Convergence & Divergence Among the Big Three EHR Vendors

Chilmark Bight: Allscripts, Cerner, Epic Fall 2018 User Meetings


Image originally appeared in Healthcare IT News

This fall, the three largest EHR vendors by revenue, Allscripts, Cerner and Epic, held their user conferences. This research note provides an overview of each vendor’s strategic intent, areas of future focus and our assessment.

Key Takeaways

  • Across all vendors, EHR development resources are on the wane. EHR focus is on usability improvements and moving to cloud-hosted solutions with wrap-around services.
  • Dominant message: Ensure clients are extracting highest value from their EHR – little agreement among vendors as to how that value is measured.
  • RCM is the near-term extensible app opportunity for Cerner and Allscripts.
  • All vendors tout their patient engagement capabilities. Cerner will follow Allscripts moving to an EHR-agnostic patient engagement platform.
  • Strong investments in value-based care/population health capabilities, including services. Chief differentiator is the analytics platform they run on.

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Did You Know?

The Rise of APIs and App Stores In Healthcare

Two years ago, we published a report on the promise of open APIs in healthcare. In APIs for a Healthcare App Economy: Paths to Market Success (available as a free download), provider organizations told us that developing and using APIs was low on their list of priorities. Modern REST-style APIs were still not on the radar for most providers and payers.

doctor using smartphone app

Back then, HCOs large and small said they expected their EHR vendor to build an API infrastructure for them. Two years ago, only Allscripts and athenahealth offered an app store along with a comprehensive developer support program. At that time, the other EHR vendors were slow-walking FHIR support and had vague plans for app stores and developer support programs. We found that:

  • Small HCOs were completely dependent on their EHR vendor.
  • EHR data was the most valuable data resource in healthcare.
  • Large IT vendors had varied beliefs about the role and contribution of third-party developers.
  • Large and small IT vendors had strong faith in open APIs.
  • Small and independent IT vendors were thinking way beyond the EHR.
  • Physician dissatisfaction with EHRs was an unsolved problem.

Since then, market conditions have continued to change. EHR vendors are now more vocally rolling out the API infrastructures that will bring healthcare into the mainstream of 21st century computing. Every major EHR vendor has delivered a variety of proprietary, HL7, FHIR, and SMART APIs along with the ability to leverage REST to improve their products.

Each of these companies sponsor, or will soon sponsor, an app store for third-party innovation. This has seen a concurrent rise in interest for using APIs within provider organizations. A recent Chilmark report, Healthcare App Stores: 2018 Status and Outlook, examines some of these platforms and the progress that has been made to date in more depth.

That said, some things have not changed. EHR data remains the most valued data resource in healthcare. All but the largest provider organizations are dependent on their EHR vendor for API enabling technologies. Small and independent developers struggle to participate in app stores and EHR developer support programs, despite great ideas for better apps to improve care delivery. And physician frustration with EHRs continues to grow.

Developing and using APIs is a priority for healthcare stakeholders who want to get more from their EHR investments as they identify opportunities for workflow improvements, real-time analytics dashboards, and more. While EHR vendors are leading the charge, our more recent research suggests that many other stakeholders hold or control access to other key data sources that could underpin such efforts.

The opportunity to capitalize on data already collected to provide advice and predictions is too big to ignore, and the easiest way to do this efficiently will be with integrated apps that can pull data from any relevant resource to provide the necessary insights at the right time.

Where do we go from here?

The number of apps in EHR app stores grows monthly. To date, the idea of the potential role and benefits of an independent certification body has not entered the discussion about APIs and app stores since the collapse of Happtique’s efforts in 2013. Currently, EHR vendors certify apps for their customers based on rigorous internal evaluations, but the process varies by vendor. An independent and impartial body could do more than just provide information for prospective users. Instead, it could deliver tremendous value if its assessments were multi-pronged and supplied information about the ongoing use of the app, as well as a consistent way to think about safety, security and dependability. While a certification authority could make it easier for decision-makers, the real value could be in delivering users more information about how the app delivers value across its install base.

