Category Archives: Acquisition

Here an HIE, There an HIE, Everywhere an HIE

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In late March, I headed down to Belize with a bunch of high school students to do some service work. Joining the crew was a parent, Harry (not his real name), who happened to be a urologist sharing a private practice with five other urologists. We got to talking about the industry, the rapid changes that are occurring and of course HIT, where the conversation quickly turned to health information exchanges (HIE).

This urologist’s practice has been using eClinicalWorks (eCW) for several years now and despite their proficiency with using this EHR, the practice has never fully recovered the productivity it once had. Regardless, they have come to accept this hit on productivity as just the cost of doing business. (Note: In Massachusetts all physicians must adopt and use an EHR to be credentialed, regardless of meaningful use or any other programs.)

Harry spends two days a week in surgery with most operations taking place in one of four facilities: local, unaffiliated hospital Winchester (who uses Meditech), Beth Israel Deanconess (has a home-grown EHR but encourages affiliate practices to adopt eCW), Childrens’ Hospital (a Cerner shop that also promotes eCW in ambulatory) and Partners which is now moving from its homegrown EHR solution to Epic (BTW, in a recent conversation with a contact at Partners learned that they are spending $1M/day for next five years on Epic switch - ouch!).

All of these hospital organizations want a closer affiliation with these urologists in support of future value-based payments and of course just getting these physicians to do more surgeries at their respective institutions. Thus, all of them want the urologist practice to adopt their interoperability model. Harry stated that Partners, the biggest healthcare organization in metro-Boston and arguably New England, is pushing particularly hard for them to switch to Epic as Epic does not have an HIE offering (Epic Everywhere is not an HIE in our definition nor apparently in ONC’s) and encourages its customers to put all ambulatory affiliates on Epic instead. In addition to these organizations, the Commonwealth is also encouraging this practice to join the statewide HIE.

After the pain and suffering Harry’s practice went through to become proficient on eCW, they are loathed to switch to Epic. Besides, switching to Epic would limit their ability to connect with other healthcare organizations they work with as Epic does not play well with others.

Harry’s situation is not unique and is likely being played out across the country, especially in urban areas where there may be a number of competing healthcare systems each trying to establish their own HIE. In such a situation what is an independent physician practice to do?

Certainly they could sell the practice, as many physicians have already done, to the highest bidder. Not an option for Harry and his physician partners as they like their independence and plan to keep it that way.

They could turn to the statewide HIE and hope that it will provide the depth of services (interoperability) to enable them to connect and share records in support of care coordination with all hospital systems they work with. Ideally, this may be the best approach but unfortunately they’ll be waiting a very long time for this to happen, if it happens at all. Today, most statewide HIEs, including Massachusetts are focused on enabling Direct secure messaging, a simple, political expediency that those in D.C. can point to as a shiny example of information exchange for the nearly half billion dollars spent on statewide HIEs. It is unlikely that most statewide HIEs will evolve beyond Direct providing the type of deep connectivity between a practice and an healthcare system to coordinate care effectively. That’s not to say we are throwing out the baby with the bathwater as there are some states that are doing exemplary work e.g., NY, IN

Then there is the option of just staying the course and hoping that lightweight connectivity directly into eCW will miraculously occur. For Harry and his partners, both Childrens and Beth Israel currently support eCW and interoperability with the acute care EHR will be supported. Partners may be left with no other option then to purchase a third party HIE solution to connect affiliate practices in the highly competitive, metro-Boston market. As for community hospital, Winchester, this hospital is unlikely to survive as an independent and will either be acquired or eventually be forced to shut its doors.

Still Waiting…
While the vast majority of ambulatory practices will ultimately be acquired, there will be a significant number of specialists who will continue to operate independently and with a number of healthcare institutions. The current hodgepodge of HIEs being stood up in various communities and the multitude in a given urban area will put increasing strain on physician practices such as Harry’s, who like any of us, given too much choice will simply forgo a decision.

