Lab Soft News

Citrix Has Become a Barrier to Improvements in Healthcare Software

In my opinion, many EMR and LIS systems have become outdated in terms of their architecture (see: Possible Adverse Consequences of Increased Federal Investment in HIT). I have attributed this in the past to the fact that hospital and lab executives keep purchasing them so there is no rush by the vendors to convert them to a more modern design. A recent note by Mr. HIStalk on the use of Citrix in the healthcare industry provides another view of this problem. Here is his note:

...[S]omeone lists the five companies Dell should take over, all of them in healthcare IT. They are Allscripts, Quality Systems (NextGen), CSC, Cognizant, and Citrix Systems. Citrix isn’t technically a healthcare IT vendor, but [healthcare is] probably [the company's] biggest vertical since the industry is dominated by 1970s time capsule applications that won’t run efficiently and securely without it....Actually I use Citrix a fair amount at work and it’s pretty cool – poorly architected fat client apps run a heck of a lot better over wireless or VPN when you’re only painting screens and not slinging massive data packets back and forth.

His observation is very interesting and hits the mark. I am reminded of a LIS vendor many years ago which was reluctant to admit that the use of Citrix was absolutely essential in order for its product to function adequately. The company did not want current clients to understand its fat-client problem nor potential clients to add the cost of the Citrix software to the total cost of ownership (TCO). This need for Citrix as companion software for many LISs and EMRs also places an additional work burden on the lab and hospital IT support staff. As noted above by Mr HIStalk, the success of Citrix in the vertical healthcare market is a function of the inadequate design of the EMRs and LISs that we continue to buy and operate. Citrix is cool but there is a big price to be paid in order to see it work on a daily basis.

G.E. Jumps into the Hospital Connectivity Space

As someone who spent a lot of time in the past thinking about community health information networks (CHINs), the recent news about G.E. entering the HIE (health information exchange) space made me laugh out loud. The amount of money lost on healthcare connectivity endeavors such as CHINs and regional health information exchanges, a later incarnation of the same concept, has been enormous (see: A Quick Look at CalRHIO). So here we go for one more bite at the apple (see: G.E.’s Bid to Connect Computerized Health Records).

There are all sorts of obstacles to moving the nation’s health care system, choking on paper records, into the computer age. The cost and complexity of making the transition are daunting, though the government’s $19 billion in incentives for doctors and hospitals to adopt electronic health records should help. But the hoped-for benefits of digital health records ...will not really materialize unless information flows seamlessly and securely among labs, clinics, hospitals, doctors’ offices and patients. General Electric’s big health care division is introducing on Thursday a new unit, eHealth, to pursue the business opportunity presented by this challenge. The main target for G.E.’s new business unit is in providing the technology and expertise to build regional and statewide Health Information Exchanges [HIEs], as these planned data-sharing hubs are now being called. An initial $564 million grant from federal government to the states will provide seed money to get things started. Over the last two decades, there have been efforts to set up such health information-sharing networks. They were first called Community Health Information Networks and later Regional Health Information Organizations. Mostly, they failed. Hospitals and physician groups had no incentive to make the investment to share patient information, since they were not paid for doing so. But to qualify for incentive payments from the government, doctors and hospitals need to adopt electronic health records that share information across networks....G.E. said it was investing $90 million to get the new eHealth unit going. Its offerings include software for securely storing and sharing patient information, a Web portal that can pull patient information from various sources and present it to doctor, and a Web-based personal health record, called LifeSensor. It was built by a G.E. partner, InterComponentWare. So is G.E. going head-to-head in the emerging field of personal health records — controlled by individuals, not a doctor, hospital or insurer — with the likes of Google and Microsoft?

I do take issue with the statement above that hospitals lacked an incentive to share patient information and paying them for doing so will provide sufficient motivation. My view has always been that hospital executives view patient information as proprietary and providing some small payment for them to pursue a connectivity goal will be insufficient. The problem is that they will never state their true objection but rather moan about the complexity of medical information and the challenges of clinical data exchange. Incidentally, hospitals have had no problem sharing financial information because this is how they are reimbursed (see: CCHIT Certification and "Meaningful Use" of EMRs).

