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Will Meaningful Use Affect M&A In The EMR Space?

As some of you may recall, Allscripts is said to be floating the possibility of selling out to a venture capital firm. This follows several months of tumult at the board level, including some who might have been helpful in keeping its merger with Eclypsis moving forward.

I’ve been thinking about this deal for a while, wondering whether it would come to fruition and if so, what would make it happen. And I’ve realized an Allscripts deal, or other EMR company sale, might give us a window into just how valuable Meaningful Use criteria have proven to be. Let me explain.

If I was a EMR vendor looking for an acquisition or merger, I’d certainly look at the usual metrics, including the customer list, code base my target had in house, maturity of the product line, the extent to which in-house programming talent could support the roadmap and so on. (Naturally, I’d go over its books in depth too.)

But that’s not all. These days we have some new perspectives from which to evaluate the success of EMR vendors, a set of standards which are fairly unique in the software business. Two important examples: We can look at how successfully a vendor’s customers have been able to meet Meaningful Use goals to date, and how far along the HIMSS EMR Adoption Model customers are as well.

While both are interesting, Meaningful Use is more important, as it’s such a politically fraught, complicated and rapidly evolving set of standards. In short, I’d argue that if a vendor’s customers are doing well with MU, then it’s likely the vendor is doing something right.

Now, you can’t draw a straight line between the quality of a vendor’s product and how well its customers have done in qualifying for Meaningful Use. Implementation is ultimately the hospital or doctor’s responsibility, even if the provider pays for EMR vendor consulting to get things going. And there’s lots of ways things can go wrong that have little or nothing to do with the product.

Still, I predict that Meaningful Use success is going to become a more important metric in EMR vendor M&A as time goes by. After all, the more bragging rights a company has regarding Meaningful Use success, the more they can improve the acquiring vendor’s profile. That’s gotta matter.

Greenway Medical (GWAY) Keeps Momentum Post-IPO

As readers may know, Greenway Medical Technologies is a health IT vendor that sells an integrated EMR and practice management solution, as well as interoperability tools. The mid-sized vendor excited some criticism earlier this year when it decided to launch an IPO, as few vendors in its size class have done so to date. Naysayers argued that the moment wasn’t right for a company its size to compete with big health IT players for investors.

A few quarters later, Greenway’s stock is doing well, at about $18 per share, having started out at a $10 per share offering price. Analysts, myself included, aren’t surprised to see a well-positioned company in the ambulatory care space do well, but the $550 million firm has done better than expected.

Wall Street was taken by surprise by Greenway’s release of its 4th quarter results for fiscal 2012, in which the company reported revenue growth at 24 percent and raw profit margins at 60 percent (though overall profit stood at 16 percent after all other factors were considered).

What ‘s keeping the stock going seems to be nothing more than plain old fashioned dealmaking — and notably, larger deals that extend beyond lighting up one physician office at a time:

* Greenway cut a deal with HIT vendor Relay Health (a McKesson subsidiary) in which the two are offering HIE services.

* Walgreens chose Greenway’s EHR to wire up its pharmacies for immunizations and health testing.

* Greenway snagged an agreement with Michigan Health Connect, the state’s largest HIE, to provide its technology for practices and clinics using the vendor’s solution.

If you’re seeing a pattern here, you’re not alone. Greenway isn’t just flogging its EMR/PMS to hospitals and medical practices, it’s providing the “last mile” HIE connectivity which has most providers scratching their heads.

Without a doubt, Greenway has formidable competition on the HIE technology side — a story we don’t have space for here — but it seems to me that the combo of having a EMR, PMS and HIE technology to offer is a huge plus. Like the Wall Street folks, I’m interested to see if this combo keeps Greeway afloat. Things look pretty good at the moment.

Vendor Hopes To Create Market For Windows 8-Based Tablet EMR

So far, Microsoft has played its cards pretty close to the vest when it comes to the launch of its new tablet line (and iPad wannabe Surface. But news is trickling out on Surface, which will officially go to market October 26th. That includes news of the first EMR built for the Surface, EMR Surface, which appears for sale in the new Microsoft Windows Store online for $499 a download.

