Electronic Medical Records Are Not a Cure-All

We regularly work with clients that have developed innovative solutions to vexing, long-term problems confronting healthcare.  Some examples include:  enabling hospitals to quantify patient satisfaction, managing the release of patient chart information from the hospital, and providing meaningful drug and disease content to physicians in the course of their daily work.

In discussions with potential buyers and investors for these types of businesses, we regularly hear the following:  “Won’t widespread EMR adoption make this business obsolete?”   In the minds of many thinking about the HCIT industry:

Increased EMR Use = Fully Electronic Records = Integrated Data Whizzing Back and Forth

This is a welcome goal – and it’s theoretically possible that we could live in this world one day – but there are so many barriers to this future state that it’s very likely that none of us will be around to see it.

Consider the following:

• EMRs were first created in the 1960s and 1970s, but as recently as 2011, only about 1 in 3 of office-based physicians reported use of an EMR with basic functionality in place (i.e., medical history, electronic ordering, drug interactions, etc.)  Just over half of the respondents were using any EMR at all (to record basic patient demographics, for example).
• On the inpatient side, with more than $3.1B in Meaningful Use incentives paid out as of 2011, only 35% of U.S. hospitals have now adopted EMRs.
• CMS has been paying incentives for e-prescribing for the past two years.  In the framework of potential healthcare data described above, this is one of the most basic electronic transactions possible:  passing an error-free prescription from a provider’s EMR to a pharmacy.   As of the end of 2010, CMS reports that e-prescribing has grown tremendously – to where fewer than 12% of the nearly 700,000 eligible providers are now receiving incentive payments.

This is progress to be sure, and adoption is up significantly in the past few years.  However, EMR vendors still face a long road to achieving widespread adoption for basic functionality before they dive into the other challenges like data interoperability, clinical analytics, and payer-provider convergence.

In our view, new value-based reimbursement models via prospective population health management and coordination at the point of care simply have to run through the clinical data living in the EMR.   So, as stimulus dollars trail off in the coming years, we expect the more forward-thinking EMR vendors to start looking for tangential acquisitions outside of their core business that will help them make progress toward accelerating these reimbursement initiatives.

In other words, we expect that leading EMR vendors, in an effort to create differentiation in a still-crowded marketplace, will increasingly look to absorb – rather than displace – these innovative businesses that we see every day.  What is still an open question is whether the EMR vendors will be the buyers best positioned to reap the biggest benefits of owning these companies, or if other HCIT participants will put together the pieces that move us toward that future state where healthcare data moves around effortlessly.  In either case, we don’t see much evidence yet that EMRs are the standalone panacea that some seem to think they can be.

Let us know what you think.

Conor Green

Conor Green is a Vice President at TripleTree covering the healthcare industry, and specializing in revenue cycle management and tech-enabled business services. You can email Conor at cgreen@triple-tree.com.

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Does 3M’s Acquisition of CodeRyte Represent a Defensive Strategy?

This week’s announcement that 3M has acquired CodeRyte was a surprise as much as it was completely predictable.  On one hand, 3M Health Information Systems has had enjoyed what seemed at times to be a near ubiquitous presence in the coding solutions market for years and has been noticeably absent in the M&A arena since 2006 when it acquired SoftMed Systems (note: the $230M acquisition of Attenti in 2010 sits within 3M’s Track and Trace Solutions division).  However, with the impending move to ICD-10 in October 2014 as well as a broader trend toward greater levels of clinical documentation granularity and improved data management and analytics capabilities in healthcare, it is completely understandable that 3M had to make a provocative move to both protect its market share and strengthen its ability to deliver value to its provider customers in a highly regulated, increasingly complex healthcare environment.  The fact that 3M has had a reseller arrangement with CodeRyte since 2009 is further evidence of the existing relationship and fit between the two organizations.

