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Allscripts (MDRX) Management Shakeup Spreading: Is Glen Tullman Next?

Posted on May 1, 2012 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

And Caesar’s spirit, raging for revenge,
With Ate by his side come hot from hell,
Shall in these confines with a monarch’s voice
Cry “Havoc!” and let slip the dogs of war,
Julius Caesar, Act 3, Scene 1

If ever there was havoc in the boardroom of a health IT company, this is it. Over the last several days, chairman Phil Pead (bio still up for now), CFO William Davis and three board members unceremoniously and promptly departed the management team at Allscripts Healthcare (MDRX), a company which, it’s hard to argue, otherwise seems to have been on a reasonable course for the past year or so.

By the way, this seems to have been as much an Eclipsys purge as a board purge, as all of the departing members were with the company, which Allscripts acquired in September 2010 with “a vision for a Connected Community of Health.”

Within a few days, the Board announced that it had elected board member Dennis Chookaszian as Chairman. No word yet on which unlucky CFO will be hired to face the fires of investor displeasure over the stock’s performance (see below).

It’s bad enough when a chairman and three board members split — allegedly in support of now-ex chairman Phil Pead — but when your CFO leaves, a girl’s gotta wonder whether financial improprieties will turn up later. Now, let’s be clear, I’m not suggesting that there are ANY financial issues that I know of myself, directly, but it’s never a nice thing to see Mr. CFO shove off so quickly.

What we do know is that Allscripts was slapped with a suit in 2009 alleging the company broke federal securities laws when it went live with the latest version of its EMR. Current CEO Glen Tullman and now departed CFO William Davis were named as defendents. The  accusations in the 2009 suit seem to boil down to that Allscripts failed to let customers know that it couldn’t afford to install its Touchworks 11 software properly on customer sites.

It gets even better

And now, even more fun. Perhaps to contribute to the gladiatorial atmosphere, one of Allscripts’ largest shareholders demanded Monday April 30 that its chief executive Glen Tullman resign.  (If I were Tullman I’d say “the heck with that,” gather a group of investors and buy the darned thing out from under them. Mr. Tullman, go for it!)

Anyway, it seems that HealthCor Management LP, which owns about 5 percent of Allscripts outstanding shares, thinks execs have done a bad job building the value of the stock. The fund said the stock  is “being valued well below any reasonable acquisition price,” at its Friday close of $10.30.  Other investors seem to agree with HealthCor, as the stock went  up 7.73 percent to $11.10 at the close of trading on Monday April 30.

To make sure nobody panics, the company has hurriedly announced a $200 million stock repurchase  plan, adding to a plan announced a year ago which still contains $148 million for repurchase. That should do something to keep the stock from careening down a greased slide.

Why, oh why?

Now, to the real question. Why the big shakeup in the boardroom at a time when EMR/EHR companies are extremely vulnerable to market shifts and missteps? I can’t say I’ve found any concrete reason in my research, other than storied “differences of opinion over the direction of the company.”

The financials, while they could probably be much stronger, aren’t exactly pathetic. We’ve got a 5.1 percent profit margin, quarterly revenue growth year over year of 25.5 percent and a P/E (ttm, intraday) of 28.52.  The only obvious disappointment is the big drop in share price, which fell nearly 50 percent over the last 52 weeks of trading.

And in a somewhat ironic twist, it seems that Allscripts is touting some variant of the software Eclipsys had (Touchworks) when it first ran into SEC trouble.  Allscripts may not like the guys behind the technology, but it likes the technology for sure. (Actually, I’m eager to learn more what Allscripts is doing there — drop us a note on our contact us page if you have more information.)

P.S.
  In the view of your friend and mine Mr. HISTalk, “No matter what explanations are provided, the casual observer might conclude that Glen (Tullman) staged a coup that cost the company four board members and its CFO at the worst possible time.” What do you think?

Allscripts Sunsetting PeakPractice EMR

Posted on October 28, 2010 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

It’s now official. Allscripts will be shutting down their PeakPractice EMR solution. In an FAQ for PeakPractice clients Allscripts gave more details. I’ve put a copy of the info below for reference. Honestly, this wasn’t much of a surprise for me. Allscripts had far too many EMR software in one company. It seems that Allscripts has chosen to go with: MyWay, Professional and MedFlow as their EMR packages going forward.

I do find it interesting that Allscripts plans to support PeakPractice through the first stage of meaningful use. I think the time frames were just too small to do otherwise. If there was a bit more time it would have made sense for Allscripts to use the stimulus money to motivate people to move off of PeakPractice and on to one of the other Allscripts EMR.