Maybe, just maybe the efforts of the Interop Workgroup will take practices such as Harry’s to the promise land that will allow them to support coordinated care, in a simple streamlined fashion, amongst a wide range of healthcare organizations in their community irrespective of underlying HIT infrastructures. We have not heard of any such examples to date, but we remain hopeful as the current model being deployed today, while likely addressing the all too familiar 80% of the problem, still leaves a very critical 20% unresolved.

 

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Who will regulate mHealth? Patient Engagement at Crossroads; New Alliance Takes On Interoperability

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We came back from HIMSS and got right to work on the March Monthly Update for Chilmark Advisory Services subscribers. As we’ve reported in a previous post, HIMSS13 afforded enormous buzz and less enlightenment regarding the state of health IT, particularly the four key areas we see as essential to this industry making a true difference in patient care. In our March update, and the reports currently underway, Chilmark Research does the opposite: provide insight without buzz. Below are abstracts from this month’s update. To find out how you can receive the full update, send an email to: info at chilmarkresearch dot com

Public vs. Private Oversight of Mobile Health
John Moore III

mHealth, known for rapid innovation and iteration, has a tendency to buck at the snail’s pace of FDA regulation. Last month, during a series of hearings considering whether smartphones and tablets with medical apps qualify as medical devices and thus require FDA approval, many charged the FDA with stifling innovation. After all, how many developers or investors want to sink resources into an industry that will be regulated in ways that have yet to be determined?

Enter Happtique and its Health App Certification Program. Happtique intends to complement the work of the FDA, and has introduced a set of standards for health apps that fall into the grey area between apps that are clearly medical and those with a clear consumer focus. This could herald a new age of credibility for mHealth. However, as both regulator and marketplace for many of the apps that it regulates, Happtique could end up in a very sticky situation. They will need to tread carefully to maintain their objectivity in both certifying apps while at the same time providing a marketplace for mHealth apps.

The March Toward Better Patient Engagement
Naveen Rao

The open question in health IT these days is whether patient engagement will gain traction or if it will suffer the same fate as PHRs. One thing is certain; healthcare needs far better patient engagement methods, processes and techniques than what one finds today as most current efforts in engagement have very little to do with helping a patient manage a condition. Time and again in our discussions with healthcare institutions of all sizes we find the same scenario being played out – engagement today is focused on building patient/customer loyalty to the institution – they are simply no more than marketing efforts.

Stage 2 meaningful use is requiring a deeper level of patient access to their records via view, download and transmit requirements and there is even a requirement for some email messaging between provider and patient. But there is a bigger issue at play, payment reform wherein providers will be taking on more risk for the patient populations they manage. Without deeper engagement with the patient regarding a chronic disease, providers will struggle with these new payment risk models.

Several related markets, such as telemonitoring and wearable tech are taking off. Chilmark analyst Naveen Rao spent near-exclusive attention to the patient-engagement tracks, vendors, and sessions at HIMSS13. In his article for the March update, Naveen identifies three factors that will define if and how well the patient-engagement market will stay afloat in the coming years.

CommonWell Alliance Intends to Tackle Interop
John Moore

The announcement of CommonWell Health Alliance was likely the biggest story to come out of HIMSS (Allscripts acquiring longtime HIE partner dbMotion may have been a close second). The group’s stated purpose is to enable interoperability across the five founding members’ EHRs. For starters at least, this includes: Allscripts, athenahealth, Cerner, Greenway, and McKesson’s RelayHealth division. In its simplest form, CommonWell will establish a set of standards and services that enable query-based health information sharing in a heterogeneous EHR environment.

Part of the challenge with interoperability within a community of heterogeneous EHRs is that standards are useless when it comes to things like patient matching, consent management, or locating records, all of which are fundamental to interoperability and all of which require standardized services model. CommonWell founders know this and have plans to address it. The greatest challenge facing CommonWell, however, may be the market itself as adoption of HIE tech within the ambulatory sector remains a challenge.

Each month, subscribers to the Chilmark Advisory Services (CAS) receive an update of our research on the most transformative trends in the healthcare IT sector. Exclusive to CAS subscribers, monthly updates are part of the continuous feed of information and analysis we generate to keep subscribers on top of the rapid-fire changes in this market.

