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Posts Tagged ‘Cerner’

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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A little over a week ago Google stated that it was putting a stake through the heart of their personal health platform (PHP) Google Health. We at Chilmark had been expecting this for some time, it was just a manner of when it would become official. Thus, we were somewhat taken aback by all the publicity surrounding this final chapter with our own post on the topic receiving well over 40 comments and link-backs (that may be a record – thanks everyone for contributing to the story). With the closing of Google Health, we postulated in that post that Microsoft really had no other worthy competitor that will challenge them to continuously make enhancements to HealthVault. We may have spoken prematurely.

Stepping in to take the place of Google, is none other than an ol’school EHR company (and one of the largest), Cerner, who provided their own commentary on the demise of Google Health and their future intentions. Last week we had the opportunity to talk with the Cerner Health and learn more about those intentions but before getting to that, some quick background.

Taking a different tack:
Cerner has been in the HIT business now for 31+ years having grown to one of the leading EHR vendors in the market. You’ll usually find their systems (EHR: Millenium) in large healthcare organizations. This sector of the EHR market is seeing fierce competition as Epic seems to pick up one win after another at the expense of others, including Cerner. While continuing to go head-to-head with Epic, it appears that Cerner has also chosen to take a different tack, adopting a philosophy of: if you can’t beat them straight up, change the rules of the game.

In this year’s Annual Report, co-founder and chairman Neal Patterson spoke of Cerner’s origins, its staying power in the market but most importantly, the desire to transpose Cerner from a “care company” to a “health company” stating his belief that

…the business of health may eventually become a bigger business than the business of care.

In conversations with several Cerner executives, it becomes pretty clear that this company is truly looking to remake itself into one that adopts an open approach to not only sharing information (Cerner was very instrumental in the Direct Project) but provides a foundational “network of services” to enable “communities of care.” Those communities can be within a city, a region, an employer or a State. On the HIE front, Cerner recently won the Missouri State contract (not too surprising, it is in their backyard) but Cerner is also looking to land additional multi-stakeholder, HIE contracts with their partner Certify Data Systems. Unlike virtually all other EHR-derived HIE solutions, Cerner’s is actually pretty open and can interface readily with any EHR provided the EHR uses common data standards (e.g., CCD, CCR, etc.). But what may be even more interesting then what they have done in the HIE market, is what Cerner intends to do in the broader consumer market.

Cerner Health:
Last year at Health 2.0 a couple of representatives of Cerner made a fairly simple but engaging presentation on some of the gaming concepts they were developing which reminded one of some of the earlier developments at what is now Humana’s defunct skunkworks, Crumple It Up. Though a bit gimmicky, the presentation caught one’s attention as it was certainly out of character for any EHR vendor, let alone one of the leaders.

Now, some nine months later Cerner announced its intention to take Cerner Health beyond what Google Health was (not too hard to do). The leadership team at Cerner Health graciously hosted a call with Chilmark Research to further discuss exactly what those intentions are which are outlined below:

Provide a wide range of health & wellness services for employers.
Cerner has been eating its own “dog food” for the past year using Cerner Health to promote health & wellness among their employees who to date have lost a combined 12 tons of fat (take that Biggest Loser). This weight loss program will be rolled-out across Cerner’s home town of Kansas City (employers, providers, etc.) in two weeks. Cerner Health will target a number of other health & wellness areas, with programs that include built-in incentives. Clearly, Cerner is targeting WebMD in the employer market, a market that has seen very few comprehensive solution suites and WebMD has been milking that market for a longtime and is vulnerable.

Facilitate population health management – address “communities of care.”
For some time now, employers and payers have been looking to better manage their populations to lower medical loss ratios (MLRs). Providers will be looking to do the same as they take on a greater share of the risk via new contracts (e.g. BCBS-MA’s Alternative Quality Care contract) and future Accountable Care Organizations (ACOs). Cerner Health intends to serve both employers and provider needs in this regard with “Health Graphs,” a conceptual analytics framework that combines multiple data streams to provide an accurate view of population health at the community level. The Health Graphs concept is still a bit fuzzy (as are most data analytics models to address this issue) but what we do like is the focus on communities. To be truly successful at addressing population health, one must operate from that community level. Cerner Health correctly perceives health as a community issue where within a given community, be it an employer, a hospital, a specific condition, a town, a region, etc., there are unique needs requiring a focused approach.

