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Cerner to buy Siemens health IT business for $1.3B

The next round of health IT consolidation is on. Today, Cerner confirmed the rumor that had been swirling for a couple of weeks, that it will acquire Siemens Health Services, the health IT business of Siemens AG, for $1.3 billion in cash.

Cerner and Siemens also announced a strategic alliance to, according to the press release, ” jointly invest in innovative projects that integrate health IT with medical technologies for the purpose of enhancing workflows and improving clinical outcomes.” Each company will commit as much as $50 million to the alliance over the next three years, with an initial focus on integrating images and medical devices with EHR data in cardiology, Cerner says.

The device integration should come as no surprise. In healthcare, Siemens has always been, first and foremost, a medical device company. Health IT came later, by virtue of Siemens’ acquisition of Shared Medical Systems in 2000 for 2.1 billion. (Adjusting for inflation, that deal would cost $2.9 billion today, meaning that either Siemens overpaid in 2000 or the health IT assets lost more than half their value in the past 14 years.) Cerner has been selling medical devices for integration with its EHR products for several years, but nobody has confused Cerner for a device company. The two companies should complement each other well in this regard.

It’s no surprise that Siemens wanted out of the health IT business, either. Cerner and Epic have been dominating the enterprise EHR market in recent years, winning all kinds of replacement and upgrade business from health systems that previously had used Siemens, GE Healthcare, Meditech and Eclipsys technology.

Eclipsys, of course, merged with Allscripts in 2010, in a deal also worth $1.3 billion, and the combined company struggled to the point that the board forced out several top executives two years later. That was the last major acquisition in enterprise health IT until today. I don’t expect it to be the last, though I won’t predict anything other than that Epic will continue its strategy of growing organically and that many companies, particularly ambulatory vendors, will drop out rather than pursuing federal certification to the 2014 standards.

The market has been shaping up to be a battle between Cerner and Epic for a while, though the formation of the CommonWell Health Alliance a year and a half ago — now including Cerner, Allscripts, Athenahealth, Greenway Health, McKesson, Sunquest and CPSI — shows that Epic is everybody else’s No. 1 competitor.

Cerner and Siemens say the deal should close early next year.

 

August 5, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

IBM acquiring Epic or Cerner? I dunno

The “unconfirmed rumor of a huge acquisition” that HIStalk (a.k.a. the National Inquirer of health IT) tweeted about on Wednesday apparently is that IBM was going to acquire Epic Systems. Mr. HIStalk on Thursday expressed some reservations.

 

 

So am I. The announcement was supposed to happen Friday morning, which is right now (10 am EDT as I write this). IBM is in the Eastern time zone and Epic is in the Central time zone; for that matter, Cerner also is on Central time, and when you think “huge” in health IT, really only Epic and Cerner come to mind. If there were to be an announcement not involving anyone on the west coast, it probably would have happened already.

In any case, I’m told that IBM has been rather quiet with analysts of late. I actually haven’t been able to find the ages of Epic honchos Judy Faulkner and Carl Dvorak, but they’ve been at this for some 35 years. Cerner CEO Neal Patterson is 65 and has an ownership interest in the Sporting KC soccer team. He’s also been in the health IT business for 35 years.You’d think any or all of the three have to be thinking of retirement, or, in Patterson’s case, moving on to the hobby of running a pro sports franchise. Except that Faulkner seems to love what she does.

Cerner’s stock price has dipped a bit in the last couple of months, but it has risen by 259 percent in the past five years, according to Yahoo! Finance. It still seems as if the health IT business has plenty of room to grow, especially among the biggest players, who promise to be the biggest beneficiaries of consolidation on the lower end of the market.

Until I hear something more substantive, I am not buying the IBM-Epic rumor. IBM-Cerner seems a tad more likely, but I still need to hear more.

May 2, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Athenahealth-EHRA news significant only that it shakes up the status quo

By now, you’ve likely heard the news that Athenahealth has decided to quit the HIMSS EHR Association. As Athenahealth’s Dan Haley put it in a blog post: “At the end of the day, athenahealth left the EHRA because we never really belonged there in the first place. The EHRA was founded in 2004 by a group of EHR software vendors. Today, a decade into the age of cloud technology, the EHRA is still dominated and governed by a group of EHR software vendors.”