Sometime in the next few months, the ONC will issue new rules on information blocking and what constitutes an API that does not require “special effort” to access and use. While these actions may seem like a watershed moment for health IT, the provider market has moved perceptibly since ONC began its rulemaking. Just two years ago, providers were curious about APIs and app stores but they weren’t ready to make any commitments.

Slowly and inexorably, healthcare is embracing the downloadable app as a tool for innovation and improvement. One-size-fits-all platforms are not meeting the needs of the industry and apps can do more to assist with care provision needs than just provide supplemental functionality – to read more about opportunities for apps to have significant impact, take a look at the infographic we developed to accompany our more recent report, or read more in this deep dive post from June.

The opportunity to capitalize on data already collected to provide advice and predictions is too big to ignore, and the easiest way to do this efficiently will be with integrated apps that can pull data from any relevant resource to provide the necessary insights at the right time.

Allscripts — Stabilize, then Proceed with Innovation

At the recent Allscripts Client Experience (ACE, #ACEHHS18) conference, the company gave us a day and a half deep dive into their current strategy and initiatives. As much as Allscripts positioned themselves as the innovative leader among the leading EHR vendors, the fundamental reality was far simpler. This is a company that is seeking to stabilize its base, and that is a good thing.

Figure 1: Allscripts’ Advances in the Last Five Years

As most readers know, when CEO Paul Black took over the reins at Allscripts he had quite a mess on his hands. Previous management had grown the company through a series of acquisitions, but little attention was paid to how these various acquisitions would be stitched together to provide a comprehensive and cohesive EHR that extended from hospitals (acute) to small practices (ambulatory).

Clients were not happy, and Allscripts increasingly lost ground to both Cerner and Epic.

Under Black’s leadership losses have been stemmed, costs brought into alignment, and the bottom line has improved. Today, Allscripts has an acute to ambulatory EHR solution in Sunrise, which now represents roughly half of Allscripts’ annual revenue.

The company has also continued its acquisition strategy, picking up two other EHR platforms –  McKesson’s EIS business (see our original take here) and Practice Fusion. While hearing little about Practice Fusion at this event – after all it was focused on Allscripts’s acute clients – we did hear from a number of former McKesson (Paragon) clients that they were quite happy to have Allscripts as their new parent. As one Paragon customer told me:

“We have been ignored for years. McKesson failed to address known problems with their software. At least now we have a voice and Allscripts is making progress.”

In another session with two Allscripts customers, each related their thorough evaluation and due diligence research of current acute care EHR solutions. Their conclusion: The EHR has become a commodity with comparable functionality across all major aspects that were important to them. Since EHR software is no longer a key differentiator, the relationship with the vendor and the need to minimize disruption to frontline users of the software become paramount. This is likely true across the industry and why the long purported EHR replacement market never materialized.

The EHR has become a commodity with comparable functionality across all major aspects that were important to them. Since EHR software is no longer a key differentiator, the relationship with the vendor and the need to minimize disruption to frontline users of the software become paramount.

Stabilization Done – Now Innovate

In a brief conversation with Black, he was passionate in stating that he wants this company to be seen as the true innovator of the big three EHR vendors. He pointed to their precision medicine efforts with 2bPrecise, a young company started by the founders of HIE vendor dbMotion, a company Allscripts had acquired several years ago.

2bPrecise is now embedded within EHR Sunrise workflow and the company is working with six beta customers, including the Mayo Clinic. Today, Allscripts is the only EHR company that offers the physician the ability to match medication treatment protocols with a patient’s genomic information (e.g., how well a patient can metabolize a given medication) – pretty futuristic and promising work. But there is a fly in the ointment: who pays for this second order derivative to define patient-medication matching? No clear answers yet, though the move to value-based care (capitation) may provide accelerated adoption for certain, complicated diseases (behavioral health, cancer, etc.).

Another innovation they announced at ACE was allowing clinicians from within Sunrise to directly order (prescribe) a Lyft ride for a patient (original partnership announced in March). The use cases for such are numerous, from setting up an appointment (25% of low-income patients cite transportation as a leading cause of missed appointments) to taking a patient home upon discharge. Nice feature for both clinicians and patients.

The company has also been quite progressive on the patient engagement front, first with its vendor agnostic patient portal – FollowMyHealth and its recent acquisition of HealthGrid, a patient engagement tool based on texting.