I have covered both the Microsoft and Google forays into the PHR development and, of late, Google's partial withdrawal from this field. I have come to the personal conclusion that the Google executives have decided either that they have bigger fish to fry (e.g., the cell phone market with Android) and/or the healthcare market poses too many risks and too little profit for a technically innovative and adroit company (see: Google Health Running Out of Steam, According to Experts). For Microsoft, working several years behind the curve and having power lunches with hospital executives probably feels just about right (see: Microsoft's Cell Phone Operating System Lacks Key Functionality). I suspect that G.E. decided to hold its nose and jump into the HIE fray. After all, McKesson, a serious competitor, has had success linking physician offices and office EMRs with its RelayHealth product (see: Developing an Electronic Medical Record Ecosystem (Network).

Another Saga of "Blame the Vendor" Leaks Out of the UK

There are days when I am sure that Neal Patterson, CEO of Cerner, regrets the little pas de deux that his company has been engaged in with the British government and its NHS for years. Mr. HIStalk alerts us to another chapter to this continuing saga with its "blame the EMR vendor" theme:

Speaking of Cerner, St. Bartholomew’s Hospital in London faces fines of $650,000 per month for lengthy patient backlogs that it blames on the “dreadful” Cerner Millennium. I doubt it’s that simple, but blaming the computer is always convenient.

Here's an excerpt from the source (see: Barts faces fine over IT failures):

St Bartholomew’s Hospital in London faces being fined £400,000 a month for missing patient care targets as a result of the troubled NHS IT programme....Tory MP Richard Bacon, a member of the Commons public accounts committee, which scrutinises public spending, said the £12.7bn NHS IT programme had led to Barts developing a backlog of thousands of patients waiting for treatment....He said the Cerner Millennium system had caused “havoc” wherever it had been deployed in the NHS. The hospital was failing to meet a Department of Health target that no one should wait more than 18 weeks to receive hospital treatment from the time they are referred by a GP.

I have covered the issue of "blame the vendor" in a previous notes (see: Do Hospital Executives Use Their IT Vendors as Scapegoats?). My guess is that there's plenty of blame to go around with the NHS' EMR program and that their electronic medical record problems are multifactorial (see: NHS Computer Czar "Outed" by his Mum). I also believe that any large-scale IT project mounted by the NHS will inevitably end in chaos, with or without Millennium in the mix. You have a mixture of a creaking government bureaucracy, hospital personnel who may not be motivated to put in a day's work, and a host of grand-standing politicians playing to the crowd. Did you note the name of the Tory MP quoted above -- it's BACON. From what I know about the usual wait for hospital admission in the U.K., 18 weeks seems like good performance. Comparable in some ways to Canada (see: The Fundamental Flaws in the Canadian Healthcare Delivery System). Does everyone understand the irony of the British government fining a hospital $650,000 per month that it itself owns and manages. The government hospital executives will surely ask for a larger operating budget to cover their recurring fines? Another alternative is to withhold payments to Cerner. Blame the vendor.

Forbes.com Puts Some Numbers to the Epic Systems Success Story

I have a special and continuing interest in the corporate culture of Epic Systems, one of the most successful hospital EMR companies. Because its founder and CEO, Judith Faulkner, does not allow interviews and the company is privately held, hard facts about it can be hard to acquire. However, a recent story in Forbes.com about Epic (see; Wired Medicine's Silent Giant) provides much new information and analysis, all of which rings true to me. Below is an excerpt from it:

