I usually go out on my motorcycle and the come home and take a nap. I’m usually having a drink by 4:00 or 4:30. When I travel, I have to wear clothes and stay up until 6:00.

I’m going to take two weeks off in a motorhome and go to Yellowstone. I won’t make a dime. I called my clients and told them not to call me. I could do it all year if I wanted to. You eat what you kill.

I love it, but to be candid for your readers, don’t jump into it short-sightedly. Bob Pagnotta was the golden man. He was loved as a vendor in the ’70s like Judy Faulkner is today. When he went out on this consulting binge in 1987, he sent out a one-page letter to 27 CEOs he’d served over the years. He said, “I’m sick of the vendor world. If you need me, it’s $1,000 a day.”

He got six responses from guys who wanted a day a week. He was stuck and I picked up the extra day. The power to go out and get those six responses is rare. Without Bob, I’d have starved the first five or six years of the business.

How has consulting changed over the years?

For the worse. It’s bigger. When I started with SMS in 1969, the big vendor was GE, who sold MediNet. They had 500 or 600 hospitals, maybe $40 or $50 million in total revenue. SMS lost money until 1972 or 1973. Vendors were small. Even McAuto had 100 employees and maybe 10 hospitals.

You knew all the hospitals and employees. Those billion-dollar firms today like Siemens and McKesson and Cerner – it’s frightening. It’s a CEO a year. A total merry-go-round at the VP level. Companies buy and sell products like I buy motorcycles. I yearn for the good old days when you knew everybody and they all knew you.

Sheldon Dorenfest goes back 30 years also. He pegged the size of the industry. Probably the total size in 1970 was $100 million and most of that was hardware. Software was embryonic.

In my era of 1969-70, I was an installer and we were free. Can you imagine that today? They called us implementation directors. SMS didn’t start charging for us until the late 70s. It was a different business then. I think it was nicer, but I’m old and jaded, so maybe young kids have a different perspective.

We used punch cards. You sat at a keyboard and punched cards that were sent over lines one byte at a time. When I saw the first CRT – the IBM 2771, I think it was – green lights on a TV screen, no cardboard, no holes. Blew my mind. Typed on a keyboard and it went down the line.

We just had an SMS reunion in March 2007 in Orlando, 50 of the old farts from SMS in 1969. Told old stories. Of those 50, probably 10 are multi-millionaires. They saved their stock. SMS stock was a penny a share when I started and they weren’t public. They gave you 40 or 50 shares for joining and a few hundred if you did well. I ended up with a few thousand shares worth a penny each.

The company went public in maybe 1975 at $15 a share. I’d been given a couple of thousand. It’s what these executives are working for today. Stock options are staggering. It grew and split several times, but I’d sold every share to buy Porsches and Hondas and missed out on probably $1,000 a share. I blew all mine.

What do you see happening in the next 5-10 years with consulting firms?

The ones that go public will have the toughest time, like FCG and ACS. It’s an earnings per share treadmill. How do you grow 15 or 20% a year and still be honest with your client and tell them not to buy certain systems and not be an alpha site? Clients will get angry and then you can’t sell. It’s a vicious treadmill.

A software vendor can come out with new products, charge for them, and make millions. Consultants are “same old, same old”. Help them pick them and install them. How do you get 15 or 20% except by ripping off your client and selling them stuff they don’t need? For a hundred-million-dollar consulting firm, it’s murder.

What are the biggest mistakes CIOs make when negotiating contracts?

Annnouncing a vendor of choice. That’s the biggest mistake. That effectively says “all concessions are ended”. Stupid, like when you meet someone in a bar and look into her blue eyes and say “Let’s get married”. She won’t get married because she thinks you’re weird. You won’t get a prenuptial agreement. On the other hand, tell her you’re going home to a redhead and she’ll do almost anything.

RFPs are a farce. The vendor that lies the most wins. They’re the vendor of choice. You should have picked two winners and then negotiated between the two.

Imagine if your CEO goes to HIMSS and falls in love and tells a vendor he’s going to buy their product and wants you to negotiate deal. How you gonna get a deal? The CEO should tell you he saw some interesting systems and let you lead the charge. Keep the CEO out of the picture as long as you can.

If you’ve ever been a vendor, the salesman’s credo is to sell as high as you can on the org chart. If you can get to the board, do that, but at least get to the CEO. The nastiest ones would try the CFO, and if he wouldn’t buy, he go to the CEO tell him the CFO’s incompetent. You do the same with the CEO if you have to – go to the board.

It’s not the company as much as the sales exec. There are vicious sharks out there that will do anything to get a deal. Glengarry Glen Ross is a classic picture. Getting a guy fired who’s standing in the way of a deal is minor.

Think of the commission check. We just negotiated an East Coast CPOE and clinicals deal worth $40 million. The going commission rate is probably two percent, maybe three percent for the rep, and he’s just the order-taker. The regional VP is probably $100K. The VP of sales, several thousand more shares and maybe a bonus. You’re looking at six- and seven-figure commissions. What would you not do for that? These aren’t immoral or unusual people. They’re just like you and me, but they have far better focus. They’re looking at their W2 every day. We just look at it at the end of the year.

