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.
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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“As biometric data becomes cheaper and easier to collect through smart sensors, devices, and mobile apps, expect to see more innovations in consumer health.”

-Alicia Vergaras

Will Surescripts Become De facto NwHIN?

Just as Healtheway looks to ween itself off the federal gravy train, Surescripts comes along and in a couple of quick strokes looks ready to drive a stake into the heart of Healtheway or at least any desire Healtheway may have to become the Nationwide Health Information Network (NwHIN).

It all started when Surescripts acquired collaborative HIE messaging vendor Kryptiq in late August. This was quickly followed a week later with Surescripts’ announcement that it would become Epic’s vendor of choice for cross-EHR connectivity. It appears that Epic has finally succumbed to the inevitable; that it will need to open up its system (Epic’s purported Epic Elsewhere, to address cross EHR connectivity was in reality Epic Nowhere – just vaporware) to communicate in a heterogeneous EHR environment. The Surescripts Clinical Interoperability (CI) network solution will become an “Epic Unit” and on Epic’s price sheet. The details of this story were covered in our September Monthly Update for CAS subscribers. (more…)

Looking Back on 2011 – What A Strange Year It’s Been

It is almost becoming the norm to say that it has been another tumultuous year in the healthcare IT market. Market consolidation, pushback on timelines, growing chorus from IT departments that enough is enough against the backdrop of the political circus in Washington and across the land as we prepare for the 2012 election year. If 2011, was a bit bumpy, believe we will see craters in the road to HIT enlightenment in 2012. But we’ll save that discussion for our future predictions for 2012 post, which we hope to get to next week. (Editor’s Note: Don’t hold your breath though, if the snow flakes are flying, we’ll be on the slopes next week.)

Today’s post takes a look back on 2011 by reviewing our predictions earlier in the year and assessing where we hit the mark, where we missed and if there is such a thing, where we came close. So without further adieu…

1. MU Initiatives Move to Tactical 
Hit This did come true as meaningful use, while still top of mind for the CIO, is not top of mind for others in the executive suite who are now looking at how to compete in the future as reimbursement models shift from fee-for-service to value-based contracts.

2. C-Suite Strategy Focuses on New Payment Models 
Hit An admittedly “softball” prediction, this was a natural fall-out of prediction numero uno. And yes, the consultants are making out like bandits as we predicted they would helping senior execs figure out their future competitive strategy.

3. RCM & Charge Capture Systems Require Overhaul 
Miss By and large, most vendors in this sector have not done a whole lot yet as they await to see how the market develops. With most healthcare organizations struggling to get the basics done (e.g., meet MU requirements, ICD-9 -> ICD-10, apply analytics, etc.) we are not seeing big demand from customers and subsequently, not a big push by vendors.

4. Mergers & Acquisitions Continue Unabated
Hit Another “gimme” of sorts for we had this prediction in 2010 and it was a “hit” and need only look at this market with its some odd 300+ EHRs to choose from, everyone wanting to call themselves at HIE vendor (last we checked, HIMSS listed some 189 HIE vendors alone), countless other HIT solutions to see that this market is far from mature. But arguably the biggest news in 2011 was Microsoft’s capitulation that despite the billion dollar plus investment, it wasn’t cut out or the clinical market and dumping its HIT assets into a new joint venture with GE. What we are also seeing is some rationality return as valuations have moderated. This may have led to Thomson Reuters’ recent decision to not sell-off its healthcare division – no one was willing to pay the high price tag they had on this property.

5. Federally Funded State Initiatives Struggle
Toss-up There has been some progress and there are those that would vehemently argue that Beacon Communities, RECs and state HIEs are moving ahead briskly. But then again, we do get some disturbing reports that all is not progressing as once envisioned, one might even go so far as to say some of these programs are beyond just struggling, but clearly going off the tracks. We’ll reserve judgment until we see clear evidence of such pending disasters, which will likely be prevalent, but highly distributed.

6. Changing of the Guard at ONC
Hit Not long after we posted our 2011 predictions, Blumenthal announced his resignation from ONC. We could not have been more prophetic if we tried.

7. Physicians will continue to go Ga-Ga over the iPad and the fast-following touchscreen tablets much to the chagrin of CIOs.
Hit Enabling physicians access to health information systems via their hand-held mobile devices, including touch-screen tablets is still a struggle for most organizations. At first, IT departments turned to Citrix as stop-gap measure, but the UX was far from ideal. In our recent research we found many an IT department still struggling to address this issue. mobile enablement of physicians is a top priority.

8. Apps Proliferate: Consumer-facing First, Private Practice Second, Enterprises Dead Last
Hit In hindsight, another admittedly easy prediction to make. What may be a more interesting prediction is when will mHealth Apps really become a truly viable market? Does the profitable exit of iTriage/Healthagen, which was picked up by Aetna portend such? By our standards, no. Go back to our recent post from the mHealth Summit for more in-depth analysis.

9. The Poor Man’s (doctor’s) HIE Takes Hold
Miss We thought that the Direct Project would quickly take hold and see rapid adoption among smaller physician practices and those organizations looking to “connect the last mile” to small affiliated practices in their network. Not happening yet though the current administration is doing its best to push this technology by requiring all state designated entities that are standing up statewide HIEs to include Direct in the strategic operating plan.

