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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

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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

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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

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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

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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

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Video: Live from HIMSS with Athenahealth CEO Jonathan Bush

NEW ORLEANS—I made my debut for the new Health Innovation Broadcast Consortium last night with a live webcast interview with Athenahealth CEO Jonathan Bush. As usual, I didn’t need to prepare much for the interview because Bush almost interviews himself, so I just decided to wing it. Also as usual, we kept it light, as each of us had a beer in our hand, since we were at the House of Blues in the French Quarter, where Athenahealth had its annual HIMSS party. (This year featured a jazz funeral marking the “death of software.”) But we did discuss some topics actually relevant to health IT, including meaningful use and Athenahealth’s recent acquisition of Epocrates. Enjoy.

Watch live streaming video from hibc at livestream.com

March 4, 2013 I Written By

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Video: Jonathan Bush at HIMSS12

As has become custom, I carved out some time at HIMSS to interview Jonathan Bush, the always outspoken and insightful CEO of athenahealth. This time, instead of meeting in some sterile conference room, we got together just before the start of athenahealth’s annual HIMSS party, which happened to be at Ghostbar at the top of the Palms hotel in Las Vegas.

The setting, on the balcony of the 55th floor, tied into the company’s embrace of the cloud. The staff of both the bar and of athenahealth did a great job finding a single spotlight on the balcony, overlooking the bright lights of the Strip. Yeah, there’s a shadow on Bush’s face and you can hear the wind at times, but I think it adds to rather than disrupts the vibe.

As usual, we joke around a lot, but we also get into some serious discussions about ICD-10, meaningful use, health IT innovation and even my involvement with Health eVillages, a subject that came up because athenahealth has a health IT charity effort of its own in India. (Speaking of HealtheVillages, co-founder Donato Trumato is presenting a case study at HIMSS Thursday morning. It’s at 9:45 a.m. PST in Marco Polo 803 on the first floor of the Venetian. I’ll probably be waiting for the media availability of Dr. Farzad Mostashari at that time. Something about meaningful use Stage 2.)

Enjoy the video. I know I did.

Jonathan Bush at HIMSS12 from Neil Versel on Vimeo.

 

February 23, 2012 I Written By

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A vendor’s view on selling of data

As long as there have been EMRs, there have been vendors selling aggregated, de-identified data. And there have been people worried about privacy.

That issue came up last week AHIMA Legal EHR Summit right here in Chicago, during a session exploring issues related to data ownership and stewardship in the era of cloud computing. (I’ll have a more complete rundown of the session Monday in InformationWeek Healthcare.)

Near the start of the panel, Daniel Orenstein, senior VP and general counsel of Athenahealth tried to put any lingering questions to rest right away. “I think data monetization is kind of a red herring,” Nussbaum said of people who criticize vendors for selling sensitive patient information. According to Nussbaum, de-identified data no longer includes any protected health information as defined by HIPAA, and only has value in the aggregate.

What he didn’t mention—and what nobody on the panel or in the audience brought up— is the possibility that data that supposedly were de-identified could be re-identified to a reasonable degree of precision. I’ve heard this for years, but I don’t know if anyone’s actually re-identified patient data outside of academia. Is this a real threat, or is Nussbaum right about it being a red herring?

UPDATE, August 22, 4:25 pm CDT: Here’s the InformationWeek story I referenced.

 

August 21, 2011 I Written By

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Video: athenahealth’s Jonathan Bush at HIMSS11

As has become custom at HIMSS, I sat down with Jonathan Bush, chairman, CEO and president of athenahealth, at the 2011 conference in Orlando, Fla., last week. But due to some technical difficulties in getting the room we thought we had reserved and in getting my audio recorder to work (OK, OK, I didn’t have fresh batteries on me), I busted out the HD video camera. (Wouldn’t you know, the battery was losing steam there, too, so I had to plug the camera in. I have since determined that the USB port wasn’t working, so I exchanged it this past weekend. But I seriously digress.)

In this interview, we talk athena’s business, meaningful use, 5010/ICD-10, ACOs, cloud computing and health reform. We poke a little fun at the “boat show” that the vendor expo has become and make plans for the “Cloud Cavalry” to ride into Las Vegas at HIMSS12.

YouTube recently raised the maximum video length to 15 minutes, but we went on for about 20, so I had to break the interview into two parts.

Part One

Part Two

Don’t forget to check out my fledgling YouTube channel, http://www.youtube.com/neilversel.

February 28, 2011 I Written By

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Podcast: Jonathan Bush at HIMSS09

CHICAGO—It’s becoming a tradition, sitting down with athenahealth Chairman, CEO and President Jonathan Bush for a podcast during the annual HIMSS conference. If you missed the original in 2007 or the sequel in 2008, you missed a whole lot of fun. If you happened to catch either or both of those, you know you’re in for some more entertainment, and perhaps even some enlightenment. We get awfully intellectual this time.

By the way, this one is rated PG-13 for language, but the kiddies wouldn’t understand the topic anyway. Enjoy.

Podcast details: Interview with athenahealth’s Jonathan Bush at HIMSS09. MP3, stereo, 64 kbps, 16.6 MB, running time 36:11.

1:45 Thoughts on “meaningful use”
2:25 Maybe accelerate PQRI?
3:30 Why EHR implementation has failed so far
4:40 David Ricardo and physician transcription
4:35 Let primary care physicians be the disruptive force
5:30 Lessons from “House”
6:15 Rethinking medicine
6:50 Micromanagement by the government and thoughts on scope of practice
7:50 Practice models that work
9:05 Data that help manage populations
10:05 Lobbying in Washington and qualifying for stimulus money
11:15 Medicare audits
11:30 HIMSS membership and “defensive” business management
13:00 Software-enabled service vs. software vs. ASP vs. software as a service
14:30 Examples of software-enabled services
16:45 Why standalone software is dying
17:15 Uninstalls of other products
18:15 How the stimulus has affected the company
21:20 “Aggressive stance” of Medicare
21:40 Many things happening at once
22:40 Unintended consequences of government actions
24:50 Entitlement spending and end-of-life care
28:30 Potential similar problems with stimulus and a return of the <a href="
http://clinicalit.blogspot.com/2007/03/podcast-jonathan-bush.html”>”plutonium sneakers.”
29:20 Decision-makers who have never run a practice
30:00 Hopes for David Blumenthal as national coordinator
30:30 Thoughts on comparative effectiveness studies
31:20 Concerns of HIT industry: “Don’t make what I’ve been doing for years illegal.”
31:50 Different needs for different doctors
32:35 New standards on data mining and patient privacy
34:20 The example of General Motors

April 12, 2009 I Written By

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