Lastly, the company is in the process to move its core portfolio of products to a common client user interface (UI) based on progressive web architecture. This effort is in conjunction with their move to hosting their solutions on Microsoft’s Azure platform. Note: the move to hosted cloud services has taken the healthcare IT sector by storm. Three years ago, few CIOs were willing to go “off-prem.” Today, there is literally a tsunami of interest among CIOs looking to off-load the care and feeding of their EHRs and other applications.

Challenges Remain

The EHR market is dead in the U.S. To grow, one must either acquire other EHR vendors and leverage their maintenance revenues aggressively while cutting SG&A costs or look to the next generation of solutions and services the client base will need.

Allscripts has done a little of both but what concerns me most is their lack of a clear and compelling solution suite to support the migration to value-based care. Their messaging around population health (CareInMotion) was generic and this solution suite to support value-based care modalities still lags competing solutions. They are working to rectify these shortcomings, but they are slow in coming.

Their analytics story, quite surprisingly, was nowhere in evidence – little discussion during the sessions I attended nor highlighted in their product pavilion. Contrasting this with what I experienced this past week at Cerner’s own user conference, CHC, or at Epic’s UGM in late August, was striking.

The innovative efforts at Allscripts are heartening, especially those regarding patient engagement. Yet these efforts will not keep the lights on for most healthcare organizations as we migrate to data-driven care delivery models. The industry migration of clinical care from an art (little to no data) to a science (data-driven) is readily apparent – Allscripts’ own story on this, however, is currently not quite as clear.

Healthcare App Stores Moving to Mainstream

Update, 9/4/2018: This post was based on research conducted for the report, Healthcare App Stores: Status and Outlook, which is now available. 

Apple’s early and fantastic success with its app store spawned imitators. App stores are a relatively new wrinkle in healthcare IT vendor’s approach to relationships aimed at better serving existing customers or finding new ones. Most major IT vendors to payers and providers have partnerships with other companies that provide complementary technology or services. These arrangements allow the partners to reach markets, users, or use cases that either vendor would find challenging on its own.

In the wider economy, successful app stores rely on a widely-accepted set of Web technologies. Chief among these are REST-style APIs offering programmers simple and uniform access to data and functionality across organizations and systems. REST APIs provide the data fuel that transformed consumer and enterprise apps. Most API programs are open in that documentation is available to anyone. Programmers can often use the APIs without any interaction with the API publisher. In other cases, they can use them after getting an API key, usually a simple online process while many API program sponsors monetize access at certain call volume thresholds. Health Level 7, the standards organization, created Fast Healthcare Interoperability Resources (FHIR) to enable modern, REST-style APIs that will be far less unwieldy for programmers than traditional HL7, IHE, or C-CDA APIs. The advent of FHIR-standard APIs and SMART’s use of OAuth supplies the crucial building blocks for effective app stores in healthcare.

While the challenges are daunting, the opportunity to improve healthcare is vast. Healthcare users are eager to discuss their unmet needs. Small and independent developers are eager to address these needs.

What will be the App Store Platform?

App stores facilitate the distribution of applications that add value to some base platform or brand. On the strength of the large volume and variety of data these companies collect for their HCO customers, the EHR is that platform. EHRs also have strong brand recognition among clinicians. The vast majority of HCOs lack the resources to develop their own applications, relying mostly on their EHR vendor for new and better functionality. Ironically, most EHR vendors recognize that they lack the resources or bandwidth to be the sole source for new and better functionality.

Other categories of companies could be the platform that establishes and hosts an app store. Payers and providers have the strongest brand name recognition with patients and their caregivers. Medical equipment vendors have large data volumes and established brands among healthcare workers that could provide visibility and attention from users. Companies that provide healthcare transaction or data services have amassed stupendous data volumes but remain mostly unknown to patients and are not top-of-mind for healthcare workers. In theory, any entity that holds large inventories of patient data or has a strong brand could sponsor an app store.

The technical potential already exists to access data or services from any combination of provider, payer, data aggregator, or another source. For now, the willingness to make such capabilities a reality is lacking, given that healthcare’s financial incentives almost demand that organizations hoard, monetize, or closely control the use of their data. While the challenges are daunting, the opportunity to improve healthcare is vast. Healthcare users are eager to discuss their unmet needs. Small and independent developers are eager to address these needs.