10. Analytics & Business Intelligence Perceived as Nirvana 
Hit, kind of… 
In retrospect, not even sure this was really a prediction but simply more of a statement as to where healthcare organizations are headed with their HIT investments. We have a long ways to go, though there is certainly no lack of vendors that now are touting some form of analytics capabilities. Our advice, tread carefully as most solutions today are half-baked.

11) The Buzz at HIMSS’11? Everything ACO! 
Miss 
While some vendors were discussing ACO enablement at the 2011 HIMSS, the vast majority were not with the key focus continuing to be meeting Meaningful Use requirements. As mentioned in previous prediction, we see MU as a tactical issue with the strategic issue being: How do we leverage IT infrastructure to support communities of care? Maybe at HIMSS’12 we’ll see more discussion of this issue, but we’re not holding our breath.

This may have been our best year yet with our predictions having only 3 clear misses out of 11 predictions made. Granted, some of those predictions were not exactly the most profound or shall we say big stretches, but we do take some satisfaction in really nailing a few.

And while we intend to provide our own 2012 predictions, no time like the present to begin the process. So we ask you dear reader, what is your 2-3 top predictions for 2012? Will Todd Park stay on at HHS? Will forced budget cuts decimate HITECH? Will the Supreme Court’s ruling on ACA have any impact on HIT spend by either payers or providers? Will mHealth Apps such as WellDoc’s for diabetic care finally receive a CBT code thereby accelerating adoption of such tools?  We look forward to your input.

And of course we wish everyone a Joyous holiday season and wish you and yours continued good health in the new year to come.

Home for Christmas by Thomas Kinkade

Microsoft Bows Out of the Clinical Market

Today, GE and Microsoft announced a joint venture (JV) that will lead to the formation of a new company (NewCo) targeting the clinical healthcare market sector. The NewCo will be located near Microsoft HQ in Redmond, WA, start with roughly 700 employees and combine the remaining Microsoft clinical products, Amalga UIS and the former Sentillion products Vergence and expreSSO with GE’s eHealth and Qualibria suite. NewCo’s new CEO will be GE’s Michael Simpson, who has been heading up the combined Qualibria-eHealth group since earlier this year after a re-org at GE. Along with this announcement, Microsoft’s Health Solutions Group (HSG) leader, Peter Neupert stated that he’ll be retiring.

Combine the above announcement with Microsoft’s long anticipated sale of Amalga HIS, which went to Orion Health in October, and you are left with Microsoft completely pulling out of the clinical market. Sure, they’ll claim to be still in healthcare by directly selling their horizontal products (e.g., SharePoint, MS Office, various server products, etc.) into this sector and having a stake in this JV, but it is also exceedingly clear that Microsoft will no longer have any direct involvement in this market, that will be left to GE. That being said, Microsoft did state that they’ll hang onto HealthVault, but even here, that is more likely a by-product of no one wanting to take on HealthVault rather than Microsoft’s strong desire to continue to try and build a viable, revenue generating entity out of it. Do not be too surprised if, in a year’s time, HealthVault falls to the wayside much like Google Health did this year.

During our briefing call with Microsoft and GE we learned the following:

Core to NewCo’s objectives is to leverage the joint assets of Microsoft and GE to build out an entirely new platform that will focus on four key areas to begin with:

  • Clinical surveillance to identify such things as infection outbreaks within an acute care facility before they run rampent.
  • Population health management to facilitate care management processes, which is a productization of work GE has been doing with Geisinger as part of the Keystone Beacon program.
  • Reduce hospital readmissions by leveraging analytics to identify patients at risk and initiate appropriate interventions.
  • Facilitate transitions in care, which like reducing hospital readmissions, is something that is on the mind of every senior healthcare executive we talk to.

These four target areas are nothing new or inspirational as just about every vendor we talk to has some program in place or under development to address these four areas as well. The product roadmap does not have much hitting the market until 2014.

Financial terms were not disclosed but our guess is that Microsoft contributed IP and the development team behind these products. In return, they will receive some sort of royalty stake in future sales. GE will lead the new organization, contribute its Qualibria/eHealth IP and GE sales and marketing will take the product(s) to market. Thus, most sales and marketing folks and other support staff in Microsoft’s former Health Solutions Group are being shown the door, which is unfortunate as we head into the holidays.

A couple of things come across as a bit ironic. First, Microsoft executives time and again stated that they knew what they were getting into when they entered this vertical and that it would take patience to build a viable presence. So much for patience. Second, Microsoft sold off the Amalga HIS product as many a potential HIT partner was wary of partnering with Microsoft as long as Microsoft had under ownership an EHR. Now what does Microsoft do, it joins in partnership with a struggling HIT vendor in the acute care market. Will any of the other major or even second tier HIT vendors partner up with the GE/MSFT NewCo – don’t bet on it.

The announcement also raises more than a few questions such as:

What becomes of Microsoft’s existing HIE contracts, particularly the one they pulled all the stops out to win, the Chicago HIE which is now under development?

What becomes of Microsoft’s recently announced relationship with Orion Health? Will Orion now be partnering with NewCo, which is essentially GE?  GE, with its own HIE solutions targeting enterprise accounts, is a direct competitor to Orion.

