Whose Data is it Anyway?

Chilmark Research tends to shy away from the thorny, nearly intractable issues of privacy and security of Personal Health Information (PHI) (we’ll leave that to the lawyers and policy wonks to figure out). However one thing is very clear: As we continue to conduct more and more of our daily activities, both business and personal, via some form of digital device all those little messages, those bits and bytes of data we create are being collected by someone, somewhere to create a more accurate profile of us. In my own case, how else would my favorite site for weather (weatherunderground) know I’m an outdoor enthusiast and have a banner ad for backcountry?

Despite our reluctance to tread into this domain, it is one of extreme importance.  The healthcare industry is undergoing a digital transformation at roughly the same time as consumers increasingly use an ever wider set of digital tools from social media (twitter, facebook, etc.) to text messaging services (txt4baby) to various health & wellness apps on smartphones and even biometric sensors (Nike+, fitbit, Withings, etc.). We’re not sure where all this will lead but at the very least, the public needs to gain a better understanding of how their digital bits and bytes are being used and maybe begin to think twice as to how and where and with whom they share their PHI.

Today, we found one such educational tool, an animated video by Michael Rigley which is quite powerful using MMS as an example.

If this is what the telecoms can now do with a simple MMS, just imagine what they might do with some of that rich health-info you may be communicating.

As an aside, Dr. Searls is doing some interesting work at Harvard Law’s Berkman Center on the concept of VRM, (Vendor Relationship Management). Much of the principles he outlines could easily be transposed to the healthcare sector and the management of one’s PHI.

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Welcomed Changes for 2012

Since its start in 2007, Chilmark Research has kept a fairly low profile as analyst firms go, focusing on a few discrete domains of healthcare IT (HIT). First there was patient and consumer engagement that led to the publication of our first report on Personal Health Records (PHRs). That first research effort led to a significant amount of consulting work and subsequently no reports published for broader market consumption until 2010. That year Chilmark research expanded into the mHealth domain, with the assistance of analyst Cora Sharma, and published the report: mHealth in the Enterprise.

In early 2011, Chilmark published what is arguably its most important, or certainly most popular body of research, a report on the Health Information Exchange (HIE) market. It was this report that clearly cemented Chilmark Research as a well-respected analyst firm providing unbiased, objective, and in-depth research on the domains it covers.

But there was a problem. By and large the vast majority of this work was done by one individual, myself, the founder of Chilmark Research. Over the course of 2011, particularly during the fall when a significant number of consulting assignments came in the door, I quickly came to the realization that I needed help. I was reaching burnout and the model needed to change.

What’s New:
In 2012, Chilmark Research is launching a subscription service called the Chilmark Advisory Service (CAS). This service will provide subscribers one of our annual market research reports (an updated HIE report is forthcoming, others in the works), a number of other content deliverables and direct access to Chilmark Research analysts for specific inquiries. More will be forthcoming regarding this service but encourage you to contact us directly (info @ chilmarkresearch dot com) if you wish to learn more immediately or schedule a meeting at HIMSS to discuss this service further.

Our research agenda for 2012 will look quite similar to our past work for we strongly believe these are the most important topics in healthcare IT today:

Patient & Consumer Engagement
Why it’s important: As the industry migrates to reimbursement models based on outcomes and providers take on more risk, it will become increasingly important to truly engage the patient and their loved ones as part of the care team. Also, in highly competitive markets, providers will be seeking new approaches to not only engage consumers, but build loyalty.

What we’ll be covering: Patient/consumer engagement and outreach strategies of both providers and payers including patient portals (Stage 2 meaningful use requirements are key market driver), telehealth, privacy & security (including consent management) and new models of care & outreach to not only improve consumer/patient satisfaction but improve outcomes.

mHealth
Why it’s important: No doubt about it, the growing ubiquity of smartphones and how they have become such an integral part of our lives (we store family pictures there, we record our expense reports on them, we answer emails, etc.) and an ever growing number of consumers are doing mobile searches to answer health-related questions. Couple this with near saturation of physician adoption of smartphones and the growing use of touchscreen tablets by providers, it is not too hard to imagine a future where mHealth becomes the touch-stone for provider-patient engagement.

What we’ll be covering: Primarily address consumer-centric and clinician-centric mHealth Apps, how the market is developing, what is being adopted and used and why, and lastly, what is the trajectory for this rapidly evolving, ever changing market.  Currently, we are in the midst of producing a report (ready by HIMSS’12) that takes a close look at mHealth Apps for provider-patient engagement.

Health Information Exchange
Why it’s important: The HIEs being put in place today are the fundamental infrastructure, “the pipes,” that will enable one, be it clinician or consumer, to create a true longitudinal, patient record which will lead to safer, more effective care (at least basic logic points to such). These pipes will also allow researchers, public health officials and others to perform advanced analytics on this clinical data that can lead to better, more effective and responsive care. Lastly, as we move to new outcomes-based reimbursement models, HIEs will become an absolute necessity for virtually all medium to large size healthcare organizations.