Provide a PHP with an ecosystem of third party apps and go direct to consumer.
Cerner Health will go head-to-head with HealthVault by offering a PHP with a published software development kit (SDK) for third party independent software vendors (ISVs) by year-end. This will enable an ecosystem of applications to potential sit on top of the Cerner Health stack. Currently, the SDK is undergoing testing with a limited set of beta ISVs to fully flush-out capabilities, documentation etc., before a broader roll-out. In addition to releasing the SDK at year-end, Cerner will also open the doors to any and all consumers/patients to store their personal health information (PHI) on the Cerner Health PHP. Similar to HealthVault, Cerner Health will support all leading data standards, Project Direct protocols, and certainly allow one to upload their Blue Button files to the PHP.

The big challenge for Cerner on the PHP front is soliciting ISVs to join. Many will perceive Cerner as a competitor to their own initiatives and one should not expect competing EHRs (Allscripts, eClinicalWorks, Epic, GE, Nextgen, etc.) to readily partner either. Where Cerner Health draws the lines of what it intends to take to market and what it will look to partners to provide remains unclear. In what is still a very immature market, this is not necessarily a bad thing but it will prove challenging for Cerner to build-out that ecosystem on the PHP without clearer articulation of intentions.

The Wrap:
Cerner’s entry into the health market is a bold move and hardly a slam-dunk. Reading between the lines, Cerner Health has an extremely broad charter that will likely bring it into competition with a wide range of vendors outside its traditional EHR haunts including Microsoft, Intuit and WebMD to the multitude of disease management firms and of course population health analytics firms such as Ingenix, Thomson Reuters, SAS and IBM. Have they bitten off more then they can chew? That’s a very real possibility. But one thing this company does have going for it is staying power and one would be foolish to discount them this early in what will be a very long race.

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Moving from an event focusing on HIE/REC initiatives by various States, the next two events, HealthCampSF and Health 2.0, took data liquidity to new heights.  Having the CTO of HHS, Todd Park, kick things off at HealthCamp by channeling Oprah and discussing/promoting the Clinical Health Data Initiative (CDHI) as well as the Blue Button sure got things started. But that was only the beginning. The organizers of Health 2.0 really out-did themselves this year, certainly making up for last year’s event, with a highlight being the Code-a-Thon challenge wherein teams of developers joined together to use freely available data (e.g., CDHI) to create new, novel and potentially useful apps.  While these developers only had a few days to put together an app, their efforts, while a little rough around the edges, were creative and demonstrated what might be possible once we bring some liquidity to health data.

But there are certainly examples where an abundance of data, or at least data sharing can run amuck and likewise there are examples, such as the Code-A-Thon and others at the Health 2.0 conference that exemplify what may be done with data if it is applied in a streamlined fashion.

An example of the former was the Accelerator Demo.  In this mock demonstration an elderly woman and her adult child navigated the ins and outs of the healthcare system through a multitude of consumer facing healthcare-centric apps. (FYI: Health 2.0 Accelerator, or H2A for short, was created to facilitate data sharing across the multitude of consumer-facing healthcare applications). Unfortunately, rather than showing how a consumer can readily and easily use such apps, leveraging data to facilitate their interaction with the healthcare system this demo completely bogged down becoming almost impossible to follow.  After watching this demo it was quite easy to see why most of these Health 2.0 apps have failed to catch hold. Each app is trying to performing some unique function.  Consumers don’t want that, won’t adopt that.  What they want, what they need is a solution that addresses several needs in one neat, tight package (app).  Today, it seems that only WebMD comes close to addressing this need. Unfortunately, it often seems that WebMD is more interested in only maximizing advertising dollars then delivering on this need through further development of their solution suite.  But maybe that is just a clear signal that this is still a very immature market with very low rates of adoption and thus not worthy of significant investment.

