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IBM Strengthens Healthcare Play, Picks up Initiate

February 3, 2010 by John

This morning, IBM announced that it will acquire leading healthcare Master Data Management (MDM) vendor, Initiate for an undisclosed sum.  The healthcare IT (HIT) sector is white hot right now so it is likely IBM paid a pretty penny for Initiate, the clear healthcare market leader in Master Patient Index (MPI) technology.  Combining Initiate sales for 2009 at around $90-95M, a hot sector (say 3.5-4x revenue evaluation)  and one concludes that IBM put down nearly $400M for this healthcare darling.  This acquisition confirms one of our 2010 predictions – a significant increase in HIT acquisitions, including the entry (or increased presence, as in this case) of large IT vendors.

So What Did IBM Get?

With tens of billions of ARRA stimulus funding being poured into the healthcare sector under the HITECH Act, IBM has picked up one of the real jewels in the industry who is ideally positioned to capitalize on a significant portion of that federal largess.

As we have written previously, core to HITECH legislation is that funding be used to promote “information exchange for care coordination.” Such coordination of care hinges on a clinician’s ability to pull up the right records, for the right patient, at the right time. Tapping such patient information tucked within an EHR, an HIE, a public health database, etc. at the click of a mouse is done via MPI, but this is no trivial task. Most software vendors offer an MPI solution within their product based on deterministic algorithms.  But these algorithms, that rely on such things as name, address, maybe a social security number, are often not robust enough for large data sets.  More advanced, albeit more complex, MPI solutions rely on probabilistic algorithms, which is Initiate’s core competency.

Initiate currently serves some 2,400 healthcare facilities and lays claim to being used at 40 or so health information exchanges (HIEs).  Currently, Chilmark Research is conducting a study on the HIE market (hope to have draft ready by HIMSS) and in our discussions with many in this sector, Initiate is seen as the clear market leader and partner to provide HIE clients with an MPI that will meet their complex information sharing needs.

In somewhat of a surprising move, Initiate jumped directly into the HIE market by acquiring the small HIE start-up, Accenx in October 2009.  It will be of some interest to see how aggressively IBM leverages both Initiate and the Accenx solution going forward.  Our bet is that IBM will partner for RHIOs (e.g. Axolotl, Carefx, Medicity, etc.) but go directly after the private HIEs within large Integrated Delivery Networks (IDNs) competing against the likes of large EMR companies Cerner and Epic as well as HIE pure plays Medicity, RelayHealth, etc.

Final Assessment:

Excellent move by IBM and an acquisition that they will be able to leverage in other markets such as their significant presence in supply chain management.

Installing Initiate requires a significant amount of services, IBM will be able to capitalize upon this as well.  Also, IBM has a not so insignificant hardware (large database servers) and software businesses  that can be combined with Initiate to provide healthcare with a larger, more complete solutions suite.

This acquisition will put increasing pressure on Oracle to make a bigger move in the healthcare sector.  (Note that Sun Microsystems, a recent Oracle acquisition, does have an MPI – being used in NHIN’s CONNECT platform – but reports from the field do not rate this solution highly).

Acquisition also puts some pressure on Microsoft’s Health Solutions Group, who yesterday closed on their acquisition of Sentillion.  Microsoft is making a modest play in the HIE market with Amalga UIS, Sentillion will also play a role here, but there is, at least to our knowledge, no MPI solution within Microsoft’s portfolio that can compete with Initiate. How Microsoft responds will be interesting to follow.

There is some danger, however, that Initiate may languish under the IBM umbrella becoming buried within a multitude of applications that IBM currently offers.  Hopefully, IBM recognizes the jewel they have acquired and will not let this market darling succumb to internal forces that may wish to simply drop Initiate into the large IBM application hopper.

For another perspective, Ray Wang of Software Insiders has a good analysis of this acquisition in the context of the MDM market space.

Posted in EHR, HIE, HIT, Microsoft | Tagged , , , , , | 4 Comments »

iPHR Market Report Executive Summary Now Up at Scribd

February 1, 2010 by John

Chilmark Research has just released the Executive Summary of its iPHR Market Report to the general public via the open publishing website, Scribd.

Maybe this was an act of generosity in honor of the shortest month of the year.

Maybe this is just to further get the word out on Chilmark Research in advance of the big industry confab HIMSS, which begins one month to the day from today’s date.

Or maybe this is just in response to the upcoming eBook wars between Amazon and Apple.

