Weekly News Recap

  • Allscripts announces Q1 results that beat earnings expectations but fell short on revenue
  • Meditech’s Q1 saw reduced revenue, operating income, and net cash from operations although unrealized security gains pushing earnings dramatically higher
  • Capsule Technologies acquires Bernoulli Health
  • Cerner filings indicate that activist investor Starboard Value made its run on the company’s board two days after Brent Shafer announced his new “operating model”
  • A new KLAS report on hospital market share finds that Epic beat Cerner handily in new hospital gains excluding Cerner’s one-time VA deal, with Cerner losing 65 Millennium hospitals vs. Epic losing one
  • HHS announces that it will use its discretion to reduce maximum annual HIPAA fines based on level of culpability

Best Reader Comments

Life in rural America is in a serious long-term decline and has been for decades. De-industrialization has just piled on, especially in smaller towns in the Midwest, Northeast, and the South to a lesser degree especially since 2000. The only area that has avoided this trend is smaller (and relatively newer towns) in the SW and West which never had much, if any, of a manufacturing base to begin with. They have been able to pivot more easily to the current economic model especially if they attract tourists year-round and/or have a higher education institution which has remained competitive. If smaller towns are declining economically and demographically, there is going to be less of a need for community hospitals especially those with aging physical plants which are costly to remain and run. The trend is going to be ASC/outpatient wherever possible and more micro-hospitals/hospital-at-home. There will still be a need for facilities to treat emergency patients but that is going to be a much more complex issue from a political and economic standpoint. Coming back full circle, there is still going to be a market for community hospital IT software but it will be one that is in long-term decline and largely a maintenance market that lives of the 16-20% annual software and maintenance feeds vendors charge (more if they host it). What is likely going to emerge is software to support new models of care and much smaller facilities. It just won’t have the $$$ that an enterprise community hospital system has to it. (Lazlo Hollyfeld)

Being an IT person and a long time athlete who has used FitBits, heart rate monitors, and training logs, I figure that the right way to handle the data stream from personal monitoring devices, logs, etc. is for vendors to develop an integrated approach that uses certified devices, periodically calibrated if necessary, feeding data streams to repositories. For example, this could include a bundle of devices for an elderly person with CHF. These might include a few things. One would be a scale, expecting twice-daily readings to check for rapid weight gain due to non-compliance with diuretic. Another would be a smart pill dispenser to track medication adherence … Between the data stream and the clinician would be carefully tuned algorithms that would decide when to alert a licensed provider like an advice nurse in a call center … Once these packages are matured and the value in preventing admissions / readmissions has been demonstrated, I would envision PCPs ‘prescribing’ the bundles, with all of the associated intelligence and process, to their patients. Kaiser Permanente was doing some futures work on this kind of thing a couple of years ago. (Dr. J Fanboy)

I agree 100% with Vaporware and that Cerner has made a deal with the devil with the DoD contract. That is just an opinion based on my experiences. However what isn’t an opinion is that Cerner is a publicly traded company that has to answer to forces that Meditech and Epic do not. It is not an opinion that Cerner has caved to the pressure of profit-seeking investors and it will fundamentally impact the way the manage and pay their talent as well as their development and support expenditures. Do you honestly think that having to balance a huge contract with a notoriously difficult customer in the most open and public way, while at the same time trying to please shareholders demanding more profit now, is conducive to being a responsible steward for your private and community hospital partners? (You don’t need a weatherman to know …)

Whichever vendor you attach to the feed trough basically becomes the de facto in-house IT / development shop for the federal government. The in-house VistA talent that was swept out was expensive, but at least they made an EHR that worked when you turned it on. (Vaporware?)