What we’ll be covering: As mentioned above, last year’s HIE Market Report put Chilmark Research firmly on the map as a firm providing unmatched coverage of this market. We have every intention of keeping that title. First off, we will be releasing an update of the HIE Market Report (target HIMSS’12 release date) with in-depth profiles of some 25 vendors. Second, we are launching a major research project in early February on end users’ experiences and future strategies for their HIE deployments. We have much more planned for this market, but that is a very good start!

How We’ll Do It:
As mentioned previously, I had some help, but not enough and certainly not enough to launch a major expansion of Chilmark Research. To address this issue I went out and found some incredibly bright young people (always believed in the adage, surround yourself with people smarter than you) to join Chilmark Research. They are:

The returning Cora Sharma who’s research use to be the mHealth domain but has now moved to Patient & Consumer Engagement Strategies & Tools.

The former Washingtonian who has returned to his New England roots, Naveen Rao. Naveen’s research focus will be HIE & analytics/BI domains.

And last but certainly not least, my son, John Moore III who in addition to leading an mHealth start-up of his own, will be focusing his research efforts at Chilmark on, you guessed it – mHealth.

Brief bios on these three stellar additions to the Chilmark Research team are over in the “About” section of this website.

I do not hire readily (learned my lessons there long ago) and have been very judicious in choosing only those who show significant promise. I have no doubt in my mind that with some mentoring, these three have the chops to become some of the finest analysts in the industry and the credibility that Chilmark has established in the market will continue to grow.

Speaking on behalf of the Chilmark Research team, we look forward to continuing to provide this vitally important industry that impacts us all with the critical research that is needed to help guide it forward in the successful adoption and use of IT to truly improve healthcare delivery. Each of us are very passionate about this issue, it is a mission for us and through our research we intend to make a positive impact.

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Predictions 2012: Not What You Think

Admittedly, our predictions for 2011 were modest. Most of those predictions were logical and did not take a whole lot of imagination to envision thus our success rate, 7 “hits”, 2 “toss-ups” and 2 “misses was quite high. And though are biggest accomplishment, predicting Blumenthal’s departure just a few short weeks before he actually announced such intentions is laudable, by and large these predictions just didn’t go far enough. So for 2012, rather than make simplistic predictions such as “analytics will be a high growth area” or “mHealth will create greater security concerns” or even “ACOs will begin to take hold” as none of these are all that thought provoking, we’ll go out on a limb with many of our predictions. Hopefully that limb won’t crack sending us crashing to the ground.

Without further adieu, here are our predictions:

Consumer/Patient Engagement – Not What it Seems
Despite the best efforts of the team at ONC to beat the consumer/patient engagement drum, providers by and large are still struggling with such basic issues of taking live their certified EHRs, making the transition to ICD-10, meeting physician demands to have everything served up on their new iPad and of course mapping out future strategies in anticipation of payment reform. Thus, we foresee consumer engagement remaining a tertiary issue in 2012. Just too many other pressing priorities at the moment. WebMD’s implosion on Jan. 10^th may portend that this is not such a bad move – at least in the near term.

Bloom is Off the Rose, EHR Market Plateaus
Going out on a limb, we see 2012 as the year when we start talking of the post EHR-era. Yes, there will be plenty more EHR sales in the year to come but over 2012 we will also see EHR sales growth begin to plateau and level off by end of Q4’12. You heard it here first folks, it is time to collect your EHR winnings and seek new places to invest.

Finally, We’ll See Some Fairly Competent Tablet Apps from Legacy Vendors
Though physicians continue to adopt iPads at a rapid rate, they struggle to effectively use them in the hospitals to which they are affiliated simply because most hospital HIS cannot serve up an application effectively on an iPad. Sure, many have tried using Citrix as a stop-gap measure but this is just isn’t cutting it. In speaking to one CIO of a major IDN recently, he was so frustrated with his core EHR vendor’s slow pace of development that he is about ready to self-fund the development of an App for his physicians. Fear not CIOs and frustrated physicians, we have had the opportunity to see several alpha versions of iPad Apps that major EHR vendors are developing and they actually look pretty good. Look to Q2-Q3 ’12 for general availability release of these touch-screen native (mostly iPad-centric) Apps.

At Gunpoint, Direct Project Gains Traction
In 2011, the message came down from on high, or at least from the feds, that all State HIEs must include the use of Direct in their strategic plan. Pretty clear that this was politically motivated as to date, for the $500M plus we, as taxpayers are spending on these public HIEs, there is very little to show for it and we are now running headlong into an election year and this administration needs to show something, anything, in the way of success as it pertains to health information exchange. Sure Direct facilitates health information exchange (the verb), but so does a fax machine and frankly, Direct is only a modest step beyond faxing. Therefore, Direct will gain traction in these “forced” instances but we do not see it extending its reach into the much larger market of private, enterprise HIEs (does not sufficiently support care coordination, population health and analytics) and thus Direct’s overall impact in the market will be small and fade to nothing in three years time.

