Caradigm Kills eHealth, Partners with Orion

Today, Caradigm and Orion Health announced their partnership wherein Caradigm will go to market with Orion Health’s HIE solution suite and likewise Orion Health will take  Caradigm’s analytics solution, Caradigm Intelligence Platform (CIP) to market to its existing and future customers. Existing Caradigm customers (~20) who are now on the eHealth platform will be put on life-support and encouraged to make the transition to Orion’s solution in the coming year.

Orion Health has had a long relationship with Microsoft, including acquiring Microsoft’s Amalga HIS solution and partnering with Orion to combine the then Amalga UIS with Orion’s HIE solution. Shortly after this announcement was made though, Microsoft threw in the towel on the clinical market combining its assets with a collection of those from GE which resulted in the NewCo, Caradigm.

As part of the establishment of Caradigm, GE contributed eHealth, its HIE solution suite that was co-developed with Geisinger and Qualibria, a quality management platform developed in conjunction with InterMountain. With the death of eHealth and a product which has yet to see the light of day (Qualibria) its beginning to look like GE brought very little to the Caradigm relationship.

Back to the Orion-Caradigm partnership…

As we have written in the past the core services that HIE vendors offered in the past are quickly being commoditized by such things as Direct secure messaging being embedded in future certified EHRs for stage two meaningful use requirements. With the recent announcement of CommonWell Health Alliance, even query type services may also become commoditized.

Clearly, to stay competitive and relevant, HIE vendors need to move to what we term as HIE 2.0, providing more advanced services that leverage the data flowing through the “pipes” of an HIE to more effectively manage the health of a given community the HIE serves. This is particularly important for enterprise clients ( a market Orion is now targeting) and can also assist public HIEs (Orion’s traditional market) in providing value-add services that may help them reach nirvana (sustainability). With CIP, Orion can provide a more compelling offering. The big challenge here for Orion will be in effectively pricing and deploying CIP, (Amalga UIS was notoriously expensive and difficult to deploy. Caradigm has rebranded Amalga Version 3, a much improved version architecturally, as CIP to distance themselves from the stigma of the Amalga brand).

While the relationship provides value to Orion, it may provide even greater value to Caradigm, a company that has stumbled to gain traction in the market. Orion provides a ready channel to market via Orion’s existing broad HIE customer base – one of the world’s largest. Orion also provides Caradigm an effective exit from directly participating in the HIE market with a solution that frankly was not up to the task. The announcement also claims that Orion has agreed to develop applications for the CIP which contributes to Caradigm’s goal of being perceived as a platform play in the market. What those apps may be is still an open question. Based on the language in the PR, it looks like not a lot of thought has gone into that aspect of the relationship yet.

Now we’ll just have to wait and see how this plays out in the market.

What to watch:

1. Joint customer wins – who and where.
2. How many existing eHealth clients transition directly to Orion or jettison for another HIE vendor entirely.
3. Apps that Orion builds for CIP.
4. Existing Orion clients that purchase CIP and whether or not we see accelerated growth in such purchases or an initial surge followed by stagnation.