I’m honestly interested to hear how well the conversion goes between PeakPractice and other Allscripts EMR solutions. I think there’s going to be a lot of misinformation about what the can and can’t convert. Especially since it seems like what they’ll be able to convert will depend on which Allscripts EMR software you choose to convert to. Yeah, this has mess written all over it.

I’ll be watching for the next round of companies that take care of EMR conversions from PeakPractice. I remember the round when all the Misys users were ready to convert from Misys to something other than Allscripts. I expect we’ll see similar movement by PeakPractice EMR users. So much for going with a large company to ensure the stability of your EMR software.

Here’s the letter from Allscripts to PeakPractice Users:

Dear Valued PeakPractice Client,

When we brought together Allscripts and Eclipsys, we committed to you that we would share critical decisions as soon as they were complete.

After careful deliberation and review, we are making a change to our future plans for PeakPractice. In making this decision, our goal was to ensure that we could effectively meet your needs both now and in the future by providing you with systems that are stable, easy to support, and flexible enough to allow us to quickly respond to the rapidly changing market and regulatory requirements.

After careful analysis, we have decided to make the following changes.

We will continue development of the current version (5.5) of PeakPractice and ensure that it achieves ARRA Certification as a Complete EHR. We will be submitting this version for certification later in October. This will allow you, as a current PeakPractice client, to use the certified version to demonstrate Stage 1 Meaningful Use and claim your 2011 Stimulus incentives. With this version, you will be eligible for the first two years of incentives for Stimulus, totaling $30,000 under the Medicare program ($18,000 in year 1 and $12,000 in year 2).

We will continue development to ensure PeakPractice’s compliance with ANSI 5010, which will be released as PeakPractice version 5.6.

We will continue to provide support and hot fixes as needed for PeakPractice for the foreseeable future.
Relative to future versions, we will not develop net new features for PeakPractice once ARRA certification and ANSI 5010 compliance are achieved.

We will offer an upgrade path that includes both a FREE like-for-like, license-for-license swap and a FREE data conversion (see below) for current PeakPractice clients who want to upgrade to another Allscripts solution. We expect that many of our clients will choose to wait to upgrade until after you demonstrate Meaningful Use in 2011 with PeakPractice and receive your Stimulus incentives.

We have set up a PeakPractice Hotline at 877-611-1377 to both answer questions and arrange an assessment as to which Allscripts EHR/PM platform will be best for your organization.

We will work with you to determine the product and timeline that is designed to be most effective for you and have the least impact on your operations. We would encourage you to consider scheduling an upgrade to your EHR/PM solution at a time that is best for you, again, most likely after you have demonstrated Meaningful Use in 2011.

In terms of the upgrade we are making available, we will provide the following.

A FREE like-for-like, license-for-license swap between PeakPractice and a corresponding Allscripts EHR and/or PM solution (MyWay, Professional or MedFlow, depending upon your needs). We recognize there are many complexities surrounding the combinations of Practice Management and EHR products, but our program addresses each of these in detail.

We will convert data from your PeakPractice system to the selected Allscripts solution for FREE. Again, the scope of what will be converted varies depending on the systems from which and to which you are migrating.

Please note that while templates are not included in this conversion, we can recommend resources that can assist with template conversions, if you wish to pursue them. Likewise, other services (such as ASP fees, support, set-up, hosting, and EDI, such as through Payerpath) are available for the Allscripts products, but are not part of the free upgrade. We will be happy to discuss how to arrange for those services with you. This free upgrade is available through December 31, 2012. This should give everyone ample time to decide which route they wish to pursue.

We do not make this change lightly, as we recognize and appreciate the investment that you have made in this solution.
You will likely have many questions about this process, and we hope this link to our Frequently Asked Questions document addresses many of them. If you have further questions, please call the PeakPractice hotline (877-611-1377) or your Allscripts representative.

We intend to provide you with a pathway that allows you to achieve all stages of Meaningful Use and protects the investment you have made. We are committed to working with you as partners during and after this transition.

EMR Market Share

Posted on October 6, 2010 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

One of the most popular questions I get asked (although far behind the Which EMR is Best? question) is what’s the EMR market share look like. The problem is that there really isn’t any great data out there for EMR market share. Plus, the numbers that EMR vendors give out just clouds up the conversation completely.

Here’s an example from an article about Allscripts completed merger with Eclipsys:

“What this merger heralds is the coming together of the health care system,” says Tullman. In other words, Allscripts now provides service to about 180,000 physicians (roughly 30% of all U.S. physicians), more than 1500 American hospitals (about 50% of U.S. hospitals with 200 beds or more) and over 10,000 post acute care facilities (more than 75% of U.S. facilities).

These numbers just make me laugh. The wrong assumption that people make is that when they say they provide services to 180,000 physicians that they mean their providing EMR services. After all, Allscripts has something like 7 different EMR software products, right? Too bad that assumption would be way off base.