First CPT Codes for mHealth Apps Issued
mHealth Apps for care provisioning have not seen any significant adoption beyond pilot studies, studies which typically show some efficacy in their use. The big hang-up is a simple one, the risk to reward ratio for physicians to adopt and use mHealth Apps as part of the care process is too low. What might change that risk-reward ratio though is a CPT code whereby a physician actually gets paid to use, or have a patient use an App as part of the care process. WellDoc is one of the few mHealth App companies that is quite aggressive in moving the ball forward and we would not be too surprised if WellDoc did industry ground-breaking work to secure the first CPT codes for their diabetes management App.

Train has Left the Station as Supreme Court Rules on ACA
Though the Supreme Court will hear arguments for and against the constitutionality of the Affordable Care Act (ACA), it is unlikely that their subsequent ruling will throw out all of ACA (they may prune it). More importantly, the move to value-based reimbursement models is already in full swing, which is something that will not be reversed. Whatever the Supreme Court rules, its impact will be minimal and the numerous changes we are seeing take place today (move to accountable care models, patient centered medical home, etc.) will continue as the train has already left the station.

Changing of the Guard as Dynamic Duo Departs
Last year we predicted the departure of ONC head, Dr. David Blumenthal. This year is an election year and it is expected that there will be a significant changing of the guard across the administration. We predict that the dynamic duo that is Aneesh Chopra, White House CTO and Todd Park, HHS CTO will both be leaving their posts by end of the year.

M&A Continues, but at far more Reasonable Valuations
Okay, yes we have had this prediction for three years running, but we just can’t help ourselves as we see far too many vendors in this market (some 300+ EHR vendors alone!) and some rationalization must enter at some point. We are seeing rationalization on valuations (e.g., no one was willing to pay what Thomson Reuters wanted for their healthcare business unit despite there being a sizable number of bidders) and this will create an opportunity for acceleration in M&A activity in 2012.

Floundering HITECH Initiatives Attract Political Spotlight
Yes, we are seeing some modest success and adoption of EHRs as a result of the HITECH Act but the preponderance of such success is at hospitals that first have had some form of EHR already in place and also have a lot to lose if proposed reimbursement cuts from CMS come to fruition at the end this multi-year march to certified EHR adoption and meaningful use. Yet, under the covers we are still not seeing wide-spread EHR adoption at the ambulatory level, especially among smaller practices, State HIE initiatives struggle to define what they’ll actually be when the grow-up, the Beacon programs have not reached the promise land, and the RECs, well we were never a big fan of these for obvious reasons we outlined previously. As this is an election year, healthcare and anything with the stamp of the Obama administration on it, will become fair game and dragged into the limelight. Get ready for healthcare to become the political piñata of 2012

HIE Vendors Stumble
By the end of 2012, the final awards for State HIEs will conclude and with it the evaporation of the $500M plus honey-pot that attracted so many vendors into this space. What’s next for these vendors? Some will stumble out of the market with little to show for their efforts. Others will work with their public clients to stand-up these public HIEs in order that they provide value to their respective communities, which will not be easy and lead to more stumbling. And of course HIE vendors who have traditionally been focused on public markets will reposition themselves for the private, enterprise market. Some of these vendors are now stumbling in this transition to the enterprise market (requires different sales resources and tactics, technology requirements, etc.). This will result in yet another shakeout in this niche industry sector. (Our forthcoming HIE Market Report will provide further details)

The funny thing about doing these predictions is that as one actually goes through the process of thinking about this market, which is currently going through nearly unprecedented change, one ponders so many other predictions that just end up on the cutting room floor. Some of those include:

Payers continue to struggle with exactly what they’ll offer on the State Health Insurance Exchange.

Pharma companies look to insert themselves directly into physician workflow, via HIT.

Despite rising cost share, consumers still struggle to make intelligent, informed decisions.

Telehealth gets some wind under its wings as big telecoms start aggressive lobbying efforts.

You get the idea, plenty of turmoil, no lack of potential trajectories in technology adoption and use within the healthcare sector and we here at Chilmark Research look forward to continuing to provide thoughtful insight on this ever evolving market in 2012.

So now it’s your turn. Are we on the mark with our predictions? Did we reach too far? Is there a particular prediction that you have which we totally missed? It is you, the community of readers that make this site far richer than we ever could do on our own and we look forward to your feedback.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Home for Christmas by Thomas Kinkade

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mHealth: Seemingly Stuck in Neutral

As many readers know, Chilmark Research has been a strong proponent of mHealth for several years. Despite this enthusiasm, we sometimes come away from a conference, such as this week’s mHealth Summit, with the feeling that the only ones making a living with mHealth are conference organizers. Maybe it was the format of this particular conference – too many presentations that were not well vetted for relevance and content. Maybe it was the lack of exhibitors – where is the rest of the legacy HIT market who are all claiming to be bringing mHealth solutions to market? Maybe it was hearing too many mHealth vendors with weak value propositions asking the Feds to step in and jump start this market. Or maybe it was the over reliance on government presentations and an ill-fated alliance with HIMSS, who sponsored less than visionary sessions. Hard to point to any single thing that contributed to this ho hum feeling, so let’s just chalk it up to all the above.