That’s not to say a number of companies aren’t trying to change this, see a wealth of opportunity and are investing for the future.  Unlike past Health 2.0 events where Microsoft has played a small role, this year the folks from Redmond were quite active in a number of panels, demos and the like. Adobe was also there having participated in and won the Blue Button Developer’s Challenge sponsored by the Markle Foundation and Robert Wood Johnson Foundation. Adobe’s winning entry allowed for the automatic creation of a PDF document upon downloading a Blue Button file (Blue Button files are currently flat, ASCII files).

Nearly perennial speakers at Health 2.0 conferences past have been AllScripts CEO, Glen Tullman and athenahealth’s CEO, Jonathan Bush speaking on their respective views of clinical HIT issues. This year neither took the stage, but Cerner did. Unlike their clinical HIT brethren, Cerner did not wax poetically on interoperability, meaningful use and the like but instead gave a presentation on their Personal Health Record (PHR) system, Cerner Health as well as a new game-like platform, Cerner Active that promotes and tracks physical activity. These systems are interlinked with each other and likewise with the host EHR – again letting the data flow across these systems in the promotion of health and wellness objectives.  While the interface/GUI of Cerner Health and Cerner Active still require additional work, the overall system architecture is well executed. Unlike what is arguably the best PHR from an EHR company (Epic’s MyChart) today, Cerner’s PHR is fully portable. Granted, this is a modest distinction as all EHR-based PHRs will be required to provide a level of portability in the future under Meaningful Use Rules, but it is good to see one of the largest EHR vendors take a proactive stance. So Epic, when will you open up?

The Cerner demo that showed data flowing back and forth from the EHR to the PHR got me thinking that these two terms, EHR and PHR are no longer relevant.  Hold on to your hats folks as it is now time to introduce a new acronym, drum roll please…

The CHR for Collaborative Health Record

Language is a powerful tool. By using the terms EHR and PHR we subconsciously, and even consciously, create divisions within a care team. On one side we have the patient, family and loved ones using the PHR,  On the other side is the clinicians with their EHR.  These divisions are becoming increasingly artificial and have the very real potential of hindering care rather than promoting it. While legislative laws have been written using the terms PHR, EHR and the like, it is high-time, before we get to far down the road of HITECH and Meaningful Use, that we begin talking about a larger vision of the future, one where a CHR is the core of HIT initiatives and future planning.

Now this was my fourth Health 2.0 conference and the best one to date.  With over 1,000 participants (it was a packed house) all appearing to have an active interest in changing/improving the healthcare system and along the way, make a business out of it, the Health 2.0 is easily the most exciting and innovative event in the HIT market, albeit with a heavy tilt towards consumer-facing apps.  But like Ben Rooks, an equity analyst who does an occasional post for HIStalk, the event makes one schizophrenic. You get excited by all the energy in the air, the innovative concepts being presented, but become quickly dis-heartened when you pull back the covers to find just another innovative idea/product, but not a company. Most presenters do not have a well-structured and viable path to market outside of the all too common Freemium model, a model that only seems to work in massively scalable markets.

There are always exceptions and one presentation that caught my attention was that of Will Barkis from Bill-Doctor. This company certainly did not have the polish of Castlight Health, nor did it have the some $80M in VC funding that Castlight received.  What Bill-Doctor did have though was a solution to solve a very real consumer and healthcare system problem, bill negotiation and payment. The solution addresses this issue in a very simple and straight-forward manner that will serve both sides of the bargaining table – doctors/hospitals get paid more then what a collection agency will gather and consumers get a more reasonable, negotiated bill to pay.  Bill-Doctor’s revenue model is also has a very compelling and will turn a profit quickly. If I could, I’d bet on this horse to show. (Note: I contacted Will re the Bill-Doctor website. He informed me that it is not live yet but was gracious enough to provide the slide-deck demo which is provided at end of this post.)

