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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If you Google ‘health’; you will no longer find Google Health

In a culmination of a yearlong rumor mill, Google finally came clean in its announcement  late last week that it would discontinue its personal health record (PHR) program, Google Health.

In many ways it’s a shame that Google has pulled out of evangelizing the PHR.  We have long been vocal that healthcare would benefit from non-traditional players entering the market with tech based solutions despite our skepticism on PHR adoption trends; that an outsider like Google tried to use its vast resources to innovate the healthcare market was inspiring.

Ideally, Google would have brought fresh ideas and tried-and-tested approaches from other industries (financial services, e-commerce) to tackle issues like collaboration, workflow integration, and data silos – all bugaboos for healthcare which other industries have solved.

Our top five reasons why Google Health failed:

• Lacked executive support within Google
• Lacked an elegant user interface
• Never deployed a scalable business/revenue model
• Failed to capture physician support
• Lacked Integration capabilities to healthcare information sources

Perhaps if Google Health was more Google-like (social, able to leverage advertising or other information monetization models, always connected to underlying information sources, and much more consumer friendly), adoption would have been better.

It’s likely however, that Google Health was doomed from the start.

Outside of tech geeks and fitness enthusiasts, PHRs simply have not seen wide market adoption as the most patients haven’t aligned around a paradigm of managing their health information 24×7.  Google created an engagement tool without a strategy to “engage the unengaged” and bet on the come that user adoption would materialize around the strength of Google’s brand.

Over the past several months we have increasingly talked and written about a healthcare market where consumers want to and in fact are becoming more engaged in their health. The problem is that consumers don’t know how to engage in their own health, and physicians don’t offer the necessary catalyst to make it happen.

Tools (like Google Health) are not enough.  Healthcare organizations need to put entire programs in place to engage a consumer with clearly articulated benefits (incentives, cost savings, better access to care, better care, etc.).  Once in place, more effective consumer targeting and engagement will follow.

In the coming weeks, we will be publishing research on consumer engagement platforms in healthcare and where innovative technologies will attempt to “engage the unengaged”.

Until then, 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

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ACOs: Millions of Web Hits…Dozens of Theories…One Bottom Line

Nine million. That’s how many web hits are returned during a Google search for “Accountable Care Organization,” and reflects the countless articles, white papers and opinions that have been published regarding the potential successes and more likely pitfalls of the proposed ACO mandate. As highlighted in my colleague’s recent post, our team is continuously evaluating the business development opportunities being fueled by the demands and requirements of these new provider organizations.  Last week, the members of our Healthcare Executive Roundtable recently discussed and debated an element of the ACO equation that is not typically highlighted and could become a critical component of ACO success (or failure)…Trust.

In boardrooms around the country, health care executives are focusing on the technical requirements for their future ACO’s clinical and administrative systems. They are pouring over spreadsheets and attempting to understand the data and analytical tools that will be necessary for adequate financial and quality of care reporting. Getting these operational elements “right” is important; however, these business leaders should also focus on designing a culture – and the corresponding behaviors, communication, and incentives that will fuel strong and collaborative relationships between the ACO and its community of providers.

As Ed Brown, CEO of Iowa Clinic puts it, “People are unclear about what the value-based world looks like, and they’re unsettled on what clini­cal integration really means. And nobody has really made it work.”  This lack of clarity around the value-based model will make it challenging for providers to leave the financial security blanket of the traditional fee-for-service payment engine.  Moreover, influencing them to modify their approach to patient care for the benefit of the system and the promise of shared savings is a monumental effort. Success by any measure will largely depend on the trust established between providers and the ACO organization itself. ACO’s should prioritize establishing trust with providers in three key areas:

• ACO Operations and Management:  Providers need to trust that the ACO is well run. Understanding the organizational governance, expertise of the management team and core capabilities (strategic assets) will help generate confidence that the ACO is well-positioned to generate enough shared savings to make participation worthwhile. In addition, it is critical that the ACO measure and report management performance metrics that demonstrate its accountability to the providers.
• Compensation Incentives:  Providers need to trust that they are getting their fair distribution of shared savings. Clinical algorithms defining quality and outcomes must be evidence-based; and the financial tools and risk-adjustment methodologies used to distribute payment must be easy to understand. Above all, the organization’s compensation schemes must be highly transparent and accessible so that providers can validate that they are being treated as an equally valued business partner in the organization.
• Confidence in Provider Team:  Providers need to trust their ACO provider colleagues. If the right incentives are in place to bring members within the organization together, providers will need to trust that their peers will also be active participants working toward fully coordinated care within the ACO. Under an accountabilities and outcomes-based model, it will be important that providers view their care responsibilities as extending beyond the encounter. Active provider participants should be practicing first-class follow-up care, improving patient satisfaction, and reducing re-admission rates which will achieve collective rewards.