...[T]he hottest company in the electronic medical records industry is a secretive Wisconsin outfit called Epic Systems. It does little marketing or advertising, shuns acquisitions, never issues press releases and tries to stay out of the headlines....Yet with a reputation for customer service and software that is more user-friendly than most, Epic has snagged contracts with famous places like the Cleveland Clinic and University of Chicago Medical Center, the big HMO Kaiser Permanente and Group Health Cooperative in Seattle. Epic has recently been winning about 40% of the new contracts for electronic records systems at major hospitals--far ahead of its competitors....In 2008, Epic won 24 big-hospital contracts, versus 12 for McKesson ... and 10 for Siemens....A contract to install medical records software at a 400-bed hospital might be worth $20 to $30 million over several years....Epic had $600 million in revenue last year, up from $500 million in 2007. It does not disclose its profits. The company focuses exclusively on larger hospitals and health systems--it has just 180 customers--allowing it to get business by word of mouth without much marketing....Computer programmer Judith Faulkner founded Epic in 1979 with three part-time employees and is still chief executive....[S]he is known for her liberal politics and buying quirky artwork for headquarters, according to local newspaper reports....Epic has a reputation for relatively high prices and high levels of service to ensure software is installed on time with as few snafus as possible...The fact that Epic is private is also viewed as an advantage by some hospitals....Installing medical records can take a year or more, and hospitals don't want a vendor that will be distracted every three months with earnings reports. Drexel University medical computing expert Scot Silverstein is a harsh critic of most medical records systems, which he says are confusing, glitch-prone and hard to use. But he gives Epic some grudging respect. "It is not terrible. Epic has the advantage of having been around for a long time, and they have been steadily improving the quality of their product. It is much simpler in its appearance to end users than some of the competing products. The user is not presented with a massively complex set of screens." ....Epic, of course, was unavailable for comment [on this article].

I found it interesting that Epic's privately-held status is put forth in the article as an advantage by health system clients because the company does not need to "dress up' quarterly earnings or court financial analysts. It would be more worrisome for me, as in the case of Kaiser Permanente, to have spent a king's ransom ("The Kaiser project will cost $4.2 billion by the time the final updates are completed in 2013.") on an EMR provided by a company micro-managed on a daily basis by a single individual. Perhaps plans have been made for Judith Faulkner's succession and the hospitals hold the system source code to ostensibly protect their institutions, but I very much doubt it.

For me, here's one of the paradoxes of the Epic success story. As noted above, Epic only sells to large health systems. These, of course, are the very organizations with the largest numbers of talented IT professionals. One of the secrets of the Epic success is that the company has a "take it or leave it" approach to its software products. In other words, the company does not allow local hospital IT personnel to modify the product -- only install and maintain it. The result of this arrangement is a "not terrible" EMR product, referred to by me in a previous note in a more charitable way as vanilla (see: Some Additional Insights into the Epic Corporate Culture). There are probably few other segments of the global IT industry where the most successful company in an industry would provide a product requiring a multi-billion dollar investment that is described as "not terrible."

Despite HIPAA, the Privacy of Our Health Records Is Largely a Myth

Most of us, perhaps too glibly, assume that our medical records, both in hardcopy and electronic formats, remain a bastion of privacy and can be securely anonymized and and thus protected from prying eyes. Mr. HIStalk comments wisely on this topic in a recent blog post:

I think that [HIT vendors selling hospital clients' ‘de-identified’ clinical data] conveniently [hide] behind the concept of “anonymization” as an absolute; a simple technique of magically rendering highly sensitive personal data untraceable. Sounds good to a lay person, right? It even sounds technically reasonable as long as you’re thinking of someone having only one data element (just your birth date) instead of multiples (your birth date and ZIP code) and one database (a prescription file) instead of multiples containing joinable fields (prescriptions plus driver’s license records plus a grocery store loyalty card database). It’s like security in general: rarely absolute, secure only if there’s not enough incentive for someone to go to the trouble to crack the code.

I stated rather bluntly in a previous note (see: On the Privacy of Health Information: The Horse Is Already Out of the Barn) that the privacy of medical records is largely a myth and that we should get accustomed to the idea. I specifically cited an article in the Washington Post describing how pharmacy benefit managers (PBMs) sell data about individuals to health insurance companies in order for them to assess financial risk of insurance applicants (see: Prescription Data Used To Assess Consumers). The lede to this this article stated the problem succinctly: "Health and life insurance companies have access to a powerful new tool for evaluating whether to cover individual consumers: a health "credit report" drawn from databases containing prescription drug records on more than 200 million Americans." In other words, health insurance companies can acquire from the PBMs a report of your health status based on the type and doses of the drugs that are prescribed for you by your physician. The PBMs assert that the disclosure of such information is legal because the consumers authorize the release of such information to health insurance companies.