With that being said 3M’s move to acquire CodeRyte represents, in our opinion, a potential defensive strategy to maintain its leadership position in coding and documentation improvement.  While not conclusive, there are a host of data points that seem to support this assertion:

• Heavy reliance on legacy encoder and grouper technologies – 3M’s leading flagship products provide a lot of financial stability for the organization, but these technologies are becoming dated amid the industry’s ongoing evolution and other, more nimble solutions coming to market
• Success and momentum of Optum and A-Life – Optum’s acquisition of A-Life has been very successful in the marketplace as of late, further challenging 3M’s existing position in computer assisted coding (CAC)
• Uptake of point of care workflow tools – While 3M’s 360 Encompass System provides an intriguing bridge between customer’s financial and clinical data at the point of care, this solution is relatively new and has presumably not had the sort of uptake that meaningfully impacts the division’s top-line
• Limited success in penetrating adjacent markets – 3M has struggled to extend its solution set into growing opportunities with payers, Health Information Exchanges (HIEs), and Accountable Care Organizations (ACOs).  Payers, for one, represent a huge counter-market to the providers as the entire healthcare industry looks to neutralize the impact of the ICD-10 transition

This isn’t to say that the combination of 3M and CodeRyte isn’t innovative – in fact, the addition of CodeRyte’s Natural Language Processing (NLP) and CAC capabilities could greatly improve the workflow efficiencies at the end-user level.  However, the need of 3M to bolster and extend its coding capabilities is apparent as emerging clinical, financial, and compliance objectives increasingly require a more pervasive data management and analytics platform delivered at the point of care and throughout the healthcare ecosystem (providers, payers, EMR vendors, consumers, etc.) to solve a range of increasingly complex and intermingled challenges.

 

Seth Kneller

Seth Kneller is a Vice President at TripleTree covering the healthcare industry, specializing in revenue cycle management, clinical software solutions, geriatric care and healthcare analytics. Follow Seth on Twitter or e-mail him at skneller@triple-tree.com.

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Ramping up for HIMSS 2012

It’s hard to believe that HIMSS 2012 is just around the corner.  As we look ahead amid the consolidation and investment opportunities in healthcare, if you are at HIMSS this year and would like to exchange perspectives on the industry or bring us up to speed on your progress for the year, please let us know.

Here is what’s on our radar related to our research and advisor agenda for the year.

• Why ‘consumerism’ is impacting healthcare delivery models at an unprecedented pace
• How mobile applications are key tools for navigating a ‘B2C shift’ in healthcare
• Where innovations are evolving quickly to meet the demographic shift of seniors
• How productivity tied to health is a growing focus for employers
• Why compliance-centric issues ranging from payment integrity to improved patient outcomes are dominating many health care cost debates
• How the shift toward ACOs and Medical homes is radically altering care delivery models
• The impacts of ‘life beyond the EMR’ as more granular clinical documentation will substantially increase risks associated with reimbursement, compliance, and productivity.
• How healthcare is being driven by data and analytics to build a more complete picture of a patient
• Where the pharma market is shifting away from paper-based systems and processes and calling for innovations that reduce cost across the clinical development landscape

Let us know what you’re thinking about…see you at HIMSS in a few weeks!

Chris Hoffmann

Chris Hoffmann is a Senior Director at TripleTree covering ‘consumerism’ and where legacy and edge technologies are impacting healthcare. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

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Microsoft follows Google’s Lead and Exits Healthcare

Yesterday, Microsoft announced a new joint venture with GE where both organizations would transfer significant healthcare software technology into a new company led by GE health care executive Michael Simpson. This new company will be based in the Redmond area and have more than 700 employees dedicated to HCIT solutions.

A few months back, Microsoft sold its EMR (Amalga HIS) to Orion and via this announcement,  is transferring two of its three remaining healthcare assets – Amalga and Sentillion – into the JV.. Curiously, Microsoft is hanging onto HealthVault, its personal health record (PHR) suite.

It is hard to grasp why Microsoft would jettison its “crown jewel” HCIT and clinical solutions into the JV and say goodbye to most of its healthcare team (including top exec Peter Neupert (retiring)), while apparently remaining content to simply sell its horizontal platform and servers into health care settings.  (We understand that many Microsoft employees will be transferred into the JV). Moreover, what will become of other HC initiatives underway at Microsoft such as their announced work in the insurance exchange marketplace?

