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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.

Justin Barnes lands at Georgia Tech’s startup incubator

Here’s some more personnel news for you: Justin Barnes, who last month stepped down as chief of industry affairs and government affairs for EHR vendor Greenway Health, has been named entrepreneur-in-residence at Georgia Tech’s Advanced Technology Development Center.

The startup incubator isn’t specific to healthcare, but it sounds like Barnes will be focusing a lot of his energy on the healthcare sector. Per his bio: “He mentors and provides strategic entrepreneurial advice as well as key business connections to help grow a wide range of organizations including healthcare and IT companies, industry collaboratives, health systems and physician practices.” Barnes does have a lot of experience in healthcare. Before he spent 11 years at Greenway for 11 years, he was a founding vice president of Healinx, the precursor company to RelayHealth. Barnes also worked at HBO & Co. when that company was acquired by McKesson.

June 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.

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.

Welcome to my YouTube channel

First came blogging, then podcasting. Now I’m venturing into vodcasting with my very own YouTube channel.

Here’s my first short video, with me cleaning out my filing cabinet and riffing on the evolution of the health IT industry over the last 10 years, focusing on Physician Micro Systems. The company, which dates to 1983, changed its name to Practice Partner and later was bought by McKesson.

The video is in HD, thanks to my new Kodak PlaySport ZX3 camera (no, I didn’t get the purple). I may be a bit hard to hear when not looking at the camera because the microphone is built into the camera. At least there’s not a lot of background noise. I’m learning, and the videos will get better.

So, without further ado, here is my short video.

Now, who wants to teach me how to embed ads in the videos so I can make a little money with it? The blog and the podcasting sure don’t produce much income.

January 4, 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.

McKesson at HIMSS

CHICAGO—It had to be awkward for Sunny Sanwal, chief operating officer for McKesson Provider Technologies‘ North American operations. He had to speak today at the company’s annual medial lunch event at HIMSS, just days after his boss, Pam Pure, was sacked.

Indeed, the talk I’m hearing at HIMSS is that Pure was fired because the IT division wasn’t meeting its sales targets, even though it makes up only about 3 percent of the healthcare giant’s overall business. If you were wondering about the timing, a few days before the health IT industry’s biggest event of the year, it makes more sense when you know that Pure left one day before the end of McKesson’s fiscal year on March 31.

As for Sanyal, he went over the company’s business strategy and how McKesson expects to help its customers capture some of the stimulus money, but one thing jumped out at me. In an apparent attempt to reassure investors—even though there didn’t seem to be any financial analysts present—Sanyal mentioned that McKesson makes a considerable amount of money from technology services, including maintenance of installed systems.

If I were a prospective customer, I’d be worried if the vendor started talking about high maintenance costs.

April 6, 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.

Early HIMSS news

HIMSS09 doesn’t officially start until Sunday, but the announcements already are starting to come fast and furious:

First off, you may have already heard the news that Pamela Pure is out as president of McKesson‘s Technology Solutions division. The company’s planned media briefing at HIMSS on Monday now will be led by Sunny Sanyal, chief operating officer of the IT division.

In other executive news, the recently re-named Surescripts—formerly SureScripts-RxHub—has hired Harry Totonis as president and CEO. Totonis previously led the analytics division of MasterCard Worldwide and was a senior partner at Booz Allen Hamilton.

I expect that this experience running an analytics operation might give pause to the privacy and anti-data-mining camps. Surescripts and the rest of the e-prescribing industry may have to completely overhaul some of their policies in light of the forthcoming new HIPAA regulations called for in the stimulus legislation.

By the way, Surescripts says previous co-CEOs JP Little and Rick Ratliff will remain with the company in undisclosed roles.

Medsphere announced that it will debut OV Meds, the first of a series of modular upgrades to the OpenVista 2.0 EHR. OV Meds includes medication reconciliation technology, a pharmacy dashboard, a drug-pricing engine and a patient drug information library.

I don’t want to get bogged down in contract “wins” for vendors because I’ll never get anything else done, but I’ll mention that Allscripts announced its first end-to-end sale of technology for a hospital, physician offices, emergency department and home care. The customer is 118-bed Ottawa (Ill.) Regional Hospital and Healthcare Center.

April 2, 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.