I am not saying that we should let down out guard or even think about abandoning HIPAA. There are too many people feeding at the HIPAA trough -- to do so would postpone our economic recovery for at least another year. I just want to reinforce Mr. HIStalk's major point, which is that no privacy or anonymization system is absolute. If someone with a computer, a few dollars, and some computer savvy wants to learn all of the details about your health status, there is little that can be done to protect your data. The situation is not going to get better in the future as "protected" health information is replicated to an increasing number of applications and databases including personal health records (PHRs), for which I am a strong advocate. Let's face facts. When the pharmaceutical companies pull out their checkbooks, nothing or no one is protected. Even the AMA, supposedly chartered to protect its physician members, is susceptible to the lure of cold, hard cash (see: AMA Discloses Masterfile Physician Data to Pharmaceutical Companies).

Smartphones as the New PCs; Connecting to Healthcare Professionals and Consumers

I have been using my new smartphone, a Palm Pre, for about a month now. I have posted a number of previous notes about the use of such devices for educating healthcare consumers and reporting lab test results to physicians (see: Making e-Health Information Accessible with Smart Phones; The Mobile Web and the Future of eHealth). Various features of this device have greatly impressed me, not the least of which has been the ease of surfing the web and the ability to quickly download new applications. A recent article referred to "smartphone apps" as the foundation for a new gold rush and I completely agree (see: Smartphone apps are the technology world's new gold rush). Below is an excerpt from it:

Credit Suisse recently projected that total smartphone sales for 2009 will end up at around 176 million units. In the years ahead, Credit Suisse expects the smartphone market to balloon to around 1.5 billion units. By comparison, worldwide unit sales of all mobile phones in 2009 will be about 1.2 billion and worldwide unit sales of all PCs in 2009 will be about 300 million....Beyond smartphone applications, there are several additional forces at work that are going to drive the growth of the smartphone market:

• This next generation of mobile broadband will unleash a new wave of software applications and video services on smartphones. It will also enable augmented reality software to let smartphones interact with the real world.

• [T]he mobile phone will become [the PC for people in emerging economies] because cellular towers are much easier and cheaper to deploy and there are inexpensive ways to generate small bursts of recharging power....
  

• [A]ll mobile phones will naturally become smartphones as their underlying software takes on more advanced functions and vendors become less likely to build their own OS and more likely to use an open source mobile OS like Android or license Windows Mobile or Palm’s webOS.

Vendors and developers are already anticipating the day when there will be over a billion smartphone users on the planet. Having seen the runaway success of the iPhone App Store (which, frankly, happened as much in spite of Apple as because of it), mobile platform vendors do not want to concede this huge competitive advantage to Apple. Thus, all the big ones are building their own app repositories and are wooing software developers to write applications.

Let me simply restate the obvious by saying that smartphone will be an essential means by which the clinical labs will communicate test results to physicians. Rotating my smartphone by 90 degrees changes the screen format to landscape. Although I have commented in the past that cell phones did not provide enough screen "real estate" to display lab reports, I have now changed by mind about this. With "hand gestures" that can be used to magnify text or images, a touch-sensitive screen, and superb screen resolution, it will be a simple matter for physicians to read lab reports using these devices. The next step, clearly, will be the development of applications running on smart phones that will assist clinicians in "digesting" a set of lab test results and provide diagnostic support.