A straight up comparison of Google’s complete retreat from health care to this move by Microsoft is a bit unfair, but yet another juggernaut exiting from an industry desperately in need of new ideas is puzzling.

Is this JV the type of new idea needed by the healthcare sector?  Nat McLemore, GM for Microsoft Health Solutions Group describes the GE / Microsoft JV as follows:

“… Microsoft and GE Healthcare have just announced an exciting new initiative aimed at improving healthcare quality and the patient experience. The two companies are creating a joint venture that will combine Microsoft’s deep expertise in building platforms and ecosystems with GE Healthcare’s experience in clinical and administrative workflow solutions. The new venture, which is pending regulatory approval and has yet to be named, will develop and market an open, interoperable technology platform and next-generation clinical applications that will help enable better population health management.

The joint venture’s foundational offering of an open technological platform will also enable application developers to build customized, differentiated solutions that interact to meet customers’ specific needs. By enabling independent software vendors, system integrators and healthcare IT pros to develop on a common platform, the joint venture aims to support a robust ecosystem of partners that offers customers real choice.”

For veteran watchers of technology centric alliances, it is easy to be skeptical.

The platform approach is exactly what Microsoft Amalga was about – a gigantic integration engine for healthcare. It is no surprise that Amalga will be a major foundational asset in the new company. The challenge with Amalga, and the reason why its adoption was limited in the US, is that giant footprint implementations are far from the ideal solution. Amalga required massive investments and a multi-year implementation to stand-up, and in a world where hospitals and other healthcare organizations don’t have the appetite or budget for monolithic systems and if they do…it likely orbits around an EMR.  The likes of Epic have taken up most of the bandwidth that hospitals can afford for big-iron IT projects and despite Microsoft attempt to buy market share, its ‘platform strategy’ had limited success.

If the JV platform vision is right (and what is needed for the industry) it will take a few years to get legs. Beyond integrating their HCIT suites (and apparently work has already been underway here for a few months) it will take considerable effort for the new company to ready its platform for app developers, a sometimes skeptical lot. Developers may opt to wait and see whether the JV successfully drives adoption for their platform vision given their traditionally limited resources and proclivity for aligning around the true vendor platforms where market share is known, versus jumping on board into the Microsoft/GE health care legacy.

Finally, is this big platform vision the right approach in today’s world of SaaS, Cloud, SOA, and modular app development? Healthcare already has many traditional stacks   – Epic, Cerner, McKesson, Allscrips…the list goes on. The new entrants like Aetna/Medicity, Optum/Axolotl, IBM, Oracle, and others are focused on integrating data and workflows. If the new company claims it is the ‘true path’ for data integration, the market could become confused with other mega HCIT vendor messages, given they acute need for nimble solutions that are quick to implement, solve an immediate pain point, and provide a near term ROI.

Big HCIT vendors must do more to help perpetuate a strong vision and direction for the healthcare industry and perhaps this is where this new venture can emerge as a leader. Microsoft and GE have both tried and neither was successful. Perhaps they have some new innovation and new capabilities that could create a truly differentiated solution. We’re watching closely and would like to know what you think.

Scott Donahue

Scott Donahue is a Vice President at TripleTree covering infrastructure and application technologies across numerous industries and specializes in assessing the “master brands” of IT and Healthcare. Follow Scott on Twitter or e-mail him at sdonahue@triple-tree.com

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HHS Reform Timelines…Wiggle Room In Sight?

Aggressive IT deadlines have left the healthcare industry scrambling to meet a host of regulatory mandates spanning HIT adoption, payment transaction methodologies, coding standards, and state-run health insurance exchanges.  Hundreds of new regulations have been implemented over the past couple of years, leaving the industry torn in how limited time and resources are utilized among care delivery, quality and cost reduction initiatives, process/infrastructure modernization, and increasingly stringent regulatory reporting requirements.

Hospitals and doctors have been especially overwhelmed with regulations and have been reprioritizing investments to support EMR implementation, Meaningful Use qualification, and what is expected to be a tidal wave of new entrants into the system once the 2014 health reform mandates become effective.