EMR Surface is produced by a company called Pariscribe, based in Toronto, which says it was key in building Canada’s first Web-based EMR. Its existing products include a radiology system, physiotherapy suite, dental suite, patient registration software for kiosks and an EMR.

What makes EMR Surface interesting isn’t just that it’s based on a new tablet. Far more interesting is that it runs on Windows 8 which, according to a piece in MobiHealthNews, the company sees as a major competitive advantage in the corporate world.

As readers know, the majority of mobile devices in healthcare run on iOS or Android, and last I checked, there’s been little discussion of the notion that a Windows 8 device could slip between the cracks. That doesn’t mean Pariscribe is whacky to think so, however; in fact, it’s an intriguing idea.

According to article author Neil Versel, Pariscribe president and CEO Manny Abraham believes that Surface and Windows 8 and Surface will do a better job of bridging the gap between mobile and desktop computing. If he’s right, the company is really on to something.

The thing is, iOS and Android have an iron grip on the mobile device market right now. Even the might of Microsoft might not be sufficient to break the market’s preference for these two operating systems.

That being said, if Pariscribe has come up with a particularly nifty solution, it could give Surface-based (and Win 8 based) EMRs a foot in the door. I’m eager to see how they do!

Will Big EMR Vendors Use Healthcare Standards As A Weapon?

Standards are a tricky thing. Some times, they bring a technical niche to its senses and promote innovation, and others, they’re well-intentioned academic efforts which gain no ground. From what I’ve seen over the years, the difference between which standards gain acceptance and which end up in trash bin of history has more to do with politics than technical merit.

But what the EMR industry did neither? From the mind of my crafty colleague John, here’s a scenario to consider. What if rather than going with an industry-wide standard for interoperability, the big EMR vendors agreed on a standard they’d share and more or less shut out the smaller players?

Yeah, I already hear you asking: “Wouldn’t that be an antitrust violation?” While I am not and probably never will be a lawyer, my guess is if a bunch of big vendors deliberately, obviously shut the smaller players out, it would be. But standards are so slippery that I bet it’d be a while before anyone outside of our industry saw something funny going on.

Besides, the government is doing everything in its power to get EMR vendors to help providers achieve interoperability. Right now ONC is not getting much cooperation — in fact, I’d characterize the big vendors’ stance as ‘passive aggressive’ at best. So if Epic, Cerner, Siemens, MEDITECH and their brethren found a way to make their products work together, they might get a gold star rather then an FTC/DoJ slap on the wrist.

Besides, it would be in the interests of the bigger firms to include a few smaller players in their interoperability effort, the ones in the big boys’ sweet spots, and then “oops,” the smaller companies would get acquired and the knowledge would stay home.

Right now, as far as I can tell, it’s Epic versus the rest of the world, and that rest of the EMR world is not minded to play nicely with anyone else either. But if John can imagine a big-EMR-company standards-based coup d’etat happening, rest assured they have as well.

John’s Comment: Since Anne mentions this as my idea, I thought I’d weight in a little bit on the subject. While it’s possible that the big EHR vendors could adopt a different standard and shut out the small EHR vendors, I don’t think that’s likely. Instead of adopting a different standard, I could see the large EHR vendors basically prioritizing the interfaces with the small EHR vendors into oblivion.

In fact, in many ways the big EHR vendors could use the standard as a shield for what they’re doing. They’ll say that they can interface with any EHR vendor because they’re using the widely adopted standard. However, it’s one thing to have the technical capability to exchange healthcare information and a very different thing to actually create the trust relationship between EHR vendors to make the data sharing possible.

Think about it from a large EHR vendor perspective. Why do they want to be bothered with interoperability with 600+ EHR vendors? That’s a lot of work and is something that could actually hurt their business more than it helps.

