Ahem….what do we say about privacy and data selling…bingo it appears as if you read through the entire article why else would this type of data be shared with Wall Street Investors to make a market for selling some new analytic algorithms. Now get this the investors got to see this “private” information that a patient can’t even get access to see. This reminds me of ePatientDave, “give me my damn data” and this is a total abuse here as the data is not being used for better care but for “better money”.
Now this also says something about access to revenue cycling too, payers and integrators might want to visit this scenario and make sure that it stays on a server for one and what levels of access will be granted. Now this gets worse as the types of information and patients were related to mental health, HIV, Parkinson's and more. How many investors glazed over these records? Accretive gets paid on the revenue boost is provides. There are a lot of these types of 3rd parties around in healthcare and here’s another one used by Blue Cross who had some bad algorithms.
Actually when it comes down to payer disputes you wonder did the hospital bill erroneously on purpose or did they get some bad algorithms and a bunch of promises? If I were one of these patients, court might be on my mind and I would want to know what investors on Wall Street potentially or did see my data! On their website they talk about bringing increased discipline to the revenue cycle so is that the revenue cycle on Wall Street?
Well Fargo just dumped one of these types of companies recently and remember the big data breach at Stanford, also the fault of a 3rd party, so with history being built here who wants to trust a 3rd party today if you don’t have to as patient records end up on the web and in the hands of investors on the street. The 3rd party folks are the algorithm makers though that promise better profits and use of money. This whole scenario though is kind of sad as they were supposed to be helping a couple non profits boost their revenue but the hospitals probably had no clue on the methodologies like showing patients records was in the plan.
“The screen shot also includes numeric scores to predict the “complexity” of the patient and the probability of an inpatient hospitalization, and a box to describe the “frailty” of the patient.”
Tine to start licensing and taxing those data sellers and have a federal disclosure site so we all know what’s going on, beginning to make more sense every day! The link below will describe a bit of this brainstorm. BD
ST. PAUL, Minn. - Minnesota Attorney General Lori Swanson has filed a lawsuit against a debt collector accused of failing to protect the confidential information of 23,500 hospital patients after a company laptop was stolen from a rental car parked in the Seven Corners are of Minneapolis.
The lawsuit filed Thursday alleges Accretive Health, Inc., a debt collection agency that is part of a New York private equity fund conglomerate, failed to protect the confidentiality of patient health care records and failing to disclose its involvement in their health care.
Last July, Accretive lost a laptop computer containing unencrypted health data of about 23,500 patients of two Minnesota hospital systems -- Fairview Health Services and North Memorial Health Care.
Under both contracts, Accretive controls and directs the work of hospital employees and “infuses” its own employees into the staffs of the hospitals. Accretive gets base compensation and incentive pay for helping the hospitals boost revenue or cut costs.
“The debt collector found a way to essentially monetize portions of the revenue and health care delivery systems of some nonprofit hospitals for Wall Street investors, without the knowledge or consent of patients who have the right to know how their information is being used and to have it kept confidential,” Swanson said.
The state seeks an order requiring Accretive to fully disclose to patients:
- What information it has about Minnesota patients
- What information it has lost about Minnesota patients
- Where and to whom it has sent information about Minnesota patients
- The purposes for which it amasses and uses information about Minnesota patients.
One more the mergers and acquisitions speak out again on how health insurance companies have diversified their portfolios and are no longer “just an insurance company” with numerous subsidiaries both in the Health IT area and even others in what you might consider “unrelated” businesses. Here’s one example below with a diversified interest with a new division created to distribute hearing aids and offer incentives for those in certain areas of the us to sign up for insurance plans. I sometimes wonder how other insurers view this?
Here’s another example of what one might consider a business outside of what we might normally consider a related business with low incoming housing investments in New Mexico. One thing to keep in mind today is all the aggregated data that flows and the algorithms and SQL statements that bring some of this together. Data is big business.
Just a couple weeks ago we read about the investment with mobile health and again we venture down into the data business here again as the Optum division which has many subsidiaries has a huge focus on data, and part of the renamed group was the old “Ingenix” company that has consulted and provided data services for years and last year settled their case with the AMA with short paying providers for out of network services.
This kind of brings me around again to what I call the “Alternative Millionaire’s Tax” with companies that buy and sell data and this seems to be a good place for a mention here as the Optum Division has been making money for years with aggregating and selling prescription and other data. With big profits as such we certainly could entertain a license and tax situation for those making billions on the data selling business. As a short comparison from another Healthcare company, Walgreens has estimated their data selling business to be valued at just under $800 million, so again something to give some thought to as hospitals, providers, and patients struggle to afford medical care today.
Another good article to read about the over sell and naïve and gullible nature of the US with both government and consumers, read what Nanex has to say as they are the folks that monitor and study rogue algorithms in the stock market and look for indicators of the “next flash crash”. A couple paragraphs are below and will the SEC be suckered in to this huge expense of programmers who want to make big dollars writing code convince a naïve and gullible SEC? It’s all over the place with digital illiteracy, steroid marketing and algorithms for huge profits only and they have teeth. At a certain point in time we might need to REALLY think about the value of some of the data we analyze today and the cost and this is worth a mention as this is the big growth area for United, algorithms and software analytics via consulting services. It is also worth a note that United last year hired the former Assistant Attorney General for the State of Minnesota for their general counsel.
Below is one example of the algorithm/software business as the company created a clearinghouse business and collaborated with an medical records company to integrate the services with Epic and of course this means more data revenue for the company and puts a bit of stress on other smaller existing clearinghouse businesses in the US as well.
One more thing too is let’s not forget that they also own a bank with over $1 billion on deposit with health savings accounts and I would guess this also leaves them open to lend money on monies held here and somewhat compete with other banks. As you can read in the quote below the funds are largely generated by employers, in other words large US corporations so they seem to go hand in hand, right?
“OptumHealth offers three types of HSAs, as well as tax-advantaged health care savings and spending accounts, debit-card services, benefits administration services, and payment products. About three-quarters of the bank’s 1.6 million accounts are employer-generated, while the other quarter are individual accounts.”