Then again, maybe it was just time to allow the broader healthcare community to take advantage of this report in light of future “meaningful use” requirements where those seeking federal stimulus dollars for the adoption and use of certified EHRs will need to provide their customers with a PHR by 2013 (at least that is what the draft rules are calling for).

So with that, please have at it and if you have any follow-on comments regarding the content of this Executive Summary (you even will get some idea as to the entire report’s content via the Table of Contents) please let us know (leave them at the bottom of this post) as we will be updating the report in 2010 with a particular emphasis on meaningful use requirements and provider-centric PHRs.

Posted in Dossia, EHR, Google Health, HealthVault, PHR, consumer health | Tagged , , | 4 Comments »

Siemens Brings HealthVault to Europe

January 28, 2010 by John

Today, Siemens announced that it has struck a deal with Microsoft to create a German instance of the HealthVault platform to serve the citizens of Germany.  In a deal similar to the one that Microsoft struck with Canadian telecom, Telus, Siemens IT Solutions and Services (SIS) will re-purpose the base HealthVault platform to meet Germany’s legal framework for Personal Health Information (PHI) and seek German partners to create a rich ecosystem of data providers (insurers, providers) and apps/services to serve this market.

After a joint briefing with Microsoft and Siemens as well as interviews with three German software firms, SAP (one of the world’s largest enterprise software companies), ICW (healthcare IT infrastructure & PHR solutions) and careon (case/disease mgmt & PHR solutions), here is the scoop:

The Skinny:

Siemens SIS is 35,000 employees strong operating in 40 countries.  Siemens SIS serves a wide range of industries, from manufacturing, to finance and of course healthcare, which is one of its smaller markets, albeit showing strong growth.  In addition to a deep presence in Germany, Siemens SIS provides services to number of other countries’ national healthcare programs – leading one to conclude that Germany may be just the first foray/country that this partnership will seek to serve.

This is an exclusive license between Microsoft and Siemens to serve the German market and both companies stated that this is a very long-term contract as it will takes years to develop, deploy and gain traction.  Terms of agreement were not disclosed, but both companies will share in revenue generated.

Target market/business model is to sell the HealthVault service to potential sponsors that have a desire to improve care and disease management.  Likely candidates include payers and employers.  Hospitals are also a potential target market.

Service will go live in second half of 2010 and include the entire HealthVault platform, including Connection Center for biometric devices.  Existing HealthVault ecosystem partners with solutions pertinent to the German market will be included and Siemens is currently in discussions with many eHealth companies in Germany to on-board them as well upon formal launch of the platform later this year.

Agreement does not include Siemens’ healthcare software business (e.g. Soarian) or medical device (e.g., imaging systems).  This may come later, but nothing appears to be on the roadmap today.

This deal/opportunity is being driven by many of the same market changes occurring elsewhere (e.g., aging population, rising healthcare costs, etc.), and the migration from provider-centric care to consumer-centric care.

Impressions, Prospects, Challenges:

The German companies interviewed thought that Microsoft made a savvy move in partnering with Siemens as Siemens is a well-known and trusted brand in the German market, whereas they reported that there is some public distrust of the Microsoft.  Siemens, with its extensive experience in the German healthcare market, one interviewee put Siemens’ HIT market share at 33% of German hospital market, is also well-versed in the strict and highly regulated PHI privacy laws, which will assist in the creation of a secure, regulatory compliant platform to serve this market.  Siemens also has a reputation to uphold and will be quite cautious in insuring the privacy and security of citizens’ PHI.

The deal also comes at a time of much turmoil in the German healthcare sector, particularly at the highest levels of government with the recent appointment of a new Health Minister, Philipp Rosler, who in one of his first acts, placed a moratorium on the German roll-out of eHealth cards and the entire “Connector” program upon which these healthcards were to be based.  Siemens, a one-time participant in the Connector program announced it would withdraw from the Connector program in September 2009 (note: Siemens started talking to Microsoft one month prior to pulling out of Connector – coincidence? Unlikely.).

According to those interviewed in Germany, the Connector program, despite enormous sums spent (estimates put it at ~$2.25B) was doomed from the start as it was “politically not doable” due to its top-down strategy (sounds like the US’s own NHIN), inability to move rapidly in response to market changes and extreme reluctance of physicians to support open transparency and exchange of patient records across Connector.  Similar to the US and the challenges RHIOs face, German physicians fear data liquidity of PHI may lead to loss of control of the relationship (he/she who owns the data, owns the relationship) and subsequently, potential loss of business.  Physicians reportedly also did not want to be burdened with the cost of card readers and on-ramping to Connector

In Germany, all citizens have a right to obtain copies of their medical records and most payers provide incentives to physicians to encourage them to provide records to their patients.  In practice, however, the German software companies Chilmark interviewed universally stated that most consumers do not bother asking for their records and due to the aforementioned issues/concerns regarding transparency, few physicians encourage it.  Therefore, Germany also shares with the US a PHR market today that is very immature and requiring a significant amount of consumer education and physician adoption/engagement.  Siemens has a long road ahead.

