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Would Cerner DoD Loss Seal Its Fate As An Also-Ran?

Posted on July 29, 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.

Update: Cerner has been announced as the winner of the DoD EHR Contract.

As everyone knows, Epic has attained a near-unbeatable place in the race for U.S. hospital market share. By one important criterion, Meaningful Use attestations, Epic has the lead hands down, with about 186,000 attestations as of March 2015 compared with 120,331 attestations on Cerner systems.

That being said, Cerner is hardly an insignificant force in the hospital EMR marketplace. It’s a multibillion-dollar powerhouse which still holds a strong #2 position and, if a casual survey of Web and social media commentary is to be believed, has done far less to alienate its customers with high-handed tactics. And while Cerner systems are far from cheap, you don’t regularly see headlines citing a Cerner investment as pivotal in a hospital’s credit rating taking a pratfall. Also, Cerner has the most contracts with MU-eligible hospitals, holding contracts with about 20% of them.

Nonetheless, there’s an event looming which could tip the scales substantially further in Epic’s direction. As many readers know, Epic is part of a team competing for the Department of Defense’s $11B Healthcare Management Systems Modernization contract (Word on the street is that we could hear the winner of the DoD EHR bid this week). I’d argue that if Epic wins this deal, it might have the leverage to push Cerner’s head under water once and for all.  Cerner, too, is fighting for the deal, but if it wins that probably won’t be enough to close the gap with Epic, as it’s harder to play catch up than to zoom ahead in a space you already control.

Now my colleague John argues that winning the DoD contract might actually be bad for Epic. As he sees it, losing the DoD deal wouldn’t do much damage to its reputation, as most hospital leaders would understand that military healthcare bears little resemblance to commercial healthcare delivery. In fact, he contends that if Epic wins the contract, it could be bad for its customers, as the Verona, Wisc.-based giant may be forced to divert significant resources away from hospital projects. His reasoning makes sense.

But losing the DoD contract would almost certainly have a negative impact on Cerner. While Epic might not suffer much of an image loss if it loses the contest, Cerner might. After all, it doesn’t have quite the marquee list of customers that Epic does (such as the Cleveland Clinic, Massachusetts General Hospital, Mayo Clinic and the Johns Hopkins Hospital). And if Cerner’s rep suffers, look out. As a surgeon writing for investor site Seeking Alpha notes, the comparatively low cost of switching TO Cerner can just as easily be used as a reason to switch AWAY FROM Cerner.

What’s more, while Cerner’s acquisition of Siemens’ health IT business — adding the Soarian product to its stable — is likely to help the company differentiate itself further going forward, but that’s going to take a while.  If Cerner loses the DoD bid, the financial and PR hit could dampen the impact of the acquisition.

Net-net, I doubt that Cerner is going to lie down and play dead under any circumstances, nor should it. Epic may have a substantial advantage but there’s certainly room for Cerner to keep trucking. Still, if Cerner loses the DoD bid it could have a big impact on its business. Now is the time for Cerner to reassure current and potential customers that it’s not planning to scale back if Epic wins.

IBM and Epic Prep for Multi Billion Dollar DoD EHR Contract

Posted on January 12, 2015 I Written By

In this recent Nextgov article, they talk about what Team IBM/Epic are doing to prepare for the massive bid:

On Wednesday, IBM and Epic raised the bar in their bidding strategy, announcing the formation of an advisory group of leading experts in large, successful EHR integrations to advise the companies on how to manage the overhaul — if they should win the contract, of course.

The advisory group’s creation was included as part of IBM and Epic’s bid package, according to Andy Maner, managing partner for IBM’s federal practice.

In a press briefing at IBM’s Washington, D.C., offices, Maner emphasized the importance of soliciting advice and insight from the group. Members of the advisory board include health care organizations, such as the American Medical Informatics Association, Duke University Health System and School of Medicine, Mercy Health, Sentara Healthcare and the Yale-New Haven Hospital.

Add this new advisory group to the report that Epic and IBM set up a DoD hardened Epic implementation environment and you can see how seriously they’re taking their bid. Here’s a short quote from that report:

Epic President Carl Dvorak explained the early move will also help test the performance of an Epic system on a data center and network that meets Defense Information Systems Agency guidelines for security. An IBM spokesperson told FCW that testing on the Epic system has been ongoing since November 2014.

As we noted in our last article, 2015’s going to be an exciting year for EHR as this $11+ billion EHR contract gets handed out. What do you think of Team IBM/Epic’s chances?