There’s also the Chinese investment the company bought early in 2010.
If you were to stop and look you might also notice one more subsidiary that can consult with biotech and device companies to introduce new products to the FDA and you know when you think about it they might just have a subsidiary to handle the entire process from FDA approval all the way down to provider reimbursement too.
One other related item too is the purchase of physicians groups which is growing and the acquisition of Monarch in Orange County is one big example of buying a huge managed care group.
Again, in summary with such large profits and a lot coming from the data end of the business, this looks like one company where licensing and taxing the data sold for huge profits could fit and there are many more as Hedge Funds, Facebook and tons of other companies are cashing in royally and this all leads to bottom line profits for running algorithms on servers 24/7 that you can’t see, touch or talk to as far as the consumer is concerned, but automated algorithms for data mining and selling are yielding huge profits for corporate USA while as consumers we are becoming “data chasers” to fix a lot of the flawed data that is out there today. It’s a good idea today to read up and see how the corporate USA scene has changed tremendously due to the huge array of mergers and acquisitions as companies are not the same ones they were 2 to 3 years ago by any means. BD
UnitedHealth Group (NYSE:UNH) today reported fourth quarter and full year 2011 results, highlighted by strong enrollment and revenue growth in each of UnitedHealthcare’s benefits businesses and strong revenue growth at all Optum business units. Full year and fourth quarter 2011 net earnings were $4.73 per share and $1.17 per share, respectively. Cash flows from operations were $7 billion in 2011.
The Company continues to estimate 2012 revenues in the range of $107 billion to $108 billion and net earnings in the range of $4.55 to $4.75 per share.
Is there money in those algos? This story might answer that. Why would this employee who was a contracted programmer take this code? It’s worth money and if you read often enough you know I discuss those algos and software is nothing more than a group of algorithms, words of Bill Gates.
A co-worker said the employee said the accused confused he lost the drive containing the code and get this, it’s the software (aka algorithms) that cost $10 million to develop to track the billions of dollars that the US government dispenses “daily” to government agencies..these are some pretty commanding algorithms…so the programmer apparently took the code and who knows where it would go next? A lot of government code is open source but don’t think that is the case here…what’s the next security breach to occur? BD
Bo Zhang, 32, of Queens, New York, worked as a contract programmer at the bank. He was accused of illegally copying software to an external hard drive, according to a criminal complaint filed in U.S. district court in Manhattan.
Authorities said the software, owned by the U.S. Treasury Department, cost about $9.5 million to develop.
A New York Fed spokesman said in a statement that the bank immediately investigated the suspected breach when it was uncovered and promptly referred the matter to authorities.
Zhang told investigators he took the code "for private use and in order to ensure that it was available to him in the event that he lost his job," the complaint said.
The code, called the Government-wide Accounting and Reporting Program (GWA), was developed to help track the billions of dollars the United States government transfers daily. The GWA provides federal agencies with a statement of their account balance, the complaint said.
This is kind of an alarming incident but when you read further it does not stop the treatment process and the secondary outbursts are surgically removed. This affects about half of those treated to be on alert, but not all of those develop the secondary skin cancer, only about a quarter of the 50% risk group.
This sounds like a big step in recognizing undesired side effect with oncology treatments. BD
Drug Used to Treat Melanoma with One Mutation Sets off a Cascade that Results in a Different Type of Skin Cancer in Cells with Another Mutation
Patients with metastatic melanoma taking the recently approved drug vemurafenib (Zelboraf®) responded well to the twice daily pill, but some of them developed a different, secondary skin cancer.
Now, researchers at UCLA’s Jonsson Comprehensive Cancer Center, working with investigators from the Institute of Cancer Research in London, Roche and Plexxikon, have elucidated the mechanism by which vemurafenib excels at fighting melanoma but also allows for the development of skin squamous cell carcinomas.
The very action by which the pill works, blocking the mutated BRAF protein in melanoma cells, sets off a cellular cascade in other skin cells if they have another pre-disposing cancer mutation and ultimately accelerates the secondary skin cancers, said Dr. Antoni Ribas, co-senior author of the paper and a professor of hematology/oncology.
About 50 percent of patients who get melanoma have the BRAF mutation and can be treated with vemurafenib, Ribas said. Of those, a fourth of the patients develop skin squamous cell carcinomas. The squamous cell carcinomas were removed surgically, and vemurafenib was not discontinued for this side effect.
“We wondered why it was that we were treating and getting the melanoma to shrink, but another skin cancer was developing,” said Ribas, who studies melanoma at the Jonsson Cancer Center. “We looked at what was likely making them grow and we discovered that the drug was making pre-existing cells with a RAS mutation grow into skin squamous cell cancers.”
The 18-month study appears in the Jan. 19, 2012 edition of the New England Journal of Medicine.
The combined research team performed a molecular analysis to identify the oncogenic mutations in the squamous cell lesions of patients treated with the BRAF inhibitor. Among 21 tumor samples studied, 13 had RAS mutations. In a different set of 14 samples, eight had RAS mutations, Ribas said.
“Our data indicate that RAS mutations are present in about 60 percent of cases in patients who develop skin squamous cell cancers while treated with vemurafenib,” Ribas said. “This RAS mutation is likely caused by prior skin damage from sun exposure, and what vemurafenib does is accelerate the appearance of these skin squamous cell cancers, as opposed to being the cause of the mutation that starts these cancers.”
Ribas’ group found that blocking the non-mutated BRAF in cells with mutated RAS caused them to send signals around BRAF that induced the growth of the squamous cell cancers.
The discovery of the squamous cell cancer mechanism has led to strategies to inhibit both the BRAF mutation with vemurafenib and block the cellular cascade with a different drug, a MEK inhibitor, before it initiates the secondary skin cancers, said co-senior author Professor Richard Marais from the Institute of Cancer Research in London, who developed the animal model for the study.
“By understanding the mechanism by which these squamous cell cancers develop, we have been able to devise a strategy to prevent the second tumors without blocking the beneficial effects of the BRAF drugs,” Marais said. “This may allow many more patients to benefit from these important drugs.”