Athenahealth long has billed itself as a services company, not a software vendor, going so far as to hold a jazz funeral for the “death of software” at HIMSS13 in New Orleans. Athenahealth didn’t join the EHRA until 2011 anyway. It sounded like a bad fit.

I contacted Athenahealth, and was told that the company remains “fully committed” to the CommonWell Health Alliance, a coalition of health IT companies — also including Allscripts, Cerner, CPSI, Greenway Health, McKesson and Sunquest Information Systems — that came together for the stated purpose of “developing, deploying and promoting interoperability for the common good.” (There’s also the unstated purpose of fighting the dominance of Epic Systems.)

Athenahealth is staying on the interoperability path, but as is befitting the corporate culture, is going rogue when it comes to EHRs. It’s not the first time. It won’t be the last time, because it’s not like most of the other vendors/service providers, if for no other reason than CEO Jonathan Bush doesn’t fit the buttoned-down model of an executive. For that matter, neither did his co-founder, Todd Park, whom I often called an “anti-bureaucrat” during his time with the federal government. Park’s brother, Ed, is COO of Athenahealth, and also has unconventional tendencies.

I can relate to this mentality in a way. I quit the Association of Health Care Journalists years ago because it didn’t feel like a good fit for me. That group tried to include health IT in its programming, but it really was an organization for consumer and scientific reporters, not those of us in the business and trade press. Eight years later, I still don’t think the national media are doing such a great job covering health policy or explaining the nuances of this complicated industry. And, as I’ve said many times before about healthcare, the status quo is unacceptable.

 

April 23, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

All my HIMSS coverage in one place

The last of my 10 MedCity News stories from HIMSS14 has been posted. It’s a nice mix of news, features, analysis and commentary. Here are links to all of them, in chronological order.
NantHealth launches Clinical Operating System – biggest of big data startups – with $1B (Feb. 25)

Body + biology + behavior: Intel exec explains how technology is making N=1 care possible (Feb. 26)

Tavenner: 2014 is your last chance for a hardship exemption for Meaningful Use 2 (Feb. 27)

HIMSS crowd skeptical of promise for flexibility on MU2 hardship requests (Feb. 27)

Google Glass startup expecting third healthcare client in less than 6 months (Feb. 27)

DeSalvo: True EHR interoperability – and a national HIE – is possible by 2017 (Feb. 28)

DeSalvo meets and greets – briefly – while Tavenner keeps her distance at HIMSS (March 3)

HIMSS Intelligent Hospital tracks patients, pills and clinicians in completely connected loop (March 5)

Interoperability Showcase uses car crash to show how connected data really can improve patient care (March 5)

Athenahealth’s first inpatient product isn’t quite an EHR, but a ‘Trojan horse’ into hospitals (March 10)

 

March 12, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

CMS clarifies MU2 hardship exemptions

As I reported for MedCity News at HIMSS14 nearly two weeks ago, CMS Administrator Marilyn Tavenner announced plans to provide unspecified flexibility in claims for Meaningful Use Stage 2 hardship exemptions this year. Tavenner then left without speaking to the media.

The news left a lot of people scratching their heads and waiting for some details. Today, CMS issued some clarification, confirming that there would be exemptions for healthcare providers unable to have EHRs certified to 2014 standards in place for the 2014 reporting year. This is particularly important now because Medicare penalties for not achieving Meaningful Use take effect next year, but they are based on the 2014 reporting year (Oct. 1, 2013-Sept. 30, 2014 for hospitals, the 2014 calendar year for physicians and other individual “eligible providers.”)

The guidance confirms that CMS is aware of the problems caused by the slow pace of certification to the new, 2014 standards that Stage 2 requires. As of today, according to the ONC Certified Health IT Products List (CHPL), there are 3,736 ambulatory and 1,200 EHRs and EHR modules certified to 2011 standards, but just 899 total that meet 2014 certification.

Here’s the one-page CMS guidance for hospitals/critical access hospitals and the one for eligible providers.

March 11, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

HIMSS gossip

ORLANDO, Fla.—Two days of HIMSS14 have come and gone, and I’m not bouncing off the walls just yet. But I did bounce off the pavement Monday night when I tripped exiting a shuttle bus, and have some facial scrapes to show for it. You will see the evidence whenever Health Innovation Media gets around to posting a video interview I conducted Tuesday afternoon.

