Monday Morning Update 02/27/06

From Anonymous: "Re: Epic. Phillips has sold Xtenity products- they've got a customer installing and the Philips folks are learning the ropes. Business for Epic has slowed down a bit, although the analysis management is giving out is that Epic's target market is saturated, mostly with Epic sales. While most folks have fixated on Kaiser or maybe Allina, Epic has sold to a bunch of customers and has quite a few installs underway. From what I've heard about competitors (not much), the slowdown is not limited to just Epic. There's quite a bit of experience with Epic's inpatient products now, with lots of areas identified for improvements. Despite being at the top of the KLAS ratings, no one's under the impression in the company that there's isn't lots to do to make a better product, and as the pace of the Inpatient/Hyperspace/Care Everywhere/Xtenity frenzy slows down a bit, performance and useability are getting huge amounts of resources put in."

From Drew: "If you haven't already, try this site out. They do a good job of exposing me to stuff I like, but had never heard of before. Where was I when Eva Cassidy was alive?" He's proposed a big winner: music recommendation engine Pandora, by the the Music Genome Project (a fascinating business story, with their technology being licensed for kiosks in stores like Best Buy to help people looking for new music.) It's uncanny - you tell it one song or artist you like and it builds a personal streaming radio station with music you'll probably like equally. In my case, I said I like Yes, so I'm listening to (and liking) Be Bop Deluxe, which I'd heard of but never listened to (Eva Cassidy sounds good, too.) Addicting and free if you don't mind ads or $36 a year otherwise. Stunningly cool and gets you out of that music rut you've been stuck in since college. Those geniuses ought to make a mint.

From Matchless: "The Siemens Global Innovation Network stated mission is all about clinical systems and based on their exit from several healthcare markets (general financials, payroll) the rumors of their pending divestment from the patient accounting space should be given some weight. If we add to this the unconfirmed sale of the European rights to their patient accounting systems to SAP, their exclusive North American ERP partner, it certainly appears SMS clients could be in for another rough ride.” Siemens/SMS has had plenty of non-clinical course changes, going back to PeopleSoft, Scheduling.com, etc. From the cheap seats, they just look confused and indecisive, especially for a company whose own highly touted offering is floundering.

From Anonymous: "Re: HIMSS hype. Although I did not attend HIMSS this year so I don't know first hand, the author of this article seems to think there was less hype at HIMSS this year: 'The 2006 HIMSS conference might best be remembered for what did not happen. People didn't buy the hype -- and for that matter, the nearly 850 vendors and other exhibitors didn't have much flash and dash to dish.' I can hardly believe that is true, however." There was at least a perception of less hype, mostly because there was not a single, vendor-friendly hot issue on the radar like CPOE, HIPAA, or PDAs in the past (other than RHIOs, which the big-boothed crowd obviously has little reason to support, tout, or even acknowledge.) For that reason, the hype was more vendor individualistic instead of communal. Certainly there was the usual abundance of superfluous glitz, jolly glad-handing, and pompous self-importance (from both vendors and star-power attendees alike) but the multi-storied booths didn't hide the fact that vendors are pitching the same products from previous years to the same people who already know about them. I'd like to think that unbiased information from HIStalk and other sources has made it harder to hide behind the hype and therefore less advantageous to sling it, but that's me doing my own hyping.

From The PACS Designer: "As to the discussion on how Philips is doing with Xtenity, the word I'm hearing is fine. As with any new system there are always minor hiccups before users become comfortable with the new work process and the resulting job reassignments and any bugs are removed from the system. The first order was taken in March of last year and the first brave customer was Metro Health Hospital, Grand Rapids, Michigan. If you want to know how things are now, talk to them. When you have two best of breed suppliers, Philips and Epic, working closely together good things are bound to happen. Happy customers are your best sales brochure!"

Thanks to everyone who e-mailed me in response to my weekly Inside Healthcare Computing editorials. I'm surprised how much better my rants sound when they've been edited by a pro like Steve Larose over there. They're offering a great subscription deal for HIStalk readers if you're interested.

