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GE Phasing Out Centricity Enterprise, To Some Surprise

Posted on April 22, 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.

Conceding that its competitors have the upper hand, GE is phasing out its Centricity Enterprise product, informing the world in a #HIMSS15 announcement which has gotten little play from our tech media colleagues.  As we’ve argued before, HIMSS is not only a great time to announce big plays, it’s also a great time to bury unpleasant news, and GE seems to have succeeded.

Not surprisingly, employees saw things coming long ago. More than a year ago, for example, a 10-year-plus employee of GE Healthcare called the vendor out on what they saw as low-wattage efforts on company rating site Glassdoor.com. The ex-employee cited a “lack of resources to deliver a good EHR product, [causing] a strong customer base to choose other EHR vendors.”

It’s little wonder that GE is backing out of Centricity Enterprise, which according to a report in MedCity News generated only 5 percent of its EMR revenue, according to Jon Zimmerman, general manager of clinical business solutions. “Is it in the best interest of our customers, shareholders and employees to (be) in a market where competitors are clearly ahead, or should we recognize the situation and go to where the market is going?” Zimmerman told MedCity.

But the fact is, Zimmerman’s comments are somewhat disingenuous. At HIMSS, the company admitted that it had begun the process of dumping Centricity Enterprise three years ago, though it’s not clear how long ago it began to let customers know about its plans. For example, I doubt that Continuum Health Partners CIO Mark Moroses, who as of summer 2013 was moving his organization to the Centricity enterprise EMR, expected to have it phased out less than two years later.

It’s worth wondering why a player with GE’s resources seemingly couldn’t hack the enterprise market. But the problem isn’t new. As far back  as 2011, GE was forced to admit that some of its ambulatory and enterprise customers wouldn’t be able to achieve Meaningful Use with their products. That was probably the beginning of the end for the Enterprise product, which ranked either fifth or sixth in the market recently depending on who you asked. But with Epic alone controlling 15% to 20% of the enterprise EMR market of late, and Cerner hot on its heels, giving up probably was a reasonable response.

The real question is what comes next. If Glassdoor.com posters are any indication, GE Healthcare is prone to frequent strategic changes as management shifts, so who knows what the future holds for its ambulatory Centricity EMR?

At the moment,  it seems that GE is firmly behind its ambulatory product. And that makes sense. After all, physicians are decommissioning their existing EMRs at a frantic rate, and are eager to find substitutes, and that gives GE plenty of sales opportunities. With 70% of physicians unhappy with their EMR, according to a study announced in February of last year, it should be easy pickins.

But given the way GE may have fumbled the ball on the enterprise side, I’d want some proof that leaders there had a long-term commitment to ambulatory care. Practices have a hard enough time finding EMRs that work for them; having to switch for reasons that have nothing to do with them makes no sense.

No Cloud Based Hospital EHR of Note…Yet?

Posted on April 8, 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.

Scott Mace offered this interesting intro to his article “Cloud Adoption Gains Traction” in Health Leaders Magazine:

While no cloud-based electronic health record software of note for hospitals has yet to emerge on the scene, cloud-based ambulatory EHRs continue to gain traction, storage remains a strong cloud option, and intriguing new analytics options are tapping the versatility of cloud technology.

A look at hospital EHR market share and the main EHR companies (Epic, Cerner, MEDITECH, etc) are not cloud based EHR systems. Sure, some of them might have their client server installs hosted in the cloud, but that’s not a true single database EHR cloud.

What’s fascinating to me is why cloud EHR hasn’t taken off in hospitals like it’s taken off in the rest of the world (even ambulatory EHR as the article notes). It’s worth noting that athenahealth is working on a cloud based hospital EHR. However, there still at least a couple years out from even being in the conversation when a hospital considers selecting an EHR. The small SaaS Hospital EHR vendors don’t even make a dent in the market share.

Here’s why I think cloud EHR hasn’t taken off in hospitals:

Early Adopters – Many hospitals adopted some form of EHR really early on. They made the investment before cloud was really a decent option to consider (ie. before high speed internet was ubiquitous). Now they’re stuck with a legacy investment and they’re still paying off that investment

Switching Costs are High – Switching EHR in the ambulatory world is hard. Doing so in a hospital is infinitely more difficult. If I’m a CIO at a hospital, do I want to put my organization through that process? It takes a really visionary CIO and a supportive CEO to make the change.

No Great SaaS Hospital Alternatives – Once hospitals decided they needed one all in one system, that narrowed the number of EHR options to very few. We still have yet to see a SaaS software expand their offerings to cover the full gamut of software that’s required by a hospital. For example, even Epic which has been around forever (and is not a cloud EHR for the record), still gets complaints from hospitals about their lab software. Now apply that to 100 departments in a hospital and SaaS software just hasn’t been able to provide the full suite of software a hospital requires.