Another challenge is Siemens’ lackluster track record in the consumer market.  Sure, they have made forays into consumer goods (e.g., phones) but by and large, this is a B2B company, not a B2C.  Granted, the intent of Siemens is to “sell” the HealthVault platform and its services to payers, employers and providers (a B2B model), but Siemens will need to think like a consumer to insure that this HealthVault instance serves the need(s) of the average German or risk failure.

Microsoft may also find Siemens difficult to work with as this is a very large, complex organization with a myriad of interests in countless markets.  For example, SAP and Siemens spent tens of millions of Euros on a failed effort to more closely integrate the Siemens Soarian platform to SAP’s ERP platform via SAP’s Web Services platform, NetWeaver.  Will Microsoft run into a similar problem?  There is always that chance, though in this case less likely as this is not about tying two disparate systems and data architectures together, but more about providing an open platform (data repository) for a citizen’s PHI.  In Germany, HL7, V2.x is widely used and will likely be the standard by which clinical data will be imported into HealthVault.

While SAP does not have a direct play in the consumer eHealth market, both careon and ICW do.  careon and ICW welcome the announcement for they see it bringing much greater visibility to the market for consumer control of PHI and the tools to do such.  In the case of ICW, which has had its own intentions to be the “platform of choice” to serve the German market (they have an extensive capability to directly import biometric data from numerous devices – directly competing with HealthVault’s Connection Center), they certainly see this as a competitive threat, but claim that much like the car rental market, consumers/businesses like having a choice and they intend to be that second option.  For careon, this move by Siemens is warmly welcomed and they hope to become one of the leading ecosystem partners.  Currently, careon, through its solution suite, provides case management services for some 1.2M German citizens.  careon sees many opportunities to further leverage and extend their service offerings through a platform such as HealthVault.

The Wrap:

Microsoft is clearly the leader in the Personal Health Platform (PHP) market with Google Health fading into the distance. (Note: hard to compare HealthVault to Dossia as they each have very distinctive and not readily comparable operating models).

That is not to say that Microsoft is handsomely and profitably capitalizing on these initiatives.  The market in the US has been extremely slow to take off, their Canadian partner Telus has yet to formally launch the Canadian instance of HealthVault, Telus Health Space and as outlined above, the roll-out in Germany will have its share of challenges.  Gaining traction to support such initiatives requires patient money and it appears that to date, the head honchos at Microsoft have been willing to give Microsoft’s Health Solutions Group (HSG) a fairly long leash and the necessary resources to build-out this business.

But to be truly successful, Microsoft and its partners will need to look more closely at what consumers actually wish to do with their PHI, how they wish to interact with the healthcare system of their respective country and what are the dominant, valued services consumers seek. If one looks to success stories like Kaiser-Permanente’s MyChart, US consumers want transactional services (see their labs, make appointments, have eConsults, etc.) and today, none of these are readily supported on any of these PHPs.  What other transactional services might consumers use? We’ll leave that to Microsoft and its partners to figure out as each country will have its own nuances.

And let us not forget the sponsors (payers, employers & providers) who may offer the HealthVault service to their respective constiuents.  These are the target markets for Siemens and Siemens’ ability to accurately price the service and demonstrate value to a sponsor is far from a done deal.  Proof points will be necessary and as we all know, proof points are extremely hard to come by in a new market/service offering requiring more an act of faith on the part of a sponsor than clear demonstrable metrics of return on investment.  In tight economic times such as these where companies are risk adverse, this is a bold leap by Siemens and Chilmark will watch this roll-out carefully.

Posted in HealthVault, Microsoft, PHP, PHR | Tagged , , , | 3 Comments »

The PHR Risk: Revolution Health Axes PHR

January 27, 2010 by John

Revolution Health is closing down its Personal Health Record (PHR) service at the end of February.  Below is the email sent to those with a Revolution Health PHR account.

Thank you for being a loyal user of the Revolution Health Personal Health Record. Unfortunately we will be discontinuing this service as of the end of February 2010 and removing all records, information, and data from the Revolution Health Web site.