I think it’s pretty clear that the Allscripts product that’s most widely used is SureScripts (ePrescribing). Take out the SureScripts users and I wonder how many physicians really use Allscripts products. The number would be DRAMATICALLY lower.

Of course, we could have easily known this if we just looked at the “30% of all U.S. physicians” quote. There aren’t even that many physicians using an EMR (let alone an Allscripts EMR). I’m sure similar things could be said about the hospital numbers listed above.

Yes, these numbers are just the “spin” that is so prevalent in marketing and PR. That is their job after all. Hard to complain too much about them doing their job.

One thing is certain. Trying to figure out EMR market share is pretty much impossible. Plus, the ones that are the loudest aren’t always the ones with the most market share. Remember that.

Allscripts Acquires Eclipsys

Posted on June 9, 2010 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Today, it was announced that Allscripts will acquire Eclipsys for $1.3 billion. This is a really big move and not all that unexpected. We knew that consolidation was coming and for that matter it’s going to keep happening. However, this is a very large merger that has a lot of questions. Allscripts and Eclipsys have created a new site for the acquisition.

Here’s a video of Glen Tullman talking about the acquisition of Eclipsys:

The comments made on the HISTalk post about the merger were really interesting. Here’s just a few:
From NYC EMR:
Allscripts hosted a meeting Monday showing integration options with Eclipsys with some of their mutual clients (NYP, Lahey, etc). This didn’t go well for Allscripts, clients dont like the product and hate the integration obtions. One client calling it an abortion, one other saying it is a good attempt but falls short. They also commented negatively on AllScripts management saying they sell well, but can’t execute. Privately the clients me and to a tee they said Eclipsys new release is what they want with more content, but that AllScripts is well off the mark for a go-forward Ambulatory solutoin. Hopefully Eclipsys will continue to build out thier solution instead of some hokey integration story that Allscripts is touting to make up for their lack of an acute care offering. Does anyone else know anything about this?

From Not Happy:
“Eclipsys, you have over 20 million a year from a client and what did that go to? No enterprise revenue cycle product, 50 million for Bond and Medinotes? Now the investment goes towards 5 plus ambulatory and HIE products? Merger has WAY too many products for the same markets- Ambulatory alone has Mysis, allscripts touchworks, allscripts professional, Eclipsys sunrise amb, Eclipsys peak (bond clinician), and Medinotes.”. Forest Gump take away- RUN, RUN, RUN

From Lazlo Holyfeld:
Smorgasbord. My bet is that Sunset Ambulatory and MyWay get sunsetted in the end. Allscripts has Peak Practice for the small practices while keeping Professional & Enterprise for the big clients. Allscripts did waste some R&D funds on trying to update the source from Aprima to bring MyWay up-to-speed this year especially on the coding/billing side. In the end, it is still a pig with lipstick on it. If you really want MyWay, you are better off with Aprima (iMedica).

As for the HIE aspect, that is the harder part of this to guess what plays ot. Allscripts has several parternships with various HIE vendors but dbMotion is their contracted partner. If a client doesn’t want dbMotion, they have to have a seperate agreement.

More interesting to see what happens with the Eclipsys relationships with Medicity & Microsoft. Less clear on what happens there.

North Shore-LIJ Health System Invests $400 Million To Connect Physicians

Posted on October 1, 2009 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This is an interesting press release about connecting 7,000 physicians and 13 hospitals EHR systems together. Although, the most glaring part is the $400 million it will take to make it happen. Here’s the press release:

“The North Shore-LIJ Health System announced today it is subsidizing up to 85 percent of the cost of implementing and operating an Electronic Health Records (EHR) system in the offices of its more than 7,000 affiliated physicians in New York City and Long Island — part of a $400 million investment to strengthen the quality of care throughout the region by automating inpatient and outpatient records in all medical settings, including 13 hospitals. In implementing the largest EHR program in the New York metropolitan area and one of the largest in the nation, North Shore-LIJ will provide physicians with individual subsidies of up to $40,000 over five years.”

Michael J. Dowling, president and chief executive officer (CEO) of the North Shore-LIJ Health System said “We’re not going to measure our return-on-investment (ROI) in terms of dollars and cents; our ROI will be based on our ability to improve patient outcomes.”

“Glen Tullman, CEO of Allscripts, noted that providing physicians with real-time care guidelines via the EHR increases the probability of achieving fundamental improvements in the quality of patient care.”

John Bosco, North Shore-LIJ’s chief information officer said “the Allscripts’ EHR will connect to a separate inpatient clinical information system from Eclipsys Corporation that North Shore-LIJ is deploying at its hospitals and other facilities.”