What becomes of HealthVault Community Connect, which combined Amalga with HealthVault and SharePoint? Is this now a dead product or will NewCo simply use the Centricity patient portal?

As you can probably tell by the tenor of this piece, we’re not a big fan of this announcement and are disappointed that Microsoft has decided to fold-up its tent and retreat. Unlike the legacy HIT vendors in this market, Microsoft could lay the claim to some neutrality and potentially build-out an Amalga-based ecosystem platform. But business is often not kind to those that have an altruistic bent and in this case Microsoft simply made a clear-cut business decision to unleash an asset that was not meeting internal metrics despite what some believe may have been an investment in excess of $1B in the last 5 years to build-out HSG.

Once again, another company with grandiose plans to change healthcare has quietly walked away leaving this market to the incumbent HIT vendors. We also do not see strong prospects for the future build-out of a robust ecosystem of partners on the combined Amalga-Qualibria platform that NewCo proposes as there are too many competitive issues that just get in the way. We could be wrong on this one, but our guess is that NewCo is likely to struggle as much as Microsoft has in the past for relevance in this fractious HIT market.

Addendum:
Sean Nolan, chief architect for Microsoft HealthVault, provides his own view on this JV announcement. While his view differs from ours on the implications and future of this JV and HealthVault, one thing we do hope that Sean proves us wrong on, is the future success of HealthVault. We would love nothing more than to see it succeed but at this juncture, we remain pessimistic. 

Stepping in Where Google Health Left Off

A little over a week ago Google stated that it was putting a stake through the heart of their personal health platform (PHP) Google Health. We at Chilmark had been expecting this for some time, it was just a manner of when it would become official. Thus, we were somewhat taken aback by all the publicity surrounding this final chapter with our own post on the topic receiving well over 40 comments and link-backs (that may be a record – thanks everyone for contributing to the story). With the closing of Google Health, we postulated in that post that Microsoft really had no other worthy competitor that will challenge them to continuously make enhancements to HealthVault. We may have spoken prematurely.

Stepping in to take the place of Google, is none other than an ol’school EHR company (and one of the largest), Cerner, who provided their own commentary on the demise of Google Health and their future intentions. Last week we had the opportunity to talk with the Cerner Health and learn more about those intentions but before getting to that, some quick background.

Taking a different tack:
Cerner has been in the HIT business now for 31+ years having grown to one of the leading EHR vendors in the market. You’ll usually find their systems (EHR: Millenium) in large healthcare organizations. This sector of the EHR market is seeing fierce competition as Epic seems to pick up one win after another at the expense of others, including Cerner. While continuing to go head-to-head with Epic, it appears that Cerner has also chosen to take a different tack, adopting a philosophy of: if you can’t beat them straight up, change the rules of the game.

In this year’s Annual Report, co-founder and chairman Neal Patterson spoke of Cerner’s origins, its staying power in the market but most importantly, the desire to transpose Cerner from a “care company” to a “health company” stating his belief that

…the business of health may eventually become a bigger business than the business of care.

In conversations with several Cerner executives, it becomes pretty clear that this company is truly looking to remake itself into one that adopts an open approach to not only sharing information (Cerner was very instrumental in the Direct Project) but provides a foundational “network of services” to enable “communities of care.” Those communities can be within a city, a region, an employer or a State. On the HIE front, Cerner recently won the Missouri State contract (not too surprising, it is in their backyard) but Cerner is also looking to land additional multi-stakeholder, HIE contracts with their partner Certify Data Systems. Unlike virtually all other EHR-derived HIE solutions, Cerner’s is actually pretty open and can interface readily with any EHR provided the EHR uses common data standards (e.g., CCD, CCR, etc.). But what may be even more interesting then what they have done in the HIE market, is what Cerner intends to do in the broader consumer market.

Cerner Health:
Last year at Health 2.0 a couple of representatives of Cerner made a fairly simple but engaging presentation on some of the gaming concepts they were developing which reminded one of some of the earlier developments at what is now Humana’s defunct skunkworks, Crumple It Up. Though a bit gimmicky, the presentation caught one’s attention as it was certainly out of character for any EHR vendor, let alone one of the leaders.

Now, some nine months later Cerner announced its intention to take Cerner Health beyond what Google Health was (not too hard to do). The leadership team at Cerner Health graciously hosted a call with Chilmark Research to further discuss exactly what those intentions are which are outlined below:

Provide a wide range of health & wellness services for employers.
Cerner has been eating its own “dog food” for the past year using Cerner Health to promote health & wellness among their employees who to date have lost a combined 12 tons of fat (take that Biggest Loser). This weight loss program will be rolled-out across Cerner’s home town of Kansas City (employers, providers, etc.) in two weeks. Cerner Health will target a number of other health & wellness areas, with programs that include built-in incentives. Clearly, Cerner is targeting WebMD in the employer market, a market that has seen very few comprehensive solution suites and WebMD has been milking that market for a longtime and is vulnerable.