Muli-Billion Dollar DoD EHR Contract Promises Exciting Times in 2015

Posted on January 9, 2015 I Written By

This summer the DOD is set to award the multi billion dollar electronic health records contract. Each group that bid on it contains at least one company the provides product and one with heavy weight Gov’t/DOD presence.

Who is going to win? Who is in real trouble if they don’t? As far as the winner is concerned, my new, Christmas gift , Crystal Ball doesn’t have this level of experience yet. What I do know is that who the actual winner is will affect the entire Healthcare IT marketplace.

Of the bidders, there are a few companies “betting the farm” on winning this. More later on who, but they could be in serious trouble if they are not the winners.

The contract is scheduled to be awarded in early July. I’m sure there will be protests and pressure from the losers, so the contract’s full impact might be delayed briefly.

When all this is sorted out the need for qualified people to work on the project is going to be huge and securing a position there will be considered a prize for many because the contract itself is going to last for at least 8 years.

Basically this means that if you are looking for a position, there are going to be a huge amount of health IT job opportunities available. As professionals move to the DOD contract, most will need previous experience. Where are they going to come from? These experienced professional departures will create job opportunities when they leave.

For employers, you might want to look into your employee retention efforts. Some companies out there are going to have a major problem with retention. You may be putting out fires all summer long as the experienced health IT marketplace shifts.

The Best Thing For Epic Might Be to NOT Win the DoD Contract

Posted on June 2, 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.

Update: Cerner has been announced as the winner of the DoD EHR Contract. So, we’ll have a chance to see what impact this has on future EHR contracts for Epic.

For those not familiar with the Department of Defense (DoD) EHR contract that’s being bid on right now, check out our post about the $11 billion EHR contract. Yes, you’re reading that right. That’s $11 billion with a B. I believe that would be the largest single EHR contract ever (I believe Kaiser was $4 billion to start).

Needless to say, this is an enormous contract that will make some outside companies very rich. I can’t even imagine what $11 billion of EHR consultants and software would look like. That’s a lot of EHR jobs to go around, but I digress.

Most people in the industry seem to believe that Epic is the front runner in the race. Considering the number of large deals that Epic has won, Epic winning the DoD EHR contract would be a safe bet. Although, I wonder if the best thing for Epic would be for them to not win the DoD contract.

Sure, Epic would take a short term PR hit if someone else like Cerner wins the DoD contract. You can already predict the press headlines talking about the fall from power as Epic loses to Cerner (similar to when Cerner won the Intermountain deal over Epic). That would have some damage to Epic’s reputation, but not really. It’s not like any other hospital in the US thinks that their contract would be anything like the DoD EHR contract. In fact, many of the hospitals purchasing Epic EHR will be grateful that Epic resources aren’t being tied up on a new $11 billion contract while their “small” $100 million EHR project languishes.

Indeed, the best thing for Epic might be for it to NOT win the DoD EHR contract. Let’s remember that Epic has a really good history of successful EHR implementations. Sure, there are a few examples where the Epic implementation hasn’t gone so well. However, I think the general view of the industry is that Epic implementations generally go well. In fact, there are stories of Epic contracts so stringent that when an Epic implementation starts to go bad, Epic comes in and takes over to make sure that the implementation goes well.

Long story short, Epic has the best reputation of any hospital EHR vendor when it comes to successful EHR implementations (especially large ones). Epic winning the DoD EHR contract could do a lot to tarnish that reputation.

One might argue that if Epic’s successful with the $11 billion DoD EHR contract, that it will be a boon to their current reputation. That’s fair, but the DoD EHR implementation would be unlike most other EHR implementations. First, the DoD doesn’t have a sterling reputation for successful healthcare software projects. That will likely become an issue for anyone who wins the contract. Second, we’re talking about a government entity with layers of red tape and bureaucracy. A small company like Epic (small in government contractor terms) isn’t going to carry the same weight as they usually do in their other hospital EHR implementations. Epic, the control company, won’t be able to control the DoD EHR project the same way they usually do.

One could use the same argument I used above about why even if Epic gets the DoD contract and fails, it won’t tarnish their reputation since hospitals realize that the DoD is unique. However, the difference between losing a bid and a failed $11 billion project is very different. The failed DoD EHR bid will be covered once and then generally forgotten. A failed $11 billion contract can carry on for years as timelines are delayed, budget overruns are reported, discontent leaks out, he said-she said occurs, and the media churns and speculates on what’s happening with the DoD EHR project.