The Healthcare App Store Opportunity

While better applications for clinicians and patients are a priority, the demand for more effective use of IT in healthcare is not limited by user category or use case. Some specific examples include:

  • Care coordination apps that:
    • borrow functional ideas from social network applications
    • support people involved in care who have no access to an EHR
  • Apps that use the longitudinal record to:
    • to conceptualize and present each patient as a sequence of birth-to-death care gaps
    • provide real-time access to individual data points
    • support more precise search
  • Apps for:
    • comparing the cost implications of different treatment and medication options
    • self-service scheduling for patients and clinicians
  • Better support for patient-generated data, including patient-reported outcomes
  • Patient-focused peer group community apps modeled on social networks
  • Error detection and prevention
  • Utilization management
  • Precision medicine support

The recent and widespread adoption of EHRs highlights the need to supplement or enhance the EHR itself. EHRs are not the only opportunity, since only a minority of the healthcare workforce uses an EHR regularly. The need to activate and engage patients with more effective applications is also important for most healthcare stakeholders. Patients have only ever known a disjointed “customer experience” with healthcare. Ideas such as convenience, price transparency, or predictability would never enter into the average patient’s expectations of interacting with any aspect of the healthcare system. But patients are beginning to expect a more conventional “consumer” experience with healthcare. The proliferation of high-deductible plans and rapidly increasing out-of-pocket costs could eventually produce a market or regulatory response that could impose a different approach and processes for consumers.

Apps in the 2020s

In theory, an app could discover patient data at multiple organizations using a network-based record location service’s APIs. It could access that data directly from as many organizations as the application and use case demand. It could match pertinent records using an API-accessible master patient index service. It could access workflow from yet another network-based service to support part or all of a patient encounter. This kind of orchestrated functionality using distributed data is increasingly commonplace in consumer and some enterprise apps where the application uses REST-based access to data and functionality from multiple organizations. Healthcare is years away from being able to deploy such a scenario, but many in HIT would like to see it become a reality.

We are preparing a report on the status and outlook of healthcare app stores. For now, EHR vendors have shown strong interest in investing to reach new markets, users, and use cases. Most vendors recruit third-party developers and companies into their developer programs outside of their clinician user base. Third-party experiences with EHR vendors such as Epic, Allscripts, and athenahealth have varied in terms of support, costs, and allowed functionality. This report not only inventories the ways that EHR vendors are expanding functional and organizational app coverage; it also looks at the outlook for some of the other potential app store platform hosts.

Looking to 2017: Our Baker’s Dozen Forecast

future12016 is heading for the doors, 2017 readily awaits. But what will this New Year bring? One thing for sure, a new president and administration that appears intent on rewriting the rules, be they foreign policy, environmental or healthcare.

But in the grand scheme of things in healthcare IT (HIT), what can we truly expect of this New Year? Collectively, we put our heads together here at Chilmark Research and came up with our annual baker’s dozen of 2017 predictions.

Risk-based contracting for HIT solutions accelerates. 2017 will see HCOs be much more conservative with their HIT spend. The care and feeding of their bright and shiny new EHR will continue to draw the vast majority of resources. What’s left to spend will increasingly be tied to shared-risk contracts between vendor and HCO.

HCOs demand clear ROI on their HIT spend. The billions of dollars spent over the last several years to digitize the healthcare sector has shown little, if any demonstrable ROI – call it healthcare’s own “productivity paradox”. HIT vendors will be put to the test to clearly articulate and stand behind ROI, something that athenahealth just announced. Expect many more to follow suit in 2017.

Progressive HCOs admit – their patient portals suck. With the potential unwinding of portions of the ACA and policies that push more responsibility on the consumer, HCOs will finally come to realize that they are not just an HCO but a health service addressing a wide array of consumer health needs. Houston-based Memorial-Hermann gets it and are launching a completely new consumer experience during the Super Bowl, which coincidently is being held in their hometown of Houston.