Health Innovation Media’s Gregg Masters and Dr. Pat Salber have been camped out near the HIMSS press room since Sunday with their video equipment, querying various newsmakers on various health IT topics, and occasionally having guest interviewers. As I walked out of the press room on my way to the exhibit hall, I said hello to former national health IT coordinator Dr. Farzad Mostashari, who looked like he was just hanging around, but was actually waiting to be interviewed. Masters and Salber asked me if I’d be interested in interviewing Mostashari right there on the spot with no preparation, and with just 15 minutes to get down to the show floor.

If you recall, I did a live interview—yes, streamed live on the Web—last year with Athenahealth honcho Jonathan Bush, beers in hand, for the Health Innovation Broadcast Consortium that Masters and Salber were involved in. (I don’t know the status of that project, as there’s nothing new on that site since last July.) So of course I said yes, and I think it went pretty well. Well, there were a couple of hiccups, as in me thinking we needed to wrap up earlier than we actually had to. And then there’s this:

 

Followed by this:

 

Yes, the Twitterverse catches everything.

Now about that facial injury. I think I just need to avoid Orlando. In 2011, the last time HIMSS met here, I needed six stitches above my right eye after I banged my face against the edge of the bathtub in my hotel room. As I arrived for the 2008 conference here, I turned on my phone after landing and got the message that my grandfather had passed away. Just for good measure, I passed through Orlando on my way back from Europe in 2009. As the flight pulled to the gate, the skies opened up with a violent summer thunderstorm, prompting the airport to close the ramp, preventing the ground crew from unloading bags for nearly an hour. I was stuck in the no-man’s land of U.S. Customs for that whole time, where cell phones are prohibited. It was not until I cleared security, took the airport tram to a different terminal, then hustled to the gate that I knew I would make my connecting flight. So yeah, it’s become a pattern.

Anyway, speaking of Jonathan Bush, he is not at HIMSS14 because he is on sabbatical to write a book and who knows what else? Well, here’s a clue. He was spotted at the Winter Olympics in Sochi, Russia, last week with his more famous brother, Billy, host of “Access Hollywood.” (Hat tip to HIStalk for showing this video at HIStalkapalooza Monday night.)

I also heard that Bush is considering a run for political office of some kind, perhaps because it’s, you know, the family business. Anyone care to confirm this?

I do know for a fact that at least one HIMSS attendee is actually seeking office. That would be Dr. Steven Daviss, CMIO of startup M3 Information, maker of a mental health screening app called My M3. Daviss is running for Democratic Central Committee in Baltimore this year. If he wins, he plans on seeking a seat in the Maryland House of Delegates in 2018, in part because he says there is only one other physician among the state legislature.

Daviss himself is on sabbatical from his job as chairman of psychiatry at the University of Maryland’s Baltimore Washington Medical Center in Glen Burnie, Md.

February 25, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Podcast: HIMSS CEO Steve Lieber, 2014 edition

It’s time for my annual podcast interview with HIMSS President and CEO Steve Lieber, this time from the Orange County Convention Center in Orlando, Fla., on the day before the official opening of the 2014 HIMSS Conference, rather than in his Chicago office a week or so in advance.

Lieber reiterated HIMSS’ position that the federal government should extend the attestation period for Meaningful Use Stage 2 by one year. I wasn’t there, but today at the CIO Forum, one of the preconference educational symposia, ONC Chief Medical Officer Jacob Reider, M.D., hinted that there will be an announcement on Stage 2 flexibility, possibly Thursday morning at a joint ONC-CMS town hall. That session will feature CMS Administrator Marilyn Tavenner and new national health IT coordinator Karen DeSalvo, M.D. I’ve never heard either of them speak, and now I’m excited to be covering that session.

We also discussed other aspects of healthcare reform, trends in health IT and expectations for HIMSS14. Of note, on Monday morning, HIMSS and two other organizations will announce a new initiative on “personal connected health.”

Near the end, I reference the podcast I did last week with Dr. Ray Dorsey about remote care for Parkinson’s patients. For easy reference, here’s the link.