You have a reputation for being an aggressive contract negotiator. Do you have some good stories on things that happened while knocking heads with a vendor’s negotiator?

I hate to print this. The ultimate is that you tell both finalists they lost and you hang up and wait a couple of weeks. They’ll go to the CEO, CFO, CIO or whomever and give them a deal. I don’t care. I tell my clients if you can get more money, do it.

What does it cost McKesson to ship Paragon to a 150-bed hospital in Arkansas? A $2 DVD and a $20 Fedex. Everything else has been expensed in prior years. Maybe you have to buy lots of dinners. Cerner will spend $100,000 on airline tickets. What does it cost to build a Ford or Chevy? Why should hospitals spend 10, 20, or 40 million dollars for these systems?

Meditech’s profit is around 40%. Cerner and McKesson are public, probably in the teens pretax. Maybe the average vendor is 15% pretax, 7.5% after. What’s the typical hospital’s margin? In New Jersey, it’s negative. They pass the hat every year. Well-run shops like Columbia can eke out five percent. How much do you want to give to those poor people at Epic?

You ask to have negotiating session. In come six guys in suits, of which two or three are lawyers. Shake their hand and, they’ll have a caucus on who’ll shake hands and whether they’ll speak Latin or Greek. A wonderful CFO, Paul Long with Hunter Group, would see those lawyers and say, “I don’t have my lawyers. This meeting is over.”

We tell vendors, “Don’t bring your lawyers. We’re businessmen, and if you can’t explain it to us, we don’t want your systems because it will be normal human beings using it.” They want to choke the meeting to death and hope the hospital gives up and signs. The hospital is paying $300 or $400 an hour and they hope you’ll finally sign. Do 98% of the deal, then have a lawyer look over the clauses. If you can’t read and understand it, it’s a bad contract.

For response time, maybe the vendor has a three-page warranty. Rip it up and write it in one paragraph so that everyone can understand. Other than that, it’s legal gobbledygook. You don’t have lawyers on the nurse stations.

We were doing a very big deal in the Southeast. I got a nasty letter from VP of sales to my home address. I had told the client in front of them about trouble we’d had with that vendor in the past – response time, support, things like that. The letter said I was breaching my confidentiality agreement. I have no such agreement. That’s between them and their client. I took the letter to the hospital and showed them. They immediately chose the other vendor. Sometimes life works out like that and the good guy wins.

What hospital or IDN is the best IT showcase you can think of?

Hopkins in Baltimore. Stephanie Reel walks on water. It’s the most demanding job on Earth. She’s got 10 Nobel prize winners, 1,000 academics, and executives who know as much about IT as she does.

Meridian in New Jersey. Becky Weber, a former SMS installer, is CIO. She can make 20-year-old Invision look hot and blow people away when they come for a site visit. She beats up Siemens, but at the end of the day, she does good demos and gives good references.

Sisters of St. Francis. Bill Laker. He had high costs and unhappy users. We did an assessment and wrote a mean report. We said the users were unhappy and he was spending too much money. He went out, talked to users, and figured out they really were pretty unhappy. He looked at our numbers on staff comparisons. Two years of hard work later, he had turned it around, cut staff, cut costs, and improved satisfaction.

I’ll give you some vendor names and you give me some adjectives that come into your head. McKesson.

Interfarce. That’s a combination of integration and interface.

Cerner.

Stock price. Earnings per share.

Epic

Epic costs, with a small E. Very expensive, in other words.

QuadraMed.

Wonderful. Think reasonable cost. We get great contracts and reasonable service. It’s a pleasant surprise when you look under the covers.

Siemens.

They have the best plan of any IT vendor with Soarian. If they can deliver it, if they can code Soarian.PPT, they’ll own the industry. I don’t know how far they are.

Eclipsys.

Pleasant surprise. Nice tradition, that old Technicon tradition. A strong ethic of professionalism from Harvey, who did all the hard lifting at SMS. Nice to negotiate with. They try to deliver and don’t lie too much. They probably tell more truth than everyone. Mike Smeraski is golden if you can deal with him.

Misys.

Past tense. They’re gone. It’s a shame. That makes them the ultimate marketing company – they actually sold themselves.

Medsphere.

Fabulous VP in Frank Pecaitis. May be the best-kept secret in the industry. It’s a small hospital’s chance at an affordable system. exciting interfaces with MUMPS and Cache’, but compared to spending 10 or 20 million dollars that vendors want, that free license and reasonable maintenance could be the best-kept secret.

Meditech.

The army. It’s like a cult. If you believe, you’ll be happy. A lot of young kids out of Boston College. Prices have inched up, so it’s not the deal it used to be. The client server we call “lipstick on  a pig,” because you still get all the old Magic stuff. Everybody does what they’re told. They don’t negotiate. They’ve got almost a six- to nine-month line. They’re almost too successful. I wish they’d go public. I’d buy that stock.

You watched the industry grow up. Who in it has been most memorable?

There’s so many. So many fabulous people in the business.