Facilitate population health management – address “communities of care.”
For some time now, employers and payers have been looking to better manage their populations to lower medical loss ratios (MLRs). Providers will be looking to do the same as they take on a greater share of the risk via new contracts (e.g. BCBS-MA’s Alternative Quality Care contract) and future Accountable Care Organizations (ACOs). Cerner Health intends to serve both employers and provider needs in this regard with “Health Graphs,” a conceptual analytics framework that combines multiple data streams to provide an accurate view of population health at the community level. The Health Graphs concept is still a bit fuzzy (as are most data analytics models to address this issue) but what we do like is the focus on communities. To be truly successful at addressing population health, one must operate from that community level. Cerner Health correctly perceives health as a community issue where within a given community, be it an employer, a hospital, a specific condition, a town, a region, etc., there are unique needs requiring a focused approach.

Provide a PHP with an ecosystem of third party apps and go direct to consumer.
Cerner Health will go head-to-head with HealthVault by offering a PHP with a published software development kit (SDK) for third party independent software vendors (ISVs) by year-end. This will enable an ecosystem of applications to potential sit on top of the Cerner Health stack. Currently, the SDK is undergoing testing with a limited set of beta ISVs to fully flush-out capabilities, documentation etc., before a broader roll-out. In addition to releasing the SDK at year-end, Cerner will also open the doors to any and all consumers/patients to store their personal health information (PHI) on the Cerner Health PHP. Similar to HealthVault, Cerner Health will support all leading data standards, Project Direct protocols, and certainly allow one to upload their Blue Button files to the PHP.

The big challenge for Cerner on the PHP front is soliciting ISVs to join. Many will perceive Cerner as a competitor to their own initiatives and one should not expect competing EHRs (Allscripts, eClinicalWorks, Epic, GE, Nextgen, etc.) to readily partner either. Where Cerner Health draws the lines of what it intends to take to market and what it will look to partners to provide remains unclear. In what is still a very immature market, this is not necessarily a bad thing but it will prove challenging for Cerner to build-out that ecosystem on the PHP without clearer articulation of intentions.

The Wrap:
Cerner’s entry into the health market is a bold move and hardly a slam-dunk. Reading between the lines, Cerner Health has an extremely broad charter that will likely bring it into competition with a wide range of vendors outside its traditional EHR haunts including Microsoft, Intuit and WebMD to the multitude of disease management firms and of course population health analytics firms such as Ingenix, Thomson Reuters, SAS and IBM. Have they bitten off more then they can chew? That’s a very real possibility. But one thing this company does have going for it is staying power and one would be foolish to discount them this early in what will be a very long race.

GE and Intel Target Telemed, Put $250M on Table

telemedGE and Intel today jointly announced a partnership to address the healthcare telemedicine market, which they peg at $3B today, and more than doubling to $7.7B by 2012.  Companies agreed to pool $250M for R&D over the next five years.  Also, GE will become the channel to take Intel’s Health Guide to market. This announcement will certainly put Philips in an uncomfortable spot as to date, they seem to be in the dark with no significant push or news to note.

What would have been a real killer here is if Peter Neupert, or heck, since this was a CEO affair, Steve Ballmer were also in on the announcement, signing on to the Continua Alliance (something Intel helped get started) and talking about linking telemed to HealthVault (like what is being done at Cleveland Clinic) and subsequently closing the loop to physician practices.  But since Microsoft is reluctant to jump on to the Continua bandwagon, why not Eric Schmidt and Google Health since Google Health demonstrated such capabilities last fall at Connected for Health?

The NEJM released a study today on that looked at readmissions of Medicare patients from 2003-2004, finding nearly 20% of Medicare recipients requiring readmission within 30 days of discharge at a cost to taxpayers of $17.4B a year.

Now let’s look at a scenario where we were to combine GE, Intel and HealthVault.

Patient goes in for procedure, is discharge with all instructions, clinical notes etc. loaded up to their HealthVault account, which they can then share with their PCP.  Patient also receives a home monitoring kit, ala Health Guide and GE biomtric devices for telemed. With this kit, patient records daily readings that are fed directly into the Health Cloud of HealthVault where the care team, with patient consent, can view daily progress.  Also, since it is up in the Cloud, loved ones (remote family members, say a daughter or son) can also monitor progress.  If those daily recordings show any problems, there can be quick and more cost effective intervention.

This seems so logical and certainly points to a clear and compelling business opportunity as we certainly do not have th facilities to handle the aging baby boomer population.  Now if we can only get Medicare (CMS) to see the logic as to date, they have been extremely reluctant, some say incalcitrant, in funding virtually any telemed.  That being said, it does appear that CMS is ever so slowly dipping their toe into telemedicine.

No Longer Just Chips at Intel

Late last week, Intel announced that it had received FDA approval or its consumer/caregiver centric health device, the Intel Health Guide.

The Health Guide is a single purpose platform to facilitate telehealth by collecting data from devices (heart rate, weight, glucose, etc.) and securely transmitting the data for remote monitoring by a clinician or other caregiver. Intel also states that the Health Guide will also enable secure email communication and delivery of health-related content to the end user (consumer). This is the second product to come out of Intel’s Digital Health Group, the first being a clinician-centric, mobile computing platform, the MCA.

The release of Health Guide follows last month’s announcement by Intel of the social caregiver’s website, ConnectingforCare, which was formed in partnership with the National Family Caregivers Association. This site is still very immature and lacking critical content thus begging the question – Do we really need another social community website such as this when we are already inundated with numerous, healthcare centric social sites?