We all think that winning an $11 billion contract would be great. Indeed, that’s a lot of money and would be an enormous win worth celebrating. The only question is how long will the celebration continue? If I’m Epic, I wouldn’t be too sad if I didn’t win the contract. In the long term, it might be for the best.

$11 Billion DoD EHR Contract

Posted on May 1, 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.

Nextgov has a great article up which outlines many of the details of the soon to be bid out Healthcare Management Systems Modernization contract. I’d prefer to call it the DoD EHR Contract or AHLTA replacement contract. Certainly there’s more to it than EHR, but that will be the core of the contract and the big name EHR vendors will all be involved.

Here’s a section of the article which gives you an idea of the size of the contract:

The DHMSM contract’s estimated lifecycle value is approximately $11 billion and would include initial operating capabilities by 2017 and full functionality by 2023, according to Dr. Jonathan Woodson, assistant secretary of Defense for health affairs, who testified in February before the House Appropriations Committee’s defense panel.

Even in Washington, $11 billion is a lot of money, and it would surely rank among the largest IT-related contracts in government. What’s unique about this effort is that the Pentagon wants a single contractor to lead the integration of a commercial electronic health records system to cover its nearly 10 million beneficiaries and large assortment of health care facilities worldwide. Defense is one of the largest health care providers in the country, on par in size with the Veterans Affairs Department and private sector leaders like Kaiser Permanente.

The article also states that they want to issue a contract with one vendor. We’ll see how that plays out. I’ve seen some rumors out there about who will be bidding. No doubt it will be a combination of the usual government contractors and EHR consultant companies together with EHR vendors like Epic and Cerner.

What’s going to be really interesting is the VA and its Vista EHR (Vista Evolution) is said to be bidding on the contract as well. We’ll see if they’re the only Vista bid or if others join in as well.

Here’s another great insight into the DoD EHR Contract:

Major data gaps in patient records occur when health care is delivered to beneficiaries outside the DOD network, and today approximately half of DOD’s 9.8 million beneficiaries receive their health care outside the network.

This was an obvious complaint of the AHLTA system. The DoD and VA couldn’t even get their EHR systems to be interoperable. I’m not optimistic that interoperability will be obtainable even under this new contract. That includes DoD to VA interoperability, let alone trying to connect with the care the DoD beneficiaries receive outside the DoD network.

I realize that nothing with the DoD health system is simple. Its an enormous system with all sorts of crazy government regulations. However, I’d hope for $11 billion, we could do better than we’re doing for our veterans.

At HIMSS, I talked with a largely military EHR vendor. They told me that they were close to being able to exchange records between different locations. That’s right. At HIMSS 2014 the amazing breakthrough was that 2 locations with the same EHR software were close to being able to exchange data.

DoD, VA Spent Bulk of 2012 iEHR Budget on Support Contracts

Posted on November 27, 2013 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.

The VA and DoD’s iEHR project may or may not come together, but it seems clear that at least one party is getting ahead — the vendors the agencies retained to support the project.

A new report from the Interagency Program Office concludes that the two agencies spent more than $300 million funding support contracts for iEHR work in 2012.  The IPO’s job is  to modernize the Military Health System’s EMR software.

DoD and the VA have been working to build a joint integrated EMR, known as the iEHR, since 2009. The idea is to build an EMR which allows every service member to have and maintain a single personal electronic health record through their career and lifetime.

However, to say the project has been troubled is an understatement, with changes of strategy riddling the effort throughout its lifespan.

In February, for example, the iEHR project was halted, with officials electing to make their current EMR systems more interoperable.

A few months later, DoD Secretary Chuck Hagel wrote a memo stating that the agency will consider a commercial EMR system. Most recently, the DoD asked 27 EMR vendors to provide demos of possible EMR replacements.

Most recently, the DoD announced that it was looking for contractors that can support its current EMR, AHLTA, through 2018.

All  I can say is that if you’re following all of this you’re way ahead of me. With so many switches in direction, I can’t imagine anything lasting and good coming out of the process. Maybe you have to be military to get it. As for me, I see a strategy process that seems to be governed by something resembling a coin flip.

DoD Official Says Agency *Might* Select VistA Derivative

Posted on June 20, 2013 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.

While it appears to be an outside shot, it’s possible that the Department of Defense might still consider a derivative of the VistA EMR for its VA EMR integration project, though a straight ahead VistA implementation sounds like it may be out of the question.

At a briefing by DoD, Under Secretary for Acquisition, Technology and Logistics Frank Kendall said that while using and modernizing VistA was a “reasonable decision” for VA, it’s necessarily as bright an idea for the DoD.