I’d have to go back to my old buddy Pagnotta. He’s not that famous and he’s provincial. He lives in the northeast and doesn’t like to fly. He can sell screen doors on a submarine. If he wants you to have a typewriter, you’ll have one tomorrow and he’ll show up with ribbons and paper and make you so happy you’ll tell your neighbor, “You have to have one” and they’ll give up their word processor.

Dozens of characters have been stellar in this industry. The combination of selling, marketing, leadership, charisma, honesty, integrity, and morality – it’s so rare. You realize you have to live with these customers, not just rip everybody off and buy an island and be a hermit.

Early in my career, I was a sales exec like the scumbags I’m running down in this interview. I did it with a company that didn’t deliver the product. We sold stuff and it didn’t get delivered. I moved on another vendor, another vendor, then became a consultant. Three years ago, I went back to that same large multi-hospital IDN where I had sold a non-existent system 25 year before and they had lost all their millions. I started with the executives. The CEO, CMO – it was the people – they hadn’t moved. I had had a nice dark brown beard, but I had shaved it off. They started telling me about those terrible scumbags that sold them the nonexistent system that cost them millions. Sweat started running down my nose, but they didn’t recognize me. That’s the industry. I was a scumbag, and now I’m a consultant hero. We play different roles at different times in our careers.

You’ve been reading HIStalk for a long time. Give me the pitch you’d make to attract new readers and sponsors.

It’s more of the truth than anywhere else. You have the guts to put it in print than the mealy-mouthed magazines. They always edit out the name of the vendor and that destroys the article. You name names and tell the truth – that’s priceless.

Any last words?

Since I’m a consultant, I’ll advise readers to beware of them as well as vendors. Negotiate with them as strongly as with vendors. They’re getting a free ride, sometimes taking more millions than the vendor. Consultants should work for thousands of dollars, not millions, get projects done in months, not years, and work themselves out of a job and not stay forever and suck the place dry. Get your expert advice, thank them, and show them the door. Don’t let them become your partner and run the hospital for the next 10 years.

Monday Morning Update 8/6/07

From Morrie Kessler: “Re: Perot Systems. On the acquisition hunt? Any ideas of who it could be?” The company announces that Q2 revenue was up 11%, but EPS dropped to $0.18 vs. $0.21. As part of the announcement, Perot says it will acquire a company with $80-90 million in revenue in the next few weeks (OK, I need to know who … whisper it to me). They also mentioned a plan to acquire two or three companies each year in their focus areas, with an interest in expanding outside the US (i.e. “we need cheap offshore labor like FCG and those other guys”).

From Paul Cicero: “Re: Kaiser. Even the Kaiser-bashing Sac Bee pointed out that the surgeon accused of killing the mentally retarded, dying patient for the purpose of harvesting his organs, who actually didn’t die when they took him off life support and gave him a stunning amount of drugs in order to ease his assumed passage, wasn’t working as a Kaiser physician when he was performing his service. I know you are not a Kaiser basher, so I thought I’d point that out.” Thanks. I didn’t catch that in the story. That may keep Kaiser off the inevitable lawsuit list, although having him on staff and providing him with what I assume is the bulk of his livelihood can’t be good PR nonetheless.

From Buffy Patterson-Davis: “Re: Intel’s Craig Barrett. You are soooo right! He has been insufferable at the AHIC meetings that I have attended. Just ridiculous. He seems to think that attaching a few devices to a home health care network will solve the whole problem. I’m always impressed at how polite the clinicians are in the crowd when he is speaking – they never boo. I’ve heard a lot of corporate execs talking about health care lately and the bottom line has been a deep fury at having to spend money on the benefits. I mean, they are livid. They try to hide it, but it just bursts out. I sat next to the heir of a prominent company at a meeting and the resentment was plain. They just don’t want to pay. Period. They don’t want to pay taxes, either.”

From Billy Batts: “Re: UPMC. Interesting discussion about UPMC’s environment. A couple of comments: 1) cost savings and cost avoidance are very different. If you project sizable costs and then avoid them, that’s not the same as cost savings, which are usually measured from your existing cost base. Much of UPMC’s public statements about costs appear to be based more on avoidance than savings. And of course, there is somewhat of an incentive to project future costs as high as possible so that the avoidance of those costs looks really good. 2) Going from 40 servers at $500K down to six servers at $6.5K defies common sense. If UPMC’s engineers are really going to ‘roll out an application to additional sites’ and claim to be able to do it with a half dozen desktop machines, there is a major disconnect somewhere. So I wouldn’t necessarily bet on UPMC in this case. 3) Holland should be more cautious in his claims. We have been heavily virtualized with both servers and storage for several years, as is the case with other healthcare sites. It’s tiresome to keep hearing how far behind we are. Healthcare is arguably the most complex industry in our economy and our IT environments reflect this. Claiming that we should have the same technology environment as much simpler industries demonstrates a lack of appreciation for the challenges we face in our business, and is not a reflection of ‘how good we are’.”

And speaking of UPMC, Inga tried, at Art Vandelay’s suggestion, to connect with UPMC to talk about virtualization. She got a curt “no” in response to her request for an interview. We’ve got a few UPMC readers, so the first words I thought of (an old, crude saying) involve people you’d sleep with, but not bring home to meet the family. I guess we don’t have the cachet of those inexperienced kid journalists who’ve never worked a day in either healthcare or IT. Maybe I should ban UPMC’s IP address from reading here.

