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A Look at MEDITECH’s Place in the EHR Marketplace and Where They’re Headed

Posted on February 12, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Healthcare Scene was lucky to sit down with Helen Waters, VP at MEDITECH, to talk about the EHR market and MEDITECH’s place in that market. Plus, we dive into the culture and history of MEDITECH and how it’s changed. We also explore MEDITECH’s plans around innovation, integration, and value along with MEDITECH’s efforts to deploy cloud and mobile solutions. Finally, we had to talk about healthcare interoperability. We hope you’ll enjoy this wide ranging interview with Helen Waters:

After the formal interview we did above, we allow people watching live to be able to ask questions and even hop on camera to offer their insights or ask questions of Helen in what we call the “after party.” In this “after party” discussion we talk to Helen about her thoughts on the changing healthcare reimbursement landscape and what MEDITECH is doing to prepare for it. We also talk about integrating telemedicine into MEDITECH. I also ask Helen about MEDITECH’s views on EHR APIs. Check out the second half of our interview below:

We hope you’ll enjoy this look into EHR vendor, MEDITECH.

EMR Usability A Pressing Issue

Posted on January 29, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

A few months ago, in a move that hasn’t gotten a lot of attention, the AMA and MedStar Health made an interesting play. The physicians’ group and the health system released a joint framework designed to rank EMR usability, as well as using the framework to rank the usability of a number of widely-implemented systems.

What makes these scores interesting is not that they’re just another set of rankings — those are pretty much everywhere — but that the researchers focused on EMR usability. As any clinician will tell you (and many have told me) despite years of evolution, EMRs are still a pain in the butt to use. And clearly, market forces are doing little to change this. Looking at where widely-used systems rate on usability is a refreshing look at a neglected issue.

To score the EMRs, researchers dug into EMR vendor testing reports from ONC. This makes sense. After all, though the agency doesn’t use this data for certification, the ONC does require EMR vendors to report on user-centered design processes they used for eight capabilities.

And while the ONC doesn’t base EMR certifications on usability, my gut feeling is that the data source is pretty reliable. I would tend to believe that given they’re talking to a certifying authority, vendors are less like to fudge these reports than any they’d prepare for potential customers.

According to the partners, Allscripts and McKesson were the highest-scoring EMR vendors, gaining 15 out of 15 points. eClinicalWorks was the lowest-scoring EMR, getting only 5 of 15 possible points. In-betweeners included Cerner and MEDITECH, which got 13 points each, and Epic, which got 9 points.

And here’s the criteria for the rankings:

  • User Centered Design Process:  EMRs were rated on whether they had a user-centered design process, how many participants took part (15+ was best) and whether test participants had a clinical background.
  • Summative Testing Methodology: These ratings focused on how detailed the use cases relied upon by the testing were and whether usability measures focused on appropriate factors (effectiveness, efficiency and satisfaction).
  • Summative Testing Results:  These measures focused on whether success rates for first-time users were 80% or more, and on how substantive descriptions of areas for improvement were.

Given the spotty results across the population of EMRs tested, it seems clear that usability hasn’t been a core concern of most vendors. (Yes, I know, some of you are saying, “Boy howdy, we knew that already!”)

Perhaps more importantly, though, it can be inferred that usability hasn’t been a priority for the health systems and practices investing in these products. After all, some of the so-so ratings, such as that for the Epic product, come from companies that have been in the market forever and have had the time to iterate a mature, usable product. If health systems were demanding that EMRs be easy to use, the scores would probably be higher.

Frankly, I can’t for the life of me understand why an organization would invest hundreds of millions of dollars (or even a billion) dollars in an EMR without being sure that clinicians can actually use it. After all, a good EMR experience can be very attractive to potential recruits as well as current clinicians. In fact, a study from early last year found that 79% of RNs see the hospital’s EMR as a one of the top 3 considerations in choosing where to work.

Maybe it’s an artifact of a prior era. In the past, perhaps the health systems investing in less-usable EMRs were just making the best of a shoddy situation. But I don’t think that excuse plays anymore. I believe more providers need to adopt frameworks like this one, and apply them rigorously.