So that you don’t lose the information you’ve entered into the system, we strongly suggest that you download your personal records as a PDF to print and save for future reference. To do this, simply follow these instructions:

1.       Log in to your Personal Health Record.

2.       From any page of your record, click on the “printable version” link on the top right corner of any page. When you see a pop-up box asking you to “Select the following sections to include in your print out,” simply make sure that the sections you want to print and save are checked and then click the “Submit” button.

3.       Once the PDF is created (this only takes a moment), you can print directly from it and/or save it to your computer. To print the PDF, click on the printer icon at the top left of the page. To save it, click on the disk icon to the right of the printer icon.

If you encounter a problem printing or saving your records, please e-mail our customer service department at CustomerCare@revolutionhealth.com for assistance. Even after the Personal Health Record is no longer available, Revolution Health and our partner sites will continue to offer you the same great health information and community pages as always. We hope you continue to visit Revolution Health often to take advantage of our offerings.

Thank you,
The Revolution Health Team

Revolution Health, the one time Internet consumer healthcare upstart darling that founder Steve Case (AOL fame) stated would change healthcare as we know it, flamed out early after a series of strategic missteps and ultimately was sold to the online health publisher, Everyday Health, who is now preparing to do an IPO in 2010.

It’s not like this is a great loss to the nascent PHR industry (Revolution Health actually had a pretty p*ss-poor PHR) nor a signal that PHRs are dead, though Chilmark Research has argued that no one is interested in a digital file cabinet for their health records, which most PHRs are today.  Rather, the PHR market is extremely difficult to gain traction in and all but impossible if a PHR vendor is pursuing a direct to consumer (B2C) marketing strategy.  Revolution Health was attempting such and failed.  PassportMD was pursuing such and was recently acquired.  Countless other PHRs in the market pursuing such a B2C strategy are simply the walking dead – zombies that still have a web presence but no activity (e.g., VitalChart).

What this announcement does say, however, is that one needs to be careful in their own assessment of a PHR for personal use or even if they are looking to sponsor a PHR for their members (payers), employees (employers), or customers/patients (providers).  Not all PHRs are created equal, not all will survive.  Look to those that have a broad customer base, steer clear of those that are solely focused on the consumer.

What is truly odd in this announcement by Revolution Health is that rather than offering their customers the option to directly export their data to another service, be it Google Health, HealthVault, WebMD or one of the PHR players in the market, they are taking the most expeditious path out the door.  Not exactly consumer friendly.  Also, Revolution Health states it will remove all records from the website, but says nothing about what will happen with this highly personal data thereafter.  Will it still be on their servers?  Lastly, why is it that when one goes to the Revolution Health website, you can still register to create your own PHR account?

Now how screwed up is that?!

ADDENDUM:

Ted Eytan, of Kaiser-Permanente, gives his own spin on the story arguing that it is not that consumers do not want a PHR, its just that they seek a solution that actually helps them manage their health and in KP’s case, their interaction with this healthcare provider.  Impressive statistics at KP, truly a leader in this market that virtually all in this market can learn from.

Posted in Google Health, HealthVault, PHR, consumer health | Tagged , , | 4 Comments »

Personal Health Systems: A View from Across the Pond

January 25, 2010 by John

The European Union (EU) is struggling with many of the same healthcare issues as the US, aging population, ever increasing costs of care and the need to move to new modalities of care.  This is one of the key take-aways from a recent EU-sponsored report: Reconstructing the Whole: Present and Future of Personal Health Systems.  This report looks at the present state of Personal Health Systems (PHS), assesses gaps (technology, process & culture) and lays out what is required to meet the “promise of PHS” by the year 2020.

The report takes a very broad brush to what is PHS including IT, sensors, diagnostics, and drug development (personalized).  This is a big report at some 240pgs and unfortunately is one of those reports that is all too big and all too academic to be useful to the average healthcare wonk.  But tucked within this future, sitting-on-the-bookshelf and collecting dust report are a couple of tidbits worth mentioning.

On pages 79-86 are a series of gap analysis tables (20 in all) addressing a wide range of areas associated with PHS.  Below is the Table addressing Patient Decision Aid Tools.

While the above gap analysis tables are instructive, they are not terribly “deep” and at times come across as superficial – thus would make good fodder for a “high-level” presentation to a less informed audience.

Arguably the best Table is found towards the end of the report titled: Six Domains of Implementation Gaps.

The table clearly lays out what are the future challenges to broader adoption and use of PHS.  The key take-away here is the surprising similarity between the US and its EU counterparts in the deployment and use of PHS, despite what are very different healthcare system models.  Which raises the question: Will such uber-players in the Personal Health Platforms (PHP) market, e.g., Dossia, Google Health and HealthVault create the systems and platforms required to support PHS data requirements?  HealthVault’s move into international markets, (Canada and Thailand) signal yes, but will providers, payers and ultimately consumers join in?