Despite the hype, healthcare Internet of Things (IoT) stays on periphery. IoT in healthcare has slid into the trough of disillusionment. HCOs have been unable to scale-up pilot efforts, which often had promising results. Simply put, workflow for a patient panel of 50-200 is significantly different than that for 10,000. Until that issue gets resolved, IoT will stay stuck in neutral.

Artificial intelligence (AI) and machine learning will remain outside of the clinic. AI, machine learning, cognitive computing and the like are getting a lot of attention. Yet, despite the aggressive marketing by some, we will not see any of it at scale in the clinical setting. Even the much-ballyhooed efforts in radiology will only see limited pilots in the coming year.

Consumers find AI avatars as valuable as they are personal. 2016 saw the limited launch of such consumer-centric tools as the Medtronic-IBM diabetes app Sugar.IQ. Many more will come to market in 2017 as these personal, virtual care coaches show efficacy and lower utilization costs. The level of “personalization” that these avatars are capable of will define their success.

21st Century Cures Act interoperability provisions a dead letter. Without enforcement, regulations are worth about as much as the paper they are printed on. Do not expect much follow-thru from the new administration in enforcing new regulations passed during the waning days of the Obama administration.

EHR vendors get serious about API programs. Savvy, EHR vendors are quickly realizing that they must migrate to a platform play, building an ecosystem to extend their value to an HCO. Allscripts and athenahealth have been ahead of the pack for years. Cerner just launched its API program (limited release) in October. More will follow in 2017.

Precision medicine fails to grow substantially outside of oncology. Despite the promise, precision medicine is actually a very tough thing to do in practice. We simply do not have enough data for a broad swath of diseases. Oncology is the exception where gene sequencing – often the keystone to precision medicine – is quite common. NantHealth is one company targeting the oncology opportunity for precision medicine.

Blockchain moves from hype to traction. By its very nature, Blockchain is nearly impossible to hack making it possibly the best cyber-security tool in the market today for personal health information. 2016 was the year of Blockchain hype. 2017 is the year Blockchain-enabled solutions start arriving in the market – maybe even one from a major HIT vendor. The relatively young start-up PokitDok had a good write-up earlier this month on the subject.

HCOs continue to expand regionally via M&A. In 2017, expect to see several M&As as HCOs move outside their traditional market(s) to build multi-State, super clinically integrated networks CINs. Example: Boston-based Partners Healthcare moves to acquire Maine Health and/or Dartmouth Hitchcock

Best-of-Breed PHM and analytics vendors continue to stay one-step ahead. EHR vendors are aggressively looking to penetrate this market and have made significant R&D investments. Yet, best-of-breed still have a leg-up on innovation – for now. 2018 may be a very different story.

HIMSS’17 will be far calmer and less frenetic. The EHR market has plateaued, the PHM market is still by and large in pilot phase, a new administration wants to repeal the ACA – the list goes on. With so much in flux, 2017 will be a lackluster year for most HIT vendors and the first sign of such will present itself in a month and a half in Orlando.

Annual Review: 2015 Predictions

predictionWhat good are predictions and the prognosticators who make them if they never go back and assess those predictions later?

A big fat goose egg, or worse, if you set some aspects of your strategic plan in alignment with those predictions.

The annual predictions that we and other industry followers author this time of year are honestly a pretty mixed bag. Some are completely nonsensical, others laughable, some plausible and a rare few downright prophetic. Here at Chilmark, we truly strive to not be either of the first two and more of the latter two.

For 2015, we made a baker’s dozen of predictions. Our batting average remains above .500, though we did not hit as many “out of the park” predictions as I would have liked. There’s always next year and our 2016 Predictions will be released in next week or so.

But for now, let’s focus on our “hits” and “misses” for 2015.

Hit: Hospital Alliances Shift to ‘Preserve and Extend’ vs ‘Rip and Replace’ as M&A Slows
Many an HCO are finding that it is simply too expensive to migrate everyone on to the same single EHR platform. Geisinger’s recent acquisition is a perfect example wherein Geisinger will continue its use of Epic, while AtlantiCare will remain on Cerner. Extending these two disparate platform capabilities will happen with Cerner’s relatively EHR neutral Healthe Intent PHM platform.