Look, I know that EMR investment is a complex dance. And obviously, notions of usability will continue to evolve as EMRs involve — so perhaps it can’t be the top priority for every buyer. But it’s more than time for health organizations to take usability seriously.

Is An Epic Investment Bad For Health Leaders’ Job Stability?

Posted on January 28, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

For quite some time now, the buzz has been that at least one EMR vendor was a safe bet for everyone involved. “No one ever got fired for choosing Epic” has begun to seem as obvious a sentiment as “No one ever got fired for choosing IBM” in hospital C-suites. And certainly, in previous times that was probably true.

But it’s beginning to look as though at least in some cases, Epic has not been as safe a choice as health execs had hoped. In fact, while it’s not exactly a fully-fledged trend, it’s worth noting that Epic-related costs and technical issues have led to job losses for hospital CIOs, as well as other operational leaders, in recent times.

Perhaps the most recent example of Epic-related job attrition took place earlier this month, when the chief information officer and chief operating officer of Denver Health Medical Center. According to the Denver Post, the two executives left their posts in the wake of major disagreements over the medical center’s big investment in an Epic EMR.

The Denver Post story reports that former Denver Health CIO Gregory Veltri was on the outs with CEO Arthur Gonzalez from the outset where Epic was concerned. Apparently, Veltri argued from the get-go that the Epic install costs — which he estimated could hit $300 million when the $70 million cost of dumping the center’s current EMR contract and doubling of its IT staff were computed — stood a chance of bankrupting the hospital. (Gonzalez, for his part, claims that the Epic installation is under budget at $170 million, and says that the system should go live in April.)

In another example of Epic-related turnover, the chief information officer at Maine Medical Center in Portland seems to have left his job at least in part due to the financial impact of the hospital’s $160 million Epic investment. Admittedly, the departure of CIO Barry Blumenfeld may also have been related to technical problems with the rollout which slowed hospital collections. This took place back in 2013, but it still seems noteworthy.

The spring of 2013 also saw the departure of Sheila Sanders, the chief information officer for Wake Forest Baptist Medical Center, in the midst of the medical center’s struggles to implement its own Epic system. While Wake Forest Baptist had spent a comparatively modest $13.3 million on direct Epic costs during its second quarter of fiscal 2012-13, the medical center had been socked by delays in revenue resulting to Epic rollout problems, including issues with billing, coding and collections.

Wake Forest Baptist reported taking an $8 million hit that quarter due to “business-cycle disruptions (that) have had a greater-than-anticipated impact on volumes and productivity.” It also reported $26.6 million in lost margin due to reduced volume during go-live and post go-live Epic optimization.

Of course, a botched rollout can mean job insecurity no matter what EMR the hospital has chosen. For example, in May of 2014, Athens Regional Medical Center President and CEO James Thaw was apparently pressured out of office when the facility’s Cerner rollout went poorly. (After weeks of Cerner problems, the hospital’s staff voted 270-0 that they had “no confidence” in the hospital’s leadership. Gulp!) Somehow, Senior Vice President and CIO Gretchen Tegethoff kept her job, but my bet is that it was a close-run thing.

And to be fair, this is obviously a small, selected set of anecdotes about questionable Epic rollouts. They don’t prove that Epic is a CIO job killer or an ineffective EMR. But these stories do highlight the fact that while Epic investments might yield good things, rolling Epic out requires nerves of steel and flawless execution.

Athenahealth Amps Up Drive To Build Inpatient EMR

Posted on January 26, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

EMR vendor athenahealth has been driving forward for a while now to build a new hospital inpatient system and fight for the big-ticket customers in acute care. Given the intense competition for the acute care EMR dollar, I’m skeptical that athenahealth can wedge its way into the game. But so far, it looks like the vendor is going about things the right way.

athenahealth already offers the athenaOne suite, which includes an ambulatory EMR, revenue cycle management and patient engagement tools. But it seems the ambitious execs there have also decided to participate in the bare-knuckled fight for hospital bucks being duked out between Cerner, Epic, MEDITECH, McKesson and Allscripts. Considering the billions at stake, these acute care giants won’t be gentle. But as the following details suggest, athenahealth may just have enough going for it to slip into place.