After doing market research, DoD technology leaders have decided that they’ll consider a mix of competing commercial products as well as Vista-based systems, and have taken in about 20 pitches from EMR vendors.

“Three of them were from VistA-based approaches, and the rest were from other approaches,” Kendall said. “So we think we have a rich field to pick from, and we can make a best value determination for DoD.”

When asked how much the DoD’s next EMR move is going to cost, Kendall did a bit of a bob and weave, saying that seamlessly integrated data is funded in the ’13 and ’14 budgets, without naming a number for those projects or long-term costs.

OK folks. You know what?  This whole thing really ticks me off — how about you?

I don’t know why the DoD is so dismissive of VistA, but despite its colossal failures with AHLTA and the death of the iEHR project, people there still seem to think they should pursue their own course rather than go with what’s been working at the VA.

And as an American taxpayer, much less a health IT analyst, I’m really tired of hearing the leadership at DoD justify their shaky moves in the EMR arena.

Come on, Mr. Kendall. Why won’t you be more specific about the costs of your health IT initiative?  Perhaps it’s because VistA-based products could cost 10 times less than, say, an Epic installation and you don’t want annoying editors like me bugging you about it?

Apparently even blistering critiques by your colleagues haven’t moved leaders like you off of your entrenched commercial approach to EMR integration.  I guess it’ll take a memo from on high — apparently one from President Obama doesn’t suffice — to get the generalissimos of HIT at the DoD to try something that might work.

DoD, VA Plan To Streamline EMR Integration Effort

Posted on February 12, 2013 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.

The Department of Defense and VA have decided to change the way they integrate their two EMRs, in an effort they say will lower the cost and speed the pace of interoperating.  The new approach is expected to offer at least partial functionality by 2014, rather than forcing the two agencies to wait until 2017, reports FederalNewsRadio.com.

Rather than sticking to their current course, which involves a massive effort to integrate their respective EMRs into a single system, health IT leaders will attempt to make more short term  progress.

To date, the DoD and VA have been working on common requirements and data standards and developing a shared enterprise service bus, all in the service of creating a single system. Agency leaders had estimated that the existing project would cost $4 billion.

The new plan, while keeping the larger goal of integrating by 2017, will include efforts to use existing solutions to get to interoperability quickly. Leaders expect their new direction to be considerably cheaper.

By the end of this year, the two departments will begin sharing a common UI, with the rollout beginning in seven DoD and VA wounded warrior polytrauma centers. Then, by  2014, the VA and DoD expect to be exchanging seven types of critical data, including lab results, clinical notes and allergies. The VA and DoD will accomplish this by standardizing the day their systems currently use, the VA’s chief information officer told FederalNewsRadio.com.

Another key component of the two agencies’ efforts is establishing a common system for identity management.  The identity management system is drawing on the massive Defense Manpower Data Center storehouse of personnel informaton operated by the DoD.

New Open-Source GUI Can Display Multiple EMRs

Posted on May 30, 2012 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 non-profit focused on HIT has released an open-source graphical user interface which will provide a common view for patient information from multiple EMRs — a very useful trick if the software delivers what it promises.

The interface, Janus, was created as part of an interoperability program designed to link Department of Defense and VA data.  Right now, Janus is deployed at the VA Pacific Islands Health Care System/Triper Army Medical Center and clinics at James A. Lovell Federal Health Care System.

This seems like a great idea. If doctors in private medical settings could look at multiple EMR outputs at one time, I’m sure they’d be grateful.  After all, it can’t be much fun going from EMR to EMR as you travel from one hospital to another.

Such a unified view would probably save lives, ultimately, as it’d make it easier for doctors to quickly spot problems and review cases distributed across hospitals and clinics. Oh, and reduce doctor burnout too.

Though I’m a big fan of open source efforts, I’m sorry to say that I doubt it will make a dent in the way hospital IT departments and commercial EMRs are deployed.  Unfortunately, most vendors seem to feel they have more to gain by creating silos than making data sharing easy.

Still, it’s good to hear that the VA and DoD are doing something to interoperate. The two have been notorious for spending billions of bucks on integration projects that go nowhere, especially here in the healthcare arena.

The DoD’s AHLTA EMR project alone consumed 13 years and $2 billion, according to one account. The project went wrong due to poor planning and what sounds like arrogance (a failure to appreciate the “significant complexity” of the program), the Government Accountability Office concluded in 2010.