That being said, however, the mHealth Summit, now in its third year, is the best conference one can attend in the US if one wants to get the global pulse on all things mHealth.

From its humble beginnings where the first conference was quickly over-subscribed and held in a small DC amphitheater, this year’s event drew over 3,000 attendees to the massive Gaylord Resort outside of Washington DC for three days of countless sessions running concurrently covering every aspect of mHealth one could imagine. While most sessions were structured as panels with several short presentations, one was thankful that presentations were indeed short for few had substance. But nearly every session had one stellar presentation that kept one hopeful. Those were the gems of this event and like any event, the networking that occurs in the halls.

And then there were those sessions that took a close look at mHealth adoption in developing countries. This is the current market for mHealth (albeit almost all nonprofit) for these countries have real health needs having to deliver healthcare to a highly distributed and often rural population with too few doctors and lack a robust land-line network (no Internet cafes here folks). But what they do have are cell phones – lots of them and they are not tied to legacy systems and associated processes. Even among some of the poorest countries, the rapid adoption of cellphones by the populace is staggering (e.g., India alone now represents 20% of all cellphones in use worldwide). Combine the need with very little in the way of legacy HIT infrastructure and the ubiquitous nature of cellphones and you have a ripe opportunity to redefine care delivery models. Look overseas to these developing countries for the real future of mHealth for this is where best practices in mHealth-enabled care delivery will likely develop and later be adopted in more developed countries, US included.

That is not to say they are no advances occurring here in the US. One of the keynote speakers, cardiologist Eric Topol, gave several live demos during his talk of the mHealth tools he is already using including stating that he has not used a stethoscope in two years, instead preferring to use mobisante’s ultrasound wand and iPhone App.  Then there was our conversation with WellDoc’s CTO who informed us that they are currently being deployed at a number of institutions and hope to have a host of CPT codes that doctors can bill against in late 2012. And there was the small start-up we spoke with who has done the hard work of first identifying what the value proposition is for all stakeholders in a community (payers, providers and consumers) and then developed an extremely compelling solution (think analytics & automated quality reporting, tied to reimbursement, tied to consumer engagement) that has a lot of promise in a market where physicians’ pay will increasingly be based on outcomes and ability to meet pre-defined quality metrics

Therein lies arguably the biggest take-away from the mHealth Summit. As one individual put it, ‘There was a bit of whining about getting the government to force large corporations to form strategic partnerships with smaller organizations.” But what these start-ups really need is to simply focus on addressing the age old question: ‘What’s in it for me?’ These companies need to stop the whining and do their homework defining the value proposition for not just the consumer, or just the doctor, but think more broadly of the impact their solution may have on the delivery of care, and how each stakeholder may benefit. Unfortunately, as these conference clearly showed, the mHealth market is still heavy on hype and little on substance.

Addendum:
For a slightly different take, check out the post by VC firm Psilos’ Managing Partner Lisa Suennen’s. Well worth the read. And more recently, Charles Huang, formerly of Spark Capital, provides his own view of the mHealth Summit, including a a call that once and for all, we need to kill the term mHealth.

Also, the image used for this story was taken by Joel Selanikio, CEO & co-founder of DataDyne.org an organization focusing on mobile data collection, particularly, the App EpiSurveyor. Thanks Joel. 

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Giving Thanks, Albeit Belatedly

While it would be much better to give thanks prior to our (the US’s) big Thanksgiving holiday, sometimes things just get in the way as has been the case this fall. In fact, many things have gotten in the way – all good things, very good things, but gotten in the way nonetheless leaving you dear reader, far less to actually read from Chilmark Research. Truly wish that this was not the case , but alas, as a small but growing analyst firm, we are seeing our own challenges in scaling up Chilmark Research to meet demand. And yes, we are seriously looking into revamping some of our own internal processes to insure that we continue to deliver timely, relevant and cogent posts on HIT market trends.

Which brings us to our first pause to give thanks.

This fall has seen an explosion of activity for us, activity that has us juggling so many balls and somehow managing to keep them all in the air. That explosion of activity has come in the form of numerous client engagements that has provided Chilmark Research with an opportunity to further delve deeper into a number of healthcare sub-sectors including:

mHealth adoption of patient-provider engagement Apps. A larger report for the general market will be released in February.

Concierge Care: market drivers, key players and future forecast.

Aging-in-Place telehealth and remote sensing market opportunity assessment.

Strategy workshops with several clients helping them map out their HIT strategy.

Deep dive research on current and future state of imaging exchange to promote collaborative care processes, which has also resulted in our first time trip to RSNA.

