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Background On Cerner’s Capture Of DoD EHR Data Center Biz

Posted on January 6, 2016 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.

As many readers will know, the Department of Defense awarded Cerner the $4.3 billion Defense Healthcare Management System Modernization contract this summer, through its partnership with Leidos and Accenture. In doing so the partners beat out some formidable competition, including an Epic/IBM bid and a group, led by Computer Sciences Corp., whose partners included Allscripts and HP.

This is a system integration project on the grandest scale, connecting healthcare systems located at Army hospitals, on Naval vessels, in battlefield clinics across the glove. The idea is to bring all of this data — on active-duty members, reservists and civilian contractors — into a single open, interoperable platform. The new platform should serve 9.5 million military beneficiaries in roughly 1,000 locations.

Now, just six months into the 10-year deal, the DoD has decided to change the rules a bit. Military officials have concluded that the new records system capabilities won’t function at their best unless they’re hosted in a Center datacenter. The new system, officials said, “requires direct access to proprietary Cerner data, which is only available within Cerner-owned-and-operated data centers.”

I’m not sharing this tidbit because it nets the partnership more money — Cerner will take in a comparatively trivial $5 million per year to host the government health data — but for a few other reasons that offer ongoing perspective on this massive deal:

  • While there’s no concrete way to prove this, the buzz around the time of Cerner winning the contract was that it won because it was perceived as more open than Epic. Arguably, if the DoD has to transfer data hosting because it needs access to proprietary algorithms, maybe the whole open thing was a fake-out. Certainly, needing access to Cerner logic locks down the deal even further than a straight ahead contract award.
  • Why couldn’t the DoD anticipate that their own data centers wouldn’t meet the needs of the project?  And why didn’t planners know, in advance, that they’d need access to Cerner’s “quantitative models and strategies” prior to signing on the dotted line? Admittedly, this is a sprawling project, but planning for appropriate network architecture seems pretty basic to me. Did Cerner deliberately raise this issue only after the deal was done?
  • In the notice the DoD issued outlining its intention to shift hosting to Cerner, it noted that while it wasn’t seeking competitive proposals, “any firm believing that they can fulfill the requirement of providing these services may be considered by the Agency.” The key for late entrants would be to prove that they could both meet hosting requirements and connect to proprietary Cerner data.
  • Was the intent always to host the EHR at the Cerner data centers and this was a way to do an end around the bid process and make the initial bid look more attractive (ie. cheaper) so it won the contract? I wonder how many more of these late additions the DoD will have when implementing the Cerner EHR. We’ve seen many hospital EHR implementation budgets have skyrocketed. It’s not hard to imagine the same scenario playing out with the DoD EHR budget. This might be the first of many EHR add-ons that weren’t part of the original contract.

Allscripts (MDRX) At Important Moment In Its History

Posted on May 21, 2015 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.

Allscripts has announced plans to move more of its software development and operations to India, while cutting 250 jobs in the U.S., or about 3.5% of its 7,200-member workforce.  While this is significant enough as it is, it’s an even more important leading indicator of how Allscripts may perform going forward. Here’s how I think things will net out.

Making a “rebalancing”:  The company has called the changes a “rebalancing” of staff which will allow it to respond more effectively and efficiently to shifts in its software design and product dev plans.

But the decision didn’t happen in a vacuum, either. Allscripts recently reported taking a $10.1 million loss for the first quarter ending March 31. That’s down from a loss of $20.7 million for Q1 2014, but the company still appears to be struggling. Allscripts’ overall revenue dropped 2% to $334.6 million for the quarter ending March 31, compared with Q1 of 2014.

What’s next? What should providers draw from these numbers, and Allscripts’ plan to shift more development work offshore? Let’s consider some highlights from the vendor’s recent past:

* Despite some recent sales gains, the vendor occupies a difficult place in the EMR vendor market — neither powerful enough to take on enterprise leaders like Epic and Cerner directly, nor agile enough to compete in the flexibility-focused ambulatory space against relentless competitors like athenahealth.

