HIMSS’15 Pilgrimage: Impressions and Takeaways

CRinMoroccoAnother year, another HIMSS conference. While I often may gripe about this event; the seemingly endless parroting of buzzword(s) de jour, the countless press releases that really are much ado about nothing and highly questionable surveys and research results, that have little founding in reality, there is a silver lining to all of this…

HIMSS affords me the opportunity to meet with so many people I’ve come to know in this sector. Some are my mentors, others clients or partners and all have become friends. That friendship extends from a shared desire and dedication to improve healthcare delivery through the effective adoption and use of IT.

While HIMSS is utterly exhausting it is also incredibly invigorating – kind of a Yin/Yang thing.  I always return from the event with a ton of ideas as to where Chilmark can further assist this industry, because frankly, finding good objective research and insights in this sector sure seems tough to come by.

Key Takeaways:

The “Big Data” hype cools to a simmer. Thankfully, the number of companies quoting, referencing or inferring how they address big data has subsided. This sector needs to get the little data right before it can step-up in any meaningful way to big data.

PHM is a too vague a term. The challenge with population health management (PHM), as a term, is that it is so broad. This results in virtually any vendor laying claim to it – though they may only be solving a very small piece of the PHM puzzle. No vendor at HIMSS’15 has a solution that can fully enable a PHM strategy. Met with many a CIO who has come to same conclusion, but every CIO struggled with same problem: Where best to start and with who?

Everyone does Care Management. In his post prior to HIMSS, our analyst Matt predicted that care management/care coordination would be the new buzzword term de jour. He was spot on. Countless vendors had banners promoting their ability to address care management processes. Unfortunately for users, when one takes a deeper look at these care management apps, one typically finds a glorified spreadsheet. Surely we can do better than this!

Clinical analytics is cool, but financial and clinical analytics together insures long-term survival. Saw plenty of vendors promoting their latest analytic wares and virtually all the demos focused on clinical analytics. Only a few vendors have taken the next step and are co-mingling clinical and financial analytics – which will be absolutely critical for HCOs. Unfortunately, most of these solutions make it far too difficult to perform such a simple task as: At the patient level, identify the most costly patients, what is driving the high costs of care for these patient(s) (visits to specialists, procedures, labs, meds, etc.) in order to determine what may be done to reign in costs.

Notes & Observations

A couple of companies I spoke with, Arcadia and Health Catalyst, did talk about the co-mingling of clinical and financial data, but as mentioned previously, they were in the minority.

ICW was back after a five year hiatus from HIMSS. They’ve gone through a major restructuring to refocus their development efforts on HIE and care management. They’ve always had some pretty decent technology under the hood – their challenge has been channel(s) to market. Not easy for a company from abroad.

Humana announced Transcend Insights (combo of Certify Data Systems, Anvita and nliven), yet another payer-led solution suite. They’ll be challenged to compete with Aetna’s Healthagen and UHG’s Optum. Humana’s deep expertise in Medicare may be key differentiator.

Caradigm looks to be finally gaining some traction and their booth was very busy. They are beginning to get some wins for their Care Management suite, which they co-developed with Geisinger Health.

Orion Health has the most visionary architecture for CNM that I have witnessed to date. Now they have to execute on that vision.

RelayHealth now has both performance analytics (HBOC) and MedVentive under its wing. They will be combining RelayHealth’s data aggregation capabilities, these analytics solutions and hosting in Microsoft’s Azure Cloud. Going beta this summer at ten sites and G.A., by end of summer.

Apervita was one of the more interesting briefings, as they are a company trying to create a marketplace for analytic algorithms that an HCO can source and apply to their EDW. Recently landed Series A round – one to watch.

Aetna’s Healthagen is targeting self-insured employers as well. In North Carolina, the PHM program Healthagen rolled-out across the 680K state employees realized a savings to the state of some $450M over three years. Not sure how those savings were calculated, but a number even half that is impressive.

Kryptiq, which recently spun-out from Surescripts, is taking to market Care Manager, an app originally developed at Providence Health in Portland. Solution automates many of the tasks required for CCM reimbursement under Medicare.