Ribas said that this is one of the very few times that oncologists understand molecularly why a side effect to cancer treatment is happening.
“The side effect in this case is caused by how the drug works in a different cellular setting,” he said. “In one case it inhibits cancer growth, and in another it makes the malignant cells grow faster.”
Studies currently are under way testing BRAF and MEK inhibitors in combination in patients with metastatic melanoma, Ribas said.
“Our data provide a molecular mechanism for the clinical toxicity of a targeted oncogene inhibitor that apparently contradicts the intended effects,” the study states.
The study was supported by Roche, Plexxikon, the Seaver Institute, the Louise Belley and Richard Schnarr Fund, the Fred L. Hartley Family Foundation, the Wesley Coyle Memorial Fund, the Ruby Family Foundation, the Albert Stroberg and Betsy Patterson Fund, the Jonsson Cancer Center Foundation and the Caltech-UCLA Joint Center for Translational Medicine.
UCLA's Jonsson Comprehensive Cancer Center has more than 240 researchers and clinicians engaged in disease research, prevention, detection, control, treatment and education. One of the nation's largest comprehensive cancer centers, the Jonsson center is dedicated to promoting research and translating basic science into leading-edge clinical studies. In July 2011, the Jonsson Cancer Center was named among the top 10 cancer centers nationwide by U.S. News & World Report, a ranking it has held for 11 of the last 12 years. For more information on the Jonsson Cancer Center, visit our website at http://www.cancer.ucla.edu.
Jon goes back to Foxconn-revisited…in his usual style and he says we need to make our factories look more like those in China. Workers live in dormitories and don’t know each other, cuts down on commuting and friendship.
Workers are finding ways of improving their conditions, hotlines with trying to stop suicide and put nets around buildings to catch jumpers…I think we remember this from a year ago and he says in the US we call this “treating the symptoms”.
“It’s me, Siri, in your pants pocket working on giving you testicular cancer”…If it works for those factories, electronics would cost more..modern work fare…a game to the rescue…this is great humor but there are somethings I does make one ponder…there’s just one level and this is it…(the middle class) as algorithms are marketed and designed and sold to consumers.
He shows the work of the algorithms in place for sure in a humorous way. Why are health insurance companies getting into the low income housing business though? I hope this is not a Foxconn plan to create communities with jobs that pay little and have medical care on campus? What is up with this?
The same company owns a subsidiary that will basically give you a free hearing aid made in China if you sign up for their health insurance…more below…and the subsidiary they built to distribute and coming to Walmart soon as I understand…
He moves on to the next part, a game that has one level…hmmm…we another insurance company banking on this too…data to sell? Will this make you healthy? I prefer real knowledge.
I just ask is there where we are headed with mining and selling data today and big corporations taking over our day to day decisions? The more information they have to judge and discriminate, the ability to control and humiliate the middle class grows.
At any rate with the use of algorithms today that have teeth and the amount of flawed data out there, are we going in this direction? I put this out for an awareness and perhaps to generate some though processes. I like technology and the good things it brings but am not oblivious to how it can also be abused as well and a NYU professor says it even better than me, read and listen up.
I sure hope Richard Cordray understands math and the power of the algorithms when used both in an intuitive and good manner and the reality of those who design for pure profit that hurts consumers. You can see, smell or touch them, but they are running on server 24/7 every day making like impacting decisions, crafted by some of the smartest programmers and developers that the money on Wall Street can buy.
Another good article to read about the over sell and naïve and gullible nature of the US with both government and consumers, read what Nanex has to say as they are the folks that monitor and study rogue algorithms in the stock market and look for indicators of the “next flash crash”. A couple paragraphs are below and will the SEC be suckered in to this huge expense of programmers who want to make big dollars writing code convince a naïve and gullible SEC? It’s all over the place with digital illiteracy, steroid marketing and algorithms for huge profits only and they have teeth. BD
“Wall street hires the best software developers money can buy. They write clever algorithms. These algorithms will only get more clever as time goes on. Which means they will always be changing. Now, writing software to detect what other software is doing is 100 times more difficult. Which in the software world means 100 times more expensive. Which means hiring people that do not exist, since Wall Street already snapped up the best, and you need the best times 100 (you can't make it up in quantity and just get 100 times more wizards, because many will have poor social skills, and you need these people to communicate).”
“You see the folly of trying to regulate the markets in real-time? Real-time raises the cost exponentially times a million. To a level that all the kings in the world couldn't afford. It would be one thing to track in real-time, things that had known behavior. Like your checking account being overdrawn. Maybe credit card fraud in the making (which, by-the-way, hasn't been perfected yet, despite lots of money and time thrown at the problem). “
To go back a little bit in time the chip was also set up to communicate with personal health records like Healthvault. The latest development on the chip was the ability to communicate real time glucose readings. The FDA has approved the product and the HealthLink software.
In addition, Medcomp who makes vascular access catheters will use the chip in vascular ports for identifying the port in a patient for proper medication dispensing. As it read here though the use with Medcomp still needs to secure FDA approval. This chip keeps coming back around with many lives. BD
DELRAY BEACH, Fla., Jan 17, 2012 (BUSINESS WIRE) -- VeriTeQ Acquisition Corporation ("VeriTeQ" or "Company"), a marketer of implantable, radio frequency identification ("RFID") technologies for patient identification and sensor applications, announced today it has acquired the VeriChip implantable microchip and related technologies, and Health Link personal health record from PositiveID Corporation. VeriTeQ is majority owned and led by Scott R. Silverman, former Chairman and CEO of PositiveID and VeriChip Corporation. PositiveID has retained an ownership interest in VeriTeQ.
VeriTeQ will focus on three main areas: patient identification and personal health record (PHR) access through the VeriChip implantable microchip and Health Link web-based PHR; implantable sensor applications; and identification of medical devices within the body. VeriTeQ will also focus on identification and sensor applications for animals.