The American Medical Association (AMA) set newswires and the blogosphere abuzz last week when they publically voiced opposition to the transition to ICD-10 coding stating “the implementation of ICD-10 will create significant burdens on the practice of medicine with no direct benefit to individual patients’ care.”  Some dispute the AMA’s move as self-serving given their interests in maintaining the stature and importance of the Current Procedural Terminology (CPT) code set.  Nevertheless, whether the AMA’s move was defensive or not is irrelevant – the vast majority of providers and a meaningful cross-section of payers are ill-prepared to meet the ICD-10 transition deadlines that CMS currently has in place.

To the relief of payers, providers, vendors, and states, the department of Health and Human Services (HHS) and the Center for Medicare and Medicaid Services (CMS) have recently backed off from a few key deadlines.  While these announcements by no means cancel any existing mandates, at a minimum they buy the industry some time to comply with the overarching legislative intent of increasing coverage among the uninsured population, incentivizing IT adoption, and driving improved levels of care delivery.  Of note:

1. HIPAA 5010– CMS announced that it would hold off enforcing the HIPAA 5010 transaction sets until March 31, 2012, a 90-day extension to the original enforcement date. While the compliance date will technically remain intact, relaxing the enforcement date “encourages all covered entities to continue working with their trading partners to become compliant with the new HIPAA standards and to determine their readiness to accept the new standards as of Jan. 1, 2012,” as stated in a release by CMS’ Office of E-Health Standards and Services (OESS).HIPAA 5010 is widely viewed as a precursor to the impending transition to ICD-10 in October 2013. The enormity of that effort will dwarf HIPAA 5010. This week’s announcement foreshadows further delays yet to come.
2. Stage 2 Meaningful Use– HHS announced this week that it would delay its compliance date for Stage 2 Meaningful Use from 2013 to 2014. The extension specifically impacts eligible providers that qualified for Stage 1 Meaningful Use in 2011. Providers, vendors, and government work groups alike have noted the timing issues and inherent disincentive posed on early adopters attempting to adhere to criteria that have yet to be finalized. The Health IT Policy Committee, a federally-chartered advisory panel to HHS, recommended these changes earlier this year to the endorsement of Farzad Mostashari, M.D., ONC’s National Coordinator for Health Information Technology.HHS Secretary Kathleen Sebelius acknowledged the progress to date, referring to the reported doubling of HIT adoption over the past two years. In its move to extend the Stage 2 deadline HHS has smartly protected its initial success by attentively listening and responding to the needs of an overwhelmed provider community.
3. Health Insurance Exchanges – HHS (though the Center for Consumer Information and Insurance Oversight – CCIIO) has seemingly relaxed (or at least clarified) a critical deadline for the states to stand-up their Insurance Exchanges. This week, CCIIO extended a grant deadline by six months until June 2012 from December 2011. Also CCIIO has committed funding for the establishment exchanges beyond the previous January 1, 2014 deadline. Now states have until December 2014 to apply for grants for continued exchange development provided that at least a portion of the exchange is operational by January 1, 2014.

While it is not entirely clear why these significant changes coincided in timing – perhaps it had to do with the resignation of controversial CMS chief Don Berwick – these reprieves are no doubt welcomed within the industry. The extra time will give payers, providers, and states some extra time to meet their compliance mandates.

This extra time should not be squandered. Industry participants must continue to plan for and implement systems that support new EDI standards within 5010, the reporting requirements of Stage 2 Meaningful Use, and the complexities of insurance exchanges. Furthermore, the real value in any of these mandates is not meeting the minimum requirements of the mandate itself, but rather the powerful and compelling capabilities that each enables in terms of improved communication and workflow automation that will enable entirely new quality and cost initiatives.

We’re optimistic that the timeline flexibility of HHS regarding timelines will promote more thoughtful approaches, investments and implementations across all impacted organizations, let us know what you think.

Scott Donahue

Scott Donahue is a Vice President at TripleTree covering infrastructure and application technologies across numerous industries and specializes in assessing the “master brands” of IT and Healthcare. Follow Scott on Twitter or e-mail him at sdonahue@triple-tree.com

Seth Kneller

Seth Kneller is an Associate at TripleTree covering the healthcare industry, specializing in revenue cycle management, clinical software solutions, geriatric care and healthcare analytics. Follow Seth on Twitter or e-mail him at skneller@triple-tree.com.