The EHR bubble is over but big question is: Will bolt-on sales of PHM-enabling modules be enough to sustain this market? Cerner is seeing very good traction for its Healthe Registries product, but a contract sale of that product likely pales in comparison to a Millennium sale.

The EHR vendors with the biggest, most elaborate booths are also the ones that are struggling the most in today’s increasingly competitive market.

athena2

Athenahealth had by far some of the best marketing booth panels I’ve ever seen at HIMSS.

InterSystems is jumping into the patient portal business. We’ve never been fans of EHR-tethered portals and Intersystems’ move is welcomed.

Health Catalyst continues its momentum, both in raising funds and landing new clients. They are moving fast knowing that the likes of Epic, Cerner and other best of breed vendors are in pursuit.

Lumira, management buy-out of Wellogic from Alere, is building out a solution suite combining engagement, data exchange, biometrics and analytics. Lumira sees itself as a becoming an “Outcomes Company”. How that differs from a traditional MCO is hard to gauge right now.

Everyone wanted to know the implications of IBM’s big announcements at HIMSS. Certainly thought provoking, but IBM has a ways to go to convince the market, especially providers, of what value they can deliver.

The record winning CCD file that Medicity has seen fly over its network was 100MB – that’s HUGE! By way of comparison, one of our 100+pg market trends reports averages about 1.3MB. Is it any wonder that this industry struggles with interoperability.

Plenty of talk and wringing of hands over issue of interoperability, but saw nothing at HIMSS that gave me hope that this issue will be solved across the country in the next 12-18months. Think 3-5yrs at best.

Box had a small booth at HIMSS and unbeknownst to me, acquired a start-up that has a pretty slick DICOM image viewing and medical grade mark-up application that now resides on Box.

BluePrint Healthcare IT’s Care Navigator is a nicely packaged app for care coordination. Children’s Specialized Hospital in NJ have been able to derive some high value from its use in caring for its pediatrics patients.

Wrap-up

Of course, with 42K+ attendees, some 1.2K+ exhibitors there is no way any one person can take it all in. One needs a plan and a highly targeted one at that to be able to really get any value out of this event. As they say, practice makes perfect and this being my eighth or so HIMSS, I am getting a little more practiced at how to navigate this event. Never easy, always exhausting, at times depressing, but also never boring. See you in Las Vegas – the site of next year’s HIMSS.

Stay up to the minute.

“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

Orion Health Aspires to PaaS

Pasted image at 2015_01_12 08_33 AMThe interoperability problems that plague healthcare are compounded by the paucity of developer options for modern software development. Software as a Service (SaaS) models are increasingly commonplace for EHRs, population health and other finished applications. Platform as a Service (PaaS) models to support application developers are essentially non-existent in the healthcare sector, though we have been arguing for this need since our first HIE report several years ago.

For this reason, we were pleased to talk this week to Orion Health about its “Healthier Populations” roadmap to support population health efforts of providers. While the roadmap has many components, one aspect is especially relevant to developers: Orion Health’s plans to leverage “open” technologies to create a PaaS for Healthier Populations.

Briefly, Healthier Populations consolidates all data sources into a NoSQL database (Cassandra) with an API management layer to support clinical applications – both clinician and consumer facing. The new Cassandra data platform also connects out to an in-memory Map-Reduce engine, Spark, which has some very strong performance metrics when compared to the currently popular Hadoop.

Unlike most of the vendors we routinely talk to, Orion Health’s plan uses technologies and development ideas that leverage modern distributed processing concepts, and web-based client functionality. It plans to assemble a comprehensive clinical and financial data source (EHR, HIEs, payer sources) with an API that will provide roughly the data-sharing network envisioned by the JTF.  For now, the API is proprietary but we expect the company to provide the JTF’s recommended FHIR-based open API if and when it becomes a reality.

Orion Health is currently piloting this solution at Cal INDEX, a health information organization (HIO) formed by California’s two largest payers but open to any healthcare data contributor in California. It has information on 9 million patients and aspirations to encompass the health data of most everyone in the state (some 25M). The technology that Orion Health’s new Healthier Populations platform is built upon can certainly handle that scale. What remains to be seen is how quickly Orion Health and Cal INDEX will open up the platform for independent software vendors (ISVs) as the current plan is to do internal development of apps, especially consumer-facing.

