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McKesson and Infor Go-To-Market Partnership – What Happens Now?

Posted on January 9, 2017 I Written By

For the past twenty years, I have been working with healthcare organizations to implement technologies and improve business processes. During that time, I have had the opportunity to lead major transformation initiatives including implementation of EHR and ERP systems as well as design and build of shared service centers. I have worked with many of the largest healthcare providers in the United States as well as many academic and children's hospitals. In this blog, I will be discussing my experiences and ideas and encourage everyone to share your own as well in the comments.

A couple weeks ago, McKesson and Infor announced a partnership that will have McKesson EIS (Enterprise Information Solutions) offering Infor Cloudsuite as their cloud-based ERP (Enterprise Resource Planning) solution for human resources, supply chain, and financials. What does each party have to gain from this partnership and what does this mean for existing customers of McKesson ERP solutions?

Infor continues to be the dominant player in the ERP space for healthcare providers. Its healthcare applications, previously known as Lawson (and probably always known as Lawson to many of us), have the largest market share with the majority of larger hospitals and healthcare systems. Its closest competitor in the past, Peoplesoft, is now owned by Oracle which is focused on developing and promoting its Fusion product and has released the final version of the Peoplesoft product. Workday, the cloud-only solution that is publicly traded and making significant strives in many industries, has won deals in human resources and financials implementations but lacks a supply chain solution, critical to any integrated ERP deployment. SAP, the largest ERP provider in the world, has a strong presence in healthcare manufacturers but does not provide a supply chain solution well suited for the unique needs of healthcare providers, and therefore has a very small market share.

McKesson, once a strong player in this space, has faded over the years in ERP as they have with EHR solutions. The majority of the McKesson ERP customer base, using the products commonly referred to as Pathways, have been long-time legacy customers. Pathways has not been kept up with modern ERP needs, and it has been many years since I have seen a hospital consider Pathways as a potential solution, but rather it is typically the solution being replaced.

Infor has invested significantly in creating a cloud-based solution, referred to as CloudSuite. However, the existing healthcare customer base typically has an on-premise installation and therefore cloud adoption has been focused on new customers as well as those that are specifically looking to transition away from on-premise. McKesson has not had a cloud offering, therefore it would make sense for them to partner with someone to offer it as an alternative to Pathways.

Infor will gain access to the Mckesson customer base, many of whom are likely considering leaving Pathways for other solutions anyway. In addition, Infor will be able to provide Mckesson’s Strategic Sourcing solution for their customers.

However, it is unclear what that means for Pathways. While McKesson press releases state that CloudSuite is an alternative to Pathways, one has to wonder why Infor would want to expose their solution to someone who is actively selling a competitive solution, and why McKesson would continue to invest in Pathways when it has access to a much more mature and robust solution as a go-forward path for its Pathways customers.

Therefore while it is likely that McKesson will keep Pathways supported and up-to-date with regulatory improvements for the time being, it seems very unlikely that they would continue to enhance it – and inevitable that it will eventually be sunset in favor of transitioning those customers to Infor Cloudsuite. If history is indeed an appropriate predictor of the future, consider that McKesson announced its BetterHealth 2020 plan – in which they announced a focus on Paragon as their EHR but continued support of the older Horizon EHR product. Shortly after that they went back on that commitment and announced they would sunset Horizon in 2018.

Meaningful Use has led to a focus of resources on Electronic Health Records implementations which have led many customers to hold onto their older ERP solutions past their useful life. I suspect that the next two years will see a re-focus to ERP solutions with customers with more modern solutions focusing on upgrades and new feature deployment while customers with older solutions making a change.

Those customers who stayed on Horizon for too long are currently in a rush to implement replacements before the March 2018 sunset date.Customers on Pathways products should likely start the conversation now about their long-term ERP plans and consider if they want to get ahead of any sunset announcement.

If you’d like to receive future posts by Brian in your inbox, you can subscribe to future Healthcare Optimization Scene posts here. Be sure to also read the archive of previous Healthcare Optimization Scene posts.

Operationalizing Health IT Discoveries

Posted on June 24, 2016 I Written By

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

I’ve been talking a lot lately with people about how we take the health IT discoveries made at one hospital and apply them to another hospital. In a recent conversation I had with Jonathan Sheldon from Oracle, he highlighted that “Many organizations don’t care about research, but just want a product that works.”

I agree completely with this comment from Jonathan. While there are some very large healthcare organizations that do a lot of research, there are even more healthcare organizations that just want to see patients in the best way possible. They just want to implement the research that other organizations have done. They just want something that works.