Until such time as such diagnostic support apps are available, clinicians can always point their smartphone browser to the ARUP Consult, which is a "Physician's Guide to Laboratory Test Selection and Interpretation." I have highlighted this excellent resource in a previous blog note (see: ARUP Offers Lab Algorithms for Disease Diagnosis Support). Here are some more details copied from the web site:

• Nearly 2,000 lab tests categorized into disease-related topics
• Disease topics include clinical background information, test ordering suggestions, and concise diagnostic advice
• More than 50 algorithms support clinical decision-making
• New and updated content released 6 times a year
• Co-authored and maintained by experts at the University of Utah School of Medicine and ARUP Laboratories

A Scenario for Lab Computing in the Post-Classic-LIS Era

I think that we may now be working our way through what might be called the post-classic-LIS era. The classic LISs were designed to meet most of the computing needs of the major hospital-based clinical labs such as chemistry, hematology, microbiology, and blood bank. These multipurpose systems dominated the market for about three decades. The first crack in the facade of their functionality and invincibility was the emergence in the market of so-called middleware. These niche applications were supported and promoted by the IVD vendors and smaller software companies, installed as "black boxes" between analyzers and the LISs, and provided additional functionality not always available in the LISs. A second blow was struck when many of the LISs available in the market were unable to adequately support molecular diagnostics. In response, a small group of the LIS vendors finally developed molecular diagnostics modules. The third blow consisted of the digital pathology systems that have been been supplied largely by a new set of vendors, manufacturing both the requisite scanners and software. The fourth blow, now in its very earliest developmental stage, has been integrated diagnostics which may ultimately result in the emergence of blended diagnostic information system (DIS).

A similar pattern is occurring in the hospital EMR market. Successful vendors such as Epic Systems have been unable to provide EMRs that adequately accommodate to the increasingly complex data and images generated in the major diagnostic departments such as pathology, clinical labs, radiology, cardiology, and gastroenterology. The inadequacy of these nominally "global EMRs" has not raised any alarms because the purchasers of EMRs, hospital CEOs and CIOs, rarely if ever use them on a daily basis for their own work. To explain away this EMR functionality problem. the advocates for these systems declare that they have not been designed to store and report all of this burgeoning diagnostic information and, most particularly, diagnostic images.

In contrast, the daily users of the "ancillary" diagnostic systems continue to insist that they function at a very high level in order to accomplish their daily work. In my opinion, the classic LISs, in a manner similar to the hospital EMRs, will gradually evolve into front-end viewers for the complex molecular test results and images that will be managed by back-end modules and linked under a federated architectural model (see: The Value of a Federated Architecture in Pathology). HL7 will be inadequate as an standard for these modules due to the length of time and cost required to develop interfaces. The solution to this need for an on-the-fly interoperability solution will be LITS-Interop which is web-based, flexible, and inexpensive. Increasingly complex versions of this software were demonstrated at the Lab InfoTech Summit last March in Las Vegas and the just completed APIII conference in Pittsburgh.

I believe that lab computing of the future will resemble something like the following: the classic LISs will remain in-situ, primarily as viewers for the specialized back-end federated modules with LITS-Interop serving as the interoperability solution. These hospital lab mini-networks will be linked into larger regional or national lab networks with scattered reference lab nodes and with participation of panels of pathology and lab medicine consultants. The manner in which the hospital EMRs evolve will become largely irrelevant to lab professionals. The federated hospital lab mini-network will continue to pass to the hospital EMRs those top-level diagnoses that the EMRs can digest. If the hospital clinicians need to view detailed lab information or surgical pathology images, they will link to the web-based federated lab network described above. A similar situation obtains today if the clinicians want to view radiology images -- they sign on to the specialized radiology PACS, usually managed by the radiology department.

Dell Jumps into the Office EMR Market

I find it useful to distinguish between office EMRs and hospital EMRs, although healthcare IT articles often don't make this distinction clear. Although both types of software support healthcare delivery, physician office practices are a world apart from hospitals. Some software vendors have developed EMRs that operate in both environments but which are frequently too complex for optimal use in physician offices. One of the most successful office EMR products, eClinicalWorks, has been successful in the market because it is relatively inexpensive and also designed with attention to optimizing the workflow of a physician offices. Below is an excerpt from an article that addresses the office EMR market but you wouldn't necessarily know if from the headline (see: Tech Companies Push to Digitize Patients’ Records):