This table provides our general impressions of this new offering from Orion Health:

Orion Health Open Platform

Advantages

Challenges

  • Modern computing architecture with open, NoSQL database and analytics staging
  • Better base for analytics, BI tool agnostic
  • Could support wide range of workflows including community-wide care management
  • Highly scalable PaaS architecture
  • Published APIs positioned for eventual FHIR compliance
  • Integration to clinical and administrative workflows
  • Pricing strategy
  • Provider willingness to experiment with new technology
  • Not open to ISVs yet and strategy to remedy unclear
  • Lack of partnerships for analytics tools (e.g., risk stratification, contract management, readmissions, etc.)

 

Orion Health’s Healthier Populations platform is their attempt to assemble a general-purpose, open infrastructure to support a healthcare organization’s (HCO) population health management (PHM) strategy. Orion Health has rightly assumed that they alone will not be able to provide all the capabilities required for PHM and have instead developed a truly state-of-the-art PaaS platform, built on open technologies. This provides a certain level of future-proofing of the solution suite and the flexibility to optimize the platform to meet specific community PHM needs. We are hard pressed to name any other HIT vendor that is in a position to offer anything similar although many will say that they do.

Free Research: Migration to Clinician Network Mgmt

CNMLast summer we published another edition of our popular Health Information Exchange (HIE) Market Trends Report. Over the years, this report has for many, become the “authoritative source of information on the HIE Market.” That’s not me talking, that is exactly what we have heard from those who have purchased this report.

This, of course, makes us feel quite proud as our mission here at Chilmark Research is pretty straight-forward:

Provide research that will assist Healthcare Organizations (HCOs) in their understanding, assessment, adoption, deployment and use of IT to improve the quality of care delivered. 

This is what get us up in the morning. This is what motivates us for everyone here at Chilmark wants to make a contribution to improving this crazy, at times frustrating, market sector.

With the release of the latest 2013 HIE Market Trends Report, however, I had an uneasy feeling. The vast majority of the market continued to view HIE as just that, moving basic health information from point A to point B. If anything, HIE has been further dumbed-down with the advent of Direct Secure Messaging, which is really nothing more than secure, point-to-point email – a far cry from interoperability and query-based information exchange.

Another issue was that I was not seeing much thought going into what is next for HCOs and their investments in HIE. Recent reports such as HIEs reduce ED visits is something we have been talking about for years. Seriously, is this the best we can come up with? What new capabilities will HCOs want (or be able) to enable across their HIE? What is the next level of value realization beyond basic records exchange and lab orders/referrals?

I increasingly came to the realization that the vocabulary of how we talk about HIE needed to change. Language is powerful and our current fixation on HIE and the vocabulary associated with it may be preventing this industry from looking beyond this limited construct. For the purposes of that 2013 HIE report, we used the term HIE 2.0 (did I ever mention I have never been a fan of 2.0 attached to any acronym) to signal a change.

In late fall of 2013, after some discussions with clients, consultants and HCO executives, we decided there was the need to test these ruminations. Chilmark put together a prospectus for a research project on Clinician Network Management (CNM) and found five willing sponsors for this research (CareEvolution, McKesson, Optum, Orion Health and one that prefers to remain anonymous). The research objective was to conduct primary research to determine the state of the market in moving to enable CNM, which goes under many guises including physician alignment, clinically integrated networks, etc. but none of these terms have quite the scope that we envisioned for CNM.

Some of the results of our CNM research are quite telling.

  • The market is roiling under massive structural changes.
  • Most HCOs are ill-prepared for the move to from fee-for-service to value-based reimbursement (VBR), though all see it coming.
  • Those select HCOs who are now preparing for VBR are looking to be quite prescriptive in their requirements of affiliated and owned physicians – that will be supported via a CNM model.
  • There remains a divide (level of distrust) between payers and providers that will take time to mend despite the need for both to work more closely together.
  • HIT vendors are, by and large, not keeping up with the needs of HCOs to support CNM initiatives.
  • A best-of-breed approach is seen as only path forward today to enable CNM.

Of course, we learned far more than the above which you’ll find in the report itself. Since this report was sponsored with the intent of helping to educate the market, it is being offered for free. I encourage you to grab a copy – you won’t be disappointed.