But what I find most troubling in the multitude of presentations I saw and discussions I had during the breaks was the lack of hard evidence that these creative solutions actually make a difference. The hard work of tying these ideas, these products, these concepts to outcomes, to improvements in quality of care delivered, to demonstrable returns on investment just aren’t there. Granted, some of these companies and products are very new to the market, but others have been at this for several years now and still, where is the evidence that these solutions actually make a difference? I can’t recall a single presentation where such hard evidence was presented.  Until that occurs, the Health 2.0 event and those that participate will remain more of a side show, dare a I say the freak show, while the main event occurs under the big top at a three ring circus such as HIMSS.

Don’t get me wrong, the Health 2.0 event is exciting, the ideas truly innovative and the organizers of the event have done a very good job putting together an event that covers the broad spectrum of health. If you want to see what the future may look like, this is definitely an event to attend. My concern rests with the need for hard-core impact analysis rather than the fluff and anecdotal evidence that is presented.  Without such evidence, broader buy-in and subsequently market adoption will remain elusive for those presenting at Health 2.0

ADDENDUM:
Above mosaic picture was taken in the Mission area of San Francisco.  Was staying there in a small studio apartment I found through Airbnb – a great site if you are on a budget.


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Introductory Remarks: Chilmark Research is pleased to welcome a new addition to our staff, Cora Sharma.  Cora will be leading our research efforts in the mobile health app market (mHealth) and below is her first post on the subject.  Cora has a great background having received a BSc in Computer Science, worked in the software sector for several years and recently graduated from MIT’s Sloan School of Business. While at Sloan, Cora did an internship with McKesson where she found her calling, HIT and the desire to become an analyst.  She’s a great addition to Chilmark Research and I’m confident she’ll produce some excellent research. – Stay tuned.

The concept of mobility in healthcare is nothing new to providers, vendors, and to Chilmark Research alike.  The current media and investor buzz surrounding mHealth stems from the belief that: 1) mobile technology has finally matured to a point where age-old healthcare processes can finally be revamped; and 2) mobile technology has not only matured but has actually been adopted en-mass by physicians and shows no signs of abating.

Doctors Love Smartphones, but are GaGa over the iPad
Recent reports from SpyGlass Consulting and Manhattan Research show that the vast majority of physicians already use smartphones. Pamela Dolan at the AMA has a nice commentary on these latest numbers. Chilmark Research’s recent talks with industry folks shows that the iPad is also gaining significant traction with physicians.  At a recent conference in Denver where Chilmark Research attended and spoke, the CIO of Catholic Health Initiative (CHI) sees providing their doctors with mobile apps (in CHI’s case on the iPad) as critical to the success of complying with meaningful use requirements.

mHealth Apps in Acute Care
Given that physicians have now ‘gone mobile’, does this imply that they will no longer be satisfied with computers-on-wheels (COWs), demanding mobile access to every piece of data buried in Health Information Systems (HIS)?   If yes, providing doctors with mobile access to patient and hospital data could be just the perk needed to attract more affiliated physicians, satisfy existing ones and ultimately drive the adoption and use of HIT by clinicians.

Here is a brief look at the mHealth acute care vendor landscape:

  • Pure play inpatient mobile solutions companies like PatientKeeper and MedAptus have built their businesses on providing clinicians with mobile apps, each having started with charge capture and quality measures.  PatientKeeper expanded into CPOE with a limited roll-out that is scheduled to go GA in 2011. As the mHealth market continues to gain momentum, it will be interesting to follow the fate of these two companies.
  • The big boys of HIS (Cerner, Eclipsys/Allscripts, Epic, GE Healthcare, McKesson, MEDITECH, Siemens) all have mHealth stories, albeit weak ones that revolve mostly around mobile browser access to their core EHR.  Early this year Epic released the Haiku app to Apple’s AppStore, resulting in some fanfare from the tech community.   Also, the Citrix Receiver app makes it possible to run Windows-based apps like McKesson and Cerner securely on the iPhone/iPad and Android, though with obvious usability issues associated with being a non-native app.
  • Potential entrants/disruptors from outside the industry face a battle with the big boys, who seem to want to reduce mobility to an extra feature on their systems.  Diversinet is making a play in secure doctor-doctor and doctor-patient communications for the enterprise. The company has made extensive investments to the tune of some $80M spent over the last decade developing IP in encryption and identity management.

