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Health System Pays Docs To Use Cerner EHR

Posted on November 7, 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.

Typically, we cover US-based stories in this blog, but the following is just too intriguing to miss. According to a Vancouver newspaper, an area hospital system agreed to pay physicians a daily fee to use its unpopular Cerner EHR, positioning the payments as compensation for unpaid overtime spent learning the system.

The Times Colonist is reporting that local hospital system Island Health has offered on-call physicians at its Nanaimo Regional General Hospital $260 a day, and emergency department physicians up to $780 a day, to use its unpopular Cerner system.

The newspaper cites a memo from hospital chief medical officer and executive vice president Dr. Jeremy Etherington, which says that the payment was in recognition of “the extra burden the new electronic health record has placed on many physicians during the rollout phase” of the new EHR.

In 2013, Island Health (which is based in British Columbia, Canada) signed a 10 year, $50 million deal with Cerner to implement its platform across its three hospitals. More recently, in March of this year, Island Health’s three facilities went live on the Cerner platform.

Within weeks, physicians at Nanaimo Regional Hospital were flooding executives with complaints about the new platform, which they claimed we randomly lost, buried or changed orders for drugs and diagnostic tests. Some physicians at the hospital reverted to using pen and paper to complete orders.

Not long after, physicians signed a petition asking the health system to stop further implementation, citing safety and workability concerns, but executives still moved forward with the rollout.

Neither the newspaper article nor other reports could identify how many physicians accepted the offer from Island Health. Also, the health systems management hasn’t shared how it picked doctors who were eligible for the payout, and what criteria it used to determine the size of the higher emergency department physician payouts. However, according to a Nanaimo physician and medical staff member quoted by Becker’s Health IT & CIO Review quotes, execs structured the payments to reflect the unpaid overtime doctors put in to learn the system.

As for the claims that the Cerner system was causing clinical problems and even perhaps endangering patients, that issue is still seemingly unresolved. In late July, British Columbia Minister of Health Terry Lake apparently ordered a review of the Cerner system, but results of that review do not appear to be available just yet.

It’s not clear whether the payments bought Island Health enough goodwill to mollify the bad feelings of doctors who didn’t receive one of these payments, nor whether those who are being paid will stay bought. And that’s the real question here. Call the payments a publicity stunt, an attempt at fairness or cynical political strategy, they may not be enough to get physicians onto the system if they are convinced it doesn’t work. I guess we’ll have to wait and see what happens.

Mount Sinai Uses AI To Manage CHF Cases

Posted on October 31, 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.

New York-based Mount Sinai Hospital has begun a project which puts it in the vanguard of predictive analytics, working with a partner focused on artificial intelligence. Mount Sinai plans to use the Cloud Medx Clinical AI Platform to predict which patients might develop congestive heart failure and care better for those who’ve already done so.

As many readers will know, CHF is a dangerous chronic condition, but it can be managed with drugs, proper diet and exercise, plus measurement of blood pressure and respiratory function by remote monitoring devices. And of course, hospitals can mine their EMR for other clinical clues, as well as rifling through data from implantable medical devices or health tracking bands or smartwatches, to see if a patient’s condition is going south.

But using AI can give a hospital a more in-depth look at patterns that might not be visible to the unaided clinician. In fact, CloudMedx is already helping Sacramento-based Sutter Physician Services improve its patient care by digging out unseen patterns in patient data.

To perform its calculations, CloudMedx runs massive databases on public clouds such as Amazon Web Services and Microsoft Azure, then layers its specialized analytics and algorithms on top of the data, allowing physicians or researchers to query the database. The analytics tools use natural language processing and machine learning to track patients over time and derive real-time clinical insights.

In this case, the query tools let clinicians determine which patients are at risk of developing CHF or seeing their CHF status deteriorate. Factors the system evaluates include medical notes, a patient’s family history, demographics and past medical procedures, which are rolled up into a patient risk score.

In moving ahead with this strategy, Mount Sinai is rolling out what is likely to be a common strategy in the future. Going forward, expect to see other providers engage the growing number of AI-based healthcare analytics vendors, many of whom seem to have significant momentum.