I’ll be writing and sending the first Brev+IT shortly. Consider this a beta test, just in case I mess up the formatting or e-mailing. I see 141 subscribers so far. I may post the first issue online to encourage (or discourage, depending on how it goes) new signups. UPDATE: First issue is here. Subscribe to your right if interested.

Sponsor website cruise: (1) I see that Healthia has some interesting consultant positions open for clinicals, surgery, pharmacy, radiology, and HIM, to name a few. If your consultant employer has chewed you up and spit you out, give them a look – they’ve got a great reputation for being employee-friendly. (2) EnovateIT has redesigned their site, I notice, and you can more easily find specific products from a front-page product selector. (3) You probably noticed EHRConsultant’s rotating ads to your left, which now describe the company’s main offerings: the EHRscope product guide, their Naturally Speaking product line with 12 medical vocabularies, and the flagship EHR Consultant service for matching physicians with EHRs. (4) Our friends at Pring|Pierce Executive Search are ready to apply their industy experience to place executive-level talent (sales, marketing, strategy) reliably, effectively, and professionally. (5) Providers who need assistance with strategic planning, operational assessments, patient safety, and contract negotiation (and who doesn’t) and at the right price (even better) should give a look at MedMatica Consulting Associates. They’ll put experienced, regional resources on the ground quickly and cost-effectively to energize your projects and maybe keep you from getting fired when your teams are in over their heads. (6) Last but not least, our colleagues at The White Stone Group can help with documenting and managing communications, such as in denials management and caregiver hand-off (Joint Commission, anyone?) Who couldn’t use a patient-indexed communications capture system that involves minimal IT headaches and slam-dunk ROI? Please help HIStalk by clicking sponsor ads to your left and checking out what they offer. They keep HIStalk coming free and I appreciate them.

I ran across a press release from Lucida Healthcare Group that describes cool technology they came up with for recruiting traveling nurses. They have trucks carrying mobile billboards that invite sending a cell phone text message for more information. Then, data from the GPS systems in the trucks is merged with the incoming call records to measure the effectiveness of each truck’s route, allowing re-routing for optimal ad response. That’s almost as good a testimonial for their savvy as their HIStalk sponsorship (shameless plug by me).

Alamance Regional (NC) chooses SIS surgery through their Eclipsys partnership.

Any Travel, Inc. may be suing Misys for supposedly trashing its El Dorado office buildings in Tucson, but apparently the damage wasn’t bad enough to discourage buyers. The property has been sold for $5.8 million to a company that will gut the buildings in turning them into a multi-tenant complex.

A physician systems consultant criticizes the industry in a letter to the editor of a Vermont newspaper: “What I saw, all too frequently, was a prime example of people in the computer technology field taking advantage of others that have little knowledge of the technology involved. I saw one office pay nearly $7,000 each for computers that were worth $300 and then buy software that was more than 10 years out of date … An electronic medical records system is just software in which a vast amount of information is saved and interlinked. Most modern commercial, off-the-shelf database management software can be programmed so easily that even complex networked or Internet-based software can be custom developed to create centralized software applications that service a large number of geographically dispersed offices.”

Scottsdale Healthcare (AZ) is piloting what its vendors say is the first patient room service meal system that checks dietary restrictions and allergies.

FCG reports lackluster Q2 numbers: flat revenue, EPS $0.12 vs $0.20. They tried hard in the announcement to confuse readers into comparing the current EPS with those from last quarter instead of Q2 ’06, or at least it appears to me. Shares jumped nearly 9% on the encouraging news that profits tanked, but not as bad as everybody expected.

A California judge orders jurors in a medical malpractice case not to see Michael Moore’s Sicko, which featured a similar case. Good advice they probably didn’t need: the movie has done only $22 million of business, although Moore’s deal is 50% of the gross, so his stomach is jiggling all the way to the bank. If it ends up doing as well as his previous movie, he’ll pocket over $100 million (plus a huge cut of DVD sales) for doing whatever it is he does. You have to love a socialist blowhard with a populist message who’s worth more than the captains of industry he hates (and who actually create jobs). Plus, his foundation (with minimal donations to actual causes) has owned shares in Halliburton, defense contracting giants, and even those carmakers he ripped in Roger and Me. He also claimed in a previous movie that he would “hire only black people,” but not even one has crept into the credits so far. And, he proclaims disdain for copyright laws, except when he’s demanding that people not download his own movies. “When Moore flew to London to visit people at the BBC or promote a film, he took the Concorde and stayed at the Ritz. But he also allegedly booked a room at a cheap hotel down the street where he could meet with journalists and pose as a ‘man of humble circumstances.” What a gasbag.

CPSI promotes Darrell West from controller to CFO.

I didn’t realize you cared so much for Clarion Health Center (PA) It was darned nice of you to send $100,000 of your Federal tax dollars to them to help pay for their EMR software.