The inclusion of ACOs as a provision of the Patient Protection and Affordability Act is a strategy to realign delivery systems in the US so that they provide high quality, coordinated care.  The bottom line for achievement might simply boil down to whether providers can engage in meaningful and integrated relationships with the ACO and with each other. Since relationships are based on trust—predictability, integrity, and reciprocity–it is imperative that ACOs make trust a deliberate priority.  Our research and advisory agenda is 100% focused on the possibilities of ACOs, and moreover the innovations and business models which will be required to make them successful.

Let us know what you think!

Emma Daugherty & Archelle Georgiou

Emma Daugherty is a Senior Analyst at TripleTree covering the life sciences sector with a focus on provider technologies and patient safety.  You can contact her at edaugherty@triple-tree.com.

Archelle is a Senior Advisor and Chair of TripleTree’s Healthcare Executive Roundtable, and focused on creating health through innovation.  You can follow Archelle on Twitter or email her at ageorgiou@triple-tree.com.

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Wireless & Mobile Health Taking Center Stage as Reform & Consumer Preferences Converge

As we enter 2011, the topic of wireless and mobile healthcare and its growing public acceptance should be top of mind for every healthcare professional or investor.

According to TripleTree’s most recent mHealth survey, over 43% of healthcare professionals are working with mHealth devices or applications on a daily or weekly basis.  Additionally, over 70% of healthcare professionals surveyed are knowledgeable of their applications and uses.

Physician use of mHealth applications may spur greater adoption amongst the general populace – the “if my doctor does it, it must be a good idea” phenomenon.   Many industry watchers agree that well north of 500,000 physicians are already using iPads (in the U.S.) and this number is growing by the hour!

For patients, increased tablet use may spur them to investigate health monitoring apps for for their phones. And the good news is that they will find over 7,000 apps across the Android and iPhone app markets.  Indeed, over 3 million downloads have been logged for these apps in 2010 on Android alone.

Even if every download of a mHealth app was to a separate user, the mHealth application market of over 33 million users is at most 10% penetrated.

Expect a surge of health and fitness applications in 2011 as developers (and retailers) realize that this market may be poised for a growth surge, barring any regulatory hurdles.

There may be potential roadblocks in adoption, however.  HIPPA overshadows everything health-related in the US, and the mHealth market is no different. Data leaks and the sensitivity of the data recorded may lead some consumers to doubt the security and privacy of mHealth apps. However, once large players such as Google, Microsoft, or Apple enter the market (or endorse applications) consumer doubt will ease.

These market trends are foundational as we approach our sixth annual Convergence Summit to advance the discussion of wireless and mobile innovations in healthcare.  Compliance, seniors and chronic illness and improving access to care are just a few of the topics we’ll assess and discuss.  To learn more click here.

Rob McCray

Rob is the CEO of the Wireless-Life Sciences Alliance and senior advisor to TripleTree.  Follow Rob on Twitter, or email him at rmccray@wirelesslifesciences.org.

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Seven Considerations for the Impact of Open Source on Healthcare – 10/18/10

There has been much written by TripleTree and others on the influence of cloud technologies on healthcare, but what about open source as a transformative technology?

No doubt open source technologies will make their way into and have an impact on healthcare in some way, but we’re of the mindset that it will take a long time to get here, and the size of the impact could be minimal. Here are seven considerations for healthcare CIOs and their technology partners:

1. Commercial open source vendors are small and unsophisticated in the ways of healthcare IT. So with little investment and large barriers to entry (slow buying cycles, antiquated architectures, compliance, etc.), healthcare will be a hard sell. There will probably be some experiments, trial runs, and partnerships with early stage ISV’s looking to triangulate around the trend of SaaS/Cloud/Open Source; but in reality it will take a few years to get efforts ramped up into large commercially viable solutions.
2. Virtualization will have a bigger impact on HCIT operational efficiency than simply open source. Sure, where virtualization and open source intersect (specifically at the Xen hypervisor), there may be some impact, but I think open source gets overshadowed by virtualization investments.
3. The IT “master brands” vendors with expressed interest in healthcare (MSFT, IBM, HP, etc) are pushing their proprietary stacks.  Deeper pockets will prevail and the only new entrant that can make an impact is probably Google (and their HC commitment is questionable). Will they push ChromeOS into HC and make a meaningful impact?  Not likely as ChromeOS is too new and Google Health is too consumer (rather than system) focused. Plus with Oracle taking out Sun, another open source proponent will move to a proprietary stack (Fusion)
4. Workflow and process integration in HC systems are mostly manual. Before open source has a meaningful impact on data integration a process automation evolution within healthcare is needed…and process automation in healthcare is nascent.
5. Open source has had a good seven year run of enterprise acceptance. Given that healthcare is lagging about 10 years behind in IT innovation, we likely have two plus years before HC starts thinking about open source more widely. In smaller pockets, we could see early open source efforts where a few innovative vendors expose limited/departmental use cases or in public sector instances where states try to be innovative with alternative procurement (e.g.  HIE may see open source experimentation).
6. The mainstreaming of SaaS and other alternate delivery/licensing/outsourcing models from groups like Athena provide a better value proposition.  This is relevant to the likely adopters – small and mid-size doctor’s offices – who want to avoid on-premise open source systems and related complexities of specialized IT knowledge and a willingness to go-it-alone with limited vendor support.  SaaS wasn’t mainstream when enterprises began to embrace open source; but now that SaaS (and cloud) is prevalent the same drivers of open source adoption don’t exist.
7. Open source will probably have more of an impact in research/government/university settings where a healthcare focus and established open source culture (around longer running projects) can coexist.  Within healthcare, open source will emerge more readily with health plans where large data centers and processing make it an interesting operating system.