Last year, athenahealth got the ball rolling when it struck a co-development deal with Boston-based Beth Israel Deaconess Medical Center to create a new inpatient system. The two organizations agreed to kick off the development work at Beth Israel’s 58-bed hospital, which is located in the nearby suburb of Needham, Mass.  The deal makes particular sense given that athena corporate is located in another Boston suburb, Watertown.

To supplement its development efforts, athenahealth also picked up small-hospital EMR vendor RazorInsights and Beth Israel’s home-built webOMR EMR. athena has replaced the RazorInsights EMR with a rebuilt version of its ambulatory athenaClinicals EMR, and integrated it with the RI hospital information system, plus several ancillary systems. This hybrid system is being sold to the small-hospital market.

athenahealth has begun converting webOMR into athenaNet in partnership with the small Needham branch of Beth Israel, working with clinicians and technical staffers to better understand the inpatient care environment.

That agreement alone might have gotten the job done, but athena didn’t stop there. Last week, the vendor announced that it would be partnering with the University of Toledo Medical Center to further speed the development of its inpatient EMR. The agreement clearly builds on the vendor’s prior relationship with the University of Toledo Physicians, which picked up the athenaOne suite in late 2014.

The deal with UTMC will do more than give athenahealth another testbed and development site. This agreement with the health system, which is dumping its McKesson Horizon system by 2018, gives athenahealth a real-life win in a substantial setting. What’s more, given that the medical center is being given the chance to build things to its liking, the new acute-care EMR is unlikely to cost as much over the long-term as, say, Epic support and maintenance.

I must admit that I still see athenahealth’s plans as fairly risky. While it has significant resources, the vendor can’t match those of its big competitors. What’s more, it could lose a great deal if it endangers its strong legacy base of ambulatory users. But if any of the established ambulatory HIT firms have a shot at the bigger deals, this one does. I’m eager to see how this turns out.

Epic EMR Costs Drag Down Finances At Brigham and Women’s

Posted on January 4, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

It’s worth noting from the outset that many healthcare organizations have had it worse. Epic installs have blown health system budgets sky high, sapped their profitability and undermined their credit ratings. So upon hearing the following you may not be tempted to play a sad song on the world’s smallest violin.

Still, it’s worth noting that in part due to the costs of its Epic implementation, the venerable Brigham and Women’s Hospital will fall $53 million short of its expected $121 million surplus for fiscal 2015. According to news reports, this is the first time Brigham and Women’s has missed such a target in more than 10 years.

The hospital’s president, Betsy Nabel, MD, noted that the Brigham and Women’s install is part of a massive $1.2 billion Epic implementation cutting across the 10 hospitals of the Partners HealthCare system. The broader Partners implementation is proving to be a budget-buster as well. Three years ago, Partners went into the effort with a comparatively scant $600 million budget.

Brigham and Women’s — along with nearby Dana-Farber Cancer Institute — hired 1,500 extra staff members to help with the Epic go-live, which took place in June of this year. The Brigham had budgeted $47 million during the previous year to pay for the transition costs.

But the transition cost $27 million more than expected. For one thing, once they began using the EMR, Brigham and Women’s staff apparently undercoded a bunch of visits, lowering patient care revenues.  The hospital also gave up some revenue voluntarily, by cutting back on patient volume during the first months post-go-live to ease the transition.

The rest of the shortfall came from lost patient volume in February due to heavy snowfall, as well as paying more than it had expected into its employee pension fund.

A few words of commentary seem called-for here.

* It’s not clear to me why the staffers made so many coding mistakes going out the door with the new install. I’ve written about perhaps a dozen Epic installs in depth, and have studied many more, and a rash of post-implementation coding mistakes doesn’t seem to be common. Am I missing something, or were the staffers undertrained?