For example, there’s Lumiata, a developer of AI-based productive health analytics whose Risk Matrix tool draws on more than 175 million patient-record years. Risk Matrix offers real-time predictions for 20 chronic conditions, including CHF, chronic kidney disease and diabetes.

Risk Matrix bases its predictions on its customers’ datasets, including labs, EHR data claims information and other types of data organized using FHIR. Once data is mapped out into FHIR, Risk Matrix generates output for more than 1 million records in less than three hours, the company reports. Users access Risk Matrix analyses using a FHIR-compatible API, which in turn allows for the results to be integrated into the output of the existing workflows.

But Lumiata is just the tip of the iceberg. CB Insights has identified more than 90 companies applying machine learning algorithms and predictive analytics to important problems in healthcare.

While many startups have flocked into the imaging and diagnostics space, expect to see AI-related activity in drug discovery, remote monitoring and oncology. Also, market watchers say companies founded to do AI work outside of healthcare see many opportunities there as well.

Now, at least at this stage, high-end AI tools are likely to be beyond the budget of mid-sized to small community hospitals. Nonetheless, they’re likely to be deployed far more often as value-based reimbursement hits the scene, so they might end up in use at your hospital after all.

Access To Electronic Health Data Saves Money In Emergency Department

Posted on October 24, 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 new research study has found that emergency department patients benefit from having their electronic health records available when they’re being treated. Researchers found that when health information was available electronically, the patient’s care was speeded up, and that it also generated substantial cost savings.

Researchers with the University of Michigan School of Public Health reviewed the emergency department summaries from 4,451 adult and pediatric ED visits for about one year, examining how different forms of health data accessibility affected patients.

In 80% of the cases, the emergency department had to have all or part of the patient’s medical records faxed to the hospital where they were being treated. In the other 20% of the cases, however, where the ED staff had access to a patient’s complete electronic health record, they were seen much more quickly and treatment was often more efficient.

Specifically, the researchers found that when information requests from outside organizations were returned electronically instead of by fax, doctors saw that information an hour faster, which cut a patient’s time in the ED by almost 53 minutes.

This, in turn, seems to have reduced physicians’ use of MRIs, x-rays and CT scans by 1.6% to 2.5%, as well as lowering the likelihood of hospital admission by 2.4%. The researchers also found that average cost for care were $1,187 lower when information was delivered electronically.

An interesting side note to the study is that when information was made available electronically on patients, it was supplied through Epic’s Care Everywhere platform, which is reportedly used in about 20% of healthcare systems nationwide. Apparently, the University of Michigan Health System (which hosted the study) doesn’t belong to an HIE.

While I’m not saying that there’s anything untoward about this, I wasn’t surprised to find principal author Jordan Everson, a doctoral candidate in health services at the school, is a former Epic employee. He would know better than most how Epic’s health data sharing technology works.

From direct experience, I can state that Care Everywhere isn’t necessarily used or even understood by employees of some major health systems in my geographic location, and perhaps not configured right even when health systems attempt to use it. This continues to frustrate leaders at Epic, who emphasize time and again that this platform exists, and that is used quite actively by many of its customers.

But the implications of the study go well beyond the information sharing tools U-M Health System uses. The more important takeaway from the study is that this is quantitative evidence that having electronic data immediately available makes clinical and financial sense (at least from the patient perspective). If that premise was ever in question, this study does a lot to support it. Clearly, making it quick and easy for ED doctors to get up to speed makes a concrete difference in patient care.

Should You Buy Pop Health Tools And EMRs From One Vendor?

Posted on October 17, 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.

According to a new story appearing in HealthITAnalytics, EMR vendors are increasingly moving into the population health management space. In fact, according to an IDC Research market report featured in the story, the lines between the EMR and population health management marketplaces are beginning to blur, with vendors offering products tackling both documentation and patient management.

While this is not news to anyone who’s attended a major industry tradeshow in the last few years, the extent of the transition might be. Apparently, half of the top population health management vendors featured by IDC – including athenahealth, eClinicalWorks and Allscripts — also offer EMR platforms. (According to HealthITAnalytics, other pop health vendors identified as leaders by IDC include Wellcentive, Medecision, Optum and IBM Phytel.)