Still more questions then answers at this early juncture in the development of consumer-focused systems and platforms.  But there is a ray of hope in the global commonality of challenges faced that will lead to increasing attention and subsequently resources dedicated to bridging the gaps, addressing these challenges to create more effective and efficient care delivery models.

Posted in Dossia, Google Health, HealthVault, PHP, PHR, PHS, consumer health | Tagged , | 3 Comments »

Stunned but Smiling

January 21, 2010 by John

Found out yesterday that of some 500 industry analysts now on Twitter, I ranked 34th according to analysis done by the global PR firm, Edelman.  Wow!

As some of you know, nearly a year ago I started experimenting with the application/service Twitter and put a “Twitter Feed” on the site.  I approached the use of Twitter cautiously remembering when it first arrived on the scene in 2006 and thinking WTF, why would anyone except the most egotistical ever use Twitter to broadcast what they are doing at a particular moment in time?

Well, times change and so does one’s opinion.

I began using Twitter for two specific purposes, marketing and research.

On the marketing front, I found I could use Twitter to create a following of those interested in Chilmark Research’s reports, posts and musings on all things healthcare IT.  Today, nearly 1,750 people follow @john_chilmark.  Sure,it is not Bill Gates who just joined Twitter this week and now has over a quarter of a million followers, but for this analyst working a pretty selective niche in the IT market, I’m quite pleased with the results and will probably exceed 2,000 followers in the next month or so.

For research I found Twitter to be simply an amazing resource. Rather than RSS feeds that dominated my efforts to stay abreast of developments in the healthcare space, I now use those that I follow (around 440 others) to keep me informed on the latest trends in healthcare IT, technology (e.g., cloud computing), and policy. Those I follow basically act as my filter and tweeting only about those issues which are most relevant to them.  The trick here is to choose those you wish to follow wisely.

In the twitterverse, it is important to give as well as receive. Beyond announcing Chilmark’s latest post or research effort, an area that has been particularly fruitful for me to engage my followers is attendance at various events.  In the past I used to take copious notes and write a follow-up post on a given event.  I still do this but with less frequency and have instead migrated to using Twitter to give real-time, 140 character posts of the most critical things I am seeing, hearing and/or experiencing.

Lessons Learned:

Do not write off any technology completely: One never knows how a technology might evolve and ultimately prove useful in the future.  Twitter is one of Chilmark’s top research resources today.

Define your purpose: Twitter is messy.  If you do not go in with a clear objective of what you wish to accomplish in using this service you’ll flounder aimlessly and likely walk-away.

Choose who you follow carefully: When first joining, I began “following” many who were considered social media gurus.  Have come to the conclusion that many of these gurus are utter bores with far too many inane tweets. My rule of thumb: Do not follow someone who tweets one personal event like “buying coffee at airport Starbucks…” for every 20 tweets. Creates to much noise.

Be engaged and engaging: Engage whenever you can with others on key topics of interest to you (and your followers) sharing thoughts and ideas.  Be cogent in your tweets, share knowledge, contribute.

Posted in PHR | Tagged , , | 2 Comments »

Martha’s Mistakes

January 20, 2010 by John

Not one to comment on broader political issues but just can’t help myself today after awakening to the news that Kennedy’s Senate seat has gone to the Republican upstart Scott Brown.  Whatever happened to carrying on Kennedy’s legacy for healthcare reform, something Martha Coakley vowed to support and Brown vowed to defeat? Has Massachusetts really gone Red (or just a lighter shade of Blue)?

Reflecting on my own thoughts and vote for Martha, have come up with the following missteps of Martha’s that ultimately led to her losing what was considered a sure thing, Kennedy’s seat in Congress.

1) Assuming the cat is in the bag. Skating to an overwhelming victory in the Democratic primary, Martha naturally assumed that Kennedy’s seat was her’s for the taking.  Sure, the Republicans would put someone on their ticket, a sacrificial lamb, but a serious contender, no.  Surprise, surprise.  Yes, the Republicans put forward a relatively unknown State Senator from a small community, but this unknown Scott Brown proved to be an extremely engaging and aggressive politician.  By the time Martha’s political machine realized that they had a serious challenger on their hands, it was too late, his momentum too great.