* News reports suggest that nearly $14 million of the unexpected costs came from the planned reductions in patient care volume. It seems to me that if Brigham and Women’s execs planned for that shortfall, they’d know how much it was going to be. Why all of the surprise already?

By the way, the shortfall apparently kicked up so much dust that Dame Judy personally flew out to Boston to meet with the hospital leadership to head off PR trouble offer guidance.

Following the meeting, hospital president Dr. Betsy Nabel told a town hall-style gathering that all is well — that the coding problems will pass and revenue levels reestablish themselves. And after all, she noted, the Epic install is already working well enough that there’s been no increase in medical errors at the hospital.

Well, that’s a start at least. Keeping medical errors from getting worse is certainly a good thing. But for its sake, let’s hope the Brigham expects more than that from Epic!

Rural Hospitals Catching Up In HIT Adoption

Posted on December 14, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Historically, rural hospitals have lagged when it comes to health IT adoption. But according to at least one yardstick, the HIMSS EMR Adoption Model (EMRAM), rural facilities seem to have closed much of the gap.

Just a few years ago, many rural hospitals were barely at stage one of the model, which ranks facilities from Stage 0 (All three ancillaries not installed) to Stage 7 (Complete EMR; CCD transactions to share data; Data warehousing; Data continuity with ED, ambulatory, OP). Only two years ago, research suggested that rural and critical access hospitals were lagging far behind in meeting Meaningful Use criteria, and risked incurring penalties this year.

By the end of 2014, however, rural hospitals averaged a Stage 4 rating (CPOE, Clinical Decision Support (clinical protocols). This compares favorably with the 4.7 rank achieved by urban hospitals, and though academic/teaching hospitals were well ahead at a 5.4 ranking, that’s a much smaller difference than you might have seen even five years ago. Meaningful Use incentives, plus overall industry pressure to automate, seem to have done their job.

I’m pondering this, in part, because the CPSI acquisition of Healthland piqued my interest. CPSI picked up Healthland, a provider of rural and critical access hospital software, for $250 million. Given rural hospitals’ history of slow HIT adoption, I wasn’t sure what CPSI saw in Healthland, though the deal does bring revenue cycle management and an EMR for post-acute care facilities to the table.

Now that I’ve learned what progress the rural health IT market has seen, I’m no longer so skeptical. In fact, when you consider that the Healthland acquisition brings 3,300 post-acute customers that it didn’t have before, it seems like CPSI got a pretty nice deal.

Given the growing strength of the rural HIT market, I don’t think the Healthland buyout will be the last domino to fall here. I can easily imagine the giants — Cerner in particular — seeing their way clear to acquiring the combined CPSI/Healthland entity. Why Cerner? Well, if for no other reasons than having a ton of cash — and a more flexible attitude than Epic — I can imagine Cerner getting excited about rural access.

But even putting aside M&A dynamics, the news from rural markets is still intriguing. While having sophisticated health IT infrastructure is a plus anywhere, my guess is that it will be particularly powerful for rural and critical access hospitals. I hope that the growth of HIT capabilities brings a breath of fresh air — and the benefits of cutting-edge care management — to facilities that have traditionally gotten the short end of the stick.

Meditech EHR Market Share

Posted on November 25, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I recently got subscribed to the Navin, Haffty & Associates email newsletter. The title on their website claims they’re the “Largest and Most Respected MEDITECH consulting firm.” I’ll let you decide on those two counts, but they’re clearly all in as a consulting firm with MEDITECH. In their latest newsletter John Haffty, President of Navin, Haffty & Associates, shared some statistics on MEDITECH market share that I thought might be of interest to readers:

Statistically speaking, MEDITECH has over 2,400 clients. The number of MEDITECH clients by platform is outlined below:
Client/Server – 1,056
MAGIC – 848
6.x – 546

Over the past five years 285 clients have been added, 137 of which implemented 6.x. Clients often add their existing platform as they acquire hospitals and this has resulted in the addition of 22 MAGIC and 126 Client/Server sites. In addition, MEDITECH has signed 31 organizations for the new Ambulatory product. Of the 546 Ambulatory 6.x sites, 279 have chosen 6.1, with some already LIVE.