Reading through some of Intel’s documents (caution PDFs) on their health care evolution and design philosophy, it is clear that Intel has every intention to move from a passive player in the market, supplying microprocessors (chips) to any and all takers, to becoming a direct developer, marketer and seller of devices such as the Health Guide. Intel sees a huge opportunity in the telehealth market to serve an aging baby boomer population that will increasingly use technologies such as this to manage their health, in conjunction with their physician, from the comfort of their home.

Savvy move on Intel’s part as there is indeed a significant opportunity and I see no single dominant player in the market today. Sure, Philips is there as well as Omron and Panasonic, along with GE giving it a close look but no one has taken a commanding lead. Thus, there are no formidable barriers to a new entrant such as Intel. It is still a wide open market.

But in reading the announcement I am struck by the lack of reference on Intel’s part as to how the Health Guide fits into the broader context of care and in particular, electronic records, be they PHR, EMR or EHR. No reference whatsoever on this front which has me quite puzzled as Intel is a key partner in the Personal Health System (PHS) Dossia, which Colin Evans, formerly of Intel, is now leading. This raises a number of questions:

  • How will the Health Guide fit into a consumer’s existing PHR such as one from RelayHealth which already has secure physician-consumer communication embedded in the PHR?
  • Similarly, how will Health Guide interface to a solution like ICW’s LifeSensor PHR that has a significant number of interfaces to existing biometric devices?
  • How might Health Guide integrate into a clinician’s existing workflow and EMR solution and if the clinician offers a patient portal, will Health Guide automatically populate the patient portal with biometric data and any communications that occur electronically?
  • What might be the connection between the Health Guide and a PHS. For example, Microsoft’s HealthVault is in many ways similar to Health Guide (at least from a software perspective) in that it offers secure communication of biometric data to a secure server for storage and retrieval? Are these competing solutions or complimentary?

In making the announcement of FDA approval, Intel also stated that the product would not be released to market until late this year or early next. That should give Intel enough time to further clarify the positioning of Health Guide and address the questions above. Otherwise, despite all the bells & whistles, Health Guide will struggle.

For a more positive spin on the Health Guide, here’s a brief interview with the Health Group WW Director of Marketing and Sales.

[youtube=http://www.youtube.com/watch?v=gi9m75BSg4s]

Snap Shots from HIMSS

Here at the big, dare I say massive, healthcare IT (HIT) conference for the next couple of days. It is late, I’m exhausted, and the prose may not be the best, but wanted to give a few impressions/snap shots from this first time attendee.

Did I say big? Indeed it is with some 900+ exhibitors this year and those exhibitors range from the big boys, like GE, Siemens and Philips to nano-sized, niche vendors selling odd widgets that not many people seem terribly interested in.

HIMSS is very insular and could use some outside perspective(s). Sessions I attended today had senior IT executives from providers and vendors all parroting themselves. A certain amount of this can be expected, but I find an unusually high level of it here.

The dominant view is that it is not a consumer, but a patient that everyone is ultimately serving. While I understand and appreciate where this perspective originated from, it is a perspective that is so 80’s. The times they are a changing and the CIO needs to begin looking outward to engage the consumer. I’m not seeing any originality here at HIMSS on how to make that happen. Too bad Deloitte isn’t here to give a keynote presentation on some of the findings from their recent consumer healthcare study, that might shake them up a bit.

Then again, maybe not.

A couple of CIOs I spoke with told me that they get very little consumer traffic on their hospital’s website and what little consumer traffic they do get is 80%+ focused on the job listings. Therefore, they are dedicating resources to other, more pressing activities.

With all the buzz about consumer health and a consumer’s purported desire to use Web-based tools (see recent Deloitte report), makes one wonder where is the disconnect. Is it just that these CIOs have made their websites so difficult to navigate that a consumer simply gives up, or is it just easy for someone being interviewed over the phone to say yes, sure I’d like to schedule an appointment over the Web with my physician, but when giving that capability, still reverts back to traditional methods. This is something that is going to require more digging to get to the bottom of.

Sat through a somewhat embarrassing media session hosted by HIMSS to present the findings of their annual CIO Leadership survey. Embarrassing for one savvy reporter pointed out some serious inconsistencies in the survey data exposing some equally serious flaws in methodology. And what I found particularly bizarre is what the survey left out. For example, no inquiry on pay for performance, even though this is a key business issue that will be heavily dependent on HIT in the future.

The most grandiose, over the top booth award goes to McKesson, who has a huge exhibit with the biggest light display I have ever seen at any conference. They certainly blew out their carbon footprint with that exhibit. Sure hope they don’t have any “Green” messaging in their booth.

The most understated booth award goes to our most recent entrant to the HIT market, Google, who had at best a 10’x20′ booth which was absolutely abuzz with people 4-5 deep, which basically crowded out the aisle as well. Luckily, I know one of the Google Product Managers and was able to get in quickly, get some questions answered and move on. Google is still very sensitive about their PHR, quickly shooing someone away when they tried to grab a quick pix with their cellphone.