My hope is that I’m completely wrong with this, but I’ve already seen the large EHR vendors getting together to make data sharing possible. The question is whether they’re sincerely doing this out of a desire to connect as many health records as quickly as possible or whether it is good strategy. My gut feeling is that it’s probably both. It just works out that the first is better to say in public and the second is just a nice result of doing the first.

Allscripts May Sell Out To Private Equity Buyer

Update: You might be interested to read this post on Allscripts Plans to Discontinue MyWay.

Having just gone through the hell of a board gone wild, perhaps Allscripts’ leadership doubts it has the ability to govern. Or maybe it’s just bracing for the fresh hells that EMR companies will face when the industry’s Big Consolidation begins (something we all know will happen, though not when). Either way, it seems that Allscripts is ready for a change in ownership.

Earlier this week, Bloomberg Businessweek reported that the company has retained Citigroup to explore selling out to a private equity buyer. According to published reports, Allscripts is considering a leveraged buyout, which would take it private but leave it holding a ton of debt. It sure must be eager to avoid scrutiny by curmudgeons on Wall Street!

At least one research type has already given such a move the thumbs up. According to Bloomberg Businessweek, David Windley, an analyst with Jefferies & Co., the move makes sense despite the inherently high costs. Allscripts “continues to climb a steep product integration hill that would be more comfortable out of the public eye,” the site quotes Windley as telling his clients.

Investors seem pleased with the prospect of an Allscripts sale too. Shares of the company (MDRX) rose 14 percent when the news that Allscripts had tapped Citigroup hit the press last week. Clearly, they don’t have complete confidence that the stock is headed for success as the company is constituted today.

There’s no doubt that Allscripts is on a challenging path in creating new, unified product offerings for a feverishly competitive market. The product integration effort Windley is referring to, and it’s a massive one, is the integration of Allscripts products with those of rival Eclipsys Corp., which it acquired in 2010.

Whether integration has been proceeding smoothly or not, it can’t have been a big confidence builder six months ago when Allscripts fired Chairman Phil Pead, who’d come on board when Eclipsys was purchased, and three board members resigned.

Plus, the rumors are swirling about Allscripts planning to sunset MyWay and move users to their Allscripts Professional product. More details on that change as it develops.

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October 5, 2012 I Written By Anne Zieger

Filed Under: EHR EHR Market Electronic Health Record Electronic Medical Record EMR Healthcare IT Healthcare IT Market

Tags:AllScripts Citigroup Inc. EHR EHR Vendor Electronic Health Records Electronic Medical Records EMR EMR Vendor EMR Vendor News Large EHR Vendor Large EMR Vendor MDRX

Doctors and Lowering Their EHR Standards

I wrote a post a few months back called The Perfect EMR is Mythology that I think people took the wrong way. In that post, I’m not saying that doctors should lower their EHR standards just because it is the EHR product that is most accessible and easy to implement. I’m not saying that doctors should just take whatever EHR they see first. I’m not even saying that every doctor should adopt EHR.

It’s one thing to accept and use an EHR product that’s imperfect, but still improves your clinic. It’s another thing to accept a terrible product that makes your life miserable. Particularly when there are other EHR software out there that won’t make your life miserable. Something I’ve been seeing more and more from doctors is that they haven’t found the perfect EMR software that does exactly everything they could imagine an EMR to do, so they wait. I think this is a bad choice for many.

Yes, I do think that doctors should spend plenty of time doing proper due diligence before “marrying” themselves to an EHR system. They should absolutely find one that works well for their clinical situation. Physicians should absolutely have reasonable expectations for their EHR vendor and hold them to it. In fact, physicians should hold EMR vendors accountable for what that EHR vendor has committed to accomplish in the EMR selection process.

As I said in my previous post:
Don’t let the quest for perfection get in the way of incremental improvement. Perfection is more nearly obtained through many incremental improvement than giant leaps.

If a physician’s standard is a perfect EHR, then they’re going to be sorely disappointed. If their standard is improvements in their clinic, then there are EHR options out there that are well worth considering and implementing.