MEDITECH’s market share for hospitals by bed size demonstrates a strong industry presence:

23% – under 99 beds
36% – 100-199 beds
36% – 200-299 beds
27% – 300-399 beds
17% – 400+ beds

I’ve long argued that MEDITECH was still a sleeping giant in the EHR space. Epic and Cerner gets most of the headlines, but MEDITECH still has a massive market share. Of course, after CPSI’s acquisition of Healthland today, it looks like CPSI wants to play as well.

5 Pieces of Advice When Checking Out Epic or Cerner

Posted on September 29, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Elise Ames and Vince Ciotti has an interesting follow up post on Health System CIO that looks at Epic versus Cerner in the hospital EHR (or HIS if you prefer) market. The reality is pretty simple. Epic or Cerner are both going to be around for a long time to come. Although, I really enjoyed the 5 pieces of advice they offer at the end of the post for those buying a new car EHR (LIS):

  1. Owner’s manual —it’s sitting right there in the glove box. For an HIS, check out the user manuals – they’re all on-line today. And unlike RFP feature checklist responses, they contain the truth…
  2. Chat with the mechanics — they know what works well, and what breaks the most. For an HIS, ask to meet your implementation project manager before signing, and ask about their staff and (non?) experience…
  3. Take a test drive in the model you’re buying, and on the roads you’ll be travelling. For an HIS, make unchaperoned site visits and phone calls to client hospitals of your size and using your apps…
  4. Check out the warranty — what’s covered versus what’s not? With an HIS, ask for a boilerplate contract and request changes while you still have some competitive pressure…
  5. Negotiate price — don’t tell the Chevy dealer he won, then ask for a discount. Tell him you may buy a Ford unless he gives you a deal… After all, no one pays list price for a mega-buck HIS, do they?

I’ve heard of many of these suggestions before. However, the first one was one I hadn’t heard before. It’s a great idea and is the beauty of the internet. I’m also surprised by those that don’t do “unchaperoned” visits to current users of an EHR. Yes, it’s one thing to go to a reference site for an EHR. That’s a good thing as well, but you’ll get more value visiting one that isn’t a reference site per se.

Antitrust In The Brave New EMR World

Posted on September 18, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Late last month, former Brigham and Women’s Hospital CEO Paul Levy made waves in the health IT world when he accused Epic of conspiring with Boston healthcare system Partners HealthCare.

In a post on his wryly-named Not Running a Hospital blog, Levy argues that Epic’s relationship with Partners raises antitrust concerns:

Here’s how it works.  Partners enters into a contract with Epic for the construction of an EHR for its facilities.  The two organizations go to the Partners-affiliated, but independent, medical practice groups and tell them that they have to install the Epic EHR–even if the EHR they have had for years is perfectly adequate for their purposes.  If a doctor’s practice asks why they can’t keep their old system, Epic makes clear that interoperability between its system and the practice’s legacy system is not feasible.  Meanwhile, to clinch the conversion, Partners also informs the local practices that failure to install the Epic system will foreclose those practices from participating in the favorable insurance contracting relationships it enjoys.  It is in this manner that the Epic-Partners actions box out the competition in this market.

In his article, Levy calls on Massachusetts Attorney General Maura Healey, and attorneys general of other states for that matter, to be on the lookout for similar deals between Epic and health systems elsewhere.

Interestingly, in other cases health systems accused of seeking excessive market power have used their Epic investment as a defense. For example, when its 2012 acquisition of Nampa, ID-based Saltzer Medical Group was challenged by the FTC, Boise health system St. Luke’s cited its $200M Epic system as a mitigating factor. Its lawyers asserted that St. Luke’s investment in effort was proof that the health system would be able to improve the region’s healthcare by better care coordination.