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Wanted: Smart investors, smart developers & smart policy makers

Ahead of his keynote address at the upcoming Wireless-Life Sciences Alliance Convergence Summit in San Diego next month, Bill McGuire, M.D., recently sat with mobihealthnews (MHN) editor Brian Dolan for an interview on the efficacy of technology in healthcare and the road ahead.

(MHN) How do you characterize the opportunity for wireless health? Could you also provide us with some sense of the current investment climate — a lot of activity? A lot of interest but not a lot of activity?

I like to position it as: How can we build products, services, and systems that facilitate the eventual appropriate health and wellbeing for the people in this country and elsewhere. In pursuit of that and in consideration of all that has been done — both good and bad — and all that is yet to be done, which is significant and formidable, I think the whole area of technology enabled healthcare or mHealth or any term you’d like to apply, offers significant opportunity to meet that end. It still remains to be seen obviously what the most appropriate areas and most beneficial areas will be to accomplishing that. When it comes to investments, of course, there will be a lot of investments in things that don’t make any difference or are not contributory to the kind of outcomes I am describing.

(MHN) What kind of things?

If you look at what has happened in last several years particularly with reform: These huge expenditures that have been directed at technology applications in healthcare. I’m afraid we will see that we have spent an enormous amount of money for marginal or no gain. It’s very indiscriminate. That’s classic healthcare, though and classic investing: ‘Let’s just throw money at things.’

You have the whole idea of applications on cell phones for example. Embedded among [the thousands] of health apps out there are probably a few that will make a difference in the lives of some people. Those apps should theoretically lower costs and improve outcomes, but most of these apps exist because we happen to like apps, it’s a nice story, so we chase them. Discerning what is ultimately going to make a difference and result in the kind of outcomes we are looking for, which is differentiated from just investing money, is the critical issue. The smart investors, smart developers, smart policy makers and so on will benefit from that. The land grab that is going on right now — just throwing money at it — is a little bit misguided.

Another issue is the lack of interactivity among these technology applications. The fragmentation and silos continue. Rather than determining how to piece a number of necessary components together, we have a lot of independent efforts out there to chase after something. We ask for electronic medical records (EMRs) but we don’t necessarily put out standards of performance and interactivity between them. So when someone comes along and asks to gather data or information we know that we can’t get it from each and every one of them.

(MHN) So EMR efforts are misguided?

The amount of money that is being thrown at this stuff relative to the value that it is going to return to us is ridiculous and it will not prove to offer up the kind of end gains that we are touting. Those are health outcomes gains and financial gains in terms of lowering costs. I see nothing that suggests this is going to dramatically improve outcomes, improve access to care for people who had heretofore not had access to care and certainly nothing that suggests that it is going to lower the costs of healthcare in America. People are rushing to do various EMRs simply because the government says we will pay you to install it. If you talk to people who try to extract data from various EMRs they would tell you that there is no consistency in the expectation to do it from many different systems and yet we are spending billions of dollars on this.

(MHN) Let’s switch gears back to wireless health. Are any companies on the right path? If you aren’t comfortable naming companies, what are some specific use cases that you think are promising?

I will be necessarily cautious about the specifics because I don’t want to come across as endorsing or refuting things that I know relatively little about specifically. Let’s start with a concept. What I think we are talking about in some way parallels what we are seeing from efforts in education. As we confront challenges around resource availability and the spacial relationship between the users (the someone in need) and the resource. The ability to take content out to individuals — which is what mHealth or various mobile technologies have done — becomes a substitution for asking those people to go to the content source in a different way.

It’s sort of like: If the cost of gas goes up and bus costs go up, how do we really expect kids to learn about the arts when they used to get on a bus and go on a field trip to a museum? Museums are beginning to take their content to the students where they live. The Metropolitan Opera says we can’t expect everyone to come to the Met, but opera is an important cultural element for society. So they started filming it and showing it at theaters around the country, which has been wildly successful. In these cases we are looking for ways to bring content out to touch people when we can’t in essence do it physically.