Hit: One Fifth of all Healthcare Visits will be Virtual
Over half of the state governments across the US now mandate that payers must cover telehealth visits. Employers are certainly on-board with this as well as telehealth increases employee productivity. We see nothing but continuing strong growth in this service.

Hit: Provider-driven Care Management Remains Manual and Painstaking
This situation is even worse than we thought based on our recent research for the Longitudinal Care Plans Report and our forthcoming Care Management Report. Of course, this creates a lot of opportunity for those that can solve what appears to be a nearly intractable issue. Paraphrasing that famous quote from The Graduate: Just one word: Workflow

Hit: Direct Secure Messaging Expands Greatly and Disappoints Mightily
Pretty much a no-brainer on this one. We’ve had our doubts about Direct from the moment it was first proposed as a stop-gap to the horrible performance of state HIEs despite over $500M of investment by the Feds. Thus, no surprise that if anything defined IT issues in 2015, it was interoperability, or lack thereof. Direct does not, cannot and will never address interoperability.

Hit: EHR Vendors Make Further Inroads in Analytics
Cerner released its PHM-centric EDW in late 2014 and has already far outstripped its original forecast by 300%. Epic is less forthcoming with their Cogito wins, but word has it that they are finally gaining some traction. Other EHR vendors are also getting into the game, notably athenahealth, eClinicalWorks and McKesson. But despite the gains of a few, market need far outstrips what the vast majority of other EHR vendor can provide. A lucrative market still exists for best of breed vendors such as Arcadia, Conifer, Geneia, Health Catalyst and numerous others.

Hit: Big Bang EHR Go-lives are Over, Market Slows
Cerner’s Q3 numbers caught more than a few Wall St. analysts off-guard. NextGen/QSI continues to struggle, Allscripts is not really winning much of anything of size in U.S. market. Even Wall St darling athenahealth has come under close scrutiny. The U.S. EHR market has plateaued. Future growth in the US will be at the expense of another. Expect some very competitive pricing in the acute, mid and lower market sectors that will increasingly squeeze margins.

Mixed: CommonWell Must Scale in 2015 to Survive
CommonWell gained a modicum of traction in 2015 and participating vendors by and large are offering it free to their customers. Despite this, CommonWell has not hit the accelerating curve of adoption and one has to wonder if not now, when? Similarly, the Sequoia Project has really gone nowhere.

Mixed: Forty Percent of ACOs Adopt New “Post-Portal” Tools, but Still Fail to Craft Global Engagement Strategy
Nowhere near forty percent of ACOs have adopted “post-portal” patient engagement tools at scale. Market is still in testing mode as it makes the transition to new care delivery models. Crafting a global engagement strategy is still several years out.

Miss: Low Eligible Provider (EP) Attestation for Stage 2 MU (MU2) Forces Major Program Redesign
Despite the grumblings of EPs across the country, the Feds by and large held their course on MU2 requirements and throwing providers a concession to extending timelines.

Miss: Biggest M&A News of the Year – Allscripts Goes Private
We knew this one was a stretch but still believe it is not completely out of the picture. Allscripts leadership have slowly but surely stabilized this struggling EHR vendor but its still large customer base (with lucrative maintenance contracts) makes it a ripe target for leverage buy-out.

Miss: Enrolled Lives Under ACOs Grow, Number of ACOs Does Not
Oddly, the reverse occurred wherein ACO growth was almost sixteen percent growing from 640 in 2014 to 740 by Sept 2015. Despite growth in ACOs, enrollment held steady at 24M. It appears that large ACOs are giving way to smaller, tightly focused ones.

Miss: Price Transparency Spreads to 5-7 more States and Begins to Impact all Healthcare Markets
While almost all states have some form of legislation for reporting on pricing, very few if any have gone to the lengths of what Massachusetts has tried to accomplish. Providers in Massachusetts are really struggling to meet this requirement. Other states are sitting on the sidelines.

Too Early to Tell: Rapid Market Changes Force Out 50% of Healthcare CIOs
This is still up in the air as this prediction extended out to 2020. Currently, I’m a little uneasy about this prediction as there seems to be a significant amount of calcification in the IT departments of many an HCO. Rather than replace the CIO, seems that many HCOs are simply leaving the CIO in place to address tactical issues and moving more strategic initiatives to program business owners.