Fear – I think most hospitals are still afraid of the cloud. There are plenty of reasons why they should be less afraid of cloud than their current set up, but there’s still very much fear surrounding cloud. Somehow having the servers in my data center, on site where I can touch them and feel them makes me feel more safe. Reality or not, this fear has prevented most hospitals from even considering a cloud based EHR. I think they’re starting to get past it since every hospital now has something in the cloud, but that wasn’t true even 5 years ago in many organizations.

I’m sure there are other reasons you can offer in the comments. Of course, Scott Mace’s article linked above goes into a number of the benefits of a cloud EHR. However, that’s not yet a realistic option for hospitals. I’m sure one day it will be.

RNs are Choosing Where to Work Based on Hospital EHR

Posted on February 27, 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 came across this tweet and it made me stop and realize how important the selection and more important the implementation of your EHR will be for your organization. In many areas there’s already a nurse shortage, so it would become even more of an issue if your hospital comes to be known as the hospital with the cumbersome EHR.

Here’s some insight into the survey results from the article linked above:

79% of job seeking registered nurses reported that the reputation of the hospital’s EHR system is a top three consideration in their choice of where they will work. Nurses in the 22 largest metropolitan statistical areas are most satisfied with the usability of Cerner, McKesson, NextGen and Epic Systems. Those EHRs receiving the lowest satisfaction scores by nurses include Meditech, Allscripts, eClinicalWorks and HCare.

The article did also quote someone as saying that a well done EHR implementation can be a recruiting benefit. So, like most things it’s a double edge sword. A great EHR can be a benefit to you when recruiting nurses to your organization, but a poorly done, complex EHR could drive nurses away.

I’m pretty sure this side affect wasn’t discussed when evaluating how to implement the EHR and what kind of resources to commit to ensuring a successful and well done EHR implementation. They’re paying the price now.

Department of Defense (DOD) and Open Source EHR

Posted on February 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 was intrigued by a report by the Center for New American Security that was covered in this article on HealthcareDive. In the report, they make a good case for why the Department of Defense (DOD) should select an open source EHR solution as opposed to a commercial solution. Here’s an excerpt from the article:

“I think the commercial systems are very good at what they do,” Ondra said. However, “they are not ideally designed for efficiency and enhancement of care delivery, and I think the DOD can do better with an open source system both in the near-term, and more importantly in the long-term, because of the type of innovation and creativity that can more quickly come into these systems.”

Reports like this make a pretty good case for open source. Plus, I love that it also pointed out that commercial EHR vendors were built on the back of the fee for service model which doesn’t matter to the DOD. It was also interesting to think about the DOD’s selection of an open source EHR system as an investment in other hospitals since the money they spend on an open source EHR could help to catalyze the ongoing development of a free open source EHR solution.

While these arguments make a lot of sense, it seems that the DOD has decided not to go with an open source EHR solution and instead is opting for a commercial alternative. In this article (Thanks Paul) the DOD has narrowed the list of contenders for the $11 Billion DOD EHR contract (DHMSM) to just: CSC/HP/Allscripts, Leidos/Accenture/Cerner, and IBM/Epic who “fall within the competitive range.” They reported that PwC/Google/GDIT/DSS/Medsphere and Intersystems did not fall within the competitive range.

I’ll be interested to hear Medsphere’s take on this since every report I’ve ever read has Medsphere and their open source Vista solution as much less expensive than the commercial alternatives (Epic, Cerner, Eclipsys). So, I can’t imagine that the Medsphere bid was so much more than the others. Unless the consultants are charging through the nose for it. Or maybe the open source Vista option wasn’t “in the competitive range” because it was too cheap. Wouldn’t that be hilarious to consider. Hopefully the government isn’t that stupid, but…

I don’t claim to have any clue on how these $11 billion government contract bids work. I’m just a casual observer from the sideline. It seems like 3 companies remain in the ring. I guess the Google juice wasn’t enough for the PwC/Medsphere bid.

Cerner Offers Voluntary Separation Packages

Posted on February 24, 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.

The Kansas City Star is reporting that Cerner is offering employers whose combination of years of service and age total 65 have been offered voluntary separation packages. Here’s an excerpt from the article:

Cerner spokesman Dan Smith said the one-time offer reflects the “deep bench of complementary talent” because of the Siemens acquisition and doesn’t affect Cerner’s continued hiring or its future growth plans.