For all of these clients and those we may have the opportunity to serve in the future, we wish to give thanks for these opportunities always teach us something new. At Chilmark Research we have an insatiable appetite for learning.

We also wish to give thanks to you, our readership for first inspiring us to write these posts through your comments, your inputs, your private emails to us. When first starting Chilmark Research, these posts were used for marketing, to build credibility in a market we knew little about. The process of writing these posts built readership, but more importantly, it forced us to do good research. You can’t build credibility with lame posts that are no more than a rehash of some press release or fail to take to task questionable moves by policy makers or vendors.

But now writing these posts is not so much about marketing for Chilmark Research. From those humble beginnings several years ago, we have built a substantial readership that includes quite a few extremely senior and influential HIT market movers and shakers. Also, based on the volume of inquiries we now receive for future engagements, it appears that Chilmark Research has indeed established a reputable brand in the HIT market. Therefore, we want our posts to be seen more as our way of contributing to the discussion, a discussion that will help others better adopt, deploy and use HIT to not only deliver better care, but to create a health system that is more responsive to and inclusive of the needs of patients and their loved ones.

Lastly, we wish to thank all of those who have helped us along the way. From the numerous clients who early on had faith in Chilmark Research and hired us on to provide specific research services to the countless educational mentors in the healthcare market who have taken us under their wing providing us sage advice along the way on the structure of what appears to be is a convoluted market. There are far too many to list here but they know who they are. Thank you once again for all of your assistance along this journey, we would have never gotten this far without you.

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Trickle Down Health or Health 2.0 Impressions

Another year, another Health 2.0 under the belt. This being the fourth time attending it is interesting to see how this event and its participants have evolved. Like many things in life, some things at Health 2.0 have changed, some have not, most for the better, but there remain some troubling aspects to this event that cannot be ignored.

When thinking back on the demos of countless vendors of years’ past, this year’s Health 2.0 had two distinguishing characteristics:

Demos are cleaner, with better user interfaces (UI). The companies demoing at Health 2.0 are spending a lot more time and resources on creating inviting, clean and engaging interfaces that are a welcome change from the cluttered messes of demos past. As with Mark Twain’s famous quote: “I would have written you a shorter letter if I had the time.” reducing an application to its core elements takes time. Clearly, the majority of Health 2.0 vendors this year have spent the time and resources necessary to create a simple and engaging environment for the end user.

Business models are more sophisticated. At the first Health 2.0 event, just about every single vendor there stated that their business model was going to be based on some mix of Freemium and advertising revenue. Needless to say, just about every Health 2.0 start-up from that conference has either gone out of business, is among the walking dead (takes a lot to completely kill a company – trust me, I’ve been there) or has changed their model to survive. This year, the business models presented are more creative and for some, likely to see success in the market.

The contributing factor to these two changes is the amount of money now flowing into the health IT sector. Investors smell opportunity and are placing some pretty big bets as represented by the investments in Castlight (~$80M), ZocDoc ($50M) and CareCloud, who announced a $20M round at the event. That’s some serious cash and with all the investors that were present at this event, quite sure there are more investments in the wings.

Snap-shot impressions of demos:

• Mobile remains hot but no one seems to have figured out a way to rise above the noise.
• Big data is the new hot phrase but few understand its implications. Most demos simply demonstrated even more fractionation of data into distinct silos with no clear path towards aggregation.
• Many see the key to success as becoming the facebook of healthcare with a Zynga Farmville thrown in for good measure. By the end of two days, just about ready to strangle the next demo that started with some reference to facebook and/or gamification.
• Pricing transparency is a big area of focus for many but seriously doubt most will get past their first round of angel funding as this is already a competitive market. Speaking of which, almost as frustrating as short vacuous demos is the lack of clear arguments by those giving these demos as to why they’ll succeed.
• Demos never get into details, thus rarely instructive.
• Many platform plays, ala PaaS, but like big data, few truly understand what that means and how to get there.

While Health 2.0 can get overwhelming with the number of rapid fire, albeit  shallow demos from the multitudes of vendors who are all trying to make their mark in a market that has experienced a significant amount of churn, the event is invigorating for the passion that is shown. Sure, everyone is hoping to make a living on their next greatest innovation, but unlike virtually any other health IT related conference, those at Health 2.0 have passion. They are on a mission. They want to truly change healthcare. They want to make a difference. That passion is contagious. Unfortunately, that passion appears to be confined to the digerati.