Next week we will present our collective predictions for 2016, a year that promises to hold many surprises.

Health 2.0 Grows Up

IMG_7512Nine conferences later and finally, the Health 2.0 event is showing signs of maturity. Sure, there remains plenty of cheerleading for all those fabulous little start-ups that claim they will be the ones disrupting healthcare. And the Health 2.0 event is only to happy to oblige in giving these start-ups their few minutes of fame up on the big stage. After all, with some 80 odd sponsors, almost all vendors, Health 2.0 organizers are not going to bite the hand that feeds them.

But what we are happy to see is that the event has tempered this hype with a certain amount of reflection and pragmatism. This partly reflects an industry that has grown tired of hype and wants to see results.

So what are some key take-aways for Brian Eastwood and myself…

  • The loci of interest has shifted from almost exclusively the consumer, to consumer-provider interaction and collaboration. There is a tsunami of solutions entering the market that attempt to combine education, collaboration and action to drive patient/physician (or consumer/clinician) activation – all circling back to care management. This is leading to a blurring of the lines between traditional domains of care management, patient engagement and clinician alignment. I was particularly impressed by the demos of CareSync, Conversa and RoundingWell.
  • In past, majority of start-ups demoing their wares at Health 2.0 were targeting the consumer market, only to find no ready market. Now they are targeting providers, which at first glance appears quite lucrative. Not so fast you healthcare entrepreneur. They are running into a significant barrier here as well – extremely long sales cycles. Even if a start-up offers their product for free as part of a pilot, proof-of-concept initiative, it can take up to a year to get it through “the approval process.”
  • Healthcare organizations want to bring new innovations into their organizations and are beginning to realize that they are a part of the adoption problem. Several providers are now looking to band together and develop common best practices that will facilitate adoption of new innovations going forward, e.g. tackling the IRB approval process.
  • Low-acuity care is the low-hanging fruit. Much of the consumer-facing technology on display addressed the inefficiencies of receiving care for minor aches and pains, from the care itself to the administrative burden it places on patient as well as providers. While this is poised to further exacerbate what the American Medical Association sees as the degradation of the provider-patient relationship, it’s also poised to provide convenient care options for patients who don’t have a relationship with a provider at all.
  • Allscripts, one of the vendors rated in our recent EHR PaaS report, was there promoting their Developer Partners program. They have done a good job here – honestly leading virtually all other EHR vendors and now have some 132 third party vendors in this program. Their API, Unify, is built with JSON and they currently have some 500 service call profiles for across various Allscripts products (EHRs, PMS, etc.).
  • Messaging still rules. For every one next-generation wearable device in the expo hall (with growing use cases for monitoring chronic conditions, it’s worth noting), there were several apps centered on messaging. This year’s Health 2.0 gave us tools for asking questions of a real doctor and not Dr. Google (Curely), coordinating caregivers (see first point), and communicating with a wellness coach (too many to count). In addition, the most effective interventions in the Clinton Foundation’s pilot programs to bring healthcare services to rural and urban underserved communities involved SMS messaging. And that’s in part because…

…the digital divide still persists. Yes, smartphone and Wi-Fi adoption continues to climb, but the digital health industry cannot assume that every healthcare technology consumer – or physician, for that matter – has an iPhone 6, an iPad Retina, and a MacBook Air (all of which were easy to find at Health 2.0). Putting digital health in the hands of those who need it most – the chronically ill, the poor, the uninsured, the elderly, or a combination therein – means building solutions that they can use right now.

The event remains an outlier in the world of Health IT. There is little if any representation of other major HIT vendors (Allscripts and athenahealth were the exceptions). This is not necessarily a bad thing, but it does lead to an audience that is self-selecting and not very representative of the HIT sector in totality and most importantly, few if any of those that ultimately make key purchasing decisions for their organizations were in attendance.

While I never thought this event would make it past 5 years before drifting off into the sunset, here we are approaching a decade and this event continues to draw a big crowd with some 1,900 in attendance. Clearly there remains strong interest in this field and the Health 2.0 organizers are just about the only game in town for most start-ups to gain some modicum of visibility in a very noisy market.