Cynthia Burghard, Research Director with IDC Health Insights, says that providers want to integrate patient management and big data analytics to support their ACO deals and meet tregulatory requirements. In an IDC press release, she notes that providers need to manage both clinical and financial outcomes to survive under value-based reimbursement.

While all of this makes sense to me on paper, I’d like to raise a question here. Does buying both your EMR and your pop health tool from the same vendor have a meaningful downside? I’d argue that it might.

Yes, from a high level, buying an EMR and population health management engine from the same vendor is a good idea. In theory, the two are likely to work together more effectively than two platforms from two separate vendors, as there’s unlikely to be any conflict between the purposes of the EMR and the purposes of the population health tool.

But in practice, it’s worth bearing in mind that we haven’t yet evolved a standard feature set or business model for managing patients at the population level (though you might be interested in some of these emerging best practices). So this is a far bigger risk than buying, for example, a practice management tool and an EMR from the same vendor — after all, practice management software has been around long enough that it’s fairly standardized.

On the other hand, if you buy a population health tool and an EMR from, say, Allscripts, you’re buying not only technology but their view of how population health management should be done. And the two platforms are somewhat, for lack of a better word, inbred if they try to cover your entire scope of patient management. Whatever blind spots the EMR may have, the pop health management platform may have as well.

I guess what I’m trying to say here is that while it makes great business sense for the vendors to offer both EMR and pop health products, it’s not necessarily in the provider’s interests to pile both of those products onto their infrastructure. At this stage, I’d argue, it’s worth preserving your flexibility, even if you spend more or have to work harder to develop the business logic you need on the population health side.

But I’m willing to change my mind. Readers, what do you think?

Cerner Tops List Of Hospital Vendors For Medicare EHR Incentive Program

Posted on September 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.

Research from the ONC concludes that Cerner systems are in use by the most hospitals using certified technology to participate in the Medicare EHR Incentive Program. It’s interesting to note that this list includes players that rarely appear on overall lists of top hospital EHR vendors, though admittedly, there’s no one way to measure market dominance that produces consistent results every time.

According to ONC statistics, there were 175 vendors supplying certified health IT to 4,474 nonfederal acute-care hospitals participating in the Medicare EHR Incentive Program. Ninety-five percent of these vendors have 2014 certified technology.

The report notes that six of these vendors (Cerner, Meditech, Epic, Evident, Medhost and McKesson) provide 2014 certified technology 92% of hospitals using the technology. When you throw in athenahealth, Prognosis and QuadraMed, bringing the list to 10 vendors, you’ve got a group that supplies 2014 technology to 98% of eligible hospitals.

According to the data, the vendors at the top fall in as follows. Cerner tops the list of total hospitals using its certified health IT, with 1,029 hospitals;  Meditech was next with 953 hospitals; Epic came in third with 869 hospitals; CPSI’s Evident (formerly Healthland) was fourth with 637 hospitals; McKesson fifth with 462 hospitals; and Medhost sixth with 359 hospitals.

As is usually the case with any attempt to look at market share, the data comes with its own quirks. For example, when looking at ONC’s data as of July 2016 on ambulatory healthcare providers choice of certified technology, Epic was way ahead of the pack with 83,674 users. Allscripts came in at a distant second with 33,123 users. Cerner came in sixth with 15,100 ambulatory users. In other words, vendors one might class as “enterprise” focused are doing well among clinicians. (See more data along these lines in a Medscape survey I summarized previously.)

Then consider data from HIMSS Analytics, which concludes that Epic has 40% of the hospital health IT market, followed by Cerner at a distant second with 13%, Allscripts at 10%, Meditech at 7% and eClinicalWorks at 5% and NextGen with 4%. Why the big difference in numbers? It seems that HIMSS Analytics includes the size of the hospital in its calculations versus the ONC data above which talks about the number of hospitals.

