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Telecom’s Tepid Plays in HIE Market

by John Moore | July 20, 2010

The telecom industry makes its money delivering bits and bytes. Therefore, it is not too surprising that the two major players here in the US, AT&T and Verizon are placing some bets in the healthcare sector.  Primary among those bets are enabling telehealth (both have been perennial sponsors of the Partners Connected for Health Symposium), providing communication services to large IDNs and more recently making a play in the still emerging Health Information Exchange (HIE) market.

AT&T has Healthcare Community Online (HCO) as their primary HIE solution, which they often take to market with partner Covisint.  The lighthouse customer for these two was the now belly-up SharedHealth in the state of Tennessee. Despite AT&T’s claims to have a viable and competitive HIE solution, we have never heard anyone mention them, either within the context of an RFP, a competitive bake-off, mentioned as a competitor by other HIE vendors, etc.  Nothing. Nada.  It’s as if they don’t exist, and frankly, maybe they don’t in the HIE market. (Chilmark did not discount Covisint and there will be a detailed profile of this HIE vendor in our forthcoming report.)

Is Verizon doing anything more substantial in the HIE market?

Late last week, Verizon announced its own HIE product suite.  Let’s be polite, the press release didn’t have us in a panic wanting to call Verizon and immediately get a briefing.  Heck, writing this post several days after the release went out may give you another hint as to our level of interest and excitement.

What’s the problem?

1) Putting “Cloud” in the title of the press release.  Boring, and honestly not at all new as virtually all the leading HIE vendors having been providing cloud-based HIE solutions for years.

2) More importantly, Verizon’s chosen partners, MEDfx, MedVirginia and Oracle.  First MEDfx is but one of the countless and like its brethren, nameless, little HIT vendors out there in the market trying to survive, offering a wide range of solutions from EMR to PM, to HIE etc.  A mish-mash of products with little market traction.. Our bet is that 5 years from now, they’ll be gone.  One would have thought that with its size, brand and clout, Verizon would have been able to do better than this for an app partner. Second, picking a client as a partner? There may be some small value to that but to make that a key part of your announcement message, not so good and a clear sign of weakness.  Besides, it looks like what is really going on here is that MedVirginia is simply replacing its existing HIE vendor, Wellogic, an HIE vendor who, if field reports are correct, is on its last legs.  OK, we’ll give Verizon credit for partnering with Oracle for Oracle’s Master Patient Index solution, if it is indeed the one that Oracle built and not the poorer substitute built by one of Oracle’s most recent acquisition, Sun Microsystems.

It just puzzle’s us that these two very large companies, with clear established brands in the market are making such tepid plays in the HIE market.  They certainly have the resources to do something far bigger, say acquire one of the leading HIE vendors that has an established presence, good customer list and build from there.  In some of our more recent discussions with those assessing and looking to purchase an HIE solution, the issue of vendor viability is always a topic of discussion.  A large company like one of these telecoms could clearly remove that issue from discussion.

Maybe it is just a case of it’s not in their DNA.  Telecoms sell simple services that can be leverage across multiple markets.  Delving into the healthcare sector with an HIE play requires more than just a communication network, it requires secure messaging, deep domain knowledge of healthcare workflow and best practices and it requires a level of software expertise that is foreign to these companies.  No, it is Chilmark’s belief that announcements such as this simply cloud-up what is already a pretty murky market.

Our bottom-line advice to those assessing HIE solutions in this murky market:

1) Look to a vendor that has a proven track record, with good references from those you respect.

2) Seek a vendor (and not just their service partners) who has domain expertise and truly understands what is trying to be accomplished within the context of an HIE.  Look closely at their workflow templates as these will give you some idea as to how well they understand the business.

3) Delve deeply to understand a vendor’s true compettive differentiators.

4) Look closely at their list of partners, both software and service, and talk to the vendors customers about how well these partners’ solutions are integrated into the entire solution suite.

And dear readers, if you have a few suggestions of your own, please add them to the list in the comment section below.

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