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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.

eHealth Initiative ‘2020 Roadmap’ panel needs consumers

This press release showed up my inbox on Tuesday:

eHealth Initiative Launches 2020 Roadmap Process

Framework to Change the Future of Nation’s Healthcare System

March 25, 2014, Washington, D.C. – The eHealth Initiative (eHI) announced the launch of the eHealth Initiative 2020 Roadmap, a public-private collaboration that will help guide the  transformation of the nation’s healthcare system by 2020. With the help and support of a  wide array of leading healthcare associations, organizations, and federal agencies, 2020 Roadmap will propose key policy recommendations to implement at a federal level and actions for the private sector to help transform healthcare.

“Health reform calls for transformation to a value-based interoperable system, but there is no direction on how to transition from our current work processes and systems. Clinicians, payers and providers are in dire need of leadership to help transform delivery systems and control cost,” said Jennifer Covich Bordenick, Chief Executive Officer of the eHealth Initiative. “The goal of our new initiative is to craft a multi-stakeholder solution that coordinates the efforts of both the public and private sector so that we can make this transition successfully.”

The 2020 Roadmap will be developed over the next six months through a series of surveys, webinars, executive roundtables, and events with key constituencies; the outcome will be a consensus on how to shape the future of our healthcare system.  Individuals are welcome to complete surveys, participate in upcoming events, and provide general feedback. A new survey is currently being fielded to gather information from the industry.

The 2020 Roadmap will focus on recommendations that:

•        Identify a sustainable glide path for meaningful use;

•        Promote interoperable systems;

•        Transform care delivery; and

•        Balance innovation and privacy.

Several advisors representing different stakeholders are leading the 2020 Roadmap activities, including:

·         John Glaser, PhD, Chief Executive Officer, Health Services, Siemens (representing vendors)

·         Sam Ho, MD, Executive Vice President and Chief Medical Officer, UnitedHealthcare, Chair eHI Board of Directors, (representing payers)

·         Christopher Ross, MD, Chief Information Officer, Mayo Clinic (representing providers)

·         Susan Turney, MD, Chief Executive Officer, Medical Group Management Association (representing clinicians)

·         Micky Tripathi, PhD, President and Chief Executive Officer, Massachusetts eHealth Collaborative (representing information exchanges)

·         Joseph Touey, Senior Vice President, North American Pharmaceuticals, Information Technology, GlaxoSmithKline (representing pharmaceutical manufacturers)

“The impressive caliber of individuals leading our effort reflects the importance of the 2020 Roadmap,” said Jennifer Covich Bordenick. “We invite all organizations to participate in this important process and bring the best thinking to the table.”

Visit the 2020 Roadmap webpage for more information at http://www.ehidc.org/2020-roadmapMore information about the eHealth Initiative is available online at www.ehidc.org.

###

About the eHealth Initiative: The eHealth Initiative (eHI) is a Washington D.C.-based, independent, non-profit organization whose mission is to drive improvements in the quality, safety, and efficiency of healthcare through information and information technology. eHI is the only national organization that represents all of the stakeholders in the healthcare industry. Working with its membership, eHI advocates for the use of health IT that is practical, sustainable and addresses stakeholder needs, particularly those of patients. www.ehidc.org .

What immediately jumped out at me was the list of advisors. I’m familiar with most of the names, and I am sure all are qualified to provide valuable input on how to promote interoperability and improve our nation’s broken healthcare infrastructure. But the notes on representation raise an important question: How come nobody is representing consumers?

It’s after hours as I read the press release and I post this commentary, but I’ve e-mailed the press contact to see if the eHealth Initiative has a good answer. I will report back as soon as I hear anything. In the meantime, consumer and patient advocacy groups should take Bordenick up on her offer to participate.

UPDATE, March 27, 11 am CDT: I’ve just received this response directly from Bordenick:

Please know that the news release just highlighted just a few of the individuals and groups that will be involved.  We absolutely welcome the representation and involvement of patient and advocacy groups, and any stakeholder groups who want to participate— that is one of the reasons we put the announcement out, and asked people to fill in contact info in the survey. We are at the very start of this process, so now is definitely the time to get engaged. We currently work with National Partnership for Women and Families, Center Democracy & Technology, American Cancer Society, and have just started work with Smart Patients, and many others. We expect all of these groups to continue working with us, and many others to join in the process.

So there you have it. As I said in the original post, consumers and patient advocacy groups should take Bordenick up on the offer. It sounds like she would appreciate it.

March 26, 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.

CEO, COO leaving is ‘exciting’ for MModal?

Did you catch the news this week about the shakeup in the executive suite of transcription and clinical documentation service provider MModal?

The Franklin, Tenn.-based company, formerly known as MedQuist, announced Tuesday that CEO Vern Davenport has “chosen to leave the company,” as has COO Amy Amick. In their place, MModal named Duncan W. James, formerly of QuadraMed, as the new CEO and promoted CFO Ron Scarboro to COO. Finance VP David Woodworth takes over as acting CFO. In addition, MModal brought in Graham O. King, ex-head of both Shared Medical Systems — now part of Siemens — and  HBO & Co. — cleaning up a scandal at the latter company prior to its 1999 takeover by McKesson — to fill the newly established position of chairman of the board.

In a statement, Greg Belinfanti of MModal owner One Equity Partners said, “This is a very exciting, positive period for MModal as it continues to grow and increase its presence in the healthcare industry’s important clinical documentation segment.” Say what? You just lost two of your top three executives for reasons you aren’t disclosing and it’s an “exciting, positive period” for the company?

The only thing I can guess is that Davenport and Amick might be working on a new venture together. The two were both executives at Misys Healthcare Systems — Davenport as CEO — in 2008 when that vendor merged with Allscripts. For what it’s worth, at least two other top Misys people, namely Paul Edge and Michael Raymer, remain at MModal, as far as I can tell from their LinkedIn profiles and from MModal’s current list of executives. Stay tuned.

June 7, 2013 I Written By

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

Bet on videoconferencing growth before PHR ubiquity

Last week, I reported in InformationWeek on a Manhattan Research study showing that 7 percent of U.S. physicians were chatting with patients via videoconference. What the research didn’t say is how many consultations actually take place by videoconferencing. My guess is that it’s minuscule, but virtual visits will soon become commonplace.

According to Australian online healthcare community eHealthSpace, technology vendor Siemens is forecasting that 20 percent of all medical consultations in Australia will take place online by 2020. Much of that growth will come from rural and remote areas of a vast country that’s full of remote, sparsely populated areas.

I find that much more believable than another Siemens prediction that 90 percent of Aussies will have a “personally controlled electronic healthcare record” (whatever that means) by 2020. I’m guessing that videoconferencing with doctors will boom long before there’s widespread adoption of any health record controlled by patients.

 

June 3, 2011 I Written By

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

EHRs in the public eye

I saw this ad in Terminal 3 at Chicago’s O’Hare International Airport last week:

It’s a simple and powerful message, but I wonder how many people truly understand it?

I don’t know when this ad went up, but it could be something left over from HIMSS in April. I see a lot of healthcare ads at O’Hare since there are so many health and medical conventions here, but many are out of date, such as from last year’s Radiological Society of North America event, generally held in late November. Few are this large or have such visibility, right between a gate and an in-terminal restaurant in the heart of a major hub for American Airlines. Perhaps Siemens is trying to influence people in town to meet with Allscripts downtown or GE Healthcare in the northwest suburbs, or maybe it’s targeted at the many Obama-ites who shuttle between Chicago and Washington? Rahm Emanuel, please give me a call.

October 19, 2009 I Written By

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