Wisconsin hospitals are going crane-crazy erecting new Taj Mahospitals. Bet they’ll keep those diagnostic machines cranking to cover the $1 billion tab. In fact, a local business guy claims it’s driving up healthcare costs (duh) and that Milwaukee alone has more MRI machines than in all of Canada. Children’s Wisconsin wins the prize at a $2 million per bed project (children’s hospitals are always out of control financially because “it’s for the kids”, meaning “don’t dare question our budgets or we’ll drag out awww-inducing snapshots of tykes while you’re PowerPointing financial statements”). Here’s my theory: non-profit guys don’t get juicy stock options, so they spend the money building monuments to their own wonderfulness, convincing themselves it’s really for the patients or the community. The execs at places I’ve worked couldn’t wait to put on their honorary hard hats and run around the job site looking important. Hint: hire more nurses (or build a cheap, functional nursing school and graduate a lot more of them) if you want to do the community a favor. And, if you want to get really crazy, cut prices for the uninsured.

CareTech Solutions announces its BoardNet product, a secure communications portal for hospital board members.

Meditech’s latest quarterly SEC filings: revenue up 11.3%, EPS $0.67 vs. $0.59.

Talk to me.

Well, I’m embarrassed. I’ve never watched Mr. Ed (it seemed too stupid even among stupid TV shows), so I didn’t recognize the theme lyrics that Scot wrote were the originals. Still, that inspired him to compose his own, in honor of Craig Barrett and his EMR-powered horses.A horse is a horse
Of course, of course
And no one can talk to a horse of course
That is of course unless the horse
Has an equine EHR.

Go right to the source and ask the horse
He’ll give you the medical history that you’ll endorse
He’s always on a steady course
The horse has EHR!

People yakity-yak a streak
And waste your time of day,
But a horse will never speak
Unless he has something medical to say!

A horse is a horse
Of course, of course
And this one will complain about EHR privacy ’till his voice is hoarse
You never heard of a talking horse?
Well listen to this:
“I am a horse with EHR!”

Premier Healthcare Alliance names Randy Thomas vice president of Integrated Product Management and Marketing. She comes from IBM and, before, that TSI and Eclipsys.iMedica announces their customer based has increased 76% in the first six months of 2007 as 77 new clients have purchased their EMR/PM integrated solution. iMedica, based in Dallas, was started by several old Millbrook employees after GE acquired Millbrook. I have heard the iMedica product has functionality similar to GE Centricity (the old Millbrook product) but with lots of technological bells and whistles such as .NET.

Thanks to Bill Lynch of Axolotl, who took the time to write a note reminding me that despite Santa Barbara’s RHIO failure, there have been other efforts that are making good progress. “HIEs/RHIOs have been up and running, successfully, for quite a while. HealthBridge, Taconic/THINC, Quality Health Network and many others have shown what can be done if you build your HIE with committed partners, candid communications, clinician-first workflows, and proven technology.”

A couple in Arkansas just had their 17th child. Wow. Why, why, why? Guess it is not as odd as the lady in Mexico City who kept her dead husband in her bedside and had her adult son remove the worms every so often. Our little HIT world seems so ho-hum and mundane when you compare it to such “real world” happenings.

Inga’s listening.

News 8/3/07

From The PACS Designer: “Re: networks. TPD was perusing the computer network terrain looking for what’s new and possible as we increase connectivity across the  globe. Most of us are very familiar with Ethernet (created originally by Xerox and still going strong) as well as TCP/IP (Transmission Control Protocol/Internet Protocol). Well, there are some new networks brewing and they are called ‘Public Next Generation Network’, or NGN, and ‘Next Generation Corporate Network’ or NGCN. They have come about because of the demand for more security across the entire communications chain and we’ll be hearing more about them as we go forward. Link [warning: PDF].”

From Doc McGee: “Re: Misys. They have recruited Cory Eaves as EVP, CTO & CIO. His responsibilities will be to lead all things IT, internal and in product strategy and development. He held a similar position at ERP company SSA Global, which was buying struggling ERP companies left and right, not sunsetting any products, and leveraging maintenance revenue streams. That company’s vision was to bring the software together on two platforms and slowly raise maintenance fees and add capabilities to entice customers to upgrade. Cory knows his stuff and is pretty adept at navigating the often choppy waters between various product factions/groups in an organization as well as working with customers. He may be just what Misys needs right now to right this listing ship.”

From Anonymous Fan: “Re: athenahealth. Jonathan Bush and athenahealth are the cover story in this month’s Inc Magazine – regarding fun, their unique culture, how it is good for customers and business, and how he goes about managing his troops.Here is another link to him in a batman outfit and talking about some of the cool stuff the folks there do and how he connects fun to purpose.” The issue is on fun in the workplace. I was glad to see the mag add this caveat: “But don’t buy that karaoke machine yet. The common practice of treating sick cultures with a fun-graft–parties, silly hats, visits from Mister Softee–is insulting to employees and vaguely grotesque. For fun to thrive, meaningful work, competent management, fair compensation, and mutually respectful employees are table stakes. If you lack any of those, start there. Once the bread’s in place, come back and we’ll talk circuses.” Well said. I’ve worked in near-slave camp IT environments with carefully designated fun events prescribed by our little Hitler, sort of like Hawaiian Shirt Friday in Office Space, where a lobotomized corporate penguin passionlessly tries to connect (like Bill Lumbergh did) with the oppressed masses who yearn to cause him pain: “Oh, and remember, next Friday is Hawaiian shirt day, so, you know, if you want to, go ahead and wear a Hawaiian shirt and jeans.” There’s nothing more depressing than brain-dead galley slaves pretending to be festive while gobbling down cheap, cold pizza while dolled up in jollitywear and muttering obscenities about the clueless management team who thought their loyalty could be bought cheap.