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Caradigm Kills eHealth, Partners with Orion

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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.
Both companies have something to gain in this relationship and will strive to make it work. But such partnerships can be extremely difficult to manage in the field. It will require close collaboration, a significant degree of trust and a willingness to give. Despite its large size and massive parents (MSFT & GE), Caradigm will need to give more to make this truly work.
Editor’s Note: A more in-depth deep dive into this partnership and its implications will be a part of our April Monthly Update that will be distributed to Chilmark Advisory Service clients.

 

 

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ACO Here, ACO There, ACO, ACO Everywhere & Vendor Response

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In less than two years we have gone from Accountable Care Organization (ACO) as a concept, to ACO as a new model of care delivery. With the January announcement that there were 106 more added to the Medicare ACO program, we now have 254 ACOs nationwide. David Muhlestein of Leavitt Partners has done some of his own research and puts the total number of ACO-like entities at over 400. And let’s not forget that commercial insurers are putting forth their own contracts with providers to set-up similar accountable delivery systems where there is some element of gain and risk sharing with providers.

Now it is one thing to say you have signed on to become an ACO and quite another to actually execute on the contract. Among the numerous challenges that an ACO model presents, is the need for more sophisticated IT systems that will support distributed care management across a diverse care team that extends from the primary care physician, to the specialists, to the care manager, the patient and others. EHRs today will simply not get you there.

Today, there is no such out of the box solution from any one vendor that will enable an ACO model. But there are several vendors positioning themselves to be that one stop shop to enable your ACO strategy.

Following are some vignettes of several vendors looking to enable an ACO strategy and what they have on offer. (Note: This is our proverbial toe-in-the-water as we’ll be doing a comprehensive report on this market later this year)

Aetna: A commercial payer, Aetna is looking for new high-growth revenue opportunities and has targeted healthcare IT. Shortly after acquiring leading HIE vendor Medicity, and soon after leading mHealth App iTriage the company announced its ACO-enablement suite that combines the two above with analytics/managed care solution Active Health.
Strengths: Strong HIE brand, good consumer/patient engagement tools
Weakness: Predictive analytics and care management tools are not as competitive

CareEvolution: A privately owned HIE targeting the private, enterprise market, the company has built its own analytics engine, Galileo. Galileo provides deep dive capabilities into clinical, operational and claims data contained within a given network of providers.
Strengths: State of art HIE solution, good analytics capabilities
Weaknesses: Consumer/patient engagement tools are almost non-existent, low recognition in market

Cerner: Cerner’s HealtheIntent is part of the company’s broader strategy to move beyond being an IT company to becoming a health company. Like most EHR companies, ability to move as fast as market requirements is a challenge.
Strengths: Leading EHR, strong brand, leading visionary among EHR companies, has a good HIE solution, has broad suite of consumer engagement tools
Weaknesses: Analytics is lagging, resources to respond quickly is a challenge, distributed care management tools still work in progress

Epic: Company has one objective, rule all and do so through a highly proprietary and closed model. With Epic Everywhere, their HIE solution for Epic sites, company is able to provide exchange across entities as long as they are using Epic. Recently signed deal with Surescripts to allow exchange with other EHRs. Epic’s MyChart is the leading patient portal in the market.
Strengths: Growing dominance in market, solution suite is tightly integrated from ambulatory to acute care settings, patient portal is widely adopted
Weaknesses: Epic continues to follow a dated model of highly controlled, closed system that while providing high integrity, will ultimately yield a lumbering dinosaur – think Wang circa 1983

RelayHealth: Part of McKesson, RelayHealth has always been a catchall for various acquisitions that McKesson could not find an appropriate home for. A major reorg occurred a couple of weeks ago that will reposition RelayHealth as McKesson’s ACO-enablement suite.
Strengths: Strong consumer/patient engagement tools, a leading HIE solution in the enterprise market and with the reorg, the addition of new assets including the recently acquired analytics solution, MedVentive
Weaknesses: Still does not have a good story to tell around distributed care management, how MedVentive will be folded in remains to be seen.