mHealth Apps in Ambulatory
There are a multitude of physician content and productivity apps in the AppStore, from anatomical diagrams to medical calculators to ICD-9 lookup and arguably the most successful category, medical content apps.

Mobile medical content companies such as Epocrates and Medscape have had a presence on physicians’ phones/PDAs for years.   We are closely following Epocrates’ expansion into the SaaS EHR market.  If mobile EHR access is a truly compelling value proposition for ambulatory physicians (we aren’t convinced it is), then Epocrates may be able to leverage the brand’s mobile association and large, existing installed base to stand out from the 400+ competing EHR vendors.

A number of ambulatory EHR vendors (AllScripts, eClinicalWorks, Greenway and NextGen) have recently introduced their own EHR mobile apps, most built for Apple’s mobile OS. Currently, it appears that little is on offer from EHR vendors for Google’s Android mobile OS, though that may change as Android becomes an increasingly compelling alternative to Apple.

Onward Ho!
Dipping our research fingers into the mHealth market, Chilmark Research is launching a new initiative that will culminate in the report: Enterprise Adoption of mHealth apps: Trends, Issues and Challenges. Over the course of the next couple of months (target release date is in advance of NIH’s mHealth Summit in DC) we will interview executives from the major HIS vendors, best-of-breed vendors, tech entrants, and leading Hospitals/IDNs. Through both primary and secondary research we will answer such questions as:

  • What top mobile apps are currently being adopted in the enterprise?
  • What are the priority unmet needs among leading Hospitals/IDNs?
  • What challenges are currently hindering adoption of mHealth apps in the enterprise?

In the meantime we will be posting every other week specifically to give updates on our mHealth research.  Onward Ho!

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top-ten-goldOne of the nice things about all the writing done over the past year is that one can go back, apply some analytics and see exactly what topics/posts were popular over the past year.

So, drumroll please…

Following are the Top Ten Posts at Chilmark Research for 2008 with brief commentary:

10) Zagat Physician Rating Goes LiveThere are now a plethora of physician rating services with this being but one example.  Unfortunately, this service is restricted to Wellpoint members.  Based on what we’ve seen from most payers in their seeming inability to truly engage consumers/members, doubt this Zagats service is getting much traction.

9) Wal-Mart EMR Mandate Implications: Wal-Mart is a massive presence in any of the markets it enters.  Their decision to chose a single EMR solution for all of their retail clinics reverberated throughout the market.  Now that Wal-Mart is rolling out the Personal Health Platform Dossia among its employees, one can expect eClinicalWorks to be closely tied to Dossia as well.

8 ) Oracle+Cerner=Opportunity: Rumors come, rumors go and some seem to take on a life of their own, resurfacing on a firly regular basis.  The rumor that Oracle will acquire Cerner does have some logic to it, but with the current financial mess, this won’t happen anytime soon.

7) Defining a Functional Model for PHRs or How Many Cooks Does it Take: This post took a critical look at the three functional models: one by HL7, another from the Robert Wood Johnson Foundation’s Project Health Design and the third from the payer organization AHIP.  We’re not too keen on any of these models as it is the market that will define a functional model that delivers value, not academics which predominate the first two groups or one from the payers, which have selfish self-interests at heart.

6) Google Health Goes Live: Post went up the day that Google formally released Google Health to the market.  A belated launch, some eight months after Microsoft released a pre-mature HealthVault.  Google Health will slightly more mature than HealthVault coming out of the gates, as seemingly stalled. See post in the Number 5 spot.