From Scot Silverstein: “Re: Siemens. The Siemens cardiology system team I met in Germany were quite competent and ‘got it’ regarding what was needed. I’ve since found out those people are ‘no longer with the company’ and was told that part of the problems with the Soarian product was due to their influence. I rather think the problems were not the result of rigorous German engineering, but American IT practices.” And speaking of Scot, he had as good a time as I did ripping Intel’s Craig Barrett for his “my horses have EMRs” statement. Actually, he worked harder at it: he even composed new lyrics to the theme from Mr. Ed.

From Mike Kirby: “Re: CNMC. Kelly Styles, CIO of Children’s National Medical Center in DC, has ‘resigned to pursue other opportunities.’ Last day will be at the end of August.”

Marc Holland of Health Industry Insights dropped me a line about UPMC’s virtualization project, for which his company is providing validation services. He agrees with Art Vandelay that healthcare is two years’ behind other industries on virtualization. UPMC is projecting huge cost savings, although application vendors aren’t necessarily sharing their enthusiasm. One of their big ones (I mention them here a lot) was asked to quote hardware for rolling out an application to additional UPMC sites. They called for 40 servers at a $500,000 price. UPMC’s engineers estimated they could use virtualization to cut the hardware back to six servers for $6,500. The vendor refused to warranty that configuration, although they eventually agreed to four times the horsepower that UPMC recommended: 13 servers at around $250,000. Now assuming UPMC was right initially (I’d bet on them), their configuration was 98.7% less expensive, not to mention the future savings in maintenance, electricity, and software. Did that get your attention like it did mine?

Last chance to get this weekend’s inaugural Brev+IT newsletter. Sign up to your right. Judging from the number of signups, lots of folks are looking forward to it. Thanks, as usual, for the support. It’s not like I need the extra work, but it should be fun.

I got lots of interest in the reader’s request for a job description for Manager of Cardiovascular Informatics, all of it from folks who want a copy if I get one (which I haven’t so far). If you have one, several of us would apparently appreciate your sending it to me. The Rumor Report to your right will accept attachments, so use that if you’d rather.

Modern Healthcare reports that Suzanne Delblanco has resigned as CEO of Leapfrog Group, effective this fall. Since their ill-advised “CPOE or bust” stance made them initially threatening but ultimately irrelevant, you have to wonder where they go from here. They haven’t been in their heyday for years, but even in just the past two, their member count has dropped by 57%, according to current and archived versions of their web page. Most of their HIT vendor members bailed. Federal records show she was paid $179K, hardly generous by DC standards, although at just 39, I’m sure she has big paydays ahead.

At least this takes attention away from HealthConnect: a Kaiser Permanente surgeon is charged with intentionally killing a disabled patient with drugs in order to harvest his organs for transplant. Hootan Roozrokh, MD, quoted on his Kaiser web page as saying “I THRIVE by endeavoring to practice good karma,” faces eight years in prison (that’s all?)

The CEO of a hospital pricing company argues that ambulatory EMRs don’t make sense unless providers are paid fixed prices for quality. “Do we really expect that improvements in these processes will result in a cost justification for an EMR, or more globally, an improvement in the cost/quality profile of care for the country? If the entire country implemented EMRs overnight, would we see significant overall improvement in healthcare productivity, efficiency, quality and customer service?”

An Eclipsys shareholder is suing 20 past and present Eclipsys officers, claiming he and other shareholders were defrauded by option back-dating, insider trading, and falsified financial reports. I reported in May that the company said it had found evidence of back-dating, but claimed it was done by executives who left in 2006 (that’s still a corporate problem, it seems to me, but they didn’t seem to be worried when they said that). The shareholder submitted a lengthy list of trades and dates, claiming that the bigwigs enjoyed a 196% return on their options while regular shareholders lost 29% in the same period. Named: Cooper, Dipierro, Rudish, Wilson, Fife, Eckert, Coletti, Copple, Deady, Gomez, Etue, Hall, Patton, and Risenhoover (those are the ones I know, but there were a few more).

Speaking of Eclipsys, they announce Q2 numbers: revenue up 16%, EPS $0.11 vs. $0.03. Shares closed at $23.61 Wednesday, easily blowing through the 52-week high of $22.92.

Vince Ciotti sent over the 20th anniversary issue of the H.I.S. Professionals newsletter. Bob Pagnotta, Karl Sydor, and Vince started the company in 1987. “There are few companies in the healthcare IT industry, whether vendor or consulting, that have lasted 20 years, with all of the Big Eight consultants having fallen by the wayside along with countless other start-ups and ’boutique’ firms. What is equally amazing is that most of the firm’s original consultants are still active with the firm after 15 or more years.” They named their best hospital clients: Johns Hopkins, Meridian Health, and Sisters of Saint Francis. I was a client many years ago (Vince doesn’t know that since I’m anonymous, and now I know I wasn’t among their favorites) and they did a good job.