This is, I believe, the seventh consecutive year I have done a podcast with Lieber at or just before the annual HIMSS conference. Another interview that has become somewhat of a tradition won’t happen this time, as Athenahealth CEO Jonathan Bush is not making the trip to Orlando this year.

 

Podcast details: Interview with HIMSS President and CEO Steve Lieber, Feb. 23, 2014, at HIMSS14 in Orlando, Fla. MP3, stereo, 128 kbps, 36.2 MB. Running time 39:35.

0:40 “It’s time to execute.”
1:40 Challenges for small hospitals and small practices
3:10 New ONC EHR certification proposal and continued questions about Meaningful Use Stage 2
5:00 Prioritizing with multiple healthcare reform initiatives underway, including proposed SGR repeal
6:30 Surviving ICD-10 transition
7:35 HIMSS’ position on MU2 timelines
9:05 Remember “macro objective” of Meaningful Use
10:00 Letter to HHS from organizations not including HIMSS calling for what he says are “very vague” changes to MU2 criteria
11:40 Things in MU2 causing providers fits
13:05 Fewer EHR vendors certified for 2014, but more HIMSS exhibitors
15:00 What this means for providers who bought products certified to 2011 standards
17:20 Progress on Meaningful Use so far
21:00 Looking toward Stage 3
22:42 What healthcare.gov struggles might mean for health IT
25:35 Other aspects of the Affordable Care Act being lost in the public debate
27:10 Political considerations related to health IT
29:40 Patient engagement and new HIMSS exhibitors
32:20 Why healthcare spending and provider shortage forecasts don’t account for efficiency gains made from technology and innovation
35:10 Demographic challenges for healthcare
35:45 Shift from hospitals to ambulatory and home care and consolidation of provider organizations

February 23, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

My HIMSS agenda

After a couple of weeks of uncertainty, I now know I will be covering HIMSS for MedCity News. A lot of vendors and PR firms have of course pitched me for meetings, and the reality is, I’ve not always found vendor meetings all that interesting. In fact, the absolute worst thing about the annual HIMSS conference—and I’ve covered every one since 2002—is the few weeks beforehand, when I’m trying to juggle my schedule.

I have occasionally double-booked or simply forgotten to enter appointments into my calendar, but these things do happen when you are juggling dozens if not hundreds of e-mails, you don’t have a secretary and, oh, by the way, have regular work to do a the same time. Sometimes I’ve scrambled to change appointments up to the moment I get on the plane. It’s just a mess most of the time because of the sheer volume of requests and the need to fit it into my normal routine. (Interestingly, and scarily, it’s similar to how healthcare often operates, and mistakes made in healthcare can be deadly.)

The bottom line is, there are more than 1,200 vendors at HIMSS these days, and there is one of me. I can maybe meet with 10-12 of them over the five days of HIMSS, counting Sunday and Thursday, and most of the vendors have gone home by Wednesday evening. One thing a I’ve found is that lot of vendors don’t understand that there are also more than 300 educational sessions to choose from; HIMSS doesn’t just happen in the zoo known as the exhibit hall. I tend to find a lot of great stories from those sessions, so I make them a priority.

Anyway, I have about 10 stories to do for MedCity News during and immediately after HIMSS, and some have fairly specific requirements. (I also have to find time to, you know, write the stories. Sometimes, it’s a trade-off between covering a session/meeting with a vendor and doing my work. Doing the work necessarily wins. Two years ago in Las Vegas, I had to cancel two or three vendor meetings after CMS and ONC dropped the proposed Meaningful Use Stage 2 rules during a town hall-style session. If you recall, the thousands of people trying to download the proposal all but crashed the public Wi-Fi network at the Venetian.)

Two stories are about companies I discover at the new Startup Showcase. If you’re among the startups on display there, let me know. I’ve got one story to do on the Intelligent Hospital Pavilion and another on the Interoperability Showcase. I’ll probably just spend an hour or so walking through and asking questions, but if you’re there and think you have a compelling angle for me, I’m listening.

That’s four stories right there. Three more are from coverage of specific sessions, so those are already booked. I’ve also got three opinion/analysis pieces to write in the week after the fact, and I’m pretty flexible on those. I’m just going to see what I discover and what jumps out at me. A theme usually emerges by the second day.