No doubt the buying patterns vary when you look at the number of beds a hospital has. For example, according to research done last year by peer60, CPSI and eClinicalWorks held the biggest share of the market among facilities with less than 100 beds, MEDITECH, McKesson and Siemens dominated the mid-sized hospital categories, and as the number of beds rises from 250 to 1000+ plus, Cerner and Epic emerge as the top players.

The truth is, market share numbers are interesting, and not just to the vendors who hope to emerge on top. Everyone loves a good horse race, after all. But it’s good to take these numbers with a large dose of context, or they mean very little.

Study: Hospital EMR Rollouts Didn’t Cause Patient Harm

Posted on September 14, 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.

Rolling out a hospital EMR can be very disruptive. The predictable problems that can arise – from the need to cut back on ambulatory patient visits to the staff learning curve to unplanned outages – are bad enough. And of course, when the implementation hits a major snag, things can get much worse.

Just to pull one name out of a hat, consider the experience of the Vancouver Island Health Authority in British Columbia, Canada. One of the hospitals managed by the Authority, which is embroiled in a $174 million Cerner implementation, had to move physicians in its emergency department back to pen and paper in July. Physicians had complained that the system was changing medication orders and physician instructions.

But fortunately, this experience is definitely the exception rather than the rule, according to a study appearing in The BMJ. In fact, such rollouts typically don’t cause adverse events or needless deaths, nor do they seem to boost hospital readmissions, according to the journal.

The study, which was led by a research team from Harvard, Brigham and Women’s Hospital, Beth Israel Deaconess Medical Center and Massachusetts General Hospital, looked at the association between EHR implementation and short-term inpatient mortality, adverse safety events or readmissions among Medicare enrollees getting care at 17 U.S. hospitals. The hospitals selected for the study had rolled out or replaced their EHRs in a “big bang”-style, single-day go-live in 2011 and 2012.

To get a sense of how selected hospitals performed, the team studied patients admitted to the studied facilities 90 days before and 90 days after EHR implementation. The researchers also gathered similar data from a control group of all admissions during the same period by hospitals in the same referral region. For selected hospitals, they analyzed data on 28,235 patients admitted 90 days before the implementation, and 26,453 admitted 90 days after the EHR cutover. (The control size was 284,632 admissions before and 276,513 after.)

Apparently, researchers were expecting to see patient care problems arise. Their assumption was that in the wake of the go-live, the hospitals would see a short increase in mortality, readmissions and adverse safety events. One of the reasons they expected to see this bump in problems is that some negative problems related to time and season, such as the “weekend effect” and the “July effect,” are well documented in existing research. Surely the big changes engendered by an EHR cutover would have an impact as well, they reasoned.

But that’s not what they found. In fact, the researchers wrote, “there was no evidence of a significant or consistent negative association between EHR implementation and short-term mortality, readmissions, or adverse events.”

I was as surprised as the researchers to learn that EHR rollouts studied didn’t cause patient harm or health instability. Considering the immense impact an EHR can have on clinical workflow, it seems strange to read that no new problems arose. That being said, hospitals in this group may have been doing upgrades – which have to be less challenging than going digital for the first time – and were adopting at a time when some best practices had emerged.

Regardless, given the immense challenges posed by hospital EHR rollouts, it’s good to read about a few that went well.  We all need some good news!

Hospitals Using Market-Leading EHR Have Higher HIE Use

Posted on July 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 new study concludes that hospital engagement with HIEs is tied with the level of dominance their EHR vendor has in their marketplace. The study, which appeared in Health Affairs, looked at national data from 2012 and 2013 to look at how vendor dominance related to hospitals’ HIE involvement level. And their analysis suggests that the more market power a given vendor has, the more it may stifle hospitals’ HIE participation.

As researchers note, federal policymakers have expressed concern that some EHR vendors may be hampering the free flow of data between providers, in part by making cross-vendor HIE implementation difficult. To address this concern, the study looked at hospitals’ behavior in differently-structured EHR marketplaces.

Researchers concluded that hospitals using the EHR which dominated their marketplace engaged in an average of 45% more HIE activities than facilities using non-dominant vendors. On the other hand, in markets where the leading vendor was less dominant, controlling 20% of the market, hospitals using the dominant vendor engaged in 59% more HIE activities than hospitals using a different vendor.