In healthcare the same principle exists. People who live in remote sites do not have access to care — primary care to say nothing of secondary or specialized care. How do we help them manage their health and wellness and help deliver services that might be beneficial to acute but relatively everyday problems? That is the kind of application opportunity that the technology provides. Whether that includes telehealth, applications, gaming… that’s the huge opportunity.

(MHN) Any closing thoughts?

I think healthcare might be unique in that it is a space where technological advance has not positively influenced efficiency or cost reduction. Just across the aboard it has not happened. Costs keep going up year after year after year. Why is that? The discussion we hope to have at the WLSA Summit is around how the companies presenting are in fact going to accomplish the needs of both enhancing efficiencies and lowering costs while achieving improved health outcomes for people. I expect it will be a lively discussion about disruption and how mobile will play into that.

Dr. McGuire is widely respected for his uncensored clarity about what has, hasn’t and can work relative to advancing the health of our nation.  This interview offers a sneak peak at the keynote remarks he will deliver during the WLSA Convergence Summit on May 11, 2011.  Click here to register.

Bill McGuire, M.D. is the former CEO of UnitedHealth Group and current Vice Chairman of TripleTree Holding Company.

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HHS Announcement Signals Start of ACO Services Race

With the proposed rule from the HHS and CMS finally released today for public comment, reactions and analysis will grow in the coming days on what it all means for healthcare providers.  We thought it made sense to offer some perspective on how we’re viewing the evolving opportunities for innovators, their investors, and their partners.

While integrated delivery networks (IDNs) and other large provider groups will have plenty to sort through to determine the tradeoffs of seeking accountable care organization (ACO) status, a number of researchers are already digging into the thorny issues surrounding ACOs to help develop standards, best practices, and collaboration between different models that are likely to spring up in the wake of health reform.  See this and this as examples.

What is most interesting to us so far is the jockeying of HIT vendors to reposition themselves as experts to the developing ACO marketplace.  While there are a number of ways to think about this – and our thinking is evolving pretty much daily – we see a few targeted areas where vendors are going to play.  None will be able to offer anything close to the end-to-end ACO functionality that several claim in their marketing materials.

Our view on the rapidly developing market for ACO services follows:

• Creating the ACO:  Provider groups will require help sorting through those 1,000 pages of regulations, and we are already seeing opportunities for large, healthcare-focused consulting and implementation firms that have the ear of the hospital CEO to help steer the design and creation of these models. Companies like Accenture, IBM, Deloitte, Dell/Perot and the Advisory Board are being asked questions every day by their clients about ACOs – and at least one have already started to work on their own solution.  Partnerships with these consulting firms will aid adoption for vendors downstream in the areas below

• Enabling the ACO:  The clinical integration of the ACO is the area of hottest focus right now – transactions in this space clearly demonstrate this.  HIE and interoperability vendors Axolotl, Medicity, and CareFX have all traded in the past 12 months.   Payers like UnitedHealth and Aetna have placed their bets on HIEs as the backbone on which clinical data will be integrated.  For provider networks looking to challenge this paradigm, the recent wave of physician practice acquisitions by hospitals and/or the subsidization of a single EMR system in an area (Minneapolis is largely an Epic market, for example) indicate that there may be another approach to achieve clinical integration.

• Optimizing the ACO:  Once an ACO is established, the network of providers will need plenty of technological capability:  decision support and evidentiary guidelines, contracting and risk tools, compliance reporting, and performance benchmarking analysis among them.  Many companies already providing these services to health insurers are sprinting to reposition themselves as experts for the provider community as well – visit the home page of any formerly payer-focused software vendor as proof.  Market interest in companies participating in this space is heating up.

• Marketing the ACO and Engaging with the Patient:  In our view, this is an overlooked area so far and will eventually be key to closing the loop on the ACO return on investment.  Vendors that will compete in this space are currently offering a range of services that can help do this, from health and wellness to member enrollment activities.  Once provider groups are operating as “mini-payers,” keeping patients healthy outside the facility walls while also keeping them happy with the level of engagement they experience with their physicians will extremely important.