VeriTeQ's acquisition also includes the rights to a Development and Supply Agreement with Medical Components, Inc. ("Medcomp"), a leading manufacturer of vascular access catheters. Under the terms of the agreement, Medcomp will embed the VeriChip microchip in its vascular ports to facilitate identification of the port in a patient and proper medication dispensing.
Admittedly, our predictions for 2011 were modest. Most of those predictions were logical and did not take a whole lot of imagination to envision thus our success rate, 7 “hits”, 2 “toss-ups” and 2 “misses was quite high. And though are biggest accomplishment, predicting Blumenthal’s departure just a few short weeks before he actually announced such intentions is laudable, by and large these predictions just didn’t go far enough. So for 2012, rather than make simplistic predictions such as “analytics will be a high growth area” or “mHealth will create greater security concerns” or even “ACOs will begin to take hold” as none of these are all that thought provoking, we’ll go out on a limb with many of our predictions. Hopefully that limb won’t crack sending us crashing to the ground.
Without further adieu, here are our predictions:
Consumer/Patient Engagement – Not What it Seems
Despite the best efforts of the team at ONC to beat the consumer/patient engagement drum, providers by and large are still struggling with such basic issues of taking live their certified EHRs, making the transition to ICD-10, meeting physician demands to have everything served up on their new iPad and of course mapping out future strategies in anticipation of payment reform. Thus, we foresee consumer engagement remaining a tertiary issue in 2012. Just too many other pressing priorities at the moment. WebMD’s implosion on Jan. 10th may portend that this is not such a bad move – at least in the near term.
Bloom is Off the Rose, EHR Market Plateaus
Going out on a limb, we see 2012 as the year when we start talking of the post EHR-era. Yes, there will be plenty more EHR sales in the year to come but over 2012 we will also see EHR sales growth begin to plateau and level off by end of Q4’12. You heard it here first folks, it is time to collect your EHR winnings and seek new places to invest.
Finally, We’ll See Some Fairly Competent Tablet Apps from Legacy Vendors
Though physicians continue to adopt iPads at a rapid rate, they struggle to effectively use them in the hospitals to which they are affiliated simply because most hospital HIS cannot serve up an application effectively on an iPad. Sure, many have tried using Citrix as a stop-gap measure but this is just isn’t cutting it. In speaking to one CIO of a major IDN recently, he was so frustrated with his core EHR vendor’s slow pace of development that he is about ready to self-fund the development of an App for his physicians. Fear not CIOs and frustrated physicians, we have had the opportunity to see several alpha versions of iPad Apps that major EHR vendors are developing and they actually look pretty good. Look to Q2-Q3 ’12 for general availability release of these touch-screen native (mostly iPad-centric) Apps.
At Gunpoint, Direct Project Gains Traction
In 2011, the message came down from on high, or at least from the feds, that all State HIEs must include the use of Direct in their strategic plan. Pretty clear that this was politically motivated as to date, for the $500M plus we, as taxpayers are spending on these public HIEs, there is very little to show for it and we are now running headlong into an election year and this administration needs to show something, anything, in the way of success as it pertains to health information exchange. Sure Direct facilitates health information exchange (the verb), but so does a fax machine and frankly, Direct is only a modest step beyond faxing. Therefore, Direct will gain traction in these “forced” instances but we do not see it extending its reach into the much larger market of private, enterprise HIEs (does not sufficiently support care coordination, population health and analytics) and thus Direct’s overall impact in the market will be small and fade to nothing in three years time.
First CPT Codes for mHealth Apps Issued
mHealth Apps for care provisioning have not seen any significant adoption beyond pilot studies, studies which typically show some efficacy in their use. The big hang-up is a simple one, the risk to reward ratio for physicians to adopt and use mHealth Apps as part of the care process is too low. What might change that risk-reward ratio though is a CPT code whereby a physician actually gets paid to use, or have a patient use an App as part of the care process. WellDoc is one of the few mHealth App companies that is quite aggressive in moving the ball forward and we would not be too surprised if WellDoc did industry ground-breaking work to secure the first CPT codes for their diabetes management App.
Train has Left the Station as Supreme Court Rules on ACA
Though the Supreme Court will hear arguments for and against the constitutionality of the Affordable Care Act (ACA), it is unlikely that their subsequent ruling will throw out all of ACA (they may prune it). More importantly, the move to value-based reimbursement models is already in full swing, which is something that will not be reversed. Whatever the Supreme Court rules, its impact will be minimal and the numerous changes we are seeing take place today (move to accountable care models, patient centered medical home, etc.) will continue as the train has already left the station.
Changing of the Guard as Dynamic Duo Departs
Last year we predicted the departure of ONC head, Dr. David Blumenthal. This year is an election year and it is expected that there will be a significant changing of the guard across the administration. We predict that the dynamic duo that is Aneesh Chopra, White House CTO and Todd Park, HHS CTO will both be leaving their posts by end of the year.
M&A Continues, but at far more Reasonable Valuations
Okay, yes we have had this prediction for three years running, but we just can’t help ourselves as we see far too many vendors in this market (some 300+ EHR vendors alone!) and some rationalization must enter at some point. We are seeing rationalization on valuations (e.g., no one was willing to pay what Thomson Reuters wanted for their healthcare business unit despite there being a sizable number of bidders) and this will create an opportunity for acceleration in M&A activity in 2012.