“This is a truly voluntary program for all of our U.S. associates,” Smith said. “There is no pre-determined outcome and no number to hit. It provides eligible associates who might be ready to make a change the chance to decide to stay or pursue a different option and get benefits not normally associated with voluntary departures.”

With any large acquisition like the one Cerner did of Siemens, there has to be a lot of duplicate functions and they have to look at how to trim back the number of employees. So, this shouldn’t come as any surprise. In fact, I think the fact that they’re currently doing a voluntary separation package might mean that they aren’t looking to slim down the company as much as you’d think. Some investors might think that’s a bad plan since every company the size or Cerner or Siemens (let alone the combined company) could likely fire 10% of the workforce and improve their company’s profitability. Although, it could also be a sign of how much growth Cerner is experiencing.

Personally, I’ll be watching to see if they announce some other layoffs. It will be a surprise to me if they don’t announce some involuntary layoffs. Either way, this is a normal part of an acquisition like this.

It does make me wonder how many of these older professionals that accept the voluntary separation packages will end up at the wide variety of EHR consulting companies out there. You have to think that would be a pretty sweet deal for them.

Will Cerner Let Mayo Clinic Move to Epic Easily?

Posted on February 9, 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.

As most regular readers know, we don’t try to get into the rat race of breaking news on things like EHR selection, the latest meaningful use, or whatever else might be time sensitive healthcare news. Sure, every once in a while we’ll report something we haven’t seen or heard other places, but we’re more interested in the macro trends and the broader insight of what various announcements mean. We don’t want to report on something happening, but instead want to tell you why something that happened is important.

A great example of this is Mayo Clinic’s decision to go with Epic and leave behind Cerner, GE, and other systems. There’s a good interview with Mayo Clinic CEO, Cris Ross, that talks about Mayo’s decision to go with Epic. As he says in the interview, GE Centricity wasn’t part of their future plans, and so they were really deciding between Epic and Cerner. Sad to see that Vista wasn’t even part of their consideration (at least it seems).

Based on Cris Ross’ comments, he commented that he liked Epic’s revenue cycle management and patient engagement options better than Cerner. Although, my guess is that they liked Epic’s ambulatory better than Cerner as well since they were going away from GE Centricity. Cris Ross’s double speak is interesting though:

As we looked at what met our needs, across all of our practices, around revenue cycle and our interests around patient engagement and so on, although it was a difficult choice, in the end it was a pretty clear choice that Epic was a better fit.

Either it was a difficult choice or it was a pretty clear choice. I think what Cris Ross is really saying is that they’d already decided to go with Epic and so it was a clear choice for them, but I better at least throw a dog bone to Cerner and say it was a hard choice. Reminds me of the judges on the voice that have to choose between two of their artists. You know the producers told them to make it sound like it’s a hard choice even if it’s an easy one.

Turns out in Mayo’s case they probably need to act like it was a really hard choice and be kind to Cerner. Mayo has been a Cerner customer for a long time and the last thing they want to do is to anger Cerner. Cerner still holds a lot of Mayo’s data that Mayo will want to get out of the Cerner system as part of the move to Epic.

I’ll be interested to watch this transition. Will Cerner be nice and let Mayo and their EHR data go easily? Same for GE Centricity. I’ve heard of hundreds of EHR switches and many of them have a really challenging time getting their data from their previous EHR vendor. Some choose to make it expensive. Others choose to not cooperate at all. Given Mayo’s stature and the switch from Pepsi to Coke (Cerner to Epic, but I’m not sure which is Pepsi and which is Coke), I’ll be interested to see if Cerner lets them go without any issues.

I can’t recall many moves between Epic and Cerner and vice versa. Although, we can be sure that this is a preview of coming attractions. It will be interesting to see how each company handles these types of switches. What they do now will likely lay the groundwork for future EHR switching.

Cerner Completes Acquisition of Siemens Health Services

Posted on February 2, 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.

As we first wrote about back in August 2014, Cerner Has Acquired Siemens and today the acquisition is complete. Here’s a quote from Neal Patterson, Cerner Chairman CEO and Co-Founder, about the acquisition:

“By combining client bases, investments in R&D and associates, we are in a great position to lead clients through one of the most dynamic eras in health care,” said Neal Patterson, Cerner chairman, CEO and co-founder. “Cerner remains focused on key development areas including population health, physician experience, open platforms, revenue cycle and mobility. We see these as critical areas of investment to ensure providers can meet growing regulatory demands and control costs, while continuing to improve quality of care.”

This note on Cerner revenue and client base was quite interesting: “Cerner expects revenue in 2015 to be approximately $4.8 billion to $5 billion, with a client base spanning more than 30 countries across more than 18,000 facilities.” For those keeping track at home, the purchase price for the acquisition was $1.3 billion plus working capital adjustments.