Our research agenda and strategic advisory work have the ACO services space top of mind right now and our thinking is evolving constantly.  We’d love to know what you think.

Conor Green

Conor Green is a Vice President at TripleTree covering the healthcare industry, and specializing in revenue cycle management and tech-enabled business services. You can email Conor at cgreen@triple-tree.com.

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Rationalizing Clinical Analytics in Healthcare IT

Innovative and complex technologies are rapidly gaining market traction, but are far from ubiquitous across U.S. hospitals.  For instance, why can credit card companies proactively call, email, and text customers within minutes of potential fraud on their accounts, but hospitals don’t use the same types of analytics to provide patients with better, and in some cases life-saving care?

The answers to these questions are not simple, but we’ve grouped them into four themes:

• The systems, or lack thereof, in place at hospitals historically did not provide adequate interoperability;
• Hospitals have prioritized expensive electronic medical record (EMR) deployments and revenue cycle management solutions ahead of clinical analytics platforms and have not had budget dollars to allocate to additional projects given cost constraints;
• Clinicians have not been educated and trained to use these type of tools and, aside from early adopters, are reluctant to change;
• There are not enough incentives in place for hospitals to change how they operate in order to improve care.

Hopefully these excuses will dissipate as modern clinical and administrative systems are deployed, clinicians realize the power of analytics, and incentives change across the healthcare landscape.  Chart reviews and significant human intervention with patients will still be prevalent, but clinical surveillance analytics will be additive platforms for improving patient care.  As hospitals complete the initial phases of their EMR deployments and have time to focus on harnessing their data to improve care, the market for clinical analytics will grow quickly.

Last week, Wolters Kluwer acquired Pharmacy OneSource (Disclosure: TripleTree was the exclusive advisor to Pharmacy OneSource on the deal).  The flagship application provided by Pharmacy OneSource is Sentri7®, a unique solution in an emerging market for clinical surveillance.  Sentri7 is a software-as-a-service (SaaS) application that receives data feeds from various hospital systems, such as EMR, admissions and demographics, nursing, laboratory, radiology, and pharmacy.  The system analyzes data feeds real-time against business rules (configured by hospital clinicians) which identify opportunities for clinicians to intervene and improve patient care.  A harbinger of where this market will evolve, Sentri7 can:

• Identify patients with complex medical conditions that are being overlooked,
• Warn of early signs of sepsis,
• Remind clinicians if evidence-based guidelines are not being followed,
• And ensure the appropriate drugs are being administered to patients.

To be successful in this market, systems must be flexible, easy to use and seamlessly integrate into a clinicians’ workflow.  While EMR systems from the likes of Epic and Cerner can be programmed to mine data, they lack the architectural flexibility offered by clinical surveillance tools like Sentri7 which will become table stakes as the expectations of clinicians evolve.  Hospital IT departments are already over-burdened and adding development and maintenance of analytics business rules to their purview is not practical.

As the interoperability of healthcare data continues to expand, health information exchanges will enable analytics across regional hospital systems, surgery centers and standalone clinics.   We expect automated analytical tools to continue to proliferate across all areas of healthcare and related to clinical analytics within the hospital, surveillance is just the beginning.

Let us know what you think. Thanks and have a great week!

Jason Grais

Jason Grais is a Director at TripleTree covering the healthcare industry specializing in healthcare IT, population health management and emerging services in the life sciences sector. You can email him at jgrais@triple-tree.com

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Far Reaching Implications Likely With FTC’s “Do Not Track” Proposal

The FTC’s recently proposed “Do Not Track” initiative is example of a larger movement within the regulatory space. The increase in regulation – be it the recent push for a web privacy “Bill of Rights”, the FTC becoming every involved in net neutrality, the oversight of the FDA on new mHealth applications, or HIPAA’s increased relevance as we move to universal electronic medical records (EMRs) in the coming years – is being followed by a subsequent explosion in governance, risk, and compliance (GRC) activity.