2) Forgetting Tip O’Neill’s most famous quote, “all politics are local”: Martha’s stump speeches spoke often of carrying on the agenda for change that brought Obama to office.  That resonated well with the Democratic faithful (and Democratic leadership) but like the rest of the nation, Massachusetts voters are increasingly independent, siding with neither party, instead looking for a candidate that will be their voice in Washington fighting for their specific needs and concerns.  Martha’s “voice” was not her own, was not that of the Massachusetts electorate, but that of a political machine which is increasingly being viewed as detached from the current reality of most citizens in the nation, Massachusetts included.

3) Failure to engage and capture the imagination: What can I say, listening to Martha speak was about as exciting as watching spring thaw of a frozen New England pond.  As much as I can not stand the majority of Brown’s positions (against healthcare reform, still thinks climate change is not anthropomorphically induced, likes to use the terrorism scare tactics of the Bush era, etc.) I have to admit, he was an engaging and dynamic speaker.

This vote is not necessarily a vote against Obama and his policies, despite such pronunciations in numerous right of center publications.  No, this was a local election about local issues.  The candidate that won was the one who was most successful in taking the pulse of the local electorate, empathize with their concerns and reflect back to them that he understands and will do something about it.

Now it is Washington’s turn to get out of their stretch limos and connect to the local populace and begin addressing some of the very real issues and needs of the body politic or risk losing more than the passage of a Bill before Congress.

Posted in PHR | Tagged , , , | 2 Comments »

RHIO Failure: CalRHIO Goes Belly-up

January 18, 2010 by John

The much ballyhooed Health Information Exchange (HIE) in the state of California, CalRHIO, has raised the white flag, dismissing its troops and sending home its arms supplier (Medicity).  Despite its founding five years ago, support of some significant organizations (e.g., United Health Group, Cisco, HP, California Hospital Assoc., etc.) spending some $7M to date and launching a major roadshow in March last year that included the go live of 23 institutions in Orange County in October, CalRHIO did not get the support of California’s Health and Human Services (CHHS) to be the state designated entity for overseeing ARRA funding for state HIEs.

Based on an article in California Healthline, a number of other organizations had some serious concerns with CalRHIO, enough concerns to start their own organization, the California eHealth Collaborative (CAeHC).  What is surprising here is that one of those that called into question CalRHIO’s operating model was its former CEO Lori Hack, who is now a board member of the competing CAeHC.  Primary concerns/issues with CalRHIO included:

Besides the obvious hit the Medicity takes (they widely promoted this win) and the egg on the face of many proponents of the CalRHIO, probably the clearest message here is that the governance issue of HIEs is extremely political, especially when a boat-load of federal Stimulus dollars are at stake.  The CalRHIO fiasco is unlikely to be the last one we’ll hear of over the next 3-9 months.

Posted in HIE, policy | Tagged , | 1 Comment »

Top Ten Predictions for Healthcare IT in 2010

January 14, 2010 by John

Plenty of top ten predictions on any number of topics, but it is rare to find one focusing on healthcare IT, Chilmark Research’s bailiwick.  And while we may be just a little late in getting this out there onto the streets, it is mid-January after all, our quick search on the net did not turn up any other posts with such a finely tuned agenda so here goes…

1) HITECH Act Suffers Birthing Pains: Despite the hard work of many to create clear guidelines (meaningful use & certification of EHRs), roll-out extension centers, and establish Health Information Exchanges (HIEs), we have only just begun.  The devil is in the details (implementation/execution) and 2010 will be marked by a number of stumbles and most likely a significant amount of wasted tax dollars.

2) Hospitals and Large Practices Bite the Bullet, EMR Vendors Cheer, Small Practices Look on with Jaundiced Eye: With a clear signal from Washington on what will be required to get HITECH funding/reimbursement for EMR purchases/upgrades to meet meaningful use, hospitals and large practices will begin seriously evaluating and buying EMR solutions and ancillary solutions to meet those guidelines and capitalize on ARRA incentives (HIMSS will be hopping this year).  That’s the good news.  Bad news, most small practices, where estimates of 80% of all patient-physician interaction occur, will still be behind the eight-ball on EMR adoption and struggle to meet HHS-defined time-lines for reimbursement.

3) Consolidation will Accelerate: Large HIT vendors will acquire smaller firms to meet meaningful use guidelines (e.g. acquire PHR company to meet 2013 requirements) and move into adjacent downstream markets. Don’t be surprised if a large IT vendor from outside the industry makes a buy to move into this now lucrative market.

4) Regulatory Crackdown Increases: Not a tough prediction as the new administration has signaled that it will enforce laws on the books that the previous administration simply ignored.  With more stringent HIPAA guidelines now in play expect to see some significant fines such as the one levied against CVS for $2.25M in 2009.  IT security (software & services) will be another hot market in the healthcare sector in 2010.

