June 9, 2008

1. ONCHIT Happens (To Have a Plan)

Facts and Background

HHS's Office of the National Coordinator for Health Information Technology announced its 2008-2012 strategic plan on Tuesday, emphasizing federal coordination, additional CCHIT certification, and and elimination of privacy and ROI roadblocks to EMR adoption.

Opinion

The plan says a lot without really saying anything, the hallmark of a consultant-prepared document. Good ideas aside, ONCHIT doesn't have the money or support to make much headway toward its lofty technology goals, especially since the office was created by what will likely be regarded as the worst presidential administration in US history. EMR adoption hasn't changed much, RHIOs are dropping like flies, CCHIT is now unavoidable but still hasn't put more EMR systems online, the VA is trying to replace the very system that ONCHIT was supposed to get widely adopted and from whose ranks its current coordinator was drawn, and pitch man David Brailer bailed out for private industry. On the other hand, we now have five expensive and poorly created acronym definitions. About the only good result from ONCHIT so far has been visibility (such as it is) and HITSP. ONCHIT has taken on several of the industry's biggest problems, but has solved none of them.

Musings

• The plan emphasizes the inconsistent privacy policies in force, although it doesn't seem to offer a solution.
• The new adoption goal is to have 40% of physician offices overall using CCHIT-certified EHRs by 2012 and 12% of those practices of five doctors and fewer, measured by an annual survey. Apparently that will allow ONCHIT to declare victory in meeting the president's call for a "majority" of Americans to have their care managed with electronic records.
• The report acknowledges that electronic systems are expensive and provide benefits to everybody except the physicians who have to pay for them, so ONCHIT proposes to try to make a case for malpractice insurance premium reductions for their use. Good luck with that.
• It's sticking with the CCHIT certification plan, refusing to acknowledge uncertified EMRs. That's consistent with its recent definition of EHR meaning "CCHIT-certified" while everything else is the less-sexy EMR.
• ONCHIT wants the licensing boards for healthcare professions to require informatics course work.
• ONCHIT wants personal health records to be certified in what will surely be yet another expansion of CCHIT's purview.
• Despite minimal success at increasing physician EMR adoption, ONCHIT now wants to focus on population-based projects and data standards.

2. Rardin' to Go: Merge Healthcare Dumps Suits, Troops, Loot

Facts and Background

Imaging vendor Merge Healthcare announced Wednesday that its senior executives had resigned en masse, that it will slash 15% of its remaining workforce, and that early vendor contract terminations and reorganization costs will result in several million dollards in restructuring charges. Merrick Healthcare Solutions, which loaned Merge $20 million to settle a securities class action lawsuit two weeks ago, apparently took control of both the company's board and its management team.

Opinion

Rardin's September 2006 hiring as CEO hiring was announced the day Merge announced a $216 million quarterly loss and weeks after the company's top executives quit. He founded Software AG and sold IMNET off to HBOC, but Merge ended his streak. Arguments about whether Merge was already doomed by then or whether Rardin killed it are apt to be inconclusive.

Musings

• Merge will drop the Cedara name, probably the best one it owns.
• This seems to be a purely financial play, one that a company with any chance of survival wouldn't have accepted.
• The best return on Merrick's investment is to sell the company's assets off piecemeal, which could be the plan given the reorganization along clean functional lines (assuming someone might actually want them).
• Need proof that Merge had no bargaining position? It had to pay 13% interest on the money loaned to it by Merrick, an only slightly better rate than charging it to the company Amex.
• Merrick's loan is secured by Merge's assets, which means if Merge can't improve its bottom like, it defaults and Merrick owns everything for just $0.35 per share.
• The pitiful cash Merge got isn't likely to help it much, especially since there's no way it will generate immediate sales and probably not many prospects are looking to make a long-term product investment with a company on the ropes.

3. California: Doctor Shopping is the One Type of Drug Abuse We Won't Tolerate

Facts and Background

The State of California announced Thursday that it will create an online database that allows doctors and pharmacies to detect drug abusers who obtain prescriptions from multiple physicians.

Opinion

It's good information for clinicians, but at a considerable privacy cost. It's only a replacement for an existing system, but it's fanning medical and legal arguments on the definition and detection of drug abuse.

Musings

• The state already has had a system in place since 1996 (CURES) that contains 86 million prescription records, but providers are required to use the telephone or fax machine to get information from it.
• The new system will cost $3.5 million over the next three years. It will be paid for by a donor whose children were killed by driver who was taking drugs prescribed by several doctors.
• The database is opposed by groups who claim that legitimate pain treatment will be underused because of the stigma of abuse.
• There is no set criteria for defining drug abuse from usage data alone. Still, prescribers can at least determine whether their prescriptions conflict with others.
• Privacy advocates aren't likely to be happy with the idea that a large number of providers can easily look up patient information online.
• Kaiser Permanente paid for most of the feasibility study, so one might assume their interest to be financial.
• California joins 35 other states with similar databases.
• If databases like this are really useful for detecting prescribing irregularities to help patients, why limit them to just controlled substances? (see "because privacy advocates would go bonkers").

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