Churn rate is of course a concern for all vendors not named Epic, however their entry in to selling directly in to hospitals they used to flat out say no to is indicative they know that the acquisition advantage they have is running out of targets. The cat is out of the bag that selling off to the large chain doesn’t cut costs for the community and it doesn’t improve services. The hospitals that have managed their money and capital commitments have been able to resist having to sell of to rid themselves of debt. Many communities take great pride in having their own independent hospital. In short the assumption that every community hospital will end up being owned by Epic or Cerner running systems isn’t set in stone. (Smartfood99)

I also am on board with you as it pertains to Cerner’s terrible attempts at RCM. I mean really, how hard is it to build a reliable financial system? That is what many of us though when Cerner bought Siemens, that Soarian financials would be the go-forward strategy. But instead, for the first three years post merger, Cerner actually still sold Millennium and Soarian Financials and customers were confused and pissed at the same time: why the option? With Cerner’s cash on hand and number of employees, why the hell can they not figure this out? They are so worried about always being first to market. Screw first to market, just make your product the best product. God rest his soul, but this falls on Neal. This should have been corrected years ago, but like that dog in the movie Up, Neal would pick a direction and then see a squirrel and completely lose focus. (Associate CIO)

I actually am more optimistic about Meditech beating Cerner than you. I think the Neal Patterson Cerner would have swallowed the entire lower part of the market and then there would be a Cerner-Epic duopoly. This private equity firm seems to be trying to move Cerner’s focus from gaining market share to milking their customer base. I doubt the corporate suit they have in charge now has the original vision or an alternative vision that he can articulate to the board and shareholders. That could drive the Cerner offering to a price nearer to Epic’s. With the cash-strapped community hospitals or penny pinching for-profits, that could make the cheaper, good-enough Meditech Expanse more tolerable. (SelfInfllictedWound)

I have come to a general conclusion about a lot of this. The EHR is a proxy for a lot of the irritants for clinicians, even if the EHR isn’t the underlying cause. To oversimplify while getting to the point, most physicians are employees now. As an employee, you do what your employer tells you to do. You can complain, but you’ll do as you are told. Or resign. Or get fired. Ouch. I can appreciate how this means some loss of status and independence for physicians. On the other hand, what do you think working life is like for most people? Medicine is a noble profession, but when you attempt to lean on that in order to support privileged working conditions, I don’t think that will go well. (Brian Too)

Watercooler Talk Tidbits

The local paper says that most dentists in Olean, NY haven’t implemented EHRs, some of them wary after seeing the “billing disaster” of Glens Falls Hospital in implementing Cerner. One local dentist uses digital imaging, but says, “When I need to read what I wrote about a patient, I have a paper record … because there can always be a system failure.” Most of the 48% of US dentists that don’t use EHRs question their value and security even though they agree that it’s easier to read online than on paper.

In England, the family of a 64-year-old woman who died in the hospital says that another patient was annoyed by the woman’s snoring, so she beat the woman on the head with a cup. The hospital expressed condolences, but says “it is clearly not possible for staff to supervise all patients individually round the clock.” It makes you wonder why hospitals can’t work like hotels, where rooms are locked to keep unauthorized people out, but employees use a master key whose activity is tracked. That wouldn’t work in hospitals with the illogical and universally despised “semi-private” (meaning not private at all) rooms.

A Mississippi anesthesiologist says he has spent $30,000 on lawyers and notification letters after someone broke into his practice’s offsite storage unit and stole the paper medical records of 14,000 patients. I had an immediate mental image of the “Storage Wars” gang shining flashlights onto his stacks of cardboard boxes in formulating their bidding strategy.


The former girlfriend of a California radiologist captures security video of him crawling through her back yard and peering into windows. The doctor was already on medical probation for a series of arrests related to domestic issues and was previously fired as a locum tenens radiologist by a hospital for inaccurate reports, inappropriate behavior, and unstated mental issues.

An Idaho man whose wellness multi-level marketing company has given him a $4.5 billion net worth creates a $500,000 legal defense fund for people who are being pressured by medical debt collectors. He provides as an example Medical Recovery Services, which he describes as, “We’ve got an outfit operating in Idaho Falls, a debt collection agency, that’s more interested in running up attorney fees than they are in collecting medical debt,” describing one of his own employees whose unpaid bill of $294 was turned over to collectors who inflated it to $6,000.


Bizarre: in England, a 26-year-old “serial prankster” who enjoyed startling his girlfriend by repeatedly faking his own suicide – by squirting ketchup on himself to look like he’d been stabbed and pretending to have an anaphylactic reaction from eating nuts while driving – dies from brain swelling after tying sweatpants around his neck to make her think he had hanged himself on the stairs. 

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