Former Cerner guy John Thompson lands as CEO of an ad software company.

Iowa Health System chooses Allscripts for ED software.

AMICAS Q2 numbers: revenue flat, EPS -$.01. vs. $0.01.

Rollout of the UK’s military EMR system begins. DmicP will eventually connect to the NHS system.

The trade group for state government CIOs says they should get more involved in RHIOs and NHIN.

Robert Goldstein, formerly of MDG Medical, joins Tennessee’s Shared Health RHIO as COO.

Talk to me.

CCHIT has so far added six vendors that have passed its 2007 ambulatory EMR certification criteria:

• Community Computer Service (MEDENT 17) 7/11/2007
• e-MDs, Inc. (e-MDs Solution Series 6.1.2) 7/18/2007
• Greenway Medical Technologies (PrimeSuite 2007 R2) 6/22/2007
• McKesson Provider Technologies (Practice Partner 9.2.1) 7/17/2007
• NextGen Healthcare Information Systems, Inc. (NextGen EMR 5.4.29) 6/25/2007
• Purkinje (CareSeries EHR 2.0) 7/27/2007

Vendors must pass 100% of the functionality, security, and interoperability requirements. The requirements are comprehensive – the functionality requirements alone run 46 pages. I expect many vendors to have a tough time getting certified. Will the market demand certified solutions when a doctor can be efficient and paperless using systems that don’t meet all the requirements?

Eclipsys signs a couple of new contracts. The University of Pennsylvania Health System (UPHS) extends their current agreement, adding pharmacy, med admin, KBC, and content from Zynx. Bayshore Community Hospital of Holmdel, NJ will implement patient financials, access management, and Sunrise Clinical Manager.

A reader had reported that customers weren’t able to get through to Sage. So far, I have sent an e-mail to Sage’s general inquiries e-mail (no response), plus attempted to call John Schoutsen, who is listed on the Web site as the company’s media and investment relations contact. Perhaps both the webmaster and Mr. Schoutsen were laid off, because the listed number is no longer working.

MED3000 acquires Pathology Service Associates (SC), which offers pathology revenue cycle management and practice management and marketing services. It has over 75 practice customers in 27 states, representing 400 pathologists.

Health Affairs publishes a “retrospective” titled “Lessons Learned from the Santa Barbara Project and Their Implications for Health Information Exchange.” Some conclusions are obvious: privacy should be addressed early; local support (especially financial) is critical; and implementation should be staged instead of big bang. “Initially, the vendor erred in its assessment that the technology needed to implement the Care Data Exchange (CDE) already existed in the market. Second, the vendor’s subsequent development and implementation of its own technology was slow and did not adequately define users’ functional requirements, which necessitated redesign and redevelopment of important functionality. Last, poor documentation and insufficient testing of the data interfaces meant that many of them had to be reworked, introducing further delays. In all, a development project scheduled to take three years took six; unfortunately, the boldess of the vision was not matched by a focused and efficient software development effort.” And thus, goodbye Santa Barbara, David Brailer, and CareScience; hello CHCF, Perot, and Medicity.

Inga’s listening.

News 8/1/07

From INVISIONforever: “Re: Soarian. I checked the Siemens website to see what it was saying about Soarian. Soarian Financials is no longer being touted as a solution for hospital and MD billing. Is this an error or a reflection of a diminished goal? Also, I was surprised to see Soarian Scheduling listed as a revenue cycle solution — it doesn’t even have an insurance master. Under Soarian Departmental Systems, only Cardiology is listed. If you compare this with their promises four years ago, the disparity is huge.” Speaking of Soarian financials, guess who’s just signed for them: Partners (!) They’ll implement scheduling, decision support, document management, community access, and payor connectivity. John Glaser had mentioned in an Inside Healthcare Computing interview that he had a big Siemens revenue cycle project upcoming and some SOA initiatives, but this caught me off guard. Certainly it’s a much-needed boost for Siemens, assuming that their stuff works, anyway.

From Hrundi V. Bakshi: “Re: Lawson. The Lawson project at Mayo was overrun and under functional. Many physicians are complaining. They can’t tell a consult/revisit/new patient from one encounter to another, much less from one facility charge to another. They can’t reconcile medicare patients from one facility to another. It’s often taking physicians 12-25 minutes per encounter to do documentation. The non-MD in charge doesn’t seem to ask doctors what makes sense. Mayo’s IT/Finance strategy needs some serious updating in personnel, vision, and education. They’re aptly set to be the laggard of adoption and questionable due diligence.”

From Molly Clutterbuck: “Re: Cisco and AHA. It’s not objective based on performance, so what’s it based on? Cisco is getting their clocks cleaned in healthcare by better performing vendors. First they bought a HIMSS user group, now they’ve paid for AHA’s ‘recommendation’. Those involved need to get off the speakers’ tour long enough to look at what’s happening with Cisco in wireless. I never knew the AHA to be all that interested in IT. Where have they been all these years?”

