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February 18, 2008

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1. Microsoft Bobs in Rough Healthcare Applications Seas

Facts and Background

Microsoft announced Wednesday that will market its recently acquired hospital software applications under the Amalga name.

Opinion

Precocious toddler Azyxxi gets adopted by a rich new family who changes it name and makes it share a room with their unpopular stepchildren.

Musings

Few doubt that Azyxxi was pretty good, but selling what is basically a custom application built by and for a hospital in Thailand is going to take some work (and maybe some FDA approvals for PACS).
Other big non-software vendors have bought foreign HIS applications as a cheap way to crack the US market (Agfa and Kodak come to mind). Every one of them sank quickly without a trace.
In fact, Microsoft did some HIT toe-dipping in 2001 with its involvement with Amicore. It sank quickly without a trace.
Who's going to install and support full-blown hospital information systems for Microsoft? The Thailand-based company it bought these products from just a few weeks ago had only 71 employees, all of them in Thailand. They will probably end up using consulting firms if they ever sell anything.
Buying and relabeling somebody else's software will show those naysayers who say Microsoft has run out of ideas, right?
Azyxxi got a mention from Steve Ballmer and Captain Kirk at HIMSS last year, but all the other whiz-bang stuff he demonstrated (like the computerized table) seems to have sunk quickly without a trace.
Don't believe the hype that MSFT has all kinds of sites up and running on Amalga. They have a handful of early adopters/development partners of Azyxxi whose status has not been announced that I've heard, all of whom I'm betting paid nothing and contributed varying levels of commitment. That's it.
Vista isn't selling. Office isn't selling. MSFT stock isn't selling, trading only a little above its 2003 price. Bill's out of the picture. Its haters are as passionate and large in number as Google's legion of fans. Say, let's get into healthcare!
Does anyone hear Amalga and not think of having a tooth filled?

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2. Allscripts, Eclipsys, WebMD Shares Trampled in Investor Stampede

Facts and Background

Shares of Allscripts dropped over 25% on Thursday after the company announced lower margins and problems with bringing customers live on its new version of TouchWorks. Eclipsys shares dropped on high volume after announced higher profits. WebMD stock took a 10% hit Monday after the company lowered its 2008 outlook and warned that a takeover by majority owner HLTH Corp. was in jeopardy.

Opinion

In this investment and economic environment, it's Strike 1 and you're out, although all three of these companies have wiffed before.

Musings

Former high flyer Allscripts is the biggest loser here. Investors have clearly lost patience with its lack of results and were surprised by the warning about TouchWorks implementation delays.
Which sounds a lot like Eclipsys two years ago, by the way.
If the market cap of Allscripts keeps dropping, surely someone will express interest.

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3. Wal-Mart Has a Blue Vested Interest in eClinicalWorks

Facts and Background

Information Week reported Tuesday that Wal-Mart's agreement with in-store clinic operator RediClinic requires the company's clinics to switch from their self-developed EMR software to that of eClinicalWorks.

Opinion

No wonder Allscripts is struggling. All the action is with small vendors offering inexpensive and easy-to-use physician applications.

Musings

eCW was asked by Wal-Mart to keep its relationship quiet.
A deal like this won't add a lot of revenue to eCW's $60 million a year (especially at just $5,000 per physician), but it will open a lot of doors.
Can eCW's software provide the level of practitioner guidance and clinical backup that allows them to work in tiny spaces and crank through patients quickly? If so, private physicians will surely take notice since their business model isn't all that different for 90% of patient encounters.
One area in which eClinical Works is stronger than RediClinic's homegrown apps is in interoperability, although that's not much of a selling point for doctors.
Since Wal-Mart is testing the Dossia personal health record application, eCW may get some early experience working with it.
This is a huge win for eClinicalWorks no matter how you look at it. And, a kick in the groin to its bigger, older, and more expensive competitors.

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