Floundering HITECH Initiatives Attract Political Spotlight
Yes, we are seeing some modest success and adoption of EHRs as a result of the HITECH Act but the preponderance of such success is at hospitals that first have had some form of EHR already in place and also have a lot to lose if proposed reimbursement cuts from CMS come to fruition at the end this multi-year march to certified EHR adoption and meaningful use. Yet, under the covers we are still not seeing wide-spread EHR adoption at the ambulatory level, especially among smaller practices, State HIE initiatives struggle to define what they’ll actually be when the grow-up, the Beacon programs have not reached the promise land, and the RECs, well we were never a big fan of these for obvious reasons we outlined previously. As this is an election year, healthcare and anything with the stamp of the Obama administration on it, will become fair game and dragged into the limelight. Get ready for healthcare to become the political piñata of 2012
HIE Vendors Stumble
By the end of 2012, the final awards for State HIEs will conclude and with it the evaporation of the $500M plus honey-pot that attracted so many vendors into this space. What’s next for these vendors? Some will stumble out of the market with little to show for their efforts. Others will work with their public clients to stand-up these public HIEs in order that they provide value to their respective communities, which will not be easy and lead to more stumbling. And of course HIE vendors who have traditionally been focused on public markets will reposition themselves for the private, enterprise market. Some of these vendors are now stumbling in this transition to the enterprise market (requires different sales resources and tactics, technology requirements, etc.). This will result in yet another shakeout in this niche industry sector. (Our forthcoming HIE Market Report will provide further details)
The funny thing about doing these predictions is that as one actually goes through the process of thinking about this market, which is currently going through nearly unprecedented change, one ponders so many other predictions that just end up on the cutting room floor. Some of those include:
Payers continue to struggle with exactly what they’ll offer on the State Health Insurance Exchange.
Pharma companies look to insert themselves directly into physician workflow, via HIT.
Despite rising cost share, consumers still struggle to make intelligent, informed decisions.
Telehealth gets some wind under its wings as big telecoms start aggressive lobbying efforts.
You get the idea, plenty of turmoil, no lack of potential trajectories in technology adoption and use within the healthcare sector and we here at Chilmark Research look forward to continuing to provide thoughtful insight on this ever evolving market in 2012.
So now it’s your turn. Are we on the mark with our predictions? Did we reach too far? Is there a particular prediction that you have which we totally missed? It is you, the community of readers that make this site far richer than we ever could do on our own and we look forward to your feedback.
It is almost becoming the norm to say that it has been another tumultuous year in the healthcare IT market. Market consolidation, pushback on timelines, growing chorus from IT departments that enough is enough against the backdrop of the political circus in Washington and across the land as we prepare for the 2012 election year. If 2011, was a bit bumpy, believe we will see craters in the road to HIT enlightenment in 2012. But we’ll save that discussion for our future predictions for 2012 post, which we hope to get to next week. (Editor’s Note: Don’t hold your breath though, if the snow flakes are flying, we’ll be on the slopes next week.)
Today’s post takes a look back on 2011 by reviewing our predictions earlier in the year and assessing where we hit the mark, where we missed and if there is such a thing, where we came close. So without further adieu…
1. MU Initiatives Move to Tactical
Hit This did come true as meaningful use, while still top of mind for the CIO, is not top of mind for others in the executive suite who are now looking at how to compete in the future as reimbursement models shift from fee-for-service to value-based contracts.
2. C-Suite Strategy Focuses on New Payment Models
Hit An admittedly “softball” prediction, this was a natural fall-out of prediction numero uno. And yes, the consultants are making out like bandits as we predicted they would helping senior execs figure out their future competitive strategy.
3. RCM & Charge Capture Systems Require Overhaul
Miss By and large, most vendors in this sector have not done a whole lot yet as they await to see how the market develops. With most healthcare organizations struggling to get the basics done (e.g., meet MU requirements, ICD-9 -> ICD-10, apply analytics, etc.) we are not seeing big demand from customers and subsequently, not a big push by vendors.
4. Mergers & Acquisitions Continue Unabated
Hit Another “gimme” of sorts for we had this prediction in 2010 and it was a “hit” and need only look at this market with its some odd 300+ EHRs to choose from, everyone wanting to call themselves at HIE vendor (last we checked, HIMSS listed some 189 HIE vendors alone), countless other HIT solutions to see that this market is far from mature. But arguably the biggest news in 2011 was Microsoft’s capitulation that despite the billion dollar plus investment, it wasn’t cut out or the clinical market and dumping its HIT assets into a new joint venture with GE. What we are also seeing is some rationality return as valuations have moderated. This may have led to Thomson Reuters’ recent decision to not sell-off its healthcare division – no one was willing to pay the high price tag they had on this property.
5. Federally Funded State Initiatives Struggle
Toss-up There has been some progress and there are those that would vehemently argue that Beacon Communities, RECs and state HIEs are moving ahead briskly. But then again, we do get some disturbing reports that all is not progressing as once envisioned, one might even go so far as to say some of these programs are beyond just struggling, but clearly going off the tracks. We’ll reserve judgment until we see clear evidence of such pending disasters, which will likely be prevalent, but highly distributed.
6. Changing of the Guard at ONC
Hit Not long after we posted our 2011 predictions, Blumenthal announced his resignation from ONC. We could not have been more prophetic if we tried.
7. Physicians will continue to go Ga-Ga over the iPad and the fast-following touchscreen tablets much to the chagrin of CIOs.
Hit Enabling physicians access to health information systems via their hand-held mobile devices, including touch-screen tablets is still a struggle for most organizations. At first, IT departments turned to Citrix as stop-gap measure, but the UX was far from ideal. In our recent research we found many an IT department still struggling to address this issue. mobile enablement of physicians is a top priority.
8. Apps Proliferate: Consumer-facing First, Private Practice Second, Enterprises Dead Last
Hit In hindsight, another admittedly easy prediction to make. What may be a more interesting prediction is when will mHealth Apps really become a truly viable market? Does the profitable exit of iTriage/Healthagen, which was picked up by Aetna portend such? By our standards, no. Go back to our recent post from the mHealth Summit for more in-depth analysis.
9. The Poor Man’s (doctor’s) HIE Takes Hold
Miss We thought that the Direct Project would quickly take hold and see rapid adoption among smaller physician practices and those organizations looking to “connect the last mile” to small affiliated practices in their network. Not happening yet though the current administration is doing its best to push this technology by requiring all state designated entities that are standing up statewide HIEs to include Direct in the strategic operating plan.
10. Analytics & Business Intelligence Perceived as Nirvana
Hit, kind of… In retrospect, not even sure this was really a prediction but simply more of a statement as to where healthcare organizations are headed with their HIT investments. We have a long ways to go, though there is certainly no lack of vendors that now are touting some form of analytics capabilities. Our advice, tread carefully as most solutions today are half-baked.