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May 2, 2012 I Written By John Lynn

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit.

Filed Under: EHR Electronic Health Record Electronic Medical Record EMR EMR Adoption Healthcare IT

Tags:EHR Perfection EHR Selection EHR Vendor EMR Perfection EMR Selection

Is Revenue Cycle Management Sexy?

A few months back I attended a user group meeting for a large EHR vendor. While waiting for the opening keynote speech I was talking with the EHR vendor’s PR person. During our conversation they made a really interesting comment that stuck with me. I can’t remember the exact context of the conversation, but they said something to the effect of, “We also do a lot of work in revenue cycle management (RCM) and Accountable Care Organizations (ACOs), but that’s not the sexy things that people like to write about even though that’s where a lot of the money is in our business.”

It begs the question, “Is Revenue Cycle Management (RCM) sexy?”

Her comment really has had me thinking about revenue cycle management and particularly her final point about that being where the money is in their business. I’ve always believed in business that it’s a smart thing to follow the money, whether its sexy or not. On that note, I plan to do a series of posts related to revenue cycle management here on EMR and EHR. As for ACOs, I already started a series of ACO posts on EMR and HIPAA starting with my post “ACO Model Risks and Rewards.”

While I might not try and achieve the lofty goal of making revenue cycle management sexy, I do hope to be able to dig into many of the dynamics around revenue cycle management. I hope to look at reasons why revenue cycle management is so popular and doing so well. Why do so many doctors and hospital CIO/CFOs turn to revenue cycle management for their practice and hospitals? Are all RCM options created equal? What separates the various RCM options? What will be the future of revenue cycle management going forward?

In the past week, a number of online discussions have kicked up around a post I did on EMR and HIPAA around Streamlining Revenue Cycle Automation. The discussion shows there’s a real interest in discussing this topic.

I’m also interested to hear your thoughts on revenue cycle management. Are there areas you’d like me to cover? Are there important trends in RCM that more people should know about? No, this isn’t an open invitation for revenue cycle management companies to pitch me. I’m interested in good information about what’s happening with revenue cycle management.

No doubt that managing the revenue of a hospital of physician practice is incredibly important. Hopefully we can add to that knowledge base. Plus, I think it’s likely worth exploring how adoption of EHR is impacting revenue cycle management as well. Will there be less of a need for revenue cycle management with more EHR software or more of a need for RCM?

Let’s hear your thoughts, suggestions and ideas about RCM in the comments. Hopefully I can build on them in future posts.

Do Privately-Owned EMR Vendors Offer Better Customer Care?

When a company like Greenway Medical Technologies (NASDAQ: GWAY) goes public, most of the post-IPO talk centers on what its leaders will do with the money.

Ideally, the newly-rich EMR vendor will do customer-friendly stuff like improving their product and strengthening their technical support organization. In reality, though, public companies have a different focus; their job is keeping the Wall Street folks who own their shares happy.

Since happy largely means only one thing — increasing profits and earnings per share — that vendor isn’t likely to take on new expenses. No, it’s more likely to find ways to charge more and sell more, rather than doing a better job of showing love to its existing customers.

SRSsoft’s Evan Steele has shared a nice analysis of how KLAS customer support ratings (for companies serving the 6 to 25 physician practice) compare with the vendor’s financial status. While they’re not exactly scientific, Steele’s conclusions are still striking; he concludes that five of the top six vendors are privately owned.

Now, I’m not sure how that correlates with another KLAS data point, in which publicly-held EMR/practice management vendor athenahealth (NASDAQ: ATHN) was named as top-ranked provider for its cloud-based EHR in December. Its stock has also been on a generally upward climb for the past 12 months, ranging from $39.87 to $72.70 per share.

Is it possible athena is managing to please both its customers and its investors? Well, if the typically nasty gossip you see on athena’s discussion board is any indication, no. It looks like grouchy insiders are shorting the stock, which some expect to plunge below its starting price to $30/share or so fairly soon.