This is by no means an exhaustive list of those HIT companies looking to offer an ACO-enablement solution suite, but simply meant to provide some perspective on what is currently on offer in the market.

As we prepare to head to HIMSS a week from Saturday, on the top of our list of things we wish to learn more about is exactly how companies such as those listed above and others not listed are meeting the current and future needs of the 400+ ACOs across the country and more importantly, how they intend to become the leaders in this rapidly developing field.

Thanks to KramesStayWell.com for the image

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2013 – A Year of Surprises

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In the blink of an eye, a New Year has appeared and with it the need to look into our crystal ball (or is it a magic 8 ball) to make our annual predictions for the healthcare IT sector. Personally, I find this to be one of the more interesting and seriously fun parts of being an analyst.

Be forewarned, we’ve seen enough mealy-mouth, water-downed predictions as of late that simply state the obvious to last a lifetime. So let’s crack a few eggs and make some stretch predictions shall we. (Note: each analyst has contributed a prediction or two, which is noted).

1) Structured Data will Remain Gold Standard in 2013 – Cora
Despite Watson and all the buzz about mining unstructured data, the only data that will be analyzed in volume in 2013 will remain structured data. Forget about the 80% of health data that is unstructured. Simple key-value matching will continue but robust, rigorous pattern matching, NLP, etc, will have to wait.

2) The Need to Address Data Quality Moves to Forefront - Cora
Data quality issues (DQ) will become increasingly visible as more providers wonder why their clinical data is such garbage. Providers will be shocked they need to invest in DQ specialists/departments/processes (along with the security to support them).

3) Many ACOs Come to an “OMG, What Have We Done” Moment - Rob
For the first half of the year healthcare organizations (HCOs) will be all buzzy implementing, on paper, gain-sharing ACOs. By Independence Day these same HCOs will begin figuring out it is hard and expensive to set up an ACO and that their back office financial management tools are inadequate. By the end of 2013, just two years away from Risk Assumption ACOs (RAACOs) HCOs will take one of three paths: 1) realize ACOs carry all the risk and more of HMOs and bow-out; or 2) scramble to purchase and implement complex financial management software; or 3) cash-out and sell themselves to a payer.

4) Several HIE Vendors Pack Bags & Leave – John
Virtually all of the federal funds distributed to States to stand-up their statewide HIEs has been allocated. Without that federal largess we will begin seeing some vendors exit the HIE market. Who will they be? Think large companies with lots of brand equity and close ties to lobbyists but with only modest healthcare experience. Those vendors that remain must now contend with upping their value proposition beyond simple information  exchange (Direct Secure Messaging will take over that task). Some of the weaker HIE players with limited resources will be looking for a buyer.

5) HIE Market Growth Begins to Slow -John
Over the last several years the HIE market has been growing at a blistering pace well in excess of 30%. That growth will begin to taper off ever so slightly in 2013, say 18-22% CAGR as all who have adopted a solution continue down the arduous path deployment and on-ramping ambulatory providers to extract value from their HIE platform.

6) Despite Strong Growth in Direct Secure Messaging (DSM), Fax Isn’t Dead Yet - Brian
Volume growth in use of DSM sent via health information service providers (HISPs) in 2013 will exceed 100% driven primarily by integrated delivery networks (IDNs) seeking efficiencies and referrals. Despite this impressive sounding growth, far less than 5% of all care transitions will use DSM by end of 2013. And don’t forget, numbers lie. Much will be reported in 2013 on the growth in absolute number of secure email IDs issued by HISPs, but the majority of those accounts will remain inactive.

7) EHR Source Code Subpoenaed -Rob
We will see our first EHR software source code subpoenaed in a malpractice lawsuit this year – the developer will be named as a co-defendant.