11) The Buzz at HIMSS’11? Everything ACO!
Miss While some vendors were discussing ACO enablement at the 2011 HIMSS, the vast majority were not with the key focus continuing to be meeting Meaningful Use requirements. As mentioned in previous prediction, we see MU as a tactical issue with the strategic issue being: How do we leverage IT infrastructure to support communities of care? Maybe at HIMSS’12 we’ll see more discussion of this issue, but we’re not holding our breath.
This may have been our best year yet with our predictions having only 3 clear misses out of 11 predictions made. Granted, some of those predictions were not exactly the most profound or shall we say big stretches, but we do take some satisfaction in really nailing a few.
And while we intend to provide our own 2012 predictions, no time like the present to begin the process. So we ask you dear reader, what is your 2-3 top predictions for 2012? Will Todd Park stay on at HHS? Will forced budget cuts decimate HITECH? Will the Supreme Court’s ruling on ACA have any impact on HIT spend by either payers or providers? Will mHealth Apps such as WellDoc’s for diabetic care finally receive a CBT code thereby accelerating adoption of such tools? We look forward to your input.
And of course we wish everyone a Joyous holiday season and wish you and yours continued good health in the new year to come.
As many readers know, Chilmark Research has been a strong proponent of mHealth for several years. Despite this enthusiasm, we sometimes come away from a conference, such as this week’s mHealth Summit, with the feeling that the only ones making a living with mHealth are conference organizers. Maybe it was the format of this particular conference – too many presentations that were not well vetted for relevance and content. Maybe it was the lack of exhibitors – where is the rest of the legacy HIT market who are all claiming to be bringing mHealth solutions to market? Maybe it was hearing too many mHealth vendors with weak value propositions asking the Feds to step in and jump start this market. Or maybe it was the over reliance on government presentations and an ill-fated alliance with HIMSS, who sponsored less than visionary sessions. Hard to point to any single thing that contributed to this ho hum feeling, so let’s just chalk it up to all the above.
That being said, however, the mHealth Summit, now in its third year, is the best conference one can attend in the US if one wants to get the global pulse on all things mHealth.
From its humble beginnings where the first conference was quickly over-subscribed and held in a small DC amphitheater, this year’s event drew over 3,000 attendees to the massive Gaylord Resort outside of Washington DC for three days of countless sessions running concurrently covering every aspect of mHealth one could imagine. While most sessions were structured as panels with several short presentations, one was thankful that presentations were indeed short for few had substance. But nearly every session had one stellar presentation that kept one hopeful. Those were the gems of this event and like any event, the networking that occurs in the halls.
And then there were those sessions that took a close look at mHealth adoption in developing countries. This is the current market for mHealth (albeit almost all nonprofit) for these countries have real health needs having to deliver healthcare to a highly distributed and often rural population with too few doctors and lack a robust land-line network (no Internet cafes here folks). But what they do have are cell phones – lots of them and they are not tied to legacy systems and associated processes. Even among some of the poorest countries, the rapid adoption of cellphones by the populace is staggering (e.g., India alone now represents 20% of all cellphones in use worldwide). Combine the need with very little in the way of legacy HIT infrastructure and the ubiquitous nature of cellphones and you have a ripe opportunity to redefine care delivery models. Look overseas to these developing countries for the real future of mHealth for this is where best practices in mHealth-enabled care delivery will likely develop and later be adopted in more developed countries, US included.
That is not to say they are no advances occurring here in the US. One of the keynote speakers, cardiologist Eric Topol, gave several live demos during his talk of the mHealth tools he is already using including stating that he has not used a stethoscope in two years, instead preferring to use mobisante’s ultrasound wand and iPhone App. Then there was our conversation with WellDoc’s CTO who informed us that they are currently being deployed at a number of institutions and hope to have a host of CPT codes that doctors can bill against in late 2012. And there was the small start-up we spoke with who has done the hard work of first identifying what the value proposition is for all stakeholders in a community (payers, providers and consumers) and then developed an extremely compelling solution (think analytics & automated quality reporting, tied to reimbursement, tied to consumer engagement) that has a lot of promise in a market where physicians’ pay will increasingly be based on outcomes and ability to meet pre-defined quality metrics
Therein lies arguably the biggest take-away from the mHealth Summit. As one individual put it, ‘There was a bit of whining about getting the government to force large corporations to form strategic partnerships with smaller organizations.” But what these start-ups really need is to simply focus on addressing the age old question: ‘What’s in it for me?’ These companies need to stop the whining and do their homework defining the value proposition for not just the consumer, or just the doctor, but think more broadly of the impact their solution may have on the delivery of care, and how each stakeholder may benefit. Unfortunately, as these conference clearly showed, the mHealth market is still heavy on hype and little on substance.
For a slightly different take, check out the post by VC firm Psilos’ Managing Partner Lisa Suennen’s. Well worth the read. And more recently, Charles Huang, formerly of Spark Capital, provides his own view of the mHealth Summit, including a a call that once and for all, we need to kill the term mHealth.
Also, the image used for this story was taken by Joel Selanikio, CEO & co-founder of DataDyne.org an organization focusing on mobile data collection, particularly, the App EpiSurveyor. Thanks Joel.
Today, GE and Microsoft announced a joint venture (JV) that will lead to the formation of a new company (NewCo) targeting the clinical healthcare market sector. The NewCo will be located near Microsoft HQ in Redmond, WA, start with roughly 700 employees and combine the remaining Microsoft clinical products, Amalga UIS and the former Sentillion products Vergence and expreSSO with GE’s eHealth and Qualibria suite. NewCo’s new CEO will be GE’s Michael Simpson, who has been heading up the combined Qualibria-eHealth group since earlier this year after a re-org at GE. Along with this announcement, Microsoft’s Health Solutions Group (HSG) leader, Peter Neupert stated that he’ll be retiring.