 

HIMSS-pressions

EpicRideWhat an epic (or is it Epic, or for that matter EPIC) ride where one seemingly goes in and out of noise tunnels on the exhibit floor all in the hopes of finding some meaningful signal as to what is really happening in the market. This is, for better or worse, what HIMSS is all about and like HIMSS conferences of yore, finding that signal could be excruciatingly difficult. But over the course of those few days wherein I was being bounced from one meeting to the next, patterns did emerge.

Thankfully, at this year’s HIMSS I was not alone and in fact, had the entire Chilmark team there, each focusing on gathering information/data points for their respective research domains. While I will highlight some of the bigger industry-wide patterns in this post, each lead analyst for our four research domains (analytics, EHR, HIE and patient engagement) will publish their own impressions over the course of this week.

Accelerating move to VBR: No doubt about it, the ACA train has left the station and we are halfway to Hicksville on the VBR train (VBR = value based reimbursement). In conversations with several senior HCO executives, there is no longer any question that the industry is moving to VBR and the train appears to be a high-speed one. Three payers I spoke with stated that roughly 50% of reimbursements in 2017 will be VBR-based. We may see a train-wreck among less savvy and astute HCOs as recent research we have conducted uncovered a market where the majority of HCOs remain ill-prepared for this transition – they are still in a reactive, tactical operating mode.

No one wants to be an HIE vendor: With the exception of one vendor, RelayHealth, every HIE vendor I met with no longer considers themselves an HIE vendor. This is partly due to the rapid commoditization of base interop technology and services and the need for these vendors to “move up the stack” and provide a higher value proposition. A few seem to be trending in the right direction but the majority of these vendors are currently pushing PowerPoint and buzzwords rather than truly reference-able clients and use cases. (Brian will take a closer look at HIE in follow-on post.)

Despite buzz, population health management (PHM) remains an amoeba. Last year the big buzz was around PHM. Well, the enthusiasm has not waned for PHM, at least from the vendors but try to get one to clearly articulate what it means and how it maps to their solution suite – good luck.

In every briefing I had with a purported PHM solution provider I asked a simple question: What is your process map to enable a client to effectively move to a PHM model of care across the community they serve with your solution suite? Only one vendor, Cerner, was able to articulate such a process map, everyone else just sort of waved their hands about and spoke of “high-level this, high-level that.” Ugh, I simply can’t stand high-level BS.

Patient engagement saw plenty of visibility but little reality. HIMSS made a big point this year to promote patient engagement, but from what I observed, that market is a mess – confusing messages, confusing positioning, questionable offerings. About the only thing that seems relevant today to most providers that I spoke to was meeting MU2 patient engagement requirements so they are simply using the lame PHR that their EHR vendor offers. For larger HCOs, there is additional interest in promoting customer loyalty. Beyond that, pilot-itis reigns supreme. (Naveen will go into far greater depth later this week.) 

Industry finally gets workflow religion. At my first HIMSS, I vividly recall the Davis Award recipient stating that he wished they had paid more attention to workflow in their EHR install. I about fell out of my chair as a CIO would have been fired in the manufacturing sector for making such a statement. Workflow considerations in that industry were part and parcel of any strategic deployment of IT – not an afterthought.

At this year’s HIMSS I heard plenty of talk about workflow integration but data-rich workflow tools that extend across a heterogenous EHR environment are still in PowerPoint. Likely the leading reason why many HCOs are rationalizing the EHRs they will support to a very select few or in the case of Epic shops, one.

Related sad story though: Met an old colleague who now leads a small ACO of 8,700 patients. She is now in the process of developing a strategic IT plan for the ACO, an IT plan that needs to take into consideration 22 different EHRs across the various practices. I don’t hold much hope for this ACO as I see no easy path to care coordination across such a disparate network.

A Few Parthian Shots
HIT spending will be flat in 2014 as HCOs focus on meeting ICD-10 and MU2 requirements. Speaking of which, there are lies, damn lies and then there are statistics. Sat in on HIMSS Analytics Leadership survey presentation, where I kid you not, according to their survey, 92% of the nearly 300 HCOs surveyed said they are ready for ICD-10 switch-over. That’s a very optimistic group they are surveying.