The most effective booth display was EMR vendor Epic’s posting of their most recent KLAS rankings. Needless to say, they are blowing away their major competitors, Cerner, Eclipsys, McKesson, Siemens and GE. Simply amazing how far ahead Epic is ranked on a variety of key metrics in comparison to these competitors.

Best demo: RelayHealth PHR. I knew RealyHealth did consumer-physician communications, but I did not know that they had as much PHR capability as they demonstrated to me today. Really quite something, though I have some reservations about the solution as it is really targeted for the physician and actual patient control features appear to be weak. Will learn more tomorrow when I sit down with one of their executives.

At this point, I’ve been going for 17+ hours straight. Time to get some sleep and get ready for another long day tomorrow.

Note: For some reasons, quite possibly due to exhaustion, inadvertently hit the wrong button so this did not go up last night as planned. So, slightly late but still relevant.

With Merger, Is WebMD Now in Play?

This morning, along with announcing very good 4th qtr growth at WebMD, a concurrent announcement was made that Healtheon and WebMD have agreed to merge, putting the value of the combined entity at about $2.3B. Due to the structure of the deal, WebMD will also end up with a hefty war chest estimated at $700M.

While I am no financial analyst, what I do know is that the past ownership structure of WebMD (84% owned by Healtheon) made WebMD a difficult acquisition target. Now that the two have combined WebMD may become much more attractive to a potential suitor.

WebMD is an attractive property for a number of reasons including:

Brand Recognition – They are the 800 pound gorilla in the personal health and wellness market, no one comes even close in numbers of page views and unique visitors.

Customers – WebMD has a long list of enterprise customers, both employers and health plans that is the envy of the industry.

Hot Market – Seems like everyone is clamoring for a piece of the action in the personal health and wellness space including the big boys Microsoft and Google.

Cash – A $700M war chest is nothing to sneeze at.

So who will come courting? Some likely suspects include:

RevolutionHealth could benefit with some added breadth and depth from WebMD and would love those WebMD customers. Also, WebMD had a relationship with AOL (discontinued last year) and RevolutionHealth is run by former AOL head, Steven Case. There will, however, be a lot of overlap that will need to be rationalized. Probability: High

Google may like the content and some of the tools WebMD would bring, but they are also pretty far along in their own plans/development and Brand, well Google has plenty of that. Probability: Low

Microsoft is much like Google, but has a greater propensity to make an acquisition to keep Google at bay. Microsoft might acquire WebMD as a defensive move. Also, Microsoft might like to have all those enterprise customers, not that they don’t have them already, but it could sure extend their presence in enterprise accounts. Probability: Medium

Intuit has taken a decidedly low profile approach to the PHR market. If they wanted to dramatically boost their visibility and further strengthen their product portfolio, this would be a good move for them. Unfortunately, it takes Intuit outside of its sweet spot/core competencies, thus they are unlikely to make a move. Probability: Low

Yahoo? Why not, though they seem to be ignoring the health & wellness market and have enough issues to deal with right now, primary among them the beast from Redmond. Probability: Low

Large insurers like WellPoint or Cigna could make a move similar to Aetna’s acquisition of ActiveHealth or UntiedHealth’s acquisition of HeathAtoZ and acquire WebMD. Thing is, the scale of a WebMD acquisition is massive in comparison and it could get quite messy as a lot of health plans (over 100) have some form of a relationship with WebMD and may bolt if WebMD goes to a competitor. Probability: Medium-low

Other HIT vendors such as McKesson, GE, Siemens, etc., are focused on business to business sales and in particular sales to hospitals. While WebMD gives them future paths for growth and could be leveraged in innovative ways (connecting clinicals to PHR and decision support tools), falls outside their current sales and distribution channels and is simply not in their DNA. Probability: Low

I’m sure their are other suitors out there, but this is just a quick hit list off the top of my head. And while I can give no definitive answer as to who the suitor will be, WebMD will have new ownership in 12-18 months. Probability: Very High

Predictions 2008: Telehealth Jumps, RHIOs Fade, Legislation Stalls & PHRs Get the Press

A common practice in the analyst community is to take a look back at what has occurred and project forward as to what we might see in the coming year. I won’t spend anytime on what has occurred as you can always drift back to previous posts.

Following are the Top Ten predictions for 2008. Note, these predictions are primarily focused on our core research competency – Personal Healthcare Technology. And if these top ten differ from yours, by all means give us a comment providing your list.

1.) Election Year Puts Many Initiatives in Neutral
2.) Telehealth Continues to Gain Momentum Driving Consolidation
3.) Consumer Electronic Manufacturers Jump on Telehealth Bandwagon
4.) Legacy HIT Vendors Copycat AthenaHealth with Their Own SaaS Offerings
5.) PHRs Still in Headlines, While Adoption Stumbles Along
6.) Attention Turns to PHSs, but Vision Remains Well Ahead of Reality
7.) PDF – Healthcare Hits the Streets, Retail Clinics Love it, Physicians Less So
8.) Personal Identifier Initiatives on the Hill are DOA in ‘08
9.) Employers Expand High Deductible Plan Offerings, Consumers Challenged
10.) HIEs Hold Steady, RHIOs Fade Away – Major Re-thinking of NHIN

Election Year Puts Many Initiatives in Neutral
As the Bush administration continues to see high-ranking officials leave office, no new healthcare-centric initiatives are launched and those, such as the ill-fated National Health Information Network (NHIN), are put on life-support. Even pay for performance (P4P) activities are pulled back until a new administration is in place (mid 2009).