Diagnosis software maker Isabel gets a NY Times mention. "A BIG part of the answer is that all of the other medical progress we have made has distracted us from the misdiagnosis crisis ... [Isabel physician] Joseph Britto, a former intensive-care doctor, likes to compare medicine's attitude toward mistakes with the airline industry's. At the insistence of pilots, who have the ultimate incentive not to mess up, airlines have studied their errors and nearly eliminated crashes. 'Unlike pilots,' Dr. Britto said, 'doctors don't go down with their planes.'"

Shahid, aka The Healthcare IT Guy, was nice enough to post an answer to the question asked here about why legacy vendors don't jump on CCOW.

Are Canadian hospitals better off buying bigger and better marketed software from the US, or should the difference in healthcare delivery sway them toward born-in-Canada products? Says Mark Groper of Dinmar (Oacis): "One is the funding. It still isn't there. A lot of the money that Canada Health Infoway has, still hasn't been spent. The other is the procurement practices and policies that make it very difficult for companies like ours to secure the business. The U.S. companies we compete against are much larger, and they spend a lot of time lobbying the provincial and federal governments. A lot of [buying] decisions aren't necessarily made on the basis of what's the right product."

South Carolina's Palmetto Health signs up for MercuryMD's mobile physician solution.

Idiotic Hospital Lawsuit of the Week, as recommended by Matthew Holt. A Canadian hospital assisted one of their nurses when she complained of harrassment by her ex-boyfriend, a physician also employed by the hospital. They helped her prepare paperwork for a restraining order but the court was slow to act, so they also assigned escorts to her and gave the physician a different shift, reluctant to fire him due to lack of evidence. The doctor stabbed her to death in the hospital and then killed himself by injecting an unidentified substance. The nurse's father, mother, sister, and grandmother are suing the hospital, hospital administration, the physician's estate, and his psychiatrist for $13.5 million.

CIO Field Report

• Hospital type: Academic, Single Hospital, <200 Beds, North.
• IT Operating Budget: $2-5 million.
• Most important IT projects now underway: PACS, getting rid of legacy apps, prep for CPOE and documentation.
• Systems you’ll be buying within the next three years: Have signed contracts for all the software. New stuff will be around integrating peripheral instrumentation - ECG, EEG, etc.
• Best application vendors: EPIC - by far #1. Siemens - #2. Eclipsys - distant 3rd.
• Worst application vendors: Mediware, Sysware, Med2020.
• Hottest IT skills in the market: Interface programmers, project management, analysts who keep "big picture" in mind.
• Interesting rumors you've heard: Sysware - something is going on at the corporate level. Don't know details.
• Hottest people in the HIT industry: None of us!
• Trends really heating up: Integrating monitoring equipment into nurse call.
• Trends cooling off: Wireless.

This seems like a stretch: a former McKesson VP was implied by his new employer to have single-handedly driven sales "from $0 to $3.5 billion over a period of five years." Wouldn't commissions that large put him on a Caribbean island instead of in a new sales management job?

Great Q4 numbers for Eclipsys: revenue up 21%, EPS to $0.10 from -$0.06, meeting Wall Street expectations. For FY05, EPS was $0.01. The long-awaited profit has arrived. The stock jumped on heavy trading, hitting a new 52-week high. If their Sunrise 4.5 medication management offering is any good, they should make some sales. Andy can't take much credit yet, but clearing out Mahogany Row was a good signal that things needed to change. As long as he and John Gomez get along, I expect good things from them.

CalRHIO is having its third summit despite having not yet started a pilot project. They're developing standards and infrastructure like everyone else (many of those pioneers will be dead wrong and forced to re-do it all in a few years) but I do like this goal: "A recommended clinical data set will be released soon to help data sources understand what they must be able to provide to participate in data exchange, help data users understand the kind of information they will be able to obtain, and define for consumers the information that will be shared with authorized users." Now if they'd just release a report card of who's able to provide that (and the systems they're using to do so) I'd be happy. Hospitals and physician offices should be graded on their use of technology the same way vendors are for developing it (and I don't mean Most Wired.)