5) HealthVault Surges, Google Health Flounders: After all the anticipation for Google Health and the pending battle royale for mind-share between Microsoft and Google for the hearts and minds of health concious consumers, the battle is turning out to be boring. Google is following its common laissez faire approach to developing its service (very thin on resources being deployed) while Microsoft is investing significantly, and it shows.

4) Mobile Health on the iPhone: Since the launch of the 3G iPhone earlier this year we have seen an incredible number of health & wellness apps showing up on the AppStore, which number well over 400 today.  Recently, Apple redesigned the site to make it easier to see which apps are most popular.  Loads of opportunity remains for those that are creative as most apps are pretty simplistic.

3) eClinicalWorks Tight-lipped on the Wal-Mart Deal: This post followed on the heels of Number 9 above.  eClinicalWorks is one of the EMR darlings for smaller practices which remains a relatively untapped market.

2) Walgreen’s Ups Ante in Retail Health: In March, Walgreen’s made the dual move of acquiring both I-trax and Whole Health Management, two providers of corporate campus health clinics.  What seemed like a good move then, may now be one that they are regretting as employers continue to downsize and trim costs.  If Walgreens would have waited (and they could get the $$$ in this tight credit market) they would have been able to pick up these companies for a song today. Alas, hindsight is always 20-20.

and the Top Post in 2008 was…

1) Google’s Schmidt Outlines Health Platform: We all knew Google was going to release some form of PHR in 2008.  We even saw some early screenshots back in August of 2007 when a few presentation slides slipped into the public domain.  But after those slides, we heard nothing, saw nothing, but knew it was coming.  Thus, when Google’s CEO, Eric Schmidt took the stage as a keynote speaker at HIMSS, we waited in anticipation and Schmidt did not disappoint.

And that dear readers is what YOU, found most interesting at Chilmark Research, that is if we not include the post where we announced te release of our iPHR Market Report Executive Summary.  We were absolutely thrilled with how popular that post was (it far exceeded the number 1 post on Google above) and even more thrilled at all the people who have downloaded this Ex. Summary (nearly 400 downloads for all corners of the globe, at least all continents, withthe exception of Antactica, we’re still waiting for that one to come in.

Thank you all for visiting, reading and commenting. We value your input and hope in return, we have provided some valuable analysis on the market.

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In case you didn’t see it, Bloomberg had an article last week that assessed the possibility of the ever acquisitive Oracle (some 40 acquisitions in last 4+ years) making a move on healthcare by acquiring Cerner.

While I normally focus on consumer-facing apps, can’t help but comment on this story as I know Oracle quite well (and many of the companies it acquired) from my days as an IT analyst leading the Enterprise Group for the manufacturing centric analyst firm, ARC Advisory Group.

So is this possible/probable?

Well, yes and no for the following reasons:

Yes

  • Oracle is very savvy at making acquisitions work, no one does it better in the enterprise software market than Oracle.
  • Oracle, unlike major competitor SAP likes making acquisitions, its core to their growth strategy.
  • They need new markets to achieve target growth projections as their existing markets, while still having opportunities, are mostly at the mid-tier and lower levels and will not be enough.
  • Healthcare sector is increasing spending on IT, faster than most other large market sectors.  It is also a very large market.
  • They have existing presence in healthcare as most large healthcare enterprises are already running on top of Oracle databases.

No

  • Healthcare is a difficult, fragmented market with few large entities (target customers) among providers.  There are no GMs or Fords or Dow Chemicals to conquer, therefore cost of sales will likely be high.
  • Healthcare is full of regulatory requirements and lots of customization of software.  Oracle is not a fan of customized solutions and for years has aggressively promoted an out of box solution approach.
  • This sector has not seen much consolidation – there are far too many EMR solutions today.  Maybe a big play by Oracle will help to rationalize the market, but right now it appears too early for them, unless of course they acquire a couple of leading players serving different tiers of the market e.g., buy both Cerner and athenahealth.
  • This market has yet to demonstrate that it is truly a global market, which limits growth to North America for the time being.  Granted, that is still a big market, but its not like manufacturing where distributed product development and manufacturing has occurred for years and systems, process and software has been developed to support such activities.

