January 7, 2008

Note: three stories instead of five will make up each issue, beginning with this one. It became obvious that the average week doesn't have five newsworthy events. Showcasing three will provide a quicker read without missing anything important.

1. Allscripts Acquires Case Management Software Vendor ECIN

Facts and Background

Allscripts announced on last Wednesday that it had acquired all outstanding stock of Extended Care Information Network for $90 million in cash. Chicago-based ECIN sells Web-based utilization management, case management, and discharge planning systems. The company has 80 employees and $19 million in revenue.

Opinion

Allscripts' Canopy discharge planning software gets a stablemate for what sounds like too much money (4.5x revenue?) Still, it's a ripe area with minimal competition and Allscripts becomes quite a force in it.

Musings

• Surely the two products will be merged in some way to avoid confusing prospects.
• Allscripts CEO Glen Tullman was on ECIN's board and was an investor in it, but he claims no conflict of interest and recused himself from acquisition discussions.
• ECIN's software was developed by a Chicago-area software consulting firm that makes listserv software. That company's former president is now ECIN's CTO.
• ECIN has good KLAS scores and very few negative customer comments.
• This is an interesting and minimally competitive niche.
• ECIN had the right attributes to attract takeover attention: good size and growth, little competition, good KLAS scores, Web services, recent high profile sales, and VC backing.
• Selling discharge planning systems means convincing hospitals to do a much better job of discharge planning. That function carries little clout in the average hospital. Allscripts needs to elevate its importance to the C-suite instead of its usual spot in the food chain: being turfed it off to deferential nurses with minimal physician influence who needed a job less strenuous than patient care.

2. ONCHIT's Budget Unchanged for 2008

Facts and Background

The appropriations bill that funds the Office of the National Coordinator for Health Information Technology will provide the agency with a 2008 budget of $61.3 million, the same as 2007. Coordinator Robert Kolodner says his office will have to delay or cancel new projects, with the Nationwide Health Information Network suffering most.

Opinion

A flat budget plus a zero percent track record for passing HIMSS-cheerled HIT funding bills makes it clear that the government will not simply write checks to increase HIT adoption. Thank goodness. If the industry really believes in the benefit of HIT, it will invest on its own.

Musings

• President Bush wanted $118 million for ONCHIT. Then again, he's just about the most fiscally irresponsible Republican to ever gain and hold office at any level.
• Postponed: interoperability demonstration projects and PHR standards work.
• Benefits aside, NHIN would be a boondoggle. RHIOs only squander millions, chump change to the dozens of billions NHIN would require, much of it lining the pockets of otherwise indifferent contractors who always have their hands down Uncle Sam's pants.
• Is ONCHIT still relevant without Brailer and under a lame duck president? Most of its accomplishments seem to have happened within its first six months of existence. Despite all the national healthcare posturing, Congress seems unimpressed with ONCHIT's value given its modest funding.

3. Year-End "Best in KLAS" Winners Announced

Facts and Background

KLAS announced its Top 20 Year-End Report for 2007 this past Friday.

Opinion

The publiclized "awards" are kind of interesting, but KLAS still hasn't followed through on its promise to make its methodology more transparent. Until it does, the also-rans will certainly find little resistance to their claims of questionable science. KLAS has turned into the Academy Awards with its awards ceremonies and seal of approval, with the only difference being that moviemakers don't pay to earn or display an Oscar. Can acceptance speeches be far behind? In the absence of any better evaluative tool, however, vendors will keep paying to play.

Musings

• Cellar dwellers: Cerner and GE Healthcare, which have several offerings each that are dead last or next to last in their respective categories.
• USA still has the #1 product overall (along with #5) although I bet few CIOs know anything about the company or its products.
• DR Systems did well again. Surely somebody won't be able to resist buying them.
• GE Healthcare has two of the bottom three products: the former Carecast and the old Triple G LIS. So much for a mammoth conglomerate adding value. Both fared better without GE's ownership.
• Epic tops the chart in both inpatient systems and large physician practices. The importance of that should not be overlooked.
   

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