From Venny: “Re: Craig Barrett’s horses. Damn the EMR. To boost Intel, he needs to market chips to his four-legged friends. Who knew horses could read e-mails? Are cow chips next?”

From Bernard Stein: “Re: Misys. You are slow on the Misys news. More high level departures.” Maybe my former sources aren’t there any more since nobody’s spreading a little rumor love HIStalk’s way. I’ve not heard anything about exodi. But, Vern Davenport is hinting at acquisitions and says the realignment is 85% done. He agrees with boss Mike Lawrie (always a good idea) that the company’s healthcare “performance remains poor”.

July will be another record HIStalk month. So far: 51,416 visits, 88,156 page views (that doesn’t count RSS readers). Both measures doubled in the past year and trended highly up later in the month. And for that, I thank you and HIStalk’s sponsors.

I should also mention Brev+IT, the weekly e-mail newsletter that starts this weekend. Now about the name: I’m merciless when somebody makes a lame pun involving the letters IT, but it fit so well in this case that I’m willing to humbly accept the inevitable scorn. The main message I wanted to get across is that it will be highly concise, covering only the five most important stories of the week, and with background information and opinion to put it into context (thus the name, which I hope you’ll pronounce “brevity.” Get it? Or is that “Get IT”?) HIStalk is for industry lifers who love the insider stuff, while Brev+IT will get executives up to speed in minutes. See the sample. You’ll notice one tiny spot for a sponsor text ad, which I’ll most likely offer to existing Platinum sponsors at no extra charge. There’s a sign-up form to your right (on HIStalk2 only for now until my HTML guy gets it prettied up). Lots of folks are signing up already, so maybe it’s redundant for me to invite you to do the same.

The Wall Street Journal quotes Microsoft as saying it’s expanding its healthcare efforts: 20 new employees stateside (doctors and other clinicians) and 30 in China (developers). The healthcare group is supposedly given free rein as one of a handful of areas in which MSFT sees big potential.

A long-time reader is in need of a job description for Manager of Cardiovascular Informatics. If you have one, please shoot it to me. Thanks.

Bankrupt Bayonne Medical Center (NJ) finds a Santa Claus willing to pay for a new EMR system: you. Or more specifically, your Federal tax dollars.

Stanford University will offer AMIA’s 10×10 informatics program.

Rhode Island will create a statewide Health Information Exchange, with EDS as the primary contractor and InterSystems providing its HealthShare platform.

Talk to me.

TPD or Mr. HIStalk – any chance you can interview someone at UPMC about their lessons learned from virtualization? The early information is hitting the usual magazines, but it is a little sanitized for my taste. [Inga is working on that, Art. Good idea.]

Virtualization is the only way to get close to the necessary efficiency with the limitations of most of our cottage industry’s vendors. Even getting them to accept virtualization is a tough sell. But, even if you use it only for development purposes, it is cost effective. Less hardware, you use it only when you need it, and you have fewer physical server instances to patch.

For those of you who can’t do or sell anything without a maturity model, here is a first cut we can iterate as an industry. Who says we are not innovative?

Level 1
Can you help me spell that? I could heat a homeless shelter in Alaska from the number of servers (mostly Windows and Intel) I have in the data center.

Level 2
I am running VMWare for my developers on the PCs to test the five different versions of Windows clients on eight different PC hardware configurations we have out there. AND I approached my 300 vendors, of which 20 knew what I was talking about, five said they’d consider it if we upgraded to a current version from the one we run that’s four releases out-of-date, three said OK and they’d have their top tech guru contact me (that was seven months ago), two said they’d have to report me to their manager for using bad language, and one said they’d do it if we’d pay a higher maintenance fee.

Level 3
Just doing it without vendor blessing for all those fine two-tier, Windows server-based development servers. AND virtualizing tape back-up and storage (damn, TPD – you’re already to Level 3).

Level 4
After wasting five man-years of effort, outsourcing it to someone else and making it their problem, while paying too much for the service.

Level 5
Getting your ERP vendor to virtualize some of their 20 servers, storage, and tape devices. Come on now, you thought that we can even talk about a healthcare vendor doing this for another five years? The rest of the world has two years’ of experience on us right now.

Monday Morning Update 7/30/07

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Talk to me.

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

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

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

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

Inga’s listening.

News 7/26/07

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Has the product been stable for you?

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

When did you get your last update?

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

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

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

What is the CPOE utilization?

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

Are orders being sent electronically from CPOE to pharmacy?

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

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

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

Have you ever considered switching to another system?

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

What are the best and worst things about CPR?

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

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

Would you recommend CPR to others as it exists today?

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

News 7/25/07

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chat up Inga.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The acquisition is expected to close later this summer.

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

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

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

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

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

Thoughts

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

Reader Comments

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

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

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

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

Post Your Thoughts on HIStalk Discussion

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

Monday Morning Update 7/23/07

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

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

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

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

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

Rumor: physician practice vendor AcerMED has abruptly ceased operations.

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

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

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

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

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

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

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

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

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

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

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

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

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