 

 

 

What Cerner’s DoD Win Means to Industry

tricare-flag-600So much ink, so little insight.

Quite a lot has been published on the awarding of the large Dept. of Defense (DoD) EHR contract, but almost all articles are simple rehashes of the press release and occasionally including some basic, on-the-record, public comments made by those in the upper echelons of the DoD selection committee. Once you have read 3 or 4 of these one gets frustrated with the lack of analysis, which I guess is a good thing for folks like us analysts, as that is our bread n’butter and keeps us in business.

So what is our take on this big win by Cerner, Leidos and Accenture…

  • Price played an important role as the winning bid came in roughly 20% lower than what was anticipated.
  • Leidos was a huge factor in that DoD, for better or worse, knows Leidos well and as the saying goes: “Better to work with the devil you know than the one you don’t.” Margalit did one of the better analyses of this factor.
  • Software vendor’s perceived position on interoperability was important, but likely tertiary to previous two.
  • Good PR win for Cerner and Epic’s golden glow has faded just a tad.

But it is that third bullet point where the healthcare industry may see the biggest impact from this contract award.

Background:
The three EHR vendors bidding for the DoD contract where Allscripts, Cerner and Epic. Allscripts was never really in the running as their solution suite has had issues, especially on the acute side. That left Cerner and Epic duking it out for the contract and the war of words began.

That war of words centered on the relative “openness” of these two vendors’s solutions and in this case openness was not about open source software, but how easy did these solutions interoperate with solutions from other EHR vendors. Neither had a stellar record in this regard, but Cerner has worked hard to reposition itself as an advocate of open, interoperable systems and was a key founder and architect behind the CommonWell Health Alliance.

While Cerner was joining with several other vendors in the founding of CommonWell, Epic held fast to its integrated, ambulatory/acute solution strategy, encouraging customers to forgo the headaches of interoperating with other EHRs and simply go all in on Epic. This has been a very lucrative strategy for Epic. Even here in Massachusetts, senior officials at Partners Healthcare, which recently went live on Epic, have said that they intend to have all physicians working with Partners, including affiliates, on Epic. If those affiliates balk at moving to Epic, Partners will remove them from future contracts with payers. Talk about tough love. Epic also had some notoriety for not playing well with other EHRs and basically holding hostage patient data by charging hefty transaction fees for access to such, which Epic, under public pressure, rescinded this Spring.

What is particularly interesting is that our latest research on EHR vendor platform strategies found both Epic and Cerner to be roughly equal in providing access to their systems for third party developers, which is to some extent a proxy for interoperability. Who was one of the better ranked vendors? Yup, the third man out, Allscripts.

But we digress.

Looking ahead:
Epic may not have gotten a black eye from this loss, but they certainly took one on the chin. For the last several years, it appeared that Epic could do nothing wrong and was simply rolling up all the large academic medical centers and integrated delivery networks across the country. They were invincible. This loss will take away a little of their luster.

Cerner certainly gets big PR points for this win, but it is unlikely to be a highly lucrative contract for them. They won’t lose money (Cerner is extremely disciplined when it comes to finances) but they won’t make a lot either.

The contract will not significantly drain Cerner resources and existing and future customers of Cerner should not be too concerned. Leidos and Accenture will be doing the heavy lifting, Cerner just needs to provide the software capabilities that the DoD needs, and for that matter the industry.

The biggest impact on the market will be building out interoperability capabilities to support some fairly significant DoD needs. While the DoD has its own facilities, some 400+ located on military bases around the globe, 50%+ of care provided to military personnel and their dependents is from local healthcare providers via Tricare. The new system that Cerner will provide the DoD, must be able to interoperate with systems outside of DoD (those Tricare providers) to create a longitudinal patient record. Certainly Cerner will leverage the work it has done to date with other vendors that are participating in CommonWell but there are a number of EHR vendors that are still not a part of CommonWell, chief among them, Epic.

How Cerner addresses the interoperability needs of the DoD will have broad reaching implications across the industry and bears watching. Our long-term prediction is that Cerner, with DoD’s assistance, will successfully overcome many of the interop challenges we face today. No, it won’t happen overnight, but it will happen and it will be the biggest impact (and contribution) to the healthcare sector writ large.

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