That being said, one particularly intriguing comment suggests that Cerner (NASDAQ: CERN) is eyeballing athena, which observers think would be a good fit.

Cerner fits the profile I’ve outlined: it’s huge, profitable and what’s more, in need of a product to fill the physician niche it doesn’t own. If you think Cerner could just build its own physician presence, look at GE’s decision to drop doctor-oriented Centricity Advance. Clearly getting doctors to buy was much harder than it looked at first glance.

Cerner doesn’t need athena to build its margins: analysts expect it to see sales growth of 13+ percent this year, to $2.5 billion or so. It should also see earnings growth of 22+ percent to $2.25 per share.

Buying athena would give Cerner a critical medical practice presence, and at the same time, let athena keep its customers happy without forcing it to play only for a Wall Street audience. In this situation, at least, maybe an EMR vendor can have its cash and eat it too.

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February 14, 2012 I Written By Anne Zieger

Filed Under: EHR Electronic Health Record Electronic Medical Record EMR EMR Adoption EMR Technology Healthcare Healthcare IT

Tags:athenahealth Cerner EHR EHR Vendor Electronic Health Records Electronic Health Records Vendor Electronic Medical Records Electronic Medical Records Vendor EMR EMR Vendor Evan Steel GE Centricity Advance Healthcare IT Vendor KLAS SRSsoft

101 Tips to Make Your EMR and EHR More Useful – EHR Tips 66-70

Time for the second entry covering Shawn Riley’s list of 101 Tips to Make your EMR and EHR More Useful. I hope you’re enjoying the series.

70. Hard coded work flows CAN be your friend
EMR vendors are constantly playing the game of out of the box functionality versus unlimited workflow design. This is one way to look at hard coded work flows. Sometimes they have benefits since it’s one less thing that you have to configure on your system.

The other way to look at the above EMR tip is when it comes to reporting. Often if you’ve customized a workflow in your EMR, then you lose out on the benefit of the reporting that’s available with a hard coded work flow. Sometimes you can get the benefit of both, but some advanced reports really benefit from a hard coded work flow.

69. Social Media integration – the way business is done today
No EMR system has really deep social media integration….yet!? Although, it’s worth checking with your EHR vendor to see their views of the future of social media integration. Especially if you’re in a market that has a lot of physicians. You can be sure that future patients will want some sort of social media integration as part of their visit.

68. Determine how the EMR vendor encourages innovation
This EMR tip can be taken a number of different ways. The first is how does your EMR vendor innovate internally. Take a look at their last 3-5 release cycles to get an idea of how quickly they release features and how innovative those features are. It will tell you a lot about future releases of their EHR software.

The second way to take this is by asking the question, how do they take feedback and innovation from their community? Do they have an open API that would allow you (or some developer you pay) to be able to extend their EHR functionality? If you’re someone who likes to tinker with your practice, then an open API that will let you do that would be essential.

67. Determine how innovation is actually put into the practice
This EMR tip highlights the subtle difference between an EHR vendor that talks the talk and the EHR vendor that walks the walk. Every time your EHR vendor says, “That feature will be in the next release.” a red flag should go up in your mind. Maybe this company thinks and talks big, but can’t actually perform big. Although, age of the EHR vendor should play some part in this evaluation as well.

66. Is the patient portal comprehensive
Meaningful Use has almost made patient portals a requirement. It’s hard to say exactly what future meaningful use stages will require, but I won’t be surprised if a patient portal plays a large part in the future of healthcare. Plus, the new digital generation is going to be very interested in using a patient portal. You’ll want to make sure your EHR vendor is ready for both of these trends.

If you want to see my analysis of the other 101 EMR and EHR tips, I’ll be updating this page with my 101 EMR and EHR tips analysis. So, click on that link to see the other EMR tips.

101 Tips to Make Your EMR and EHR More Useful – EHR Tips 91-95

Time for the second entry covering Shawn Riley’s list of 101 Tips to Make your EMR and EHR More Useful. I hope you’re enjoying the series.