Combine the above announcement with Microsoft’s long anticipated sale of Amalga HIS, which went to Orion Health in October, and you are left with Microsoft completely pulling out of the clinical market. Sure, they’ll claim to be still in healthcare by directly selling their horizontal products (e.g., SharePoint, MS Office, various server products, etc.) into this sector and having a stake in this JV, but it is also exceedingly clear that Microsoft will no longer have any direct involvement in this market, that will be left to GE. That being said, Microsoft did state that they’ll hang onto HealthVault, but even here, that is more likely a by-product of no one wanting to take on HealthVault rather than Microsoft’s strong desire to continue to try and build a viable, revenue generating entity out of it. Do not be too surprised if, in a year’s time, HealthVault falls to the wayside much like Google Health did this year.
During our briefing call with Microsoft and GE we learned the following:
Core to NewCo’s objectives is to leverage the joint assets of Microsoft and GE to build out an entirely new platform that will focus on four key areas to begin with:
These four target areas are nothing new or inspirational as just about every vendor we talk to has some program in place or under development to address these four areas as well. The product roadmap does not have much hitting the market until 2014.
Financial terms were not disclosed but our guess is that Microsoft contributed IP and the development team behind these products. In return, they will receive some sort of royalty stake in future sales. GE will lead the new organization, contribute its Qualibria/eHealth IP and GE sales and marketing will take the product(s) to market. Thus, most sales and marketing folks and other support staff in Microsoft’s former Health Solutions Group are being shown the door, which is unfortunate as we head into the holidays.
A couple of things come across as a bit ironic. First, Microsoft executives time and again stated that they knew what they were getting into when they entered this vertical and that it would take patience to build a viable presence. So much for patience. Second, Microsoft sold off the Amalga HIS product as many a potential HIT partner was wary of partnering with Microsoft as long as Microsoft had under ownership an EHR. Now what does Microsoft do, it joins in partnership with a struggling HIT vendor in the acute care market. Will any of the other major or even second tier HIT vendors partner up with the GE/MSFT NewCo – don’t bet on it.
The announcement also raises more than a few questions such as:
What becomes of Microsoft’s existing HIE contracts, particularly the one they pulled all the stops out to win, the Chicago HIE which is now under development?
What becomes of Microsoft’s recently announced relationship with Orion Health? Will Orion now be partnering with NewCo, which is essentially GE? GE, with its own HIE solutions targeting enterprise accounts, is a direct competitor to Orion.
What becomes of HealthVault Community Connect, which combined Amalga with HealthVault and SharePoint? Is this now a dead product or will NewCo simply use the Centricity patient portal?
As you can probably tell by the tenor of this piece, we’re not a big fan of this announcement and are disappointed that Microsoft has decided to fold-up its tent and retreat. Unlike the legacy HIT vendors in this market, Microsoft could lay the claim to some neutrality and potentially build-out an Amalga-based ecosystem platform. But business is often not kind to those that have an altruistic bent and in this case Microsoft simply made a clear-cut business decision to unleash an asset that was not meeting internal metrics despite what some believe may have been an investment in excess of $1B in the last 5 years to build-out HSG.
Once again, another company with grandiose plans to change healthcare has quietly walked away leaving this market to the incumbent HIT vendors. We also do not see strong prospects for the future build-out of a robust ecosystem of partners on the combined Amalga-Qualibria platform that NewCo proposes as there are too many competitive issues that just get in the way. We could be wrong on this one, but our guess is that NewCo is likely to struggle as much as Microsoft has in the past for relevance in this fractious HIT market.
Sean Nolan, chief architect for Microsoft HealthVault, provides his own view on this JV announcement. While his view differs from ours on the implications and future of this JV and HealthVault, one thing we do hope that Sean proves us wrong on, is the future success of HealthVault. We would love nothing more than to see it succeed but at this juncture, we remain pessimistic.
While it would be much better to give thanks prior to our (the US’s) big Thanksgiving holiday, sometimes things just get in the way as has been the case this fall. In fact, many things have gotten in the way – all good things, very good things, but gotten in the way nonetheless leaving you dear reader, far less to actually read from Chilmark Research. Truly wish that this was not the case , but alas, as a small but growing analyst firm, we are seeing our own challenges in scaling up Chilmark Research to meet demand. And yes, we are seriously looking into revamping some of our own internal processes to insure that we continue to deliver timely, relevant and cogent posts on HIT market trends.
Which brings us to our first pause to give thanks.
This fall has seen an explosion of activity for us, activity that has us juggling so many balls and somehow managing to keep them all in the air. That explosion of activity has come in the form of numerous client engagements that has provided Chilmark Research with an opportunity to further delve deeper into a number of healthcare sub-sectors including:
mHealth adoption of patient-provider engagement Apps. A larger report for the general market will be released in February.
Concierge Care: market drivers, key players and future forecast.
Aging-in-Place telehealth and remote sensing market opportunity assessment.
Strategy workshops with several clients helping them map out their HIT strategy.
Deep dive research on current and future state of imaging exchange to promote collaborative care processes, which has also resulted in our first time trip to RSNA.
For all of these clients and those we may have the opportunity to serve in the future, we wish to give thanks for these opportunities always teach us something new. At Chilmark Research we have an insatiable appetite for learning.
We also wish to give thanks to you, our readership for first inspiring us to write these posts through your comments, your inputs, your private emails to us. When first starting Chilmark Research, these posts were used for marketing, to build credibility in a market we knew little about. The process of writing these posts built readership, but more importantly, it forced us to do good research. You can’t build credibility with lame posts that are no more than a rehash of some press release or fail to take to task questionable moves by policy makers or vendors.
But now writing these posts is not so much about marketing for Chilmark Research. From those humble beginnings several years ago, we have built a substantial readership that includes quite a few extremely senior and influential HIT market movers and shakers. Also, based on the volume of inquiries we now receive for future engagements, it appears that Chilmark Research has indeed established a reputable brand in the HIT market. Therefore, we want our posts to be seen more as our way of contributing to the discussion, a discussion that will help others better adopt, deploy and use HIT to not only deliver better care, but to create a health system that is more responsive to and inclusive of the needs of patients and their loved ones.