5) Second Gen mHealth Apps Enter Market – Melding of Smartphones and Devices Remains Nascent: With literally thousands of mHealth apps now available, most of them crappy one dimensional apps, we will begin seeing more sophisticated mHealth apps enter the market.  These apps will also command a price, but their value will easily justify the purchase for many consumers.  In 2009 there was also a lot of buzz around the melding of med devices and smartphones, (remember the iPhone 3GS intro with J&J on stage demo’ing Lifescan). That buzz faded rapidly when FDA showed up to inquire about compliance.  FDA approval requirements/process (and aforementioned strengthening of enforcement by this administration) will limit introduction and thus proliferation of new innovative devices hinged to a smartphone.

6) CMS Still Twittles its Thumbs Regarding Remote Monitoring, Payers and Large IDNs Step-up: For some ungodly reason, CMS just can’t seem to get its mind around the concept of remote monitoring/telehealth and will not open its purse to reimburse for such services.  That leaves the elderly out of the equation, however, increasingly, large IDNs will adopt such care modalities to improve care of patients after discharge and capitalize on pay for performance incentives offered by payers.  A much small market will be services/systems that baby boomers will purchase to assist them in caring for their elderly parents.

7) Baby Boomers Struggle Caring for Their Parents – Seek Solutions: Over the last week, in casual conversation the topic of caring for elderly parents among my baby boomer peers has come up on several occasions.  This is quickly becoming a very big problem for many of us as we struggle to insure our parents are healthy, or at least being well taken care of, while we reside in the next city, state or maybe even country.  There are no easy ways that I or my peers (some of those I have spoken to are senior leaders in the HIT market) know of to address this issue. We are seeking solutions, we want system changes (e.g., proxy sign-offs, Social Security Admin releases, etc.) that will simplify our ability to care for our parents.

8.) HealthVault Continues to Put Distance Between Itself and Other Personal Health Platforms (PHP): While Dossia struggles to get its founding members to on-ramp to the Dossia platform (still only Wal-Mart today though have been told 2-3 others should go live in Q1), and Google messes around with Android and Chrome while virtually ignoring Google Health, Microsoft’s HealthVault continues to push ahead becoming the de facto PHP in the market much like Apple’s iPhone is the de facto smartphone today.

9) Telecom Companies Struggle to Define Their Role in the Healthcare Sector: Virtually all of the major telecom providers in the US have a healthcare strategy, but to date, they have little to show for it.  While we expect that they will become more vocal (i.e., more press releases) these PRs will be more show than substance and telecoms will continue to flounder in this market.

10) I will “Podium” at the Northeast Spring Classic Cycling Roadrace – Tour of Battenkill: This is a real stretch goal for me for two reasons: First, I have never raced this race before and reports are, its a tough one at 62 miles, mix of paved and dirt roads with some serious climbs. Second, it has been awhile since I’ve done some serious racing  – a lot of training ahead.  I do have one thing going for me though, I am a “climber” and this is a climber’s race.  Hmm, maybe this warrants a trip back out to San Diego for some good climbing workouts with my friend’s club, Slow Step.

Opps, looking at the title noticed I promised 10 HIT predictions, so that last one didn’t count.  Here’s te 10th, HIT prediction, drum roll please…

The Health Internet is a Stillbirth as Beltway Bandits Maintain Tight Control of the NHIN.

Posted in CMS, Dossia, EHR, EMR, Google Health, HIE, HIT, HealthVault, Microsoft, P4P, PHP, PHR, mHealth, policy, telehealth | 9 Comments »

Analysis: MediConnect Acquires PHR Vendor, PassportMD

January 12, 2010 by John

Yesterday, MediConnect announced that it had acquired Florida-based PHR vendor, PassportMD. The acquisition is a good move by MediConnect as it will allow them to extend beyond just collecting records on behalf of consumers (it offers such a service on Google Health), but now provide consumers with a solution to present such records in an easy to view and understand format within the framework of the PassportMD PHR. Terms of the deal were not disclosed and PassportMD operations will be moved to MediConnect’s headquarters in Utah.

Based on prior knowledge of PassportMD and my call with MediConnect’s CEO, Amy Anderson yesterday, following is Chilmark Research’s assessment of the acquisition.