We wrote previously about John Glaser staying on at Cerner. Cerner has committed to supporting and advancing the Soarian platform for at least the next decade. Although, that’s not a surprise since it will probably take a decade for the Soarian licenses to come up for renewal so they can move them to the Cerner platform.

Give it 3-4 years and you’ll see why Soarian is not likely to be a long term option for organizations. It’s expensive to support 1 platform, let alone two. Cerner will be doing the minimum necessary on Soarian and integrating new revenue streams into it. Otherwise, I can’t imagine they’ll do anything great with it.

The next couple years are going to get really interesting as the two heavyweights battle it out: Cerner and Epic. Although, I thought Neal’s areas of interest for Cerner were interesting: population health, physician experience, open platforms, revenue cycle and mobility. I’d love to sit down with him and talk about what they’re really doing in these areas. Especially around open platforms.

A Turning Point? Wearables Could Save 1.3M Lives by 2020

Posted on December 22, 2014 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 years, wearable health bands have been expensive toys useful almost exclusively to fit people who wanted to get fitter. On their own, wearables may be chic, sophisticated and even produce medically relevant information for the user, but they haven’t been integrated into practical care strategies for other populations.

And with good reason. For one thing, doctors don’t need to know whether an otherwise-healthy patient took 10,000 steps during a run, what their heart rate was on Thursdays in June or even what their pulse ox reading was if they’re not wheezy asthmatics. Just as importantly, today’s EMRs don’t allow for importing and analyzing this data even if it is important for that particular patient.

But as the banners at last week’s mHealth Summit pointed out, we’re headed for the era of the mHealth ecosystem, a world were all the various pieces needed to make patient generated data relevant are in place. That means good things for the future health of all patients, not just fitness nuts.  In fact, a Swiss analyst firm is predicting that smart wearable devices will save 1.3 million lives by 2020, largely through reductions in mortality to in-hospital use of such devices, according to mobihealthnews.

New research from Switzerland-based Soreon Research argues that smart wearables, connected directly with smart devices, projects that using wearables for in-hospital monitoring will probably save about 700,000 lives of the 1.3 million it expects to see preserved by 2020. Even better, wearables can then take the modern outside the hospital. “New wearable technology can easily extend monitoring functions beyond the intensive care unit and alert medical professionals to any follow on medical problems a patient may develop,” according to Soreon Research Director Pascal Koenig.

Not surprisingly, given their focus on monitoring aerobic activities, Soreon projects that wearables can be particularly helpful in avoiding cardiovascular disease and obesity. The firm believes that monitoring patients with wearables could prevent 230,000 deaths due to cardiovascular diseases, and reduce obesity related deaths by 150,000.

And that’s just a taste of how omnipresent wearables use may be within a few years. In fact, Soreon believes that patients with chronic conditions will help push up the smart wearables market from $2 billion today to $41 billion, or more than 1000% growth. That’s a pretty staggering growth rate regardless of how you look at it, but particularly given that at the moment, clinical use of smart wearables is largely in the pilot stage.

What few if any pundits are discussing — notably, as I see it — is what software tools hospitals will use to crunch this flood of data that will wash it on top of the astonishing volume of data EMRs are already producing.

True, at the mHealth Summit there were vendors pitching dashboards for just this purpose, who argued that their tools would allow healthcare organizations to manage populations via wearable. And of course tools like Apple HealthKit and Microsoft Health hope to serve as middlemen who can get the job done.

These solutions will definitely offer some value to providers. Still, I’d argue that wearables will not make a huge impact on clinical outcomes until the day what they produce can be managed efficiently within the EMR environment a provider uses, and I don’t see players like Epic and Cerner making big moves in this direction. When the mHealth ecosystem comes together it’s likely to produce everything analysts predict and more, but bringing things together may take much longer than they expect.

John Glaser to Stay on as Senior VP of Cerner Upon Close of Acquisition

Posted on November 19, 2014 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.

In case you’re living under a rock (or more affectionately, you’re too busy working to follow the inside baseball of EHR company acquisition), Cerner is set to acquire Siemens in late winter or early spring pending all the needed approvals for companies this size. Watching the merging of these two companies is going to be very interesting indeed.

Neil Versel just reported that John Glaser, current CEO of Siemens Health Services, has announced that upon close of acquisition he’ll be joining the Cerner team as a Senior VP. I also love that John Glaser made this announcement on the Cerner blog.