* According to an analysis of Meaningful Use data by Modern Healthcare, Allscripts is second only to Epic when it comes to vendors of complete EMRs whose customers have qualified for incentives. This suggests that Allscripts is capable of being an effective provider business partner.

* On the other hand, some providers still distrust Allscripts since the company discontinued sales of and support for its MyWay EMR in 2012. What’s more, a current class action lawsuit is underway against Allscripts, alleging that MyWay was defective and that using it harmed providers’ business.

* Partnering with HP and Computer Sciences Corp., Allscripts is competing to be chosen as the new EMR for the U.S. Department of Defense’s Military Health System, and is still in the running for the $11 billion contract. But so are Epic and Cerner.

The bottom line: Taken together, these data points suggest that Allscripts is at a critical point in its history.

For one thing, cutting domestic staff and shifting dev operations to India is probably a make or break decision; if the change doesn’t work out, Allscripts probably won’t have time to pull back and successfully reorient its development team to current trends.

Allscripts is also at a key point when it comes to growing place in the brutal ambulatory EMR market. With players like athenahealth nipping at its heels from behind, and Epic and Cerner more or less controlling the enterprise market, Allscripts has to be very sure who it wants to be — and I’m not sure it is.

Then when I consider that Allscripts is still in the red after a year of effort, despite being at a peak level for sales, that tears it.  I’m forced to conclude that the awkwardly-positioned vendor will have to make more changes over the next year or two if it hopes to be agile enough to stay afloat. I believe Allscripts can do it, but it will take a lot of political will to make it happen. We’ll just have to see if it has that will.

Will EHR Vendors Become Service and Consulting Companies?

Posted on October 14, 2014 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 the topic of a really interesting LinkedIn discussion: Will EHR Vendors Become Service and Consulting Companies?

I think this is a really great question and one that’s worthy of serious consideration. I think we’ve seen this happen time and time again in the IT industry. Some of the best examples are IBM, HP, and Dell. As their IT hardware and software becomes a “commodity” then they leverage their relationships and domain expertise to change into a service and consulting company. Usually this also involves them spending their extra cash to acquire the leading consulting company (or companies) in the industry as well.

In some ways we’re already seeing this happen. Epic announced a consulting division of their company in order to retain their senior staff. Cerner’s always made a good chunk of their money from consulting services.

Of course, thanks to meaningful use incentive money and some still massive upgrade costs, EHR vendors haven’t needed to shift their business model to a service and consulting model yet. There’s still plenty of money to be made just selling the software, training, etc.

What will also be interesting to watch is whether the large service and consulting companies like Accenture, IBM, HP, Dell, etc. will eat up the market share so that the EHR companies don’t have as much of an opportunity to grow a service and consulting business. No doubt it will be a big dog fight. Not to mention many of the current EHR consulting companies (although, you could see many of these getting acquired by the EHR vendors).

I guess my short answer to this question is: In the short term, we’re not likely to see a massive shift towards services and consulting, but long term it’s very likely to happen. What are your thoughts?

Allscripts And Team Battle Epic and IBM for DoD Contract

Posted on June 27, 2014 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.

Earlier this month,we shared the news that Epic and IBM had gotten together to fight for the DoD’s massive Healthcare Management Systems  Modernization project. The project is to replace the current Military Health System, which should serve some 9.7 million beneficiaries.  The winning team should make about $11 billion to do the work.

So it’s little wonder that another group of health IT giants have stepped up to fight for such a juicy prize.  A group lead by Computer Sciences Corp., whose partners include Allscripts and HP, has announced that it intends to compete for the contract.

The HMSM project is extremely ambitious. It’s intended to connect varied healthcare systems across the globe, located at Army hospitals, on Naval vessels, in battlefield clinics and more, into a single open, interoperable platform serving not only active-duty members, but also reservists and civilian contractors.

Before you burst out laughing at the idea that any EMR vendor could pull this off, it’s worth considering that perhaps their partners can.  It’s hard to argue that CSC has a long track record in both government and private sector health IT work, and HP has 50 years with of experience in developing IT projects military health and VA projects.