Meanwhile, if the dominant EHR vendor controlled 80% of the market, hospitals using the leading vendor engaged in only 25% more HIE activities than those using a different vendor. In other words, high levels of local market dominance by a single vendor seemed to be associated with relatively low levels of HIE involvement.

According to the study’s authors, the data suggests that to promote cross-vendor HIE use, policymakers may need to take local market competition between EHR vendors into consideration. And though they don’t say this directly, they also seem to imply that both high vendor dominance and low vendor dominance can both slow HIE engagement, and that moderate dominance may foster such participation.

While this is interesting stuff, it may be moot. What the study doesn’t address is that the entire HIE model comes with handicaps that go beyond what it takes to integrate disparate EHR systems. Even if two hospital systems in a market are using, say, Cerner systems, how does it benefit them to work on sharing data that will help their rival deliver better care? I’ve heard this question asked by hospital financial types, and while it’s a brutal sentiment, it gets to something important.

Nonetheless, I’d argue that studying the dynamics of how EHR vendors compete is quite worthwhile. When a single vendor dominates a marketplace, it has to have an impact on everyone in that market’s healthcare system, including patients. Understanding just what that impact is makes a great deal of sense.

Hospitals Struggle To Use EHRs To Report eCQMs

Posted on July 18, 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 new study by CMS has found that hospitals are struggling to use their EHRs to report electronic clinical quality measures. The agency found that while EHRs helped contractors collect data remotely using hospital staffers, EHR platforms “had not yet matured” enough to meet the specs required, according to Managed Care magazine.

The CMS findings came from a validation pilot study of eCQMs. The goal of the pilot study was to evaluate approaches for validating eCQMs for the Hospital Inpatient Quality Reporting program.

The program, which was mandated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, authorized CMS to pay hospitals a higher annual update to their payment rates if they successfully reported designated quality measures. Later legislation mandated that Medicare hospitals that don’t successfully report would be hit with a 2.0% reduction in the annual rate of inflation used to calculate payment.

One might guess that putting EHRs in place would help hospitals comply. But it appears that this is not been the case in many instances. In fact, hospital IT leaders are facing some significant challenges in linking EHR data to the required reporting format.

To accurately report eCQMs, hospitals must create complete and accurate Quality Reporting Data Architecture (QRDA)-I files based on 2014 eCQM specifications. But hospitals reported that they were having a hard time mapping the information in the EHR systems to the QRDA-I specifications, particularly given the use of unstructured data fields and multiple source of information for various events, Managed Care reported. Measures match rates, in turn, were rather low, ranging from 12% to 49%.

The hospitals involved in the pilot also said that data mapping and workflow issues were major problems. For example, as it turned out much of the information they needed was locked up in free text, notes or scanned documents rather than discrete data fields. That made it impossible for those hospitals to extract the data and mapping to the elements found in the QRDA-I files.

To solve these problems, pilot hospital reported, CMS should consider addressing three key areas: boost communication, outreach and education to raise hospital and vendor understanding of eCQMs; cut down the burden imposed by eCQM adoption; and offer tools and guidance to help hospitals with eCQM implementation.

As CMS learns, the help hospitals want should be forthcoming. In the report, CMS said that it plans to conduct additional validation pilots in the future. The agency said its goal will be able to help hospitals and vendors transition to eCQM reporting, and over time to increase the accuracy of the data that gets reported.

EMR Lawsuit – A Taste Of Things To Come

Posted on July 13, 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 central Pennsylvania health system is embroiled in a court fight with Cerner amid allegations that its EMR technology has created serious patient care problems that could have led to serious harm.

PinnacleHealth, a three-hospital system based in Harrisburg, PA, is blaming series of patient care problems on its Siemens health IT technology, which was acquired by Cerner in February 2015. Apparently, PinnacleHealth had used Siemens as a vendor for 20 years, but when it grew dissatisfied with the platform, cut back its relationship with Siemens and signed a contract with Epic.