I think this is a big deal since I believe John Glaser is at the point in his career that he could do just about anything (or nothing) if that’s what he desired. The few times I’ve interacted with John Glaser, he was sincerely interested in moving healthcare forward through the use of advanced IT. I imagine that’s what’s motivating him to stay with Cerner. No doubt, Cerner is sitting on a huge opportunity.

In John Glaser’s blog post, he provided an interesting insight into Neal Patterson’s comments at the Cerner user conference:

In his CHC keynote address, Cerner CEO Neal Patterson did a masterful job of conveying Cerner’s commitment to patient-centered care. Before he spoke, a patient and her nurse were introduced with explanation that the woman’s life was saved by a Cerner sepsis alerting system. Neal then shared the incredible challenges he and his wife have faced in her battle with cancer because of limited interoperability.

Neal’s keynote was very personal – about how we can make a loved one’s care journey easier by ensuring that all records – every detail – are available electronically and accurately wherever the patient receives care. It was the case for interoperability but also the case for making a patient’s life easier and the care better.

It’s hard for me to say how much of this was theatrics, but I’m glad they are at least talking the right talk. I really do hope that Neal’s personal experience will drive interoperability forward. Neil Versel suggested that interoperability would be John Glaser’s focus at Cerner. I hope he’s successful.

While at CHIME, I talked with Judy Faulkner, CEO of Epic, and we talked briefly about interoperability. At one point in our conversation I asked Judy, “Do you know the opportunity that you have available to you?” She looked at me with a bit of a blank stare (admittedly we were both getting our lunch). I then said, “You are big enough and have enough clout that you (Epic) could set the standard for interoperability and the masses would follow.” I’m not sure she’s processed this opportunity, but it’s a huge one that they have yet to capitalize on for the benefit of healthcare as we know it.

The same opportunity is available for Cerner as well. I really hope that both companies embrace open data, open APIs, and interoperability in a big way. Both have stated their interest in these areas, but I’d like to see a little less talk…a lot more action. They’re both well positioned to be able to make interoperability a reality. They just need to understand what that really means and go to work on it.

I’m hopeful that both companies are making progress on this. Having John Glaser focused on it should help that as well. The key will be that both companies have to realize that interoperability is what’s best for healthcare in general and in the end that will be what’s best for their customers as well.

Investor Wants to Take Down Epic

Posted on October 13, 2014 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 came across a really interesting comment from Chamath Palihapitiya, a venture capitalist (made his money working at Facebook), who commented on the healthcare industry and how he wanted to invest in a startup company that would take down Facebook. I embedded the full video below. His comments about EHR and Epic start at about 52:38 or you can click here to see it.

Here’s a great quote for those who can’t watch the video:

“Somebody has to go after the electronic medical record market in a really big way. Let’s go and take down this company call Epic which is this massive, old conglomerate. It’s like the IBM of healthcare.”

After saying this, he talks about how he and other VC investors like John Doerr could call people from Obama (for meaningful use stage 3) to Mayo Clinic to help a startup company try and take down Epic. He even asserts that he’d call Mayo Clinic and suggest that they should rip out Epic and go with this startup company.

Everyone reading this blog know that it won’t be nearly this simple to convince any hospital that’s on Epic to leave it behind. I agree with Chamath that it will happen at some point, but it won’t be nearly as easy as what he describes. Chamath also suggested that it might take $100 million and you might fail, but what a way to fail.

It certainly provides an interesting view into the way these venture capitalists and many startup companies approach a problem. However, I take a more nuance and practical approach of how I think that Epic will be disrupted. I think that it will require a mix of a new technology paired with a dynamic CIO that’s friends with the hospital IT leadership. You need that mix of amazing technology with insider credibility or it won’t be a success. Plus, you’re not going to go straight in and take out Epic. You’re going to start with a hospital department and create something amazing. Then, that will make the rest of the hospital jealous and you’ll expand from there until you can replace Epic. That’s how I see it playing out, but it likely won’t happen until after the MU dollars are spent.

Chamath’s comments were also interesting, because it shows that he doesn’t know the healthcare market very well. First, he said that meaningful use was part of ACA, but meaningful use is part of ARRA (the HITECH Act) and not ACA. This is a common error by many and doesn’t really impact the points he made. Second, he said that Epic is a big conglomerate. Epic is the farthest thing from a conglomerate that you can find. Has Epic ever acquired any company or technology? Cerner, McKesson, GE, etc could be called conglomerates, but Epic is not. Again, a subtle thing, but shows Chamath’s depth of understanding in the industry. It makes sense though. He isn’t an expert in healthcare IT. He’s an expert in seeing market opportunities. No doubt, disrupting Epic and Cerner would make for a massive company.