The goal of moving paper medical records into the digital age has been championed for years by health care policy makers across the political spectrum, from Hillary Rodham Clinton to Newt Gingrich.... Although most of the government money will not start flowing until next year, the companies hoping to get their share include technology giants like General Electric, I.B.M. and the big telecommunications company, Verizon. Also in the hunt are smaller health technology specialists like Athenahealth, eClinicalWorks and Practice Fusion....Dell, the personal computer maker, plans to join the scramble in earnest, announcing its plan to form a partnership with hospital groups around the country to offer electronic health records — hardware, software, consulting services and financing — to their affiliated physicians. Dell, like the other players, sees the big opportunity as being in offices with 10 doctors or fewer, where three-fourths of the nation’s physicians practice medicine. To proponents, electronic health records, when thoughtfully set up and deployed, are a modern tool to improve care and help curb costs. They hold a patient’s health history, medications, lab tests and, when connected to databases, treatment guidelines....But doctors in small offices have not moved to digital records, mainly because today’s technology is costly and complex. What is needed, experts agree, are new models of delivery and easier-to-use technology to reduce the expense and technical headaches. The proposed offerings are typically bets on the new Internet-based service model, known as cloud computing, in which much of the computing firepower and data reside in remote data centers, which doctors, nurses and staff would use via the Web browsers on their personal computers....EClinicalWorks has added four data centers in the last year, bringing the total to 10, for hosting electronic health records as a service over the Internet. The company offers its records both as conventional PC software and as a Web service.

So why the sudden interest on the part of PC manufacturers like Dell? First of all, the physician office environment is familiar to them -- small businesses in need of automation but without much depth in computer expertise among office personnel. Secondly, the physicians managing their own practices have no disdain for cloud computing when it is shown to be dependable, secure, and cost-effective. In large hospitals, by way of contrast, there may be numerous IT personnel who provide technology advice to the CEO and CIO, all of whom will be very protective of their jobs. On this basis alone, converting to cloud computing, with transfer of much of the hardware and software support to an outside organization, will have little appeal. The good news in this story is that the entry into the office EMR market of a company like Dell will raise the competitive stakes. This is a company that is accustomed to providing services and lower-priced products to small enterprises and probably views physician office records as just another type of information, which I think is the correct approach.

Some Additional Insights into the Epic Corporate Culture

It's probably no coincidence that two of the most successful vendors of healthcare software, Epic Systems and Meditech, are very similar in their organizational structure and corporate culture. Both are dominated by their founders and a small set of insiders, have few management layers, are privately held, don't bother to advertise but rather let customers come to them, and prohibit their clients from meddling with their software. Multiple layer of managers are superfluous when the CEO/founder micro-manages or strongly influences most company decisions. There is no need for the CEO to bother with interviews because the opinions of the financial writers and pundits are largely irrelevant. If every hospital installation is almost identical, all of them can be managed centrally and efficiently. The software of these companies drifts toward vanilla -- not great, not terrible, but good enough to satisfy hospital CEOs who are not eager for IT failures. Client feedback, both positive and negative, is largely irrelevant.

I have blogged about the Epic and its culture in previous notes (see: Epic Systems and Its Corporate Culture; More on the Epic Culture: Is This a Cult or a Company?; The Secret to Epic's Success in the Hospital EMR Market). I have just come across a discussion thread about the company in one of the on-line corporate jobs and gossip boards called Indeed.  I present below an excerpt from one of the anonymous reviews of Epic that focuses on the managerial aspects of the company:

1. Management...:It's awful and there's a trickle down effect from you know who. It's flat, meaning that the true decision-makers are spread thin. With a company of roughly 3500 employees, there are only a dozen that can make impactful [sic] decisions and it doesn't end there. The dirty dozen also have perfected the micro-management style.... When I left, I was only 3 steps from [CEO] Judy [Faulkner] on the [corporate ladder] but it might as well been 1000, yet the execs felt compelled to control every little detail, most of which could/should have been controlled by the next 100 in the company

2. Management [continued]...: Epic doesn't have "managers." They have team leads and group leads. A team lead usually directs a team of 5 to 7 employees. A group lead directs a subset of team leads. There are 24 year olds in the team lead role and I know of a 28 yo as a group lead. This isn't necessarily a bad thing, except the only quality needed to become a team lead is a strong work ethic. That's it....As a result, there is an overwhelming lack of leadership throughout the middle ranks of the company...and here's the kicker: work ethic is basically determined by hours logged....People skills, communication, etc was rarely a factor. I was fortunate to have 2 competent team leads when I started but I was the exception to the rule. They "train" the newly promoted team leads but that training is a joke....