But the argument didn’t fly with the FTC, which didn’t believe that tying employed doctors to an EMR was needed to generate regional healthcare efficiencies. “Shared access to electronic medical records that St. Luke’s cited as a central benefit of the transaction can be achieved without an employment relationship or merger,” said Deborah Feinstein, director of the FTC’s Bureau of Competition at a speech given last year.

In my opinion, both Levy and Feinstein make excellent points. If Levy is right, it can easily be argued that Partners and Epic are engaging in questionable behavior, as it troubles at least this non-lawyer to see doctors strongarmed into using any particular EMR. And given that St. Luke’s was in the process of building a program to coordinate with unaffiliated physicians, it does seem that crying “we have Epic!” doesn’t address the problem.

But these are just bullet points. Overall, my sense is that neither state attorneys general nor the FTC and DoJ are sure how EMRs impact a health system’s market power, nor what constitutes anticompetitive behavior on the part of a vendor. I don’t know whether regulators don’t see EMR issues as a priority or are simply biding their time, but from my standpoint they are more than ripe for attack. What do you think?

Another Giant In Play: 3M Looking At “Strategic Alternatives” For HIS Unit

Posted on September 14, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Given the staggering number of EMR launches that took place in the wake of the Meaningful Use kickoff, mergers, sell-offs and business failures were quite predictable. Despite the feds’ doling out $30B in incentive dollars, even that wasn’t enough to keep hundreds of EMR entrants afloat.

It hasn’t been as clear what would happen to large vendors with HIT interests, given that they had enough capital to ride more than one wave of provider adoption. The field has just begun to shake out, with only a small handful of major transactions taking place. Recent plays by large tech players include Cerner’s $1.3B acquisition of Siemens Health Services, which included the Soarian EMR. There’s also ADP’s sale of EMR solution AdvancedMD to Marlin Equity Partners after previously acquiring e-MDs. Not to mention Greenway and Vitera Healthcare Solutions joining forces and Pri-Med acquiring Amazing Charts.

Another major move was announced this April at HIMSS 15, when GE Healthcare announced that it was phasing out its Centricity Enterprise product. According to news reports, the Enterprise product only generated 5% of the Healthcare division’s EMR revenue. I could keep going, but you get the point.

Now, 3M has joined the fray, announcing this week that it was “exploring strategic alternatives” for its HIS business, including spinning off or selling the unit.  (It’s also considering keeping its HIS business on board and investing in its future.)  The company, which has signed Goldman, Sachs & Co. as strategic advisor and investment banker, says that it will probably announce what direction it will head in by the end of the first quarter of next year.

On the surface, 3M Health Information Systems looks like a very solid business. The HIS unit, which is focused on computer-assisted coding, clinical documentation improvement, performance monitoring, quality outcomes reporting and terminology management, reportedly works with more than 5,000 hospitals, plus government and commercial payers. According to 3M, the HIS business generated trailing 12-month revenues of about $730M, and has sustained 10%+ compounded annual growth for 10 years.

That being said, it’s hard to say what the fallout from the ICD-10 switchover will be, and it’s not unreasonable for 3M to consider whether it wants to compete in the post-switchover world. After all, while the HIS unit seems to be quite healthy, it’s certainly faces stiff competition from several directions, including EMRs with integrated billing and coding technology. Also, the company may be saddled with outdated legacy infrastructure, which makes it hard to keep up in this new era of revenue cycle management.

By the end of the first quarter of 2016, 3M will have had a chance to see how its customers are faring post-ICD-10, and how its customers needs are shifting. 3M will also find out whether other HIS players with (presumably) newer technology in place are interested in doing a rollup with its business.

Truthfully, if 3M doesn’t think it can benefit from investing in the HIS unit, I’m not sure who else would benefit from doing so. In fact, I’d argue that 3M is undermining its chances at a deal by waffling over whether it plans to invest or divest; as I see it, this implies that the HIS unit will be on life support without a major cash infusion, which is not something I’d find attractive as an investor.  If nothing else I’d want to buy the unit at a firesale price! But I guess we’ll have to wait until March 2016 to see what happens.