The list of technology issues confronting healthcare is considerable, and it’s unclear that open source would have impact given other innovative tools.  We’re watching the likes of Citrix and RedHat as vendors that could step forward and we’ll continue to update this blog with our latest thinking.

Thanks and have a great week!

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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Feeding the Giants – 09/24/10

It’s official. The recession is over and has been for some time. According to the folks who track this at the National Bureau of Economic Research (NBER), the recession ended in June 2009. While most folks on main street may not have heard this news yet, a few of the global software master brands have been busy delivering the good news to a fairly large group of software shareholders over the last 16 months in the form of aggressive acquisitions.

Among the corporate development groups at IBM, HP, Microsoft, Oracle, SAP, and Cisco, a total of 57 deals have been transacted since the recession ended. Throw in Intel, EMC, Google, and Dell – all of whom are active in targeting software acquisitions – and the total deal count passes 100!

Software is not only hot, but it’s a market that is consolidating quickly. There is clearly an active race to shore up enterprise spend on software and related IT technologies. With hundreds of billions in cash lying around corporate balance sheets of the largest master brands, the fevered pace of software acquisitions will continue.

Just look at Oracle’s statements within the last couple weeks. In explaining why they hired Mark Hurd, Oracle Co-president Safra Catz stated “… we need people experienced in operating a $100 billion business”. Hurd ran the largest technology company in the world at just about $125 billion in annual sales. For Oracle to almost quadruple in size to hit the revenue target Catz mentions, the company will have to step-up its already aggressive acquisition pace.

So the race is on. The tech giants will continue their acquisition spree with sights set on filling portfolio gaps and entering net-new areas. With literally thousands of software vendors, the landscape is on one hand a target rich environment. However, in considering sale, size, solution uniqueness, profitability, architectural and cultural fit and a host of other factors that go into acquisition decisions, the universe of highly attractive targets which are large enough to move the needle for these behemoths is limited. Aggressive competitive bidding will become the norm.

Case in point is the much publicized bidding war between Dell and HP for 3Par which saw the acquisition price more than double from $1.13 billion to $2.4 billion in a matter of a few days. While 3Par may seem an anomaly and extreme case, competitive bidding is a fairly common occurrence, especially for the best assets in the market.

Even though the recession does not feel over for the folks on Main Street, the corporate development groups in some of the largest master brands have never been busier. Oracle, HP, IBM, and others mentioned will continue to target best properties in the race to round out their stacks and become the dominant players in enterprise IT.

Have a great week!

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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Can Cloud Computing Help Fix Healthcare? – 08/23/10

(The following is an excerpt from an article our colleague Scott Donahue authored for CloudBook magazine on hCloud – read the full article here)

Few topics have dominated the political news cycle over the past year more than health care reform. The recently passed Patient Protection and Affordable Care Act are aimed at improving the quality, cost, and accessibility of health care in the United States – an indisputably massive but much-needed undertaking.

Aside from political debates in Washington, the technology industry continues to buzz about cloud computing. It may seem, at first glance, that health care reform and cloud computing are unrelated, but TripleTree’s research and investment banking advisory work across the health care landscape are proving otherwise; the linkage with cloud is actually quite significant.

Our viewpoint is that cloud computing may end up mending a health care system that has largely let a decade of IT innovation pass by and now finds itself trapped in inefficiency and stifled by legacy IT systems.

Much has already been written about cloud computing’s potential and demonstrated successes at helping enterprise IT infrastructures adapt and transform into more efficient and flexible environments. But where does cloud computing fit within health care?