There are two themes to take away from this:

• The GRC and security sectors will become more popular amongst investors
• The old adage, “knowledge is power” is even more true now that user-centric data is paramount to business analytics, business intelligence, and a key competitive advantage for firms

The effects of these themes are beginning to unfold in the market already, even before some of this potential regulation is signed into law.

User-centric data accumulates quickly and must be stored in large data warehouses. This leads to investors oftentimes branding companies like 3Par (with complex data storage programs) as “marketplace darlings”. Data storage is a building block for cloud computing and vendors offering these solutions will increasingly be seen as valued assets; consider the following:

• Dell just acquired Compellent for $960m or 6.5x revenue, a move that again underscores strong valuations for storage software firms
• A recent PCWorld articled noted that data center server capacity is more than doubling every 24 months

In addition, security is a top concern for user-centric data storage. Market growth and opportunity among security focused vendors is equally robust:

• Intel’s purchase of McAfee for $6.8 billion or 3.4x revenue shows potentially high multiples for security companies
• Social sites like Facebook are increasing security controls for user data in the wake of exposed data leaks
• Because of WikiLeaks, the US Department of Defense banned users from possessing flash drives and CDs while on premise in secured network facilities

The growing emphasis by vendors on verticals solutions makes this an even bigger topic – a single failure point or overlooked compliance metric can lead to massive sector-centric data leaks, as the very recent attack against entertainment website Gawker shows (millions of users personal information was exposed to the web).

Our ongoing research and advisory work across the GRC and data storage spaces allows us to keep abreast of market movements and trends to provide thoughtful insight to our clients. If you’re interested in learning more, or have some perspectives to offer – we’d love to hear from you.

Have a great week.

Adam Link

Adam Link is an analyst at TripleTree covering healthcare delivery models, specializing in software and wireless health.  Follow Adam on Twitter at AdamJLink or email him at alink@triple-tree.com.

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Reading the Tea Leaves: The HITECH Act & Health Reform in the Wake of the Election

The results of the November mid-term elections signaled Republican gains across the board and a majority win in the House. This power shift creates an air of uncertainly and raises a major question for the future of healthcare in the United States.  For those in the Healthcare IT domain, many wondered if this political sea change would affect the $20 Billion promised to EMR adoption through “meaningful use” in the HITECH Act.

Many pundits believe a major focus of the recent election was Obama’s healthcare reform legislation. In fact, according to HIMSS, nearly 20% of voters indicated that health was the single most significant factor in their vote.  It’s important to remember that the HITECH Act is part of the American Recovery and Reinvestment Act (ARRA) established in 2009 and not part Obama’s healthcare reform initiative.  The HITECH Act was established as an important initiative to create jobs and usher America’s outdated healthcare system into the modern age.  When HITECH was established in 2009 it received wide support from democrats and republicans alike.

So what do these election results mean for the future of the HITECH Act?

• Repeal or reduction in funding is highly unlikely. Most experts can agree with the conclusion that healthcare IT funding is not a key item targeted for spending cuts.  According to Jennifer Haberkorn, a healthcare policy and politics reporter with POLITICO, “It’s not on the radar”.  Haberkorn and other experts agree that Obama’s Healthcare Reform is the banner issue and the HITECH Act should proceed as planned with full funding.
• Increased oversight on all healthcare spending, including HITECH. More scrutiny will be placed on all government spending going forward and there will be no exception for the HITECH Act.
• More uncertainty. All of these factors create uncertainty.  This could lead to hospitals spending money quickly rather than wisely. Changes to the definition of “meaningful use” or other legislative modifications will create headaches for healthcare institutions banking on these Federal dollars.

The view of TripleTree and most experts is that HITECH Act is safe for the time being.  This is good news to the Healthcare IT domain and those who are driving to see technology improvements in the U.S. healthcare system.  TripleTree is closely following these developments. Stay tuned for updates related to the HITECH Act.  Visit www.himss.org to see a detailed presentation entitled, “A Post – Election Analysis: Potential Effects on Health IT Policy”.

Michael Boardman

Michael Boardman is an associate at TripleTree covering the healthcare and technology industries, specializing in clinical software solutions.  Follow Michael on Twitter or e-mail him at mboardman@triple-tree.com.

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