That being said, one has to wonder whether Allscripts — which is boasting of bringing an open architecture to the project — can really put his money where its mouth is. (One could say the same of Epic, which frequently describes its platform as interoperable but has a reputation of being interoperable only from one Epic installation to the other.)

To be fair, both project groups have about as much integration firepower as anyone on earth. Maybe, if the winner manages to create an interoperable platform for the military, they’ll bring that to private industry and will see some real information sharing there.

That being said, I remain skeptical that the DoD is going to get what it’s paying for; as far as I know, there is no massively interoperable platform in existence that meets the specs this project has.  That’s not an absolute dealbreaker, but it should raise some eyebrows.

Bottom line, the DoD seems determined to give it a try, regardless of the shaky state of interoperability in the industry overall. And its goals seem to be the right ones. After all, who  wouldn’t want an open platform that lends itself to future change and development?  Sadly, however, I think it’s more likely that will be shaking our heads over the collapse of the project some years from now.

EHR is More than Software

Posted on July 12, 2012 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.

Far too often when we talk about EHR, we mostly only talk about the software side of an EHR implementation. Certainly selecting the right EHR software is the most important part of an EHR implementation. It will guide and direct many of the other EHR implementation decisions. However, once you’ve selected the right EHR software, you need to make sure and give plenty of attention to the hardware side of an EHR implementation as well. Many don’t and suffer the consequences.

Yes, I know that many clinics and even some hospitals sit back and rely on their EHR vendor to walk them through all their new technical hardware needs. This can work out really well since the EHR vendor knows which hardware will work best with their EHR software. Plus, many EHR vendors have partnered with hardware vendors to provide a really seamless service to their customers. For example, we recently posted to the EMR and EHR video website some HP videos with their EHR partners Greenway and Quest Diagnostics. In fact, at HIMSS I learned about the HP EHReadySM Program which focuses on the seamless EHR implementation experience between EHR software and hardware. I was amazed by the number of EHR partners HP had.

Other clinics have their own in house IT support that deal with all of their EHR hardware needs. In some cases, the doctors themselves act as their own IT support. Regardless of how you approach your EHR hardware, here are some things to consider when it comes to hardware during an EHR implementation:

Consult Other EHR Physician Users – One of the best ways to learn what hardware you need for your EHR is to ask existing users of that EHR. Don’t ask a clinic that’s been using that EHR for more than a year. They’re likely using older hardware you can’t buy anymore and have also forgotten what they bought. Instead ask your EHR vendor for a doctor who’s been using their EHR for about a year.

Existing Infrastructure – Any vendor worth their salt is going to want you to use your existing infrastructure as much as possible. If you just bought a brand new laptop, then there shouldn’t be a need to replace that in order to use the EHR. However, be very careful that you don’t take this too far. I know many clinics who have tried to skate by on old hardware and made their EHR implementation miserable. They finally spend the $500 on a new desktop and EHR satisfaction skyrockets. For some context on when to invest in hardware, read these article on EHR performance issues and EHR slowness. Make sure your lack of investment in hardware isn’t the reason your “EHR is Slow.”

Financing – Yes, the cost of EHR software has dropped dramatically with even a number of high quality Free EHR software offerings. However, many doctors forget to add in the EHR hardware costs including: desktops, laptops, scanners, tablets, printers, cables, network devices, signature pads, cameras, etc. You can and should defray these costs with existing infrastructure as mentioned above, but that only goes so far. All of these hardware costs can add up and especially larger clinics might need to consider financing the cost of all this hardware.

Lifecycle Management – If you’re in a larger clinic you’re going to want to make sure you have a good lifecycle management plan in place for your hardware. A thoughtful replacement cycle for your hardware is so much better than unplanned hardware crashes with no budget plan to replace it. This replacement cycle should also correspond to your EHR vendors ongoing development plans. How much longer will they support your current hardware? When will they support the latest operating system?

Hire Great IT Help – With few exceptions, the best thing a clinic can do is to hire competent IT people to assist them with the selection and implementation of their hardware. A few doctors get a kick out of the latest IT. For the rest of the doctors out there (which is most of you), find great IT support. No, your daughter’s boyfriend who likes computers usually doesn’t match that description.