Telehealth Continues to Gain Momentum Driving Consolidation
2007 saw several reports touting the efficacy of telehealth practices, from interacting with a physician over the Internet to the migration of outpatient care and monitoring to the home via health sensor networks and the Web. This will be one of the strongest areas of growth in healthcare technology in 2008 with annual percentage rate growth in the mid-teens. Growth will drive consolidation, as large established players such as Philips, GE and Siemens acquire smaller device manufacturers with either unique technology platforms or specific vertical market presence.

Consumer Electronic Manufacturers Jump on Telehealth Bandwagon
The growth in telehealth and simple demographics (this market will only get bigger) will attract other electronic manufacturers with strong Brand and established consumer distribution channels. Think Sony, Toshiba, LG. Still too early for Nokia and Apple, but they are coming. These companies will also look to acquire, or partner with established players in the personal health technology market to gain domain knowledge and market presence. The upcoming CES confab in Las Vegas may shed some light on who will make the first move.

Legacy HIT Vendors Copycat AthenaHealth with Their Own SaaS Offerings
The success of AthenaHealth in the market and on Wall Street (10th best performing IPO in 2007) is certainly not lost on the traditional Healthcare IT (HIT) vendors. Like the software firms in the enterprise market who have all tried to replicate Salesforce.com with their own SaaS CRM solution, expect the legacy HIT vendors to do the same in their attempts to replicate AthenaHealth. Expect the same lack of success. To date, none of the traditional enterprise software vendors have been able to catch Salesforce.com, which still shows remarkable momentum in the market.

PHRs Still in Headlines, While Adoption Stumbles Along
With the impending release of Google Health in the first half of 2008, we will continue to see a lot of press dedicated to Personal Health Records (PHRs). Despite the press and employers who continue to adopt these solutions for their employees to foster better healthcare practices, there remain many significant challenges that will prevent the PHR market from really breaking out. Expect 2008 to be a build-out year for PHR vendors, thus tracking large customer wins, partnerships and alliances of these vendors will be critical to assess long-term viablity.

Attention Turns to PHSs, but Vision Remains Well Ahead of Reality
Microsoft has HealthVault, employers have Dossia and Google will have Google Health (or some other Brand name) by mid-2008. All of these are Personal Health Systems (PHSs). They are not a PHR, but a data repository and ultimately a utility that other applications, including PHRs can tap to serve the consumer. Each of these PHSs have enormous resources behind them, but their vision is far ahead of what they will be able to deliver in 2008. There is a lot of heavy lifting (standards, tagging, document management, security, etc.) that these entities will need to address, consuming most of 2008. Look to mid-2009 for these systems to be at a level of functionality that is useful to the broad market.

PDF-Healthcare Hits the Streets, Retail Clinics Love it, Physicians Less So
The “Best Practices Guide” for the use of PDF-Healthcare is making its way through the formal review process with expected release in the next month or so. Currently being used by one of the largest retail clinics, PDF-Healthcare has demonstrated its utility for this retail clinic that is now exchanging over 10,000 unique PDF-Healthcare documents a day throughout its organization.

While this retail clinic has reaped a number of advantages through the use of PDF-Healthcare, and larger healthcare providers will do so as well, smaller physician practices will be challenged by this format as most are ill equipped to accept such digital documentation. Thus, PDF-Healthcare will become another forcing function for physician adoption of EMR, something that most have been loathed to do.

Personal Identifier Initiatives on the Hill are DOA in ‘08

Several proposals surfaced in 2007 calling for the establishment of a personal identifier for American citizens to better track/tag their medical records. This is becoming increasingly relevant as use of digital records accelerates. Despite a very real need for personal identifiers, this issue exacerbates existing fears of privacy and government intrusion. Thus, this will not see the legislative light of day in 2008. A new administration may take it up in 2009 if they receive a strong mandate from the public (i.e., a landslide victory).

Employers Expand High Deductible Plan Offerings, Consumers Challenged
Building upon the growing trend we saw in 2007 of employers seeking new ways to lower their exposure to double digit growth in medical benefit costs, consumer-driven health plans, most often with high deductibles, are now in vogue. Young, healthy employees sign-on to such plans, chronic care sufferers reject them and middle-age employees with families struggle to determine what is best for them. Unfortunately, for this latter group few resources are available to assist them with making the best choice. And as for those young, healthy and very often Internet-savvy employees, they look to the Web to help them pick a doctor and control expenses. But they to will come up empty handed as cost transparency will remain elusive in 2008.

HIEs Hold Steady, RHIOs Fade Away – Major Re-thinking of NHIN
The reports released at the end of 2007, the first on the relatively dismal state of Regional Health Information Organizations (RHIOs) and the second on the modest success of Health Information Exchanges (HIEs) were simply a harbinger for 2008. Expect 2008 to deliver more of the same for RHIOs as they continue to struggle to establish a value proposition that will overcome competing entities participation in a RHIO. And there is the nagging issue of a revenue model for RHIOs to make them self-sustaining long-term – to date, this issue has not been solved. Both of these problems will lead to nearly a third of the remaining RHIOs closing their doors by the end of 2008 and another third will be best characterized as the walking dead.