Lastly, we wish to thank all of those who have helped us along the way. From the numerous clients who early on had faith in Chilmark Research and hired us on to provide specific research services to the countless educational mentors in the healthcare market who have taken us under their wing providing us sage advice along the way on the structure of what appears to be is a convoluted market. There are far too many to list here but they know who they are. Thank you once again for all of your assistance along this journey, we would have never gotten this far without you.
Acquisition fever has set in and they’re dropping like flies, independent HIE vendors that is. Earlier today, Siemens announced its intent to acquire enterprise HIE vendor MobileMD. So in little over a year we have seen IBM snag Initiate, Axolotl fall into the hands of Ingenix/United Health Group (Ingenix is now known as OptumInsight), Medicity tie the knot with Aetna, Harris pick-up Dept of Defense clinician portal darling Carefx and Wellogic, a damsel in distress, being rescued by Alere. Elsevier also announce an intent to acquire dbMotion for a whooping $310M, but nothing came of that other than a substantiation of the rumor that dbMotion was being shopped.
That does not leave many small, independent HIE vendors that have some traction left in the market. Following is our list of such vendors and what might become of them:
4medica: A relative new comer to the HIE market, 4medica will be profiled for the first time in the upcoming HIE Market Trends Report which is scheduled for release in early 2012. 4medica is quite strong on lab information exchange. Future: 4medica still remains under the radar screen as it completes its platform to truly serve all HIE needs. Once that process is complete, the company is likely to gain increasing attention and will be acquired in 18-14 months.
Care Evolution: Privately owned and self-funded, founder has every intent to stay independent. As he has told us on more than one occasion, I’ve already made plenty of money and this is not about cashing out to the highest bidder. Future: Everyone has a price but this company may be one of the last to fall into the arms of another.
Certified Data Systems: Appliance (think small router with embedded HIE functionality) HIE vendor that has close, yet non-exclusive partnership with Cerner. Would not be surprised if they struck a similar deal with Epic as Epic struggles to connect to EHRs outside its system. Future: Fairly new to the HIE market but gaining traction. Will stay independent for next 12-18 months, after that, anyone’s guess.
dbMotion: One company already made a bid, but pulled back, thus pretty clear this company will be acquired, question is how much and we suspect it will be significantly less than what Elsevier was planning to pay. Future: If price is right, could be acquired at anytime.
HealthUnity: Small HIE vendor from the Pacific Northwest that made a big splash when with Microsoft (Amalga UIS) they won the big Chicago HIE contract. Future: With Microsoft cozying up close to Orion, HealthUnity will be looking hard for other partners and/or to be acquired. Will give them 12-18 months as an independent.
ICA: Another small HIE vendor that has had a few wins here and there but will come under increasing pressure from larger, better funded HIEs. Future: Likely to be acquired in next 6-12 months, maybe even earlier.
ICW: InterComponent Ware is a German HIT company and a sizable one at that with over 600 employees. To date, ICW has a very small presence in the US HIE market so an acquisition, if there were one, would have little impact. Future: Their foreign ownership, size and interests in several health related markets make them an unlikely candidate for acquisition.
InterSystems: Arms dealer to all, InterSystems Cache and Ensemble are widely used in the market and the company has built upon these core technologies to get into HIE market. Future: Fiercely independent and senior team is basically the same since founding this company will remain independent.
Kryptiq: Having signed a strong partnership deal with Surescripts, Kryptiq is unlikely to be interested in any acquisitions talks. Future: Will remain independent for time being and if Surescripts’ Clinical Interoperability solution gains significant traction, Surescripts will likely acquire Kryptiq outright.
Orion Health: New Zealand-based, privately owned with good prospects in markets beyond America’s shores, this company will likely want to stay independent (future IPO) unless of course a very large software company (think IBM, Microsoft, Oracle etc.) gives them an offer they can’t refuse. Future: Will stay independent.
Getting back to the Siemens/MobileMD deal…
While we have not had an opportunity to talk with either Siemens or MobileMD (will provide follow-on update once we do) here are some quick take-aways:
Siemens has chosen to buy. This is unlike other EHR vendors who have either built their own HIE solution (athenahealth, eClinicalWorks, Epic, NextGen) or have partnered with others (Allscripts, Cerner, GE).
Existing partner doesn’t cut it. Siemens has an existing partnership with NextGen for ambulatory but NextGen’s HIE is a closed system. This prevented Siemens from being able to leverage this partnership to serve their client needs, which most often includes a multitude of EHRs in the ambulatory sector to interface with.
Lacked sufficient internal resources. By buying into the market, Siemens has signalled that it does not have the development resources to respond quickly enough to customer demand (not too surprising, Siemens has been struggling in the North American market for sometime). This also signals that they could not find the right partner outside of their NextGen relationship, which is a tad puzzling as we are quite sure they paid a premium for MobileMD.
Paid a premium. We estimated MobileMD sales in 2010 just shy of $8M in our 2011 HIE Market Report. HIE vendors are selling at a premium, even second tier ones such as MobileMD. Assuming industry average growth in 2011 (we peg it at 30%) that would give MobileMD sales of ~$10.5M for 2011. We put the final strike price for MobileMD at $95-110M.
Existing MobileMD customers relived. Unlike the acquisitions of Axolotl and Medicity, which both fell into the hands of payers, MobileMD is going to a fellow HIT vendor which must assuage the fears of more than a few MobileMD customers and prospects. Siemens intends to keep MobileMD whole, bringing on-board MobileMD’s president and founder, again contributing to continuity.
ADDENDUM: Please excuse our lack of posting on industry trends in a more frequent manner. Like many in the healthcare sector, Chilmark Research is struggling to keep up with demand and recruit top-notch resources. We seem to have hit our stride in this market, are receiving countless engagement inquiries and engaging in most of them. All good problems to have, but you dear reader are the one who ultimately suffers from our lack of posts. Thank you for your patience to date and know that we are doing our best to keep you informed with some of the best research and analysis of this critically important and meaningful market.