Hardware Takes Time – When planning your EHR implementation schedule, make sure you give plenty of time to implement the hardware side of the EHR implementation. It takes time to select the hardware, for the hardware to be delivered, for the IT people to implement, configure, and test, the hardware, etc. I’ve seen many EHR implementations delayed while they’re waiting for the hardware to arrive.

Those are a few suggestions to help you out. I hope that readers will offer other suggestions in the comments. My key message for this post is to not forget about the hardware side of an EHR implementation. EHR hardware is completely manageable if you deal with it early. If you wait or skimp, then it can wreak havoc on your EHR plans.

This post is sponsored by HP Healthcare, however opinions on products and services expressed here are my own. Disclosure per FTC’s 16 CFR, Part 255.

HP Launches EHReady for Healthcare IT Market

Posted on July 19, 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.

I got an email announcing the new HP EHR initiative called EHReady. I was really interested to hear what HP was working on in the EMR industry since DELL’s has a number of EMR initiatives. In order to learn more, I did an email interview about EHReady with Chris Mertens, HP’s vice president of healthcare business.

Why would a practice want to use this HP solution?  What makes it more than just a nice marketing program?

Our new EHReady program is a comprehensive solution that helps hospitals engage with their physicians and help them transition to a complete EHR solution. We works very closely with its enterprise clients and know how tough it can be for physicians to adopt new technology. As the HITECH act was being developed, we began forming this program which they believe will make it much easier for hospitals to extend their technology solutions out to their affiliated physicians.

As the largest computer manufacturer in the world, we offer the full range of products and solutions to meet the needs of hospitals and their physicians: mobile systems, desktops, printing solutions, servers, storage, and even peripherals like mobile carts and biometric devices.

Will this program focus more on hospital EMR software or ambulatory EMR software?

The program targets hospitals, Regional Extension Centers, and other associations working closely with physicians to adopt EHR solutions. We will not be reselling the EHR solution, but rather enabling each hospital to work closely with their affiliated physicians to determine the best solution.

Which EMR software will you be making available to consumers?

This service program supports a wide range of EHR software from our healthcare partners. We are also collaborating with key independent software vendors to provide customers with a choice of EHR applications. We are currently engaged in an extensive ISV qualification and selection process.

How did you decide between the 300+ EMR vendors and how do you know the EMR software you support will work well across all the unique clinical practices?

With this announcement, we are not officially naming partners for the EHReady program, although we do have existing relationships with many software providers and continue to build more. We will also be working with a number of HP resellers including one quoted in the press release – Open Systems Technologies.

We are opening up the program now to make sure that hospitals are aware of this offering. Many hospitals are already established with certain EHR vendors, and it’s our goal to work with a variety of software partners to better meet the needs of more hospitals. The EHReady program is designed to do just that – allow for a simple, turnkey solution that will fit with what hospitals may already have in place in terms of EHR software.

What will you be doing specifically to ensure that organizations understand and qualify for ARRA EMR stimulus money?

We offer a full suite of leasing and other financial options, which offer practitioners the ability to bundle HP and non-HP EHR solution components into a single, low payment.

When practitioners choose an HP Financial Services ownership program, they can choose to acquire their EHR solution now, without a large cash outlay. The practitioners can make small payments and have the choice to either pay the program off quickly or continue to make small payments after the ARRA subsidy is received.

In addition, all HP solutions meet the criteria of “Meaningful Use” that is required to obtain the funds to help physicians move towards a “digital office” environment.

Will HP be providing the software and technical support needed or partnering with other organizations?

We will work closely with our extensive network of value-added resellers to support EHReady with site assessments, training, implementation and support services for hospitals and their affiliated physicians.

Since every EHR software has its own unique features, the installation of EHR software through this program will be done in partnership with HP through our network of HP partners.

EHReady’s IT services can be structured to support a seamless EHR install or upgrade with minimal interruption to hospitals and affiliated physicians. An “IT checkup” onsite assessment service kicks off the EHR system consultation, leading to planning and setup services to fully implement the EHR solution.