While RHIOs fade, HIEs will continue to operate and see modest growth. Unlike RHIOs, HIEs are formed by entities that have a strong desire to share information, not withhold it. But HIEs will not be the panacea to the need for a NHIN as their reach will be limited and highly localized. This will limit the overall growth of HIEs and subsequently, their impact to the market.

Philips Continues Buying Spree

Philips Electronics announced on Friday that it will acquire Respironics for $66/share or about $5.13 billion, a 24% premium.   This is the third and largest healthcare-centric acquisition that Philips has made in December.  The first was Emergin, a small company (~100 employees, estimated $18 million in 2007 sales) and provider of medical alarming systems for hospitals.  The second, Visicua a supplier of systems for remote monitoring of intensive care units, was acquired for $430 million.

All three acquisitions are the manifestation of Philips’ “Vision 2010” strategy, which was announced in early September. As part of this new vision for the company, divisions have been realigned into three distinct groups, lighting, consumer lifestyle and healthcare with planned investments to build these three into market leading organizations.

Within healthcare, Philips combined its separate Medical and Consumer Health divisions into one entity. While the first two acquisitions are in support of the former Medical group, the Respironics acquisition will provide solutions that span both the hospital/provider market and the home healthcare market.

The acquisition of Respironics, while appearing expensive at first blush, is a brilliant move and will, if executed properly, reap significant benefits for Philips for a number of reasons including:

  • Fills a gap in Philips current product portfolio allowing them to deliver to market a more complete solution suite.
  • Respironics is on a tear, with revenue growth in the mid-teens and margin growth of nearly 20% that shows no signs of slowing. They also appear to be a very well managed company and Philips has publicly (and wisely) stated they foresee no layoffs as a result of this acquisition.
  • Respironics, a US-based company has only recently made significant in-roads in overseas expansion, which represents roughly 31% of sales in FY06. Philips, with its broad international distribution network, could see some quick gains by broadening Respironics international presence.

Philips is positioning itself well for the inevitable move to deliver far more healthcare services, via telehealth, within the home rather than at a hospital or physician practice.  One of the nation’s largest, integrated healthcare providers, Kaiser-Permanente, for example is exploring new ways to deliver healthcare at the home to minimize the need for building more facilities.  Several studies have also been recently released that clearly demonstrate the efficacy of telehealth.

With the minor exception of the partnership between GE and Boston Scientific, Philips’ major competitors Siemens and GE have been relatively silent, leaving one to wonder if they lack the vision or have simply chosen to head down a different path.  My guess is that they are watching Philips’ moves with a wary eye and 2008 may well see a number of follow-on acquisitions by these companies to keep pace with Philips.

Update on the GE-Boston Scientific Partnership

Recently wrote a brief post on the GE-Boston Scientific partnership, but left a few questions unanswered awaiting a reply from one of the companies. Received an email today that helps clarify the partnership.

First-off, it is an exclusive partnership between these two companies. No need to despair, however, as the exclusive clause is for a very brief 90 days. Such short-term clauses are designed to allow a partner to get some early traction in the market, via a media blitz, but that is about it.

Boston Scientific also went on to say that LATITUDE is HL7 compliant, thus having the ability to interface with any EMR solution that adheres to the HL7 standard. Granted, it will take a bit more work on the part of a hospital’s IT system to integrate LATITUDE with their EMR via HL7, versus the out -of-the-box integration that GE will offer with Centricity, but it is possible.

As an added note, Boston Scientific also stated that they are working with competitor Medtronic’s Paceart group to insure interoperability with that platform as well.  Looks like everyone might be a winner there.

GE and Boston Scientific Push Telehealth Envelop

Mid last week, GE and Boston Scientific made an interesting announcement wherein Boston Scientific’s patient monitoring platform, LATITUDE will be able to automatically update a patient’s Centricity-based electronic medical record (EMR).

Currently, cardiologists use LATITUDE to remotely monitor a patient’s defibulator implant, but this data is collected and stored separately, outside of a patient’s core medical record.  LATITUDE appears popular with strong adoption since its introduction in 2005 as Boston Sci. claims that 1,700 clinics now use the software to monitor over 70,000 patients.

While LATITUDE has seen strong adoption, a major shortcoming of the software has been lack of connectivity/interoperability to allow LATITUDE data to automatically populate a patients health record within a clinic’s EMR system.  With this partnership, at least those who are using Centricity, cardiologists and others responsible for a patient’s care will be better able to track a patient’s well-being, collaborate where necessary and hopefully lead to better outcomes, or at least better internal workflow and thus efficiencies.

Did try contacting Boston Scientific to ask if this was an exclusive deal with GE.  No response.  Hopefully, for their sake and the broader market, it is not exclusive as GE is far from the leading solution out there in the EMR market.

And taking it in another direction, wonder if Boston Scientific is working with Microsoft to have LATITUDE and their devices also interoperate with HealthVault.  Seems quite logical as in their press release, they also mention how LATITUDE is also being combined with wireless weight scale and blood pressure monitoring equipment that they are now taking to market to provide more comprehensive wellness data to a physician.