Background:

PassportMD

PassportMD is a small PHR vendor founded by dermatologist Steven Hacker to primarily serve seniors.  When Chilmark Research conducted its study on the PHR market in late 2007/early 2008, PassportMD was predominantly a USB-based PHR targeted at seniors who traveled frequently, thus the “Passport” brand.  In mid-2008, PassportMD received investment funding and moved aggressively to build a web-based PHR and recruited Joan Lunden as its spokesperson. In late 2008, PassportMD was one of four PHR vendors selected to participate in the CMS trial that is now taking place in Utah and Arizona.

Targeting seniors, PassportMD is designed to be very easy to use with a fairly straight-forward, intuitive interface.  Among its features is a “mouse-over” capability that provides more detailed information on various aspects of one’s health record, for example medications or conditions, to set-up phone call-based medication reminders and the ability to selectively tag and share aspects of one’s PHR with their physician.   The company also offered a “Concierge Service” whereby it would act as a proxy for the consumer to gather their personal health information (PHI) from various sources for a small fee to populate the PHR.

PassportMD used a direct-to-consumer marketing model, an extremely challenging approach that no PHR to date has been successful at pursuing.  Despite the assistance of a well-known spokesperson such as Joan Lunden, establishing a partnership with Microsoft’s HealthVault, offering a basic PHR for free and being one of the four selected for the CMS demo, PassportMD today has struggled to gain subscribers today having fewer than 5,000 active users.

MediConnect

MediConnect was founded in 1996 and has grown rapidly to nearly 1,000 employees today structured around a direct, business-to-business service model.  MediConnect is not so much a software firm, as a services firm providing medical record retrieval services for insurers and lawyers.  This explains the high employee count as retrieving medical records in an industry that has a dearth of content in digital format(s) is not a trivial task.  Once the medical records are retrieved, MediConnect can scan them and if desired, perform data extraction and medical coding services for its clients (see figure).  CEO Amy Anderson stated during our call yesterday that MediConnect now has over 6M records stored in a secure encrypted format on its servers.

Anderson stated that MediConnect had been considering an expansion of its services into the consumer market, including the development of their own PHR.  Not long after PassportMD approached MediConnect about its ability to facilitate PassportMD’s concierge service, MediConnect decided that rather then build, simply buy a PHR solution, PassportMD.

MediConnect will continue to offer the PassportMD PHR for free and will even populate the PHR with any consumers’ PHI that they may have stored on their servers, upon a consumer’s request.  MediConnect’s business model for PassportMD will be similar to their existing model for business clients, collecting a small fee for retrieval of records on behalf of a consumer while offering the base PassportMD PHR for free.  Anderson stated that the consumer’s PHI in PassportMD would be fully portable allowing a consumer to download them to their hard-drive, print them out, send as a PDF or export in either CCR or CCD clinical formats.  (Note: MediConnect is already on Google Health and PassportMD is on HealthVault, thus the combined solution will be available on either of these personal health platforms (PHP)).

Analysis:

Based on personal experience, there is certainly a need to assist consumers in collecting their medical records, which may be scattered across numerous institutions and doctors’ offices.  But a need is not necessarily a market and MediConnect will face some serious challenges ahead for PassportMD for the following reasons:

The direct to consumer go to market strategy for PHRs is an absolute dead-end.  Today’s consumers are still not at a point of education/knowledge as to the value of owning and controlling their PHI.  It is highly unlikely that MediConnect will have success where so many before it have failed.

MediConnect may offer a solution suite to health insurers helping insurers provide their members with a PHR populated with claims data.  With the notable exceptions of Aetna and United Health, the insurance market has done a terrible job in offering PHRs and supporting portability for their members.  Couple that with consumer distrust of insurers and it is pretty easy to see why insurer sponsored PHRs are rarely used and may even be on the decline.  One insurance executive I spoke to discontinued their relationship with WebMD replacing this expense with allowing members to export their records to one of the major PHPs, which of course was free for this insurer to enable.  MediConnect’s opportunity here is limited.

The employer market for PHRs is one area that MediConnect may find some opportunities but this will take some additional investment on their part to develop a presence in this market among the brokers that serve large self-insured employers who are the primary market for such services.  Of course, MediConnect may also look to the employer-based PHP Dossia for some traction in the employer market if they have the patience as Dossia has been moving quite slowly since its founding.

Thankfully, it appears that Mediconnect already has a robust business in the existing services that it provides business clients and can afford to be patient letting the market develop for PHRs and subsequently PassportMD as there are no easy opportunities/quick wins today in the PHR market outside of the provider space.

Posted in CCD, CCR, Dossia, Google Health, HealthVault, PHP, PHR, consumer health | Tagged , , | 4 Comments »

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