Not sure we’ll see any big announcements for EHR switches either in 2014 as HCOs look to stabilize their infrastructure in advance of ICD-10 conversion. Just too big a financial risk.

Spoke to a few senior executives from large HCOs that have moved to Epic. Each one stated that their strategy will be to move all physicians, owned and affiliated, acute and ambulatory, to Epic. If you want to be a participant in their contracts with payers, that will be the entry fee. They all admitted that they will allow specialists to keep their EHR but all stated this is an exceedingly small percentage (~5-8%) of physicians in-network.

Looks like CVS is dumping their longtime EHR partner for their MinuteClinics, a highly customized version of athenaclinicals (as I recall, CVS was athena’s first athenaclinicals customer) A thousand apologies athena, and thanks for informing us that CVS MinuteClinics use athenacollector, not athenaclinicals. Indeed it was a highly customized version of Allscripts that got the boot in favor of Epic’s ambulatory EHR. In a twist of irony though, CVS is now a member of Epic’s detested foe on the interop front, CommonWell.

Epic counters CommonWell by working with HealtheWay to stand-up the Carequality alliance. Details still extremely thin on this alliance with some vendors, like Greenway, a member of both CommonWell and Carequality (Is Greenway hedging bets?).

Caradigm has once again remade itself and its strategy, now calling itself a population health company. Much of their offering is the productization of Geisinger best practices. If you like what Geisinger has done to date on care coordination, Caradigm may be of interest.

Cerner’s Smart Registries, which was co-developed with Advocate and now live appears to be gaining traction with over half-dozen contracts signed so far. I like what they have done here and is much in alignment with our views on Clinician Network Management.

Orion Health continues to roll, in fact rolling much faster than I imagined having grown enterprise clients by 200% in 2013. Orion struggled in the past to move beyond the public HIE market but that issue is now in the rearview mirror. Their challenge though is to move even faster to build out functionality on top of their base infrastructure.

In closing, HIMSS is exhausting and I need fuel to move. My preferred fuel of choice is a double shot cappuccino. I sampled many on the show floor, thank you one and all for providing. But there is only one vendor that truly stands out in providing the absolutely best expresso – Agfa. So big thanks Agfa and your professional baristas for providing me the fuel for HIMSS. See you next year.

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.

 

 

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. 

Siemens Jumps into HIE Waters

Acquisition fever has set in and they’re dropping like flies, independent HIE vendors that is. Earlier today, Siemens announced its intent to acquire enterprise HIE vendor MobileMD. So in little over a year we have seen IBM snag Initiate, Axolotl fall into the hands of Ingenix/United Health Group (Ingenix is now known as OptumInsight), Medicity tie the knot with Aetna, Harris pick-up Dept of Defense clinician portal darling Carefx and Wellogic, a damsel in distress, being rescued by Alere. Elsevier also announce an intent to acquire dbMotion for a whooping $310M, but nothing came of that other than a substantiation of the rumor that dbMotion was being shopped.

That does not leave many small, independent HIE vendors that have some traction left in the market. Following is our list of such vendors and what might become of them:

4medica: A relative new comer to the HIE market, 4medica will be profiled for the first time in the upcoming HIE Market Trends Report which is scheduled for release in early 2012. 4medica is quite strong on lab information exchange. Future: 4medica still remains under the radar screen as it completes its platform to truly serve all HIE needs. Once that process is complete, the company is likely to gain increasing attention and will be acquired in 18-14 months.

Care Evolution: Privately owned and self-funded, founder has every intent to stay independent. As he has told us on more than one occasion, I’ve already made plenty of money and this is not about cashing out to the highest bidder. Future: Everyone has a price but this company may be one of the last to fall into the arms of another.

Certified Data Systems: Appliance (think small router with embedded HIE functionality) HIE vendor that has close, yet non-exclusive partnership with Cerner. Would not be surprised if they struck a similar deal with Epic as Epic struggles to connect to EHRs outside its system. Future: Fairly new to the HIE market but gaining traction. Will stay independent for next 12-18 months, after that, anyone’s guess.

dbMotion: One company already made a bid, but pulled back, thus pretty clear this company will be acquired, question is how much and we suspect it will be significantly less than what Elsevier was planning to pay. Future: If price is right, could be acquired at anytime.