Away from the madness, I will be at the fifth annual New Media Meetup on Tuesday evening, Feb. 25, hosted by the one and only John Lynn, who also hosts this very blog as part of the Healthcare Scene network. It’s free, but there is limited space, so you do need to preregister.

I will see you in Orlando in a little more than a week.

 

February 14, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

More accolades for Topol as ‘connected health’ gains

I’m convinced that Dr. Eric Topol is one of those rare people, like Dr. John Halamka, who can function on minimal sleep, perhaps four hours a night. He just gets that much done.

Yesterday, AT&T named Topol chief medical advisor. As such, the company says, Topol will “impact the design, development and delivery” of connected health products and services for the AT&T ForHealth business. This is on top of his appointment last year as editor-in-chief of Medscape, his many speaking engagements and TV appearances and, lest we forget, his day job as cardiologist, geneticist and chief academic officer at Scripps Health in San Diego and leader of the Scripps Translational Science Institute.

Topol will not, however, be replacing Dr. Geeta Nayyar, who was full-time CMIO at AT&T until September.

This news comes a couple weeks after CBS News ran a segment on the possible demise of the stethoscope at the hands of the portable ultrasound.

 

This is not the first time we have heard this idea. Yes, it was Topol who dropped his stethoscope in the trash on stage at TEDMED 2009 and suggested that the handheld ultrasound should become the standard of care by the time the 200th anniversary of the stethoscope rolled around in 2016.

Given how slowly medicine moves, I wouldn’t bet on the stethoscope being extinct in the next two years; the cost of the GE Healthcare Vscan ultrasound, the one Topol demonstrated in 2009, hasn’t really budged since then. A new one will still set you back $7,900. I can’t see primary care physicians shelling out that kind of cash when the old technology is $200 or less.

Meanwhile, this week we get more evidence that “connected health” may be winning the terminology battle over mobile, wireless and digital health. The February edition of Health Affairs examines this field, which the policy journal says encompasses telemedicine, telehealth and mobile health. On the other hand, the lead author of one of the overview articles is Dr. Joseph Kvedar, founder and director of the Center for Connected Health at Partners HealthCare in Boston. He is the champion of the term, and possibly the creator of it.

 

 

February 4, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

CCHIT, KLAS might signal new era in EHRs

Two stories that have hit in the last 48 hours illustrate how the status quo in EHRs is being upset.

First off, as John Lynn broke late Tuesday night—first as a rumor and then as a confirmed fact—on his EMR and HIPAA blog, CCHIT, formerly known as the Certification Commission for Health Information Technology, is getting out of the health IT certification business, thus making sense out of the name change. The organization will continue to offer preparatory courses for ONC-sanctioned testing and certification, but no more actual certification.

CCHIT recommended that vendors turn to another authorized testing and certification body, Verizon-owned ICSA Labs, though there are others that still do offer certification, including Drummond Group, SLI Global Solutions, InfoGard Laboratories, and, for e-prescribing technology, Surescripts. Interestingly, CCHIT also announced that it will partner with HIMSS to offer a series of health IT events for vendors and providers. This is interesting because HIMSS was one of the three founding organizations of CCHIT in 2004, and CCHIT was under fire five years ago for maintaining too close of a relationship with HIMSS (also see this link).

When Meaningful Use came along with the passage of the American Recovery and Reinvestment Act in 2009, CCHIT lost its exclusivity in certifying health IT products, as EHR certification essentially became commoditized. Other certifying bodies also have undercut CCHIT on price, so this move really does not surprise me.

The other big story, if you pay attention to things such as vendor rankings, is that Athenahealth just unseated Epic Systems as KLAS Research’s “Best in KLAS Overall Software Vendor” of 2013. Epic had held the top spot for eight years in a row. “The old guard of HIT leaders is finally being displaced by more nimble, innovative models designed for health care’s future—not for its past. The latest KLAS rankings show that closed-system, traditional software offerings are not robust or flexible enough to meet providers’ demands anymore,” Athenahealth CEO Jonathan Bush said in a statement.

I’m not sure I’d go that far, as Epic is still eating everyone else’s lunch in the enterprise market. But, to me, this shows that smaller physician practices that don’t have IT departments are adopting EHRs and want a cloud-based product that is easy to maintain. That certainly heralds a major shift in health IT.

January 30, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.