Looking around at the Health 2.0 audience one sees a sea of almost exclusively upper, middle class professionals that are tapping away on their iPad, smartphone or laptop. When one sits back and thinks about the many demos seen, virtually all of them seem to be designed for this audience. Maybe the most disturbing part of the event was the on-stage interview with a mother of eight kids (she was white, middle age and clearly upper middle class) showing how her family is tapped into the quantified self movement with the various Apps they use to track their health and fitness. This is not representative of the broad swath of the American populace who are the ones that will drive our healthcare system off the proverbial cliff. It is that grandmother in Indiana who is caring for her diabetic, overweight husband, two grandchildren, a daughter suffering from an addiction and a son-in-law who is unemployed and has no health insurance that we need to talk to, have up on stage to tell us what they need to better manage their health and interaction with the healthcare system. And we need not go to that extreme, how about just having someone from a safety-net clinic talk about their needs? Sadly, no such representatives were to be found at Health 2.0.

It is this detachment that has Chilmark most concern with this passionate movement. Yes, virtually all Health 2.0 participants are passionate about helping all healthcare stakeholders but if we do not start talking to a broader cross-section of the populace, this movement may be much like the barricade scene in Les Miserables wherein the students leading the call for a revolution end up dead and with little to show for they had not engaged the populace-at-large. Some may argue that like this technology will indeed trickle down to the masses in much the same way that smartphones are now replacing feature phones in the mobile market. This “trickle-down theory may indeed come to pass but then again, we could just as easily end up with something very similar toPresident Reagan’s trickle-down theory for wealth distribution and we all know what the end result of that has been.

 

 

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Who Will be the Salesforce.com of Healthcare IT?

Last week was the massive Salesforce.com user conference Dreamforce (massive in that there were more attendees at Dreamforce then this year’s HIMSS!). We’ve been reviewing more than a few articles and writings written by those who attended the event. In the few short years of its existence (~13yrs) Salesforce.com has become one of the leading Customer Relationship Management (CRM) vendors in the market and basically pushed the previous leader Siebel to the brink and into the arms of Oracle. Salesforce is arguably the leader in the Software as a Service (SaaS) market and thus someone to pay close attention to on all things “Cloud Computing.”

So what makes Salesforce.com so compelling and what are some parallels to the healthcare sector?

Similar Market Demographics: From the beginning Salesforce has always been structured as a SaaS and targeted the hard to reach and highly distributed sales forces of companies of all sizes. Actually, they first targeted the small to medium business (SMB) market and once successful there, went after Siebel in big enterprises. In healthcare, the vast majority of care is provided by small, 1-3 physician practices that are highly distributed across the country – perfect target for a hosted SaaS offering.

Deliver Value, Not Pain: Since most sales people get a large portion of their salary via commissions, the last thing they want to do is hassle with software that is cumbersome to use. Salesforce.com’s user interface (UI) is very intuitive and surprisingly customizable (within limits) for an SaaS offering. This allows a sales person to configure the the solution to their specific needs. We hear time and again from physicians that the EHR they are being forced to use doesn’t fit their workflow and is often painful to use. (Having been demo’d more than our fair share of EHR solutions, it still shocks us just how awful the UI is for these solutions.) Like their sales brethren, physicians need solutions that fit their processes and do not slow them down.

Fold in Rich Communication Tools: At this year’s Dreamforce, Salesforce.com CEO Marc Beniof spend a substantial amount of time focusing on the rich communication tools that Salesforce is embedding to tap the move to social networks. Right now, the US Government is dumping over a half billion dollars to stand-up HIEs in every State and enterprises are easily spending double that amount to facilitate information exchange in support of referrals, lab distribution, orders, etc. What if a Salesforce for healthcare arrived on the scene allowing physicians to securely exchange information in the same manner that those on Salesforce.com use that platform for secure ad hoc communication with internal and external partners to meet customer needs?

Provide Robust Security – No Leakage: Sales leads are a sales person’s bread and butter and they guard them with their lives for it truly is their livelihood. Thus, Salesforce had to build a system that ensured a sales person’s leads were their own with no possibility of a breach (leakage) to a competitor. If Salesforce can meet this strict requirement, is it such a stretch to preserve the integrity of personal health information (PHI) on such a system?

Focus on the Data & Deliver Simple Yet Useful Analytics: Sales is often a numbers game. This requires superior, robust data management and ultimately the ability to create a wide variety of pre-configured and customizable reports. As we move towards value-based contracts, providers of all sizes will be asked to provide reports as well (typically on quality metrics) to those paying the bills (CMS, payers, etc.).

Provide an Ecosystem: Salesforce has a vision to provide an ecosystem of third party apps on top of their platform but to date, like most companies, they have struggled to make much headway here. But in time, as more and more IT functions move to the “Cloud” to support an increasingly mobile device centric world, an ecosystem is inevitable. In healthcare, where one might successfully argue that physicians are one of the most mobile of professions, accessing apps via mobile devices is quickly becoming standard practice. Increasingly, the healthcare market and in particularly those far-flung physician practices, will look to ecosystems of apps delivered over the Web to their mobile device (touch-screen tablet) to support their practices.

Adhere to KISS Principle: Like sales professionals and for that matter just about any other professional worth their salt, physicians in private practices are extremely busy and the last thing they need is to fuss around with software maintenance and upgrades. Subscribing to a SaaS takes that big upgrade headache and slams it with a double dose of Excedrin.