HealthUnity: Small HIE vendor from the Pacific Northwest that made a big splash when with Microsoft (Amalga UIS) they won the big Chicago HIE contract. Future: With Microsoft cozying up close to Orion, HealthUnity will be looking hard for other partners and/or to be acquired. Will give them 12-18 months as an independent.

ICA: Another small HIE vendor that has had a few wins here and there but will come under increasing pressure from larger, better funded HIEs. Future: Likely to be acquired in next 6-12 months, maybe even earlier.

ICW: InterComponent Ware is a German HIT company and a sizable one at that with over 600 employees. To date, ICW has a very small presence in the US HIE market so an acquisition, if there were one, would have little impact.  Future: Their foreign ownership, size and interests in several health related markets make them an unlikely candidate for acquisition.

InterSystems: Arms dealer to all, InterSystems Cache and Ensemble are widely used in the market and the company has built upon these core technologies to get into HIE market. Future: Fiercely independent and senior team is basically the same since founding this company will remain independent.

Kryptiq: Having signed a strong partnership deal with Surescripts, Kryptiq is unlikely to be interested in any acquisitions talks. Future: Will remain independent for time being and if Surescripts’ Clinical Interoperability solution gains significant traction, Surescripts will likely acquire Kryptiq outright.

Orion Health: New Zealand-based, privately owned with good prospects in markets beyond America’s shores, this company will likely want to stay independent (future IPO) unless of course a very large software company (think IBM, Microsoft, Oracle etc.) gives them an offer they can’t refuse. Future: Will stay independent.

Getting back to the Siemens/MobileMD deal…

While we have not had an opportunity to talk with either Siemens or MobileMD (will provide follow-on update once we do) here are some quick take-aways:

Siemens has chosen to buy. This is unlike other EHR vendors who have either built their own HIE solution (athenahealth, eClinicalWorks, Epic, NextGen) or have partnered with others (Allscripts, Cerner, GE).

Existing partner doesn’t cut it. Siemens has an existing partnership with NextGen for ambulatory but NextGen’s HIE is a closed system. This prevented Siemens from being able to leverage this partnership to serve their client needs, which most often includes a multitude of EHRs in the ambulatory sector to interface with.

Lacked sufficient internal resources. By buying into the market, Siemens has signalled that it does not have the development resources to respond quickly enough to customer demand (not too surprising, Siemens has been struggling in the North American market for sometime). This also signals that they could not find the right partner outside of their NextGen relationship, which is a tad puzzling as we are quite sure they paid a premium for MobileMD.

Paid a premium. We estimated MobileMD sales in 2010 just shy of $8M in our 2011 HIE Market Report. HIE vendors are selling at a premium, even second tier ones such as MobileMD. Assuming industry average growth in 2011 (we peg it at 30%) that would give MobileMD sales of ~$10.5M for 2011. We put the final strike price for MobileMD at $95-110M.

Existing MobileMD customers relived. Unlike the acquisitions of Axolotl and Medicity, which both fell into the hands of payers, MobileMD is going to a fellow HIT vendor which must assuage the fears of more than a few MobileMD customers and prospects. Siemens intends to keep MobileMD whole, bringing on-board MobileMD’s president and founder, again contributing to continuity.

ADDENDUM: Please excuse our lack of posting on industry trends in a more frequent manner. Like many in the healthcare sector, Chilmark Research is struggling to keep up with demand and recruit top-notch resources. We seem to have hit our stride in this market, are receiving countless engagement inquiries and engaging in most of them. All good problems to have, but you dear reader are the one who ultimately suffers from our lack of posts. Thank you for your patience to date and know that we are doing our best to keep you informed with some of the best research and analysis of this critically important and meaningful market.

Orion Strengthens Portfolio & MSFT Gains HIE Partner

On Monday, New Zealand based Orion Health announced that it would acquire the mothballed Health Information Services (HIS) assets of Microsoft, Amalga HIS. In the same announcement, Orion and Microsoft also announced a partnership for Microsoft’s healthcare analytics solution Amalga UIS.