The problem for big companies like Oracle, SAP, Tableau, etc is that they have the technology to scale up many of these health IT discoveries, but they aren’t doing the discovery themselves. In fact, most of them never will dive into the discovery of which healthcare data really matters.

In order to solve this, I’ve seen all of these organizations working on some sort of partnership between IT companies and healthcare research organizations. The IT company provides the technology and the commercialization of the product and the healthcare research organization provides the research knowledge on the most effective techniques.

While this all sounds very simple and logical, it’s actually much harder in practice. Taking your customer and turning them into a partner is much harder than it looks. Most healthcare organizations know how to be customers. It takes a unique healthcare organization to be an effective partner. However, this is exactly what we have to do if we want to operationalize the health IT discoveries these research organizations make.

We’re going to have to make this a reality. There’s no way that one organization can discover everything they need to discover. Healthcare is too complex as it is today. Plus, we’re just getting started with things like genomic medicine and health sensors which is going to make healthcare at least an order of magnitude more complex.

Are Your Health Data Efforts a Foundation for the Future?

Posted on June 10, 2016 I Written By

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

I recently was talking with Jonathan Sheldon from Oracle and I was inspired by the idea that today’s data projects could be the essential foundation for future healthcare analytics and care that form what we now call Precision Medicine. Chew on that idea for a minute. There’s a lot of power in the idea of building blocks that open up new avenues for innovation.

How many healthcare ideas have been shot down because “that’s impossible”? Lots of them. Why are so many of these things “impossible”? They’re impossible because there are usually 10-15 things that need to be accomplished to be able to make the impossible possible.

Take healthcare analytics as an example. I once worked with a clinician to do a study on obesity in our patient population. As we started to put together the study it required us to pull all of the charts for patients whose BMI was over a certain level. Since we were on an EHR, I ran the report and the clinician researching the study easily had a list of every patient that met her criteria. Imagine trying to do that study before EHR. Someone would have had to manually go through thousands of paper charts to identify which ones met the criteria. No doubt that study would have been met with the complaint “That’s impossible.” (Remember that too expensive or time consuming is considered impossible for most organizations.)

What I just described was a super simple study. Now take that same concept and apply it beyond studies into things like real time analytics displayed to the provider at the point of care. How do you do that in a paper chart world? That’s right. You don’t even think about it because it’s impossible.

Sometimes we have to take a step back and imagine the building blocks that will be necessary for future innovation. Clean, trusted data is a good foundational building block for that innovation. The future of healthcare is going to be built on the back of health data. Your ability to trust your data is going to be an essential step to ensuring your organization can do the “impossible”.

5 Year Projected Growth Rate for Healthcare Analytics Market

Posted on July 30, 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.

iHealthBeat recently reported some interesting data on the Healthcare Analytics market growth:

The market for health care analytics is projected to increase at a 25% compound annual growth rate between 2014 and 2019,according to a new report from Research and Markets, Health IT Analytics reports (Bresnick,  Health IT Analytics, 7/24).

If anything, I’d suggest that this is a conservative growth rate for the Healthcare Analytics market. If you go into any hospital, health analytics is one of the only thing they’re spending new money on.

In the same article linked above they suggested these companies as the major players:

  • Inovalon
  • LexisNexis
  • McKesson
  • Oracle
  • Predixion
  • SAS
  • Truven Health Analytics
  • Verisk Health

I agree that these companies will be involved, but I’m more interested in the newer Health Analytics companies that are entering and going to enter the market. We’ll see how that plays out since it seems like pretty much every healthcare IT company is creating some sort of health analytics offering.

What are your hospital’s healthcare analytics plans?

Business Intelligence And The Smart EMR

Posted on July 26, 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.

A new study by KLAS suggests that while providers are giving thought to business intelligence needs, they still haven’t honed in on favored vendors that they see as holding a leading position in healthcare. That may be, I’d suggest, because the industry is still waiting on EMRs that can offer the BI functionality they really need.

To look at the issue of BI in healthcare, KLAS interviewed execs at more than 70 hospitals and delivery systems with 200 or more beds.

When asked which BI vendors will stand out in the healthcare industry, 41 percent of respondents replied that they weren’t sure, according to a story in Health Data Management.

Of the other 59 percent who chose a vendor, IBM, SAP, Microsoft and Oracle came up as leaders in enterprise BI applications — but none of the above got more than 12 percent of the vote, HDM notes.

Vendors that did get a nod as standing out in healthcare-specific BI included Explorys, Health Catalyst, McKesson and Humedica (Optum). IBM and Microsoft were also singled out for healthcare use, but respondents noted that their products came with high price tags.