This got us to thinking…

Who in the Healthcare IT (HIT) market might become the Salesforce.com of HIT?

EHR Vendors:
We can’t think of a single vendor in the EHR market that has the foresight, the vision, the chutzpa to pull off a Salesforce.com move. Sure, one can point to PracticeFusion (who happens to have received backing from Salesforce) but we don’t see the vision there. What about athenahealth you might ask? Yes, they like to portray themselves as such, but honestly, their bread n’butter solution is not a SaaS play but more of a straight services play delivered via the Internet and a lot of old school back office processing in a warehouse in Maine. All the other EHR vendors? Either they’re too small to matter or chained to their legacy business models that they can not break free of to deliver the scale and gravitas of a Salesforce.com like solution for healthcare.

HIE Vendors:
Increasingly, HIE vendors are providing simple EHRs targeting ambulatory practices, they certainly have the information exchange piece covered (to highly varying degrees) are beginning to fold in analytics (big reason why UHG acquired Axolotl) and some are looking to provide an ecosystem play such as Medicity with its iNexx platform, Covisint with its AppCloud or even Microsoft’s somewhat aborted attempt with Amalga. Yet, despite these efforts, we do not see any one HIE company really grasping the reigns and running away with the prize. Each of the aforementioned vendors have their own reasons why they haven’t quite captured the imagination of the healthcare sector and we are not holding our breath waiting for someone to breakout.

Others:
Emdeon has a huge presence in the market as a clearinghouse for claims processing and having just been taken private by private equity firm Blackstone, they may try to make such a play. At the most recent HIMSS sat down with Emdeon for a briefing where they hinted to a desire to move more directly into clinicals, but to date, we’ve seen nothing materialize and it is unlikely to happen anytime soon. Emdeon also has the very real issue of their existing business model (did you no their number one capital expense is postage stamps?) that will keep them on the sidelines.

NaviNet is similar to Emdeon in that they already have a direct connection into the physician’s office with some one million plus healthcare providers using their service. NaviNet has the links but it does not appear that they want to get into the nitty gritty of providing a host of other services and offerings on top of their existing platform. It appears that NaviNet will add small incremental services to their platform rather than go for the whole enchilada keeping the platform simple and streamlined.

Surescripts is making a play in the HIE market with its Kryptiq partnership offering the Clinical Interoperability platform. While still early in its development. the Surescripts play is the closest thing we have seen to date to match the existing Salesforce juggernaut and the one to watch.

Now we certainly do not claim to have all the answers, never have. That is why we have a comments section below. So dear readers, we’ve given you are analysis and now it’ your turn. Who do you think is in the best position to become the Salesforce.com of the HIT market?

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Trends in Patient Engagement

As part of the process of setting our broader research agenda at Chilmark Research, we do a significant amount of secondary research combined with more limited, but highly focused primary research. We use this research to identify the “white spaces” where there appears to be a demand for some thoughtful, in-depth research and reporting that only an analyst firm such as Chilmark can provide. During that process, however, we often uncover some interesting trends similar to the HIE Snippets of the previous post.

Chilmark continues to follow the patient engagement realm, from mHealth Apps to PHRs, patient portals and personal health platforms such as Dossia and HealthVault. Recently, we have been receiving a significant number of inquiries from healthcare organizations that are developing IT strategies to meet Stage 2 meaningful use criteria to provide patients online access to their personal health information (PHI). We are also beginning to hear very early rumblings by a few forward thinking organizations on the use of new technology platforms, particularly mobile, to more deeply engage patients in managing their health in conjunction with impending value-based contracts. There have also been several announcements lately of roll-outs of Epic’s mobile patient engagement platform My Health. Lastly, earlier this week we had the pleasure to attend GE Healthcare’s Centricity Business National User’s Conference where we sat in on several patient engagement presentations. Following are some of the trends we are seeing that will be foundational to our future research on the topic:

HIE Vendors not up to task: A number of large healthcare organizations that have grown organically and through acquisition have a multitude of legacy IT systems from numerous vendors (not everyone is going Epic) in place. These organizations are now looking to link these systems together with an HIE solution and while they are at it, want to be able to provide patient access to their PHI. Problem is, most leading HIE vendors that have proven solutions for interfacing to multiple systems typically have poor patient-centric solutions. There are exceptions to every rule and companies such as RelayHealth and Kryptiq offer quite capable patient portals combined with secure messaging. But for those HIE solutions that lack such capabilities, healthcare organizations are having to look elsewhere to fulfill this need which is bringing business to MEDSEEK and Intuit Health.