An EHR hits close to home

Regular readers might recall that my dad chose to have surgery last November at Washington Hospital Center in D.C. rather than at a hospital closer to home, because the surgeon preferred the WHC facilities and because the other place had been in the news at the time for its high rate of hospital-acquired MRSA infections.

I didn’t mention the other hospital at the time because I didn’t think it was necessary, but I will tell you now that it is Suburban Hospital in Bethesda, Md. It’s relevant now because McKesson announced this morning that Suburban has contracted to deploy Horizon Clinicals and Horizon Enterprise Revenue Management for EHR, CPOE, medication managment and revenue cycle management.

I couldn’t find an online link to the press release just yet, but here’s the text:

News Release

Suburban Hospital Healthcare System Selects McKesson for Healthcare IT Transformation
Initiative focused on enhancing clinical excellence and financial performance

ATLANTA, March 30, 2009 – Recognizing that information technology (IT) can play a key role in enhancing care quality, safety and efficiency, Suburban Hospital Healthcare System decided to perform a healthcare IT transformation – and it was looking for a vendor to provide a comprehensive integrated solution. As a result, the Bethesda, Md., hospital selected McKesson to empower the initiative with the Horizon Clinicals® clinical and revenue management solution suite. Once the project is complete, Suburban will have a comprehensive electronic health record (EHR), an automated medication management system, and an integrated revenue management information system – a combination designed to differentiate Suburban in a highly competitive local healthcare environment.

“One of the major objectives of Suburban’s strategic plan has been to seek advanced information systems that would enhance our position as a technology leader and further support our mission of clinical excellence. As we searched for a partner, McKesson emerged as a clear leader,” said Christopher Timbers, chief information officer at Suburban. “McKesson impressed us with both its comprehensive technology offering and commitment to service and support. We felt they really understood what it requires to successfully implement their systems and to help us achieve our objectives for quality patient care.”

Suburban plans to replace its older technology with the advanced Horizon Clinicals solutions suite, used by more than 2 million clinicians nationwide. One element of Suburban Hospital’s new automated medication management process will be implemented at the patient’s bedside. Using a hand-held device, nurses will electronically scan a bar code on the patient’s wristband and each medication’s label, and the information will automatically appear in the patient’s EHR. This helps to ensure the “five rights” of patient safety – right patient, right drug, right dose, right time and right route. In addition, Suburban Hospital physicians will place medication orders electronically using McKesson’s computerized physician order entry solution and will use a secure Web portal to obtain immediate, secure access to patient information anytime and anywhere.

Suburban also will implement McKesson’s new revenue management solution, Horizon Enterprise Revenue Management™. This integrated revenue management system will automate Suburban’s operational and financial processes to more efficiently connect it with payors, financial institutions, physicians and consumers. In addition, tasks that were typically performed after discharge will now be carried out as early as the beginning of the patient pre-registration process. For example, information needed to better inform patients of their treatment options and assist in meeting regulatory requirements will be collected upfront. In addition to shortening the payment cycle, this proactive gathering of information should streamline patient interactions with the hospital while dramatically improving workflow efficiency and productivity.

“We’re honored to have the opportunity to work side-by-side with Suburban on such a large clinical and financial transformation” said Pamela Pure, president, McKesson Technology Solutions. “Our team is committed to helping Suburban reach its full potential by harnessing the power of the most up-to-date technology to deliver the best care possible to its community – benefiting clinicians, patients and their families.”

About Suburban Hospital Healthcare System

Suburban Hospital has served the greater Washington, DC region since 1943 with several centers of specialized care, state-of-the-art technology, and community-based wellness programs. Through strategic partnerships with some of the country’s most prestigious medical institutions, including the National Institutes of Health, National Naval Medical Center and Johns Hopkins Medicine, Suburban Hospital is able to provide a level of emergency, stroke and cardiac care that is available in very few medical centers. In addition to being a state-designated Level II Trauma Center, the hospital’s continuum of care is distinguished by a certified Primary Stroke Center; the NIH Heart Center at Suburban Hospital; and centers of excellence in orthopedic care, neurosciences, and oncology.

About McKesson
McKesson Corporation, currently ranked 18th on the FORTUNE 500, is a healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes, and improving the quality and safety of patient care. McKesson is the longest-operating company in healthcare today, marking its 175th anniversary last year. Over the course of its history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. For more information, visit

It doesn’t indicate how long the deployment will take, but let’s call this progress.

March 30, 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.