Last year, Cerner responded to PinnacleHealth’s actions with a breach of contract lawsuit, asserting that the health system hadn’t paid for services since February 2015. The suit claims that Pinnacle now owes Cerner more than $20 million.

PinnacleHealth, in turn, filed a counterclaim earlier this year in Pennsylvania state court, which seeks damages for Cerner’s alleged fraud and breach of contract. In the counterclaim, it cited several instances of problems it contends were caused by the EMR, including a case in which one patient’s blood pressure dropped dramatically after he was allegedly discharged the wrong medications. It also cites an instance in which a doctor was unable to place a pharmacy order for a newborn to receive vitamin K, a standard step taken to protect babies from serious bleeding.

While some experts are positioning this as the first of a growing number of EMR-related safety disputes, I’d argue that there’s other big issues in play which are more important to consider.

First, though it’s possible the Siemens EMR had problems, it’s impossible to know whether that had more to do with the customer’s unique IT set-up or whether there was an actual tech failure.

That being said, it’s also possible that Cerner missed something during its buyout of Siemens, a risk every vendor who acquires a technology company takes. And EMR vendor consolidation is continuing. If the acquiring vendors move too quickly, or have trouble integrating the new technology into their existing fold, will a growing number of clear-cut cases of EMR failure occur?

Also, it’s important to note that PinnacleHealth is currently battling the FTC for permission to merge with Penn State Hershey Medical Center. Clearly, it needs to have technology in place which can scale and isn’t burdened by 20 years of legacy adoption if the merger goes forward. Admittedly, Penn State Hershey is a Cerner shop, not Epic, but who knows what Penn State Hershey has in mind for HIT if it does get to close the deal?

Yes, there will be some product liability litigation over alleged EMR failures. And in some cases, particularly given the ongoing M&A activity among vendors, someone will drop the ball and bad things will probably happen.

But the most important thing I see happening here is the death knell for older systems in the wake of industry consolidation. I’d keep an eye on mergers between health systems and acquisitions by EMR vendors. Those are the forces that will dictate what happens in the HIT world going forward.

McKesson Merges Division With Change Healthcare

Posted on July 11, 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.

McKesson Corp. has announced plans to roll the majority of its Technology Solutions business into an independent organization, combining the assets with those of Change Healthcare. McKesson will co-own the new company with Change. Once the deal is complete, execs plan to take the new company public, probably sometime next year.

According to McKesson CEO John Hammergren, the two companies came together to offer a better range of options to providers. “The new company will establish a more efficient suite of end-to-end payment and claims solutions, as well as clinical capabilities,” Hammergren said in a company announcement.

The new entity, which combines most of the Technology Solutions assets with the bulk of the former Emdeon, will have combined total annual revenues of $3.4 billion. When the deal is done, McKesson will own about 70% of the new company, with the remainder held by Change Healthcare stockholders.

McKesson will still hold on to RelayHealth Pharmacy and its Enterprise Information Solutions division for now, but is looking at “strategic alternatives” for the EIS division. Change Healthcare, for its part, is keeping its pharmacy switch and prescription routing businesses, which will continue to be held by the current Change stockholders.

The deal could wring new profits out of a McKesson division which has seen better days, observers say.

The last few years have been tough for McKesson which, as HIStalk notes, has seen a growing number of customers going is technology aside in favor of Epic and Cerner solutions. Four years ago, the vendor began shifting resources away from its Horizon Clinicals product line in favor of its Paragon suite. Horizon had been serving several hundred large facilities of 300 beds and up. Since then, McKesson has struggled to convert Horizon customers to Paragon, as gossip heated up that the Atlanta vendor was dialing down Horizon support to force customers onto Paragon.

Now, execs hope the combined company will offer the resources, scalability and integration hospital customers are after. The question is whether even such a large player can challenge Epic and Cerner’s stranglehold on the hospital market. If nothing else, it will have to battle perceptions that it can’t offer the best tool for the larger hospital systems, HIStalk points out.

Still, even if it doesn’t win Epic or Cerner shops, leaders of the news spun-off entity expect to cast a wider net. Execs hope combined set of financial and payment solutions the attractive to help plan as well as providers.