Microsoft, during its HIT buying binge days a few years back had picked up the Thai-based HIS company, Global Care Solutions. Global Care Solutions was credited with building the HIS for medical tourism destination Bumrungad hospital in Thailand. While Microsoft tried to quell EHR vendor fears in the US that this HIS solution suite, later rebranded as Amalga HIS, would only be sold overseas and not it the US, most EHR partners chose to put some distance between themselves and Microsoft. Needless to say, this created far more challenges for Microsoft and its still budding healthcare sector initiatives and the company decided to discontinue further investment in Amalga HIS in July 2010, effectively putting it on the market.

Now, over a year later, Microsoft has finally found a buyer for this asset in Orion Health, who, like Microsoft, has stated that it does not intend to sell this solution suite in the US but instead focus on the Australian and Asian markets. Would not be at all surprising if Orion further extended that reach to all Commonwealth countries, which has been the company’s Go-to-Market (GTM) strategy to date. In speaking with Orion yesterday, they reiterated their intentions to not sell this solution suite in the US market.

Seeing as it took Microsoft over a year to unload Amalga HIS, one has to wonder: Was this solution suite poorly architected or was Microsoft asking far more for it than what others were willing to pay? Having been demo’d the solution on a couple of occasions, likely the latter. Which then makes one wonder, so what kind of deal was actually struck? Our guess is that it had a lot to do with the second portion of this press release, that was overlooked by most in the press, the future partnership surrounding Amalga UIS.

Our latest research on the HIE market is pointing to a significant increase in interest in combining the basics of an HIE (getting clinical data flowing) with analytics to deliver better, more informed care and equally important, optimize the operations of a healthcare organization. As the healthcare sector moves from a transaction-based reimbursement model (fee for service) to one based on outcomes (value-based contracts), analytics will play an increasingly critical role. Thus, we are seeing a number of moves in the market, both acquisitions and partnerships, that look to more closely tie what have been two disparate offerings into one cohesive package.

Orion Health does not have a robust analytics solution. Microsoft does not have a robust HIE solution. Bringing the two together could create a powerful offering and potentially put Orion on equal footing with other HIE market leaders that are currently a step ahead of them with regards to analytics, including OptumInsight (former Axolotl + Ingenix), Thomson Reuters and Care Evolution and their HIEBus platform and IBM, who acquired Initiate in 2010. For Microsoft, this also could be a significant win for to date, they have struggled to find a strong Tier One HIE partner – with Orion, they have found such a partner that could juice sales for Amalga UIS.

But this is far from a done deal for as with any partnership, the devil is always in the details. Based on our conversations with both companies, they do appear to be cognizant of the challenges that lay before them. The biggest challenge will be getting Amalga into a form factor that accelerates time to value for those who adopt this solution. To date, the Amalga solution has seen more than its fair share of challenges in the field in this regard. Couple that with the Orion customer base, which is weighted towards public HIEs, and one can foresee some significant GTM challenges for these two companies in the future. Allscripts faced a similar challenge with HIE partner dbMotion. Orion and Microsoft would be wise to look closely at how Allscripts successfully addressed this challenge for their target market.

 

HIE Report is Released

The long awaited, dare I say anticipated HIE Market Report is now complete and ready for purchase. This report, arguably the most comprehensive report yet published on this rapidly evolving market (116pgs, 21 vendors profiled, 0ver 25 tables and figures) will provide the reader with a detailed portrait of today’s HIE Market, its leading vendors, and the capabilities that they bring to market. Here’s the HIE Report’s Table of Contents (warning PDF).

The report is the culmination of interviews with countless HIE stakeholders, from State and regional officials, to healthcare CIOs, consultants and of course the HIE vendors as well. Combining these interviews with our own methodology for secondary research, the report comes presents a number of findings including:

  • A definitive classification schema of current HIE vendors that will clarify what appears at first glance as a very convoluted market.
  • The transition that is occurring as vendors move from SaaS to PaaS models and its future impact on the market.
  • The clear differences and similarity of needs of Enterprise and Public HIEs.
  • An HIE Maturity Model that will help adopters of this technology better understand the transitions that will be needed as their platform matures over time.
  • Comprehensive profiles on 21 leading HIE vendors including rankings on a number of HIE attributes as well as market presence.

If you are involved in any aspect of the HIE market, you would do your company a favor by purchasing this report. Really, it is that good.