Patient Portals interface first to transactions: Several of the presentations at the Centricity event were given by organizations with distinct clinical and administrative systems. Maybe it was just the venue, it was a Centricity Business Users’ Conference after all, but in each presentation on patient engagement the patient portal was driven from the admin-side. Sure, the portal could provide labs and some basic clinical data but it was really designed to help with the pre-registration process, appointment scheduling, secure messaging and Rx refill requests. Each organization we spoke to have plans to bring clinicals (some had Epic for clinicals, others Cerner) into the portal in the future to facilitate care processes for the truly sick, but that is a second order priority. This raises the question: Will front-end admin solutions, like Centricity’s Business Suite, become the core patient portal at the expense of those developed and offered by those from the clinical side of the fence?

Still in very, very early stages of mHealth App adoption: As mentioned previously, a number of organizations (Group Health Collaborative, Kaiser-Permanente, Stanford, UPenn Medical Center, etc.) have announced the release of an mHealth App for patient engagement, virtually all of them, My Chart instances. These releases are basically a mirroring of what is being done with patient portals mentioned above – enable transactional processes. We have yet to see anything, at any organization that has gone beyond pilot stage (e.g.WellDoc in Baltimore) in the deployment of a mHealth App to address a large at-risk population. This is puzzling for as we move to value-based contracts and accountable care, healthcare organizations will need to seriously rethink how they deliver health to chronic disease patients not just in the exam room, but at the patient’s home, in their car at work, wherever they may be to ensure compliance. mHealth can play a very effective role here but organizations’ reluctance to adopt is a chicken and egg scenario. There is not enough evidence to prove efficacy of mHealth Apps but if they don’t adopt, the evidence will not present itself. This will eventually break-thru, the question now is simply, when? And based on what we have seen in healthcare IT adoption to date, it could be a much longer wait than many VC firms and entrepreneurs currently have in their financial models.

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Re-entry into Healthcare

As with the last shuttle mission making its re-entry into the Earth’s atmosphere yesterday, I am re-entering the world of healthcare IT after an extended family vacation in the wilds of Alaska. No, I did not see John Halamka up there, it is after all a VERY BIG state, but I did get the chance to go completely off-the-grid, a blessed reprise and observe what is one of the more beautiful and still untouched landscapes in the northern hemisphere. Upon finally arriving in Vancouver I made the vow to return, but next time it will be to spend more time in the small coastal towns of the Alaskan peninsula, likely via an expedition kayak, to get up close and personal with the people and environs of this small corner of the world.

After being away for nearly two weeks, it is a challenge to pick up where one left off. Cruising through the reams of email (please excuse any delays in getting back to you I’ll get to your email yet, I promise), trying to catch up on my reading of the various industry rags and tapping twitter I feel pretty comfortable in stating the more things change, the more they stay the same (not exactly the best quote for an analyst to say as we thrive on turmoil…).  That being said, following are a few items that did catch my attention and may look into further:

FDA Releases Proposed mHealth App Regulations
On Tuesday, the FDA finally released guidance on how it intends to regulate mHealth Apps. Having taken a cursory review of these proposed regs, have to say I’m quite impressed as the FDA has struck a careful balance of  applying regulatory review where warranted while allowing plenty of room for innovation in this very young and still immature industry sector.  MobihealthNews has a fine write-up on this story.

WebMD Provides Abysmal Guidance and Tanks
WebMD, which has been seemingly immune to the recession, provided Q2’11 guidance that sent its stock into a tailspin and leading to a very rapid (next day) letter to investors from the Chairman to quell fears. Why is this significant? First, pharma is feeling the effects of the recession and is pulling advertising dollars off the table. Over the last few years, WebMD has been putting virtually all of its “eggs in one basket” – pharma. It appears that the golden goose of pharma is no longer laying golden eggs which will likely have a ripple effect on the multitude of other smaller Health 2.0 like companies whose business models are advertising based. Secondly, once again WebMD is projecting contraction in its “private portal” business. This is, or at least was, the 800lb gorilla in the PHR market for employers and payers. WebMD has milked this cow for about all its worth and do not be surprised if others start aggressively moving in. Cerner is one and we’ll talk about another tomorrow.

Stage 2 Meaningful Use Likely Delayed till 2014
Can’t say we didn’t see this coming as ONC’s advisory board basically recommended such but it does complicate the schedule for incentive payments which, as part of ARRA were meant to create jobs and create those jobs quickly. As the recession continues to drag on, there appears to be an acceptance that getting back to near full employment in this country will not occur quickly. Such acceptance has appeared to bring some rationality as to the rollo-out of EHRs. Choosing, installing, mapping workflow, testing, training and going live with an EHR, let alone meet the various requirements of meaningful use (MU) is no small task and this delay will bring a sigh of relief among many a CIO and eligible professional. But now one has to wonder: What does this mean for Stage Three?  Don’t be surprised if Stage Three gets the ax.

I’m sure there are other bits of news that I missed and welcome your input to help educate this off-the-grid analyst on all the wonderful things he missed as he was trudging through the temperate rain forests of Alaska or battling grizzlies for a share of their salmon (note, grizzlies don’t share).  BTW, this last picture is of one of the “deep forest creatures” you’ll find in that rain forest.

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