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January 21, 2008

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1. Cerner Slashes Payroll, Stock Price By Dis-Association

Facts and Background

Cerner announced Monday that it had eliminated 97 positions in Kansas City, part of a global reduction of 152 positions. CERN shares dropped over 8% Tuesday on five times their average trading volume, taking shares back to their March price.

Opinion

It's not the first time that "associates" have been shown the door individually en masse, many of them in January and February, but this may be the first time that Cerner announced it publicly.

Musings

The company said this is business as usual, but given that it missed earnings estimates last quarter, less than rosy news may be awaiting the January 31 earnings announcement.
As in most companies where employees are brought in for specific experience rather than overall capabilities, Cerner will continue to actively hire despite the layoffs.
Those displaced are now stuck in Kansas City with few prospects that don't involve relocating since the only HIT employers are local hospitals already swarming with former Cernerites.
Rumors are that the real layoff number was hundreds, not dozens.
Cerner likes cheap, obedient recent college graduates. Good strategy or not? It has worked for competitors Meditech and Epic so far.

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2. Study: Government's HIT Initiatives About as Ineffective as Government In General

Facts and Background

California HealthCare Foundation released a study Thursday in which federal healthcare IT initiatives were graded as improving awareness, but not producing fundamental change toward nationwide electronic health records.

Opinion

Bingo. Lip service and industry cheerleading aside, the government's modestly and grudgingly funded work has resulted in very little result beyond a false optimism that the much-proclaimed tipping point has been reached just because meetings have been held by low-ranking civil servants, most of whom have never used electronic medical records themselves.

Musings

Physician adoption of EMRs (not even EHRs) has not changed substantially since ONCHIT was formed, still languishing in the low double digits.
CCHIT certification, which actually has gone smoothly and operated efficiently, seems to have had minimal impact on adoption of either CPOE or EMRs.
Calling this a "study" might be misleading since it's more of a summarized interview with a couple of dozen industry leaders.
If you were waiting for the government to jump-start healthcare IT, this should be the signal to move your hopes to the private sector.
The study did not mention the high priority issue of defining five acronyms to be a notable government accomplishment or a significant barrier to its eventual progress.

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3. RHIO Failure News Slow to Reach Maine, Apparently, as HIE Launches

Facts and Background

The State of Maine announced Wednesday that construction of the nonprofit HealthInfoNet statewide health information network will begin in February with a 24-month demonstration project to follow that will involve 2,000 providers.

Opinion

Let's hope they've learned from the trail of RHIO bodies they stepped over to get to the press release stage of the project plan.

Musings

At least Maine is a small state, with only 2,000 physicians practicing in the 15 hospitals that are involved.
They seem to be making the most common mistake that kills RHIOs: charging the participating big hospitals to carry the cost for everyone else.
The only money put up so far is a one-time grant to get the pilot going. It will take another $16 million, officials say, to bring it live statewide.
The biggest funder is the Maine Health Access Foundation, which is itself is grant funded.
One state newspaper quoted HealthInfoNet's project manager as saying it will need at least $5 million a year and has no idea where it will get the money once the grant money's gone. That's probably not a good predictor of eventual success.

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