Computerworld correctly identifies a lack of hospital funds as a barrier to the interoperability lovefests going on, but then says this: "Because many hospitals run on 20-year-old IT systems, smaller institutions are often left behind, while leading ones forge ahead." Well, I know lots of big, leading hospitals and most of them run clinical software at least 20 years old. In fact, most of the shiny displays on the HIMSS floor were selling software that's at least 20 years old. Old stuff: GE/IDX, QuadraMed, MEDITECH, Misys, most of McKesson and Siemens. Relatively new (10 years or so): Cerner, Eclipsys, Epic. Architected and developed in this millennium: zero.

The HIMSS survey says 25% of hospitals have fully implemented EMRs. I say the respondents are full of crap, well-intentioned but obviously unaware of the high standards required to call that particular work done. Do they really have paperless charts, electronic MARs, interface clinical instrumentation, and systems that meet the Institute of Medicine's Gold Standard for EMRs? I'm sure they've paid for EMR applications and may have even implemented everything their vendor offers, but I'd bet money that less than 1% of them really have a true EMR up and running in all care settings. Maybe less than 0.1%.

The Burlington layoffs begin as GE starts shedding former IDX employees. The company claims few will be impacted, not much consolation to those who were or may be.

Surgery patients in the UK will wear RFID bracelets that link to EMRs, provided by Safe Surgery Systems. Great idea.

Will electronic medical records make healthcare less expensive? No, according to 2/3 of consumers. 86% of them are worried about privacy, too.

Allscripts will buy back its shares held by GE.

Providence Health Systems does what big companies always do when embarrassed: fire some scapegoats. They axe four employees for the "backups in the back seat" privacy leak on New Year's Eve. I wonder who signed the policies that authorized that practice, if indeed those existed as suggested?

Merge Healthcare's stock drops big on the announcement that their earnings statement will be delayed until financial audits are completed following its merger with Cedara last May. Rarely is that uplifting news.

Practice management company and annoyingly lowercaser athenahealth cranks up in India.

Guidant is in trouble for making software changes to its defibrillators without letting the FDA know until 15 months later.

From the stock message boards:

Merge Healthcare
"Linden is toast. Put a fork in him, he is done!!!! He is arrogant, smug and treats people like they are the Ikea deliverymen, unless, of course he needs you, or you are one of his chosen. He never learned, or practiced that old business adage; 'Be nice to them on the way up, because you meet them on the way down'. Well he and Veetch are on their way down and out. 'Change is good'.......right Rich!! and they will be changing you out!"

"Wait till Milberg Weiss gets wind of this stock. With all the recent insider selling by Linden and Veech and this news, Lerach is going to whack them on the side of the head with a shareholder lawsuit. Then they are going to have every inch of that office turned upside down. Get those shredders going boys!"

"My gut reaction is that the management is struggling with the quirky legalities of reporting during a merger year, and are exhibiting more than a slight touch of paranoia as a result. I don't think the current "problem" will be anything more than a true revenue timing issue that should sort itself out nicely by Q106's report (meaning that the money's essentially been taken out of one pocket/quarter and put into the next. Of course, that would mean higher revenues and profits for Q106, which I believe will be obvious when they finally work out the final Q405 report."

WebMD
"In my humble opinion, any cash raised from the sale of either PS or BS or both less whatever has to be 'given' to WebMD Health to purchase back Emdeon's net operating loss (which could be in excess of $200 million) will be used to buy back shares of Emdeon further reducing the number outstanding. The number outstanding after the buy back will depend on the amount of cash generated from the sales and what the offer price will be for the HLTH shares.The cash will not be used for M&A unless it is used by ViPS because the company sat on over $500 million for over 2 years and was not able to find a suitable acquisition which would generate more than the 4% being earned by the cash in Treasury Bills."