We have long espoused that innovation in health care needs to come from outside of the industry. Today, the likes of Amazon, Dell, Google, IBM, Intuit, and Microsoft have built early visions for cloud computing and see a role for themselves as health care solution providers. We are convinced that traditional HIT vendors will benefit from aligning with these groups such that their domain-specific knowledge can attach itself to approaches for cloud (public, private and hybrid), creating a transformational shift in the health care industry.

Cloud is active, relevant and fluid…see our colleague Jeff Kaplan’s recent blog post on the changing competitive landscape.

We’d be interested to know what you think…have a great week!

Chris Hoffmann

Chris Hoffmann is Research Director at TripleTree covering Cloud, SaaS and enterprise applications and specializes in CRM, loyalty and collaboration solutions across numerous industries. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

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Follow The Process: Can IT & Business Leaders Collaborate on Web Content Management Practices? – 06/28/10

Amid considerable market consolidation across all industries, the Web is becoming a bigger part of many organizations’ communication and content management strategies.   TripleTree’s team has been assessing the ramifications of content management workflows, process controls, governance and archiving strategies across many enterprise functions for three years.  While we agree that data sharing can help businesses manage customer-relevant data and an increasing amount of account driven information – web based content management strategies are challenging endeavors and IT departments are often times less than willing collaborators (pun intended).

Vendors choosing to be proactive may start by addressing an organizations’ compliance needs for best practices and solutions that ensure electronically stored information (ESI) is properly captured, identified, preserved, and analyzed.  Along the way, considerations around scalability, technology, and a solutions roadmap will help differentiate the ongoing convergence of content optimization, search, compliance, and knowledge management solutions.

For industry specific approaches (take Legal or Healthcare as examples), distinct market knowledge are now table stakes for vendors who aspire to successfully compete as their markets evolve. Even global vendors with traditional content management and other significant resources at their disposal won’t likely have the tools and expertise to guarantee success when industry specific (i.e. legal case management & search; or the linking healthcare patient payment plans and personal health records).  Content management disciplines, data integration needs and related professional services will need to be tied together to not only ensure user adoption and information relevance, but to stem organizational resistance as well.

If you’re working through similar issues, we’d like to know what you’re finding – in the meantime, here are a few other news items that caught our attention this week:

• Google encrypted search aids privacy
• Content management and its ties to eLearning
• Healthcare vendor SearchAmerica links account information to collections

TripleTree’s broad research agenda on Compliance offers more detail –if you’d like to learn more please contact us at 952-253-5300.

Have a great week!

Chris Hoffmann

Chris Hoffmann

Chris Hoffmann is Research Director at TripleTree covering Cloud, SaaS and enterprise applications and specializes in CRM, loyalty and collaboration solutions across numerous industries. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

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Uncommon Clarity – 06/07/10

Many industry pundits are predicting continued strength in the consolidation in the technology industry.  The master brands – those vendors offering full stack solutions – have led the charge to date, impacting middle market and emerging competitors in how they’re thinking about financing growth, optimizing sales channels and forging relevant alliances.  Much of this consolidation is reactionary as product and partnership announcements and new innovations come on line.   TripleTree maintains a two column scorecard of 15 tech and 15 healthcare master brands, and below we’ve summarized a random walk of occurrences from three vendors from the tech side of this ledger.

• SAP: Does new leadership bring new momentum? Consider the major acquisition of Sybase shortly after a change in leadership.  While still behind Oracle’s “full stack” capabilities, SAP made a huge leap across the stack in applications (especially capabilities to mobilize) and data management.

• Google: The only threat to Apple (iPhone and iPad) dominance is next-gen smart phones.  Sprint and TMobile are actively messaging around Andoid and buzzing about “iPhone killers”, but Google has miles to go in refining it platform to approach the elegance and simplicity of Apple.

• Microsoft: CEO Steve Ballmer says Microsoft is “all in” with cloud, but still the majority and revenues comes from OS and desktop applications. The channel / cannibalization concerns that confronted them with SaaS five years ago persist, and it’s hard to believe they have conjured up a new strategy to allay them with cloud.  Besides, it’s in Microsoft’s interest to be all-Microsoft-all-the-time, so its unlikely they will ever offer a truly interoperable, open cloud.

Let us know what you think – in the meantime, here are a few things we’re keeping an eye on:

• Provider shortages and access concerns mount for healthcare reform – more here
• Does acquiring Palm direct HP into the tablet market?  – more here
• Home health hub via Google TV? – more here
• Jeff Kaplan on HP’s restructuring – more here

Read our most recent research on Healthcare Compliance and mHealth, and if your schedule aligns, catch up with us this week at AHIP in Las Vegas.

To learn more, contact us at 952-253-5300…have a great week!

Chris Hoffmann

Chris Hoffmann is Research Director at TripleTree covering Cloud, SaaS and enterprise applications and specializes in CRM, loyalty and collaboration solutions across numerous industries. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

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