Opinion:

Oracle will make a play in the healthcare market as it is one of the few markets remaining that does not have a large, true enterprise software vendor of the likes of Oracle or SAP (Note: SAP has seen some success in the native German healthcare sector but little here).  A company like Cerner is an obvious choice, but to be successful, they’ll need to make more than one acquisition to develop a significant presence.  Oracle may also come at it from the health plan side, though Trizetto, the dominant player here was recently acquired and unlikely to be available, unless of course Oracle pays a princely sum.

Oracle will make a play, but it won’t just be Cerner, or similar large EMR vendor, it will be several.

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Over on the ever so popular healthcare IT (HIT) rumor mongering website, HIStalk, there has been a running stream of comments since yesterday regarding PHRs that began with a comment by the owner of the site, Mr. HIStalk himself, more or less agreeing with comments by the CEO of EMR vendor Cerner. It appears that Cerner’s CEO, in a recent interview, dissed both Google Health and HealthVault calling them nothing more than “electronic shoeboxes”.

In some respects he is correct. Today, it is far too difficult for consumers to have an independent, untethered PHR, or in the case of HealthVault, a data repository for their records as the consumer must frequently load up all the data via self-entry. Even getting claims data into an untethered PHR is difficult, but it appears that insurers are moving a little faster in that direction than most providers.

But this is changing and the change will accelerate over time as more Integrated Delivery Networks (IDNs), and large hospitals networks (Beth Israel Deaconess, Cleveland Clinic, Medstar, and even maybe Kaiser) begin to provide their customers with an ability to load their medical records up to a 3rd party service thereby enabling portability and consumer control of their records.

Getting back to HIStalk…

In a desire to set the record straight, at least from my vantage point which arguably is well-informed, I provided a fairly lengthy comment on HIStalk in response to comments that preceded it to clear the air. Admittedly, the tone is sharp but after awhile, I really do tire at the amount of dis-information and illogical assumptions that are bantered about.

1) Google & MS are businesses, they are public companies, they have shareholders, so of course they have a business case for defining and supporting their efforts in healthcare, including these consumer plays. I don’t have a problem with that at all as long as they are up front about it, which they have been to date. Actually see their entry into the market as raising the overall quality, security and privacy of PHR solutions going forward, which is a very good thing.

2) In speaking with numerous 3rd party PHR vendors as part of compiling the recently released PHR Market Report, these vendors universally reported that EMR vendors refuse to play ball. The EMR vendors drag their feet in opening up their systems, even when their customers ask them to. No EMR vendor has a vested interest (ie business case) to support opening their systems. Unfortunately, standards are not mature enough nor adopted widely enough to make it happen either. These vendors will be kicking and screaming till the end. Google and Microsoft have the clout and resources to change this dynamic, which we are now beginning to see.

3) Epic MyChart and any other EMR consumer portal certainly has advantages, but all patient portals are tethered and always will be to the host EMR. These systems do not provide a longitudinal record of health for the consumer and should the consumer move, change physicians, whatever, its not like the consumer can easily take that tethered PHR and all the data in it with them. Google and Cleveland Clinic as well as BIDMC are providing portability and from what I hear, much to the chagrin of Epic. Epic hates this!

3b) In addition to the tethered issue, patient portals also do not capture the full health record for those who may have multiple physicians.

3c) And let us not forget the disintermediation of healthcare with medical tourism and retail clinics. An EMR-centric patient portal can not and will not address this issue.

Many changes are afoot and as I outline in our market report, the entrance of Google and MS into this market has some extremely broad ramifications across the entire healthcare sector that I don’t believe we can even begin to imagine in our wildest dreams.

Stay tuned, “The Revolution Will Not Be Televised”

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