3. [CEO] Judy [Faulkner]. She's just strange. If you've dealt with her in the past, you'll understand what I'm saying. She's great for the company as the customers have great faith in her leadership. The company is her baby and she probably averages 90 hours/week. However, I think lack of a life has really skewed her vision....She's beyond demanding. She's mostly pleasant but if she's putting in 90 hours, she expects those working directly with her to do the same. She's the ultimate micro-manager.

Demanding long work days from "20-something" employees is the norm in the software industry. Hiring only youngsters and indoctrinating them in the "correct" way of thinking is also not novel. Many of these employees are learning the trade from scratch and getting their tickets stamped for subsequent positions. They will tolerate such conditions for the experience to be gained and will leave if unhappy. Moreover, hospital CEOs and CIOs really don't care about the morale among their various vendor employees. They only care whether the Epic software they have purchased for millions of dollars can be "slammed-in" and runs "adequately" in their hospitals. I think that the executives of other healthcare software companies should take note of the Epic and Meditech business models which appear to be the most successful in the industry.

The Secret to Epic's Success in the Hospital EMR Market

Mr. HIStalk, in response to a reader's comment, opines about why Epic has been so successful in the hospital EMR market. Although short, his analysis provides a penetrating analysis of why a particular vendor has experienced such success and may continue to do so.

It’s easy to see with 20-20-hindsight why Epic owns the markets they choose to play in: (a) they built new products that reflected that inpatient-outpatient continuum while their competitors kept bolting on marginally useful features and acquisitions onto old platforms that were clearly unsuited for them; (b) they created MyChart before anyone cared about sharing data and PHRs; (c) they didn’t get bogged down in a Viet Nam of unsuitable customers by selling indiscriminately to just anyone; and (d) they ran their implementations firmly and protected customers from their own success-sapping indecision. Nobody else is even close, handing over the entire upper-end market to Epic without much resistance. Cerner had a shot but doesn’t seem to be selling much new business, while the reps from GE, Siemens, and McKesson might as well carry a white flag when they visit hospitals of more than 400 beds. Eclipsys is strong in the traditional inpatient core of CPOE, pharmacy, and nursing, but won’t get a foothold with customers who want a broad application line that covers outpatient in a single database. Epic owes its success to weak competition as much as anything else. In a perfect world, someone would step up to offer an Cadillac alternative, but for now, Epic is running its own Cash for Clunkers program (they get the cash).

What's fascinating about this analysis is how much more prescient Epic has been about the EMR market than its competitors and hospital executives. I will guarantee you that few hospital CEOs/CIOs were talking about PHRs and sharing clinical data with patients a few years ago. Most of them still don't like the idea -- they consider clinical data to be proprietary to them. Any yet Epic began to develop their PHR product, MyChart, in such an environment because it was the right thing to do. The major payoff for this investment is yet to come. Ten years ago, inpatient care was the dominant focus of care for hospital executives and their primary automation focus. Few talked about the inpatient-outpatient continuum. An yet, even then, the migration of surgical and oncology patients to the outpatient setting was very predictable.

The last two items on Mr. HIStalk's list, picking the right hospital customers and protecting them from their own inadequacies, are essential ingredients in Epic's success formula. You see, it's not enough for an EMR vendor to understand precisely where the hospital market is heading. It's essential that its customers buy into this vision (or at least think that they do). The rest are rejected. The vendor then needs to protect all of its "acceptable customers" from self-inflicted wounds. These wounds include indecision and an irresistible urge to customize an EMR to an unmanageable degree based on pressure from politically powerful groups within the hospital. The product that then gets installed is a workable and standardized, if lackluster, EMR. Cash for clunkers.