95. Background check the vendor’s support team
This is such great advice. You’re guaranteed to have to call your EHR’s support number. You want to know what kind of answer you get. Certainly this can be learned by asking current clients of the EHR vendor. Although, don’t just ask the clients the EHR vendor gives you. Also, be sure to call other users of that EHR system to understand what kind of support they get when they have an issue.

Online forums are also a great place to learn about support. Just be aware that online you’re likely only going to read about the best and worst experiences that people have had with an EHR vendor. Of course, you can also always just give their support number a call and see what happens. Cold calling their support could teach you a lot about the type of service they provide.

94. Ask how the vendor ensures disaster recovery and business continuity
This is particularly important when you’re dealing with a SaaS EHR vendor. Don’t be shy asking them for details of how they’re doing this. In fact, if I were an EHR vendor I’d have a nice detailed explanation of how we’re doing it. If they’re doing it right, they’ll be happy to talk through the details.

If you’re considering a client server based EHR software, then some of this will fall to you and your IT team. However, your IT team can often only implement certain disaster recovery and business continuity features if your EHR vendor supports those features. So, be sure to have a competent IT person look over the EHR vendors capabilities. Plus, you might want to put these capabilities in your EHR contract since they often say one thing about disaster recovery and then deliver another.

93. TRY to use a vendor that actually has standards in their system I find this point from Shawn interesting. My first problem with it is that unfortunately we don’t have great standards in healthcare IT (yet?). However, a few that are easily recognized are HL7 and CCR/CCD. I honestly can’t say I’ve seen any vendor that doesn’t support HL7 though. So, since they all do it, that won’t help you much.

The other side of this coin is the various systems that an EHR vendor uses. Do they use a standard SQL database and a common programming language or do they use a proprietary database and programming language? I’m not sure this should be a complete deal killer, but there is some benefit to choosing an EMR system that uses a standard SQL database. Particularly if we’re talking about a client server EMR system. However, for most people this won’t likely have much impact on them. The only exception being that the language and/or database they use might be an indication of how “legacy” their EHR software is.

92. Google “product name + support forum”
There’s some real value for an EHR vendor to have an online support forum. In some cases, EHR vendors have support forums that are run by a third party. I think we can all see the value in sharing experiences using a specific EHR software with someone else who uses that same software. A lot of learning can happen that way. You’ll be amazed at how creative some people are and how vastly different they might use the same software.

My only problem with some of these third party online forums is that it can often mean that the support from that EHR vendor isn’t very good. Why do I say this? Because if the EHR vendor support was better, people wouldn’t have had to turn to these third party forums to get support. You can usually see if this is the case by browsing the threads of the forum and see how many complain about not getting support from the vendor and so that’s why they found the online forum.

I wouldn’t say an online forum is absolutely essential for an EHR company, but if they have one you should know about it and see what it’s like before you buy.

91. Google “product name + Twitter / Facebook / etc…
It seems that I wouldn’t knock an EHR company as much as Shawn does when it comes to an EHR vendor’s presence on things like Twitter and Facebook. Shawn says that it could be a sign that they’re stuck in the past. While this could be true, it could also just mean that they’ve chosen other forms of marketing that fit their skills and abilities.

While I don’t necessarily count lack of social media presence as a huge minus, it can be a huge plus. Twitter has become a great way for me to get support. For some reason companies like to listen more when I broadcast my need in a public forum. So, EHR companies that listen on the likes of Twitter might be a benefit for you when you’re not getting the support you need. Plus, an EHR vendor’s Twitter, Facebook and blog can tell you a lot about the personality of an EHR company. Something that can be really important in your assessment of the company.

If you want to see my analysis of the other 101 EMR and EHR tips, I’ll be updating this page with my 101 EMR and EHR tips analysis. So, click on that link to see the other EMR tips.

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July 29, 2011 I Written By John Lynn

Filed Under: EHR Electronic Health Record Electronic Medical Record EMR

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