Meanwhile, QlikTech and Tableau Software were noted for their usability and data visualization tools though lacking in full BI toolsets, according to HDM.

While these stats are somewhat interesting on their own, they sidestep a very important issue:  when will EMRs evolve from transaction-based to intelligence-based systems?  After all, an intelligence-based EMR can do more to improve healthcare in context than freestanding BI systems.

As my colleague John Lynn notes, EMRs will ultimately need to leverage big data and support smart processes, becoming what he likes to call the “Smart EMR.”  These systems will integrate business intelligence natively rather than requiring a whole separate infrastructure to gather insights from the tsunami of patient data being generated today.

The reality, unfortunately, is that we’re a fairly long way away from having such Smart EMRs in place. Readers, how long to you think it will take before such a next-gen EMR hits the market?  And who do you think will be the first to market with such a system?

Oracle: Healthcare Providers Lose 15% Of Revenue On Missed Data Opps

Posted on July 26, 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.

Here’s some stats from Oracle regarding productive use of data which I’d guess are if anything understated.  The database giant’s new study has concluded that healthcare providers lose $70.2 million per year, or 15 percent of additional revenue per hospital, because they’re not able to take full advantage of the data they already have.

To draw this conclusion, Oracle surveyed 333 C-level executives at enterprises cutting across 11 industries, 30 of which were healthcare-related businesses.  All of the execs across the industries said they were collecting and managing more data than they were two years ago. The average increase was a hefty 85 percent. (My bet is that healthcare numbers, if isolated, would be even higher.)

Forty-seven percent of healthcare execs told Oracle that their organization couldn’t do much to generate actionable insight from the flood of new data. Worse, 40 percent said their current systems simply weren’t up to the job, reports Information Week.

To address the problem, 50 percent of healthcare execs are implementing standard tools for BI analysis, while 47 percent are looking into customized systems and applications.

Of course, Oracle has a vested interest in claiming we’re all yahoos when it comes to business intelligence, since they want you to buy their BI products. But that being said, it’s hard to argue that potentially actionable data is slipping through hospitals’ fingers; there’s simply too much new data coming in through EMRs, if nothing else.

Small wonder, then, that hospitals are hot to improve their BI capabilities. According to a recent KLAS study (see bottom of this page), 50 percent of healthcare organizations surveyed plan to buy or replace new BI systems over the next three years.  One-third said they were buying new BI tools and 19 percent are replacing BI systems.

According to the Information Week piece on the subject, hospitals are most interested in 1) enterprise analytics; 2) predictive analytics; 3) ACO analytics; 4) healthcare data integration/data warehousing; and 5) population health.  But I think we’re looking at five years at least before hospitals really get their arms around any of these, other than perhaps analytics within their own house.

The Same Fate of ERP Software Will Happen with Hospital EHR Software

Posted on March 12, 2012 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’ve often thought of the challenge associated with selling an EHR or other related enterprise software to a large hospital. As I think about this purchase process it’s made me wonder why any hospital would change out that software. I’ve often said that Epic’s approximately $1 billion contract with Kaiser (along with a number of other similar contracts) is one reason that Epic is going to be in the healthcare IT business for a long time to come.

In fact, these contracts and the process of change in hospitals has often led me to feel like change in the hospitals is almost impossible.

The amazing thing is that the same arguments could be made for ERP software in large companies. I know some people don’t like the comparison, but I think there are a lot of really interesting similarities.

In fact, I was reading through this somewhat older article which talks with Aneel Bhusri and Dave Duffield who founded PeopleSoft which was taken in a hostile takeover by Oracle and Larry Ellison. Turns out that Aneel and Dave decided to start another company a few months after the takeover of PeopleSoft. As he describes it, “we had a lot of fun so should we start another one?”

Aneel offers this insight that they found with their new Workday software as it tries and competes with the larger Oracle and SAP ERP software systems:

The big vendors are vulnerable because they require big expensive upgrades. Workday doesn’t go into startups — it’s selling to big companies that have HR and financial software in place. But companies have to update this software periodically, and the traditional vendors like Oracle and SAP make it hard and expensive to upgrade. That’s when startups like Workday jump in.

Can you see the Hospital EHR fate the same as what’s mentioned above?

Sure, the other big hospital EHR vendors will continue doing business much like Oracle and SAP are doing in the ERP world. However, there is a great opportunity for the people that have the right connections and knowledge of the hospital world to do a startup hospital EHR company that steps in and gains some market share.

I will admit that it’s going to take a gutsy hospital CIO to make this happen, but you can be sure that it will happen. Many of these hospital CIO will be rewarded handsomely for the choice as well.