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Merging Outsourced Services with Software

by John Moore | November 21, 2007

Merge Healthcare, a company that was once a darling in the Business 2.0 community has fallen from its lofty perch and is now struggling to stay viable in the rapidly changing medical imaging market.

Despite current financial woes, the company will demonstrate at next week’s big industry confab, RSNA, a new solution combining software, Merge TeleRead, with offshore radiology consulting services, Consult PreRead. While it appears that each can be purchased separately, there are no strict dependencies between the two, Merge sees customers getting the greatest value from using both concurrently: TeleRead for workflow and communication, Consult PreRead to do initial imaging analysis and reporting.

While this may appear at first glance to be a nice combination, I’m not too convinced that this will provide much uplift to Merge’s anemic sales. First, the TeleRead solution appears to be a simple workflow solution that just about every RIS/PACs vendor worth their salt already has in their product suite.  Secondly, the Consult PreRead leverages a trend that has been occurring for some time in the radiology sector – tapping into cheaper, offshore resources to supplement internal ones. Did a quick search of exhibitors at RSNA’07 and there are literally dozens of providers of such services exhibiting at RSNA. Don’t see why Merge would be any different than these other outsourcing service providers and seriously doubt Merge will be cost competitive with them.

Probably the best part of this long-winded press release were the quotes from their consulting physician:

I have been in radiology for over twenty years, and I believe that this is an industry-changing capability,” said Steven Mendelsohn, MD, a U.S. based radiologist who has been a clinical advisor in the Merge Teleradiology clinical beta tests. “I am impressed with the workflow and technology, and the medical acumen, technical accuracy and communication skills of the offshore radiologists. I am confident that this is the impetus for a new way of doing business and improving clinical efficacy in radiology.

Is it all that surprising that a consulting physician would speak positively about a vendor’s product?  Seriously, after what we saw with the orthopedic surgeons and their consulting contracts, there’s some big money to be made here and doubt if any “consulting physician” would ever speak poorly of a company that they are advising – that’s just plain “biting the hand that feeds you.” But in all fairness to the physician, he probably didn’t even fabricate the quote but was provided one by the PR department for him to sign-off on.

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