8) Chorus Grows Louder, Politicians Weigh-in and MU Program is Put in Stasis – John
HITECH & meaningful use (MU) have done their job, by and large as EHR adoption and use has swelled dramatically throughout the healthcare sector. But there is also a dark-side. Deploying software so that it is effectively used takes time. Unfortunately, the provisions of ARRA do not allow for time to be taken, which is leading to a rapid cram-down of EHRs and associated MU requirements on clinicians. Early signs of a backlash began appearing in 2012. That backlash will come into full bloom in 2013 leading to Congressional hearings and ultimately someone in the White House being forced to hit the pause button on MU requirements.

9) Quantified Self (QS) Crosses Over into Healthcare – Naveen
The peripheral, biometric, consumer market is starting to bloom. In addition to completely new products and companies, we will see development of more flexible platforms driven by a focus on open APIs. Employers will start to incentivize the QS movement as part of their benefits programs. There will also be a shift from wellness-only into light medical use of these devices for such things as physical therapy/rehabilitation programs, mood tracking, sleep tracking and simple pain reporting.

10) Providers Take Interest in Health & Wellness Solutions – John 3
Payers and employers are the traditional markets for health and wellness solutions. But in 2013, those healthcare organizations (HCOs) that are moving towards capitated care models will markedly step up their interest in and adoption of these solutions. This will also result in new hires (health coaches, nutritionists, etc.) as clinicians balk at taking on added responsibility.

11) Emerging Conflicts Over Patient Generated Health Data - Cora
Conflicts will emerge between EHR data and user-generated health data.  Early adopting QS-type patients (see prediction 10) will be bringing in their mobile-app-generated data to their doctors. Majority of doctor(s) will declare that the data doesn’t match up to their records and will not accept it. Resulting conflicts over how/if to get this data into the medical record will ensue.

12) Patient Experience Begins Being Factored In to Treatment – John 3
With increasing attention on patient/customer satisfaction and need to improve adherence to treatment plans, innovative HCOs will begin adopting mHealth solutions that enable patients to track, in real-time, their treatment experience. Treatment plans will be modified “on-the-fly” based on these “experiences” to improve adherence.

Of course there were many other predictions that we mulled over that ultimately landed on the cutting room floor. What remains are predictions that we felt will create the greatest disturbances or ripples in the industry. Predictions that are generally not all that obvious or maybe it is just that there are not many who wish to state such in writing (we’re not shy).

Whatever the case may be, these are our predictions. we’ll stick by them unless someone has some incredibly brilliant argument as to why we have it completely wrong (that’s what comments are for).

So have at it everyone, are we on target, or will we completely miss the mark in 2013?

 

 

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Benchmarking Payers Adoption of Consumer Tech

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Awhile back, a large health insurer (payer) commissioned Chilmark Research to do a market scan on how payers across the country were using emerging consumer technologies to engage their members. We found this project to be quite interesting and rather than have much of that research sit on the shelves forevermore, we decided to build upon it.

Today we are releasing the results of that effort.

Our latest report: Benchmark Report: Payer Adoption of Emerging Consumer Technologies takes a close look at over 40 payer (health insurers) initiatives that are using a wide variety of consumer technologies (apps, social media, games, etc.) for member engagement. Here’s the PR announcing the report’s release.

Now it is well-known that payers have had a very mixed record in engaging their members. Part of the problem has been trust as members are justified in taking a cautious approach when sharing their health information with payers for fear of future denials. Secondly, many payer initiatives have been half-baked wherein payers have not been fully engaged themselves in the concept of member engagement.

But as we pointed out in a post earlier this summer, this is all beginning to change. Numerous market forces are now pressing down upon payers and payers are increasingly coming to the realization that they need to deploy member engagement solutions that work. Payers are now going to where consumers already are seeking to engage their members via a variety of consumer-based technologies. This report is our initial effort to gain a greater understanding of what payers are doing today and provide some guidance as to how their efforts will evolve overtime.

One thing we have learned in the course of our research is that despite all the talk, the majority of these efforts are in their infancy and that the vast majority of payers have not even begun to venture down this path. Therefore, we intend to update this report on a periodic basis to benchmark payer adoption of consumer tech in support of member engagement and gain an even deeper understanding of what works and just as importantly, what does not.

Thanks to the many that we have interviewed over the course of the last several months to compile this report as your inputs have been invaluable.

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